Sitting of 15 March 1989

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

  ASSOCIATED BRITISH PORTS (No. 2) BILL
  Order for Third Reading read.
  To be read the Third time on Thursday 16 March.

Oral Answers to Questions
  TRADE AND INDUSTRY

    Hearing Aids
    Mr. Wigley: To ask the Chancellor of the Duchy of Lancaster what is his estimate of the numbers of hearing aid dispensers making use of home visits to sell hearing aids.
    The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. Eric Forth): I understand that some 80,000 hearing aids a year are dispensed by the private sector. There are no statistics available to indicate what proportion of those are as a result of a home visit, but it is likely that a significant proportion will have involved a call by a hearing aid dispenser.
    Mr. Wigley: Does the Minister accept that although the vast majority of visits arranged and made by private companies are perfectly reputable and of a high standard, a significant minority of those selling private hearing aids use disreputable tactics and make home visits that are neither wanted nor acceptable to the patient? Will the Government make a statement to the effect that they believe that there should be no home visits to people needing hearing aids unless they are requested by the patient?
    Mr. Forth: I recognise the hon. Gentleman's point and it has come up frequently, especially recently, as we have been considering a Bill which will be in Committee shortly. The number of complaints received, for example, by the Hearing Aid Council, which is responsible for such matters and to which such complaints should be made, is running at about 70 per year and the Royal National Institute for the Deaf, which has recently given us its latest figures, has recorded about 260 complaints in the past four months covering all matters to do with hearing aids. We recognise that there may be a problem, but the correct course for individuals who have been adversely affected is to raise the matter with the Hearing Aid Council, which then has responsibility for dealing with it and, so far as we know, is prepared and able to deal with such matters effectively.
    Ms. Quin: Does the Minister agree that in view of the unfortunate examples which have occurred there is good reason to consider tightening up the code of practice of the Hearing Aid Council and increasing the number of consumers on the council to ensure that people who need hearing aids are able to obtain them in the best conditions and at the best price possible?
    Mr. Forth: I congratulate the hon. Lady on her appointment and on her debut at the Dispatch Box. I look forward to seeing and listening to her in future. I acknowledge that this is an important matter, but I can only repeat what I said to the hon. Member for Caernarfon (Mr. Wigley). The effectiveness of the code of practice is the responsibility of the Hearing Aid Council which, so far as we are aware, has always been able and prepared to review the code of practice and when necessary, to change it. The hon. Lady will also be aware that a private Member's Bill—the Hearing Aid Council (Amendment) Bill—will shortly be in Committee. I have had dealings with the promoter of that Bill, the hon. Member for Ynys Môn (Mr. Jones). We shall seek, with him, to produce the best possible Bill which will bring us up to date in these matters and allow us to have the most effective and representative council. On the basis of conversations so far, I am optimistic that we shall be able to achieve that objective.

    Enterprise Initiative
    Mr. David Nicholson: To ask the Chancellor of the Duchy of Lancaster how many applications have so far been received for consultancy support under the enterprise initiative.
    The Chancellor of the Duchy of Lancaster and Minister of Trade and Industry (Mr. Tony Newton): More than 20,000 applications for assisted consultancy have been received since the launch of the scheme in January 1988.
    Mr. Nicholson: Is my right hon. Friend aware that the scheme, with the measures announced yesterday, will be of great help in the coming year, especially to smaller firms? Can my right hon. Friend give the House any idea of the target for the coming year and the evidence showing that the scheme is especially used by smaller firms?
    Mr. Newton: I very much agree with my hon. Friend. We are well on course and the evidence is that we have already achieved the 1,000 per month target for applications which was set for last year. We expect to be able to achieve the 1,250 per month target in the forthcoming year. About 90 per cent. of applications come from firms with fewer than 100 employees. There is no doubt that the response from those firms and the benefit to them has been considerable.

    Trade Deficit
    Mr. Wallace: To ask the Chancellor of the Duchy of Lancaster what is his latest estimate of the deficit in trade in manufactured goods for the last 12 months in respect of which figures are available.
    The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Robert Atkins): In the 12 months ended January 1989, trade in maufactured goods is provisionally estimated to have been in deficit by £14·9 billion.
    Mr. Wallace: Until recently the Chancellor of the Exchequer seemed to be saying that the impact of his policies would be to reduce that trade deficit, but yesterday he said that he did not expect to see it come down from its present record level. Can the Under-Secretary of State say what has changed, and is he concerned about it?
    Mr. Atkins: It is not for me to make judgments at the Dispatch Box about what my right hon. Friend the Chancellor of the Exchequer said yesterday as my right hon. Friend is in a better position than anyone to be in control of the facts. He said that the deficit this year would be much the same as last year and suggested again this morning that the deficit would fall. It is, however, nothing like the kind of deficit that we have had in the past as most of the imports are of components, semi-manufactured goods and other capital equipment—very much the sort of things that Opposition Members have been urging us to encourage industry to use.
    Mr. Neil Hamilton: Does my hon. Friend agree that people buy goods from abroad because they find them cheaper and of better quality than goods from this country, so the answer to our trade deficit is in the hands of British industry? Does he further agree that the panaceas suggested by the Confederation of British Industry to keep the exchange rate down are not likely to succeed? Is my hon. Friend aware that the Japanese yen has appreciated against other currencies by almost 100 per cent. in the past two years, yet Japan's trade surplus is increasing?
    Mr. Atkins: With his usual perspicacity, my hon. Friend has hit the nail on the head. He is right that this provides an opportunity for British industry to fulfil the requirements of those consumers, both commercial and private, who wish to buy equipment or material. At present, such consumers have to buy from abroad. It would clearly be better and in everyone's interests if they were to buy from home, giving British companies the opportunity to make such products.
    Mr. Rees: With the manufacturing trade deficit in mind, I looked around Leeds last weekend and this morning. The centre of the city is booming—with banking, commerce and distribution. New buildings are being erected in which nothing is manufactured but from which goods from the rest of the world are distributed. Yet Leeds was once a proud manufacturing city. I do not say that the decline has occurred only in the past 10 years, but it has certainly got worse in the past 10 years. It is a long-term problem. Will it ever end? Is there anything that the Government can do, or think that they can do, to help manufacturing in our once-great northern manufacturing cities?
    Mr. Atkins: The right hon. Gentleman is a fair man and he knows that there have been changes in the manufacturing capacity of western industrialised countries compared with what is happening in parts of the far east and the Third world. I think that the right hon. Gentleman will recognise that that change will continue. By the same token, the Government have tried, like many other Governments of European countries, to ensure that in the future high technology manufactured goods and other areas of activity are improved and given attention. The right hon. Gentleman will know, as I do, that when one travels abroad one sees that the impact of British
    396
    manufactured goods is great and that we are doing well. Of course, change is always difficult to bear, and we must ensure that that change is carried through in the most efficient way, both for the consumers and for those who manufacture the goods.
    Mr. Brandon-Bravo: Does my hon. Friend agree that part of the trade deficit results from imports which enter other than on a level playing field—for instance, supposedly duty-free imports of manufactured goods from the so-called Third world? Is my hon. Friend aware that China manufactures 30 million bicycles per year and EEC rules allow Chinese bicycles to be imported with the result that imports to this country have increased from 600,000 units to 1·3 million units, which is not good news for my constituency which has Raleigh in its centre?
    Mr. Atkins: My hon. Friend knows that Raleigh has recently increased its work force by about 300 people and that the company is doing exceptionally well. That is a tribute largely to the work that has been put in and to the quality of the cycles produced. I had always understood that Raleigh itself encouraged the import of some Chinese bicycles because they are sold in this country at a price level at which Raleigh does not compete. In those circumstances, the imports fit in with Raleigh's own range. If my hon. Friend has any further information or evidence of an adverse impact on Raleigh, perhaps he will write or come to see me so that we can pursue the matter.
    Mr. John Garrett: According to yesterday's Red Book, growth in domestic demand from last year to next year is forecast to fall by 75 per cent., so why is the trade deficit forecast to be only slightly lower next year? Does not that tell us something about the Government's view of our competitiveness?
    Mr. Atkins: If the hon. Gentleman will wait a little longer, he will be able to put that question to Treasury Ministers who discussed that matter yesterday.

    Textile Industry
    Mr. Riddick: To ask the Chancellor of the Duchy of Lancaster when he last met representatives of the wool textiles industry; and if he will make a statement.
    Mr. Tredinnick: To ask the Chancellor of the Duchy of Lancaster when he last met representatives of the British Clothing Industry Association, the Knitting Industries Federation and the British Textile Confederation; what was discussed; and if he will make a statement.
    Mr. Atkins: My hon. Friend the Minister for Trade last met representatives of the British Clothing Industry Association, the Knitting Industries Federation and the British Textile Confederation on 31 October, when a wide range of textile trade issues was discussed. He met representatives of the National Wool Textile Export Corporation on 9 January to discuss the future of the statutory wool textile industry—export promotion—levy.
    I also met several representatives of the textile industry during a visit to Manchester and at a luncheon in Bolton on 8 February.
    Mr. Riddick: Will my hon. Friend take this opportunity to congratulate the wool textile industry on record exports last year, especially as trading conditions were not at all easy? Does my hon. Friend agree that one of the challenges

    397
    facing the textile industry is to attract enough school leavers into the industry? Does he share my surprise and disappointment that only four schools out of well over 40 were represented at a recent open day of the Huddersfield Textile Trading Group when a large number of trainees, managing directors and senior company executives were there ready and prepared to talk to teachers and, indeed, to potential new recruits? Does my hon. Friend agree that that was an appalling missed opportunity and possibly a reflection on the career teachers in the schools which did not attend?
    Mr. Atkins: As usual, my hon. Friend is right to draw attention to such problems. He was also right about the success of the wool textile industry, with record exports worth £613 million last year. We should be proud of that record.
    I agree with my hon. Friend about the importance of education links and the need to get people into the industry. We should capture youngsters—not just at secondary but at primary school level—to make them appreciate that making things is of crucial importance to the future of our manufacturing base. In my experience of industry, I have found that the problems do not come from children but from the teachers. I urge my hon. Friend to encourage the teachers in his area to recognise the importance of youngsters developing an interest in manufacturing. To ensure that teachers take more interest in the career opportunities offered, perhaps my hon. Friend will take the matter up with our right hon. Friend the Secretary of State for Education and Science to see what can be done.
    Mr. Tredinnick: Will my hon. Friend join me in congratulating the British Clothing Industry Association, the Knitting Industries Federation and the British Textile Confederation on the formation of the new Apparel Knitting and Textiles Alliance, which is a great step forward in providing a unified response? Does my hon. Friend share with me and many of my constituents the deep concern felt about the recent agreement negotiated between the EEC and China in relation to textiles and the 20 per cent. increase in imports that will follow? Will my hon. Friend also consider the import of acrylic yarn from Turkey, which is of particular concern at this time as it can come in at below production costs in this country?
    Mr. Atkins: I am grateful to my hon. Friend for his comments. He is right to offer congratulations to those bodies and I join him in doing so. My hon. Friend will be aware that our hon. Friend the Minister for Trade has been discussing matters relating to Turkey and China on a regular basis. Were there to be any doubt about that, I should point out that he has been defending the interests of my hon. Friend's constituents and other companies in this country with the assiduity that we have come to expect of him. In the circumstances, my hon. Friend will understand that the agreement with China, for instance, although perhaps not so good as we in the United Kingdom might have wished, is nonetheless better than the alternative. We can exercise some control over imports from China. My hon. Friend's point about Turkey is also well taken. We have done an enormous amount about that, and Turkey's exports to this country have fallen in recent months. I repeat that my hon. Friend the Minister
    398
    for Trade has those matters in hand and will continue to fight Britain's corner as strongly as we have come to expect of him.
    Mr. Madden: Will the Minister guard against being carried away with too much self-congratulation? A large part of Britain's balance of trade deficit is made up of imported textiles and clothing, representing unfair competition. Does the Minister recognise that the combination of high interest rates, high exchange rates and unfair competition creates in the British textile and clothing industry the fear of a return to the closures, increasing short-time working and large-scale redundancies experienced in the early 1980s? Will the Minister give a clear assurance that Government policy is a renewal of the multi-fibre arrangement and a commitment to take other action in support of the British textile and clothing industry?
    Mr. Atkins: The hon. Gentleman talks as though he is the only person who understands the textile industry. [HON. MEMBERS: "He is."] He represents a point of view, but he must recognise that many Conservative Members—not least my hon. Friends the Members for Colne Valley (Mr. Riddick) and for Bosworth (Mr. Tredinnick) and myself—have parts of the textile industry in our constituencies and are fully aware of the concerns being expressed. I take the hon. Gentleman's point about unfair imports. As I said earlier, and as the hon. Gentleman knows, my hon. Friend the Minister for Trade has been working extremely hard to ensure that Britain's position is protected. It was obvious from the debate on 9 December, in which the hon. Gentleman and other right hon. and hon. Members participated, that much is being done by the Government to defend the interests of the textile industry. As for interest rates, all right hon. and hon. Members must surely recognise that an increase in interest rates is far better than an equivalent increase in the rate of inflation. It is common sense to take action to get rid of inflation by taking action on interest rates. Even the hon. Gentleman and his right hon. and hon. Friends must recognise that.
    Mr. Vaz: Does the hon. Gentleman agree that from 31 October last year until now is far too long to wait before meeting the federation? The Minister should urgently seek a meeting with representatives of the wool and textile industries. When I and other hon. Members met them a fortnight ago, representatives of those industries gave the Government a very rough ride and criticised the lack of Government action. Is the Minister aware that in the past year Leicestershire has lost 2,891 jobs out of a county work force of 40,000? That is the proof sought by the Minister for Trade that the industry is being damaged. When will the Government start protecting British jobs and British industry?
    Mr. Atkins: The hon. Gentleman is on record from the 9 December debate as being someone who wishes to break international agreements. That is something to which Conservatives and, I hope, the Opposition Front Bench would not wish to be a party, although we recognise that there are problems at various levels in the textile industry. My hon. Friend the Minister for Trade is on record as saying both in the House and outside that he is prepared to defend British interests within the limitations of the

    399
    EEC and our own legislation. The hon. Gentleman must make clear whether he is still in favour of breaking international agreements.
    Mr. Vaz: Yes, and of standing up for British interests.
    Mr. Atkins: Now we know exactly where we stand. It is on the record.
    Mr. Waller: Is my hon. Friend aware that the industry is still very concerned about imports from countries which erect blatant barriers against the entry of British goods? With the multi-fibre arrangement looming on the horizon, does my hon. Friend fully appreciate that the wool textile industry in particular does not seek protection but seeks reciprocity so that it may compete fairly?
    Mr. Atkins: My hon. Friend is yet another of my right hon. and hon. Friends who understands the industry and speaks about it with authority. He makes a very fair point. He will know that my hon. Friend the Minister for Trade is fighting that battle as strongly as he is fighting the others.
    Mr. Henderson: What advice does the Minister have for Courtauld, which right hon. and hon. Members in all parts of the House will recognise as a high-productivity company with good industrial relations, following its announcement of a further 780 redundancies in the cotton industry in Lancashire, bringing the total number of redundancies in the textile industry since October to 10,000? Following the Financial Times forecast the day before yesterday of further output cuts and exchange rate policy changes, does the Minister blame Courtauld and companies like it or does he blame his right hon. Friend the Chancellor of the Exchequer?
    Mr. Atkins: The hon. Gentleman makes an entirely fair point about Courtauld. I understand and get no pleasure from the closures that Courtauld and other mills have announced. I understand all too well, because I had been a Member of Parliament for only one month when 2,400 Courtauld workers were put out of work in my constituency. Courtauld has had to retrench, reinvest, re-equip and change its attitudes. The hon. Gentleman will know, even from his base in the north-east, that the textile industry has had its difficulties and has come through them but is currently facing further difficulties, which have been discussed in this question. I will bring the hon. Gentleman's concern to the attention of my right hon. Friend the Chancellor. The hon. Gentleman and his hon. Friends may have an opportunity to discuss these matters later this afternoon.

    Exports
    Mr. Amess: To ask the Chancellor of the Duchy of Lancaster if he will make a statement on the latest export figures.
    Mr. Newton: In the 12 months ended January 1989, the value of exports is provisionally estimated to have been £81·2 billion.
    Mr. Amess: Will my right hon. Friend join me in congratulating the many businesses in Basildon which are currently enjoying record exports as a result of their enterprise initiative and the Government's excellent
    400
    policies? Will he note our contribution to trade with the launch of the "Buy British in Basildon for Export" campaign?
    Mr. Newton: I happily join my hon. Friend in congratulating the business men of Basildon on the way in which they have taken advantage of the excellent climate that the Government have created for business. I hope that in the true spirit of reciprocal good will between hon. Members representing Essex, my hon. Friend will join me in congratulating the business men of Braintree on their slogan, "Braintree means Business".
    Mr. Win Griffiths: When does the Minister expect the value of our exports to equal the value of our imports? What influence does he think that high interest rates and inflation are having in impeding the growth of exports?
    Mr. Newton: Against the background of Britain's historic position in world trade, it would be a rash man who predicted the balance that the hon. Gentleman suggests. The question shows the hon. Gentleman's lack of knowledge about the way in which the economy has worked historically. Our trading has always been significantly assisted by invisibles. The way in which Opposition Members persistently consider only part of our national accounts is not the least of the disservices that they do to sensible economic discussion.
    Mr. Baldry: Does my right hon. Friend agree that the strength of our exports covers the whole sector, including not only services but manufacturing goods? Is he aware that last night the president of the British Constructional Steelwork Association announced that last year was its best for steel construction, with a 20 per cent. increase in the fabrication of steel compared with 1987, a record market share and record investment, much of which is being exported? Is it not sad that the only trade and industry news that the Opposition enjoy is bad news?
    Mr. Newton: The answer to the latter part of my hon. Friend's question is that it is indeed sad. As to his earlier observation, it is a striking example of the improved performance of many sectors of British industry.
    Mr. Gould: Does the right hon. Gentleman recall the forecast that the Chancellor of the Exchequer made in last year's Budget that exports would grow by 3 per cent.? He will know that in the outturn they fell by 1 per cent. Does he recall the Chancellor of the Exchequer's forecast that the balance of payments deficit would be £4 billion? He will know that the outturn was a deficit of £14·7 billion. Given that our current deficit is running at an annual rate of £20 billion, what faith does the right hon. Gentleman think that we should have in the Chancellor's current forecast that exports will grow by 5 per cent. in 1989? Is this not just another piece of ludicrous self-delusion? What is the basis for such a forecast, and what advice did the Department of Trade and Industry give the Chancellor on the subject?
    Mr. Newton: The evidence to back up the expectations that the Chancellor of the Exchequer expressed yesterday about our export position is twofold. First, the trend remains upward. Indeed, over the latest three months the volume of exports, excluding oil and what are charmingly known as erratics, was the highest ever recorded. Secondly, and perhaps more important, the overseas investment in the country is an indication of its growing

    401
    attractiveness as a manufacturing base. In addition, there is the greater strength of those manufacturing and other industries from which we can expect to see rising exports, not least on the basis of rising investment.

    Exports
    Mr. Cran: To ask the Chancellor of the Duchy of Lancaster what is the estimated volume of United Kingdom exports facilitated by the activities of the Export Credits Guarantee Department over the past five years.
    Mr. Forth: In the five years to 31 March 1988—the latest date for which figures are available—the total volume of United Kingdom exports for which guarantees have been issued by ECGD was £78·25 billion.
    Mr. Cran: I am sure that my hon. Friend would agree that the ECGD has been outstandingly successful in facilitating exports from the United Kingdom. Incidentally, it is worth noting that the ECGD has traded—if that is the right word—successfully for 60 out of its 69 years. Does my hon. Friend agree that, as with all institutions that have been affected by Third world and other debt problems, there is at least a case for looking at the ECGD's balance sheet to distinguish those debts that can be recovered from those that patently can not?
    Mr. Forth: I welcome very much what my hon. Friend says about the ECGD's invaluable contribution to the trading performance of this country. We are very confident that, in spite of some very difficult trading circumstances recently, it will continue to provide an excellent service to exporters. However, it has to be examined, and we are currently looking at its flow and at the way in which it operates to ensure that it will continue to provide the best possible service against the most secure financial background.
    Mr. Cousins: Can the Minister give the House an assurance that the present arrangements for the Export Credits Guarantee Department will survive the introduction of the single market in 1992, and that there will not be a reduction in the scale of its activities or, alternatively, entirely new arrangements opening it up to other Common Market countries?
    Mr. Forth: The hon. Gentleman makes an important point. We all recognise that the current role of the ECGD will have to be looked at, both by Her Majesty's Government and by the Commission of the European Community, in the light of developments up to and beyond 1992. This is being done. One cannot prejudge the outcome, but it is fair to say that we expect to see the ECGD's role in this country continuing to be fully comparable with that of its opposite numbers in other countries of the Community, and its role vis-a-vis countries outside the Community, if anything, being strengthened.

    Balance of Trade
    Mr. Wray: To ask the Chancellor of the Duchy of Lancaster what studies the Department of Trade and Industry is carrying out regarding the effect on the balance of trade of oil production and exports (a) falling by 50 per cent., and (b) ceasing completely.
    Mr. Newton: The latest estimates indicate that the United Kingdom will remain self-sufficient in oil until at least the end of the century, and that the level of output is likely to decline only gradually. My Department is therefore not carrying out any studies based on such hypothetical propositions as the hon. Member suggests.
    Mr. Wray: Does the Minister agree that people in this country are concerned when they consider what has happened in spite of the rise in exports—from £2·9 billion to a peak of £6·5 billion in 1986–87? Why have this Government turned a surplus of £1·6 billion in 1981 into a deficit of £20 billion in 1989?
    Mr. Newton: It is difficult to understand what the hon. Gentleman is seeking to say. It seems to me that in any commentary on these matters it is necessary, apart from anything else, to consider what has happened to oil prices over the period.
    Mr. Grylls: Does my right hon. Friend agree that there is evidence that British manufacturing industry is investing very heavily at the present time, and that that will not only improve its competitiveness, but increase its capacity to supply the home market and to export? Is it not the case, therefore, that the prospects are very good?
    Mr. Newton: Yes, indeed. My hon. Friend makes very much the point that I was seeking to make a few moments ago to the hon. Member for Dagenham (Mr. Gould).
    Mr. Kennedy: The Minister will be aware that the quality of bids that the Department of Energy has received so far for the next licensing round is encouraging news for anyone interested in future oil production, but, although it may not be his direct responsibility, will he note that in terms of 1992 the oil-related sector is concerned about the offshore supplies office and its remit to ensure as much United Kingdom content as possible in fabrication work? What discussion has the Department had here, and, more crucially, with the European Commission, to secure some base under the Single European Act for an OSO-type unit?
    Mr. Newton: The hon. Gentleman is right about the encouraging response in the latest round in respect of oil exploration and extraction, which is one reason why I am not prepared to speculate on the highly hypothetical and pessimistic basis of the original question, and I am grateful to him for making that point. The best single guarantee of participation by the offshore industry in the opportunities that remain in the North sea, and a healthy return for British industry, whether before or after 1992, is the growing strength and efficiency of British industry and its competitiveness in that area.
    Mr. Tony Banks: The Minister just said that there was a great deal of investment in British manufacturing industry. If that is so, why is the manufacturing deficit going up all the time? When shall we see some beef on this economic miracle?
    Mr. Newton: It is an undoubted fact that there has been a substantial increase in manufacturing investment, which in turn is part of a striking rise in overall investment in Britain in recent years—about twice as fast as consumption. That is a dramatic contrast to the position when the Labour Administration was in office, and it is a clear sign of the continued strengthening of the British economy.

    Manufacturing Output
    Mr. Pike: To ask the Chancellor of the Duchy of Lancaster if he will make a statement on his assessment of the causes of the relative performance of each region in terms of constant value manufacturing output since 1979.
    Mr. Atkins: There are many factors underlying regional performance, including the state of the world economy and regional industrial structure. I am happy to say that recent indices show a continuing strong growth in manufacturing output in the regions.
    Mr. Pike: When the Minister next returns to his constituency in the north-west, will he look at the real situation there instead of accepting what his civil servants tell him? Is it true that there is 38 per cent. less investment in manufacturing industry in the north-west now than there was in 1979? Is that why there are fewer jobs and 20 per cent. less output? Have not the Government failed manufacturing industry and the regions?
    Mr. Atkins: The hon. Gentleman should know that no Minister receives much advice from his civil servants on constituency matters. He uses his own eyes, as I do. Representing the north-west as he does, the hon. Gentleman will know just how well the north-west is doing at the moment.
    Mr. Pike: Rubbish.
    Mr. Atkins: The hon. Gentleman does not serve his region well by talking it down and suggesting that things are so bad. We are doing extremely well and that is largely due to the Government's economic policy.
    Mr. Dykes: Is it correct that in the past 10 years, taking all the regions together, total manufacturing industry output rose by 9·8 per cent.—less than ½ per cent. compound per annum? Britain's investment in the private sector is the lowest of all those on the OECD official list of countries with populations of more than 50 million. What are we to do to change that fundamental weakness?
    Mr. Atkins: My hon. Friend is right to highlight the fact that there is always room for improvement. It is the Government's policy to ensure that that improvement continues. If my hon. Friend remains long enough, he will learn from an answer on OECD productivity figures that Britain's productivity is one of the highest within the OECD in terms of percentages.
    Mr. Caborn: I congratulate the Minister on presenting an almost convincing fairy-tale this afternoon. The allocation of objective 2 of the new EEC structural fund is based upon unemployment and industrial decline. The EEC decided that from the 50 million people covered by that definition, 20 million are in the United Kingdom. To put it another way, 36 per cent. of objective 2 money will, under the new criteria of the structural fund, come to the United Kingdom. Is the Minister aware, therefore, that in the objective assessment of the Commission, the regions of this country are in greater industrial decline than any other areas in the EEC?
    Mr. Atkins: It might interest the hon. Gentleman to know that as a result of pressure that we have been able to impose, we have managed to obtain objective 2 status for Burnley borough council, about which the hon. Member for Burnley (Mr. Pike) questioned me. That is an
    404
    indication of the fight that we have put up against the Commissioner who, the hon. Gentleman will recall, was a Member of the Opposition and who is making life a little more difficult than we would wish it to be.

    Export Promotion
    Mr. Knapman: To ask the Chancellor of the Duchy of Lancaster if he will make a statement on the progress of recent initiatives on export promotion.
    Mr. Newton: It is just two months since the Minister for Trade launched the Department's export initiative. Since then, we have received some 2,000 inquiries in response to our advertisements in the national press alone. We expect the campaign to be very successful in introducing companies with significant export potential to the benefits of exporting.
    Mr. Knapman: I thank my right hon. Friend for that helpful reply. Will he bear in mind the problems of constituents such as mine, and particularly the Stroud valleys, where there are many small companies, employing 50, 100 or 200 people, always requiring up to date information about a large number of export markets? Is he aware that they will be unable to gain export orders unless they are aware of the tendering opportunities?
    Mr. Newton: Yes, of course, and that is very much a purpose of the enhanced range of DTI services to exporters—not least to small companies which are potential exporters—to improve the range of intelligence and information about which my hon. Friend speaks.
    Mr. Allen: Was there anything in yesterday's Budget to increase exports?
    Mr. Newton: The entire tenor and purpose of the Budget was to maintain and develop the strength of the British economy, and the confidence in it which has led to an increase in investment, including manufacturing investment, and has given us such a strong export performance.
    Mr. Gould: The right hon. Gentleman's answers are totally at variance with the experience of British industry on the ground. How does he square those answers with the fact, well known to him, that a group of major British exporters is bitterly critical of Government policy on export promotion?
    Mr. Newton: If the hon. Gentleman thinks that the tenor of his remarks and questions in the House this afternoon, and on a number of previous occasions, reflect the mood of British industry, it is he who is not getting around on the ground.
    Mr. John Marshall: Does my right hon. Friend agree that the best way to promote exports is to defeat inflation, which is much more likely to be defeated by the policies of the Budget than by the inherently expansionary and inflationary policies put forward by the Leader of the Opposition yesterday afternoon?
    Mr. Newton: In a word, yes.

    Hearing Aid Council
    Mr. Ashley: To ask the Chancellor of the Duchy of Lancaster what consideration he is giving to the reform of the Hearing Aid Council.
    Mr. Forth: The RNID's fair hearing campaign made a number of suggestions for amendments to the Hearing Aid Council Act. The Secretary of State for Health and I are considering the RNID's proposals. The Bill promoted by the hon. Member for Ynys Môn (Mr. Jones) would make changes to the Hearing Aid Council Act.
    Mr. Ashley: Is the Minister aware that the membership and composition of a Hearing Aid Council which favours the industry that it is supposed to supervise is an absurdity and should be changed in such a way that the consumers and the medical profession predominate? I hope that that change comes about shortly. Is the Minister further aware that even when that change has been made, the Secretary of State should take reserve powers to amend any code of practice or standard put forward by that council so that he can keep a watch on future developments?
    Mr. Forth: The right hon. Gentleman is aware, because he will be a member of the Committee that will consider the Bill, that the Bill proposed by the hon. Member for Ynys Môn covers those matters to which he has referred and which have concerned many people. Proposals in the Bill and, I believe, amendments to be considered by the Committee, will alter the council's composition to make it more representative and effective. I am optimistic that the Committee will conclude that the council may well be rearranged to ensure that representation is better and more effective. Together with the other changes proposed in the Bill, that will make the council more effective and allow better representation of the interests that are vital to people with hearing impairments.

    Plessey
    Mr. Colvin: To ask the Chancellor of the Duchy of Lancaster if he will make a statement on the GEC/Siemens bid for Plessey.
    Mr. Newton: The bid by GEC/Siemens for the Plessey company is being examined by the Monopolies and Mergers Commission which is due to submit its report to my right hon. and noble Friend the Secretary of State by 10 April It would be inappropriate for me to comment on the bid in advance of the publication of the commission's report.
    Mr. Colvin: Is my right hon. Friend aware that GEC has a history of growth through takeover rather than through research into and development of its own products? Therefore, the prospect for the workers and output of the company's two research centres at Roke Manor in my constituency and at Caswell near Daventry—I am pleased to see my hon. Friend the Member for Daventry (Mr. Boswell) in the Chamber—is very much worse under a Plessey carve-up than it would be under the existing management and ownership of that company.
    Mr. Newton: I think that my hon. Friend will understand that I can do no more than note his comments. I am sure that he will accept that it would be inappropriate for me to comment on them.
    Mr. Tim Smith: Does my right hon. Friend agree that, because GEC and Plessey are major suppliers to the Ministry of Defence and because such competition is vital, the taxpayer has a major interest in this matter? Will he confirm that when decisions are taken, the taxpayers' interest is taken fully into account?
    Mr. Newton: I can confirm that when my right hon. and noble Friend the Secretary of State considers these matters he will take account of everything in the commission's report and the advice of the Director General of Fair Trading. I am not willing to be drawn beyond that.
    Mr. Campbell-Savours: If the Secretary of State is to take these matters into account, will he, in the taxpayer's interest, ask Peter Levene, who is in charge of defence procurement, and all the people responsible in the contracts division of the Ministry of Defence, what they think, especially as that Department is trying to move more contracts over to a competitive-based system? If that takeover move were made in the form in which some people think it should be made, that may well act counter to this proposition.
    Mr. Newton: The House will recognise the difficulties that I face in answering supplementary questions on such a matter at this time. I cannot add to what I have already said.

    City Institutions
    Mr. Campbell-Savours: To ask the Chancellor of the Duchy of Lancaster when he last met members of City institutions to discuss matters relating to financial markets and transactions in shares.
    Mr. Newton: I frequently meet members of City institutions. Our discussions usually cover a wide range of issues, including those referred to in the hon. Member's question.
    Mr. Campbell-Savours: Has the Minister read the book "The City Sharepushers" by Mr. Davidson? If so, has he noted the comments about Harvard Securities—a company which we have effectively managed to close—Afcor Investments, IDB and Tudorbury Securities? In so far as Tudorbury Securities is still trading and, in effect, conning the public, does the right hon. Gentleman think that he should make a statement to Parliament? Is it true that Department inspectors have been investigating that company?
    Mr. Newton: I think that the hon. Gentleman will recognise that it is not appropriate for me to comment on a number of those matters in reference to both the book and specific cases.
    Mr. Ian Taylor: Does my right hon. Friend recognise the invaluable work of the British Invisible Exports Council which is encouraging the continued progress of the City in earning income for this country? Will he note in particular the latest figures, which show that invisible exports may have been under-recorded by up to £4 billion in last year's balance of trade figures?
    Mr. Newton: It is certainly true that invisible trade—as I said in response to an earlier supplementary—is one of

    407
    the strengths of our economy. I join my hon. Friend in congratulating those who have contributed to our performance in that regard.
    Mr. Stott: When the right hon. Gentleman had discussions with City institutions, did he discuss the possible future funding of the sale of Girobank? If so, did he tell them that he has told the chairman of the Post Office board that he has altered the terms of reference laid down by his predecessor for the sale of Girobank? Did he tell them that he has done that because he, the Secretary of State and the Department, are having a great deal of trouble in selling Girobank? In view of that predictable difficulty, is it not time that the Secretary of State cancelled the sale of Girobank and stopped this nonsense, to lift the veil of uncertainty that has hung over those who work for Girobank and its customers for the past nine months?
    Mr. Newton: The hon. Gentleman was present during the Adjournment debate before Christmas when I said that the Government had not changed the criteria set out at an earlier stage for the sale of Girobank. Had the hon. Gentleman attended the Select Committee the week before last, he would have heard me reaffirm that point. Quite simply, he is wrong.

    Industry and Schools
    Mr. Stevens: To ask the Chancellor of the Duchy of Lancaster what steps his Department has taken to improve links between industry and schools.
    Mr. Forth: My Department has a keen interest in promoting partnership between business and schools. Last year we launched the enterprise and education initiative, which is an ambitious programme that will extend the benefits of partnership activity to all schools. Working with organisations already active in the partnership area, DTI's 145 local advisers on enterprise and education will approach employers to ensure that there are places for all pupils to have at least two weeks' work experience before leaving school. In addition, we are setting up a programme under which 10 per cent. of teachers will each year be given the opportunity to gain first-hand experience of the world of business. My Department also supports much other partnership activity, including initial teacher training, both on a national basis and through our regional office network.
    Mr. Stevens: I am grateful to my right hon. Friend for that reply. I am sure that he will appreciate that in constituencies which, like mine, are sharing in the resurgence of business prospects in the west midlands, we are very conscious that the future of business and of students depends on understanding and contact between them. In particular, it is important that the links between industry and education should start, not at secondary school, but at primary school. In that context, would my hon. Friend care to say a little more about the teacher placement programme, which has an important contribution to make?
    Mr. Forth: My hon. Friend has put the matter in context. Arguably, one of the most important challenges that we face is to set up a dialogue and an understanding between those involved in education and those involved in wealth creation, for the obvious reason that we want to motivate teachers and pupils alike to understand the world
    408
    of business and to want participate in it. The initiative that we have launched will be a major step in that direction. On the teacher placement project, I can report to my hon. Friend that a recent very favourable report on a pilot scheme that we have been conducting has suggested mechanisms that we might develop to bring us closer to the ambitious target that we have set for encouraging participation by teachers in the business world.
    Mr. Frank Haynes: Is the Minister aware that there used to be a first-class link between the mining industry and schools in my constituency? Is he aware that that link has been cut and will he go with me to Hobart house and kick the backside of Sir Robert Haslam to get that link restored, in the interest of young people who want to work in the mining industry?
    Mr. Forth: The hon. Gentleman has made a valuable point. I hope that all those involved in the coal industry and every other industry will become increasingly aware of how important it is to educate both teachers and pupils throughout the education system in the importance of industries such as the coal mining industry. It will be in the interests of everyone for people to talk to one another, for those in the mining industry to visit schools and for those in education to visit mines so that that understanding can be maximised and the talent, skills and enthusiasm of young people will be attracted into that important industry.

    Overseas Investment
    Mr. Anthony Coombs: To ask the Chancellor of the Duchy of Lancaster what assessment he has made of how many jobs have been created or maintained by overseas investment since 1979.
    Mr. Atkins: According to the figures known to the Invest in Britain Bureau, since 1979 more than 186,000 jobs have been created and since 1983, when records were started, more than 100,000 jobs have been maintained.
    Mr. Coombs: Will my hon. Friend confirm that far from being the pariah of the international investment community, as Britain was 10 years ago, we now attract nearly one third of American investment in Europe and nearly half Japanese investment in Europe? Does he agree that this is because of the enterprise policies adopted by the Government and because industrial relations in Britain have been transformed so that British managers have far greater freedom to manage than those in any other country in Europe? Will he resist any impulse by the European Commission to make that more difficult?
    Mr. Atkins: My hon. Friend is quite right. As inward investment is one of my responsibilities, I see an enormous number of representatives from foreign companies and countries, all of whom are very keen to invest in Britain. They recognise the strength of our economy, the beneficial effects of our industrial relations legislation, and a wide variety of other factors, the most important in my opinion being the quality of the work force that they can utilise in various parts of the country. My hon. Friend is quite right to draw attention to that and he can rest assured that we will endeavour to maintain that position for as long as possible.

    Cycle Industry
    Mr. Allen: To ask the Chancellor of the Duchy of Lancaster what he is doing to encourage exports from the cycle industry in the east midlands.
    Mr. Atkins: My hon. Friend the Minister for Trade announced the launch of the export initiative on 17 January. Services provided under the initiative are available at all sectors of industry including those engaged in the production of cycles.
    My officials in the east midlands regional office of the Department are available to provide advice and assistance to all east midlands firms with an interest in exporting.
    Mr. Allen: The Secretary of State and the Minister will be aware that one of his predecessors, the right hon. Member for Chingford (Mr. Tebbit), said, in one of his more cynical moods, that the unemployed youngsters in Britain should get on their bikes. Is it not ironic that the companies which produced those British bikes have lost thousands of jobs, many of them in my constituency? Will he make serious representations to the Chancellor of the Exchequer to ensure that interest rates are brought down to a manageable level and that the inflation rate is reduced considerably so that the exports of those cycles can increase and more people can get on their bikes and work in the cycle factories?
    Mr. Atkins: I am tempted to suggest that this is a cyclical problem, but the House may not appreciate that. The hon. Gentleman makes a point about interest rates to which we have already devoted some time this afternoon. If a rise in interest rates will solve the problem of inflation we would prefer that policy to increased inflation. As the hon. Gentleman may recall, although he was not here at the time, the Labour Government forced inflation up to levels that we had to reduce when we came to office.
    In regard to the cycle industry, the hon. Gentleman will have heard my answer to my hon. Friend the Member for Nottingham, South (Mr. Brandon-Bravo) in whose constituency the Raleigh factory is situated and who never ceases to make representations to me about the interests of his constituents at Raleigh. None the less, my reply applies
    410
    just as much to the hon. Gentleman. Jobs are increasing in Raleigh in Nottingham because of the achievements of the bicycle company, and we want that to continue.

    Manufacturing Productivity
    Mr. Hind: To ask the Chancellor of the Duchy of Lancaster if he will give comparable figures for the growth of manufacturing productivity in Organisation for Economic Co-operation and Development countries between 1979 and 1987.
    Mr. Atkins: Those countries for which figures are readily available showed the following increases in manufacturing productivity between 1979 and 1987: Greece 0 per cent., Australia 6 per cent., Canada 9 per cent., Germany 14 per cent., Switzerland 19 per cent., France 20 per cent., Japan and Norway 21 per cent., the Netherlands 25 per cent., Sweden 26 per cent., Austria and Belgium 29 per cent., Spain 32 per cent., Italy and the USA 33 per cent., the United Kingdom 37 per cent. Only three countries out of the member states—Finland with 43 per cent., Portugal with 54 per cent. and Ireland with 81 per cent. have higher increases than the United Kingdom.
    Mr. Hind: I am grateful for my hon. Friend's answer. Has he noted from the labour force survey that, in the months to June 1988, manufacturing employment has increased, along with the momentous increases in productivity already mentioned? Will he also confirm that German companies operating through subsidiaries in the United Kingdom are finding that productivity in Britain is higher than in West Germany?
    Mr. Atkins: My hon. Friend is right. That is certainly the case with West German companies. He will also know, as I do, of a company—Leyland DAF—which employs many people in our respective constituencies. As a direct result of a deal with that company, productivity has increased 100 per cent. over the past 18 months. That is a measure of the productivity in British industry, which, may I yet again dare to remind the Opposition, is a great success story of which we should be proud.

Points of Order
3.30 pm
Mr. D. N. Campbell-Savours: On a point of order, Mr. Speaker. Will you confirm that between 1 October 1988 and 1 April this year no restrictions have been placed on the number of research assistants or secretaries that Members of Parliament may employ and that any hon. Member who leads the general public to believe otherwise is doing the House a disservice?
Mr. Speaker: The new arrangements covering the allocation of passes to Members' staff were debated a few weeks ago in the House.
Mr. Campbell-Savours: Will you, Mr. Speaker, confirm that what I said was true?
Mr. Speaker: I suppose that is right.
Mrs. Margaret Ewing: On a point of order, Mr. Speaker. I wish to draw the attention of the House—and in particular of you, Mr. Speaker—to the incident yesterday which led to the naming and eventual suspension of my hon. Friend the Member for Glasgow, Govan (Mr. Sillars). As you know, my hon. Friend tried to raise a point of order with you, Mr. Speaker, at 3.30 pm. You said that points of order could be taken only immediately after Question Time and, because you had already called a private notice question, you could call my hon. Friend only after that.
May I remind you, Mr. Speaker, that during Scottish questions on 21 December my hon. Friend raised a point of order and you called him. When your action was queried by the hon. Member for Paisley, South (Mr. Buchan), you ruled that any matter that needed immediate action should be raised with you there and then. I can assure you that the point that my hon. Friend the Member for Govan wished to raise yesterday needed immediate attention—it related to the abuse of the procedure of the House by the Leader of the Opposition. Why did your ruling change between 21 December and 14 March?
Mr. Speaker: The hon. Lady was correct in what she said about the point of order which was raised at Scottish Questions. However, when her hon. Friend the Member for Govan rose yesterday, the Leader of the Opposition had not begun to ask his private notice question. When the private notice question began he had not said anything.
Mr. Alex Salmond: Further to that point of order, Mr. Speaker. When I raised this matter yesterday, you asked me to consult "Erskine May" to discover why the Leader of the Opposition could raise a private notice question, and why the 12 o'clock rule did not apply in this case. I have now done so, and "Erskine May" contains no provision exempting the Leader of the Opposition from the 12 noon rule. Page 346 of "Erskine May" states:
"Questions which have not appeared on the paper, but which are of an urgent character and relate either to matters of public importance, or to the arrangement of business, may be taken after half-past three or at eleven o'clock on a Friday, provided that they have been submitted to the Speaker before noon on the day on which they are to be asked."
Page 347 of "Erskine May" states that the Leader of the Opposition does not have to establish a factor of urgency.
Given that my hon. Friend the Member for Glasgow, Govan (Mr. Sillars) contacted your office, Mr. Speaker, at
412
1.50 pm yesterday and was told that no private notice questions had been submitted, and given that no notice was placed in the Members' Lobby and no private notice questions was displayed on the annunciator yesterday, when did the Leader of the Opposition submit his question to you and what precedent was used to accept that private notice question without due notice?
Mr. Speaker: I must tell the hon. Gentleman that my office would not disclose whether any private notice questions had been submitted, because by definition such questions are private. I can tell him however, that I received notice of a private notice question from the Leader of the Opposition yesterday morning. The notice was provisional on the proposed motion for a writ being opposed at 2.30 pm, and I accepted it on that basis. It would not have been appropriate to put such a notice on the annunciator, particularly as it related to a statement that the House was expecting in any case.
As is made clear on page 347 of "Erskine May", special considerations apply to private notice questions from the Leader of the Opposition. In my opinion, what happened yesterday was perfectly regular, as I was ready to explain once the private notice question had been completed. I do not think that we can pursue the matter further now.
Mr. Dennis Skinner: On a point of order, Mr. Speaker. Is not the bottom line that anyone who enters into guerrilla activity in this place had better read pages 346 and 347 of "Erskine May" before doing so?
Mr. Speaker: That is useful advice.
Mr. Max Madden: On a point of order, Mr. Speaker. Yesterday I tried to ask the Prime Minister a question, about which I now raise a point of order of which I have given you notice. My question concerned the implications for women threatened with violence of the sentence imposed on my constituent Michelle Renshaw. When I had uttered only 16 words, Mr. Speaker, you interrupted to say:
"Order. The hon. Member knows that the Prime Minister cannot answer questions such as that."
With the greatest respect, Mr. Speaker, I do not think that on the basis of 16 words you, the Prime Minister or anyone else could have known what I was going to ask.
I have been helped by the Library, which has supplied me with five questions put to the Prime Minister on 11 February 1982, 14 December 1982, 20 December 1983, 5 February 1987 and, most recently, 10 February 1987. In all but one instance the Prime Minister replied at some length—and those questions dealt with sentences and their implications and asked her to take action.
With respect, Mr. Speaker, I ask you to reflect on the matter. If you think that I can be granted another go, perhaps I will be lucky enough to catch your eye tomorrow.
Mr. Speaker: That is a handsome offer, or rather suggestion. I was listening carefully to the hon. Gentleman's question to the Prime Minister. He referred to
"the shameful decision of Judge Pickles to sentence my constituent".—[Official Report, 14 March 1989; Vol. 149, c. 285.]
That was clearly a preamble to criticism of the judge, which is not in order on a question, and I therefore had to stop the hon. Gentleman. Let me again appeal to all hon.

413
Members to be certain when they ask questions, particularly at Prime Minister's Question Time, that their preamble is in order; then they will not be stopped.
Mr. Andrew Welsh: On a point of order Mr. Speaker. Will your clarify exactly when you reeceived the private notice question from the Leader of the Opposition yesterday? May I ask you to give a clear ruling on the precedent that you set in relation to private notice question procedure? Will you confirm that the Leader of the Opposition spoke for about 45 minutes, and that none of his questions was answered by the Chancellor of the Exchequer? Did yesterday's precedent decide the method by which private notice questions will be taken in future, or is it merely an example of the abuse of the private notice question procedure by the Front Benches?
Mr. Speaker: I think that I have said all that I am able to say about that. The House fully understands the situation.
Mr. William Ross: On a point of order, Mr. Speaker. I wish to return to the point of order raised by the hon. Member for Moray (Mrs. Ewing). Since the Budget was delivered under a private notice question, are we still operating under that procedure and will the vote on Monday be taken on the basis of the private notice question?
Mr. Speaker: Was the hon. Gentleman not here yesterday?
Mr. Ross: I was.
Mr. Speaker: Well, perhaps the hon. Gentleman did not hear what I said. When the Leader of the Opposition had completed his question, I said that since the subject of the private notice question was debatable on the resolutions I would take no further questions. The Chairman of Ways and Means then took the Chair and put those resolutions to the House.

BILL PRESENTED
  AMUSEMENT MACHINES (PROTECTION OF CHILDREN)
  Mr. Patrick Thompson, supported by Mr. Roger Gale, Mr. Andrew Bowden, Mr. Tony Favell, Mr. Conal Gregory, Mr. Charles Irving and Mr. Simon Coombs, presented a Bill to empower local authorities to prohibit in their area the use by children of amusement machines: And the same was read the First time; and ordered to be read a Second time upon Friday 5 May and to be printed. [Bill 100.]

  STATUTORY INSTRUMENTS, &c.
  Mr. Speaker: With the leave of the House, I will put together the three motions relating to statutory instruments.
  Ordered,
  That the draft Coal Industry (Restructuring Grants) Order 1989 be referred to a Standing Committee on Statutory Instruments, &c.
  That the draft Merchant Shipping (Weighing of Goods Vehicles and other Cargo) (Application to non-UK Ships) Regulations 1989 be referred to a Standing Committee on Statutory Instruments, &c.
  That the draft Merchant Shipping (Loading and Stability Assessment of Ro/Ro Passenger Ships) (Non-United Kingdom Ships) Regulations 1989 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Dorrell]

  Safety in Children's Playgrounds
  3.41 pm
  Mr. Robert G. Hughes: I beg to move,
  That leave be given to bring in a Bill to introduce compulsory safety standards for equipment, layout and surface in children's playgrounds.
  Every parent in the country and anyone who has ever taken a child to a playground knows precisely why the Bill is necessary. They also know that the problems can be substantially solved. They know that in many playgrounds in Britain their children are at risk. The playground to which I take my daughter is dangerous. When I say that it is dangerous, I mean that it has broken tarmac, pieces of metal sticking out of the tarmac and deplorable standards of maintenance.
  The Consumers Association says that this matter is one of the most important concerns of its members. It is an important concern of all parents in this country.
  A playground is different from any other place where children might choose to play because it sends out signals of safety. The National Playing Fields Association says that the presence of equipment acts as a signal or signpost saying, "Come in, you can play safely here." Therefore, where play equipment is provided there is a duty of care upon the people providing that equipment to ensure that it is safe. Regrettably, that is not the case now.
  I am certain that hon. Members of all parties care about safety in children's playgrounds and wish to see the highest possible standards. Much progress on setting the standards has been made over the past few years and British standard 5696 gives comprehensive guidance on the design and layout of playground equipment. A new British standard awaiting publication sets out standards for impact-absorbing surfaces. Those documents are commendable, and when they are in operation they make playgrounds safer. The problem is that the British standards are not usually implemented.
  Over a year ago the Consumers Association inspected 139 playgrounds in three representative areas. It records that there has been some improvement over the 12 years since its previous survey. However, it found that our children's playgrounds are not as safe as they should be. Seven out of 10 playgrounds have hard surfaces under swings, climbing frames and slides. More than one third have badly placed equipment such as swings placed in the entrance to the playground or squashed between climbing frames. That means that children are at risk from colliding with equipment or each other. In two of the three areas inspected, half the swings, roundabouts and other equipment needed attention. In the other area, that applied to one third.
  The estimates of the number of accidents caused in our playgrounds vary. The Consumers Association estimated that last year 250,000 incidents occurred in playgrounds causing injuries of all types. Clearly there is some concern in Government, and the Department of Trade and Industry has been collecting statistics. I understand that, when the statistics are published next month, they will show that each year in playgrounds there are 70,000 accidents sufficiently serious to require attendance at hospital.
  The Department responsible for play is not the Department of Trade and Industry, but the Department of the Environment. It is of some significance that, when I

  415
  spoke to officials yesterday, they told me that they were unaware that the Department of Trade and Industry was collecting statistics. Sadly, the concern of the Department of Trade and Industry does not appear to be shared by the Department of the Environment. I find that unbelievable.
  I find it unbelievable that officials at the Department of the Environment tell me that there is no hard evidence about accidents or types of accidents and that everything they see and hear is anecdotal. That is especially difficult to believe if one looks at Occasional Paper 2/76, "Children's playgrounds", published by the Department of the Environment. I shall read the opening words:
  "Nobody knows how many accidents there are in children's playgrounds—but there may be as many as 150,000 a year treated by doctors and hospitals."
  It seems that the Department knows that there is a problem, but does not want to do anything about it.
  I have one request to make of an audience wider than this House. I ask people to provide the Department of the Environment with the information that it claims it does not have.
  Mr. Gerry Steinberg: What about money?
  Mr. Hughes: I shall come on to money in a minute.
  I ask people to provide the Department of the Environment, either through me or their Member of Parliament, with information about accidents in playgrounds. Let us find out about the record and the hard evidence and put on pressure to ensure that the Bill is passed.
  The time scale for introducing the Bill must be as short as possible, but I recognise that a substantial amount of money is involved in implementing safe surfaces and proper layouts in playgrounds. I recognise that money will have to be found over a period, so the Bill will set out a schedule under which the Secretary of State for the Environment will consult and produce a statutory code of practice, probably similar to the existing British standard and the draft British standard. The code of practice will be
  416
  compulsory for new playgrounds and over five years, I suggest, compulsory in all playgrounds. I do not under-estimate the fact that money is needed to back up this proposal, but that money must be made available.
  I want to thank the people who have helped me to put together the information for the Bill. Apart from a number of hon. Members of all parties, I want to thank the National Playing Fields Association, the Consumers Association, Mr. Graham Tipp, who wrote the draft British standard, the playground equipment manufacturers and the Association of Play Industries. They have given me great help and encouragement. I also want to thank the many hundreds of parents who have written to me and other hon. Members expressing their concern about this matter. I believe that the Bill already commends itself to the nation. It has wide, all-party support, and I commend it to the House.
  Question put and agreed to.
  Bill ordered to be brought in by Mr. Robert G. Hughes, Mr. Paul Boateng, Mr. Robert B. Jones, Mr. Timothy Kirkhope, Mr. Roger Knapman, Mr. Ian McCartney, Mrs. Gillian Shephard, Mr. Ian Taylor and Mr. Matthew Taylor.

  SAFETY IN CHILDREN'S PLAYGROUNDS
  Mr. Robert G. Hughes accordingly presented a Bill to introduce compulsory safety standards for equipment, layout and surfaces in children's playgrounds: And the same was read the First time; and ordered to be read a Second time upon Friday 21 April and to be printed. [Bill 99.]

  ROYAL ASSENT
  Mr. Speaker: I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified Her Royal Assent to the following Acts:

  Consolidated Fund Act 1989.

  Elected Authorities (Northern Ireland) Act 1989.

  Prevention of Terrorism (Temporary Provisions) Act 1989.

Orders of the Day
  WAYS AND MEANS
  Order read for resuming adjourned debate on Question (14 March].

  AMENDMENT OF THE LAW
  Motion made, and the Question proposed,
  That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance; but this Resolution does not extend to the making of any amendment with respect to value added tax so as to provide—

  (a) for zero-rating or exempting any supply;

  (b) for refunding any amount of tax, otherwise than in a case where the amount has been paid by reason of a mistake;

  (c) for varying the rate of that tax otherwise than in relation to all supplies and importations; or

  (d) for relief other than relief applying to goods of whatever description or services of whatever description—[Mr. Lawson.]

  Question again proposed.

  Budget Resolutions and Economic Situation
  [Relevant documents: European Community document No. 8887/88, Annual Economic Report 1988–89 and the unnumbered document, "Annual Economic Report 1988–89" (final version as adopted by the Council).]
  3.49 pm
  Mr. John Smith: Yesterday the Chancellor of the Exchequer presented his Budget for 1989 without a word of apology for the damage done to our economy and to our society by the Budgets—now totalling six—for which he has been responsible. Last year we had a Budget for the rich. It was the most unfair redistribution of income and wealth that has occurred this century. However, it was also more than that: it was foolish as well as divisive and unfair. As is now startlingly clear, it was manifestly wrong in its assumptions about the economy and foolishly complacent about the policies it promoted.
  The Chancellor was warned by the Opposition and by a few voices elsewhere about the dangers of a deteriorating balance of payments deficit on the current account. His response was to predict—in one of the most massive failures of prediction that has been offered to the House—that the deficit for 1988 would be £4 billion. We now know just how wrong he was. The outturn was a deficit of well over £14 billion, and the Chancellor confirmed that he expects the deficit to be just as bad this year. In an interesting insight on his own embarrassment, the Chancellor did not state the actual figure. Almost as if he could not bring himself to utter the words "£14·5 billion", he took refuge in the circumlocution of saying that the current account deficit would remain at the same level as last year.
  The Chancellor's forecasts for the trade deficit are worse than ever before, but they may still be an under-estimate. The latest trade figures for January are running well ahead of the forecast that the Chancellor gave the House only yesterday. The deficit in manufactured goods for last year was in excess of £20 billion. I am forced
  418
  to observe that the surplus—not the deficit—in the balance of trade in manufactured goods when the last Labour Government left office was over £3 billion.
  We hear a little less today, but occasionally, in tones of fading echoes, we hear about the economic miracle wrought by the Government. It could, of course, be thought to be a miraculous achievement to turn a £3 billion surplus in manufactured goods into a deficit of £20 billion, all within a decade in which the Government gained the enormous windfall of £78 billion of North sea oil revenues, but, unfortunately, it would be a miracle in the wrong direction. The truth is that it is the Government's pretensions, their glosses on the truth, the hype that modern advertising has perfected to an alarming degree and the absurd claims and exaggerations, which are so faithfully repeated by acolyte organs of communication, that are miraculous. The reality is depressingly not so good.
  Let us take as examples three critical and indisputable facts about Britain's economy. We have the highest balance of payments deficit in our history, the highest interest rates in the industrialised world and, with the exceptions only of Greece and Portugal, the highest rate of inflation in the European Community. We clearly have the highest rate of inflation among the G7 countries.
  However, let us cast our minds back to just one year ago—almost a year to the day. Was there a hint of the danger ahead from our intrepid navigator, who was too busy moving the best furniture in the ship into the first-class cabins to notice the directions in which he was heading? There was not a word. Even after he had been warned in our debates on last year's Budget, in his reply the Chancellor complacently affirmed that we had an economic miracle.
  There was no talk then of a soft landing or a hard landing. I suppose that some perception of reality must have penetrated the Treasury over the year, as it now recognises that there must be a landing. However, if we are still involved in an economic miracle, it is difficult to understand why we do not keep on flying. Perhaps we are landing just to refuel or to change the pilot, or perhaps—even more likely—to give an extra seat in the cockpit for Sir Alan Walters.
  When, in the period between the Budget of 1988 and now, it became clear that the Chancellor had gravely underestimated the boom in demand that the huge expansion of credit and his irresponsible tax handouts to the rich had caused, he started the relentless increase in interest rates that moved up from 7·5 per cent. to the current 13 per cent.—and there he is stuck. Interest rates have been lowered on or shortly after the Budget for yearspast—it is almost an annual ritual—but there has been no announcement of a cut in interest rates this year, nor is there likely to be.
  The Chancellor dare not. Higher interest rates are the Lawson risk premium that must be paid to the foreign holders of the short-term money which finances the balance of payments deficit for which this Chancellor is responsible. They are the beneficiaries of the Chancellor's repeated rounds of one-club golfing. However, as is painfully clear, the losers are industry and the British people as the cost of living soars. British industry is saddled with an uncompetitive exchange rate and higher costs for investment as it seeks to compete in the world market place. Industry is being urged to prepare for 1992 with one arm tied behind its back by its own Government.

  419
  Home owners have borne the brunt of the Chancellor's chosen instrument of credit control. They have seen any tax benefits that they received in last year's Budget vanish like snow from a dyke. To be fair, not all those who received tax cuts are worse off—the rich are still well ahead. They have so much that they can finance any increase in mortgage payments—those of them, of course, who need mortgages.
  Let us consider those with more modest means. For the vast majority of home owners their mortgage payment is by far their largest domestic outgoing. A family with two children on £12,000 per year—£240 a week—received £12 per month in tax reductions last year. If they had a modest mortgage of only £25,000, their monthly repayment is up by £42. Last year the Chancellor with one hand gave them £12 and in the course of that year they were relieved of that and suffered an extra penalty of £30 per month. The Chancellor gives with one hand and then takes back with the other. It is a use of the invisible hand that even Adam Smith may not have envisaged.
  I state those figures in a moderate way, because I know that my right hon. and hon. Friends will tell me of constituents who pay £60, £70 or £80 more in mortgage repayments per month—and they are right. I gave my example to show how at modest levels of income and of mortgage the last Budget was a boomerang.
  The Chancellor described his Budget last year—I noticed him in the press doing the same this year—as a milestone, but for the majority of people in Britain the Lawson milestone has become a millstone around their necks. This year's Budget offers no relief, because 1989 will be another year of mortgage misery for millions of home owners.
  Of course, the high interest rate—the Chancellor's sole instrument to curb demand—increases the cost of living and makes the inflation rate worse. It is little wonder that the Treasury would like to fiddle the figures and take mortgage costs out of the retail prices index. But mortgage bills consume personal income just like any other price rise. The Chancellor constantly makes utterly spurious comparisons with other industrialised countries that do not include mortgage costs in their calculation of retail prices. However, the pattern of home ownership in those countries is very different and other forms of housing costs—usually rents—are taken into consideration in their calculations.
  It is invidious of the Government to disclaim the inflationary effects of increased mortgage payments; and offers precious little comfort for hard-pressed home owners this year. The truth is that, after a decade of Conservative rule, the Prime Minister's anti-inflationary rhetoric is hollow. Her hype about zero inflation is exposed as humbug, and her Government provoke, not prevent, a spiral of rising prices.
  The Chancellor's forecast of the rate of inflation has proved only slightly less reliable than his forecast of the trade deficit. Last March he said that inflation would be 4 per cent. Last September he told us that there was only a "temporary blip". But yesterday he confirmed that inflation is 8 per cent. and, even on his own estimation, it will stay high for the whole of 1989. According to the Chancellor, it will fall to 5·5 per cent., which I think even he might view as being relatively high.
  420
  To make matters worse, the Government themselves have created those inflationary own goals. [Interruption.] I hope that Ministers will pay attention, because this matter is one for which they are uniquely responsible. The Ministers seated opposite me on the Conservative Front Bench are responsible for heavy extra charges for water, electricity, public transport and National Health Service prescriptions. Those price rises sharply increase the cost of living. It is within the power of the Government not to have caused them and to reverse them. The Government are responsible for a very large part of the inflation from which we suffer.
  It was no doubt for that reason, among others, that the Financial Times commented:
  "Inflation is simply a headache for Finance Ministers who get things wrong."
  As the United Kingdom's inflation rate surges upward. the Chancellor's headache is getting worse. One might imagine that we suffer from a world contagion, but if one examines the inflation rates of competitor and analogous countries one realises that our inflation is significantly higher than theirs. We are not receiving inflation in some contagious way from those other countries, and the Chancellor has had the good fortune to be in office during a period of remarkably low commodity prices. Inflation in this country is a home-grown phenomenon—and we are looking at some of the gardeners on the Government Benches.
  The Chancellor of the Exchequer is a disillusioned monetarist who displays no real understanding of the contemporary causes of inflation. [Laughter.] The Chancellor may laugh, but I can easily demonstrate the extent of his lamentable ignorance. Inflation can either be demand-led or pushed by rising prices. The Government, remarkably, have achieved it with both. The credit boom and last year's tax cuts allowed demand to surge beyond the capacity of industry supply, creating bottlenecks and skilll shortages. Meanwhile, rising charges for public utilities have added price-pushed inflation to fuel the problem even more.
  In a celebrated phrase, the Chancellor said that inflation would be his "judge and jury". Let us, in an exercise of charity, overlook the Chancellor's attempts to fix the evidence by arguing that mortgages should be removed from the retail prices index. However much he wriggles, he will be unable to avoid the verdict. It is not for us to suggest an appropriate sentence for the criminal, because the Prime Minister is about to inflict a very severe punishment. Few of us would relish the prospect of daily tutorials in economics from Sir Alan Walters.
  Mr. Tim Smith: Is there not an element of being wise after the event in all of this? Does the right hon. and learned Gentleman recall the policies that he advocated in the House on 5 November 1987 when, on an Oppositon motion, he called for significant cuts in interest rates and increases in public spending? Is it not clear that, if those policies had been followed, interest rates and inflation would be back at the levels that we associate with the last Labour Government?
  Mr. Smith: I suppose that the Chancellor might be wiser after the event of his daily tutorials from Sir Alan Walters. I shall answer the hon. Gentleman's question very directly. Neither I in any speech, nor the Opposition in any motion, commended the Chancellor's credit boom and his irresponsible relaxation of credit. We voted against his

  421
  irresponsible tax cuts for the rich. As we are talking about being wise after the event, I ask the hon. Member for Beaconsfield (Mr. Smith)—who no doubt talked about zero inflation—now that inflation is running at 8 per cent., who is wise after the event?
  The Chief Secretary to the Treasury (Mr. John Major): It is within my memory and that of the right hon. and learned. Gentleman that on "Newsnight" last night he expressly denied that just after the stock exchange crash he called for further public expenditure and tax cuts. My hon. Friend the Member for Beaconsfield (Mr. Smith) mentioned a motion moved by the right hon. and learned Gentleman, and I have several press releases in his name suggesting precisely that. Perhaps he would care to withdraw.
  Mr. Smith: The right hon. Gentleman knows perfectly well that I said I was in favour of the small reduction in interest rates that was made at that time. That was made perfectly clear, and it does not do the right hon. Gentleman or the House any credit for him to try to change chat. We can look at the transcript of the television interview.
  Mr. Major: The right hon. and learned Gentleman is wriggling.
  Mr. Smith: Treasury Ministers are experts on wriggling.
  I remind the hon. Member for Beaconsfield that in the debate to which he referred massive public expenditure was called for by one of the leading apologists for the Government on the Government Back Benches.
  Of course we have asked for increases in public expenditure. If well-planned increases in public expenditure had been carried out as an alternative to the misguided tax cuts made in last year's Budget, we would be able to spend today, but because the Government failed to spend we now have the ludicrous position of a Government with a surplus of £14 billion or £15 billion who are frightened to spend a penny piece of it.
  Having fuelled inflation, the Chancellor now finds himself stuck with the consequences. Surely it is clear that Britain needs to invest. It needs to invest more in education and training to reduce the skill shortages by which many British companies are harmed. It needs to invest more to improve roads and railways to ease congestion, reduce pollution and promote safety. We need to spend more on the National Health Service to retain more qualified nurses and improve the quality of health care.
  Every opinion poll shows that the British people want better roads, hospitals and schools. All the evidence shows that this would be good for the British economy. Above all, we need to invest in the talents of our people so that Britain produces quality goods that other countries want to buy. As we approach the 1990s, we need an economic miracle if we are to compete successfully against the Germans, Japanese and Americans in the world market place.
  Labour Members make no apology for saying—we constantly insist on it—that our priority must be investment in training, education, research and regional development. The Chancellor and his fellow Ministers fail to understand that such public investment is non-inflationary and counter-inflationary. Investment that releases bottlenecks in skills is clearly counter-inflationary.
  422
  Investment in the regions, where there are unused resources and unemployed people, would certainly be non-inflationary.
  Public investment is not only vital to strengthen the economy but, for most of us, it is the key to improving the quality of our lives. Across the range of public services—health, education, water, the environment and transport—the effects of under-investment and penny-pinching over the years of this Conservative Government have reduced quality, safety and efficiency.
  There are one or two items in the Budget that we welcome. Some 10 years after it was promised, the Chancellor has abolished the earnings rule for pensioners. He has given a tax preference to the use of lead-free petrol. He has reduced national insurance contributions at the lower end of the earnings scale. [Interruption.] It is of particular benefit to people on the lower earnings scale. Of course it helps people throughout the earnings scale, but perhaps some of them do not deserve as much benefit as those at the bottom end of it.
  The Chancellor of the Exchequer (Mr. Nigel Lawson): The right hon. and learned Gentleman is being censorious.
  Mr. Smith: The Chancellor says that I am being censorious, but I am only being fair. I have old-fashioned notions about relating taxation to the ability to pay. I can tell the Chancellor that I do not mind being censured for holding those views; indeed, I am rather proud to accept such censure.
  The Chancellor should have done much more for the lower paid. He increased income tax personal allowances by the bare minimum he was obliged to give, as opposed to the minimum he dared to give, and by an amount less than the present rate of inflation, and below the increase in average earnings. As a result, as he knows well, the proportion of income paid in income tax, even for the lowest paid, will increase.
  For many others, the Chancellor has done nothing at all. The freezing of child benefit at £7·25 a week is a scandal. Child benefit replaced the children's tax allowance, which would have been updated every year if the Conservatives had kept to an all-party agreement to do so.
  While we are on the subject of taxation, I should say that one of the more sedulously spread myths of this Administration is that the tax burden has been reduced. It should be well enough known that the burden of tax as a percentage of national income is substantially higher now than it was before the present Government came to office. But I regret to say that that is still not widely enough appreciated, and I am always on the lookout for pieces of evidence in the presentation of the Government's own statistics that reveal this important fact yet again. I found one of some interest on page 18 of the "Financial Statement and Budget Report"—the Red Book. In table 2.5 the Government approached this matter by assessing non-oil taxes and national insurance contributions as a percentage of non-oil-money GDP. They can do it any way they like, but it is the same question that is being asked: what percentage of income is going on taxation?
  We discover that, on the basis of this analysis, the tax percentage of GDP in the six years of the present Chancellor's period of office has moved from 37·75 to 37·5—a reduction, over six years, of 0·25 per cent. The same table tells us helpfully that in 1978–79 the percentage,

  423
  under the Labour Government, was 34·25. Clearly the Chancellor has some way to go to catch up with the percentage under the last Labour Government. Indeed, at this rate of progress—one quarter of 1 per cent. every six years—it would take the Chancellor 78 years to reach that level. Perhaps I should counsel the Chancellor against an excess of prudence and caution in this matter.
  When we look at the effects of these tax changes and at the failure to increase benefits, we see how sad they are for many people in this country. Every time the Conservatives refuse to uprate child benefit they deny even modest help to the poorer families. We proposed that the Chancellor should increase child benefit to £8·35—what it would have been if it had been increased in accordance with inflation. We said that he should also increase personal income tax allowances above the increase in earnings, particularly for the low paid, and make radical reforms in national insurance contributions to make them fairer. Had he done so, a family with two children, earning £190 a week, would have gained over £6 per week—and it is worth remembering that nearly half the wage earners in Britain earn less than that amount. That would have been a real help to the lower-paid.
  Of course, the living standards of the most vulnerable people in our society will fall still further this year because the Chancellor has chosen to increase pensions and unemployment benefit by less than 6 per cent., even though, as he told us yesterday, inflation will reach 8 per cent. But it is hardly surprising that this Government overlook the less well-off. Last year the Budget was followed by the savage cuts in social security benefits caused by the new regime for income support and housing benefit. Regrettably, the effects of that continue to be with us.
  Many pensioners receiving transitional payments, which were to protect them from some of the effects of these changes, will receive no net increase in payments this year. Their transitional addition will be reduced by the amount of any uprating. My hon. Friends and I see such people at our surgeries every week. I had an unfortunately large collection at my most recent surgeries. For them, the uprating will be not just insufficient—it will be non-existent. They will have to face the relentless rise in prices caused by 8 per cent. inflation, without any help at all from the Government.
  But there is one proposal, which was mentioned only briefly by the Chancellor yesterday and with which we shall deal when we consider the Finance Bill, which we believe to be not only wrong but grotesque. I refer to the strange idea that the taxpayer should find a subsidy for private medical insurance for people over retirement age.
  It may be that that was not the Chancellor's idea. There was a rumour when it emerged during the health review that it was being resisted by the Chancellor and the Secretary of State for Health. But, as we know, resistance to the Prime Minister does not last long in this Administration. In what we might well imagine as an exercise in the adopted royal perogative, the gentlemen concerned would have been told, "We have decided." In an exercise of a distinctly non-royal we, they would conclude, "We had better do as we are told." I am confirmed in the impression that the Prime Minister was
  424
  the author of the scheme because, after all, she is one member of the Government whom we know could benefit personally from it.
  I confess to having listened with some impatience over the years to lessons in the virtue of targeting benefits from the Prime Minister, the Chancellor and nearly every occupant of the Government Benches, but I confess that it is not immediately evident to my hon. Friends or to me that we should subsidise from our taxes the private medical insurance of people such as the Prime Minister who are already well provided for.
  Mr. Ian Taylor: Since many thousands of trade unionists benefit from private health insurance, why is the right hon. and learned Gentleman trying to deny pensioners the same rights?
  Mr. Smith: As far as I know, neither trade unionists nor non-trade unionists have been the beneficiaries of tax privilege in pursuit of private medical care until this suggestion was made in the Budget.
  My constituents, many of whom, I am sorry to say, are in the poor category, when they apply for income support or housing benefit are subjected to the most rigorous tests of income and capital. For even small and modest amounts of savings, they are completely excluded from any assistance from the taxpayer because, we are told, benefits must be strictly targeted.
  Why does the same principle not apply in this case? What is the justification for an open-ended subsidy for private medical care. Bear in mind that we are talking about payments made not simply by pensioners but by those who make them on their behalf, many of whom will be paying tax at the higher rate. Why should the rest of us who pay our taxes and depend, and are happy to depend, on the NHS for our medical care subsidise by 40 per cent. the private medical bills of the hon. Gentleman, the Prime Minister or anyone else in Britain?
  No test of income or capital is applied in this case. There is no invidious inquiry into means. We know that every time Conservatives want to advance their own interests they forget about targeting, particularly when it helps the better-off and the object is privilege. Indeed, the arrangements are extremely convenient. People do not even have to fill in a form to ask for tax relief. According to BUPA advertising in today's newspapers, it will be deducted directly and the Treasury will then pay. That advertisement may be familiar to the Chancellor. It is a slightly unfair depiction of the right hon. Gentleman—
  Mr. Neil Kinnock: Sumo Lawson.
  Mr. Smith:—as he wrestles with his difficulties. All I can say is that he is in this pickle because the Prime Minister insisted that this particularly daft scheme be put into his Budget.
  We know that this is not a Budget of much substance. None the less, it is highly revealing. It reveals how fearful and defensive the Chancellor has become as he contemplates the results of his misguided policies. He has been forced to promise to maintain high interest rates for as far ahead as he can see. But with falling growth, rising inflation and a worsening deficit in our overseas trade, our economy is clearly not under wise or prudent supervision.
  The Chancellor yesterday did not dwell on the perils which lie ahead, but he knows only too well the dangers of being dependent on the good will of the foreign holders of

  425
  short-term money, whose financing of the balance of payments deficit he requires to secure by his policy of high interest rates, and on whose appreciation of their own interests the future of sterling depends.
  This country has, under Conservative rule, not only seen the dissipation of North sea oil revenues which could have been used to rebuild our industry and achieve civilised standards of service and opportunity; we have also seen this country move from a position of oil strength to a position of dependence on short-term hot money. For that unfortunate outcome the Government will he held to account.
  4.21 pm
  The Chief Secretary to the Treasury (Mr. John Major): This is my right hon. Friend's sixth Budget. In these Budgets his measures have dramatically improved the supply performance of the economy and simplified the corporate and income tax system to an extent that few people anticipated. He has reduced the rates of tax and the number of taxes. He has abolished more taxes than any other Chancellor this century. He has reduced tax distortions and tax breaks and moved steadily towards a much simpler and more efficient tax structure. No Chancellor for generations has so reformed our fiscal structure, and that work has continued in this Budget.
  The right hon. and learned Member for Monklands, East (Mr. Smith) said, correctly. that the tax burden has gone up. He is right about that, and I will tell him why. It has gone up because we are repaying Labour's borrowing—[Interruption.]—which, had we not done so——
  Mr. Kinnock: Really!
  Mr. Major: The Leader of the Opposition would learn something if he listened; it would be a novelty for him.
  As I was saying, had we not done that, it would today amount to a PSBR of £25 billion in today's terms. That is not a burden that we are prepared to have and to pass on to the next generation, even though Labour Members were prepared to do so.
  The right hon. and learned Member for Monklands, East may not believe it, but perhaps he does not understand these matters. Indeed, he has as much likelihood of understanding how the economy works as Donald Duck has of winning Mastermind—[Interruption.] I see the hon. Member for Glasgow, Garscadden (Mr. Dewar) leaving the Chamber. If that Donald returns, he at least will be extremely welcome.
  The right hon. and learned Member for Monklands, East has noticed none of these developments. He has also ignored many of the effects of the changes that have been brought about—the increased growth, the dramatic increase in investment, the greater prosperity, the rise in the number of people in work and the falling numbers of people who are unemployed.
  Mr. Harry Ewing rose——
  Mr. Major: I will give way later in my speech.
  Mr. Ewing rose——
  Mr. Major: The hon. Gentleman will have an opportunity to speak later. I am anxious to make some progress now.
  Mr. Ewing rose——
  Mr. Speaker: Order. The hon. Member for Falkirk, East (Mr. Ewing) has been a Member for a long time. He knows the rules.
  Mr. Major: The hon. Gentleman has been here a long time. We welcome his presence and I promise to give way to him later.
  The right hon. and learned Member for Monklands, East has been disparaging about the Budget. He thinks—I believe he has said so in explicit terms—that it is a missed opportunity. It is far from that. It is a prudent Budget, as my right hon. Friend said, and it is the right Budget to help bring down inflation, with the strong fiscal and monetary stance that the Government now have.
  It is a Budget that is good for savers, is good for those in work—with a £3 gain for the vast majority of employees from the national insurance changes, is good for the elderly, is good for small companies and is good for the environment.
  When in office, the Labour party produced Budgets—several a year, as I recall. People combed through them to see if anybody did not lose. One has to comb through this Chancellor's Budget to find someone who does lose. That is the significant change, and most people understand that only too well.
  The right hon. and learned Member for Monklands, East had some critical things to say about my right hon. Friend's stewardship. Of course, it is the right hon. and learned Gentleman's job to be critical, and he spares no effort in being critical. He makes even less effort in being accurate. He accuses my right hon. Friend of losing control of demand, yet I return to a point that we have debated before. After the stock exchange crash, there were genuine fears of a widespread recession. At that time, my right hon. Friend relaxed monetary policy, as everybody advised him to do, but the right hon. and learned Member for Monklands, East and his colleagues urged both cuts in interest rates and large increases in public expenditure. If we had done that—we did not increase public expenditure—the growth in demand about which the right hon. and learned Gentleman now talks would have been far worse.
  The right hon. and learned Gentleman has forgotten that. Indeed, he has forgotten it to such an extent that last night on "Newsnight" when I specifically asked him, he categorically denied having called for public expenditure increases and said that he had called only for interest rate cuts. As my hon. Friend the Member for Beaconsfield (Mr. Smith) pointed out, the right hon. and learned Gentleman not only called for increases in public expenditure but moved a motion to that effect. [Interruption.] Last night the right hon. and learned Gentleman denied it. Last night he neglected to remember—I remind him in case he has forgotten—that he had twice issued news releases calling for increased public expenditure and increased demand:
  "Smith Urges Action to Avert Recession"
  and
  "Smith Calls for Boost to Real Economy".
  That was immediately after the stock exchange crash. If that action had been taken then, the growth in demand and inflation and the trade gap which the right hon. and learned Gentleman attributes to the crash would have been far worse.
  The right hon. and learned Gentleman's critcisms were met fairly and squarely yesterday in my right hon. Friend's Budget. My right hon. Friend explained the origin of our trade gap. Exports are at an all-time high, but imports

  427
  have risen much faster as a result of rapid growth in general and a massive investment boom in particular. It is interesting that fully three quarters of our imports of manufactures now consist of production and investment goods. Consumer goods are only a small proportion. The trade gap is not driven by a public sector deficit; it is investment led, and that investment is the source of future growth in production, exports and jobs. That is the difference between this trade gap and its predecessors, and the right hon. and learned Gentleman should understand that.
  Having explained the cause, my right hon. Friend the Chancellor explained the remedy. The right action has been taken. The only effective way to slow excessive demand is to put up the cost of borrowing. That worked before and it is working now. It will choke off inflation and the trade gap will in due course diminish, and meanwhile we have no difficulty in financing it. There is no credible alternative.
  The right hon. and learned Gentleman has also been criticial of my right hon. Friend's forecasts. He had some fun with them. That reminded me of something, and I wonder whether the right hon. and learned Gentleman remembers who said this in defence of Government
  forecasts of the trade gap:
  "Obviously these are matters which are extremely difficult to forecast. I do not think that getting them right or wrong is the prerogative of any particular Government."—[Official Report, 12 March 1979; Vol. 964, c. 18.]
  Does the right hon. and learned Gentleman remember who said that? I shall tell him. [An HON. MEMBER: "Disraeli."] It was not Disraeli. It was the Secretary of State for Trade in 1979—the right hon. and learned Gentleman himself.
  Mr. John Smith: Can the Chief Secretary tell me whether at any stage in my previous career I forecast a balance of trade deficit that was over four times wrong on a rate of inflation that was over twice wrong?
  Mr. Major: I can tell the right hon. and learned Gentleman what happened. As I recall, he was a very distinguished Secretary of State for Trade for five months. During that period, we moved from a surplus to a deficit, inflation rose by 3 per cent. and heaven alone knows what happened to export performance: it did extremely badly. Mercifully, the general election cut off the right hon. and learned Gentleman's career at that stage.
  Mr. Harry Ewing: I know that the Chief Secretary's hat is in the ring for the Chancellor's job. Given the choice that the Prime Minister must make, I would say, "Better the devil you know than the devil you don't."
  The Chief Secretary waxed eloquent about repaying the national debt. Will he make it clear whether it is now part of the Government's economic policy to repay the national debt rather than investing in education, research, industry, the Health Service, the environment and everything else that improves the quality of life?
  Mr. Major: I refer the hon. Gentleman to my right hon. Friend's Budget speech, in which he made it perfectly clear that our policy in the medium term was a balanced Budget but that it would take a period to achieve that balanced budget.
  428
  On public expenditure, the hon. Gentleman may care to recall that as a result of the public expenditure round last year there was a real increase of more than 3 per cent. in the priority programmes. That is a far more substantial increase than has taken place for many years and it was particularly well targeted. Capital expenditure rose—or, at least, it is to rise in the year beginning in April—by a record amount, particularly expenditure on the National Health Service. I should have thought that the hon. Gentleman would welcome that. [HON. MEMBERS: "Answer."] The position is as I have described it and as my right hon. Friend the Chancellor explained yesterday.
  The frankness revealed in my quotation from the right hon. and learned Member for Monklands, East is refreshing, although 10 years on it seems to have deserted him. As we saw a moment ago, when the right hon. and learned Gentleman talked about the growth of credit, his frankness is not all that has deserted him; his memory appears to have gone, or at least become selective.
  I set out our solution to the trade gap a moment ago, but what was the right hon. and learned Gentleman's solution? It was a dynamic solution. [HON. MEMBERS: "What about the Budget?"] I am coming to that: it is a very important Budget. The right hon. and learned Gentleman told the House—I shall quote him whether he is embarrassed by it or not——
  "We believe that the best way to do that"—
  to improve the trade gap—
  "is to engage the attention of the sector working parties".—[Official Report, 12 March 1979; Vol. 964, c. 9.]
  So that is it. All we need is a sector working party—no incentives, no productivity growth, no supply side reform, no firm fiscal or monetary stance, just a sector working party. Nor did the right hon. and learned Gentleman propose a specific remit for the working party. His ambitions were more limited. We had only to engage the working party's attention and the trade gap would disappear. Clearly, the right hon. and learned Gentleman believed in the smack of firm indecision.
  Mr. John Smith: Whatever the policies for which I was responsible—I remind the House that we then had a manufacturing trade surplus—can the right hon. Gentleman tell me why, if monetary discipline, supply side reform and so on are so wonderful, a £3 billion surplus 10 years ago has been reduced to a deficit of £20 billion?
  Mr. Major: The right hon. and learned Gentleman will have noticed that as a result of our policies over the past few years there has been a more dramatic rise in the living standards of people in Britain than we have experienced for many years, and that is the final indicator of the success or failure of Government economic policies.
  The right hon. and learned Gentleman proposed to the shadow Cabinet a shadow Budget package of tax cuts and spending which he costed at £3 billion. That was an odd piece of costing but I shall gloss over that for today. There is a curious feature about the costing of the £3 billion package. A day or so after unveiling that package of tax cuts and spending, the right hon. and learned Gentleman criticised my right hon. Friend's Budget of last year as the cause of the growth of credit and the trade deficit. That Budget cut taxes in the current year by £4 billion.
  If the right hon. and learned Gentleman believes that the £4 billion tax cut last year created the trade deficit, why did he propose in his shadow Budget a further £3 billion

  429
  tax cut this year? The logic of the right hon. and learned Gentleman's argument is that he should be clawing back last year's reductions, not proposing more.
  If he really believes what he has said in recent months, he should not have proposed that package, or, in doing so, he should have said that it would worsen the trade gap. But he did not say that. The truth is that the right hon. and learned Gentleman has been caught out. It is now perfectly clear that he knows that last year's Budget did not create the trade gap, despite all that he and his colleagues have said repeatedly in recent months. Because he knows that, the right hon. and learned Gentleman considered it prudent to propose a tax and spending package almost as large as last year's, and larger than my right hon. Friend's proposals this year. It simply illustrates beyond doubt the sheer brass-necked hypocrisy of what the Opposition have been saying in recent months.
  That brings me to the Leader of the Opposition and what he said yesterday.
  Mr. John Smith: What about your Budget?
  Mr. Major: I am referring to the right hon. Gentleman's speech on the Budget. Is the right hon. and learned Gentleman suggesting that the Leader of the Opposition did not mention the Budget? He said yesterday, and I agree with him:
  "Governments do not have their own money … Governments only have the taxpayers' money."—[Official Report, 14 March 1989; Vol. 149, c.315.]
  He then implied, although he did not say it explicitly, that the tax burden should be reduced by taking the basic rate down by 6p, to take it to the tax burden that he believed existed under Labour.
  I thought that we had found a convert in the right hon. Gentleman, but that feeling lasted only for a moment. Within minutes of allocating the surplus to cuts in the basic rate, the right hon. Gentleman was allocating it to increases in public spending. He went further than ever before and allocated all the surplus £14 billion to increases in public spending. What the right hon. Gentleman had described as the taxpayers' money did not stay with them for very long. It was soon snatched back to be spent by him. But he overlooked one thing. With Labour policies, that surplus would not exist in the first place to be snatched back.
  The electorate understand that very well. Labour is the party of high taxation. We are the party of low taxation and that is why we sit on this side of the House and Labour Members sit opposite and will continue to do so for a large number of years to come.
  Mr. John Home Robertson: Will the Minister give way?
  Mr. Major: In a moment.
  The Leader of the Opposition said that the Government had been a bonanza for the rich and that the top 1 per cent.—which presumably includes the hon. Member for East Lothian (Mr. Home Robertson) who sought to intervene—has gained £16 billion since 1983 and £26 billion since 1979 in cumulative tax cuts. But he did not say that the same top 1 per cent. will be paying a higher proportion of total income tax in 1989–90 than they paid in 1978–79. That means that they will have paid £5·75 billion more in taxation. If they were not making that contribution, the difference would have to be made up by the other 99 per
  430
  cent. of taxpayers. But that is the right hon. Gentleman's policy. The Opposition believe in increased taxation for everyone, as they repeatedly make clear.
  It is not only the top 1 per cent. who provide a higher proportion of the total tax take than they did in 1979. The top 5 per cent. were contributing 24 per cent. of the total tax take then and now they are contributing more than 29 per cent.
  Amazingly, the right hon. Gentleman tried to pose as the friend of the low-paid. He said that the Government has removed their rights. I shall tell the Leader of the Opposition about the rights that we have given the low-paid. We have given them the right to keep more of what they earn, and they will welcome that. We have reduced the basic rate of tax from 33p to 25p in the pound—and that is before the latest reform, which provides an extra £3 a week for most people in work.
  Mr. Home Robertson: The right hon. Gentleman talks about his concern for taxpayers. May I draw his attention to what the right hon. Gentleman for Henley (Mr. Heseltine) described as the Tory tax? Is he aware that poll tax forms are being delivered to households throughout Scotland this very week? What does the right hon. Gentleman have to say about the fact that people like me, as he so charmingly put it, will end up paying less in local taxation because of that Tory tax whereas people on lower incomes throughout Scotland this year and in England next year will be paying substantially more tax?
  Mr. Major: I will tell the hon. Gentleman why so many people in Scotland will pay so much in community charge—because of the reckless way in which so many Scottish labour authorities spend.
  My right hon. Friend's Budget——
  Mr. John Smith: I repeat the question put clearly by my hon. Friend the Member for East Lothian (Mr. Home Robertson), in case the right hon. Gentleman does not understand it. Why should people who are better off receive the same treatment as those who are much worse off? Can we have a straight answer to that question?
  Mr. Major: The majority of local government expenditure—[HON. MEMBERS: "Why?"] I am answering the question and the right hon. and learned Member for Monklands, East may learn something if he listens to my answer.
  The majority of local government expenditure has been met in the past, and will be met in the future, by central Government grant, which comes out of the progressive tax system. The balance is met from the community charge, and payment of this element should be according to the services received.
  My right hon. Friend's Budget this year falls between the most far-reaching tax reforms for a generation and the introduction next year of independent taxation for husbands and wives. [Interruption.] The Leader of the Opposition is welcome to intervene if he wishes.
  Mr. Kinnock: Get on with it.
  Mr. Major: I am tempted to say, "Temper, temper." You will never lead the country if you cannot control your own temper.
  Mr. Deputy Speaker (Mr. Harold Walker): Order. I have no aspirations to lead this country.
  Mr. Major: I beg your pardon, Mr. Deputy Speaker. No one would ever suggest that you would ever lose control of your temper, or anything else.
  As my right hon. Friend the Chancellor of the Exchequer promised, this is a prudent and cautious Budget. It makes no reduction in the overall tax burden and provides strong fiscal backing for a tough monetary stance. My right hon. Friend continues with the policies that have produced the strongest fiscal position of any leading country. As a result, we are forecasting a further fiscal surplus of £14 billion—that will be the third successive year of surplus. As a result of these cumulative surpluses over three years, we will have repaid 16 per cent. of public sector debt and saved £3,000 million in interest payments each successive year. That £3,000 million will be available for more productive purposes than paying interest on past debts, many of which were run up when Labour was in government.
  This strong fiscal position has been unmatched for decades and has enabled my right hon. Friend to promote several important themes which he has pursued steadily during his six years as Chancellor. The predominant theme continues to be tax reform, designed to improve and simplify the tax system, remove tax distortions and maximise the freedom of individuals and companies to spend their own money and organise their own affairs. In that context, the main reform in the Budget is to restructure national insurance contributions. We should be entirely clear as to what yesterday's reforms mean.
  At present, people earning just below the steps for each rate band face a reduction in take-home pay as a result of an increase in their earnings. For example, someone whose earnings were near the threshold of £115 who received an increase of £ 1 would, as a result of moving to a higher rate of national insurance, find his or her take-home pay reduced by £1·37. That is clearly unsatisfactory. My right hon. Friend's reform has entirely abolished two of the three steps and goes even further to help those on lowest incomes. He retained the first step of £43 income a week—the point of entry to the whole range of contributory benefits—but at a much reduced rate. The initial contribution has been reduced by 60 per cent.—from £2·15 to only 86p. That is the cheapest entry fee to the highest contributory benefits since the Beveridge system was introduced in 1948. By any yardstick, it must be the bargain of the century.
  The reform not only introduces this low cost contribution to benefits, but removes distortions and disincentives in the national insurance system and increases take-home pay for the clear majority of people in work by about £3 a week. Seventy per cent. of the total benefit goes to those earning less than average male earnings. The reform carries with it a substantial cost to the Exchequer of £2·8 billion in a full year. It provides a simple but well-structured system of contributions for the low paid.
  Mr. John Battle: The Chief Secretary has said that people will gain £3, but those who are also on family credit and housing benefits will have their benefits deducted and will therefore lose. Simply increasing wages in this manner does not free people from the poverty trap.
  Mr. Major: The hon. Gentleman is right about the impact on some benefits. As a result of the changes in National Insurance contributions, however, take-home
  432
  pay will rise by £3. If we took the hon. Gentleman's view we would never either reduce national insurance contributions or raise tax thresholds, both of which the Opposition are keen for us to do.
  Mr. A. J. Beith: By laying such stress upon the £3, the Chief Secretary has led many people to expect that they will be better off in terms of national insurance contributions. Will he confirm that someone earning £70 a week—which, by my standards and his, is surely low pay—will be only 21p a week better off?
  Mr. Major: Yes. The reason for that is that—with, I believe, the hon. Gentleman's support at the time—my right hon. Friend, to help those very same people, reduced the national insurance steps in 1985. People have already been paying reduced contributions. That is why I said that the vast majority will receive another £3—as I said, 70 per cent. of the total benefit.
  In his shadow Budget, the right hon. and learned Member for Monklands, East also proposed a reform of national insurance contributions, but his proposal was to abolish the upper limit on contributions. That would add massively to public expenditure on state earnings-related pensions in the long term—as I hope that he will acknowledge—unless the contributory principle was ignored, with a "shadow" upper earnings limit on pension entitlement and employees receiving nothing in return for higher contributions. The right hon. and learned Gentleman is a little unclear about that, but with a "shadow" upper earnings limit—which is presumably what he has in mind—nearly 2 million employees would immediately be worse off, with the person on about one and half times average earnings paying £3·75 a week more.
  My right hon. Friend's reform maintains the contributory principle and helps the low-paid without creating losers—a much sounder system. I hope, therefore, that the right hon. and learned Gentleman and his party will support it.
  Dr. David Owen: Surely the Chief Secretary is not defending the national insurance contribution on the contributory principle. The contributory principle is a fraud in NIC terms. Surely the next step must logically be to go a stage further in each successive Budget to bring the national insurance contributions and income tax into the same relationship.
  Mr. Major: I am afraid that I do not agree with the right hon. Gentleman, although I understand his argument and am familiar with the arguments in the Green Paper. I think that the contributory principle has much to commend it. The introductory entry fee is now very low at 86p, and I think it entirely right that we should sustain the principle now and in the future.
  If the Opposition support the national insurance changes, the possibility of a parliamentary novelty will be opened up—that is, the Opposition actually voting for a reform that puts more money into the pockets of those on modest earnings. They voted against cuts in the basic rate of income tax in 1979, 1987, and 1988, and we shall watch with interest to see how they vote on national insurance contributions this year.
  Another significant measure in the Budget is my right hon. Friend's pensions proposals. We believe that they will make an important contribution to simplicity and flexibility in pensions provision. The change follows the

  433
  overwhelming logic of previous deregulation policies to maximise freedom and minimise Government interference. The proposals effectively take the Government out of the business of artificially limiting pension arrangements, and will leave employers the freedom to offer their employees whatever pensions they see fit to offer. No longer will their decision be determined by the tax regulations of the Inland Revenue.
  The restriction that my right hon. Friend does propose is the limiting of tax relief to pensions based on earnings of £60,000, with full protection of existing rights, for existing members of occupational pension schemes. Their current arrangements will not be adversely affected. The £60,000 tax relief limit will be increased in line with inflation to ensure that it retains its value. Those earning more than that and others who find the Inland Revenue limits restrictive, will be able to receive a top-up pension without tax relief, which will not in future affect the tax privileges of the main scheme.
  Mrs. Maria Fyfe: On the matter of employers who would like to do something of benefit to their employees, why has the Chancellor not lifted the high burden of taxation on workplace nurseries? Does he not want to get more women back to work in Britain to fill the jobs gap? Does he not talk to the Secretary of State for Employment?
  Mr. Major: I understand the sensitivity of that issue, but it is predominantly a matter for employers, not for the tax system. We look to employers and employees to make those arrangements.
  Mrs. Fyfe rose——
  Mr. Major: I have answered the hon. Lady's question and I have nothing further to say to her on that issue. I have made it clear that we will not change that tax and that it is a matter for employers and employees.
  As a consequence of removing those artificial restraints——
  Mr. John Smith: The right hon. Gentleman was asked a straight question by my hon. Friend the Member for Glasgow, Maryhill (Mrs. Fyfe). He was asked to justify why workplace nurseries are the subject of taxation. That is a Treasury responsibility. Will he give us the answer?
  Mr. Major: It is a benefit in kind and all benefits in kind fall into that category. We are not in the business of dividing up benefits in kind in the arbitrary fashion proposed by the right hon. and learned Member for Monklands, East. It is not a' wise way to proceed.
  As a consequence of removing those artificial tax restraints, my right hon. Friend has also been able to make some other worthwhile changes in the pension regime. The rules affecting those who retire or leave early have been simplified and the arrangements for personal pensions and additional voluntary contributions have been improved. Contribution limits have been increased substantially for those over 35 and, for the first time, people will be able to manage their own personal pension investments. Taken together, those reforms will increase choice and reduce bureaucracy for employers and employees. I hope that these and earlier pension reforms will remove much of the complexity and mystery in pension provision.
  Last year, the Inland Revenue published a consultative document setting out three main options for reform of the
  434
  life assurance industry. As a result of the representations made, my right hon. Friend has accepted that reform was necessary but that it should be achieved within the existing system. The measures he proposes have three advantages: they remove current anomalies; they enable my right hon. Friend to reduce the rate of tax on policy holders' investment income from 35 per cent. to 25 per cent. and the rate of 30 per cent. on capital gains to 25 per cent; and they also enable him to abolish entirely life assurance policy duty. We believe that those measures will result in a fairer and more effective tax regime as well as removing uncertainty and anomalies and establishing a stable regime for a unique industry.
  The second theme that runs through this and previous Budgets is the Government's determination to widen the ownership of property and capital. In this Budget my right hon. Friend has proposed a number of measures to encourage saving and capital growth through wider share ownership. Ten years ago, share ownership by individuals appeared to be a dying habit. There were only 3 million shareholders of equities, and the number was dwindling. As a result, companies found it increasingly difficult to raise equity capital from individuals. All that has changed. Partly as a result of the extensive programme of denationalisation—that is what privatisation is—there are now 9 million shareholders, one fifth of the adult population. Becoming a shareholder in industry and commerce and building up capital is now much more commonplace, and that is a welcome trend.
  The Budget proposes a range of measures to give further encouragement to share ownership again building on schemes already in place. The most important of those is the personal equity plan scheme which is to be expanded by increasing the annual investment limit from £3,000 to £4,800 and by relaxing the limits on investment in unit and investment trusts. Furthermore, shares from new issues can now be held in a PEP. The scheme has been simplified and better tailored to small investors.
  A further characteristic of the Budget is that it removes a number of fiscal injustices and anomalies. The most obvious example is the ending of the cliff-edge steps in the national insurance system, but there are others as well. In particular, there are two measures which will remove anomalies affecting elderly people. First, we have fulfilled the single unredeemed pledge from the 1979 manifesto and abolished the pensioners' earnings rule. As a result, pensioners who choose to go on working will no longer be penalised for doing so. It is simply not wise to inhibit pensioners from working if they wish to do so. Overwhelmingly, they have a great deal to contribute and, in future, they will have every encouragement to do so if they wish.
  Secondly, we are reducing to well below 40 per cent. the marginal rate of tax in the short band of income where age allowance is withdrawn. That was the subject of many representations last year, not least from hon. Members who served on the Finance Bill Committee. I hope that the change will be generally welcomed. At the same time, we have extended the higher level of age allowance, which my right hon. Friend introduced in 1987 for all those aged 80 or over, to those aged 75 or over. As a result, those aged between 75 and 79 will be significantly better off, with a gain of £1·73 a week for a single person and £2·55 for an elderly couple. Moreover, three quarters of those in that age group will now pay no income tax at all. That is a welcome measure which matches the social security

  435
  increase in income support of £2·50 for individuals and £3·50 for couples over 75, which comes into effect in October.
  The Government's economic and fiscal objectives are clear, and the Budget reaffirms them. We wish to ensure growth without inflation and to minimise tax rates to enable the greatest possible degree of taxpayer choice. We do not believe that the Government know better than the taxpayer how to spend the taxpayers' money. We continue to move towards our objective of a basic rate of income tax of no more than 20p in the pound as soon as it is prudent to do so.
  By way of contrast, the Opposition are committed to increasing tax in every way they can. They are committed to increasing tax for basic rate taxpayers, abolishing the ceiling on national insurance contributions, increasing contributions by 9 per cent. on earnings over £17,000, imposing a wealth tax and much else. All that is well documented.
  In this Budget we have further reformed the tax system. We have helped pensioners by abolishing the earnings' rule. We have removed high marginal rates for those on low incomes by reforming national insurance contributions and further measures have been put in place to widen share ownership, including substantial improvements to PEPs. The taxation of pensions and life assurance has been modernised. All that has been done within a prudent and cautious fiscal framework in which we plan to make a further massive repayment of debt next year, thus providing a fiscal stance which will buttress monetary policy in its task of bringing downward pressure on inflation.
  Mr. Kinnock: The right hon. Gentleman has referred several times to the great virtue of using the Budget surplus to repay the national debt. Can he confirm that that will continue to be an objective of the Government, should they have surpluses, and that it will continue until the next general election and not be impeded by any desire that the Government may have to make a tax cut before the next general election?
  Mr. Major: Clearly, the right hon. Gentleman is aware of the danger to his party as the high-tax party and the support for us as the low-tax party. He is aware that we are enjoying the longest period of growth since the war, latterly combined with dramatic falls in unemployment. He does not care that our policies are working. The Budget sticks with our policies and I commend them to the House.
  Mr. Dennis Skinner: On a point of order, Mr. Deputy Speaker. You will be aware of the Royal Commission on standards of conduct in public life, especially as it applies to Ministers. I see that Rambo—the Chancellor of the Exchequer—is leaving. Recommendation No. 8052 says:
  "Ministers must so order their affairs that no conflict arises, or appears to arise, between their private interests and their public duties."
  In today's Evening Standard, there is an advertisement using a picture of Rambo—the Chancellor of the Exchequer. I wondered how much he had been paid for it, whether he had posed for it and whether he will give the money to charity. Is that where the manufacturing surplus
  436
  has done? Does the suggestion of enlarged breasts imply the use of steroids? Can you investigate the matter, Mr. Deputy Speaker?
  Mr. Harry Ewing: Further to that point of order, Mr. Deputy Speaker. That appears to be a very authentic picture of the Chancellor of the Exchequer. Can it appear on his security pass for circulating round the House of Commons?—[Laughter.]
  Mr. Deputy Speaker: Order. I do not accept any responsibility for anything that appears in the Evening Standard.
  5 pm
  Mr. John Evans: In my maiden speech in the Budget debate on 1 April 1974, I said:
  "I have always been puzzled by the mystique which has surrounded an annual Budget."—[Official Report, I April 1974; Vol. 871, c. 946.]
  Fifteen years and umpteen Budgets on, the only point that still puzzles me is why we still carry on with the pompous nonsense. But yesterday's Budget was not only the usual nonsense. It was at times boring nonsense, but more importantly, it was an affront to the impoverished in our society who have suffered so grievously at the hands of this Government and for whom this Budget does nothing. Nothing that the Chief Secretary to the Treasury has said this afternoon has changed my views about what the Chancellor said yesterday.
  It will come as no surprise to the Chancellor that my constituents in St. Helens have not welcomed the Budget. He knows well that the Government's policy does not put at the top of the agenda the interests of the low-paid, the unemployed and the poor, of whom there are, unfortunately, a disproportionate number in St. Helens. He knows that the interests of poor people take second place in his order of priorities to the interests of the rich, of whom there are disproportionately few in St. Helens. There is no need for argument; let us look at the facts.
  Last year, the Chancellor cut the highest rates of tax for each member of the wealthy elite in this country. He gave out more than £1·6 billion to people who were already swimming in cash. This year, another year of misery for the poor, he has the effrontery to give just a fraction of the poor a few crumbs from his 14 billion surplus in reduced national insurance contributions. He calls that benevolence. It is the height of audacity to suggest that this is a Budget for the low-paid.
  The litmus test of the honesty of the right hon. Gentleman's claims for this Budget is that the Government are, at this very moment, forcing through the Social Security Bill, which will force unemployed claimants to accept any low-paid, unskilled job which is offered to them, no matter how humiliating. Tory Ministers know that the people who will be forced to accept those low-paid, unskilled jobs will come from areas of the country such as mine. The Government have also made it clear that they intend to abolish the wages councils, the only protection for the low-paid in Britain and for hundreds in my constituency who are covered by wages council agreements. The Chancellor's effrontery almost beggars belief. Even the worst tinpot dictator could not conjure up a more reliable recipe for a low-wage and low-skilled economy in areas such as mine.
  In St. Helens, half the population are living on or below the poverty line. Almost one in 10 people, even on the

  437
  Government's corrupt unemployment figures, are still out of work. Hundreds more are on half-baked training schemes devised by the Government at minimum cost. Real apprenticeships are a thing of the past. Investment in manufacturing, on which the triumph of the north-west economy and this country's industrial success were built, is now stagnant. On the last available figures, the fall in north-western manufacturing investment shows a net loss of one-third since 1979–33 times the loss suffered in the south-east.
  Mr. Keith Mans: Does the hon. Gentleman agree that, although manufacturing in the north-west may have declined, that is more than compensated for by the huge increase in the service sector?
  Mr. Evans: I agree that there has been a savage decline in manufacturing industry, but the hon. Gentleman knows as well as I do that the jobs in the manufacturing sector were highly skilled, highly paid jobs. Unfortunately, some of the jobs created in the service sector are low-paid, part-time and unskilled.
  The United Kingdom's balance of trade in manufactures has been in deficit since 1983 and nothing in any of the Chancellor's past six Budgets has addressed the regional disparity which that has created. Almost 40 per cent. of manufacturing jobs in the north-west have disappeared since the Tory party took power—a third more than the loss in the south-east and Britain as a whole. The point is that the demand which he is now trying desperately to contain has been import-led and the consumer demand comes not from constituencies such as mine, but from the affluent south-east. He has done much to promote that demand by sweeping tax cuts for the rich. High interest rates are now hitting my constituents before they have even started to enjoy any economic upturn.
  We are told that the Budget deals with revenues. I shall talk briefly about the revenues in the pockets of some of my constituents. At the social security offices in St. Helens, the amounts paid to the very needy have dropped dramatically since the Government introduced the social fund. Those people will not be affected by the changes to national insurance contributions.
  At my advice bureau in Haydock last Friday night—significantly, the Prime Minister was in Haydock last Friday night, but was not speaking to my constituents about their problems—a 66-year-old widow produced her pension book to show me that in 1987, her weekly benefit was £42·34 a week, with the Department of Health and Social Security paying her rent and rates. In April 1988, her benefit increased to £45·75, but she then had to pay £4·87 for rent and rates. Her real income had slipped to £40·91—a drop of £1·43 a week. She will receive a rise in April and she had the counterfoils in her book to prove it. She will receive £46·10 a week—a princely increase of 35p a week. My elderly constituent, who is a sick woman, does not know which way to turn because she now owes more than £120 in rent arrears. I do not think that she will be interested in what the Chancellor offered yesterday.
  Last Saturday morning, in my St. Helens surgery, a 70-year-old diabetic, who had his left leg amputated last December and whose wife is crippled with arthritis, informed me that their total income for two invalids was £80·43 a week. He had just been informed that his rent and rates had been increased by more than £7 a week and they
  438
  simply could not afford to pay. I do not think that that couple will be interested in private medicine bonuses or personal pension equity plans.
  The 4,500 unemployed in my constituency—that is the official figure, and there are far more than that in reality—will not see any increase in their weekly revenues. What has the Chancellor done for them? He has given them almost 8 per cent. inflation, but, as a Billinge pensioner protested to me on Friday night, when pensioners receive their increase in April, it will be just 5·9 per cent., based on last September's inflation rate. It has not passed them by that wealthy admirals and judges have just received their annual increase index-linked at the full inflation rate.
  We are not defeatists or given to complaining for the sake of it in our region, but this Government have treated us economically like paupers in comparison with their attitude to the south-east. For all the millions of pounds spent on new roads for the south-east to ease its economic boom, pennies have gone to the north-west. Billions of pounds are to be spent on rail links in the south-east, linking the Channel tunnel to London, but apparently nothing will be spent linking the rest of Britain to the capital. That is utterly unacceptable.
  New businesses have been created in the north-west, but the growth rate over the past seven years has been just 7 per cent.—half that for the rest of the nation and lower than that of any other region according to VAT registrations and deregistrations. The number of retail outlets has fallen by 6 per cent. since 1980 and there has been double that fall in the number of units in agriculture.
  Living standards for those in the south-east have jumped by over 20 per cent. since the Government took office, but in the north-west we have not seen even half that level.
  The Government have no commitment to the regions. They have reduced regional assistance and grants by 55 per cent. in the past few years and virtually scrapped any coherent regional policy. What happened when the Prime Minister came to Merseyside last weekend? What hit the headlines? Another 1,000 workers were laid off on Merseyside. That is what Tory policy has meant to the north-west of England.
  Contrary to what the Prime Minister's propaganda machine tells us, the north-south divide not only still exists: it is still growing. We are two nations in Great Britain, and the figures prove it. Why could not some of the Chancellor's enormous surplus be spent on the many schemes that local authorities, especially in the north, are only too anxious to put into operation? I refer to just one that I have brought to the attention of Ministers in the past few months. Excellent work has been done with a relatively small amount of assistance to reclaim the derelict Ravenhead glassworks site in my constituency to bring it back into productive capacity and activity.
  This Budget has done virtually nothing for the impoverished in our society. The Chancellor has, at long last, abolished the earnings rule for pensioners; I welcome that, but there could have been a real effect if he had increased pensions in line with the real rate of inflation. He could have announced that yesterday, but he did not.
  The Chancellor should also have increased child benefit in line with inflation, because in my constituency over 9,000 families have children who are under five and many are desperate for help. Such an increase would have been

  439
  a real benefit to the poorest in my constituency. However, he did not, and I leave the House to draw its own conclusions.
  If the quality of a nation's civilisation were judged on the basis of the care and attention it bestowed on its elderly and its children, most of the people of St. Helens would regard this Budget as truly barbarian.
  5.12 pm
  Sir Ian Gilmour: Tactically, I think this year's Budget well judged, and I congratulate my right hon. Friend the Chancellor of the Exchequer on his prudence. Those people who gaze wide-eyed at the large Budget surplus and shut their eyes to everything else in the economy are seriously out in their thinking. My right hon. Friend was far too sensible to do the same.
  The hon. Member for St. Helens, North (Mr. Evans) was churlish about unemployment. Of course it is still high, but, as my right hon. Friend the Chief Secretary to the Treasury said, there has been a dramatic fall recently and I am happy to say that my constituency still has the lowest unemployment rate in the country.
  I greatly welcome the Chancellor's reform of national insurance contributions, which is an important step forward, as is the abolition of the earnings rule. If only my right hon. Friend had been able to announce the rescinding of the Government's mean and unjustified failure to uprate child benefit, tactically I could have given the Budget three cheers, but as it is, it still deserves at least two and a half.
  However, strategically—unfortunately—the verdict must be different, because the Chancellor has done little or nothing to improve the competitiveness of British manufacturing industry, which should have been his main strategic objective, and because of his attitude to the balance of payments.
  Once again, my right hon. Friend the Chancellor talked yesterday about the transformation of the economy, but, far from the current position being different, it is all too drearily familiar in many respects. Once again, we have a consumer boom, culminating in inflation and in a serious balance of payments deficit. We have seen that story countless times before. We are witnessing not a transformation, but yet another repeat performance.
  I found my right hon. Friend's optimism difficult to square with the fact that the balance of payments deficit was 3 per cent. of GDP in 1988, rising to 4 per cent. in the second part of the year. We have had a similar deficit only once before, in 1974, when there had been a rise of over 40 per cent. in import prices. Although there has been some rise in import prices recently, there has been nothing like that rise, so there can be no such alibi on this occasion. The deficit is the straightforward result of British industry's continued failure to compete successfully, especially in its own market. Imports of manufactures have risen 12 times faster than domestic production since 1979—nearly doubling in the process.
  A balance of payments deficit of the present magnitude was not foreseen by the Chancellor this time last year, and since then his response has been variously to assert that it does not particularly matter and to predict that in any case it will go away of its own accord. My belief is that he is dangerously mistaken in both those contentions.
  440
  The view that a current account deficit of the present size does not especially matter and can be allowed to continue strikes me as reckless. In the short term, there will be the perpetual risk of a run on sterling, with dire consequences for inflation. It could also lead to even higher interest rates. In the longer term, a deficit of this size means first that we shall lose the net overseas wealth that was painfully acquired in the early 1980s and, if it were allowed to continue, that we would eventually join the company of debtor nations. In any case, what possible value can a medium-term financial strategy have if it does not even try to keep us solvent? That is the policy's fundamental defect.
  The external deficit will not go away or get much better of its own accord. It is no blip: it is the result of deeply entrenched adverse trends. My right hon. Friend the Chief Secretary was right to say that it is not the result of the tax cuts last year. It has a far deeper and more entrenched basis than that——
  Mr. Mans: Does my right hon. Friend agree that one reason for the deficit is the huge increase in manufacturing investment in the past few years, which contrasts with previous deficits and suggest that in the future the deficit may go down as a result of more efficient manufacturing in this country?
  Sir Ian Gilmour: I am afraid that my hon. Friend is seriously mistaken—there has not been an enormous increase in manufacturing investment. In the period from 1979 to the present day, manufacturing investment has been negative. Although it has certainly increased in the past year or so—that is encouraging—over that period as a whole it has been low. I fear that my hon. Friend's optimism is not justified.
  The fact is that those adverse trends are deep-seated and our competitive performance has shown little improvement. Those trends were masked for a long time by North sea oil and then by the serious depression at the beginning of the 1980s which checked the growth of imports, but the crunch has now come. The balance of trade in manufactures has gone from a surplus of £5·5 billion in 1980 to a deficit of £14·5 billion last year, rising in the last quarter at a rate of £17·5 billion.
  Oil production is now falling, and property income is probably falling also as our foreign assets run down. We cannot be saved by the service industries. I cannot speak for the north-west to which my hon. Friend the Member for Wyre (Mr. Mans) referred when he intervened in the speech of the hon. Member for St. Helens, North, saying that service industries in the north-west are making up for the decline in manufacturing production. I do not know about that, but they certainly cannot make up for it nationally because the scope of any international expansion in tourism services is intrinsically limited. The Japanese or the Germany will not come to London for a haircut, so there is a limit to what can be done. In any case, the balance of trade in services has recently been falling, not rising. Manufacturing industry is absolutely vital.
  What makes it more serious is that the crunch has come much sooner than it should have done, because at least when it came in 1974 unemployment was down to 400,000. Now, of course, it is only just under 2 million. Also, the crunch has come despite the fact that, in the whole period from 1979, the growth rate has been unusually slow. The growth of manufacturing output since 1979 has been the

  441
  slowest of the post-war period—that is, slower than any nine-year period before 1979. The growth of total output at about 2·1 per cent. has been the equal slowest in any nine-year period.
  The motor of growth has not been chiefly enterprise or efficiency, but personal consumption swelled by credit, which has risen faster than in any previous nine-year period taking up 90 per cent. of such growth in GDP as occurred. So nine years of slow growth have nevertheless driven us to the limit of our capacity to produce. Not only has the balance of payments gone into record deficit, but inflation, as we know—that judge and jury—is still climbing. It does not look like a supply side miracle.
  Mr. John Marek: I am grateful to the right hon. Gentleman for saying what he has. I remember the Chief Secretary not perhaps half an hour ago saying with great pride that we have been in the longest period of growth since the war. The right hon. Gentleman, however, quite rightly is painting the true picture. Would he say that the Chief Secretary was being slightly dishonest a little earlier?
  Sir Ian Gilmour: Of course I would never say that my right hon. Friend was either slightly or in any way dishonest. No doubt there are different ways of looking at these matters. I am sure that everyone in the House has the highest respect for my right hon. Friend's integrity.
  Not only is my right hon. Friend the Chancellor taking great risks in allowing the deficit to continue at such a high level, but I am not at all sure that the improvement that he forecasts, such as it is, will in fact take place. He appears to be forecasting a very bumpy soft landing, with growth continuing overall but with net exports steadily taking over from domestic demand. The trouble is that high interest rates act uncertainly, randomly and perhaps excessively on domestic demand, and they act perversely on net export demand by raising the exchange rate.
  The worry is that the Chancellor's balance of payments forecast looks optimistic. As I understand the Red Book, he is forecasting nearly a 5 per cent. increase in exports this year and rather more than 5 per cent. in 1990, while he is forecasting only a 2·5 per cent. increase in imports in 1990. All that is well out of line with what has happened in the past decade.
  If we take out oil, from 1979 to 1988 the average yearly increase in exports was about 2 per cent. and the average yearly increase in imports was about 5 per cent. So I am not persuaded that there are strong grounds for believing that the next two years will be so very different from the last nine—or that, unless there is a slump, which would certainly improve the balance of payments, this improvement will take place.
  The Red Book talks about the extra capacity available from the current investment boom, but that is only recent. The total net investment between 1980 and 1987—namely, investment less capital consumption—has been 25 per cent. lower than in the 1960s and the 1970s, while net investment in manufacturing industry has been nil or even negative. Therefore, recent investment is unlikely to make up for the previous dearth.
  The Chancellor appears to be taking a big risk in permitting the continuation of such a large balance of payments deficit, and he is taking a gamble in hoping that the improvement he forecasts will take place. Over the years, my right hon. Friend has been warned by many
  442
  people, including myself, that we would be in trouble when North sea oil began to run down. He ignored those warnings and now the trouble has begun he is still refusing to act to improve our manufacturing performance. That is why the Budget, although tactically excellent, is strategically a failure.
  5.23 pm
  Mr. A. J. Beith: It is not for the first time that I have found myself in agreement with much that the right hon. Member for Chesham and Amersham (Sir I. Gilmour) has said. It is not without significance that there is a common thread of criticism of the Budget strategy from different parties on this side of the House and from Conservative Members who are looking to the longer-term needs of the country. I disagree with the right hon. Gentleman, however, on one simple point. He quoted the Red Book forecasts and regarded them as unrealistic. I believe that the Chancellor has now conceded that point. I assume that, by indicating in the Budget statement yesterday that there would be no improvement in the balance of payments, he had abandoned his Red Book forecasts and the process of improvement which it is alleged is imminent.
  Sir Ian Gilmour: My right hon. Friend the Chancellor is reckoning on an improvement, because the deterioration was so great in the second half of last year that to keep it the same this year means an improvement.
  Mr. Beith: The Chancellor hopes that the Red Book forecasts will therefore merely enable the appalling balance of payments deficit to remain as bad as it is now.
  Yesterday I argued that this was the Budget of a frightened Chancellor, and my right hon. Friend the Member for Yeovil (Mr. Ashdown) added that it was a Budget of tiny measures. I shall start with the tiny measures and, of course, not all tiny measures are bad. There are a number of quite good ones that are worth commending.
  The first measure that the Chancellor announced was something that we had pressed upon him, which was that the smaller firms' rate of corporation tax should be the subject of a higher threshold so that it would benefit more firms and benefit them to a greater extent. Small firms have experienced greater problems as a result of the current interest rates and exchange rates than larger firms, which on the whole have been able to cope quite well by hedging. It is only a third of the way that we asked the Chancellor to go, but nevertheless I welcome it. The charity VAT reliefs are also welcome. Although long awaited, the abolition of the earnings rule is no less welcome. Although I would have liked to see a 15 per cent. differential between the price of leaded and unleaded petrol, I hope that the 10p differential will prove sufficient to encourage universal use of lead-free petrol.
  We welcome the improvements in incentives for employee share schemes and profit-related pay, to which we have long attached importance. I was disappointed by the little that the Chancellor did for savings. We argued that his PEPs scheme—much loved by himself but little loved by anyone else—was a vehicle that could be built on. He tried to do that, but he still did not do enough to make it attractive to new savers. He made it administratively simpler for new savers to participate, but the primary attraction of the scheme remains for people who have

  443
  already used up all their capital gains tax relief. It does not offer sufficient incentive to attract new savers into investing in industry, which is its purpose.
  One of the Chancellor's small measures is in fact deplorable—tax relief for private medicine. He has diverted considerable funds to assist people who have already decided that they can afford to fund separately access to private health care, when those same funds could have been used in the National Health Service.
  This Budget is paying for last year's mistakes. It is not simply a matter of saying that the Chancellor's tax cuts last year caused all the problems, although they contributed in large measure. It was a combination of tax cuts to those whose disposable incomes were already high and who therefore were more likely to spend their increased means on imported goods, together with the big bang, the credit expansion, the increased competition in credit, the intense salesmanship in credit in that more competitive period, and, of course, the decision to delay the ending of multiple mortgage tax relief until 1 August 1988. That clearly put a great deal of pressure on the housing market in the summer months of last year. That whole series of measures added together—some that the Chancellor was doing himself and others of which he should have been aware—led to that Budget having disastrous consequences.
  The Chancellor has now sought to reconfirm that inflation is his overriding priority. One is bound to ask initially how it can be a problem. All the reasons that the Government used to advance for inflation relate to matters that they reckon to have disposed of: no longer do we have a public sector deficit generating inflation; no longer are the unions rampaging around the country forcing unrealistic pay increases; no longer can it be blamed on the Labour Government; and no longer can it be blamed on those favoured villians of the piece—the preceding Conservative Government so often criticised by[Interruption]—indeed, by Conservative Members.
  How could inflation have happened when the Government were doing what they now say they will do—monitoring the growth of broad money? Is not that precisely what they have been doing? However, with all those measures, we have inflation touching 8 per cent. and a very worried Chancellor.
  That inflation has determined the shape of the Budget. The Chancellor's remarks in the early part of his speech gave the impression that he was reasonably confident that he could soon get on top of the inflation problem—but his Budget measures reveal a different picture, and we must judge the Chancellor by his actions, not by his words.
  He has avoided, because of his fear of the inflationary consequences, measures that he either wanted to implement or ought to have implemented. We saw none of his cherished standard rate tax cuts, and no additions to tax allowances over and above those required by inflation. We see the extraordinary step of not putting a penny on any of the many excise duties—for the pure and simple reason that it is a way of holding off an increase of half a percentage point on the retail prices index. There can be no other reason.
  The Chancellor has received advice from within the Government and even from the Committee whose Chairman is the Leader of the House that the duty on alcohol ought at least to be indexed and that he should
  444
  probably increase it by more than that, to make up for his failure to do so in previous years. The Chancellor's decision in that respect is a more vivid demonstration of his fears of inflation and of the inflation already built into the system than anything else.
  The Chancellor reaffirmed his continuing dependence on high interest rates. That dependence on high interest and high exchange rates is also about preventing the re-importing of inflation. The Chancellor is fond of saying that underlying inflation is only 5 per cent., because he does not believe that mortgages really matter in inflationary terms. We disagree with him about that. Additionally, however, underlying inflation is a far more serious problem than is shown by that 5 per cent. increase. A great deal of our inflation has been exported as a result of the pound being high. If the value of the pound were now to fall, we would see that inflation re-exported into this country and a still higher domestic rate of inflation.
  In addition to the factors known to be causes of inflation, if the Government's overriding priority is to tackle inflation, why are they increasing it themselves? Why have they selected measures that will increase prices and bear most heavily on the ordinary members of the community? I refer to public sector price increases relating to privatisation. Electricity charges have increased by 6·8 per cent. this year, on top of 10 per cent. last year. However, the prices that the Central Electricity Generating Board has to pay for oil and coal are down, so now is not a time when electricity prices should be increasing by 10 per cent. one year and 6·8 per cent. the next.
  Water charges will increase by 9·8 per cent. this year, but for nearly one quarter of the population they will increase much more than that, by an average of 22 per cent. That was announced yesterday. The statutory water companies have said that that is so that they can cope with the effects of privatisation and can fit themselves into the new regime that the Government are introducing in their privatisation measures. The private water companies have long charged less than publicly owned water companies, but point out that the increases they are implementing now are the direct consequence of the regime that the Government are introducing in the course of privatisation. Health charges are also being increased. We are seeing a series of Government-sponsored inflationary measures.
  The key sufferers will be the low-paid. I remind the Chief Secretary that it is very misleading to suggest—the newspapers are more guilty of this than the right hon. Gentleman—that all low-paid people will be £3 per week better off in respect of their national insurance contributions. The Chancellor has not organised his reforms of national insurance in such a way that they will secure such an improvement. He has not turned the threshold into an allowance, like a tax allowance, but has retained the arrangement whereby someone who falls within the national insurance bracket will immediately pay national insurance on the whole of his income, rather than on the amount of his income that is over the threshold level.
  The practical effect is that only those people who enjoy just below, around or just above average earnings will benefit by a £3 per week reduction. Most of the low-paid will be lucky to enjoy a £1 improvement. Most people with an income below £110 per week will enjoy a reduction of between 81p and £1·30. As I pointed out earlier, those who are earning £70 a week will be only 21 p per week better off.

  445
  As was pointed out in an intervention earlier, a family earning £85 per week will, after benefit withdrawals, be only 26p per week better off as a result of the Budget. Who can say that that is a Budget for the low-paid? A typical low-paid family will be in a ludicrous situation as a result of the Budget.
  Mr. Julian Brazier: The hon. Gentleman gives the right figures, but there is a very good reason for the situation that he describes. A family having an income of £1 or £2 per week less than the family he cited will be considerably better off and will enjoy the full £3 reduction. It is the anomaly of sudden steps under the existing system that my right hon. Friend's new measures are designed to eradicate.
  Mr. Beith: Such a family will still not receive the full £3 reduction in their national insurance contribution. If they are lucky, they might be 61p better off, or £1·41 if they receive only £80 per week. Moreover, the figures I quoted took account of benefit withdrawals. The hon. Gentleman and the Government must consider more carefully the precise effects of the measures on people whom we all agree are low-paid. The Government have not achieved the objective that they set themselves.
  None of the figures I quoted take account of the poll tax, increased council house rents or mortgages, higher water and electricity charges, and the loss of transitional payments for many people who depended on them after last year's housing benefit fiasco.
  As the right hon. Member for Chesham and Amersham pointed out, the Government have failed to address the trade deficit problem. The Chancellor forecast a £4 billion deficit, but it is now £15 billion, and he forecast the same figure for next year. What has happened to the process by which that problem was to be cured? The Chancellor, Ministers and officials argued publicly and before the Treasury Select Committee that home demand would slacken and that resources would be applied instead to exports. However, in his forecast yesterday, the Chancellor recognised that if that process takes place at all, it will be sufficient only to maintain the trade deficit at its present level for the next year. That is inadequate, and the Chancellor should have addressed ways in which industry's competitiveness could be increased to cope with the trade deficit.
  What better position could one be in than a Chancellor of the Exchequer presiding over an enormous surplus? It is ironic that the Chancellor has more money at his disposal than any of his predecessors, but he dare not spend it because of the danger of destroying confidence in so many of his previous policies.
  One of the interesting points about the surplus is that about half of it is the result of asset sales. I refer to the privatisation of national industries, sales of council houses, and other disposals—much of which income should be re-invested in the economy. A business that sells off its assets looks at ways that it can re-invest, to equip itself for the future. It does not fritter that capital away, and does not necessarily use it to pay off its mortgages or existing borrowings—not if it can identify useful ways in which re-investment can help it to trade effectively in the future.
  It is interesting to speculate why the forecast of the future surplus is low. Some commentators believe that the surplus will prove to be much higher than the Government
  446
  predict, since the Government's growth forecast is surprisingly low. One wonders whether it represents the Conservative's secret war chest, and whether the Government will use it to disburse inflationary tax increases so close to a general election that inflation will not have time to work through before polling day. The Government are certainly understating the possible future surplus. I hate to shock the Chief Secretary to the Treasury, who has a wonderful, unshockable look about him, with the suggestion that political considerations might enter the minds of Treasury Ministers.
  Mr. David Steel (Tweeddale, Etterick and Lauderdale): My hon. Friend said that the Budget cruelly failed to deal with any of the problems of the lower income groups. However, he has not yet noted that under the new proposals concerning pensions for those earning up to £60,000 a year, we, the taxpayers, could contribute as much as £4,800 per annum.
  Mr. Beith: I am glad that my right hon. Friend has applied his mind to the details of that section of the Budget. I noted that those proposals might require more detailed study.
  Some of the uses to which the Chancellor could and should have put the surplus would have had few of the inflationary dangers that are implicit in the tax cuts that he rightly declined to make. It would be interesting to know at what stage he decided against going ahead with tax cuts. Was it when he received the retail price index figures the other day? Was it a week ago, a fortnight ago or a month ago? Perhaps we shall never know until he demits office and writes a book about it.
  The Financial Secretary to the Treasury (Mr. Norman Lamont): The right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel) suggested there has been an increase in tax privileges for higher-paid people. My right hon. Friend the Chancellor announced a restriction. The right hon. Gentleman has got it the wrong way round and should correct it.
  Mr. Beith: My right hon. Friend has worked out precisely the amount by which tax relief can accrue up to the £60,000 ceiling. I am sure that we shall have a useful seminar on the details of this at a later date. I noted that the Chancellor had placed a ceiling on it, but it was quite high. Perhaps I can encourage my right hon. Friend to join me and the Financial Secretary on the Committee dealing with the Finance Bill.
  I shall give some simple examples of ways in which the surplus could have been used that many people would have liked which would do some good and would have no inflationary consequences. Why did not the Chancellor take the opportunity to increase our overseas aid budget? Many of us feel that it would be reasonable to do so, and it would not have inflationary consequences. There is surely not such a desperate shortage of potential overseas aid field workers that huge wage inflation consequences would result. If we made more effort to help other countries it might result in long-term trading advantages.
  Non-inflationary measures could have been taken in the home economy that would have helped to make industry more competitive, such as investment in training, in regional policy in areas where the economy is not overheated—and there are quite a number of those—and in environmental measures. The burden of such measures

  447
  is at present being placed on the consumer, of which the water industry is an obvious example. Skill shortages and bottlenecks in employment occur because people are unable to move to suitable low-cost housing. Investment in communications would not have been inflationary if it had been carefully tailored.
  The Chancellor could have given more help to groups whose expenditure is so close to the breadline that it is the least inflationary. They will not rush out and buy imported goods, because their expenditure is so constrained that it will provide only a little extra for food and basic essentials. I heard the hon. Gentleman mutter, "Cigarettes" sotto voce, which is an extraordinary comment to make given that the Budget failed to increase the tax on tobacco.
  Mr. Major: I said no such thing.
  Mr. Beith: I attributed it to the Financial Secretary to the Treasury, unless there is a ventriloquist on the Government Benches.
  We should have had a Budget for the future, but we have a sackcloth and ashes Budget in which the Chancellor has said, "I got it wrong." The result is a Budget of missed opportunities, which does not tackle the problems at the heart of our balance of trade deficit. It does precious little for the environment and next to nothing for the low-paid.
  The confident Chancellor has been replaced by the chastened Chancellor. We have yet to see the compassionate Chancellor or the constructive Chancellor. That transformation will not be achieved by the present occupant of the office or any of the prime ministerial favourites who are sometimes discussed as possible replacements for him. Indeed, I do not think that it will be achieved under this Government.
  5.43 pm
  Mr. Charles Wardle: Like my right hon. and hon. Friends and many commentators elsewhere, I applaud my right hon. Friend the Chancellor for his unequivocal warning in the Budget that inflation is the greatest threat to this country's renewed prosperity and for his clear signal that the fight against inflation will continue to be his overriding priority.
  If my right hon. Friend had not adopted such an explicit anti-inflationary stance, I am certain that the international money markets would instantly have taken a jaundiced view of sterling. If they did so, it would lead, in short order, to more costly imports and upward pressure on inflation in the sort of sprial that was uncomfortably familiar before 1979. Instead, the initial response of the currency markets seems to have been firm for sterling, which seems to suggest that my right hon. Friend's message that caution is his watchword has been well received in the quarters where it counts.
  No doubt the achievements of the British economy in the 1980s's, which my right hon. Friend listed in his opening remarks of his Budget speech, will have helped to remind his wider audience how far Britain has progressed over the past decade. The longest period of sustained economic growth since the second world war, substantial improvements in productivity, capital investment outpacing consumption, higher exports and a record number of
  448
  people in work are features of a healthy economy that must not be allowed to succumb again to the disease of inflation.
  The dead hand of Socialism, state intervention and the mindless self-interest of undisciplined trade unions are things of the past. Britain is now confident enough to know that enterprise and individual ownership stimulate the creation of wealth, by which the nation can afford the means to care for those in genuine need. That is why growth in gross domestic product, reduction in national debt and greatly increased public spending have become a reality at one and the same time, and why inflation is rightly regarded by my right hon. Friend as a sinister threat that could undo so much of what has recently been achieved.
  To the extent that my right hon. Friend left himself some room for tax changes, within the constraints of a balanced Budget dominated by such a large public sector debt repayment, he should be congratulated on targeting extra relief for pensioners and people on lower-thanaverage earnings. Neither group looms large in consumer spending, but both will welcome greater help.
  Changes in employees' national insurance contributions are one of the most efficient ways of putting more money in the pockets of the lower-paid and alleviating the poverty trap without fuelling greater spending power among the better-off. I hope that my right hon. Friend's proposal will be the first of several steps in this direction during the remainder of this Parliament.
  The earnings rule has long been an iniquitous charge on the old-age pension, which individuals have contracted in good faith with the state through regular national insurance contributions. To have that contract with the state broken and the old-age pension reduced, simply because an individual chooses to work after the statutory retirement age, has always seemed to be daylight robbery without a shred of actuarial justification. The proposal to abolish the earnings rule is long overdue. It is especially timely as the labour force of normal working age is shrinking, and active and experienced minds and hands aged over 60 or 65 will be in progressively greater demand.
  The extension of the higher age allowance from those aged 80 and over to those aged 75 and above is another important move because it will bring some relief to pensioners of an age who may justifiably feel that the economic boom of the 1980s has, to some extent, passed them by. They retired a decade or more ago before the state earnings-related pension scheme was under way, so many receive no more than a token ex gratia payment from their employers, the basic old-age pension and perhaps a modest income from savings. They are just above the income support bracket and do not have an occupational pension. They are a stark exception to the Government's accurate—but in this context confusing—assertion that the average income of pensioners has risen 23 per cent. more than inflation since 1979. The average is no doubt correct, but the pensioners to whom I allude have not kept up with the average, and those who qualify for the higher level of age allowance sorely need the proposed relief.
  There will be many such beneficiaries from this proposal in my constituency, who have raised families, fought wars and paid their taxes throughout their working lives without demanding a penny of social security, except perhaps housing benefit to relieve their rates bill. They deserve the extra allowance that has been proposed and I

  449
  hope that my right hon. Friend has it in mind to lower the qualifying age for the higher level to 70 and over before long to cater for women who retired at 60 a decade ago.
  Of my right hon. Friend's other measures, the proposals to encourage wider share ownership, and the further incentives for personal savings, are welcome, but they will need to be promoted more vigorously than has been the case with previous schemes if they are to have the desired effect.
  In the corporate sector, the changes in profit limits for small companies' corporation tax will provide an important stimulus for retained earnings in many developing businesses. By contrast, however, the changes in tax on company cars will no doubt be met with howls of displeasure in some quarters. I trust that my right hon. Friend will ignore the protests, because the benefit in kind of a company car will remain a substantial perk. I have no doubt that, even after the latest scale changes, the underlying benefit in kind is a significant addition to salary.
  I hope the day will come when a purist approach to tax reform can be taken, with a much lower basic rate, funded by full taxation of benefits and the abolition of mortgage interest relief, which I raised in Committee on last year's Finance Bill. It would be a fairer system in the end, but, for the time being, some anomalies are expedient. Thus, in the medium term at least, tax relief on private medical insurance will serve to shift many people from National Health Service waiting lists to the private sector, to the immediate advantage of others further down the NHS waiting lists.
  While my right hon. Friend's Budget proposals are suitably cautious for the uncertain circumstances that prevail in the face of higher inflation, it is difficult to ignore the external factors beyond his control, which could yet put a strain on our economic performance. Worries about the United States trade deficit, and an upward movement in interest rates in the United States and elsewhere, could yet put sterling under pressure, with inflationary consequences in this country, in spite of my right hon. Friend's determination to maintain high interest rates here as long as they are needed.
  There are two other factors that I should like to mention. First, employers and employees will have to reach pay settlements within the rate of inflation if interest rates are to bite into consumer spending and into higher levels of personal debt. Higher pay settlements will simply nullify the interest rate medicine.
  Secondly, it would be unwise to assume that the supply side transformation is by any means fully accomplished. The removal of controls, the shake-out of surplus labour and more flexible employment legislation have all been vital to business, but that does not mean that manufacturing industry can respond, at the drop of a hat, to the expected lower levels of domestic demand and achieve instant export gains in order to alleviate the balance of payments deficit overnight. As the House knows well, export markets are much more complex than that, and changes in business direction need rather more time for product planning and marketing than is sometimes suggested.
  In order to complete the supply side transformation, the United Kingdom business environment still needs to step up a gear, with more skills training, more enterprising and internationalist management, and greater investment in research and development from the private sector.
  450
  Further changes are needed from the Government as well, including amendments to financial services legislation, and a much more efficient transportation infrastructure—to highlight just two areas.
  Much remains to be done, but my right hon. Friend's Budget proposals address the immediate inflationary circumstances with realism. They are sound measures, which are most welcome.
  5.54 pm
  Mr. Peter L. Pike: When considering the effects of this Budget, one has to take into account what the Government have done in total. One cannot isolate the Budget from the total package—the legislation that the Government have introduced and the actions they have taken over the past 10 years. This Government can no longer hide behind the Labour Government of 1974–79. They can no longer blame the previous Government. They have been in office almost exactly 10 years, and they must be prepared to stand up and defend their record—and what an appalling record it is, so far as the majority in this country are concerned.
  It cannot be claimed that this is a Budget for the poor or the low earners. That would be a total fallacy. The Government must accept that they have forced people into low pay and poverty—whether they be unemployed, pensioners or, indeed, people in employment. Workers have been forced to take lower pay as a result of this Government's action over a period of years. Government Members have often said that low pay is better than no pay. While there may be some truth in that statement, I do not accept the basis on which it is made. It is time to say that fair pay is better than no pay. Fair pay and fair conditions are what we should be working for, but those things are not acceptable to Tory Members.
  Let me give some examples of the way in which the Government have attacked the lower-paid over the last two years. We know what they have done to curtail the wages councils. We know what they are doing to reduce the protection afforded to some of the lowest paid. The Employment Bill, which is now going through Parliament, will result in people being denied benefit if they refuse a job on grounds of pay. Indeed, I am currently dealing with constituents who have been refused benefit because, according to the Department of Employment, under the current rules governing availability for work, they went too far by asking for £80 a week. In 1989, £80 a week is very much on the low side for a married person with a family, even in a low-pay area such as north-east Lancashire. That is what the Government have done.
  In transport, let me mention the Government's competition policies. They claim that the new transport law has saved money for the country. How has it saved money for the country? By giving a worse package of conditions to the people employed in the industry. Almost all of those who work on the buses have worse conditions of employment now than they had before that legislation was passed.
  Then there is the Local Government Act that was passed last year. When local authorities are compelled to go out to competitive tendering they cannot lay down any conditions with regard to conditions of employment. The sole purpose is to worsen the working conditions and reduce the pay of employees. In response to a debate in Committee, the Minister said that many local authorities

  451
  have to put up with restrictive practices. He said that it was appalling that people working on Sundays had to be paid double time, that competitors could get them to work for time and a half, or ordinary time, or even less. Of course there is some truth in that. The present levels of unemployment make some people willing to accept conditions that they would not otherwise accept. But that does not make it right. The Minister said that Labour Members were defending the unions and attacking people's right to work and that, in his view, that was quite appalling. So long as I am in this House—and I know that this applies to my colleagues also—I will fight to protect the conditions of working people.
  The claim that this Budget will help working people is galling. A person earning £10,000 a year will be better off by £45 a year. For a person earning £28,000 a year, the saving will go up to £282. Again, the higher-paid benefit. A person on £50 a week will be £1·01 better off because of the national insurance saving. Of course, we welcome what is being done about national insurance, but it does not go far enough. A person on £600 a week will save £6·63, £1·21 of it national insurance. The Government could have increased the level at which national insurance contributions start. Yesterday, the Chancellor's excuse for not doing so was that it was a system of benefit relative to contributions, but we have always had a scale on which some people are exempt. Whether the figure is £43, £53 or £60 is something that the Government could determine. If they had wanted to take more people out of the national insurance bracket, they could have done so.
  The Government could also have helped the lower-paid by increasing the single and married person's allowances more than they did. Instead, they increased them to just slightly above the minimum established by previous Finance Acts. This is not a Budget for the poor or the low-paid.
  Since 1979, £23 billion has been handed out to the top 1 per cent. of taxpayers. Combining this and last year's Budget, the top 5 per cent. of taxpayers have had more handed out to them than the lowest 70 per cent. put together. That may be justice and equity for the Tory party but it is not for the majority of people.
  Next month, the people of Scotland will pay the poll tax for the first time, and next year it will come into force in England and Wales. I accept that there are many anomalies in the present rating system, but the poll tax replaces a system that has existed for many years with a tax that is dearer to collect and has no fairness or equity because it does not take into account ability to pay. That must be wrong and it must be condemned. I am sure that the Government will find that the British people overwhelmingly reject it.
  Some 200,000 pensioners on income support, who were on supplementary benefit before the changes introduced in April 1988, will receive no increase. The protection that they enjoyed last year, and will enjoy again this year, means that they have not suffered a cut in cash terms, but, with inflation running at 7·5 per cent. and having increased last year, they are now at least 10 per cent. worse off in real terms than they were before April last year.
  A further 300,000 pensioners on income support, who were on supplementary benefit before April last year, will not receive a full increase this year, although they will
  452
  receive something. Those in receipt of housing benefit transitional payments will also find that they will not receive the full uprating of benefit. They will not be very happy with a Budget that is supposed to be helping the lower paid and the poorer people.
  We know that the increases in mortgage interest rates have affected many people purchasing their houses over the past year, and we know too how the Government's policies have affected rents. In 1979, my local authority in Burnley received a subsidy of £1·6 million to help those renting their houses, but for the past few years it has received nothing. That shows clearly where the pressure to increase rents comes from.
  One factor that will soon have to be taken into account in considering whether people are eligible for the full housing benefit is whether they live in a bigger house than they need. An elderly couple living in the four-bedroomed house in which their family grew up may not wish to move. They will not recieve the full housing benefit because they will be deemed by the Government not to need such a big house. That may be true, but at the end of the day the Government talk of choice. People will not welcome the removal of their choice to continue to live in the house that they have lived in for many years.
  When the Government talk of choice they link it with the ability to pay. That is the big qualification. What we should be talking about is opportunity—the opportunity for people to have decent education, decent housing and a decent Health Service, regardless of their ability to pay. It is particularly important that children should not have their educational rights limited because of the inability of their parents to meet the cost of student grants, or loans, as they may be in the not too distant future.
  I welcome the tax concession on unleaded petrol as a move in the right direction. However, if the Government were serious about protecting the environment, they could have increased that figure. They claim to be the green party, concerned about the environment, but profitability and cost always come first for the Conservative party. They will always be overriding factors whatever is being considered.
  When we consider the Water Bill, currently going through Parliament, the quality of our bathing water and beaches, the deterioration of river quality and our drinking water quality, which fails to meet the EEC guidelines, we know our failures. If the Water Bill is to be enforced through the National Rivers Authority, there will be a considerable improvement, but there have already been derogations and concessions to allow more time.
  The Government know that nobody will invest money in the water industry unless they write off considerable amounts of debt and considerably relax the limits on the time allowed to deal with the problems of pollution to ensure that we bring our water, rivers and beaches and sewage treatment works up to the required standard. Unless the Government fiddle the figures and dodge the issues, they know that people will not put their money in the industry. That is why the Government announced yesterday that people will be able to put some of the money in their personal equity plans into the privatised industries. They have to do everything possible to persuade people that that is where they should be putting their money.
  The Government have a surplus of £15 billion, but they are unable to deal with the problems of our water, rivers and waste tips. The Select Committee on the Environment was unanimous in its report published last week that it was

  453
  a miracle that we had not had a disaster as a result of contamination, or an explosion. That is a failure of Government. The Government will not take enough action on chlorofluorocarbons and all the other issues, because for them money is the most important thing.
  Manufacturing industry still has a massive trading deficit—the £3 billion surplus in 1979 has become a £20 billion deficit. At the end of the day, the manufacturing industries are Britain's bread and butter. We must get our manufacturing industry into surplus if Britain is to have a future—that does not mean that I dismiss the importance of the service industries and tourism—they are important and we want to develop them and do well from them—but at the end of the day manufacturing is our base and our future depends on it. That is what our past was built on and we must get it right. There is no way in which the Government can do that because they do not believe that it is their problem. Until they recognise the problems of manufacturing industry, we shall not find the cure.
  An increase in interest rates from 7·5 per cent. to 13 per cent. affects investment in manufacturing industry and its ability to compete abroad. Energy costs are rising again. There is to be an increase in electricity charges in excess of 6 per cent. That is at a time when the price of coal and other costs have been going down, and when the cost of energy, in relative terms, for industry should have been reduced. One of our industrialists' biggest anxieties is not wages or rates but comparative energy costs, which are far higher in Britain than elsewhere in the EEC, and they are being deliberately forced up again by the Government. In addition, a 22 per cent. increase in water charges is to be imposed by the private statutory water undertakings. The Minister said that they were already private. So they are, but they are controlled under different legislation than will be the position when the Water Bill is passed. The statutory water undertakers were asking not for 22 but 50 per cent. until the Minister intervened.
  Mr. Mans: When foreigners consider investing in this country they look not only to energy costs but to industrial relations, and in the past the latter has been one of the main factors why they have refused to invest here.
  Mr. Pike: That claim is exaggerated, and, being a Lancashire Member himself, the hon. Gentleman must know that our area has a history of good industrial relations. Yet Burnley, in north-east Lancashire, is the fastest shrinking town in England. It has lost 9·7 per cent. of its population because of the decline in manufacturing industry. People are leaving to look for jobs and we have many empty houses. The same applies to Pendle, Rossendale, Hyndburn and other places in north-east Lancashire.
  In the way that people moved in the 1930s, so today people are moving from Lancashire to seek work in those areas which the Government are encouraging and developing. We want more jobs brought to our areas. The Government must have a positive policy of direction of industry, with proper regional policies. We must have good communications by road and rail to encourage investment in north-east Lancashire and the north-west.
  We can have no optimism on that score in view of what the Conservatives did when they came into power in 1979. Having brought about industrial closures, they then created a consumer demand, which we then were unable to
  454
  meet. To meet it, we had to suck in exports. We are still doing that, and the process will continue until we enlarge our own manufacturing base.
  While investment is slightly ahead of what it was in 1979, there are exceptions in some parts of the nation. We have had a low rate of investment for the last 10 years in manufacturing industry. We shall have to pay the price for that in the coming years, and the Conservatives will be held responsible for that.
  In constant terms, output in the north-west is 19 per cent. down. It now stands at £7·453 million, compared with £9·171 million in 1986. Investment is 38 per cent. down over the same period. Indeed, in the year 1985–86 there was a drop of 10 per cent. in investment in the north-west, that despite the fact that the north-west and Lancashire is a key manufacturing region in which we should be investing. Employment in manufacturing industry fell by 38 per cent. between 1979 to 1986. About 34 per cent. of the total work force in 1979 was engaged in manufacturing industry. By 1988, that had fallen to 23 per cent.
  The EEC announced recently, under objective 2 of its regional economic development fund, wide extensions of areas for benefit, and today most of Lancashire and large parts of the north-west are covered by objective 2. That state of affairs has come about because of the failure of the Government to develop the regions to their full potential. In addition, the whole of Northern Ireland is covered by objective 1 of the EEC's regional economic development fund plans.
  We have the largest share of objective 2 money of any EEC country, with 20 million people in the United Kingdom living in areas receiving objective 2 assistance. In other words, 39 per cent. of the Community population eligible for this assistance live in the United Kingdom, plus those who live in Northern Ireland coming within objective one.
  We must ensure that those funds from Europe reach their target. The British Government must not make that money subject to additionality, so that we finish up losing Government resources in the way that has happened in the past. It must be additional money. The areas concerned must benefit, and the Government must not take it from them.
  Considering that the Government had a surplus of £14 billion, one wonders why they have not done more to tackle the many housing problems that exist. Five areas in my part of the world—they are not all Labour-controlled; one is Conservative and one is Liberal—Burnley, Pendle, Rossendale, Ribble Valley and Blackburn, had an HIP allocation, in constant terms, of £59,730,000, but their bid in 1979 was for £67,916,000. That represented 83 per cent. of the bid. The bid for the current year for those areas is £47,709,000, and they are getting £9,900,000, or only 21 per cent. of the bid. They have appalling housing conditions and need a great deal of money to effect improvements. That is an indictment of the Government's record, particularly in view of the enormous surplus available to them.
  The Chancellor is in a cleft stick. He dare not allow inflation to rise, so he cannot spend money where it should be spent. The Government are failing all along the line. That will continue to be the story until we have a change of Government and a new Chancellor.
  For its inner-city programme, Burnley received in 1988–89 £1·8 million, and in the current year it is receiving

  455
  slightly more, £1·89 million. But that represents a cut in real terms. The eight areas in the north-west received £43,250,000 in 1988–1989, and collectively they will be receiving, in 1989–90, £42,903,000, yet the Government have declared that they want inner-city improvements to be a priority.
  The Government announce new schemes and produce glossy booklets about the inner cities and so on, but as the booklets become more glossy, the packages have less content, and the problems continue to exist. When they give local authorities money to deal with local problems, they are really only returning to those authorities a fraction of what they have taken from them in the last 10 years.
  Lancashire put in a bid for £34 million for its educational capital expenditure. The area is committed to spending £16 million on schools alone, yet it received an allocation of only £13·5 million. School buildings remain in urgent need of repair, yet it is well known that investment in schools has a strong bearing on the education of our children.
  My area sought £27·5 million for roads expenditure, but received an allocation of £12·82 million. All around us we see decay and decline as a result of the Government's failure to tackle the transport and other problems of communication. Conservative Members may not like to hear these facts, but they are true, and they will ensure that, when the next general election takes place, the people will vote for a party and for policies which will tackle these problems and ensure that people have a decent standard of living and a fairer deal than they will ever get under Toryism.
  A wind of change is blowing across the nation. People throughout the country can feel it. Only Conservative Members fail to recognise its existence. Many of them occupy marginal seats. I advise them to seek safer seats or to look for other jobs. They might then make a better contribution than they are making in the House to the well-being of the British people.
  6.19 pm
  Mr. John Biffen: As I listened to the hon. Member for Burnley (Mr. Pike) I began to fear that indignation would inhibit peroration, but I was delighted that we were taken for a tour. The hon. Gentleman demonstrated in graphic form the values and judgments by which he hopes to fight, and triumph at, the next election. This is a Budget that is necessarily related to that future election, so we should not in any sense be self-effacing but should put our value judgments before the House, even at this early stage.
  I know that there is great potential pedantry about considering Budgets present and Budgets past and I should like to make a passing reflection. Last year, when we had a Budget, we had evident and emerging inflation. We had a substantial Government surplus and a most ambitious range of direct tax cuts which, it was alleged, would be non-inflationary because of the absence of a Government public sector borrowing requirement. This year—the stage is reasonably familiar—we have established inflation and an even greater Government surplus, but there has been a delicacy, a development, a nuance. No longer are we given the prospect of substantial tax cuts to
  456
  give emphasis to supply side economics. We are told that they must be reined back almost in their totality to secure a more progressive addressing of inflation.
  I welcome these changes. I have no wish to be personal, but I feel as though my mere rowing boat were taking on the full complement of the Titanic. Make no mistake, the House is being asked to consider a redirection of economic policy—in a direction that is welcome but none the less offers clear prospects and disciplines to both sides of the House about the development towards a general election. There is an initial stage, which is the business of dealing with inflation at a high and challenging level and which will require compelling and consistent policies. That initial challenge successfully surmounted, we come to the second stage—how the two sides of the House will consider the use of a Government surplus which is not intended to be permanent and which exists for use in public spending, taxation and reassessed debt repayment, all of which will engage judgments that are central to the conduct of the next general election.
  Opposition Front-Bench Members agree in their hearts with every word I say. What was fascinating about the speech by the right hon. and learned Member for Monklands, East (Mr. Smith) was not that it had all the advocate's professionalism but that it did not say, "Here is a cautious Administration which has the capacity to use 1 4 billion to regenerate the economy and bring about higher levels of activity and lower unit costs, thus having an impact on inflation." There was none of that. The right hon. and learned Gentleman knows perfectly well that he would like to sit this one out. He would like to be around to benefit from the inevitable difficulties that arise in reducing inflation. The right hon. and learned Gentleman is taking no view on the £14 billion surplus which is to be used for accelerated repayment of the national debt.
  The right hon. and learned Gentleman shows good strategic sense. He leaves it to the hon. Member for Burnley—I hope that the hon. Gentleman will not leave the Chamber when all these plaudits are to be heaped upon him—and the hon. Member for St. Helens, North (Mr. Evans) who had a litany of public spending increases which they thought were instantly appropriate to deal with the current position and which were made plausible by the existence of a £14 billion Government surplus. We have been given a useful insight into the Opposition's tactics over the coming months. On the Front Bench there will be sobriety and moderation of the most impeccable kind while the rough stuff will be delegated to the franc-tireurs from the Back Benches who will argue without inhibition the true causes that they champion.
  I should like to speak about the two facets of the Budget position—inflation and the Government's surplus. My right hon. and hon. Friends should be under no illusion that the present inflationary climate is serious and that its overcoming does not invite analogies with soft landings. Such analogies induce a sense of good-natured optimism about the quality of Front Benches and the general nature of good luck in public life, and on the whole are matters that we would do well without.
  At 8 per cent., the inflation figure is much higher than anyone would have forecast a year ago. I take no view as to whether the Treasury is optimistic in the downward trend that has been predicted. I notice that today in The Times Mr. Tim Congdon, who probably has as good a track record as any commentator on these affairs, has written:

  457
  "all previous cyclical experience is that, once a credit-driven boom has started, it takes much longer than expected to bring inflation under control."
  We could add to that from our anecdotal experiences.
  I believe—I realise that this will not be accepted by the hon. Member for Burnley—that the labour market today tells us the story not of the 2 million unemployed, with its echoes of the 1930s, but of high levels of activity in the economy and emerging shortages of labour throughout the country. As Government statistics are somewhat at a discount these days, certainly for the Opposition—[Interruption.] well, "Whom God hath joined …"—I shall quote from the fourth quarterly survey of the Association of British Chambers of Commerce, which said:
  "It is therefore abundantly clear that skills and labour shortages are widespread and not at all confined to the South East."
  I understand that interest rates are the primary weapon of my right hon. and hon. Friends—it is a distinguished Treasury Bench at present. I fully understand that that has serious economic and political short-term consequences; none the less, it is the central weapon, and I believe that they are right to make it such.
  I recognise that there are always siren calls about physical controls of credit, but those calls are generally made in headlines and not in footnotes. I suspect that such physical controls are inoperable as an adjunct to my right hon. and hon. Friends' monetary policy. They are unwise, none the less, to give any credence to the cruel jibe that the Chancellor has only one club in playing this game of golf—a point made last year. Therefore, I ask, what gilt funding policy will they pursue in the context of a £14 billion debt repayment, since this could well supplement interest rate policy? I hope that, before the debate is through, they will say how they interpret that situation and opportunity.
  Let us consider the challenge that both parties will face come the next general election, when we shall have to decide how to present our cause and our aspirations to the public we serve. We do not know how long it will take to bring down the rate of inflation. I think that the process will be slower rather than quicker, although it is in the interests of all of us—economic as well as political—for the process to be as quick as possible. Having said that, I assume that, by the time of the next general election, there will be a genuine public debate about what we should do with a public sector repayment figure of something like the magnitude that the papers issued with the Budget suggest.
  The background against which we shall fight the next election, which I assume will be in 1991, will not be the same as the background to the previous election: 1991 will not be a re-run of 1987. Let us not think that inflation will have abated only to allow a recrudescence of the consumer boom. The social and political atmosphere will be quite different, and I think that there will be a stronger case to be made for the Tory tradition of social spending than hitherto.
  I yield to no one in my commitment to market economics and economic liberalism, but I have always regarded that as part of a balanced ticket—with the mechanics of wealth creation on the one hand, and what we do with wealth in the public sector on the other. A public sector policy does not undermine the free enterprise ethic—indeed, it sustains it, because we live in a society in which there is the expectation of public collective provision in social policy. I shall choose only two examples—
  458
  education and health. I have studied the spending plans for 1989–90 to 1991–92, elaborated in Cmnd. 621. A look at the planning totals in real terms shows that for the National Health Service the increase is about 5 per cent. and for education there is no increase. We have in prospect a chance to remedy that. We have in prospect a chance to preach a message of collective provision and investment which stands in the long tradition of Tory Chancellors and Tory Governments.
  My right hon. and learned Friend the Secretary of State for Health will have a great role to play in all this. He has taken to phrase-making—always a high-risk strategy for a politician to adopt. He talks of "wallet-reaching". The people who will have to do the wallet-reaching for the Health Service before the next general election are Treasury Ministers, and that attitude will have to be broadened to cover other aspects of social policy, including infrastructure and education. I must say to the Government and to my hon. Friend in general that if in 1991 we are not inspired in social policy by one-nation Toryism, that if we do not master the language, rhetoric and reality of one-nation Toryism, the nation will master US.
  6.33 pm
  Mr. John Battle: It seems to me that the Government rely on image and presentation. Their idea seems to be to create an initial impression—before the facts have been checked—and hope that it will stick later. No one will have been left with the impression that the social spending to which the right hon. Member for Shropshire, North (Mr. Biffen) referred has started with this year's Budget. The Budget was heralded in the press as a Budget for the low-paid and pensioners. The impression has been given that, although the Government did much to help the richest last year, it will be the turn of the low-paid and the pensioners this year. That argument is belied by the facts of taxation changes, compounded with social security changes.
  We have made a start, at least. The Government now actually accept that low pay exists. I served recently on the Standing Committee on the Social Security Bill. It was with some difficulty that we convinced the Minister that some of the pay on offer in Britain is incredibly low by modern standards and by the standards that we ourselves would be prepared to accept. When I pointed out that in my constituency £2 an hour and less was being offered for some jobs and my hon. Friend the Member for Birkenhead (Mr. Field) gave similar figures, the Minister asked the civil servants to telephone the jobcentres to check whether our figures were correct. He did not believe them. Those figures have been confirmed. Nearly a third of the work force—9·9 million people—earn less than two thirds of the average wage.
  We ought to scotch the rumour that this is the Budget of the low-paid and the pensioners. The Chancellor sets his speech in the context of the medium-term financial strategy. A two-tier economy is developing as a result of that stategy. On the one hand, we have those in relatively secure, reasonably paid work who may receive decent pensions while on the other we have those in part-time, temporary, low-paid work. The Budget serves to reinforce that divide in the economy.
  We need to challenge the media myth that one can tackle poverty simply by reforming the national insurance

  459
  contributions. The changes will not put an end to wage bunching just below the threshold, because what people will gain in earnings through the national insurance changes they will lose as they lose their entitlement to benefit.
  The Government say that the Opposition have no policies. We are entitled to ask them why they have failed to do as we suggested and turn the national insurance earnings limit into an allowance. That would go somewhere near to breaking people out of the poverty trap. I note that the Chancellor steered clear of increasing allowances by any more than he was legally obliged to increase them. The Chancellor tells us that he has taken from us more than he needed but that he dare not give it back because he is scared of the effect on inflation.
  Let us consider in detail the changes in national insurance contributions. Anyone earning more than £43 a week must now pay 2 per cent. in national insurance on the first £43 and 9 per cent. on earnings over that amount. It has been suggested that a step-by-step gradation is being replaced by a straight line. In fact, the earnings of low-paid workers—especially women who work part-time—will still be bunched at £43 a week and below, but they will not now be entitled to essential benefits such as maternity allowance, family credit, unemployment benefit and housing benefit. In other words, they will lose as a result of the changes. Moreover, as employers' national insurance contributions have not changed, employers will still want to keep wages below the national insurance contribution threshold. The Chancellor's national insurance reforms will give less than £1 to 5 million people earning less than £100 a week.
  Our proposals for an allowance system would have nearly doubled that gain. But the injustice is perpetuated because those earning more than £15,800 will continue to pay no extra national insurance contributions on anything they earn over that amount. Last year's injustice, whereby the rich gained the most and the poor gained the least or lost out, remains built into this year's Budget. The unemployed, pensioners living on the state pension and women receiving child benefit gain nothing from the Budget. It is worth reminding the Chancellor that 48·1 per cent. of female manual workers in full-time employment earn less than £100 a week. According to the recently published new earnings survey, the bottom 10 per cent. of the earnings distribution now receive only 31·3 per cent. of the gross weekly earnings of the top 10 per cent. compared with 42·3 per cent. in 1978.
  The proportion of male full-time workers earning less than the Council of Europe decency threshold has doubled since 1979. It is notable that, although the Government use the rhetoric of Europe and 1992, they are not yet prepared to accept the Council of Europe decency threshold of two thirds of the average wage as a means of assessing low pay. More than 50 per cent. of adult women in full-time employment earn less than that decency threshold. The tax burden of a married couple on three quarters of average earnings has increased. The figures that Ministers have given in answer to questions in the past weeks and months demonstrate that, although the Government have refused to acknowledge it.
  Many people in Britain earn well below the average wage of £254, around which the Government base their
  460
  figures and statistics. Not only are the earnings of the lowest-paid male manual workers lower compared with the average wage than they were in 1986, but the Government's failure to uprate personal allowances and thresholds by earnings levels means that an additional 160,000 families on low incomes will pay income tax. That is the economic reality of the Budget. Those people will be brought into tax because the Chancellor has done nothing to tackle the inequitable nature of the income tax structure. With a mere two bands the Government are perpetuating the injustice of a tax system operating on a huge ratchet mechanism—those at the top of the ladder get the most every time there is a step up. That has not been changed.
  The Government's failure to enmesh the tax system with the benefit system through the eligibility of those in low pay to family credit and housing benefit is surprising. It is a classic case of giving with one hand and taking away with the other. Because means-tested benefits are based on net income, any rise in net income will reduce the total benefits received, so that tax cuts have little or no effect on the poverty trap as people lose access to benefit. As the Chief Secretary to the Treasury conceded in reply to my intervention, what is offered as a teaspoonful of aid will be meaningless as the Government's hand seems to be around the windpipe of the main benefits structure so that people lose.
  On 10 April there will be effectively another Budget—the budget for the poor, in which benefits will be uprated by 5·9 per cent. That increase is below the inflation figure that the Government have accepted in the Budget. In two weeks' time poor people will be worse off as a result of the Budget.
  To tackle low pay and end the poverty trap, we need to raise non-means-tested benefit. What could be better than raising child benefit instead of freezing it year after year in the hope that it will eventually fade away? That is the best means of tackling family poverty. Another way of tackling low pay and ending the poverty trap would be to ensure that basic wage rates increase in relation to the average wage and are not so low that people need to claim benefit to supplement them.
  I do not believe that the Government intend to eradicate low pay. The Chancellor referred to the Social Security Bill, but he did not refer to the fact that the central aim of that Bill, which has completed its consideration in Committee and will soon return to the House, is to force people to accept any level of remuneration however low or they will lose access to unemployment benefit. The Bill states that the level of remuneration will no longer be a good cause for not accepting a job. That is a charter for a low-wage economy.
  Mrs. Alice Mahon: I am sure that my hon. Friend will recall that I told him that home workers in my constituency earn as little as 24p an hour packing Christmas cards, yet those Christmas cards were being sold in Woolworths for £1·69 a pack. That is the reality of the Chancellor's strategy for low pay.
  Mr. Battle: It is worth reiterating that 24p an hour is being offered for hard work, not light work. That is a scandal and a disgrace.
  The principles of the Social Security Bill will mean that people will no longer be classed as unemployed. In case hon. Members think that unemployment is not an issue in

  461
  the Budget, paragraph 3.04 of the Red Book states that employment is unlikely to rise. That can only mean that unemployment is expected to rise. That is the underlying strategy in the Budget, which is based on the fact that unemployment will not continue to go down but will rise. But unemployment will no longer be seen to rise, because those who do not accept low-paid jobs will be taken out of the system altogether. There will be no cost to the state in increased social security payments because the state will not pay. As has happened before, unemployment will become a tool to force people into work.
  America now has its lowest unemployment ever, 5·1 per cent. What is the response? There is no celebration that people are finding jobs and contributing to society. The response is that there was an emerging skills shortage. Conservative Members have used that phrase this afternoon. In their terms it means that there may be increased wage demands which they see as inflationary; therefore, there has to be a pool of unemployment to drive down wages. That is the basis of the Government's strategy in the Social Security Bill, which is not about raising benefit but about building low pay into the benefit structure.
  The Government's intention will be reinforced by the dismantling of the wages councils, which offer only minimal wage conditions. It is worth reminding the House of the figures. In the clothing and textile industry, the wages council level has been set at £1·99 an hour for some years. In Bramley jobcentre, in my constituency, job machinists are offered work at £2 an hour—1p above the wages council minimum. What will happen when the wages councils are dismantled? Does anyone imagine that the wages of job machinists will go up? Of course they will not; they will go down. The Government's real contribution to the low-paid will be to price more people into low pay and trap them in the part-time, low-paid temporary sector of the economy.
  Contrary to what Conservative Members have said, the great weakness in the Budget is that there is no ending of the tax on child care—the one thing that would enable women to take full-time, permanent and relatively secure jobs. Women will still be trapped in part-time, temporary and low-paid work. It is not, as one journalist reported this morning, that the Chancellor's
  "conscience has caught up with him".
  However, the unemployed and low-paid who are forced to pay the price for the Government's policies will catch up with his conscience.
  The majority of pensioners have not gained from the Budget. If the Chancellor really wanted to help pensioners, he would remove the £8,000 ceiling on savings for pensioners on housing benefit, which not only acts as a disincentive to save but means that they lose their housing benefit. If the Chancellor had restored the link between the rise in pensions and earnings, and pensions had risen at the same rate as inflation since 1979, from 10 April a weekly single pension would now be worth an extra £9·70, and that for a couple would be worth an extra £15·45.
  Pensioners in our society who depend on state pensions have been short-changed for years. I received a letter from a pensioner in my constituency which said:
  "If you are unlucky enough like me to be 68 and on income support you get the increase on your little pension (I don't get a full pension), straight away your income support withdraws it from you so you are back to square one … Seems to me
  462
  Sir that those who have have more, people like myself and goodness knows there are plenty of us, will still have to struggle."
  That is the equation—pensioners feel that this is not their Budget because they will be back to square one when the impact of the changes in social security and the changes in the Bill are taken into account.
  The Budget contains proposals and changes for those approaching retirement and for those in work who will benefit from the incentives and the subsidies to private pension schemes, which undermine the SERPS that we talked about earlier. However, pensioners, and those approaching pensionable age, without jobs, and those in part-time, low-paid work who do not receive pension back-up will simply suffer a decrease in state pension. Therefore, I respond with some cynicism to those who say that pensioners should be allowed to work longer. It may well be that pensioners on state pensions will have to work a lot longer.
  Mr. Ian McCartney: Is is not true that, later this week, a fuel tax will probably be imposed on pensioners—an unnecessary 6 per cent.-plus increase to pay for the privatisation of the electricity industry? Is it not a disgrace that such a tax should be imposed on pensioners, and that those charges do not appear in the Budget? The Government obviously hope that the general public will not notice that the tax has been imposed on them.
  Mr. Battle: My hon. Friend is right to remind us of that. We face rises in the charges for electricity, gas, water and medical prescriptions. In the last year we have seen the introduction of charges for sight tests and visits to the dentist which were all well above inflation. They will all have a particularly harsh impact on people—including pensioners—who live on below-average incomes.
  The Chancellor suggested that we had enjoyed one of the longest periods of strong and steady growth, but he has not chosen to ensure that pensioners have a decent standard of living in their retirement. Surely they are entitled to that. Even with present economic growth, the Government cannot sustain their promises for transitional payments of housing benefit.
  It is a marketing myth to describe this as a Budget for the low-paid or pensioners. The right hon. Member for Shropshire, North said that we should return to the Tory tradition of social spending. Such a tradition certainly does not start with this Budget. The people who will have to pay the price will do the arithmetic and work out that they have been short-changed by the Budget and the Government. They will know that the Chancellor had to introduce such a Budget because he needs a low-wage economy to be built under the structure of the upper-tier economy.
  The buzz word of the Budget is "prudence". In the Oxford English Dictionary, that word is defined as the
  "ability to discern the most suitable, politic or profitable course of action".
  We should underline the words "politic" and "profitable". The Budget will certainly be profitable for insurance and pension companies, and it was certainly a politic Budget, geared towards the bribes that will be offered in the way of tax cuts in time for the next general election. In practice, the Budget may well consolidate the marginalisation of the poor by squeezing them out by means of the tax and benefits system.

  463
  On the BBC's "Newsnight" programme on 30 July 1985, the Prime Minister said:
  "I do feel very strongly indeed that people on comparatively low wages and pensioners pay too much tax."
  That concern has not percolated through to the Chancellor's Budget, and the Government should not try to pretend that it has.
  The people who are being made to pay the price for the Government's approach to the economy cannot and will not be deceived and, when they get the chance at the next election, they will ensure that this Government pay the price.
  6.58 pm
  Sir Anthony Grant: The hon. Member for Leeds, West (Mr. Battle) made a sincere plea for the lower-paid and pensioners, and the House always listens with great respect to a sincere plea for the less fortunate in our community. I am sure that the Treasury Ministers will heed what he said. Certainly, his remarks about pensioners struck a chord with me. I agree that this is not a Budget for the lower-paid but it is prudent, sensible and in the nation's interests.
  As all my hon. Friends who have spoken have said, I think the top priority must be the curtailment of inflation—the curse which inflicts everyone and everything in our society. The debate began with the customary vigour of my right hon. Friend the Chief Secretary to the Treasury. He is one of the best Chief Secretaries that I can recall in my time in Parliament. I hasten to add that he follows the distinguished precedent of my right hon. Friend the Member for Shropshire, North (Mr. Biffen).
  Although we realise that public expenditure is dealt with at a different time, it is fair to pay tribute to my right hon. Friend the Chief Secretary. He has succeeded in reconciling the various voracious interests in public expenditure among the different Departments because of his skill and particularly pleasant personality.
  My right hon. Friend the Member for Shropshire, North—to whom we always listen with great interest and with whom I always seem to debate—is a most interesting man. We have been friends for a long time and I am sorry that he has left the Chamber. Following discussions that we used to have during the Wilson Administration and that of my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath), I never thought that I would hear him making a strong plea for further public expenditure. However, he is a percipient and far-sighted man—no other hon. Member could give a more long-sighted view of the future than he, and he may well be right. His views will certainly be carefully considered by Treasury Ministers.
  I said that this was a wise and prudent Budget. Let us look at the background. We need to go back to the famous black Monday, when stock exchanges throughout the world slumped, with Governments as well as City institutions showing excessive nervousness. The fire was fanned by the media, which tried to paint the inaccurate picture of a second Wall street crash. There were worldwide and hysterical fears of a major recession, and interest rates were brought down by too much. My right hon. Friend the Chancellor himself admits that, although he had to follow the trend, that was an error.
  Next came the failure of the BP flotation. The building societies were awash with money, which boosted the
  464
  housing market and fuelled inflation. I do not believe that the tax cuts in the 1988 Budget were the cause: I supported them at the time and still believe they were right. Although I appreciate that my right hon. Friend cannot reduce taxation in the present circumstances, I hope that the impetus for a reduction in direct taxation, which has been the main theme of this and previous Conservative Administrations, will be maintained. As I said last year, I can see no moral or merit in taking vast sums from a vast range of people, sloshing it around expensively in Government bureaucracy and then doling it out to whomever clamours loudest. That should not be part of the Government's philosophy or of that of society as a whole.
  Although dull, this Budget is wise both tactically and strategically. Within the constraints in which he has operated, my right hon. Friend has been able to find room for some helpful measures, but I shall touch on only two. The first is the encouragement of wider share ownership. I was a founder member of the movement for wider share ownership 20 or 30 years ago. In those days, we had the support of Labour Members: the present Lords Lever and Houghton were enthusiastic members. That Labour enthusiasm, however, has diminished over the years. Wider share ownership was never very fashionable, but my right hon. Friend has picked up the theme probably more than any previous Chancellor, and I am glad that he has found himself able to help the cause in his Budget. I also welcome the improvements in the personal equity grant, which had got off to a rather dull start and was not taken up as much as it should have been. My right hon. Friend has improved profit-related pay and, in particular, employee share ownership schemes.
  The hon. Member for Berwick-upon-Tweed (Mr. Beith) thought the additional incentives for people to join personal equity plans rather inadequate. Let me point out that the annual amount that can be invested—provided that it is invested in unit and investment trusts—has been quadrupled. I do not call that puny: I think it very encouraging.
  Mr. McCartney: In his analysis of wider share ownership, perhaps the hon. Gentleman will tell the House whether he believes that the Chancellor should have made a statement about compensation for my constituents and others who took the Government's advice and put all their pension savings into firms such as Barlow Clowes and other City bucket-shop operators. Having lost tens of thousands of pounds, they are receiving no public redress for advancing their position in the share-owning democracy on the Government's advice.
  Sir Anthony Grant: I share the hon. Gentleman's view. I too have constituents who have suffered from the Barlow Clowes fiasco. I am afraid that there will always be—I must choose my words carefully—people who are unsatisfactory for others to invest in, but there is always a certain number of casualties. I hope that I too brought pressure on the Government: I certainly thought that they should share some responsibility, and welcomed the news that the ombudsman was to look into the matter. I hope that reasonable redress will result from that.
  Mr. McCartney rose——
  Sir Anthony Grant: I do not want to spend all my time on Barlow Clowes, but I will give way.
  Mr. McCartney: The Government launched a BP share repurchasing exercise because of the state of the market. Given that they felt that that was the correct response, should the Chancellor not use some of the £15 billion in his coffers to assist those pensioners, some of them now destitute, to provide redress?
  Sir Anthony Grant: I do not want the Government to become involved, because when they do they get into a monumental mess. That is one of the reasons why I tend to agree with the hon. Gentleman about Barlow Clowes. The less the Government have to do with such matters the better, which is why I support privatisation.
  My right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour) spoke of the importance of the manufacturing base. Although I do not suggest that it will necessarily make a huge difference, I believe that the encouragement of worker participation and wider share ownership can make a useful and worthwhile contribution. Enthusiastic National Freight Consortium workers made substantial sums on the corporation's flotation, which they richly deserved, and I should like that to be extended throughout manufacturing industry.
  It is important to get such schemes across to the public. Let me. a suggestion, because sometimes schemes are announced in the Budget and then forgotten. Ministers—not necessarily Treasury Ministers, but certainly Trade and Industry Ministers—constantly, I hope, visit companies all over the land. I suggest that when they go in to see the company chairman—after they have been adequately refreshed in the boardroom—one of the first questions that they should ask is "What is the company doing to encourage employee share ownership schemes, personal equity plans and profit-related pay?", and they should draw his attention to the improvements that have been made in the Budget.
  I also welcome the encouragement of small firms. Small firms are one of my pet causes. I was Minister responsible for them at a time when they were not fashionable. They are now very fashionable and I am glad that my right hon. Friend has helped them with his changes in corporation tax, as they have been hit hard by the increase in interest rates. Having welcomed the simplification in VAT over the years, I was very pleased that my right hon. Friend lifted the VAT threshold for small firms to the EEC maximum.
  I am glad that my right hon. Friend the Financial Secretary is on the Front Bench, as I know that he is interested in this subject. The VAT threshold of £23,600 is ludicrously low. Very small firms earn that amount; for such firms—often run by a husband and wife, or indeed an individual—to have to go through all the panoply of formfilling, Customs and Excise inspections and so forth is an undue burden, even with the simplification of VAT. I make this plea to my right hon. Friends in the Treasury: will they please continue to press the EEC to show some common sense? The EEC is supposed to believe in small and medium-sized enterprises; this is one way in which such enterprises can be encouraged. If the level is lifted—to £50,000, £100,000 or whatever—it will be a tremendous boost for the small firms sector.
  This is a throughly sensible if dull Budget, and is in the interests of the nation as a whole. I certainly support it, and, more important, I believe that it will be supported by all sensible and thinking people.
  7.9 pm
  Mr. William Ross: I listened with interest to the speech of the right hon. and learned Member for Monklands, East (Mr. Smith). Whenever he accused the Government of being responsible for the 8 per cent. inflation we are now facing, I thought back to the performance of the previous Labour Government in the 1970s. I came to the conclusion that at that time neither he nor his right hon. and hon. Friends would have been so willing to accuse the Labour Government of being responsible for the inflation we were living through. I was rather surprised that his comments were not challenged instantly by the Ministers on the Treasury Bench. However, perhaps the Chancellor was remembering the comments he made yesterday. In a rather throwaway line he said that inflation was now fairly widespread and he seemed to be using that as an excuse for the inflation we are now facing. It is in direct contradiction to his comments in the 1970s when he said that inflation was the direct responsibility of the Government of the day.
  Mr. Andrew F. Bennett: Will the hon. Gentleman accept that during the 1970s there was a massive world oil price increase, together with an increase in other commodity prices? That was the problem with which the Labour Government had to grapple and with which by 1979 we were coming to terms. Yet the first act of this Government was to increase VAT and start the inflationary spiral again. Today we do not have world pressure on prices. In fact, oil prices are falling, so there is no excuse, except the Government's actions, for the present inflation.
  Mr. Ross: If one really wants to look for excuses, they can always be found. The hon. Gentleman's comments about oil prices are true. Today, as far as I can discover, in real terms oil prices are only about 60 per cent. higher than before the first oil price shock. I will leave the hon. Member for Denton and Reddish (Mr. Bennett) to argue that point himself if he catches your eye, Mr. Deputy Speaker. I will let the hon. Gentleman defend the previous Labour Government and let the Government of the day demolish that argument if they see fit.
  There are several things in the Budget we should all welcome, not least the £1 billion give-away in relation to the changes in national insurance contributions. However, I am curious about whether we are seeing the first timid steps towards amalgamating the national insurance contributions and the general income tax structure. I appreciate what the Chancellor said yesterday about the contributory factor, but, despite that, surely they are both basically a tax on income. Since most benefits come from general taxation anyway, there is no good reason why we cannot look forward to an amalgamation of the two so that we can see what every individual is paying in tax as a proportion of his income.
  As has already been adequately pointed out, the change does not deal with the real problem of the low pay structure found in some parts of the country, especially in the Province, of Northern Ireland where there is an over-dependence on benefits. I should like to see that swept away and replaced by realistic incomes. However, that involves another subject with which I shall deal shortly.
  I welcome the fact that married women will be given their own entitlement under capital gains taxation. That

  467
  will help small family businesses which are so painstakingly built up. It will also help the farming community, especially in the Province where we have the peculiar situation of most farms being owner-occupied.
  My party welcomes the increases in the price difference between lead-free and leaded petrol. The only sad fact is that in Northern Ireland we have only 91 outlets for lead-free petrol. I am not sure whether that problem is prevalent elsewhere in the United Kingdom but I suspect that it may be in the more sparsely populated areas. For that reason, if for no other, we should welcome the increasing differential in the price of petrol. If the difference could be increased further, it might be an added incentive, together with the other measures mentioned by the Chancellor, such as eventually getting rid of two-star petrol, to ensuring that lead-free petrol is available in every part of the country and that every petrol station has at least one pump selling lead-free petrol.
  I welcome the general tidying up of fiscal policy, which covered a wide range of things and which will benefit both small and larger investors together with old people. I welcome the fact that some tax loopholes were closed. It is amazing how tax loopholes appear every time there is a change in taxation. No doubt the well-intentioned changes of yesterday will result in new loopholes which will have to be closed by subsequent Budgets.
  However, there are some raspberries for the Chancellor. First, income tax starting points remain the same, except for indexation. There was some scope to go further or to reduce income tax by a small amount. I am dismayed that the Government are having to come to terms with the fact that the EEC is able to impose its demands upon the financial management of British affairs. That has not been mentioned in the debate so far and we should not allow it to pass unheeded. It is the first sign of a long shadow that will increase in intensity with passing years. More and more powers will be handed by this place to the Common Market. The end result will be that we lose all control over our Budget and the management of our economy. I see that there is some agreement for that view on the Government Front Bench and I am glad to see that. I cannot believe that the country will lightly throw away that freedom. The Prime Minister's Bruges speech some time ago was helpful in that respect. I hope that it is followed by action to re-establish the authority of the House over this country.
  The EEC will eventually do this nation a great deal of damage. My party has always been opposed to it. We continue to hold that view, even if we are the only party in the House to do so. We are wholeheartedly opposed to it and hope eventually to gain a considerable number of converts from both the major parties as the real meaning of the Single European Act becomes more apparent to all who sit in this place.
  I regret the failure to give further help to manufacturing industry. The manufacturing sector is about £14 billion in deficit, and I do not believe that all the talk about being competitive or about overseas investment being a help to us is good enough. Every £1 million that leaves this country and is invested in a factory somewhere else represents an export of jobs as well as capital. If we are ever to overcome the bottlenecks that have been made apparent by the deficit in our manufacturing industry, we
  468
  have to become more competitive. We can become more competitive only with better machinery, and that means the expenditure of large sums of money. That is a simple fact of life if we are to improve our efficiency. If we are not prepared to do that, we can expect the gap to get wider. Since manufacturing industry is the powerhouse of our wealth creation, we will slip further down the international league, and none of us wants to see that happen.
  I listened with great interest to the Chancellor's comments on the national debt. The effect of that huge burden of national debt on the national economy is not widely understood in the country. We are told that the housewife at No. 10 runs a fairly tight purse in her own establishment, but who has ever heard of a family who were happy to go on paying huge sums of bank interest without reducing the loan? If any of us were in that position, it would not be long before we were slipping quietly and circumspectly past the bank manager's door or before he was saying, "Here, boy, I want a word with you. When are you going to do something about it?" It is not right to continue to carry that huge debt indefinitely.
  Every 10 years we pay out as much as we owe, which seems a crazy way to proceed. There is, of course, a long history of wishful thinking behind the desire to get rid of the national debt, which extends back to Prime Minister Robert Walpole and the National Debt Reduction Act 1786. Attempts to diminish or get rid of the national debt are not new; they are two centuries old—and probably rather older than that.
  This year we have a first-time surplus of £8 billion, after the sale of various assets through the privatisation process. We were alleged to have a surplus last year, but that happened only because the Government had sold the family silver. Any family would do that in times of crisis if they were really in need of money, because silver is a mere ornament and does not make much money sitting on the family sideboard. But if one sells the family silver and then spends the proceeds on current expenditure, such as buying the groceries, one has not got out of debt. That has always been my objection to selling off assets through privatisation and never diminishing the national debt. If we sell assets that belong to the nation, we should try to do something long-term for the nation.
  In considering the debt, I am considering only the rather narrow definition of national debt in the sense of central Government debt rather than the wider area of public sector debt. That is because a great deal of local government expenditure included in the wider public sector arena relates to investments in, for example, water, sewerage and housing. Such expenditure produces concrete results which will remain after the debt incurred to build them has been repaid, although at a high rate of interest.
  At the end of last March, the central Government debt was about £197 billion, which was a huge sum of money. It has, apparently, been reduced during the past year. At one time it was much higher, as a nominal sum. After the war, the national debt was two and a quarter times the gross national product. It has fallen as a percentage not because it has been repaid, but because of the country's increasing wealth.
  In his speech today, the Chief Secretary to the Treasury talked about reducing the borrowings of the last Labour Government. I point out to the Treasury Bench that that is not strictly accurate. In 1979–80, the debt was £95·3 billion. At the end of last March, it was £197·5 billion.

  469
  During the Government's nine years in office, the debt rather more than doubled in nominal terms—if not in real terms. It was costing us £16 billion a year to service the debt. What could the Government not do with £16 billion a year? That is the amount that we are paying year after year. This year, the Government are repaying £14 billion. They are paying back what they themselves borrowed, not what the Labour Government borrowed and the House should bear that in mind. I welcome the fact that the Chancellor is paying back money and I hope that he continues to do so.
  If the right hon. Member for Shropshire, North (Mr. Biffen) were still here, I would try to comfort him by pointing out that he is not alone in being practical about what the Government should do with the surplus. I admire the right hon. Gentleman because he is practical and he knows that the first duty of a political party is to continue to win elections. He is clearly prepared to spend money in doing that. We can, therefore, expect a give-away Budget, if not next year, the year after that at the latest. The Labour party had better watch out because it is not in a position to spend money and it will not necessarily he spent in the ways in which it would like it to be spent.
  When the Chancellor and the Treasury redeemed the £14·5 billion, did they pay back only loans that had reached maturity, or did they go into the market place and buy, at above the nominal value, debt that was carrying a high rate of interest? Was that not the best way to spend the £14·5 billion? We would be interested to hear the answer.
  I noticed with considerable dismay that, having reached the happy position of being able to redeem the debt, the Chancellor did not give a commitment to eliminating it, but said very much the opposite. With the present fears about inflation, I can understand why he did not plough the £14·5 billion back into the economy, but he may be making a virtue out of necessity. It is clear that the Government got all the figures wrong last year. Nobody expected £14·5 billion and the figure was out by £10·5 billion. They cannot be any more sure about the forecast of £14·5 billion for next year unless the figures are more soundly based than in the past year. Can the Chancellor assure us that the figures are correct, or do we have to wait until next year's Budget?
  I return to the Chancellor's comments about the repayment of the national debt. He said yesterday:
  "I set out the principle of a balanced budget as the proper objective of fiscal policy, in these terms:
  'A balanced Budget is a valuable discipline for the medium term. It represents security for the present and an investment for the future. Having achieved it, I intend to stick to it. In other words, henceforth a zero PSBR will be the norm. This provides a clear and simple rule, with a good historical pedigree.' …
  To go further than this, and seek to achieve the maximum possible repayment of public debt, would not be consistent with the Government's policy, as it would mean deferring for a very long time the benefits of a reduction in the burden of taxation."—[Official Report, 14 March 1989; Vol. 149, c. 297.]
  The right hon. Member for Shropshire, North can take comfort from those words because it is clear that the policy of reducing the national debt until it is eliminated will not continue. If I am wrong, I shall be happy to hear it. The reduction is temporary and has come about because of the peculiar circumstances in which the Government found themselves with an unforeseen and massive surplus, which they have put to good use.
  470
  We should eventually set out to clear the national debt. If we consider the £14·5 billion plus the £16 billion which we are paying in interest—and the Chancellor referred yesterday to the £1·5 billion savings that he would achieve at the end of next year on the national debt interest charges—the total is about £30 billion a year. That is a huge sum of money. I hope to see the day when we do not have to find such sums in interest charges and capital repayments to repay the national debt.
  7.39 pm
  Mr. David Madel: It is a pleasure to follow the hon. Member for Londonderry, East (Mr. Ross) who raised the question of the European influence on our tax system. Although I do not fully agree with him on that, some of the controversial proposals from Brussels would require unanimity, and to date the Government have said that they will not agree to a number of them.
  As with any Budget, this Budget has been a balance between taxing and spending. The Autumn Statement is now an enshrined part of our financial scene—more is said about spending in the autumn than now. I have always regarded the Budget as the overture to the Autumn Statement because what the Chancellor says about the strength of the economy at Budget time is likely to tell us what we can expect in relation to spending in the Autumn Statement, six months ahead.
  I welcome first the national insurance reforms. It is widely felt by the public that national insurance is nothing of the sort, but that it is merely a decision to tax and a decision to pay. I am pleased that the Chancellor has lifted a tax burden on the lower paid in his national insurance changes.
  Secondly, the Chancellor has changed the tax system on unleaded petrol. He went into considerable detail on that. He has widened the gap between four-star and unleaded petrol. However, we now need a sustained advertising campaign by the motor manufacturers to get their message across and to tell us which engines will run on unleaded fuel without any changes being made. We also need to support the Chancellor's comments yesterday about the need for a complete conversion to unleaded fuel, following or running parallel with a greater availability of unleaded fuel at petrol stations.
  I welcome immensely the fulfilment of the pledge to abolish the earnings rule for pensioners. That will have an additional impact on our retraining of older people, which is at last being carried out to a greater extent. However, as a result of the Chancellor's change, there will be a further demand and a further need for such retraining.
  I turn now to excise duties and VAT. Before we even agree to the harmonisation or approximation of VAT with the EEC—I am not sure that we will and even if we do, it may be some years off—in my view, VAT does not have to stay at its present high rate for ever. It is possible to reduce it on certain items. Most people regard the retail prices index as applying only to essentials and they would not automatically class drink and tobacco as "essentials". Therefore, it might be possible for the Chancellor to reduce VAT in the future.
  I turn now to the other taxes on spending. It has been pointed out for years that it is unfair to have a 10 per cent. car tax on top of VAT. If—I repeat if—we move to an approximation of indirect taxes with Europe, that 10 per

  471
  cent. car tax will have to go and we would achieve—industry will welcome this—an approximation of new car prices in this country with those of our European neighbours.
  Therefore, I hope that for the time being we shall not rule out a reduction in VAT, which would obviously help the Chancellor in his battle to keep inflation down.
  There has been much adverse comment in the debate about last year's Budget and about what the Chancellor did between the October 1987 crash and his 1988 Budget. I have never joined in that criticism because I think the Chancellor was right to do things after the crash to stop us going into recession. My right hon. Friend pointed that out in his Budget statement when he said:
  "Output in the United Kingdom has grown faster than in all the other main European nations during the 1980s—a marked contrast to the previous two decades, when we were bottom of the league".—[Official Report, 14 March 1989; Vol. 149, c. 294.]
  In other words, the last thing that we needed in late 1987 and in 1988 was action by the Chancellor to tip the country into recession. My goodness, we needed to get to the top of the European output league to improve our manufacturing base and to provide more employment.
  I can remember reading—I was not a Member of the House then—that the then Mr. Harold Wilson hugely enjoyed himself in the 1960s when he referred to the late Mr. Harold Macmillan and Mr. Selwyn Lloyd as "Stop-Go and Son" in relation to their Budget policies. No such criticism could be levelled at my right hon. Friend the Chancellor today. There has been no stop. There has been an improvement in output and investment—something that we have all wanted—and, above all, that has created more jobs and improved our competitiveness.
  As my right hon. Friend the Financial Secretary to the Treasury is in his place, I should like to raise the question of tax relief for people who are seconded from industry into education or business. The Government have just announced a welcome new scheme, which they call Bridge, which is Government and business investing in each other. My hon. Friend the Under-Secretary of State for Corporate Affairs sent us all a letter, stating:
  "We also want to see more people from business getting first-hand experience of working in Government Departments."
  Obviously, the Government want to see more civil servants going into business but I was interested to read about business people going into Government Departments.
  I raised that issue with my right hon. Friend the Financial Secretary earlier this year in relation to tax relief for such people. In his letter to me of 11 January 1989, my right hon. Friend stated:
  "Any costs which a company or individual trader incurs in connection with the employment of the person on secondment (and in practice this is likely to mean mainly the cost of his or her salary) are allowed as a deduction in calculating the profits of the business for tax purposes."
  The new scheme is about secondment and we should welcome the move to get business, the Civil Service and Government working more closely together. From what my right hon. Friend stated in that letter, I assume that tax relief applies, but further tax incentives may be necessary to encourage firms to release and second people into the Civil Service so that Government and business can better understand what each is trying to do.
  472
  The hon. Member for Londonderry, East referred to the challenge to industry and the need for us to be much more competitive. Page 26 of the Red Book states:
  "The maintenance of competitiveness in the year ahead will depend on success in restraining unit cost increases."
  Because of 1992 we must see the challenge to our manufacturing industry in European terms. Although we have greatly improved our performance, there is a considerable way to go in terms of output and fixed investment in manufacturing.
  Because of the changes in the labour market, trade unionists and employees are in a strong position, not because we have suddenly tipped out the important reforms on trade unions that were made in the early 1980s, but simply because of the state of the labour market and the growing skills shortages. That presents a great challenge to management in responding constructively and effectively to what the Chancellor said about the need for increased competitiveness. There is an obvious need for a better use of machinery at work and for a change in working practices—in other words, for better organisation of how we work.
  There is also a need to take full advantage of the Chancellor's changes on share option schemes for employees, which he went into in considerable detail yesterday. In my view, there is a need to move to two or three-year wage deals rather than having the annual difficulty and tug-of-war about what should be paid. I hope that as an employer, the Government might feel that in some areas they can move towards such two or three-year wage deals.
  If we are to improve our competitiveness, much will depend on the speed with which we can retrain our people when new industries appear. Although industrial relations in this country have improved, in many industries there is an armistice rather than a lasting peace. If we are to move to a German standard of industrial efficiency and output, we must also have a German standard of compromise and co-operation between management and employees. That still eludes us in some industries and it damages our competitive performance. A terrific challenge now faces management, the unions and employees to get industry better organised because nothing can change the fact that 1992 is rushing upon us with all the challenges to industry that that will entail.
  I shall just say a word about Government spending. As I said, the Budget was a balance between taxation and spending. The Chancellor referred to that in relation to the repayment of debt. He said:
  "net debt interest costs will be lower by over £1·5 billion a year.
  This saving is being put to good use, allowing extra spending on departmental programmes within our overall public expenditure constraints."—[Official Report, 14 March 1989; Vol. 149, c. 296.]
  The question is, are the public expenditure constraints too tight? My right hon. Friend the Member for Shropshire, North (Mr. Biffen) mentioned health and education as two matters requiring increased but careful, planned public expenditure.
  I shall give one example. Each year Her Majesty's inspectorate of schools issues its annual report which is entitled "Standards in Education" and the latest one for 1987–88 has just come out. In that report, the inspector says:
  "In many ways, then, the education service is well placed to face the future with some confidence. But some old, familiar problems persist. Pupils and students of below

  473
  average academic attainment continue to get a generally poor deal. Accommodation in many secondary schools and in some FE colleges is in poor shape, shabby in appearance and deteriorating as repair and maintenance are further delayed."
  It is true that the Secretary of State for Education and Science has made provision for increased expenditure, but, when the next annual HMI report comes out, I hope that the inspector will not use those words, but he will be able to say, "Some old and familiar problems are diminishing as the Government get to grips with the questions of accommodation for our secondary schools and equipment in secondary schools and in further education."
  I am not suggesting that we can cure it overnight, but after 10 years in government, what will help the party and the Government is for such independent reports—which are so crucial for our children—to point to a steady improvement in what we are providing for the state education system rather than saying pessimistically, "Old and familiar problems exist."
  Another item of public expenditure to which the Government will soon have to turn their mind is the community charge and the revenue support grant that will be needed to underpin it. This is the time of year of the Grand National. As the Government rush around the legislative track, in 1990 there is this Becher's brook of the community charge to be jumped. I beg my right hon. Friend to err on the side of generosity when fixing the revenue support grant for local authorities for the first year of the community charge in 1990. I did not vote against it; in fact, I supported the Government on the community charge, because, as long as the flat rate is reasonable, I believe that it will be acceptable to the public. I know that it is early days for the public expenditure round, but now is the time for us to put in our bids and draw attention to what we believe will be contentious matters.
  I regard this as a safety first Budget, but "safety first" is not a bad slogan. it was used by the Conservative Government in 1929. Before historians leap to their feet and say, "But Mr. Baldwin lost that election by using `safety first'," I shall point to one historical fact. The evidence is that the Conservatives lost the 1929 general election because they were not perceived to be doing enough to cure unemployment. I believe that we can use "safety first" again. We certainly have a good safety first record on defence, a safety first Budget and prudence with Government finances.
  However, we want to avoid what happened in 1929, albeit on a different matter. We do not want the public to say, "We are not too sure about you, because you are not paying sufficient attention to certain public services." I have mentioned the education service and other hon. Members have mentioned the National Health Service. If the public see that we are steadily attending to what needs to be done in those aspects of Government expenditure, safety first will pay off and we shall be returned to power in 1991.
  7.41 pm
  Mr. Andrew F. Bennett: I am pleased to follow the hon. Member for Bedfordshire, South-West (Mr. Madel). Since coming to the House in 1974, he has been one of those hon. Members who have diligently argued for the education and employment services. It is a sad reflection on the Tory party that he has never achieved office—perhaps that was because he stuck
  474
  to his principles, unlike many others. I certainly agree with his comments about needing more investment in the public services.
  I believe that the best way to test this Budget is to show how it would affect my constituents. What would have happened if the Chancellor had delivered his Budget last year and this year to the Reddish or the Denton pensioners associations? If the Chancellor had gone to those two groups of pensioners, they would have torn him apart. They are extremely bitter about the way the Government have treated the average pensioner. Last year, they were insulted by the slogan that it was a give-away Budget, because for almost all the pensioners in my constituency there were no give-away provisions. They did not benefit from the Budget, but they were almost all caught by the social security changes that followed. They knew that they were the people who last year were paying the price for that give-away budget with cuts in their social security, pensions and housing benefits. Not only did they pay last year, but they are now paying because of the inflation that that Budget stoked up. They have actually been asked to pay twice.
  Last year, because of the outcry from the Opposition and from those outside the House, in the end the Government came up with transitional benefits to ease the cuts for pensioners. However, all they have done is delay those cuts for a further 12 months. Therefore, this year many of my pensioners will receive no increase at all in their pensions. If the pension is increased, not merely will it be increased by only 5 per cent. when the actual inflation rate is 8 per cent., but for many of them the extra that they receive in their pensions will be taken straight away by the loss of their transitional benefit.
  People talk about 8 per cent. inflation, but it is much higher than that for many pensioners. They are the people who have been or will be on the direct end of those price increases that have been deliberately engineered by the Government. They are the people who are having to pay higher prices for their gas because of the Government's privatisation programme. They are the people who will have to pay higher prices for electricity when the electricity industry is set up for privatisation. They are the people who will have to pay a levy on their electricity prices to sort out the mess that the Government have caused in the nuclear industry.
  They are the ones who will have to pay higher water charges. As residents in Stockport and Tameside, many are extremely bitter about the fact that over the years they have invested in the water activities of their local authority, originally through their water rates. They saw good reservoirs and, in many instances, good supply systems built. They believe that those are their systems. They do not see why they should now be sold for someone else to make a profit. Not only will someone else make a profit, but they will have to pay higher water rates.
  Many of my pensioners are concerned about the way in which the Government changed the rules about the television licence. They believe that the Government were mean in taking away from people in sheltered housing the 5p licence and substituting the £5 licence. One of my constituents moved from an upstairs flat to a downstairs one in a sheltered scheme because the stairs were difficult to cope with; because of that, she became liable to the £5 rate.
  Many of the pensioners in my constituency will feel bitter about the Government's action. They looked to this

  475
  Budget for some concession. They would have liked the Government to attempt to restore the link between pensions and earnings. They feel, as I feel, that if the country is doing well—the Government claim that the country is doing well—they should be sharing in some of that general prosperity. However, as long as the Government maintain a link merely with prices rather than with earnings, they are excluded from any share in that extra wealth.
  My constituents continually remind me that, if the link between pensions and earnings had been retained, the single pensioner would be £9·70 better off and the married couple £15·45 better off. Many pensioners in my constituency are caught by the savings rule. To some, £8,000 may sound like a lot of money, but pensioners who have been forced out of their homes because they can no longer afford to maintain them and who move into sheltered housing find that even if they have relatively small savings, they are not eligible for state benefits.
  My constituents ask also about the Christmas bonus. The Government constantly parade the fact that they restored the Christmas bonus, but it has been steadily devalued in real terms. My constituents ask why it cannot be uprated. If the Government cannot do that, why not provide a television licence concession for all pensioners, rather than for just those living in sheltered housing?
  My constituents view with some cynicism the abolition of the earnings rule, because many of them were forced out of work by the Government long before they reached pensionable age, as a result of the way that the Government have destroyed jobs in my constituency over the past 10 years. My constituents would have loved an opportunity to continue working until pensionable age, so that they could have saved a little as a hedge in their old age. For them, that was not possible. Very few of my constituents will benefit from the abolition of the earnings rule, and the Reddish and Denton pensioners associations will be quick to point out that it is people such as the Prime Minister who will benefit most from that measure, rather than the ordinary pensioner.
  They will make the same comment about private health insurance tax relief. A number of pensioners in my constituency have been waiting years for hip operations and treatment for arthritis and cataract operations. They feel that it is totally wrong that they should subsidise out of their taxes people who are rich enough to afford private health care and to jump the queue. My constituents will be very bitter about that. They will not greet the Budget with any enthusiasm.
  A large number of my constituents are low-paid. They are already bitter at wages councils being abolished and at the way in which the Government are pushing the country into a low-paid economy. My constituents await with dread the imposition of the poll tax. For those on low pay, it will make a swingeing cut in their living standards, however generous the Government may be. The low-paid have already suffered because of increased prescription charges, and they have also lost because of higher council rents and the imposition of sight test and dental examination charges. Many of them are caught in the poverty trap, which the family credit system does little to overcome.
  476
  The low-paid are the people whom an increase in child benefit would have done most to assist. One of the meanest tricks played on the low-paid with children was the Conservative view that it would be better to replace tax relief for children with a child benefit allowance—and having done so, to renege on the promise to uprate the allowance in line with inflation and to freeze it instead.
  Last year's tax give-aways meant nothing to the unemployed in my constituency, but the social security squeeze made a great deal of difference to them. A substantial number of people are receiving reduced benefits because they are repaying loans to the Department. The same applies to young people aged between 16 and 19 who have lost benefits altogether, and those same young people, perhaps because they have fallen out with their parents, face considerable difficulty in obtaining accommodation.
  In particular areas of my constituency such as Brinnington, debt management problems for people on low incomes are substantially increased. The Government have done nothing for them. Some of my constituents have at least turned to self-help schemes. I was delighted to pay a visit at the weekend to the launch of the Brinnington credit union, established by people wishing to overcome the credit problems that the Government have created and by moneylenders' extortionate interest rates.
  It may be thought that a mortgage interest rate of 13 per cent. is horrific, but some moneylenders in my constituency charge interest of 35 per cent., 40 per cent. or 50 per cent. to people who cannot afford repayments in the first place. I am delighted that my constituents have established a credit union that will help to channel local savings into relieving poverty there. It would have been nice if the Government could have provided help for such credit unions, because existing operational restrictions on credit unions are harsh.
  For my constituents, the re-creation of full employment and of well-paid jobs would probably be worth more to them than anything else, yet the Government have been destroying jobs for 10 years, and today's high exchange and interest rates make it extremely difficult for the successful companies in my constituency to expand. A company's investment programme for the year ahead may comprise three or four schemes as the subject of investment. When interest rates are as high as 13 per cent., a board may approve the first scheme on the list but not the others. If this country is to return to full employment, and if there is to be the investment that will help us pay our way in the world and which will help my constituents to secure well-paid jobs, we must ensure that firms are encouraged to make the maximum investment in new schemes.
  I turn to environmental matters. Reddish vale has been well preserved by the local authority, and the opening up of the vale by Greater Manchester council was a great achievement. It is spoiled only by the River Tame that flows through it. It is not the most polluted river in the country but certainly it is one of the most polluted. Government financial assistance to make it possible for effluent to be treated by the companies that are pumping it into that river, or to local authorities to ensure the efficiency of their sewerage works, is minimal. The Government trumpeted the Mersey basin scheme, but much of that money was spent on the lower parts of the

  477
  Mersey. If one wants clean rivers, it is better to start cleaning operations at the river source rather than lower down.
  There is great concern in my constituency about the lack of Health Service provision. More and more of my constituents are resorting to raising funds for local hospitals. I admire them for holding raffles and other fund-raising events, but that also fills me with horror. I thought that, when the National Health Service was established in 1947, it would provide proper health provision for all, and that it would not need to rely on raffles for its funding. I admire the work of fund raisers, but greater Government resources need to be pumped into the Health Service. The same is true of the schools in my constituency.
  The Government's refusal to allow local authorities to build houses means that more and more young people in my constituency are unable to obtain the housing that they need. A substantial number of elderly people who are in the wrong housing could he moved from family housing to sheltered housing if it were available. The Government must make it possible for local authorities to build housing to rent if they are to relieve misery in areas such as mine.
  The Budget has failed my constituents. There is nothing in it for pensioners or the low-paid and there is little for those on average earnings. Nothing in it will encourage my constituents to believe that the shortcomings in the Health Service, pollution in rivers or the housing crisis will be resolved. It is high time that the Chancellor and the Government went and we had a Government that cared about ordinary people rather than the extremely rich.
  8 pm
  Mr. Julian Brazier: I should like to speak about the impact of fiscal measures in successive Budgets on employment. Then I shall touch briefly on two unrelated tax concerns.
  I firmly believe that in the long term unemployment is not caused primarily by macro-economic factors. It is possible to find countries that have been prosperous for a long time yet still have high unemployment, of which America of the 1960s and 1970s is a good example. It is possible to find countries with low standards of living yet little unemployment. Korea is such an example, but before it is said that Korea has had high growth for a long time, there are other countries that have a low growth rate and low unemployment, of which Sweden is an example. The key causes of unemployment lie not in macro-economic but, micro-economic factors. There are many but I shall dwell on fiscal ones, especially the fiscal balance between tax treatment of capital and labour.
  If we take a long view of unemployment in the United Kingdom, smoothing the economic cycle by taking a five or six-year moving average, we find that unemployment rose slightly in the 1950s, rose slightly faster in the 1960s, accelerated in the 1970s and early 1980s, peaked in 1986 and fell.
  It is interesting that 1979 was the watershed in macro-economic policy. The Government followed a quite different policy from their Conservative and Labour predecessors. The watershed in the fiscal treatment of capital and labour was not 1979 but 1984, as I shall try to show. It is why I believe unemployment turned round much later than the general economy—in 1986—and why it will continue to fall sharply.
  478
  In the framework that we inherited in 1979, which was bequeathed to us as much by previous Conservative Governments as Labour Governments, a number of features were biased to capital and away from labour, such as 100 per cent. capital allowances and regional grants which were paid indiscriminately for investment in capital goods. Even if such investment was purely labour-saving and would not have a chance of standing up on normal market grounds, it may have been profitable because of the combination of 100 per cent. first-year allowances and lavish regional grants. Furthermore, we had penal rates of personal taxation and employers' national insurance contributions were 13·5 per cent. As a result the gross cost to the employer of providing even quite a modest net wage was extremely high.
  In the 1960s and 1970s, successive Governments built up a strong bias in the economy against employing labour and in favour of investment, resulting in a steadily rising rate of unemployment. I firmly believe that a high level of investment is a feature of a successful economy, but it does not follow—and I have never discovered any evidence throughout the world—that the artificial subsidy of uneconomic investment by Government is a short cut to prosperity.
  Mr. Richard Caborn: The hon. Gentleman said that he has considered different models throughout the world. Has he considered the Swedish model? Conservative Members may scoff, but full employment is the centre of its policy and it is accepted by capital and labour.
  Mr. Brazier: I am not an expert on the Swedish economy, but if the hon. Gentleman will forgive me I shall make a number of points about other countries a little later.
  In the first five years of our term of office, while I wholly supported the transition to what are generally called dry macro-economic policies, we did little about the balance in tax treatment between labour and capital. We made a little progress with basic rates of income tax and employers' national insurance contributions, but, unfortunately, it was partly outweighed by a failure in one Budget to index personal allowances and a rise in employees' national insurance contributions. The big change occurred in 1984, with a clear commitment to phasing out 100 per cent. first-year capital allowances so that investment would have to stand on its merits and not be subsidised by the taxpayer. It was followed by further cuts in income tax and employers' national insurance contributions and the abolition of indiscriminate regional grants, which were doing more harm than good. If I had more time I could cite one or two examples in which, for relatively short periods, factories benefited from those grants, which led to unfair competition and some of those factories subsequently folding.
  In 1988, those cuts in personal tax were boosted by almost doubling benefits to the working poor by replacing family income supplement with family credit. Finally, this Budget made a considerable reduction in employees' national insurance contributions.
  The net result of those changes over the past five years is that we have completely restored the balance between labour and capital. Although growth rates throughout Europe over the past 10 years have been comparable, our unemployment, according to the figures of the

  479
  Organisation for Economic Co-operation and Development, is about 7 per cent. and falling, while the average for the rest of the EEC is about 11 per cent. and rising. Most of southern Europe heavily subsidises capital, especially through regionally directed subsidies. Most of northern Europe, especially Germany, has heavy social charges, which are the equivalent of employers' national insurance contributions. Thus Europe has not righted the imbalance, and in some countries the figures are rising.
  Mr. Stuart Holland: While the hon. Gentleman is giving us this geographical tour, will he admit that the reason for the introduction of new capital and technology in northern Italy—whether it be Tuscany, Emilia Romagna or Veneto—and in Germany is that there is co-operation between management, capital and labour? Labour is involved through participation schemes or co-operative ventures in the introduction of new and flexible techniques of production.
  Mr. Brazier: I understand the hon. Gentleman's point. I said that there are other micro-economic factors involved besides fiscal factors but all the parts of Italy that the hon. Gentleman mentioned are outside the regions at which grants are directed. Most of the grants are directed at southern Italy, where, despite them, unemployment continues to worsen.
  I shall make one final geographic point to complete a quick Cook's tour. America has moved dramatically in the same direction as us. It has undergone considerable tax restructuring, which in some respects is following ours. It has managed to get rid of most of the market-distorting, investment-directed tax breaks for companies. As a result, companies are paying much more tax. At the same time the Americans have substantially reduced the burden of personal taxation. The net result across the Atlantic has been a reversal of what the previous generation experienced. In other words, America has much lower levels of unemployment than continental Europe.
  For all these reasons, in addition to a 10-year period of sound macro-economic policies, we now have five years of sound fiscal balance in the treatment of capital and labour, of which this Budget's changes in national insurance contributions represent the final building block. I congratulate the Chancellor of the Exchequer on that.
  I want to move very quickly to the two specific measures that I mentioned earlier. The first concerns armed forces housing—a subject on which I have touched in a ten-minute Bill. The heart of the property-owning democracy that this country has seen develop over the past 10 years is the ownership of a home. In the civilian population as a whole, home ownership is now running at 63 per cent.
  The sad fact is that the armed forces, in particular the Army and that section of the Air Force that deploys heavily in Germany—mostly personnel involved with the Harrier and the Tornado—have not shared in this. The very simple reason it is not possible for them to do so is that over half of our Army is abroad, and the rest is very heavily dispersed with soldiers seldom going to the same place twice—so it is impossible for a serving member to become a home owner. He can, of course, become a house owner and be an absentee landlord, with all the problems
  480
  that that entails—and, by God, I have a thick file on those problems: tax, tenants and, even worse, no tenants. Such a person cannot be an owner-occupier.
  I hope that my hon. Friend will convey to my right hon. Friend the suggestion that he consider whether, in the PEP scheme that he is developing, provision could be made for a special scheme for members of the armed forces, to enable them to accumulate, in a tax-effective manner, a capital sum that they could use to buy a home on retirement. The MIRAS advantage that is available to the civilian population should be extended to the housing payments of those members of the armed forces who do not own houses. Payments could be made into a PEP scheme to make that possible.
  The second of my two points concerns the Merchant Navy. It was very disappointing that an otherwise excellent Budget did not touch at all on the present very sad state of our merchant fleet. I am relieved to hear that numbers of some categories of ships are now stabilising, but at a very low level. I remind my right hon. Friend the Chancellor that the early-day motion on this subject, which was tabled only two or three weeks ago, already has the signatures of more than 170 Members from all parts of the House. I put it to my right hon. Friend that fiscal and other measures, but especially fiscal since we are talking about the Budget, at a minimal cost—such as extending roll-over relief to three years, or extending the upper limit for the BES as it applies to merchant shipping—would make a very big difference to ship owners, at a very small cost to the Exchequer.
  Overall, though, I believe that this is a very good Budget on both macro-economic and micro-economic grounds.
  8.14 pm
  Mr. Calum Macdonald: Yesterday's was a standstill Budget from a boxed-in Chancellor, making a mockery of his claim to be a Chancellor who concentrates his attention on the supply side of the economy. He found himself boxed in by supply side constraints that are quickly snuffing out his economic boom. The two major constraints, of course, are a lack of productive capacity in manufacturing industry and, equally, a lack of skilled and properly educated labour to man that capacity. The consequence is a British economy throttled by bottlenecks. Of course, the biggest bottleneck has been in the south-east, whereas constituencies like mine, where unemployment is rising again, are not getting even a glimmer of the prosperity of which we hear so often from Ministers. That is why regional policy must be at the heart of any credible economic strategy.
  It is the effect of this and past Budgets on the regions that I want to talk about. This Budget is a testimony to failure—the failure of the Government to promote balanced growth and balanced development in Britain. It shows that Thatcherite free market policies have led to gross overheating in the south-east, while the rest of the country has been crying out for more activity.
  It is also a Budget of fear. Despite having accumulated a surplus of some £14 billion over the past year, the Chancellor has had to run away from his own goal of lowering the overall burden of taxation. He was too scared yesterday even to increase the tax on cigarettes. The only cure for these supply side constraints on productive capacity and skilled labour is supply side investment. This

  481
  is not just a private responsibility but also a public responsibility—it is a responsibility of government. This, I feel, is the crux of the divergence between the Opposition and the Government—not just in respect of this Budget, but in respect of a succession of Budgets and Autumn Statements.
  In the past, the Government's policy has been to fuel the demand side only, with their tax cuts for the rich and their irresponsible and inflationary credit booms. The Opposition have called instead for investment in the supply side of the economy, investment in the prime factors of production—machinery and men. That is why we call, for example, for measures to improve investment in manufacturing industry, and it is a disgrace that, even now, manufacturing investment is below the level of 1979. That is why we have called again and again for investment in education and training. It is a disgrace that access to higher education—universities and polytechnics—and to colleges of further education has actually diminished during this Government's period of office.
  I want to spend a moment on that subject. I see that a quizzical look is coming over the Minister's face, but I can tell him that that is true, that access to education has fallen at a lime when industry is crying out for more skills. [Interruption.] I am referring to the ability of people in the relevant age groups to enter higher education.
  The Economic Secretary to the Treasury (Mr. Peter Lilley): The proportion?
  Mr. Macdonald: Yes, the proportion. It is astonishing that the Minister does not know the effects of his own policy on higher education. [Interruption.] Well, I refer the Minister to the response to a question put to the Secretary of State for Education and Science last month by my hon. Friend the Member for Oxford, East (Mr. Smith). The Government's own figures show that the percentage of 18 to 24-year-olds entering first degree courses—universities, polytechnics, colleges of further education—actually fell between 1979 and 1987. In 1979 it was 1·95 per cent. [Interruption.] These are the Government's own figures.
  Mr. Lilley: Including polytechnics?
  Mr. Macdonald: Including polytechnics. Access to polytechnics has increased by 28 per cent., but access to universities has fallen by 17 per cent. The percentage of 18 to 24-year-olds entering these forms of higher education fell from 1·95 per cent. in 1979 to 1·92 per cent. in 1987.
  Mr. Brazier: Let me give the hon. Gentleman the actual percentages. The total proportion of people going into all forms of higher education—universities and polytechnics—when the Government took office was about 12 per cent. That has risen to about 14 per cent. and it is on target to rise to 18 per cent. in five years through a combination of extra places and demographic changes.
  Mr. Macdonald: I refer the hon. Gentleman to the figures given by the Under-Secretary of State for Education and Science for the percentage of 18 to 24-year-olds entering first degree courses in Great Britain in universities, polytechnics and colleges of further education. The situation is the same in Scotland as in England and Wales.
  It is the grossest hypocrisy for the Secretary of State for Education and Science now to make pious statements of his intention to increase access to higher education when
  482
  he is part of a Government who have systematically reduced that access. Moreover, they have done that at a time when there was an opportunity to increase access because of the fortuitous biological fact that that part of the population was increasing. Therefore, the Government had the opportunity to increase the number of people with skills and training. I see all kinds of hurried consultation on the Conservative Benches.
  The Government's policy over the years of focusing on tax cuts has exacerbated the problems being experienced by the regions and the problems caused by the dismantling of regional policy. This Budget and last year's Budget taken together have given the great bulk of the tax cuts to the south-east. That is simply because on average the south-east has the people with the highest incomes and it is they who have been helped by the tax cuts. Fifty-two per cent. of all top rate taxpayers live in the south-east.
  This year's standstill Budget has hardly begun to make up for last year's Budget when top rate tax cuts simply fed the consumer boom in the south, giving the rich money which they simply spent on imports. The south-east alone saw 57 per cent. of the 1988 tax handouts for the rich compared with just 3 per cent. for Wales, 3 per cent. for the north, 5 per cent. for the west midlands and 6 per cent. for Scotland. This year there have been not so much tax cuts as new tax loopholes, new perks and old ones being widened, which again benefit the richest, and consequently the south-east, disproportionately.
  The tax concessions on personal equity plans have been widened. There are tax concessions on the purchase of shares in privatised industries. Yesterday we had the most scandalous single item in the Budget—the introduction of tax concessions on the purchase of private health insurance for the over-60s. Contrast that with the Government's failure to do anything about what we can call the toddler tax, the tax on workplace nurseries. Toffs who ride around in company cars can continue to enjoy their tax reliefs. Toffs who send their children to Eton can continue to send them to a tax-free institution. But ordinary working people who send their toddlers to workplace nurseries continue to be hammered.
  It is scandalous that the Chancellor is continuing to lavish such largesse on the south-east when regional aid to industry has been slashed mercilessly in recent years. Aid to the north has dropped from £325 million in 1979 to £108 million today. Aid to Scotland has fallen from £314 million when the previous Labour Government were in power to £152 million today. That policy of giving money to the south-east is not only unfair: it is economic nonsense when the economy is overheating.
  Mr. Lilley: When is the hon. Gentleman going to compare public expenditure per head in Scotland with that in the United Kingdom? Since that is 28 per cent. higher in Scotland than in England, does he think that that is unfavourable to Scotland?
  Mr. MacDonald: I should love to have a proper analysis of that figure, since it does not include defence expenditure. If Scottish public expenditure included items such as mortgage tax relief and defence expenditure and it was compared not with the United Kingdom—because the north is also badly done by—but with the south-east, we would have a different story. The Library tells me that such an analysis would be enormously difficult, but I am working on it.

  483
  The policy of giving money to the south-east when the economy is overheating is economic nonsense, yet that is done despite 2 million unemployed, even on the Government's own figures. We need a rebalancing of demand away from the overcrowded south-east to the regions, where more activity is needed. That is the only way to secure sustainable balanced growth without creating a balance of payments deficit and rising inflation.
  8.26 pm
  Mr. Keith Mans: I want to make a few comments on this year's Budget and, more specifically, on some of the national indicators that lie behind it. Before, doing so, I want to consider some points made by the hon. Members for St. Helens, North (Mr. Evans) and for Burnley (Mr. Pike), from my part of the country—the north-west.
  It never ceases to amaze me that Opposition Members, particularly from the north-west, always seem to talk down the area. The fact is that there is a good success story to tell in terms of increased employment throughout, much higher than the increases in employment in many other parts of the country; increases in manufacturing industry, on which I shall have something to say in a minute; and, more specifically, big increases in a widely expanding service sector, particularly in areas such as Liverpool and the area in which I live, the Fylde.
  One could say that we in the north-west are suffering—at least in some areas—precisely the same skills shortages that exist in the south-east. Therefore, some of the comments, particularly those made by the hon. Member for St. Helens, North, are pretty wide of the mark and do not encourage employment in areas such as my own, giving a false impression of what it is like in that part of the world.
  We in Lancashire have the largest concentration of aerospace factories this side of the Atlantic. It is a highly technical and highly skilled industry, where skill shortages are building up. That contrasts starkly with the picture painted by Opposition Members about the economic viability of the north-west.
  The hon. Member for Burnley mentioned Lancashire and education. I want to try to put the record straight. My right hon. Friend the Secretary of State for Education has given Lancashire this year a grant 40 per cent. higher than the average for shire counties throughout Britain. Indeed, the grant is the second highest of any shire county. That shows that the Government care about education, a subject to which the hon. Member for the Western Isles (Mr. Macdonald) referred.
  Mr. Caborn: Will the hon. Gentleman explain why the European Community, in designating objective 2 of the regional fund, decided that 36 per cent. of the total funds available should come to the United Kingdom? The criteria for receiving that assistance is unemployment and a declining industrial base. In Lancashire, Accrington, Blackburn, Bolton, Burnley, Bury, Liverpool, Pendle, Rochdale, Wigan and St. Helens are all now included in objective 2 because of their rate of unemployment and declining industrial base.
  Mr. Mans: By far the majority of the towns the hon. Gentleman mentioned are not in Lancashire, so I cannot comment on the point he made. I assure him that a number of other areas in Lancashire did not get the grant.
  I had intended to make the main point of my speech the merits of employee share ownership plans, but following the Budget statement it is clear that much of what I wanted to see achieved in that context has been achieved. I am pleased about that, because it represents an important step forward in this area of industrial development. I shall deal with that issue later, but I wish first to refer to the various national statistics, in particular the manufacturing output statistics, on which the Budgets are based.
  Members in all parts of the House pay great attention to those statistics, but they are relied on particularly by Opposition Members, who regard them as a good guide to the general health of the economy. I do not attach the same importance to that set of statistics because manufacturing industry is becoming more sophisticated. Peripheral activities such as design, marketing and training are gaining in importance at the expense of the core manufacturing activity on which the statistics are generally based.
  In some areas—for example in the manufacture of computers—the peripheral activities, which may in a sense be considered to be in the service sector, are now taking a larger share of the total value of the product than the product itself. Manufacturing output statistics are no longer accurate because certain items—for example, design, marketing, training and software production—may or may not be included in the statistics, depending on whether they are carried out by the manufacturing company; in other words, whether they are in-house or contracted from outside.
  If such activities are carried out by the company producing the product, they are included in the manufacturing output statistics. But if, as is increasingly the case, firms go outside for those activities, they are not included in the figures. They are, nevertheless, an important part of our total wealth-creation machine, and that is why I intervened in the speech of the hon. Member for Burnley on this point and why, as I say, I do not attach as much significance as many people do to that set of statistics.
  Consider, in that context, such mundane items as employees' canteens. If they are provided within the firm, they count as part of the total manufacturing output of that firm in terms of the statistics. But if that activity is contracted out to a firm in the service sector, they are not, so there is a distortion in the figures. We should either modify the statistics extensively in the near future or pay less reliance to them and use instead statistics that take into account advances not only in the manufacturing sector but in the service sector as well.
  Another set of statistics is the balance of payments, which again, I argue, is becoming increasingly difficult to compile accurately. The removal of exchange controls was one step in the direction of uncertainty, and in 1992, with the creation of the unitary market, it will become incredibly difficult to decide what our balance of payments are on a monthly basis.
  For that reason, one must ask whether, after the creation of the unitary market, there is any point in deciding the relative trade balance between London and Paris, for instance, any more than there is in deciding the relative trade balance between London and Birmingham.

  485
  As a guide to the viability of the economy, slavish regard to what the balance of payments is saying for a specific month is no longer the right way forward. I suspect that the financial markets already realise this, considering the way in which they understand that Britain continues to be a good place in which to invest.
  In considering the balance of payments, one must also consider the nature of the deficit itself. Here I disagreed with my right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour). He maintained that our present deficit was similar to deficits which occurred in the 1950s, 1960s and 1970s, that they were composed largely of an imbalance of consumer goods and that we were importing more consumer goods than we were exporting.
  I suspect that the deficit this time is not quite the same. It is made up this time of a much higher percentage of industrial—capital—goods and items which fall between the two sectors, items such as photocopying machines and office equipment which has traditionally come from abroad but which is necessary for the future to create the right productivity increases in that sector of industry.
  I suspect that my right hon. Friend was right when he said, in answer to my intervention, that in the last two years industrial investment has increased substantially. In my view, that is significant. There is a clear parallel between that and the fact that our balance of payments deficit has increased during those two years.
  I believe that a high percentage of the deficit is composed of capital goods and that, rather than being similar to deficits we experienced in the past, our present deficit is similar to the deficit Japan had in the 1950s and 1960s when it was successfully rebuilding its industry. We are seeing the results of that rebuilding now.
  When trying to rebuild the industrial base to produce tomorrow's rather than yesterday's goods, it is vital to equip it with first-class and world-beating machine tools and other capital goods, even though they may come from abroad. That is what I believe is going on now, and from that point of view I suspect that from 1990 onwards we shall see a rapid improvement in our balance of payments, when our consumer goods become as competitive as those from the rest of Europe and other parts of the world.
  In relation to employee share ownership plans, I am delighted with the progress that has been made in the Budget, particularly in connection with profit-related pay and in the tax relief given to payments by companies to ESOP trusts. I should like to see those moves go further. While I realise that that may not be possible this year—because of the complications in organising the tax regime successfully—perhaps we shall get next year or the year after some roll-over relief for capital gains tax when applied to employee share ownership trusts.
  In creating the right environment for the new vehicles of wealth creation to prosper, we should not be too rigid about the type of model that we want. The historical and large model of worker ownership in the Soviet Union has been a monumental failure and is rapidly being dismantled, to be replaced by a model similar to those that exist in this country.
  On a smaller scale, we have the evidence from the late 1970s when the right hon. Member for Chesterfield (Mr. Benn) tried to set up a workers' co-operative at Meriden. That showed that we must not specify too much the type of model in which we want people to be involved. It must he left to people to decide the type of employee share ownership scheme best suited to their needs and those of
  486
  the industry. I suggest that we should create a tax environment that takes account of as many different models as possible and that we allow individuals to decide which one to follow.
  The Budget recognises that the thrust of economic policy must be to continue to fight inflation and recognises the increasing importance of demographic changes and the environment as factors in economic decision making. I am especially pleased with the comments made by my right hon. Friend the Chancellor on unleaded petrol. This tax reduction is a beneficial environmental move which I hope will result in a large uptake of unleaded petrol in the coming months.
  The most important feature of the Budget is that it will be remembered as the one that finally put employee share ownership schemes on the map.
  8.42 pm
  Mr. Richard Caborn: I endorse everything that my hon. Friend the Member for Denton and Reddish (Mr. Bennett) said, because he reflected many of the worries in my constituency both before and after the Budget. As an inner-city seat, my constituency faces all the major social problems that my hon. Friend described.
  I want to deal with regional policy, the north-south divide and the structural weaknesses in the economy, especially our manufacturing base. We hope that the Single European Act will work to our benefit, but I have grave doubts about the Chancellor's short-sightedness in looking only at the straight balance sheet rather than to this country's future and ability to create wealth. As the hon. Member for Wyre (Mr. Mans) said, we must make our economy and industrial base much more competitive and productive. There are major discrepancies in our transport infrastructure alone. A golden opportunity was lost to upgrade that infrastructure so as to move goods to and from the continent as efficiently and effectively as possible.
  The Channel tunnel project could have as significant an impact in our northern regions as the French wish it to have in their northern regions. They have tackled infrastructure development with considerable public investment. In the United Kingdom, however, the Opposition struggled five times to include in the Channel Tunnel Bill provision for consultation with British Rail and the Channel Tunnel Group on the tunnel's impact. We see no light at the end of that tunnel and no sign that the Government will move in a concerted way to ensure that the regions are serviced by that innovation.
  There has been a decline in training and education. On average, people involved in management have about two days' training a year. We are woefully lacking compared with our major competitors. We are bottom of the league in terms of ability to co-ordinate on technology transfer with industry, academic institutions, local authorities and trade unions.
  Conservative Members have argued about investment in small and medium-sized businesses, especially in the venture capital market. Only yesterday an article in the Financial Times on British venture capital groups stated:
  "Mr. John Nash, chairman of the British Venture Capital Association, said yesterday that the rise in the volume of investments outside the south-east of England was encouraging, but there had been a drop in the percentage of funds going to technology-related companies from 16 per cent. in 1987 to just 9 per cent. last year.

  487
  The fall in technology-related investments emphasised concerns the association had about the number of new, innovative, wealth-creating companies being generated in the UK, Mr. Nash said. The association has begun a study of the difficulties of finding high-risk seed-capital finance for small and technology-related projects.
  The announcement of the investment patterns of venture capitalists came a few days after Lord Young, Trade and Industry Secretary, criticised venture capital organisations and the banks for failing to invest enough in high-technology business."
  That is a statement by those who are trying to organise venture capital, yet the reduction of nearly 50 per cent. in one year does not bode well.
  The Minister said that public expenditure in Scotland per head of population was 28 per cent. higher than in the rest of the United Kingdom. I suggest that he look at the form of many of the grant regimes for Scotland resulting from the work of the Scottish Development Agency, which has been effective in co-ordinating an overall strategy. In England, the regional grant regimes have been abolished and there has been a reduction in grant in real terms. There has been a reduction also in local authority expenditure—£22 billion since 1980—much of the money having gone previously into infrastructure development of education, transport and so on.
  The Government talk of their great plan for the inner cities and of urban regeneration, but we have merely seen two or three Ministers throwing a few crumbs from the Department of Trade and Industry, Department of Employment or Department of the Environment and going round developing task forces or urban development corporations. The Government's inner-city policy has been unco-ordinated and expenditure has been reduced. When departments have not been able to tackle the problems, they have abrogated their responsibilities by handing them to the private sector. As even Conservative Members have emphasised, training has been put wholly into the private sector's hands.
  Last week, the European Commission was considering the European grant regimes for the next three or four years. Objective 2 concerns eligibility criteria, unemployment, the severity of industrial job losses and industrial decline. The Commission laid down the criterion that only 15 per cent. of the population of the Community should be covered, so that the money could be targeted. We find that the funds cover 50 million people in the Community of whom 20 million are in the United Kingdom. That means that about 37 per cent. of that part of regional structural fund expenditure is coming to the United Kingdom, simply because our industrial base has been undermined to such a large degree that even the Commission has decided to try to come to the rescue. The Government's policy is totally unco-ordinated.
  The Government make much play of partnerships; they rely heavily on that concept. Opposition Members have nothing against partnerships—we encourage partnerships between the private sector and local authorities or trade unions and try to make them work—but in some areas partnerships have difficulty in developing because of lack of resources. I would go further than that. Many of the developments in the regions are based on the old transport and education infrastructures and we are having difficulty in replacing that infrastructure so that we can develop new ideas for the 1990s and beyond. Technology transfer,
  488
  cabling Britain and so on, are all essential not just in the interests of northern regions seeking to attract resources away from the south-east but because of the competition that our industry will face in 1992 and beyond with the implementation of the Single European Act.
  It is not true to say that investment in the south-east has centered on the entrepreneur alone. One has only to think of arms procurement, on which £8 billion is to be spent. The success of the M4 corridor—the silicon valley of the United Kingdom—has been born out of public sector-led financing, especially in arms procurement. Transport is another example; again, a disproportionate amount goes into the south-east. The vast majority of the £6 billion in mortgage interest charges is going into the south-east.
  Entrepreneurs have fed off public sector-led investment. There may be nothing wrong with that but it is worth comparing with the system operating in the Lander. Public sector-led investment has been dispersed around the Lander and the country. The Germans have invested in areas of growth and centres of excellence and the development of wealth creation has been more evenly spread around the country. Germany is not suffering from the overheating that the south-east is experiencing, which is no good for the south-east and certainly no good for the northern regions.
  In the not too far distant future, decisions on investment will be influenced by the existence of the Channel tunnel. Investors will not come to the south-east because it will be too costly. They will not come to the north of England because we do not have the infrastructure—the means to get goods in and out of the area, the training, the technology or the cabling. Investors may well decide in favour of northern France or northern Europe, which will have built the infrastructure necessary to sustain an advanced economy.
  Yesterday's Budget will do nothing to regenerate the north of England. I make my plea for the regeneration of the north not just on behalf of people in the north, but because it is in the interests of the economy as a whole. An opportunity has been missed. Partnerships exist in many areas of England; there is one in my own city of Sheffield, where there has been development in the transport infrastructure. An investment bank has been set up and work is being done on combined heat and power. Yet that partnership, and all the others like it, are struggling in the absence of central Government support.
  In 1991, Sheffield is to host the second biggest sporting event in the world—the world student games. The event is to be three times bigger than the Commonwealth games, with 125 countries and 7,500 sportsmen participating. Sheffield will be a window to the world, yet we have already been told that no money will be made available from central coffers. The Government say, "We are not prepared to put in any cash. You must do it all through the private sector." No other country in western Europe would take such a negative attitude.
  Let me compare the problems with which British industry must contend with what happens in one of the richest parts of West Germany. I was recently in Badenweiler and I spoke to the Conservative Leader of the Lander government. An innovation technology company has been set up which commands about 2,000 experts on a consultancy basis—a service paid for by the Lander itself. The Lander is spending 21 million deutschmarks on innovation technology to be matched by technology transfer units and again to be supported by the Lander.

  489
  When the innovation has been developed and the technology transfer has taken place and the company goes into production, it can go to the Lander bank and borrow at subsidised interest rates of 4 or 5 per cent. over 8 to 10 years. At federal level, the reconstruction bank of Germany will also put money in at 5 per cent.
  Compare those rates with the figures in the venture capital statement and with the experience of any company in the United Kingdom seeking money to develop new technology. British companies pay 12, 13 or 14 per cent. The examples that I have given come from one of the richest parts of Germany. I asked the mayor the simple question, "Why do you do it?" After all, it is, in effect, a Conservative administration. They said, "We must keep ahead of the game. Entrepreneurs do not always deliver and we have to push them. To that end we are prepared to support our industry, either from the Lander bank or from the federal bank." The support for industry extends not only to hardware but to training, to the development of transport infrastructure and so on.
  If we ask our industry—particularly small and medium-sized businesses—to take part in technology transfer schemes from our academic institutions with the necessary training without central Government support, we are tying not one of the entrepreneur's hands behind his back, hut both. The Budget will be seen as a missed opportunity, especially as we move into the much more competitive era following the implementation of the European Act in the 1990s. The Budget will have failed the nation.
  8.58 pm
  Mr. Michael Irvine: This year's Budget has produced even more confusion of thought and mind than is normal on the Opposition Benches. Some have reproached the Government for allowing inflation to gain the upper hand; others, totally ignoring the inflationary implications of what they are suggesting, have called upon us to spend some of the massive surplus that has been accumulated. The hon. Member for St. Helens, North (Mr. Evans) asked, "Why cannot some of that enormous surplus be spent?"
  The confusion reached its apogee during the speech of the Leader of the Opposition yesterday afternoon. In the course of one and the same speech he reproached the Government, claiming that last year's Budget had allowed inflationary pressures to build up, and then went on to call for the spending not of part of the surplus, but, as I understood him, of the entire £14 billion.
  One must make allowances. Rapid economic growth and a massive budgetary surplus are not characteristics associated with the financial stewardship of Labour Governments. It is not particularly surprising that Opposition Members, finding themselves in a new and unfamiliar landscape of high economic growth and a massive Budget surplus, become somewhat disoriented and confused. No doubt they feel more at home with high interest rates and a large balance of payments deficit, but there are major differences between the high interest rates and large balance of payments deficit prevailing now and those associated with Labour's term in office.
  The current interest rates squeeze has crucial characteristics which mark it out from earlier interest rate squeezes under Labour Governments. When Labour was in government, interest rate squeezes ravaged industry and
  490
  led to sharp and immediate cuts in industrial investment. Not so this time. During this interest rate squeeze, exactly what the Chancellor intended is happening. Interest rates are having their principal effect on the personal sector. The corporate sector—and certainly the larger companies—has ample cash balances. Investment by our main-line companies is holding up well. That investment by main-line companies is the key to our industrial success. High levels of investment have continued for some six months after interest rates were raised substantially. The adverse balance of trade we are now experiencing is characterised by a large element of imported capital goods. That is a reassuring feature.
  Table 3·4 of the Red Book sets out the percentage increase in the volume of manufactured goods year on year. The table shows that in 1987 and 1988 imports of capital and intermediate goods have recorded substantially greater percentage increases than consumer goods. In the short term, those imports of capital goods place a strain on our balance of payments, but in the longer term they mean that British industry is putting on muscle and becoming better equipped to meet demand in future.
  It has been claimed that the Chancellor has been forced to rely solely on interest rates to curb inflation. That is not so. The massive Budget surplus is in itself disinflationary. I have no doubt that in the particular circumstances of this year it is right to run a Budget surplus of such a size because it restrains domestic demand, helps maintain confidence overseas and reduces the interest on the debt that the Government will have to pay in future years.
  However, I am glad to see that paragraph 2.29 of the Red Book states:
  "The Government intends to move gradually from the present surplus towards a balanced budget over the medium term."
  A substantial surplus is absolutely right for now, but it will not always be so. We do not want the Government to fall into what might be termed the GEC syndrome. The time will come when it will be appropriate to use that surplus for cuts in direct taxation which increase choice, act as incentives and help to generate the economic growth which augments Government revenue. In addition to tax cuts, I hope that future Government plans for reducing the surplus will include increased public capital expenditure. I stress the word "capital". Public sector investment is needed to complement rising investment in the private sector.
  My right hon. Friend the Member for Shropshire, North (Mr. Biffen) mentioned expenditure on education and health. I have in mind expenditure on transport. Economic growth manifests itself rapidly in increased traffic movement and congestion. If our economic growth is to be sustained, we need to ensure that our transport infrastructure can cope. Otherwise, growth will be held back. Industrialists in my Ipswich constituency and in other parts of Suffolk are already telling me that their operational efficiency is being hampered by inadequate transport infrastructure.
  Running a budgetary surplus and determining how to apply it is a novel experience for a post-war British Chancellor. It shows just how far we have travelled on the road to economic success. For the moment the watchword is and should be "caution". A massive budgetary surplus is clearly right—but as the Government move towards their medium-term target of a balanced Budget, what is required is a judicious mixture of income tax cuts to

  491
  increase incentives, combined with increased capital expenditure carefully targeted where it will best assist continued economic growth.
  9.6 pm
  Mr. Stuart Holland: An effective Budget should combine social justice and economic efficiency, and this Budget does neither. It starts with the junk statistics that we have come to expect from the Treasury, to which attention has been drawn by advisers to the Select Committee. The Chancellor claimed:
  "we have experienced the longest period of strong and steady growth since the war."
  We note that he made no international comparisons. That is not surprising, because at 1980 prices the average annual growth of GDP between 1979 and 1987 was 1·8 per cent. for the United Kingdom and 2·6 per cent. for the rest of the OECD. In Japan, with which the Chancellor is glad to make comparisons on productivity based on a few years' figures, the average growth in GDP was 4·5 per cent.
  The Chancellor claimed:
  "Between 1974 and 1979 inflation had averaged more than 15 per cent. Over the past six years it has averaged 5 per cent.".
  If we put that on a comparable basis for the lifetime of the Government, between 1979 and 1989 annual inflation averaged 6·7 per cent.—more than one and a half times the figure quoted by the Chancellor. We now know that it is set to rise again, so the long-term trend is not moving towards zero but is heading for 8 per cent.
  The Chancellor claimed:
  "our productivity growth in manufacturing has exceeded even that of Japan."—[Official Report, 14 March 1989; Vol. 149, c. 293–94.]
  That is true for certain years, but its aggregate productivity growth is not the issue when comparing our manufacturing performance with that of Japan. The key comparison is with the exporting sector in Japan which, as is well known, accounts for only about 12 per cent. of the economy. The amazing productivity of Japan's giant companies, the Kairetsu, is beating us hands down in world markets and in our own market. If there is such an economic miracle, why is the regeneration of the British Motor industry being carried out in Sunderland care of Nissan, and in Austin Rover care of Honda? The Japanese are efficient. Our productivity is rising, but some of the rise is due to Japanese companies in this country.
  The Chancellor continues to claim that he has effected a miracle, but a miracle means helping the sick take up their beds and walk, not helping to walk off with the beds of the sick. A miracle means sustained domestic and export growth and full employment—not a go-stop growth of 2·7 million people unemployed, a balance of payment deficit of £14 billion and a currency standing only with the crutch of an interest rate of 13 per cent.
  The Chancellor claimed yesterday:
  "The role of fiscal policy is to bring the public accounts into balance and to keep them there, and thus underpin the process of re-establishing sound money."
  He said:
  "Inflation is disease of money; and monetary policy is its cure."—[Official Report, 14 March 1989; Vol. 149, c. 293–4.]
  That sounds fairly familiar. Perhaps the Chancellor is trying to prove that he is still a monetarist. He certainly echoes the claims made by Milton Friedman:
  492
  "Inflation starts in one place and one place only—national treasuries"
  No doubt the Chancellor has read that—he certainly seems to believe it.
  Away from the footlights and television cameras, in a major statement in 1969 Professor Friedman said of the correlation between the money supply and inflation: "changes of money income mirror changes in the normal quantity of money. But it tells us nothing about how much of any change in income is reflected in real output and how much in prices."
  In other words, there is no cause and effect but it is all done with mirrors—that is the essence of the monetarists' claim to superior scientific status above the derided economics of Keynes.
  Mirrors are hazardous. If an ass looks into one, how can a brilliant Chancellor look out? Yet the Chancellor is doing precisely that—he is trying to do it by mirrors in a "now you see it, now you don't" type of policy. We can judge from the junk statistics. Since 1979 there have been 24 changes in the unemployment figures and only the first change put the figures up. Publication in British Business of the share of multinational companies in our export trade, or the share of leading firms in our export trade has stopped. The last figures were published in 1981. No wonder there is a problem about the nature of the balancing item. When 75 firms account for half our trade and 220 firms for two thirds of our trade, when 85 per cent. of our exports are by multinationals, the transfer pricing which those multinationals can employ is likely to be one of the major factors in that grotesque balancing item, which is bigger than the Budget deficit.
  Another example of the mirror policy was the Government's attempt to revise the trade deficit just before the Budget and to take the mortgage rate out of the RPI. This is not the economics——
  Mr. Lilley rose——
  Mr. Holland: I am taking a note from the book of the Chief Secretary who accepts interventions in his time.
  Mr. Lilley: Did the hon. Gentleman say he was following my right hon. Friend's good example? I am extremely grateful to the hon. Gentleman for giving way. The hon. Gentleman has just suggested that the balancing item is due to the understatement of the value of exports by multinational companies. Is he saying that the balancing items should be largely attributable to reducing the balance of payments deficit?
  Mr. Holland: I do not know why the Economic Secretary had so much trouble making his point. Transfer pricing by multinational companies, which dominates our trade, means that our trade statistics are opaque. A standard means of transfer pricing is to inflate and overstate import prices. We should expect economic integrity from any Government and should be able to trust their figures, but such integrity is absent from this Government. Their economic policy is one not of integrity but of a massage parlour. They massage the figures to reduce the number of unemployed, to disguise the trade deficit and to understate the real trend in inflation. They massage the rich to get them to work and massage foreign investors by putting interest rates at a level that will support the pound.
  Does the Chancellor remember the cost-push, demand-pull debate which was taking place when he was a student?

  493
  Does he not know that the simple argument on demand-pull is that of too much demand chasing too few goods? Does he not recognise that this is precisely what is happening in the economy today—irrespective of money supply—because he did not slow down his pre-election boom last year?
  Has the Chancellor forgotten the basic principle of cost- push inflation, which is that pressure on capacity enables firms to push up prices because other firms are willing to pay a premium for components, rather than find their own production grinding to a halt? Has he never read Adam Smith's "The Wealth of Nations" which states:
  "people of the same trade seldom meet together, even for merriment or diversion, but the conversation ends in a conspiracy against the public or in some contrivance to raise prices"?
  Does the Chancellor of the Exchequer not realise that market forces are at work and that inflation cannot readily be wrung out of a booming economy by macro policies alone? Does he not know that coping with inflation in an overheated economy demands other measures, involving not only the structure of costs but also the regional and social distribution of demand and supply?
  As for the argument that inflation should take priority over all else—which hon. Member would thank a doctor for reducing a patient's temperature if it resulted in rigor mortis? Why should we thank the Chancellor for his counter-inflationary measures which, through penal interest rates, will kill off many small and medium firms?
  Let us consider interest rates. Is the Chancellor really unaware of the unequal impact which his policies have? The wealthy can invest their savings and therefore benefit by higher income at higher interest rates, while the less well-off—who accepted his invitation to join the democracy of property owners but then lost their jobs or the family wage earner or fell ill—could not meet their mortgage payments and were dispossessed.
  Is the Chancellor unaware of the inequality of the cost of borrowing at higher rates on big and small businesses? Unequal competition for funds means that bigger businesses can borrow at lower rates than smaller businesses. The price-making power of the big firms gives them the ability to pass on higher interest rates in the form of higher prices. High interest rates may be not disinflationary but inflationary. Big businesses can operate self-financing to cover the major part of their investment needs—often up to 85 per cent.—without access to external finance. Small and medium firms cannot do that. Higher interest rates will not hit the big league but will penalise the small firms—that is quite apart from pricing techniques which are used to understate real profits, to which I have already referred.
  Is the Chancellor or his Treasury team unaware that interest rates are both unequal, and relatively ineffective, as the major instrument of demand management? Does the Chancellor not realise that in using them to choke off demand he is strangling many small and medium entrepreneurs—the serving of whose interest once appeared to be the Tory party's main mission in government?
  The Chancellor does not face simply the problem of fiscal drag, and whether he is a fiscal drag artist. The Government did not, at first—between 1979 and 1981—succeed by raising interest rates. Their subsequent policy of fail, fail and fail again is no way to run the economy. By raising interest rates nine times, the Government have
  494
  shown that their fiscal stance is really horizontal. The Chancellor is no longer the go-go Chancellor of yesteryear but the full stop Chancellor of today and tomorrow. His Budget was less a baleful admission from yesterday's whiz kid of the need for a soft landing than an ignominious belly flop. As several hon. Members have said, the Chancellor has the money but he cannot spend it.
  Yesterday, using a vivid metaphor, my right hon. Friend the Leader of the Opposition asked why the Chancellor could not spend the money and referred to the numbers on the notes. Number 1 dealt with overheating. Where does that occur? It occurs in the south-east and parts of the midlands but not—as several of my hon. Friends have said—in the north-west, north-east, Northern Ireland or Scotland. An uneven and unbalanced regional distribution of growth is an essential part of the problem.
  The Chancellor said that how soft or hard the so-called landing would be was not in the hands of the Government alone. One thing that the Government are clearly not prepared to handle is an effective regional development policy. They blithely abolished location controls through industrial development certificates; they blithely reduced regional development grants. They then cut the ground from under regional enterprise boards such as those in Lancashire and the west midlands. The result is that, while half the country is overheating, the other half is left out in the cold. The massive resources of the regions are being wasted, while the economy as a whole grinds to a halt.
  Let us examine the numbers on the other notes. Let us take capacity utilisation. Of course there is pressure on capacity for some companies in some areas. For all the rhetoric about the supply side, the Government have no real supply side policy. Like President Reagan, the Chancellor appears to have fallen for the so-called economic theory behind the words "supply side"—used by Mr. Laffer, who drew a curve on the back of a napkin in a restaurant for President Reagan which claimed that people would work harder and pay more tax at lower tax rates.
  The incentive effect in the Laffer curve is simply laughable: it is a bad joke. As John Kenneth Galbraith has rightly pointed out, first the argument assumes that the rich are idle, not working hard enough—some Opposition Members may share that premise. Secondly, in the United States the already rich could not find real investment outlets for their windfall tax gains and simply put those gains, through lower taxes, on the stock market. The result was a massive inflation of stock market prices, contributing to the crash of October 1987.
  The fact is that the Chancellor cannot increase capacity use in the short term because the Government deny the relevance of a medium-term industrial strategy. In short, they will not plan. Yet every enterprise plans, more or less, the broad balance of its income and spending. Every manager plans if he deserves to survive the annual meeting with the firm's accountants. All our leading competitors plan—whether they use that wording, as France, Italy and Japan do, or whether they use words such as "investment co-ordination" as West Germany does.
  Only our Government, with the worst structural deficit on the non-oil visible account of nearly £25 billion, fail their own industry, management and workers, because "She who must be obeyed" thinks only that "plan" is a four-letter word.

  495
  Let us deal next with the public sector debt repayment on which the Chancellor so prides himself. Here again we see the "home economics" policy of the Prime Minister, in practice reflected in her adage that
  "every housewife knows that if by the end of the week you have spent more than you earned you are in trouble".
  Let the Government tell that to the banks, the building societies or the investment trusts, all of which know that the role of credit is what distinguishes big business from a corner shop. Even more, it is a key difference between an advanced and a primitive society.
  If the expansion of an economy were limited to retained earnings, without external borrowing, no economy could fully achieve the potential increase in productivity made possible by new technology. Not least, all our leading competitors in OECD countries—other than the United States which faces similar problems to our Government in relation to competitiveness—use public sector credit institutions to ensure that their societies can invest in their own future and that low household savings, such as we now see in the Unted Kingdom, can be offset by public credit agencies.
  Paying off the national debt is like putting money in the bank and telling the bank manager not to lend it. It is even worse than putting it in a current account, because once repaid it earns no interest for those who lent it. Nor does it earn real interest for society as a whole, in terms of public funds for investment in the nation's future.
  The real reason why the Prime Minister wants to repay the national debt and has told the Chancellor to do it lies not simply in her ignorance of its real role but in her blatant prejudice against all things public and her gross praise of all things private. That brings us back to the real guru of the Government's economic policy, Milton Friedman—he who argued that public spending drains the private sector, and who spoke of "crowding out". In those arguments Professor Friedman is simply wrong.
  Let us take the construction of council housing in the British economy. In England and Wales in the last decade, private contractors have built up to 95 per cent. of all council houses. In Scotland it is up to 98 per cent. That means that, of every £100 of public money that goes into council house building, between £95 and £98 goes straight into the pockets of private contractors. That public spending does not drain the private sector: it sustains it.
  Likewise, cuts in the council house building programme do not simply hit the direct labour organisations that the Prime Minister hates so much; 19 times out of 20 they hit the private builders, the Rotarians, the local Conservative association members and the big building firms, many of which must be wondering why they put so much money into the Tory party's pocket when the Tories—with cuts of two thirds in the housing investment programme since 1979—have been taking money by the handful out of theirs.
  The same applies to the National Health Service. In this country, not a hospital is built, not a ward or operating theatre equipped, not a drug prescribed that is not supplied by the private sector. Cuts in the NHS are actually restricting the growth and expansion of the private sector, not merely in the construction industry.
  I grant the Chancellor that he has a problem with the Prime Minister. There is certainly no evidence that she has ever opened the main volume by the man whom she most
  496
  loves to hate among economic theorists, Maynard Keynes. Had she read it, Keynes could have warned her of the consequences of the policies that the Government are now pursuing when he wrote:
  "the more virtuous we are, the more determinedly thrifty, the more obstinately orthodox in our national and personal finance, the more our incomes will have to fall when interest rises … Obstinacy can bring only a penalty and no reward."
  When they came to office the Government said that they would cut waste from higher education, public services and the National Health Service. In office, they have laid waste to higher education and public services, and they now plan to lay waste to the National Health Service. The Budget, with its implicit admission of errors on a massive scale, will penalise not only the poor but the entrepreneur.
  Before long the electors will look back on the present Government and ask, "How could they have wasted so much that was on offer from North sea oil? How could they have missed the chance to use those funds to dynamise British industry? How could they have divided the nation so completely between rich and poor regions, rich and poor people, haves and have nots? The prejudice against public spending typical of this and the last Budget recalls the images of Eliot's "The Waste Land". It is the wasteland of our blighted inner cities, our derelict industrial areas, our closed hospital wards and our underpaid and overworked hospital staff. While for other countries 1992 means opening up Europe, this Government, with their penal interest rates and with this Budget, are closing Britain down.
  Much has been said, in this debate and also in the report of the Treasury Select Committee, about junk statistics. We are less concerned with junk statistics than with the Government's junk policies. If any message is to reach the gilded salons of No. 10, it should be that the Prime Minister should junk the Chancellor before the British people junk the Government.
  9.28 pm
  The Financial Secretary to the Treasury (Mr. Norman Lamont): We have heard a number of interesting speeches and I was struck by the fact that hon. Members on both sides of the House managed to find aspects of the Budget to which they responded favourably. The hon. Member for Berwick-upon-Tweed (Mr. Beith) was good enough to praise the abolition of the earnings rule. The hon. Members for Burnley (Mr. Pike) and for Londonderry, East (Mr. Ross), together with my hon. Friend the Member for Bedfordshire, South-West (Mr. Madel) and others, praised the differential that my right hon. Friend established in favour of unleaded petrol. My hon. Friend the Member for Bexhill and Battle (Mr. Wardle) made a powerful speech giving strong support to what my right hon. Friend has done on company cars. I was especially grateful to him, because of his background in industry, knowing that it is not always the easiest policy to put across.
  My right hon. Friend the Member for Shropshire, North (Mr. Biffen) caused a mild frisson on the Front Bench by prophesying that Ministers on the Treasury Bench might later have to reach for their wallets. However, he made a powerful speech with his usual eloquence and he warmly welcomed the fiscal stance in the Budget and underlined the need, above all, to get on top of inflation.

  497
  My right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour) divided the Budget into two halves—a tactical half and a strategic half. At least he was able to give the tactical part two and a half cheers, and for that we are extremely grateful. However, I do not agree with everything that he said about manufacturing industry. There has been a great structural change in the country in manufacturing industry but I cannot go along with the prophecies made to my right hon. Friend.
  Throughout the debate there was a strong feeling, echoed on both sides of the Chamber, that it was, as my hon. Friend the Member for Bedfordshire, South-West said, a safety first Budget. The hon. Member for Berwick-upon-Tweed felt that in that respect we were making up for the mistakes of last year. That is a message and an argument that I, together with my hon. Friend the Member for Cambridgeshire, South-West (Sir A. Grant) reject strongly. Last year's tax cuts were right, they remain right and they will be seen more and more to be right. The tax cuts introduced last year will improve the competitiveness and the supply side of the economy. I have no doubt that in the long run they will also generate more revenue. I look forward to the day when we will be able to demonstrate that—I am confident that we will be able to do so—from the Dispatch Box.
  If last year's tax cuts had been wrong, we would have been reversing them. In fact, my right hon. Friend the Chancellor was confirming them and in his Budget, he made further remissions of some £3 a week for the majority of people in work. It seems an extraordinary view that if one does not take immediate action again this year to cut taxes, it means that last year's tax cuts were wrong. That view is obvious nonsense and the fact that it is nonsense was confirmed by the way in which the right hon. and learned Member for Monklands, East (Mr. Smith) put forward his shadow Budget, with a package of measures costing some £3 billion. He was the man who advanced the argument that last year's tax cuts were wrong. If they were wrong, surely he would not now be advocating further measures totalling some £3 billion, which is not far short of the total of which he was so strongly critical last year.
  Through the years my right hon. Friend and his predecessor have altered expectations as to what Budgets should be like. It is an unusual criticism and I do not find it a fierce criticism to be told that the Budget was boring or dull. Many of us would have been happy if some of the Budgets introduced by the right hon. Member for Leeds, East (M r. Healey) had been boring or dull. They were far from dull and they were very frequent. One of my hon. Friends turned up for me in a 1976 newspaper a cartoon of the right hon. Member for Leeds, East introducing one of his 1976 Budgets—his November Budget. The right hon. Gentleman was dressed up as Father Christmas, which is the way Chancellors tend to be dressed in cartoons. But in the cartoon, the taxpayers were queuing to give their presents to Father Christmas. That is how Budgets and Chancellors used to be seen. It is very different today, but we cannot always meet all the extravagant expectations that are sometimes built up.
  Opposition Members have also complained about the increase in the tax burden. I find that a surprising line of approach for them. It is rather difficult for anybody, except perhaps for a member of the Salvation Army, to believe in overnight conversion. I find that concern with the tax burden extremely astonishing. The Opposition hooted with laughter when my right hon. Friend the Chief
  498
  Secretary, when replying to the question of the right hon. and learned Member for Monklands, East about the burden of taxation, pointed out that in our first years of office, we spent our time reducing debt and putting Government finances on a much sounder footing. That is why the tax burden, as a proportion of GDP, went up. It has been going down since the early 1980s, but it did go up as a result of the measures that we took in 1979 and the early 1980s. We have emphatically reduced the burden of income tax as a proportion of GDP and, furthermore, we have reduced income tax as it affects the ordinary citizen.
  The Opposition, again, rather surprisingly, trying to have things both ways at once, like to argue that the burden of taxation has increased, although they always argue in favour of higher taxes. If the average amount of taxation has increased at all, it is only because real take-home pay has gone up so quickly under this Government. That is why average rates of tax may have increased. If we had simply taken the Labour Government's thresholds and tax rates and merely adjusted them for inflation, there is no doubt that a man on average earnings would today be paying about £18 a week more in taxation than he is doing now under this Government. If the Opposition think that the burden of taxation is too high—and I think that it is too high and we want to bring it down—why do they vote against year after year when we put forward measures to reduce the basic rate of income tax'?
  We have been told that this Budget does nothing for that mythical thing, the real economy, and that it does nothing for the current account. But the main problem is not the current account, but inflation. The measures that my right hon. Friend has put forward in his Budget are consistent with the steps he has already taken to get inflation down. It is a Budget that takes no risk with the anti-inflation strategy and it underpins the measures that my right hon. Friend has already taken on the monetary front. The trade balance will be the last indicator to respond, but it will certainly eventually do so.
  Mr. Andrew F. Bennett: If, as the Financial Secretary says, the real enemy is inflation, why have the Government deliberately allowed water prices and electricity charges to go up? If the Government were really keen to tackle inflation, they could have stopped both those increases.
  Mr. Lamont: Both those charges are going up because of the needs of those industries for investment. The fact that particular prices go up is not inconsistent with the Government's overall determination to bear down on inflation in general and it is monetary policy and the monetary framework, whatever may be happening to individual goods or commodities, which will bring down that rate.
  Mr. Holland rose——
  Mr. Lamont: I want to move on because I have one or two announcements to make. However, I shall give way.
  Mr. Holland: We look forward to those announcements. The Financial Secretary reminds me of President Charles De Gaulle who once said that a president should be concerned with inflation, not the price of eggs. Perhaps we have some sympathy for him there. But when will the trade deficit improve? We have had forecasts of this and

  499
  that, but when will we get a J-curve effect on the export side—or is it really an S-bend and is the Financial Secretary going down the tube?
  Mr. Lamont: As my right hon. Friend made clear in his Budget statement and in the Red Book, the size of the deficit this year is expected to be broadly the same as last year's. However, as my right hon. Friend the Member for Chesham and Amersham pointed out, that is likely to mean that towards the end of the year things will begin to improve somewhat.
  There is evidence that interest rates are already beginning to have their desired effect. That is obvious from the fact that the monetary aggregates, M0, and figures to be published next week, are likely to show an annualised growth rate over the past six months of below 3 per cent. It is evident from the housing market also that interest rates are beginning to have their effect.
  The result of that prompt and effective action will be that inflation will come down. While getting inflation down is primarily a task for monetary policy, it is vital that fiscal policy supports it. That is why my right hon. Friend has budgeted for a third successive year of debt repayment, something unprecedented since the late 1940s. The debt that we are now repaying has been built up by years of excessive Government borrowing. Not only have we put an end to that excessive borrowing, but we are now lifting the burden of debt and the interest payments that go with it from taxpayers now and from generations in the future.
  When the Leader of the Opposition responded to my right hon. Friend's answer to his private notice question, he said that it was the people's debt, not the Government's debt. Of course he is right, but repaying debt is not just an abstract idea of no benefit to anybody. It is the taxpayers who pay the interest, and as a result of the repayments in the past two years and the repayment in the next year, the Government will be saving taxpayers the equivalent in interest of £3 billion per year. That is dead money and dead expenditure—of no benefit to the citizens of this country.
  As my right hon. Friend the Chief Secretary to the Treasury pointed out in his Autumn Statement, he was able to give some increases to the priority areas in the public spending round because of the savings in debt interest. In that way, the programmes that Opposition Members regard as important were helped by what my right hon. Friend achieved on debt interest.
  To listen to the Leader of the Opposition—no one imagines that he will ever confront the problem of a surplus—it was clear that he could not wait to get his hands on the £14 billion. Education, health, transport, pensions and welfare payments were all things on which, according to him, that £14 billion could be spent. Indeed, the right hon. Gentleman got very close to the £20 billion of extra public expenditure that only a short time ago the Opposition were denying existed in their manifesto. However, after what the right hon. Gentleman said, there can be no doubt that the Opposition are committed to a lavish and expansive programme of public expenditure.
  Although, for reasons that my right hon. Friend the Chancellor made clear, we have not been able to cut the basic rate of tax in this year's Budget——
  Mr. William Ross: Do the Government intend eventually to eliminate the national debt or not?
  Mr. Lamont: It is not necessarily the Government's intention to do that. My right hon. Friend the Chancellor has made it clear that the objective is a balanced Budget. Indeed, my right hon. Friend explained that extremely clearly and the hon. Gentleman can read about it in the Red Book as well as in the report of my right hon. Friend's speech.
  Although we have not been able to cut the basic rate this year, in this year's Budget we have been able to make a number of valuable reforms. The most costly—the one that allows people to keep more of their own money—is the reform of employees' national insurance contributions—something that has been welcomed by even Opposition Members. This year we have been able to finish the reform of employees' national insurance contributions that was started in the 1985 Budget. In that Budget we were able to reduce the size of the disincentive for people to work, but only by introducing more steps into the system.
  In the Budget my right hon. Friend has been able to complete that reform and to remove those steps. The effect is to give people at the lower end an incentive to work, or rather it avoids that trap where people actually lose money by increasing their earnings. At the same time it is a measure that has given £3 a week to everyone earning more than £115 a week, which is 40 per cent. of average earnings.
  In addition, we have been able to make some important improvements to the tax treatment of savings. I should like to comment on the alleged crisis that was mentioned by the hon. Member for Berwick-upon-Tweed. The total saving in the economy—that is, the private and public sector combined—is about 2 per cent. higher as a proportion of GDP than in the 1970s. It has remained unchanged since 1986. Even the fall in personal savings—about which I assume hon. Members are concerned—is more than accounted for by increased personal borrowing, which is what my right hon. Friend has already taken steps to deal with through his action on interest rates.
  I have said that the Government have taken a number of steps to increase savings and especially share ownership. Earlier today I announced in a written answer the results of the latest joint Treasury and stock exchange survey of individual share ownership in the United Kingdom. That shows that in the past 10 years the number of shareholders has trebled. Nine million British people now own shares, and about 10 million have either shares or savings in unit trusts. The overwhelming reason for that change is the direct result of Government policies—notably, privatisations, employee share schemes and personal equity plans. I am sure that my hon. Friends will agree that what is especially encouraging about the survey is that it shows that, despite the stock market crash, the level of share ownership—which has dramatically increased under the Government—has kept up and small shareholders have continued to be shareholders.
  My hon. Friend the Member for Wyre (Mr. Mans) mentioned what the Government are doing for wider share ownership and especially employee share ownership plans. My right hon. Friend announced in his Budget a new tax relief for employers wishing to promote employee share ownership. ESOPs involve trusts set up for the benefit of the company's employees. My right hon. Friend has removed any uncertainty by providing that corporation

  501
  tax relief will be due for payments made to ESOP trusts that satisfy certain requirements—for example, that the trust invests in shares promptly and distributes them within a reasonable time to all employees on a similar terms basis. I regard it as especially important that this tax relief is properly targeted to ensure that our objectives are met. lf, therefore, the trustees fail to distribute shares within a reasonable time, or to meet other requirements, they will be taxed at 35 per cent.
  I should emphasise to my hon. Friend the Member for Wyre that the Government have taken a comprehensive approach to dealing with the problems of encouraging ESOPs, Company law currently restricts the extent to which companies can give financial assistance to ESOP trusts. My right hon. and noble Friend the Secretary of State for Trade and Industry expects, if some technical difficulties can be resolved, to table amendments to this year's Companies Bill to help ESOPs and to relax those restrictions.
  My hon. Friend the Member for Wyre, the hon. Member for Berwick-upon-Tweed, and several other hon. Gentlemen asked what we are doing to improve the personal equity plans. The hon, Member for Berwick-upon-Tweed somewhat under-estimated PEP's impact. In 1988, 115,000 plans were taken out, and that was after the worst stock market corrections or crash—as we are now allowed to call it—since 1929, and 270,000 were taken out in 1987.
  About £700 million has been invested in equities, which is not an insignificant sum of money. I am confident that by allowing the amount that can be invested in unit trusts and in investment trusts to increase, we shall make PEPs much more attractive to the market. My hon. Friend the Member for Bexhill and Battle said it is extremely important that managers should be motivated to market PEPs. The response we have received is that they will definitely do so, and I am confident that that will be so.
  We introduced a number of simplifications as a result of consultations with managers. We abolished the minimum holding period, and plan managers will no longer have to maintain separate portfolios for different plan years. Other changes made as a result of those consultations include changing from a calendar year to a tax year basis, and a reduction in the degree of information that plan managers must give to the Inland Revenue. I am confident that all those changes will reduce the cost of PEPs and make them more attractive to managers.
  It was interesting that when the Leader of the Opposition responded to the statement of my right hon. Friend the Chancellor of the Exchequer, he came to life when talking about PEPs and water privatisation. I was surprised that the idea that PEPs should be opened up to new issues and to privatisations, like any other new issues plainly shocked him. I can only ask, "Why not?" We want to encourage privatisation and new issues as well.
  Last July, the Government issued a consultative document that considered the possibility of simplifying the rules determining residence in this country for tax purposes and of relating liability for United Kingdom income tax more closely to the degree of an individual's connection with this country.
  It has always been recognised that any changes must take account of the wider economic implications and ensure in particular that our tax environment is broadly comparable with that of other developed countries. The United Kingdom derives considerable benefit from people
  502
  who come here from overseas to carry on business and other activities. We have no wish to see them leave. I am grateful for the many responses that we received. They expressed a variety of views, and considerable concern was expressed about the implications of moving to a world income basis of liability for certain categories of people not domiciled here.
  We decided that the world income approach would not provide a satisfactory basis of taxation for non-United Kingdom domiciled foreigners who are resident in this country. Therefore, we do not intend pursuing it, and in those circumstances it is not our intention to bring forward any proposals at this time. I may say that we received representations from members of the Labour party as well as of the Conservative party on that matter, and they were both in the same direction.
  The right hon. and learned Member for Monklands, East is interested in the cost of private medical insurance tax relief. It will cost about £40 million in its first year. In arriving at that figure, we presume additional take-up of 10 per cent. in the first year, 1990–91. I expect that in later years take-up will exceed present levels by a considerable margin. The exact figure will depend very much on the extent to which the medical insurance industry meets that new marketing challenge. As take-up increases, the diversity of private medical provision and choice should increase. At the same time, the greater proportion of people electing to take their medical treatment privately will help relieve pressure on the Health Service, to the benefit of those who continue to depend on it for their treatment.
  Mr. John Smith: If the presumption is that the increase in take-up will only be 10 per cent. despite a 40 per cent. subsidy being offered, may I take it that if there is 100 per cent. take-up, the cost will be £400 million and not £40 million?
  Mr. Lamont: We presume that there will be a 10 per cent. take-up, but——
  Mr. Smith: Why?
  Mr. Lamont: Because take-up depends on how strongly insurers market insurance. It will take time for plans to be marketed and for the figure to rise. Obviously, it will not be high in the first year, but it will increase in the second, third and fourth years. Opposition Members have suggested that the burden on the taxpayer could be about £500 for each 65-year-old, which almost exceeds the cost of National Health Service care. Their arithmetic is no better now than when they were last responsible for the economy. The average cost of tax relief for each individual's cover is expected to be under £100, while spending per head on National Health Service care for the elderly is almost 10 times as much.
  In the Finance Bill, we are bringing forward measures based on recommendations of the Keith committee. The main proposals deal with the system of interest and monetary penalties for tax offences. They will, inter alia, bring PAYE into line with the changes already enacted for VAT and corporation tax. Together with the measures in the past two Finance Acts they complete our programme of reforms of the administration of income tax, capital gains tax and corporation tax, except for the recommendations on the administration and conduct of appeals, which will be the subject of further consultation.

  503
  The right hon. and learned Member for Monklands, East has been jumping up and down and putting questions to us, which is proper because it is his job. We have heard remarkably little about what the Labour party intends to do about taxation. Labour Members have been remarkably quiet since the last election, when the exposure of their commitments to clobber all taxpayers ensured their defeat at the polls. Their addiction to taking and spending other people's money cannot be suppressed for long, as has been apparent from their remarks today.
  The salary-snatchers are at it again. The right hon. and learned Gentleman has already committed the Labour party to the abolition of the upper earnings limit on national insurance contributions, which he confirmed last week. It would increase marginal rates by nine percentage points for 2 million people, thus making them worse off at a stroke. The hon. Member for Sedgefield (Mr. Blair) wants the top rate to be 60 per cent., which, together with the abolition of the upper earnings limit, would imply a new top rate of 69 per cent. Labour Members also want to reimpose the investment income surcharge, which would lead to taxes on savings at a rate higher than 69 per cent. Labour Members have been saying that they want a Budget for savings. Their Budget for savings would include increasing taxation to a confiscatory level.
  In an interview on 12 February the right hon. and learned Member for Monklands, East admitted that he would increase income tax for many basic rate taxpayers. We still have not received answers to the two big questions, which the right hon. and learned Gentleman and his colleagues repeatedly refused to answer—by how much would the Labour party increase public expenditure, and, to pay for it, by how many pence would it increase the basic rate of income tax? We have put those questions repeatedly, but answer comes there none.
  Mr. Pike: Does the Minister agree that many ordinary people, earning ordinary incomes, think it fairer to give cuts such as those given last year by increasing allowances rather than reducing the top rate of taxation? Would such a cut not be much fairer, if that is the direction the Government want to take?
  Mr. Lamont: I am sure that those people welcome what my right hon. Friend the Chancellor has done to national insurance contributions, which is by far the most effective way of directing help to the lower-paid.
  The essence of the Budget is that the medium-term financial framework should be used to continue a more stable economic climate. Confidence and certainty should be confirmed through careful budgetary control and economic management. There will be possible reductions in taxation in future years. There will also be a fundmental improvement in the supply side of the economy. This is a Budget that builds on a decade of economic success and financial prudence. It is a Budget that recognises the
  504
  tremendous advances made in tax reform over the last decade. It is a Budget that recognises the new concerns of the environment and the elderly as well as the saver. It is a Budget that may be cautious but, above all, one that is sensible and constructive, and I commend it to the House.
  Debate adjourned.—[Mr. Alan Howarth.]
  Debate to be resumed tomorrow.

  STATUTORY INSTRUMENTS, &c.
  Mr. Speaker: By leave of the House, I shall put together the Questions on the two remaining motions on the Order Paper.
  Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &c.).

  REPRESENTATION OF THE PEOPLE
  That the draft Representation of the People (Variation of Limits of Candidates' Election Expenses) Order 1989, which was laid before this House on 16th February, be approved.
  That the draft European Parliamentary Elections (Amendment) Regulations 1989, which were laid before this House on 16th February, be approved.—[Mr. Alan Howarth.]
  Question agreed to.

PETITION

  Moray Coastguard (Peterhead)
  10 pm
  Mr. Alex Salmond: With your permission, Mr. Speaker, and that of the House, I beg leave to present a petition from John D. Buchan, former chairman of the Peterhead harbour board. The petition is signed by 350 fishing skippers from the north of Scotland, and supported by fishing organisations and harbour boards representing over 1,000 boats.
  The material allegations in the petition demonstrate the overwhelming opposition of the Scottish fishing fleet to the proposed closure, at the end of this month, of the Moray coastguard sub-centre at Peterhead and express the serious concern of the coastal communities that such a closure would adversely affect marine safety off the north-east coast of Scotland.
  The prayer reads:
  To the honourable the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled.
  The humble petition of fishermen's organisations, harbour authorities and skippers sheweth that Moray coastguard (Peterhead) provides a vital service to mariners, coastal dwellers and holidaymakers alike, and is currently threatened by cutbacks in the resources available to the service.
  Wherefore your Petitioners pray that your honourable House ensure that Her Majesty's coastguard receives the resources necessary to the maintenance of a full and thorough rescue service at the port of Peterhead and in the Moray coastguard area.
  And your Petitioners, as in duty bound, will ever pray.
  To lie upon the Table.

  Tourism (Northumberland)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Alan Howarth.]
  10.1 pm
  Mr. Allan Amos: The purpose of this debate is to draw attention to the House to the enormous and exciting potential for tourism in Northumberland. It has all the ingredients for success. There is an amazing array of natural advantages in the county. There is need for agricultural and rural diversification. Tourism is labour-intensive, and the tourist industry is based largely on self-employment and small-scale units. My hon. Friend the Minister is already a frequent visitor to the region, and I am grateful to him for his genuine interest in the area.
  As I am sure you know, Mr. Speaker, Northumberland is a beautiful land. The sheep are succulent, the people are proud, pleasant and prosperous, the cows are contented, and the scenery is stunning, staggering and spectacular. Let us look very briefly at the national context within which Northumberland has to operate. Last year was the best ever, nationally, for tourism: 15·4 million overseas visitors spent £6·2 billion, and domestic visitors spent £7 billion. The British tourist industry supports 1·4 million jobs, and about 40,000 new jobs are created each year. The annual turnover is equivalent to about 4 per cent. of GDP, and Britain is fifth in the world tourist earnings league. Nearly £7 of every £100 spent by world travellers is spent in Great Britain, and,. significantly, every 1 per cent. increase in the British world market share would lead to an increase of £1 billion in earnings and 40,000 new jobs.
  The role of the British Tourist Authority is to
  "encourage tourism throughout the country, particularly in areas of tourism potential with higher than average levels of unemployment."
  That applies in particular to a county like Northumberland, so let us look now at a recent profile of holiday visitors to the Northumbria region.
  In 1987 4·3 million visitors spent £265 million in the region, sustaining 34,000 jobs. In 1988 tourism was worth £300 million to the region. The largest proportion of Northumbria's visitors, some 69 per cent., were from managerial and white collar groups who were particularly keen on our heritage attractions. A higher than average proportion of visitors were under 45. The 35 to 44 age group was the most evident and represented some 30 per cent. of our visitors, compared with only 17 per cent. nationally. Two thirds of that category had children and, in particular, they liked Northumbria's heritage attractions and tended to stay in self-catering accommodation and caravans. The area attracts large numbers from the south-east, London and east anglia. Those people stayed slightly longer than average and spent well above the average.
  Overseas visitors were 15 per cent. of the total, and they also spent more and stayed longer than the average. Twenty per cent. were from north America, 35 per cent. from the EEC and 17 per cent. from Norway and Sweden—all countries with high income economies. The potential for expansion there is exciting. Altogether they spent £100 million.
  Other characteristics of tourism are that 80 per cent. of our visitors come by car. The most popular pastimes are sightseeing, motoring, historic attractions, rambling and sea bathing. On average, holiday visitors stayed six days
  506
  within an overall holiday period of nine days, whereas overseas visitors stayed nine days out of an overall 16-day holiday. A high proportion of our visitors simply stay overnight.
  The characteristics and behaviour of visitors to Northumberland, a part of the Northumbria region are similar. They tend to be middle-class; relatively few stay with friends and relatives. Fewer than average for the region come from overseas. They are more likely than average to come from the north. They are particularly interested in historic sights, sightseeing and rambling. Ninety per cent. come to the area by car. They spend more each day per person than in the rest of the region, and a greater proportion of those people in Northumberland as opposed to Northumbria plan their visit by seeking information in advance.
  What are the sources of that information about the region? It is a case of seeing is believing. Forty per cent. of the information comes from friends and relatives and 30 per cent. comes from previous knowledge. The region sells itself. Once people know about the region they come back time and again.
  What, then, are the attractions of Northumberland? I shall have to curtail the list and simply point out some of them. The uniqueness and diversity of the region are important. First, the recent official designation of Hadrian's wall as a world heritage site and the Roman heritage generally is a prime attraction. I am not one to boast, but Kielder water is the largest man-made lake in Europe and Kielder forest is the largest man-made forest in Europe. We have border castles galore. There is the Christian heritage. The area is the cradle of Christianity. There is the historic cathedral city of Hexham. There are historic and charming small towns such as Allendale, Blanchland and Bellingham. With Government assistance we have seen the rebirth of a village at Allenheads with its heritage centre.
  We have the south Tynedale railway and the Wentworth leisure centre in Hexham. We have sports centres in Otterburn and Ponteland, and we have a new international golf and hotel complex at Slaley hall. The Northumberland national park speaks for itself, as does the quality of the unspoilt environment generally.
  The Metro centre is on the doorstep. That is the largest covered shopping centre in Europe. The area is a vast hinterland for Scandinavian shoppers to Newcastle, and there is plenty of lead-free petrol if they want it. We welcome visitors from across the North sea. Unlike hundreds of years ago, they now pay for what they take home.
  What is the way forward? There must be an acceptance that tourism represents one of the most dynamic and exciting opportunities for the creation of jobs and wealth for the foreseeable future. Secondly, we must accept that tourism is a proper industry. It is highly competitive, it is consumer-led and it is having to meet rapidly changing tastes and fashions. There is a need, as in all other industries, for a better trained, qualified, educated and skilled work force. That is not an unnecessary expense but an essential investment.
  I would welcome the role of the Department of Employment in that. The tourist and training initiative is to be greatly welcomed, as is the education and training group from the National Economic Development Office. The new GCSE in travel and tourism, the growing number of BA degrees at universities and polytechnics and better

  507
  schools careers guidance to increase awareness of the opportunities in the tourist industry are all welcome developments.
  Tourism is largely a private sector industry, but the Government have a role to play. Their job is to create the conditions for expansion, including help with promotion and infrastructure. The Government should be, and are, a facilitator and encourager, so I have two pleas to make to the Minister. First, might we, as soon as possible, end the suspension of section 4 grants? The Northumbria tourist board told me only yesterday that it is receiving 50 applications a month which cannot be dealt with. It would be helpful if we could end this period of uncertainty.
  Mr. A. J. Beith: As the hon. Gentleman knows, my constituency shares the beauties he has described, but it also shares the belief that section 4 grants should be reinstated. This is felt particularly keenly in my constituency, on the border with Scotland. Grants continue to be paid by the Scottish tourist board on the other side of the border, while people on my side of the border feel increasingly that they are being left behind while the review takes place.
  Mr. Amos: These grants are important to the industry. They are being strategically targeted into new areas of unrealised tourism potential. They are most effective. They generate private investment with a leverage of seven or eight to one, which is an enormous ratio. They are especially important for smaller scale developments. That applies particularly in Northumberland. This shortage of section 4 grants is hitting self-catering, where the situation is already near capacity.
  My second plea is to complete and implement swiftly the latest tourism review. Again, uncertainty adversely affects the finance and confidence of the industry. The structure and framework of the industry is about right. It now needs to be enabled to get on with the job.
  The Government's help is also needed with the promotion of new products and sustaining and developing existing ones. The aim for domestic and overseas visitors must be to identify the market, to anticipate market trends, to stimulate quality and to spread the benefits away from congested London to the regions, where we have clean air and plenty of space. In such a diverse and dispersed industry, it is vital to target our resources and effort well. But we need to know visitor profiles and patterns—who is coming, what they are looking for and what type of holiday is being sought.
  Identification of the various market sectors is an essential prerequisite for successful marketing. We must accept that the vast majority of people who visit the countryside come on day trips. We need to know if there is a potential demand for specialist interest holidays, such as the Christian heritage or the Roman heritage, what proportion are on second or third holidays, what proportion are on short breaks and how many people are going on caravan holidays.
  There is a growing demand for self-catering and day trips, and that is well documented. Stays in the area of between one and three nights have been increasing significantly and will continue to do so because they represent the increasing affluence and leisure time of the majority of the population. But we must accept all the time
  508
  that we are competing with the rapid growth of holidays abroad. Equally, we must promote two-centre holidays away from London. I accept that London will always be a magnet, but Northumberland is a magnet in its own right.
  It is vital, therefore, that information is readily available in advance from the Northumbria tourist board for visitors, and from the tourist information centres on the spot, and we have good ones in Hexham and Haltwhistle in my constituency. The role of tourist information centres is crucial and they should be kept open to suit the demands of the consumers.
  Charges for book-a-bed-ahead should not fall unfairly on guest houses and hotels, which are often small establishments operating on low margin. They need to be encouraged, not put off. The locations of tourist information centres can make all the difference,. They should be, and are, at airports, transport termini and in the high streets, and other agencies have a role to support this activity—for example the Rural Development Commission.
  Marketing and market information depend on investment in the latest information technology. The efforts by various local authorities must be co-ordinated to avoid waste and unnecessary competition. Marketing Northumberland is easy. We have so much to offer: people will love the area and we must tell them about it. You, Mr. Speaker, are always welcome to visit Northumberland. You will get a warm welcome, and I look forward to seeing you there.
  The Government can help with improving quality. I commend the crown classification scheme, although I wonder about the possibility of merging it with the AA and RAC star system to establish clarity in the public's mind. It is important throughout the industry to get value for money, to raise standards and to improve training for staff to get a more professional service. That applies to every catering and accommodation outlet. For example, we need more rooms with private facilities. That is what the public want and what we must provide for them.
  The Government can greatly help also with infrastructure. Most visitors come to Northumberland by road and travel within Northumberland by road. The county has an extensive and well-maintained road network, but it is 300 miles from London, so quick and convenient access is especially important. We need the dualling of the A69 west of Hexham, a major caravan route and a winding road on which it is difficult to overtake. We need bypasses for villages such as Haltwhistle and Haydon Bridge to facilitate travel within the county and to protect the environment. We need a good motorway to the north-east, a reliable and punctual rail service and a direct link to and from the Channel tunnel—on that point, I strongly support the move to have the terminal at King's Cross.
  We also need deregulation of European air fares to get greater use of regional airports such as Newcastle and to get cheap fares.
  Mr. Ian McCartney: What about Manchester airport?
  Mr. Amos: I thought that the hon. Gentleman would say that.
  We want greater use of Newcastle international airport and the Tyne seaports for direct entry from north America and Europe. The majority of foreign visitors arrive

  509
  through London if they are coming by air, and through Dover if they are coming by sea. There is tremendous scope for improvement.
  I ask also for help on signposting. A simple principle is involved: people will not use facilities if they do not know that they exist or do not know where they are. Northumberland has large stretches of open road. More signs will not be any distraction or danger for the driver, and it is absurd to suggest that they will be. Brown and white signs are welcome but at about £500 a time are far too expensive for most ordinary people in the tourist industry. We need flexibility and common sense. As the British Tourist Authority says:
  "signposting is an important part of a successful visitor service."
  Of course, the signs must be environmentally sensitive, informative and properly designated. Unless we get this right, the problem will seriously hinder tourism development. For example, Mr. Moss, in my constituency, who opened tea rooms near Shotley Bridge, creating jobs, is about to close because no one knows that he is there as he cannot have a sign. Authorities at Vindolanda, a principal Roman site, battled for years to get a signpost. This is absurd. I urge my hon. Friend the Minister to take up these matters with his colleagues in the Department of Transport.
  I ask my hon. Friend also to take up another matter—help with obtaining EEC assistance under objective 5b of the European regional development fund and reformed structural funds. The problem is simple. Other rural areas get funds that Northumberland does not, even though, as most of Northumberland is in a rural development area, it has the benefit of a national grant aid scheme. The Northumberland rural development programme committee and I have been pressing the Government to notify the EEC that this area is under a national grant aid scheme in order to qualify for the extra EEC funds. We meet all the necessary criteria. Therefore, I believe that we are being discriminated against. The regional office of the Department of Trade and Industry is sympathetic to the submission for assistance.
  Northumberland is creating and establishing an identity for itself. It is waking up to the possibilities. In 1987–88, 26 tourism projects were recommended for grant approval at a cost of £1·5 million. That is a sign of vibrant and exciting activity. The Northumbria tourist board has invested £4 million in the region through its support of local projects. The Northern Consortium continues to launch effective promotional campaigns in the region, and the private commercial sector is now more closely involved in the management of the Northumbria tourist board.
  The stimulation of desirable and relevant investment in tourist facilities has been identified by the local authorities—Northumberland county council and Tynedale district council—as being of major importance to the economic prosperity of the area and to the quality of life. Attention is being paid to the provision of public facilities, such as public loos, museums and art galleries, to environmental matters, such as street cleaning and litter collection and to recreation and leisure facilities, such as picnic areas, parks and access to viewpoints.
  The work of other agencies is also to be commended. They include the Rural Development Commission, the Countryside Commission, the county council and the Ministry of Agriculture, Fisheries and Food, which has provided grants for on and off-farm developments. The
  510
  Forestry Commission also has a role, and the Northern Development Company has a vital part to play in promoting the region.
  Rural tourism development action programmes have been designed to create working partnerships between local authorities, the private sector and the tourist boards to implement key schemes to increase tourism and create jobs. There was one at Kielder, in my constituency, assisted by the National Tourist Board. The Keilder forest park TDAP—in existence from 1984 to 1987—was a great success. The rural tourism development strategy, launched by the Rural Development Commission last year, recognised tourism as a growing part of the rural economy.
  County council structure plans have a vital role to play. There is enormous scope for partnership between the public and private sectors in marketing and funding and for co-operation between the various agencies. Airlines and car rental companies, for example, can sell the region as well as their own services.
  The success of tourism depends on an integrated and co-ordinated approach to the development and management of tourist potential. It needs a lead—and a clear sense of direction within a clear strategy. We must maximise the use of our resources and avoid duplication. Tourism is a dynamic and vibrant industry in which we must grasp opportunities and challenges to maintain healthy growth and, in an environmentally sensitive way, to preserve the fragile beauty of our area.
  We want to extend tourism into a year-round activity. The opportunity is there. In January last year, for example, hotel room occupancy was 44 per cent.—a figure that is staggering but true—and higher than in most other regions. In September, with 73 per cent. hotel room occupancy, we were up with the leaders.
  Years ago, Northumbrians, under foreign direction built a wall to keep out the barbarians. Now we welcome all suitable visitors and we want them to stay as long as possible.
  It would not be fair for me to conclude without congratulating the Government on the commitment that they have shown to tourism by allocating more resources and by giving us a special Minister responsible for the industry.
  10.23 pm
  The Parliamentary Under-Secretary of State for Employment (Mr. John Lee): I congratulate my hon. Friend the Member for Hexham (Mr. Amos) on securing an Adjournment debate on a subject that is becoming increasingly important to his constituency and his region, and I thank him for his comprehensive speech. I am especially pleased that a number of other hon. Members are with us—not least the Opposition Chief Whip, the hon. Member for Bishop Auckland (Mr. Foster), and the hon. Member for Berwick-upon-Tweed (Mr. Beith), who take a great interest in tourism matters in their own region.
  In previous tourism debates I have begun by talking about the healthy and dynamic state of our domestic tourism industry. I am glad to say that tonight's debate will be no exception, and that I can report further encouraging signs of the buoyancy of tourism in this country.
  Figures released last week show that 1988 was another record year for United Kingdom tourism, with a total of

  511
  15·7 million visitors from overseas during the year, surpassing the previous record total in 1987. Prospects for 1989 look even better. Many tour operators are reporting a significant upturn in domestic holiday business. Some operators have seen increases of as much as 50 per cent. in forward bookings for the year compared with 1988. This very heartening state of affairs shows that the foresight and confidence of investors in the industry is beginning to pay off. In the second half of 1988 investment in major tourism projects under way or completed also reached an all-time high of over £2·5 billion, which represents an increase of 25 per cent. on the previous six months.
  It is therefore very gratifying to hear that advance bookings for the 1989 season show a very definite consumer preference for what I might term the quality end of the market. Britain is developing a quality image, and can more than match what our overseas competitors are able to offer without some of the attendant problems such as airport delays which many package tourists suffered last year. I believe that those who have invested in new facilities, or have upgraded existing facilities, will see a rich return from that investment in the coming years.
  Having outlined the national picture, I should like to focus on tourism in Northumberland. It is estimated that there are more than 1 million visitors a year spending at least one night in Northumberland, generating a total tourism spend of over £60 million. A recent survey of Northumbria tourist board members indicates that 1988 was the best ever year for visitors. Once again the customer emphasis was on quality, with many visitors attracted by the area's incomparable Roman and early Christian heritage. I am glad to say that I will be adding to this year's visitor total when I take my family to Northumberland for part of our Easter holiday later this month.
  Investment in large-scale projects in the Northumbria tourist board area totalled £110 million in the second half of 1988, an increase of 34 per cent. on the same period in 1987. Admittedly, most of that investment went into projects outside Northumberland, but we are now starting to see some major developments in Northumberland itself coming on stream, which bodes well for the future.
  One development which is already completed, although I understand that further expansion is planned, is the £1·4 million Amble marina, which provides berths for more than 200 boats. The marina's first maritime festival in September 1988 attracted 5,000 visitors in a single weekend, which shows the potential for extending the tourist season beyond the traditional high summer months. Amble was also the only northern port to win a Tidy Britain Group blue flag award in 1988.
  I am also glad to see that the project at Slaley hall, near Hexham, which my hon. Friend mentioned, is now very much on the go again, after some initial difficulties. This planned £8·7 million project, which will include a 140-bed hotel, a conference centre, timeshare lodges, a golf course, and other leisure facilities, will bring some 200 direct jobs to the area.
  One particularly interesting development is at Cragside hall in Rothbury, the first house in the world to be lit by hydro-electricity, which I visited last year. The National Trust has spent £167,000 on restoring the hydro-electric
  512
  machinery and on creating a "power circuit walk" to entertain and instruct the 100,000 or so visitors who come to the hall each year.
  On that same visit to Northumberland I also saw the very successful house of Hardy Fishing museum in Alnwick, in the constituency of the hon. Member for Berwick-upon-Tweed (Mr. Beith), which is attracting a good deal of overseas interest. Visitors to the museum can also tour the factory and see craftsmen demonstrating their traditional skills. I have no doubt that other businesses in the country would benefit from catering for visitors. I have made the promotion of modern industrial tourism something of a personal crusade. That is why I welcome the forthcoming industry-tourism conference, which is being organised by my Department, the Department of Trade and Industry, and the CBI, among others, to be held later this year in the region.
  I mentioned earlier that heritage is one of Northumberland's strongest suits. That fact was given international recognition when UNESCO designated Hadrian's wall a world heritage site. The Roman forts along the wall, Housesteads, Vindolanda, Chesters, and the Roman Army museum at Carvoran together attract well over 300,000 visitors a year, showing the importance of the wall to Northumberland's tourism industry.
  Indeed, the North-East regional tourism co-ordination group, which is chaired by the Employment Department's regional director, has set up the Hadrian's wall marketing group. This group has already carried out a review of signposting in the vicinity of the wall, and has agreed a strategy for co-ordinating the signposts to the various attractions along the wall. Other initiatives on the heritage front include the production of a leaflet called "Great North Houses", a first-ever joint effort by English Heritage, the National Trust, and the Historic Houses Association. There are now further plans to set up a Christian heritage trail, which would include such major heritage attractions as Lindisfarne priory, which now has a new £250,000 permanent exhibition of monastic life.
  Those and other initiatives illustrate the partnership approach which is beginning to achieve success in Northumberland. It is good to see that public sector bodies are getting involved in the development of tourism, and are working more closely with the private sector. The county council and all six district councils in the county belong to the regional tourist board, and many now have their own tourism officer and tourism strategy. The county council has set up a marketing campaign, using the slogan "England's Border Country", and the Northern Development Company has launched its Great North campaign, emulating Glasgow's highly successful "Glasgow's Miles Better" campaign. My Department has given financial support to the Great North campaign during the last two years.
  I am also pleased to see that commercial members of the Northumbria tourist board are now represented on the board's executive committee. However, as it has only 600 commercial members—one of the lowest memberships in the country—there is still considerable scope for increased commercial membership of the board, and for greater private sector participation in its work. I look forward to the publication of the board's tourism strategy for Northumbria, which I understand is due to appear later this year.
  Another example of fruitful collaboration between several organisations is the Kielder tourism development

  513
  action programme, which brought together, among others, the English tourist board, the Northumbrian water authority and the Countryside Commission. During the action programme's period of operation, from 1985 to 1987, investment in the area increased sevenfold to £1·5 million, leading to the development of water sports facilities, a visitor centre, sports centres and allied activities.
  Let me finally refer briefly to the section 4 scheme—the suspension of which, as my hon. Friend will know, was announced by my right hon. Friend the Secretary of State for Employment on 30 January. The future of the scheme is one of' the issues currently being considered as a result of the recent review of tourism policy in the Department of Employment. An announcement about the outcome of that review, including the future of section 4, will be made in due course. In the current financial year up to January 1988, offers of assistance totalling nearly £800,000 were made to 34 projects in the Northumbria tourist board area and offers totalling almost £1·5 million made to 37 projects in 1987–88. However, it is important to put section 4 grants, totalling about £13 million per annum nationally,
  514
  in the context of a £2·5 billion capital investment programme. It is clear that the vast majority of projects would have proceeded in any event.
  In covering the main developments and issues pertaining to tourism in Northumberland, I have attempted to paint a picture of a county that is blessed with many natural assets, with its beautiful coastline, marvellous, grand, unspoilt countryside, and its Roman and early Christian heritage. The area's tourism potential has perhaps in the past been rather neglected, and has rather fallen behind other areas which in recent years have discovered the benefits of marketing themselves as tourist destinations. Things are now changing for the better. What is needed now is a concerted effort to develop the sort of attractions and facilities that today's visitors require, and to put Northumberland firmly on the tourism map.
  The motion having been made after Ten o'clock, and the debate having continued for half an hour, MR. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at twenty-nine minutes to Eleven o'clock.

FOREIGN AND COMMONWEALTH AFFAIRS

  Turkey
  Mr. James Lamond
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will raise at the first meeting of the conference on the human dimension in Paris the treatment of political prisoners in Ankara central prison by the Turkish Government.

  Mr. Waldegrave
  It is open to participants at the Paris human dimension conference to take up any matter of concern to them. It is too early to say precisely which issues Britain will raise.

  Decade of Disabled Persons
  Mr. Hannam
  To ask the Secretary of State for Foreign and Commonwealth Affairs what support his Department is giving to the United Nations global project to promote the decade of disabled persons; and if he will make a statement.

  Mr. Eggar
  The Department of Health is the lead Department on domestic issues relating to this project. The Foreign and Commonwealth Office has, through the Overseas Development Administration, funded a three-month consultancy at the United Nations office in Vienna to identify projects and funds for the world programme of action for disabled persons.

  Civil Servants (EC)
  Mr. Cryer
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is the number of civil servants in his Department whose main task is work related wholly or mainly to the European Economic Community; and what is the gross annual cost of travel and accommodation to and from Brussels, Luxembourg and Strasbourg in connection with this work.

  Mr. Waldegrave
  There is a total of 56 staff in the diplomatic and aid wings whose work is related wholly or mainly to the EC, including clerical and secretarial staff. The annual cost of official travel and accommodation to and from Brussels, Luxembourg and Strasbourg on EC work is approximately £34,000.

  Brazil
  Mr. Dalyell
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the official visit to London of the Secretary General of the Brazilian Ministry of Foreign Affairs in March.

  Mr. Eggar
  My right hon. and learned Friend and I, as well as senior officials in the FCO, including the ODA, and my hon. Friend the Minister for Trade, had very useful discussions with Mr. Flecha de Lima during his visit last 216
  week. We covered a wide range of international issues including environmental problems, notably the future of the Amazon rainforests. We drew Mr. Flecha de Lima's attention to the strong concern felt in Britain on this issue, but stressed that our overall approach was to work with the Brazilian Government.

ATTORNEY-GENERAL

  Civil Servants (EC)
  Mr. Cryer
  To ask the Attorney-General what is the number of civil servants(a) in his office and (b) in the Lord Chancellor's Department whose main task is work related wholly or mainly to the European Economic Community; and what is the gross annual cost of travel and accommodation to and from Brussels, Luxembourg and Strasbourg in connection with this work.

  The Attorney-General
  The number of civil servants whose main task is work related wholly or mainly to the European Economic Community is as follows:

  Law Officers' Department, nine; Lord Chancellor's Department three.

  The estimated gross annual cost of travel and accommodation to and from Brussels, Luxembourg and Strasbourg for the current financial year is:

  £

  Law Officers' Department

  6,004

  Lord Chancellor's Department

  8,423

  "Codebreaker Extraordinary"
  Mr. Dalyell
  To ask the Attorney-General if he proposes to take any steps in the Australian courts to seek to prevent the publication of the book known as "Codebreaker Extraordinary" by retired captain Eric Nave.

  The Attorney-General
  No.

TRANSPORT

  Unleaded Petrol
  Mr. Stern
  To ask the Secretary of State for Transport if he will set a date by which no new car may be sold in the United Kingdom if it is incapable of using unleaded petrol.

  Mr. Peter Bottomley
  Regulations made in September last year require all new model types from 1 October 1989, and virtually all existing model types from 1 October 1990, to be capable of running on unleaded petrol. Special arrangements for the less than 2 per cent. of new cars which would need major engineering changes will expire on 1 October 1993.

  M4 Elevated Section
  Mr. Shersby
  To ask the Secretary of State for Transport what consideration he is giving to the longer-term case for repairing, improving or expanding the capacity of the M4 elevated section on the approach to central London; what forecasts have been prepared of increased traffic volume resulting from the continued expansion of traffic to and from Heathrow airport; and if he will make a statement.
  217
  Mr. Peter Bottomley
  Consultants were appointed last year to develop a strategy for management of the motorway and trunk road network within the M4/A4 corridor from London to Heathrow. The aim is to improve the reliability of journey times by making the best use of the existing system. A report on this study is expected during the summer of next year. It will incorporate all relevant traffic forecasts, including those relating to Heathrow.

  Vehicle Licensing (Computerisation)
  Miss. Emma Nicholson
  To ask the Secretary of State for Transport what is the present position concerning the computerisation of the vehicle licensing system.

  Mr. Peter Bottomley
  Vehicles licensed for use on the public road in Great Britain have to be registered on the computer at the driver and vehicle licensing centre. Computerisation there began in 1974 with new vehicles and was gradually extended to older vehicles as they were relicensed or re-registered. Since November 1983 registration marks of older vehicles not on the computer record have only been added in exceptional circumstances. These vehicles are usually given alternative numbers whose history cannot be disputed.

  Computer Safety
  Miss Emma Nicholson
  To ask the Secretary of State for Transport whether the security of on-line computer files in his Department is regularly checked for breaches by unauthorised outside access.

  Mr. Peter Bottomley
  Yes. Procedures too are reviewed regularly.

  Sealink Harbours Ltd. (Special Constables)
  Mr. Shersby
  To ask the Secretary of State for Transport if he will call for a report from the chief constable of Essex as to (i) the powers of and (ii) the nature of the warrant card required to be carried by special constables employed by Sealink Harbours Ltd. at Parkeston quay and as to which police authority such constables are accountable.

  Mr. Portillo
  These special constables are employed by Protective Security Systems Ltd. under exclusive contract to Sealink and do not come under the county police authority. The local harbour legislation incorporates a common provision under which persons nominated by the harbour undertaking may be sworn in as special constables for its premises and one mile beyond them. Sealink has stated that these staff will not be used outside port limits, save in emergency and in support of Essex police. They have photocards, issued by Sealink, identifying them as special constables.

  Mr. Shersby
  To ask the Secretary of State for Transport to which police authority special constables employed by Sealink Harbours Ltd. are accountable in cases where members of the public have recourse to the Police Complaints Commission in connection with the actions of any such constable.

  Mr. Portillo
  Under the Police and Criminal Evidence Act 1984 authorities other than police authorities which maintain a body of constables may, with the Home 218
  Secretary's approval, make agreements with the Police Complaints Authority, establishing police complaints and discipline procedures similar to those laid down in that Act. There is no such agreement at present between the authority and Sealink, which introduced its new security arrangements on 1 February 1989.

  Mr. Shersby
  To ask the Secretary of State for Transport if he will call for a report from the chief constable of Essex as to whether the special constables employed by Sealink Harbours Ltd. have been trained at district training centres in order that they are able to comply with the provisions of the Police and Criminal Evidence Act and other legislation to which constables employed in the regular police forces are subject.

  Mr. Portillo
  I understand that before these staff were sworn in as special constables they took a three-week training course, to which the Essex police contributed, and had to pass a written examination. The security manager and two of his staff formerly belonged to Essex police.

  Traffic Lights
  Mr. Nicholas Baker
  To ask the Secretary of State for Transport if he will consider introducing different shaped traffic lights so as to be discernible to colour-blind motorists and pedestrians.

  Mr. Peter Bottomley
  No. The present designs provide for colour blind people by standardising the positions and sequence of the red, amber and green lamps on traffic light signals and on the positions of the red and green people symbols on traffic light signals controlling pedestrians.

  Rail Freight
  Mr. Walters
  To ask the Secretary of State for Transport what steps are being taken to encourage greater use of the railways for the haulage of heavy goods to alleviate the environmental damage caused by heavy commercial lorries.

  Mr. Portillo
  Grants are available under section 8 of the Railways Act 1974 to assist the transport of goods by rail if the environmental benefits of keeping lorries off sensitive roads can be secured at reasonable costs and if the correct commercial decision, in the absence of grant, would be to use road. Since 1974 the Government have awarded 189 such grants totalling £64 million and we estimate that, as a result, about 3 million lorry journeys are removed from unsuitable roads every year.

  M1 (Traffic Lights)
  Mr. Greg Knight
  To ask the Secretary of State for Transport why temporary traffic lights were in operation on Saturday 4 March and Monday 6 March on the island at junction 25 of the M1 motorway.

  Mr. Peter Bottomley
  The temporary traffic signals were installed to cater for increased traffic flow resulting from the temporary closure of the southbound exit slip road at M1 junction 28 for reconstruction works from 4 to 10 March. The signals were installed to prevent queues forming back on to the M1 carriageway. At junction 25 the lights were in continuous operation from 4 to 6 March and then at peak periods only as agreed with the police.

EDUCATION AND SCIENCE

  "Standards in Education 1987–88"
  Mr. Straw
  To ask the Secretary of State for Education and Science (1) what arrangements he has made for the distribution of the annual report of Her Majesty's senior chief inspector of schools "Standards in Education 1987–88", to those within the education service; and whether copies are to be sent to every school;

  (2) what was the cost of printing the annual report of Her Majesty's senior chief inspector of schools "Standards in Education 1987–88"; and how many copies were printed.

  Mr. Kenneth Baker
  Ten thousand copies of the senior chief inspector's annual report were printed at a total cost of £2,340. The report has been sent to all chief education officers, to major national bodies within the education service, and to a number of other interested parties. The report has never been sent automatically to every school, but any institution or individual asking for a copy of the report will be sent one.

  Deaf-blind People
  Mr. Ashley
  To ask the Secretary of State for Education and Science (1) what steps he proposes to take to increase the number of qualified teachers of deaf-blind people;

  (2) what steps he has taken to improve the education of deaf-blind people; and how many qualified teachers for deaf-blind people there are in Britain;

  (3) what discussions he has had with SENSE, the organisation for deaf-blind people; and if he will meet its officials to discuss funding;

  (4) if he will conduct a special survey of the educational requirements of deaf-blind adults and children to evaluate their needs and to enable him to make adequate provisions.

  Mr. Butcher
  I refer the hon. Member to the reply I gave on 9 March to my hon. Friend the Member for Hyndburn (Mr. Hargreaves) at column 604. Officials of the Department have met representatives of SENSE on a number of occasions. They were particularly helpful in assisting the Department prepare its statement on the educational needs of deaf-blind children, a copy of which I have sent to the hon. Member. This is relevant to the points he raises.

  The funding of provision of services for the deaf-blind is the responsibility of local authorities. The statement does not envisage that the development of services for the deaf-blind should involve significant additional expenditure. However, the Department intends to follow up progress on local education authorities' consideration of the Department's statement.

  Student Grants
  Mr. Andrew Smith
  To ask the Secretary of State for Education and Science what is his estimate of the cost at 1988–89 prices of ending parental contributions in respect of student grants.

  Mr. Jackson
  Approximately £340 million.

  Mr. Andrew Smith
  To ask the Secretary of State for Education and Science what would be the cost at 1988–89 prices of restoring students to their 1979 grant level.
  220
  Mr. Jackson
  The cost of restoring the student maintenance grant in the current academic year to its 1978–79 level would be approximately £125 million.

  Mr. Andrew Smith
  To ask the Secretary of State for Education and Science what would be the cost at 1988–89 prices of restoring the level of student transport costs to their 1979 level.

  Mr. Jackson
  I refer the hon. Member to the reply I gave to the hon. Member for Denton and Reddish (Mr. Bennett) on 28 November 1988 at column 78.

  Educational Maintenance Awards
  Mr. Andrew Smith
  To ask the Secretary of State for Education and Science what would be the cost at 1988–89 prices, of introducing educational maintenance awards for 16 and 17-year-olds in full-time education in schools and colleges at(a) the same rates as income support for young people and (b) the same rates as training allowances paid to 16 and 17-year-olds on YTS.

  Mr. Jackson
  After deducting child benefit and existing maintenance payments from LEAs, the annual cost of paying maintenance allowances to all 16 and 17-year-olds currently in full-time education in schools and colleges, is estimated to be as follows:

  £ million

  (a) If the allowances are paid at the same rate as income support

  320

  (b) If the allowances are paid at the same rate as YTS allowances

  675

  Notes:

  1. These figures are based on the number of 16 and I 7-year-olds in full time education in 1986–87, the latest year for which figures are available.

  2. The figure at (a) is based on the 1988–89 income support level of £19·40 for 16 and l7-year-olds, less child benefit at the 1988–89 rate of £7·25.

  3. The figure at (b) is based on the 1988–89 YTS allowance; of £29·50 per week for 16-year-olds and £35 for 17-year-olds, less child benefit at the rate of £7·25 per week.

  4. Both figures assume no change in the 1986–87 level of local authority spending on maintenance payments for 16 and 17-year-olds, which has been converted for the present purpose to 1988–89 prices using the GDP deflator.

  Student Fees
  Mr. Andrew Smith
  To ask the Secretary of State for Education and Science what would be the extra cost in 1988–89 prices of full fee remission for all home students, in respect of part-time degree courses in(a) universities, (b) polytechnics and other colleges and (c) the open university.

  Mr. Jackson
  Estimates of the extra costs are about £1 million for the universities in Great Britain, £4 million for the polytechnics and colleges in England and £15 million for the open university.

  Polytechnics and Colleges (Grant)
  Mr. Andrew Smith
  To ask the Secretary of State for Education and Science what was the total Government grant both to the polytechnics and other colleges in each of the last 10 years; and if he will express each annual change and the total change since 1979, in real terms with 1979–80 = 100.
  221
  Mr. Jackson
  Block grant to local authorities is not hypothecated to particular services or institutions.

  The total allocations from the advanced further education pool plus capital expenditure by local authorities on polytechnics and colleges in England each year since 1979–80, (a) in cash terms, and (b) indexed in real terms as measured by the gross domestic product deflator, are:

  Financial years

  (a) Cash £ million

  (b) Index

  1979–80

  465

  100

  1980–81

  493

  89

  1981–82

  519

  86

  1982–83

  614

  95

  1983–84

  634

  94

  1984–85

  657

  92

  1985–86

  703

  94

  1986–87

  748

  97

  1987–88

  810

  99

  1988–89

  887

  102

  Expenditure1 per full-time equivalent student2 at 1986–87 prices indexed to 1979–80

  Financial Year

  1979–80

  1980–81

  1981–82

  1982–83

  1983–84

  1984–85

  1985–86

  1986–87

  Universities (Great Britain)

  real terms

  5,126

  5,533

  5,355

  5,502

  5,542

  5,484

  5,349

  5,276

  indexed (1979–80 = 100)

  100

  108

  104

  107

  108

  107

  104

  103

  Polytechnics3 (England)

  real terms

  4,179

  4,207

  4,001

  3,777

  3,421

  3,300

  3,255

  3,325

  indexed (1979–80 = 100)

  100

  101

  96

  90

  82

  79

  78

  80

  OMEs (HE) (England)

  real terms

  3,451

  3,588

  3,493

  3,376

  3,444

  3,398

  3,121

  3,170

  indexed (1979–80 = 100)

  100

  104

  101

  98

  100

  98

  90

  92

  1 The figures for universities are for Great Britain and are based on recurrent expenditure financed by UGC grants and tuition fee income for home and overseas students. The figures for polytechnics and OMEs are for England and are net recurrent institutional expenditure per full-time equivalent student. This includes direct and indirect costs of providing tuition but excludes financing cost of capital expenditure, student support and central administration costs. As the relevant expenditures are differently defined it is not possible to give an overall cost per student.

  2 The numbers of full-time and part-time students have been expressed as full-time equivalents. It is not possible to separate out the costs of full-time students.

  3 The figures for polytechnics include a small proportion of FE work.

  UGC (Grant)
  Mr. Andrew Smith
  To ask the Secretary of State for Education and Science what was the total Government grant to the University Grants Committee in each of the last 10 years; and if he will express each annual change and the total change since 1979, in real terms with 1979–80 =100.

  Mr. Jackson
  Total recurrent and capital grants made to the universities on the advice of the University Grants Committee were set out in my reply to the hon. Member's question on 10 February at column 844. The corresponding real terms figures, as measured by the gross domestic product deflator, are:

  Financial years

  Index

  1979–80

  100

  1980–81

  108

  1981–82

  101

  1982–83

  113

  1983–84

  111

  1984–85

  109

  1985–86

  106

  1986–87

  107

  1987–88

  111

  1988–89

  113

  Students (Expenditure)
  Mr. Andrew Smith
  To ask the Secretary of State for Education and Science what was the total Government expenditure(a) per student for all students in full-time higher education, (b) per university student and (c) per student in polytechnics and other colleges in each of the last 10 years; and if he will express each annual change in real terms with 1979–80 = 100.

  Mr. Jackson
  The available data are as listed. The figures show the expenditure at 1986–87 prices per full-time equivalent student in universities, in polytechnics, and in higher education at other maintained establishments. The 1986–87 real terms figures have been indexed using 1979–80 as the base year.

  Capital Expenditure
  Mr. Andrew Smith
  To ask the Secretary of State for Education and Science what was(a) the capital expenditure funded by the University Grants Committee and (b) the same figures for capital expenditure on polytechnics and other colleges, for each of the last 10 years, expressing each annual change in real terms with 1979–80 =10.

  Mr. Jackson
  The table shows capital grants made to the universities on the advice of the University Grants Committee and gross capital expenditure on further and higher education by local authorities, together with capital grants to voluntary and direct grant colleges, expressed as indicated in real terms as measured by the gross domestic product deflator.

  Financial years

  Universities (Great Britain)

  Polytechnics and other colleges (England)

  Index

  Index

  1979–80

  100

  100

  1980–81

  94

  109

  1981–82

  90

  98

  1982–83

  87

  115

  1983–84

  81

  110

  1984–85

  79

  115

  223

  Financial years

  Universities (Great Britain)

  Polytechnics and other colleges (England)

  Index

  Index

  1985–86

  83

  116

  1986–87

  89

  123

  1987–88

  84

  86

  1988–89

  86

  n/a

  Teachers (Incentive Allowances)
  Mr. Evennett
  To ask the Secretary of State for Education and Science (1) what information is available to his Department concerning the numbers of incentive allowances paid to teachers in primary, secondary and special schools in or shortly after October 1988, including in particular the numbers of allowances paid on discretionary grounds; whether the numbers of each type of allowance paid in 1987–88 closely matched the numbers advised by his Department as being available to be paid; and if he will make a statement;

  (2) if he will publish a table showing, for each type of incentive allowance payable to teachers in primary, secondary and special schools in September 1988, the total number of allowances available to be paid by employers as advised by his Department and the proportion of these which were available to be paid on discretionary grounds; if he will distinguish between allowances already allocated to individuals and those newly available to be paid on discretionary grounds; and if he will make a statement;

  (3) if he will publish a table showing the required minimum payments of incentive allowances to teachers in primary, secondary and special schools in October 1987 according to type, value and number of the allowances payable (a) by reason of a teacher's transfer to the new main salary scale, (b) by reason of the minimum requirements for rate A and B allowances in larger schools and special schools, and (c) by reason of other requirements; and if he will make a statement;

  (4) if he will publish a table showing, for each type of incentive allowance payable to teachers in primary, secondary and special schools in October 1987, the total number of allowances available to be paid by employers as advised by his Department and the proportion of these which were available to be paid on discretionary grounds; and if he will make a statement;

  (5) what information is available to his Department concerning the numbers of incentive allowances paid to teachers in primary, secondary and special schools in or shortly after September 1988, including the numbers of allowances paid on discretionary grounds; whether the numbers of each type of allowance paid in 1988–89 closely matched the numbers advised by his Department as being available to be paid; and if he will make a statement.

  Mrs. Rumbold
  Circulars 8/87 and 3/88 set out the approximate number of incentive allowances the Government wished to see awarded in October 1987 and September 1990 respectively. These were as follows:

  October 19871

  Primary

  Secondary

  A

  14,000

  11,000

  B

  216,000

  253,000

  C

  —

  —

  D

  —

  28,5002

  224

  Primary

  Secondary

  E

  —

  6,5002

  Total

  30,000

  99,000

  September 1988

  A

  24,000

  19,000

  B

  16,300

  43,300

  C

  1,300

  8,000

  D

  —

  27,000

  E

  —

  8,000

  Total

  41,600

  105,300

  1 All main-scale teachers in special schools received at least a B allowance from October 1987.

  2 These allowances were awarded automatically to teachers on scale 3, scale 4 or the senior teacher scale at 30 September 1987.

  The overall limits on the number of incentive allowances to be awarded in schools of a particular size in October 1987 were set out in annex A to the school teachers' pay and conditions document 1987, a copy of which is in the Library. A minimum of 2 per cent. of teachers were to receive A allowances in schools of group size 6 or above, and a minimum of 12 per cent. were normally to receive B allowances in schools of group size 7 or above.

  Circular 8/87 envisaged that by September 1990 there would be 55,000 allowance holders in primary schools and 110,000 in secondary schools. Following the recommendations of the first report of the interim advisory committee on school teachers' pay and conditions the planned introduction of A allowances was accelerated. Circular 3/88 envisaged that there would be an extra 6,000 A allowances above previous plans in September 1988.

  LEAs have the discretion to pay incentive allowances, within certain limits, to any teacher being paid on the main scale who satisfies one or more the criteria laid down in the school teachers' pay and conditions document. They do so in the light of local needs and priorities. It is unlikely that the numbers of teachers holding incentive allowances at any one time will coincide precisely with the Government's plans.

  The only information presently available is contained in a survey undertaken by the local authority conditions of service advisory board in September 1988. This showed that 61 LEAs had together awarded about 77,000 allowances to full-time and part-time regular teachers. 'The distribution among the 61 LEAs was as follows:

  Primary

  Secondary

  Special

  September 1988

  A

  6,878

  6,343

  —

  B

  9,922

  30,305

  7,504

  C

  318

  2,772

  960

  D

  148

  16,152

  149

  E

  19

  3,939

  55

  Total

  17,285

  59,511

  8,668

  Retired Teachers
  Mr. Win Griffiths
  To ask the Secretary of State for Education and Science (1) if he will make it his policy to review the abatement provisions concerning school teachers' pensions in order to remove any financial disincentive for part-time work in the maintained sector after retirement; and if he will make a statement;
  225
  (2) what numbers of retired or prematurely retired school teachers are known to his Department to be working either part-time or full-time in maintained schools; and if he will make a statement;

  (3) if he will describe the abatement provisions concerning teachers' pensions in the case that a retired or prematurely retired school teacher takes up part-time employment in a maintained school; when these provisions were last reviewed; and if he will make a statement.

  Mr. Butcher
  The general principle which applies across all the public service superannuation schemes is that a re-employed pensioner should not be better off as a result of being in receipt of a pension in addition to remuneration from further service than if he or she had not retired. Where the combined pay and pension are greater than the earnings on which the pension was based, the pension is reduced by the excess.

  Detailed information on re-employed teachers is not available. I understand, however, that in the year ending 31 March 1988, 302 teachers re-employed full-time and 660 teachers re-employed in a part-time capacity were considered by the Paymaster General's office under the abatement provisions.

  The policy of abatement in all public service schemes is currently being reviewed. I shall write to the hon. Member to let him know the outcome in due course.

  Mr. Win Griffiths
  To ask the Secretary of State for Education and Science if he will make it his policy to encourage the possible part-time or full-time employment of retired teachers in the maintained sector; what contribution such part-time or full-time employment can make towards filling the shortages of teachers identified by his Department; and if he will make a statement.

  Mr. Butcher
  The employment and deployment of teachers is a matter for local education authorities and schools. As part of our action programme to remedy teacher shortages we advise authorities to assess their recruitment needs and to develop a strategy for staffing their schools. The re-employment of retired teachers may in some circumstances form part of such a strategy.

  London Docklands
  Mr. Leighton
  To ask the Secretary of State for Education and Science what steps his Department is taking to assist training in London docklands with a view to ensuring that jobs go to local people.

  Mr. Nicholls
  I have been asked to reply.

  The Government's training programmes are designed to ensure that local people are equipped with the skills to meet the growing needs of employers.

  Under employment training specific steps taken to improve the targeting of training and job opportunities in Docklands include:
  compacts with employers and training providers which give priority consideration to local people;
  a customised training and priority hiring programme with construction companies to help local long-term unemployed people into jobs;
  a partnership project with Jarvis plc to integrate English as a second language and construction training to improve job opportunities for the local Vietnamese community.
  226
  Funding has also been provided for the development of compacts between employers and schools covering the docklands area. If successful they will help to provide new job and training opportunities for local school leavers.

  In addition local collaborative action is assisting local small businesses to identify skill needs and develop enterprise opportunities.

SOCIAL SECURITY

  Civil Servants (EC)
  Mr. Cryer
  To ask the Secretary of State for Social Security what is the number of civil servants in his Department whose main task is work related wholly or mainly to the European Economic Community; and what is the gross annual cost of travel and accommodation to and from Brussels, Luxembourg and Strasbourg in connection with this work.

  Mr. Peter Lloyd
  The number of social security staff dealing wholly or mainly with matters relating to the European Community is 88. This figure includes 79 staff at Newcastle central office dealing with payment of benefits/pensions to beneficiaries resident in other EC countries.

  In addition, there are four members of staff in the legal branch shared with the Department of Health who deal exclusively with EC matters.

  A small number of these staff attend EC meetings abroad when necessary but I regret that records of costs incurred for travel and subsistence are not held centrally and could be obtained only at disproportionate cost.

  Other staff may also be involved in EC work from time to time.

  Child Benefit
  Mr. Robin Cook
  To ask the Secretary of State for Social Security what has been the level of expenditure on child benefit in cash and constant 1988–89 prices in each year since 1978.

  Mr. Peter Lloyd
  The information is as follows:

  Child benefit expenditure (£ million)

  Financial year

  Cash

  1988–89 prices

  11978–79

  1,776

  3,872

  1979–80

  2,787

  5,199

  1980–81

  2,944

  4,637

  1981–82

  3,372

  4,835

  1982–83

  3,660

  4,898

  1983–84

  3,988

  5,104

  1984–85

  4,276

  5,209

  1985–86

  4,468

  5,164

  1986–87

  4,513

  5,048

  1987–88

  4,598

  4,885

  21988–89

  4,522

  4,522

  1 Child benefit not fully phased in until April 1979.

  2 Estimated outturn.

CIVIL SERVICE

  Civil Service College
  Mr. Allen
  To ask the Minister for the Civil Service (1) if he will ask the Civil Service college to plan a programme of seminars to be available to those hon. Members elected for the first time at the next general election;

  (2) if he will take steps to discover on what topics sufficient demand exists among hon. Members to arrange briefing seminars at the Civil Service college;

  (3) what proposals he has to encourage hon. Members to attend Civil Service college courses.

  Mr. Luce
  The Civil Service college held briefing seminars on the work of the Civil Service on 2 and 23 March 1988 for hon. Members who first entered the House at the beginning of this Parliament. I hope that these will be repeated after the next general election. I attach great importance to the contribution that the college can make for the benefit of hon. Members, and I am actively considering with officials how this can best be developed further.

  Civil Service (Political Activity)
  Mr. Blunkett
  To ask the Minister for the Civil Service how many staff within the Civil Service in the category politically restricted, as defined by the Civil Service pay and conditions code, have permission to engage in local political activity.

  Mr. Luce
  [holding answer 27 February 1989]: A survey of the major employing departments in 1987 showed that, between 28 September 1984 and 1 October 1987, 52 staff in the restricted group requested and were granted permission to engage in local political activity.

THE ARTS

  Sponsorship (Nottingham)
  Mr. Allen
  To ask the Minister for the Arts if he will make a statement on the level of sponsorship for the arts in Nottingham, North.

  Mr. Luce
  Figures for Nottingham, North are not available. However, latest figures for the business sponsorship incentive scheme in the east midlands as a whole show that 31 businesses have supported the arts, generating £237,000.

  Arts Funding
  Mr. Jack
  To ask the Minister for the Arts what was the level of Government and private sector funding for the arts in 1979; and what he estimates this will be in 1989, at current values.

  Mr. Luce
  Central Government funding for the arts in 1979–80 was £154 million. The provision made for 1989–90 is £439 million. There are no comprehensive figures for private funding of arts activities, which comprises their revenue and trading income together with contributions and support from individuals and organisations of all kinds.

  The Government's policy is to create the conditions in which the arts can develop by attracting additional funds
  228
  from private sources, and I welcome the evidence of its success. Thus, since its introduction in 1984, the business sponsorship incentive scheme has brought £22·75 million new money into the arts and attracted 931 new sponsors. Similarly, the receipts of the national museums and galleries from trading and other activities have risen from some £3 million in 1979–80 to an estimated £27 million in 1989–90.

  Ballet
  Mr. Pike
  To ask the Minister for the Arts what is his Department's policy regarding the promotion of ballet in the regions; and if he will make a statement.

  Mr. Luce
  I refer the hon. Member to the Adjournment debate on Wednesday 8 March 1989,Official Report, columns 1007–14.

  Industrial Museums
  Mr. Pike
  To ask the Minister for the Arts what is his Department's policy with regard to the support of working industrial museums.

  Mr. Luce
  My Department supports non-national museums through the Museums and Galleries Commission and area museum councils.

  Queen Street Mill, Burnley
  Mr. Pike
  To ask the Minister for the Arts if he will make an official visit to Queen street mill, Burnley, to discuss the case for urgent funding.

  Mr. Luce
  I have at present no plans to visit Burnley. I understand that the north-west museum and art gallery service, which is funded by the Museums and Galleries Commission and which provides advice and selective financial assistance to museums, is in contact with Burnley borough council about the mill.

  Management Consultants (Fees)
  Mr. Dobson
  To ask the Minister for the Arts what were the total fees paid out by the Office of Arts and Libraries to management consultants in 1979–80 and each year to date; and what is the estimate for the current year.

  Mr. Luce
  [holding answer, 13 March 1989]: The Office of Arts and Libraries was established in July 1983. No management consultants have been employed.

NORTHERN IRELAND

  Cordless Telephones
  Mr. Beggs
  To ask the Secretary of State for Northern Ireland whether he proposes to have enforced in Northern Ireland similar action as is taken in Great Britain by the Department of Trade and Industry in respect of illegal cordless telephones on sale to the public.

  Mr. Atkins
  I have been asked to reply.

  The Wireless Telegraphy (Cordless Telephone Apparatus (Restriction) Order (SI No. 774)) makes it unlawful to import, sell, manufacture or have in one's custody cordless telephone apparatus not meeting the Department's specification. The order applies and is enforced in Northern Ireland as in Great Britain.

SCOTLAND

  Information Campaigns
  Mr. Dewar
  To ask the Secretary of State for Scotland if he will give his Department's expected expenditure in cash terms on information campaigns in 1989–90 which is covered by class XVI Scotland Supply Estimates in 1988–89 and the comparable figure he expects to spend in 1989–90.

  Mr. Rifkind
  Proposed provision for expenditure by the Scottish Office on information campaigns in 1989–90 is £2·9 million. The estimated expenditure for 1988–89 is £2·1 million.

  Low Frequency Transmissions
  Mr. Andrew F. Bennett
  To ask the Secretary of State for Scotland what information he has regarding the effects of extremely low frequency electric and magnetic radiation on plant, animal and human life.

  Mr. Michael Forsyth
  The National Radiological Protection Board is currently reviewing the results of extensive work on possible effects on human and animal health of electromagnetic radiation. The Government will consider the board's advice when it becomes available.

  Housing Associations
  Dr. Godman
  To ask the Secretary of State for Scotland (1) what capital allocations were made to housing associations in(a) Greenock and Port Glasgow, (b) Strathclyde and (c) Scotland as a whole for (i) new building and (ii) renovation in each year since 1979;

  (2) what capital allocations to housing associations in (a) Greenock and Port Glasgow, (b) Strathclyde and (c) Scotland as a whole will be made for (i) new building and (ii) renovation in 1989; and what capital allocations are planned for 1990 and 1991.

  Lord James Douglas-Hamilton
  Such information is not held by the Secretary of State. The Secretary of State, in making his annual allocation to the Housing Corporation in Scotland for housing association purposes, requires the corporation to operate within a development programme approved by him each year. This programme is on the basis of specified categories of need. Subsequent allocations to particular associations and particular areas, and decisions on the means of provision are then the responsibility of the Housing Corporation.

  Similar procedures will operate for future years when Scottish Homes will take over from the Housing Corporation, responsibility for the funding of housing associations in Scotland.

  Labour Statistics
  Dr. Godman
  To ask the Secretary of State for Scotland what are the latest unadjusted figures for unemployment in(a) Greenock and Port Glasgow, (b) Strathclyde and (c) Scotland as a whole; and if he will give the equivalent figures for 1979 on the most nearly comparable basis.

  Mr. Lang
  The numbers of unemployed claimants for these areas on 12 January 1989 (the latest date for which information is available) are provided in the table,230
  together with corresponding figures for January 1979. (Unemployment statistics for Greenock and Port Glasgow parliamentary constituency prior to June 1983 are not available and due to changes in the coverage and compilation of the count the latest unemployment figures and those available for 1979 are not directly comparable.)

  January 1989

  January 1979

  Greenock and Port Glasgow Parliamentary Constituency

  6,619

  n/a

  Strathclyde Region

  146,556

  106,910

  Scotland

  269,043

  190,300

  n/a = not available.

  This information is available in the Library.

  Skiing
  Mr. Andrew Welsh
  To ask the Secretary of State for Scotland if he has any plans to provide a national ski-ing development policy for Scotland.

  Lord James Douglas-Hamilton
  The Government published national planning guidelines for skiing development in 1984. These guidelines set the framework within which we would expect to see development take place and continue to form the basis of Government policy for the development of skiing and for considering individual development proposals.

  Legal Profession
  Mr. Andrew Welsh
  To ask the Secretary of State for Scotland when he expects the Green Paper on the Legal profession in Scotland to be published.

  Lord James Douglas-Hamilton
  My right hon. and learned Friend's consultation paper "The Legal Profession in Scotland" was published on 13 March. Copies have been placed in the Library.

HOME DEPARTMENT

  Rape in Marriage
  Ms. Richardson
  To ask the Secretary of State for the Home Department whether he will bring forward legislation to outlaw rape in marriage.

  Mr. John Patten
  In its 1984 report on sexual offences, the criminal law revision committee set out the arguments for and against extending the offence of rape to all married couples. By a narrow majority the committee decided not to recommend such an extension, although it did unanimously favour extending the offence to couples who were no longer cohabiting if a satisfactory definition could be found. The principal arguments which swayed the committee against recommending extending the offence to married couples generally were that within marriage the act would be of different character, there would be grave difficulties in investigation and prosecution, and a husband who had intercourse with his wife without her consent could be charged with other offences.

  The Government recognises the difficulties in this matter and have no present plans for legislation.

  Computer Safety
  Miss Emma Nicholson
  To ask the Secretary of State for the Home Department (1) what precautions his Department has taken to safeguard sensitive material transmitted by computer from being accessed or obtained by third parties;

  (2) whether the security of computer files on Home Department issues is regularly checked for breaches by internal or external unauthorised access;

  (3) what is his Department's policy on the implication for security of continued departmental computerisation.

  Mr. Douglas Hogg
  A large number of computer systems operate within the Department. The security counter-measures appropriate to each system are considered at the design stage in the light of the assessed risk, and are kept under continuing review. It would not be in the interests of security to disclose the nature and extent of those measures.

  Miss Emma Nicholson
  To ask the Secretary of State for the Home Department (1) what information he has on whether computerised border control and passport control records are susceptible to electronic invasion;

  (2) what measures he has taken to prevent breaches of computerised border and passport control records by electronic invasion.

  Mr. Renton
  The security of the immigration and nationality department's computerised information systems is considered at an early stage in the design of new systems, and the security measures taken are reviewed in the light of changing threats to existing systems. It would not be in the interests of security to disclose the nature and extent of those measures.

  Miss Emma Nicholson
  To ask the Secretary of State for the Home Department following illegal extraction of files from the police computer, what steps he has taken to increase protection to ensure that no future penetration occurs.

  Mr. Douglas Hogg
  I am satisfied that the monitoring and auditing systems for users of the police national computer are adequate. Additional measures are, however, being considered in planning the replacement police national computer system due to be introduced next year.

  Crime (Dorset)
  Mr. Butterfill
  To ask the Secretary of State for the Home Department (1) what was the percentage detection rate for crimes in Dorset for each of the last two years;

  (2) what was the total number of reported crimes in Dorset for each of the last two years.

  Mr. John Patten
  The information is published annually, and most recently in tables 2.4 and 2.18 of "Criminal Statistics, England and Wales, 1987", Cmd. 498. It is planned to publish recorded crime figures for 1988 later this month in a statistical bulletin, and clear-up rates for 1988 will be included in the annual Command Paper in the autumn.

  Rugby Matches (Policing)
  Mr. Hinchliffe
  To ask the Secretary of State for the Home Department if he will obtain from the chief 232
  constables of Yorkshire. Lancashire, Cheshire and Cumbria, a list of the charges made for the policing of first and second division rugby league matches.

  Mr. Douglas Hogg
  I understand that the charges (exclusive of VAT) to individual rugby league clubs in the areas mentioned from the beginning of the current season to Saturday, 25 February 1989 have been as follows:

  Police Force and Club

  Cost £ (excluding VAT)

  North Yorkshire

  York

  908·00

  South Yorkshire

  Doncaster

  —

  Sheffield Eagles

  149·04

  West Yorkshire

  Batley

  —

  Bradford Northern

  5,671·58

  Bramley

  —

  Castleford

  5,593·03

  Dewsbury

  —

  Featherstone Rovers

  4,500·01

  Halifax

  5,767·74

  Hunslet

  1,851·26

  Keighley

  967·60

  Leeds

  17,274·27

  Wakefield

  7,108·02

  Cheshire

  Warrington

  5,993·48

  Widnes

  5,993·48

  Cumbria

  Barrow

  1,966·50

  Carlisle

  2,070·00

  Whitehaven

  1,499·60

  Workington

  749·80

  Notes:

  1. No police presence is required at some grounds.

  2. There are no first or second division rugby league clubs in Lancashire.

  Police (Sex Discrimination)
  Mr. Cohen
  To ask the Secretary of State for the Home Department what information he has for each of the last four years for each police force of the number of women police officers who have submitted formal grievances because they consider they have suffered from sexist behaviour or language.

  Mr. Douglas Hogg
  This information is not available centrally and could be obtained only at disproportionate cost.

  Mentally Disturbed Prisoners
  Mr. Cohen
  To ask the Secretary of State for the Home Department, pursuant to his answer of 8 March,Official Report columns 540–41, how many of those who committed suicide in the prison department establishments referred to therein were known to have had a history of mental disturbance; and if he will make a statement.

  Mr. Douglas Hogg
  This information is not available, but it is known that 30 per cent. of inmates who committed suicide in prison department establishments in 1987 had undergone psychiatric assessment or treatment before coming into custody.

  Immigration
  Mr. Corbyn
  To ask the Secretary of State for the Home Department (1) if he will list the criteria that the immigration service is instructed to use in order to determine whether a Member of Parliament is putting forward compelling reasons when requesting a deferral of removal in order to make representations;

  (2) what checks are made of the consistency with which the immigration service is applying the criteria to determine whether or not a Member of Parliament shall be allowed to intervene in a port refusal case;

  (3) how many individuals have been refused entry to Britain since the new guidelines on Members' representations became effective; and in how many of these refusals an hon. Member, lawyer or advice agency, sought to intervene;

  (4) how many times hon. Members have sought to intervene in port refusals since the introduction of new guidelines for hon. Members' representations; and in how many cases removal directions have been delayed in order that representations could be made.

  Mr. Renton
  The criteria are exemplified in paragraph 10 of the guidelines introduced on 3 January and sent to right hon. and hon. Members under cover of my letter of 14 December. Instructions to immigration officers emphasise that the examples of circumstances given in the guidelines are not exclusive but are illustrative of the sort of circumstances which would justify deferment of removal. Under the guidelines a right hon. or hon. Member may contact my Private Office (or, out of working hours, the Home Office duty officer) after speaking to the relevant port, in any case where he believes that the immigration service has wrongly refused to defer removal on the basis of exceptional and compelling circumstances. In the first two months of 1989 some 2,700 persons were initially refused entry at the major ports and airports. Comprehensive figures for interventions are not centrally available, but during the first eight weeks of operation of the new guidelines, I understand that at the major ports and airports some 160 calls were received asking for deferments, and removal was deferred in about 14 cases.

  Tamils
  Mr. Corbyn
  To ask the Secretary of State for the Home Department how many Tamils(a) have applied for political asylum in the United Kingdom, (b) are on temporary admission, (c) have been granted exceptional leave to remain and (d) have been returned to Sri Lanka in the last 15 months.

  Mr. Renton
  No distinction is made in statistical records between Tamils and other Sri Lankans. During the 15 months up to 30 September 1988, which is the most recent date for which these statistics are available, 341 Sri Lankans. applied for asylum in the United Kingdom. During the same period 257 Sri Lankans were granted exceptional leave to remain. There are no central records of numbers temporarily admitted, but at any one time only a small minority of those with outstanding asylum applications are detained. Removals and deportations of failed asylum seekers are not normally recorded separately. However, it is known that 45 Sri Lankans who sought asylum at ports have been removed since 1 January 1988. Additionally in the same period 26 Sri Lankans have 234
  been removed as illegal entrants and seven have been deported: most of these applied for asylum and were refused, after consideration of their applications.

  Annual information, by nationality, on applications for asylum and decisions taken is published in a statistical bulletin. The 1988 bulletin will be published during the summer of 1989. Information on passengers refused entry and removed, on illegal entry and on deportation is published annually in "Control of Immigration: Statistics, United Kingdom". The 1988 volume will also be published in the summer.

  Mr. Corbyn
  To ask the Secretary of State for the Home Department if there has been any monitoring by Her Majesty's Government of the safety of Tamils forcibly returned to Sri Lanka since the beginning of 1988; and if he will make a statement.

  Mr. Renton
  No. Asylum applicants are returned to their own country only after it has been decided that they are not refugees under the 1951 convention and that it would not be right to grant them exceptional leave. In such circumstances, as with any person in breach of immigration control whose departure we enforce, their safety becomes a matter for their own Government.

  Prison Discipline
  Mr. Oppenheim
  To ask the Secretary of State for the Home Department when he intends to implement changes in the prison disciplinary system.

  Mr. Douglas Hogg
  My right hon. Friend has laid before the House revised prison rules and revised young offender institution rules which will implement from 1 April important reforms in the disciplinary systems governing the conduct of prisoners.

  The rules introduce a new code of offences which will be simpler and clearer than the present code. New offences have been created to deal specifically with serious offences such as hostage-taking, barricading and arson. At the same time, the offences of making a false and malicious allegation against an officer and repeatedly making groundless complaints have been abolished. The maximum punishment on a single charge which is available to boards of visitors has been reduced from 180 days' loss of remission to 120 days in adult establishments, and will be 90 days for young offenders. The maximum loss of remission on consecutive punishments arising from a single incident will be 180 days and 135 days respectively. The procedures for referring more serious charges to the board of visitors have been simplified. An extensive programme of training in the new rules is being carried through, and the recent issue of a completely revised guidance manual on the conduct of adjudications will also assist boards of visitors and governors in carrying out this vital function. The manual will be available in a published edition shortly and is in any event made accessible to all prisoners. In addition, the prison Standing Order governing adjudications is being revised and will also be published.

  I believe that these changes represent a substantial improvement to the prison disciplinary system.

HEALTH

  Tobacco Industry (Meetings)
  Mr. Foulkes
  To ask the Secretary of State for Health how many meetings he, his Ministers and his Department's officials have had with representatives of the tobacco industry since 1 January 1988; and if he will list the dates, venues and purpose of each meeting.

  Mr. Mellor
  The table lists the meetings which Ministers have had with representatives of the tobacco industry or individual tobacco companies. Officials have had several meetings with representatives of individual tobacco companies and expert medical and scientific advisers which are covered by commercial confidentiality. I am not therefore at liberty to disclose details of these meetings. Officials have contact from time to time with representatives of the tobacco industry, notably as a consequence of the work of the committee for monitoring agreements on tobacco advertising and sponsorship.

  Date

  Venue

  Purpose

  12 February 1988

  Department of Health

  Meeting with the Tobacco Advisory Council on general matters relating to smoking

  25 April 1988

  Department of Health

  Meeting with Svenska Tobaks to discuss the proposed ban on certain oral tobacco products

  6 July 1988

  Department of Health

  Meeting with United States Tobacco International to discuss proposed ban on certain oral tobacco products.

  27 September 1988

  Department of Health

  Meeting with United States Tobacco International to discuss proposed ban on certain oral tobacco products.

  15 December 1988

  Department of Health

  Meeting with representatives of the tobacco industry to discuss draft EC tobacco directives.

  Sudden Infant Death Syndrome
  Mr. Hunter
  To ask the Secretary of State for Health how much public money has been directed towards research into the sudden infant death syndrome or related projects in each year since 1979, expressed(a) in cash terms, (b) in real terms on the 1979 amount and (c) as a percentage increase or decrease on the previous year.

  Mr. Freeman
  The following readily available information about research into sudden infant death syndrome and related projects refers to projects funded by the Medical Research Council, the main agency through which the Government support biomedical and clinical research.

  Actual expenditure

  Expenditure in 1979–80 prices

  Percentage change1

  £

  £

  1979–80

  79,130

  79,130

  —

  1980–81

  133,608

  112,806

  +42·56

  1981–82

  207,610

  159,569

  +41·45

  1982–83

  206,600

  148,211

  -7·12

  1983–84

  243,861

  167,328

  +12·90

  1984–85

  241,912

  157,996

  -5·58

  1985–86

  282,948

  175,329

  +10·97

  1986–87

  476,059

  285,457

  +62·81

  1987–88

  405,182

  230,772

  -19·16

  1 Percentage change of expenditure in 1979–80 prices over previous year.

  Stomach Cancer
  Mr. Alton
  To ask the Secretary of State for Health what is the incidence of stomach cancer in(a) each of the districts of the Mersey region and (b) the rest of the United Kingdom.

  Mr. Freeman
  This information is shown in the table. The latest available data are for 1984.

  Number of newly registered cases of malignant neoplasm of the stomach1, Mersey Regional Health Authority, its component Districts and United Kingdom, 1984.

  Area

  Number

  Rate per 10,000 population

  United Kingdom

  12,749

  2·26

  Mersey RHA

  589

  2·43

  Chester DHA

  43

  2·43

  Crewe DHA

  53

  2·17

  Halton DHA

  28

  1·97

  Macclesfield DHA

  30

  1·70

  Warrington DHA

  50

  2·82

  Liverpool DHA

  144

  2·90

  St. Helens and Knowsley DHA

  83

  2·32

  Southport and Formby DHA

  29

  2·49

  South Sefton DHA

  47

  2·58

  Wirral DHA

  82

  2·29

  1 International Classification of Diseases code 151.

  Air Conditioning and Hot Water Systems
  Mr. Cousins
  To ask the Secretary of State for Health what guidance or directions he gives to health authorities and hospital managers about the taking of regular bacteriological tests on air conditioning and hot water systems.

  Mr. Freeman
  In 1987, guidance based on expert advice recommended against routine sampling to detect the presence of Legionella pneumophila in both wet-spray cooling systems and hot and cold water services, unless it was suspected that they were the source of hospital-acquired infection. The application of this guidance to wet-spray cooling systems is currently under review.

  Hospital Building
  Mr. Colin Shepherd
  To ask the Secretary of State for Health if he plans to review the capital works programme for hospital building within the National Health Service.

  Mr. Freeman
  I am content to leave the review of the programme to the health authorities responsible for its management in the knowledge that our increased capital allocations will permit investment in the modernisation of the National Health Service to be sustained at record levels. Capital expenditure on the hospital and community health services in 1989–90 is planned to reach £1·2 billion, an increase in real terms of 41 per cent. over the 1978–79 level.

  Hospitals (Charity Appeals)
  Mr. Andrew F. Bennett
  To ask the Secretary of State for Health what percentage of equipment is raised for National Health Service hospitals by charity appeals.

  Mr. Freeman
  I regret that information on the percentage of National Health Service hospitals equipment expenditure met from funds raised by charity appeals is not available.

  Genito-urinary Clinics
  Mr. Cohen
  To ask the Secretary of State for Health what recent action he has taken to encourage Waltham Forest district health authority to provide a genito-urinary clinic.

  Mr. Freeman
  Planning of health services within a particular area is a matter for the health authority concerned, which is best able to judge the priorities in the light of local needs and circumstances.

  Deaf-blind People
  Mr. Ashley
  To ask the Secretary of State for Health how many (i) deaf-blind adults and (ii) deaf-blind children there are in Britain; and how long it is since the last survey was made.

  Mr. Freeman
  The numbers of adults and children in England who were registered with local authorities as blind with an additional handicap of deafness are recorded in "Registered Blind and Partially Sighted Persons at 31 March 1986—England". A copy of this publication is in the Library. The most recent collection of these statistics related to 31 March 1988 and will be published in due course.

  Registration of disability is a voluntary process. The numbers of deaf-blind adults and children in the population are believed to be considerably greater than the numbers who register but no reliable estimate is available.

  Young Persons (Remands)
  Mrs. Dunwoody
  To ask the Secretary of State for Health if he will arrange urgently for appropriate accommodation to be provided for the 15-year-old who has twice been remanded to an adult prison from Crewe juvenile court; and what secure accommodation is available for young people in the north-west.

  Mr. Mellor
  The provision of appropriate accommodation for children in care is the statutory responsibility of local authorities. I understand that Cheshire county council has been unable to find a secure vacancy in a community home for the boy referred to, although it continues to make urgent inquiries.

  There are currently 294 approved secure places provided by local authorities in England, to which all local authorities have access. Local authorities in the north-west provide 65 of these places.

ENVIRONMENT

  Elephant Ivory
  Mr. Tony Banks
  To ask the Secretary of State for the Environment if he will make it his policy to ban all imports of elephant ivory.

  Mrs. Virginia Bottomley
  Imports of ivory are controlled under EC Regulation 3626/82 which implements CITES in the Community. The European Commission has suggested measures to encourage African states to comply with the existing strict controls and to develop management programmes. These proposals were welcomed by the Council of Ministers on 2 March.

  Water Pollution
  Mr. Wray
  To ask the Secretary of State for the Environment if he will list (i) all the bodies concerned with research on pollution in water and (ii) the research projects funded or sponsored by Her Majesty's Government.

  Mr. Howard
  A list of the bodies known to the Department to be concerned with research on pollution in water has been placed in the Library of each House together with a list of research projects that the Department is funding or sponsoring, excluding research on radioactive waste disposal and drinking water quality. I do not have the information on research projects for other Government Departments.

  Tobacco Companies (Sports Sponsorship)
  Mr. Hanley
  To ask the Secretary of State for the Environment what information he has on the current annual total of sponsorship of sports by tobacco companies; if he will list these individually and in relation to other commercial sponsorship; and if he will make a statement.

  Mr. Moynihan
  The total expenditure on sports sponsorship by tobacco companies in 1987–88, the latest year for which figures are available, was £5,911,000. No information is held centrally on expenditure by individual companies. The Sports Council estimates that in 1987 sports sponsorship by non-tobacco companies was some £158 million.

  Water Authorities (Privatisation)
  Mr. Michael
  To ask the Secretary of State for the Environment whether he will make it his policy to write off the loan debt of the present water authorities in England prior to implementation of the Water Bill.

  Mr. Howard
  My right hon. Friend has no powers at present to write off any of the debts of the water authorities.

  Water Quality
  Sir David Price
  To ask the Secretary of State for the Environment what are the present levels of cleanliness of Southampton Water and the Solent, respectively; and how those levels match up to European Economic Community standards.

  Mr. Howard
  The relevant standards are those set in Directive 79/923/EEC, on the quality of water for shellfish, and in Directive 76/160/EEC on the quality of bathing water. There are five designated shellfish waters in Southampton Water and the Solent. All meet the directive's standards.

  I announced on 21 February 1989 at column 572 the results of the 1988 survey of bathing water in England, Northern Ireland and Wales. The results for identified bathing waters in the Southampton Water and Solent area are:

  Result

  Bracklesham Bay

  Pass

  West Wittering

  Pass

  West of Eastoke

  Pass

  West Hayling

  Pass

  239

  Result

  Eastney

  Fail

  Southsea

  Fail

  Stokes Bay

  Pass

  Lee-on-Solent

  Pass

  Calshot

  Fail

  Lepe

  Pass

  Highcliffe

  Pass

  Compton Bay

  Pass

  Totland Bay

  Pass

  Colwell Bay

  Fail

  Gurnard

  Fail

  Cowes

  Fail

  Ryde

  Fail

  Seagrove

  Fail

  St. Helens

  Fail

  Bembridge

  Fail

  The Southern water authority plans to spend about £30 million over the next few years on major schemes to improve bathing waters in this area.

  Sir David Price
  To ask the Secretary of State for the Environment what is the present level of cleanliness of the principal rivers in Hampshire; and to what extent they meet European Economic Community standards.

  Mr. Howard
  The principal rivers in Hampshire are classified as good quality (class 1A or 1B) for virtually all their length. These are the highest quality classifications, indicating waters which are suitable for potable supply, generally support game fisheries and have high amenity value.

  Significant stretches of these rivers and their main tributaries, are designated under EEC Directive 78/659/EEC on the quality of freshwater needed to support fish life. All are reported to be meeting the directive's standards.

  Land Disposal Policy
  Mr. Corbyn
  To ask the Secretary of State for the Environment (1) what is the policy of Her Majesty's Government with regard to the disposal of operational land surplus to requirements other than by public tender by the regional water authorities, the Central Electricity Generating Board, and the British Railways Board, respectively; and in what circumstances each of these categories of body may dispose of such land without the publication of either the purchase price or name of the purchaser;

  (2) what is the policy of Her Majesty's Government concerning the publication of the names or organisations or individuals who are successful in public tenders for land, goods, or premises being sold by central Government, local Government, and statutory bodies, respectively.

  Mr. Chope
  All public bodies are expected to offer surplus land and property for sale as soon as practicable. The method of sale may differ between Departments, local authorities and other bodies, depending on the nature of the asset to be sold, any relevant legal requirements, the application of the Crichel Down rules, the need to obtain the best price reasonably obtainable and other market and commercial factors.

  It is for individual public bodies to decide what information to make available about individual land
  240
  transactions, having regard to any legal requirements, and to any constraints which may apply by reason of commercial confidentiality or security.

  Land Disposal Policy

    Water Supply Tariffs
    Dr. Cunningham
    To ask the Secretary of State for the Environment if he will list those tariff increases for water supply from 1 April so far announced by the statutory water companies; and if he will make a statement about any action proposed by him in respect of these increases.

    Mr. Ridley
    I refer the hon. Member to the answer given by my hon. and learned Friend the Minister for Water and Planning on 14 March to my hon. Friend the Member for Bedfordshire, South-West (Mr. Madel).

    Energy Efficiency
    Mr. Cran
    To ask the Secretary of State for the Environment what part the Property Services Agency has played in promoting energy efficiency on the Government estate.

    Mr. Chope
    Energy efficiency is given a high priority by the PSA on sound environmental grounds and because it saves public expenditure. PSA, working in close co-operation with other Government Departments, promotes energy-saving measures for most Government buildings. Through its network of energy conservation officers the agency is able to provide Departments with a complete energy management service.

    Since 1972 average savings of over 25 per cent.—over £900 million at current prices—have been achieved. Current savings are over 5 per cent. per annum in real terms on the Government's total energy bill (1987–88) of over £250 million.

    Tenants' Choice
    Mrs. Gillian Shephard
    To ask the Secretary of State for the Environment when he plans to implement the tenants' choice provisions in part IV of the Housing Act 1988.

    Mr. Trippier
    Regulations have today been laid before Parliament to implement the tenants' choice scheme on 5 April. Tenants who wish to know more about choosing a new landlord are being invited, by means of advertisements in several national newspapers, to contact the Housing Corporation for an explanatory booklet about the scheme, and for any further advice, information or assistance they may need.

    Water Privatisation
    Mr. Ashby
    To ask the Secretary of State for the Environment whether there will be special share offer arrangements for the employees of the privatised water authorities.

    Mr. Howard
    The Government welcome the opportunity which privatisation of the water industry will bring for employees of the new water plcs to take a stake in the future of their companies. There will therefore be special share offer arrangements, which will include: free shares, further free shares to match those bought by employees, and possibly shares at a discount. Plc employees will also be given priority in the allocation of shares in the offer.

    The exact details of the benefits to be made available in this way will be decided nearer the time. There will be

    241
    special arrangements for employees of the water authorities who move to the new plcs and will not therefore apply to employees of the water authorities who move to the National Rivers Authority, the body which will be set up to exercise regulatory functions in relation to the water industry.

    National Rivers Authority
    Mr. Leigh
    To ask the Secretary of State for the Environment if he will give the National Rivers Authority powers to borrow in order to finance its flood defence work.

    Mr. Ridley
    I am happy today to announce our decision that the National Rivers Authority should have borrowing powers in relation to its flood defence functions. This decision recognises the importance which is widely attached to the availability of borrowing powers to cope with the need for unexpected expenditure. It meets this concern and demonstrates the Government's firm commitment to ensure that the NRA has all the powers it needs to operate effectively.

    Accordingly, we have today tabled an amendment to the Water Bill that will enable the NRA to undertake not only temporary borrowing, for which the Bill already provides, but long-term borrowing for its flood defence functions. We do not expect that these powers will need to be used very often, and their use will be restricted to situations where the NRA is faced with expenditure for which it had been impossible to plan.

    With the addition of these powers the National Rivers Authority's Flood defence committees will have all the powers it needs to continue its vital work as effectively as it has in the past.

    Power Boats
    Sir Anthony Meyer
    To ask the Secretary of State for the Environment (1) if he will hold consultations with local authorities on measures which might be taken to reduce the danger to swimmers from power boats travelling close inshore off bathing beaches;

    (2) if he will introduce regulations to provide for the marking of areas off bathing beaches where power boats are prohibited.

    Mr. Portillo
    I have been asked to reply.

    Local authorities already have powers to make byelaws to make provision for the safety of the public in these circumstances; and I consider that they are best placed to determine what measures should be taken.

    Water (Nitrate Levels)
    Mr. Harry Barnes
    To ask the Secretary of State for the Environment which water abstraction plants for domestic use in the Yorkshire and Severn Trent regions are complying with EEC limits on the nitrate levels in water supply; which are not; and on what dates each of the plants which are not complying will comply with the limits.

    Mr. Moynihan
    [holding answer 13 March 1989]: The EC drinking water directive nitrate standard applies to water as supplied to the consumer, not to water as it leaves the abstraction plant as this takes no account of subsequent blending with other water. The standard is therefore, measured in relation to water supply areas rather than abstraction plants.
    242
    All water supply areas in Yorkshire water authority comply with the EC directive nitrate standard. In the Severn-Trent water authority area the following supplies do not comply but should do so by the date shown.

    Date

    Parts of Leamington, Kenilworth, Warwick and Stratford district councils

    1989

    Parts of Stourbridge (supply used only at times of peak demand)

    end 1989

    Malvern Hills/Wyre Forest district council area

    1989

    Parts of Wrekin DC area

    1989

    Parts of Lichfield DC area, Sutton Coldfield (Birmingham Metropolitan) area, North Warwickshire and Walsall metropolitan area1

    1993–94

    Parts of Worksop and Mansfield Woodhouse (Bassetlaw and Mansfield DC areas)

    1991

    Parts of South Shropshire DC area

    1990

    Parts of Newark district council area

    1989

    1 These supplies are made by the South Staffordshire waterworks company.

    Sewage Treatment Works
    Mr. Ron Davies
    To ask the Secretary of State for the Environment if he will list for each water authority area in England the number of sewage treatment works which discharge effluent below the required standard.

    Mr. Moynihan
    [holding answer 13 March 1989]: I refer the hon. Member to the answer my right hon. Friend the Secretary of State gave to the hon. Member for Copeland (Dr. Cunningham) on 20 December 1988 at column 194.

    The figures for 1988 are not yet available, but indications are that they will show a further improvement.

    Civil Servants (EC)
    Mr. Cryer
    To ask the Secretary of State for the Environment what is the number of civil servants in his Department whose main task is work related wholly or mainly to the European Economic Community; and what is the gross annual cost of travel and accommodation to and from Brussels, Luxembourg and Strasbourg in connection with this work.

    Mr. Ridley
    At present, some 60 officials in my Department spend more than half of their time on work related to the European Community. Information about travel and accommodation costs relating to official visits to Brussels, Luxembourg and Strasbourg is not kept centrally and could only be provided at disproportionate cost.

  DEFENCE

    Low-level flying
    Dr. Thomas
    To ask the Secretary of State for Defence what classes of buildings are excluded as permissible simulated targets in the instructions to pilots concerning the types of ground features which can be selected during low-level training flights.

    Mr. Neubert
    I have nothing further to add to my reply to the hon. Member on 30 January 1989, at columns 33 and 34.

    Dr. Thomas
    To ask the Secretary of State for Defence whether he has any evidence that environmental restraints in low-flying training have been a contributory factor in recent low-flying accidents.
    243
    Mr. Neubert
    No.

    Dr. Thomas
    To ask the Secretary of State for Defence if he will make a statement on the outcome of the inquiry into a low-flying incident over Llanilar, Dyfed, on 25 August 1988.

    Mr. Neubert
    As far as my Department is aware, there has been no report of an incident over Llanilar, Dyfed on 25 August 1988.

    Dr. Thomas
    To ask the Secretary of State for Defence, pursuant to his reply to the hon. Member for Meirionnydd Nant Conwy of 1 July 1988,Official Report, column 400, if he will now declasify the instructions to Royal Air Force station commanders covering the investigation of complaints about low flying from members of the public.

    Mr. Neubert
    No.

    Dr. Thomas
    To ask the Secretary of State for Defence what maximum permitted distance between initial point and simulated target is laid down in the regulations governing the conduct of low-level attack training sorties.

    Mr. Neubert
    None.

    Dr. Thomas
    To ask the Secretary of State for Defence what measures pilots are instructed to take to alleviate noise disturbance when low flying at up to 550 knots in the run-up to simulated targets.

    Mr. Neubert
    Pilots engaged in low-flying training are instructed to keep any period of flight above the normal maximum cruising speeds to the minimum consistent with essential training requirements.

    Dr. Thomas
    To ask the Secretary of State for Defence if he will list the locations and dates of periods of Royal Air Force police covert monitoring of low flying since 25 September 1987.

    Mr. Neubert
    Covert monitoring of low-flying activity since 25 September 1987 has been conducted at the following locations over the periods stated:

    1988

    14–18 March, Amble

    25–28 April, Quedgeley and Hardwicke

    26–27 April, Braunston

    7 June, Farndon

    14–16 June, Crediton

    21–23 June, Kidwelly

    22 June, Tumble

    27–29 June, Stonehouse

    28–30 June, Keswick

    12 July, Hexham

    12 July, Holme on Spalding Moor

    18–21 July, Builth Wells

    26–27 July, Machynlleth

    23–25 August, Morpeth

    6–8 September, Halesworth

    11–13 October, Melrose

    18–20 October, Milford Haven

    Late October/early November, Redburn

    15–17 November, Newark/Farndon

    1989

    6–9 February, Upper Chute

    21–22 February, Market Bosworth

    Dr. Thomas
    To ask the Secretary of State for Defence if he will list the occasions since 1979 when Royal Air Force police covert monitoring of low flying has detected breaches of low-flying regulations.
    244
    Mr. Neubert
    The detailed information requested is not readily available and could not be obtained without disproportionate effort. Surveys do however indicate that pilots have a healthy respect for the low-flying regulations.

    Dr. Thomas
    To ask the Secretary of State for Defence what are the aircraft handling reasons for United States Air Force F111 aircraft being permitted to fly at 480 knots in the low-flying system, as stated in his reply to the hon. Member for Meirionnydd Nant Conwy of 16 November 1987,Official Report, column 451.

    Mr. Neubert
    Because of the aerodynamic characteristics of the F111 aircraft, its handling properties are enhanced at a speed of 480 knots compared with a speed of 450 knots.

    Tornado Aircraft
    Dr. Thomas
    To ask the Secretary of State for Defence if he will list those accidents to Tornado aircraft in which failure or malfunction of the fly-by-wire system was a contributory factor.

    Mr. Neubert
    There is no evidence that any such RAF Tornado accidents have occurred.

    Helicopters (Flying Practice)
    Dr. Thomas
    To ask the Secretary of State for Defence if he will list those areas of the United Kingdom which are cleared for use by military helicopters practising flying underneath high voltage power lines.

    Mr. Neubert
    All aspects of this training activity, including the areas used, are currently under review.

    Consumers (Consultation)
    Mr. Austin Mitchell
    To ask the Secretary of State for Defence what arrangements there are for consulting consumers in the work and decisions of his Department.

    Mr. Sainsbury
    I will write to the hon. Member.

    Computer Safety
    Miss Emma Nicholson
    To ask the Secretary of State for Defence whether the security of his Department's computer files is regularly checked for breaches by computer hackers.

    Mr. Archie Hamilton
    Where such access would constitute a security breach, yes.

    Miss Emma Nicholson
    To ask the Secretary of State for Defence (1) what action is taken in his Department to guard against intrusive information technology practices by unauthorised internal or external electronic intruders;

    (2) what steps he has taken to ensure that information transferred within and without his Department via computer is safe from internal or external interference;

    (3) what steps his Department has undertaken to guard against the unauthorised access of sensitive defence information files stored on computer.

    Mr. Archie Hamilton
    In the interest of national security, the nature and extent of the security counter-measures used to protect Ministry of Defence computer systems from authorised access cannot be revealed.
    245
    Miss Emma Nicholson
    To ask the Secretary of State for Defence what assessment he has made of the potential effects of unauthorised access via computer of information held by his Department on the nation's security.

    Mr. Archie Hamilton
    The potential effect of unauthorised access to the Ministry of Defence's information is indicated by the security classifications given to such material, viz:

    TOP SECRET

    Information and material the unauthorised disclosure of which would cause EXCEPTIONALLY GRAVE DAMAGE to the nation.

    SECRET

    Information and material the unauthorised disclosure of which would cause SERIOUS INJURY to the interests of the nation.

    CONFIDENTIAL

    Information and material the unauthorised disclosure of which would be PREJUDICIAL to the interests of the nation.

    RESTRICTED

    Information and material the unauthorised disclosure of which would be UNDESIRABLE in the interests of the nation.

    Miss Emma Nicholson
    To ask the Secretary of State for Defence what proposals he has to prevent the extraction of sensitive international defence material by computer, in the light of the recent problems uncovered in West Germany.

    Mr. Archie Hamilton
    It will not be clear whether any change in Ministry of Defence security policy is necessary following recent events in West Germany until our investigations are complete.

    Confidential Information
    Miss Emma Nicholson
    To ask the Secretary of State for Defence what information he has on the steps taken by the United Kingdom's allies to protect confidential defence information.

    Mr. Archie Hamilton
    The Ministry of Defence security authorities have all the information necessary to determine that the security policies of the United Kingdom's allies are comparable and compatible with Ministry of Defence security policy where the handling of Ministry of Defence material is involved.

    Equal Pay
    Mr. Menzies Campbell
    To ask the Secretary of State for Defence what is the policy of his Department with regard to equal pay for equivalent work in the three armed services; and if he will make a statement.

    Mr. Neubert
    The pay levels of service personnel are recommended by the Armed Forces Pay Review Body based on a system of job evaluation and comparability with civilian jobs of a similar weight. Job evaluation makes no distinction between service men and service women. However, service men's pay contains a 10 per cent. enhancement (the X factor) to compensate for the overall balance of advantage and disadvantage of service life, while service women receive an X factor of 9 per cent. because they are not liable for direct combat duties.

    Chemical Weapons
    Mr. Cryer
    To ask the Secretary of State for Defence what is his latest estimate of the stockpile of chemical warfare agents held by the Union of Soviet Socialist Republics.
    246
    Mr. Archie Hamilton
    The Soviet Union has the largest and most sophisticated chemical warfare capability in the world. Our estimate is that the Soviet stockpile of chemical warfare agents is several times larger than the 50,000 tonnes which it claims.

    Civil Servants (EC)
    Mr. Cryer
    To ask the Secretary of State for Defence what is the number of civil servants in his Department whose main task is work related wholly or mainly to the European Economic Community; and what is the gross annual cost of travel and accommodation to and from Brussels, Luxembourg and Strasbourg in connection with this work.

    Mr. Sainsbury
    None. Costs of travel and accommodation are not kept in a form that separately identifies EC-related work.

  PRIME MINISTER

    Press Freedom
    Mr. Redmond
    To ask the Prime Minister what reply she has sent to the recent letter sent to her by PEN American centre in respect of press freedom and individual rights in the United Kingdom; and if she will make a statement.

    The Prime Minister
    I have no record of receiving such a letter.

    Ministerial Advisers
    Mr. Robin Cook
    To ask the Prime Minister what is the annual total level of expenditure on special advisers attached to Ministers.

    The Prime Minister
    The current annual salary cost is approximately £935,000.

  NATIONAL FINANCE

    Manufactured Trade Deficit
    Mr. Austin Mitchell
    To ask the Chancellor of the Exchequer what are his projections for the deficit in manufactured trade for 1989.

    Mr. Major
    The Financial Statement and Budget Report for 1989–90 shows a forecast deficit in manufactured trade in 1989 of £15½ billion.

    Trade Deficit
    Mr. Roy Hughes
    To ask the Chancellor of the Exchequer what he now expects the trade deficit in 1989 to be.

    Mr. Major
    The Financial Statement and Budget Report for 1989–90 shows a forecast deficit for visible trade in 1989 of £21½ billion.

    Trade Balance
    Mr. Wilson
    To ask the Chancellor of the Exchequer when he expects Britain's trade balance to be in surplus.
    247
    Mr. Major
    The Financial Statement and Budget Report for 1989–90 published on 14 March 1989 provides forecasts of the visible trade balance for 1989 and the current acount balance for 1989 and the first half of 1990. Forecasts for later years are not published.

    EC Economic and Finance Council
    Mr. Rowe
    To ask the Chancellor of the Exchequer if he will make a statement on the outcome of the latest meeting of the European Communities Economic and Finance Council.

    Mr. Brooke
    The ECOFIN Council met in Brussels on 13 March. I represented the United Kingdom. The Council discussed the Commission's first quarterly examination of the economic situation in the Community.

    The Council heard a presentation from the Commission on the 10th anniversary of the European monetary system. Ministers discussed preparations for the spring meetings of the IMF and IBRD to be held in April in Washington. Ministers took note of the latest United States suggestions for strengthening the debt strategy and reaffirmed that the key to the resolution of debt problems is the implementation of economic policy reform in the debtor countries.

    The Council discussed the European Court of Auditors report for 1987; I emphasised the importance of the court's work in helping to get better value for money and in combating fraud. The Council approved the recommendation to the European Parliament on discharge of the 1987 accounts.

    The Council endorsed a declaration on fraud which foreshadowed new or revised proposals in a number of areas, notably export refunds and intervention storage; and which promised an annual report by the Commission on fraud and an early discussion of key issues chaired by the head of the Commission's anti-fraud unit. The Council will return to the subject of fraud in the near future.

    Share Ownership
    Mr. Watts
    To ask the Chancellor of the Exchequer if he will make a statement on the level of share ownership in Great Britain.

    Mr. Norman Lamont
    A joint Treasury/stock exchange survey carried out in January and February of this year shows that:9 million people, or 20 per cent. of the adult population, now own shares, the same as one year ago, and compared to seven per cent. in 1979;
    13 per cent. hold shares in privatised companies, and five per cent. own only privatised shares;
    3 per cent. hold shares in the company for which they work;
    Share ownership is widely spread; two-thirds of British shareholders come from outside the ranks of managers and the professionals; similarly, almost two-thirds come from outside the south-east.

    I am placing copies of the results of the survey in the Libraries of both Houses.

    Press and PR
    Mr. Dobson
    To ask the Chancellor of the Exchequer what are the latest figures for the number of staff presently employed and the full complement of staff including vacant posts, in the press and public relations office of the Treasury; and what is the proposed complement for 1989–90.
    248
    Mr. Brooke
    [holding answer 13 March 1989]: The number of press and public relations staff employed in the Treasury on I March 1989 was 10 and the budgeted provision was 10; the budgeted provision for 1989–90 is 10.

    Advertising
    Mr. Dobson
    To ask the Chancellor of the Exchequer what is the latest figure for the estimated spending in 1988–89 by the Treasury on(a) TV advertising, (b) radio advertising, (c) newspaper advertising and (d) other promotional material; and what is the 1989–90 budget for each of these categories of spending.

    Mr. Brooke
    [holding answer 13 March 1989]: The estimated expenditure for 1988–89 is £51,500, none of which is likely to be on television or radio advertising; the 1989–90 budget is £50,000, none of which is likely to be on television or radio advertising.

    Staff Statistics
    Mr. Dobson
    To ask the Chancellor of the Exchequer if he will give the latest figures for the number of staff presently employed, and the full complement of staff including vacant posts, by grade, in the statistical divisions in the Treasury; if he will differentiate between staff in statistical posts and staff in administrative posts; and if he will give the staffing complements by grade. and differentiated between statistical and administrative posts, proposed for 1989–90.

    Mr. Brooke
    [holding answer 13 March 1989]: The information is as follows:

    Staff in statistical divisions1

    Staff in Post 1 March 1989

    Budgeted Complement 1988–89

    Budgeted Complement 1989–90

    Unified Grade 52

    2

    2

    2

    Unified Grade 72

    8

    8

    8

    SEO

    4

    4

    4

    HEO

    5

    5

    5

    Senior Assistant Statistician/ Assistant Statistician

    4

    4

    4

    EO

    10

    11

    11

    AO/AA

    13

    13

    13

    Total

    46

    47

    47

    1 Defined as divisions headed by grade 5 chief statistician and employed mainly on statistical work. There are other statistician posts in HM Treasury which are not included in the above figures.

    2 At the senior levels of the service, where management forms a major component of most jobs, there are service-wide common pay and grading arrangements. These unified grades 1 to 7 are known as the open structure and cover grades from permanent secretary level to grade 7 level. Within the unified grades there are no formal barriers to movement between the former occupational groups, e.g. scientists, administrators, statisticians; each post should be filled by the person best equipped in terms of skills, ability and experience.

    National Debt
    Mr. Tim Smith
    To ask the Chancellor of the Exchequer what were the reasons for the rise in the national debt from £186 billion at 31 March 1987 to £197 billion at 31 March 1988, in the light of the repayment of public sector debt in the same period of £3·6 billion.

    Mr. Lilley
    [holding answer 13 March 1989]:The national debt is conventionally defined as the nominal

    249
    liabilities of the national loans fund. Unlike the public sector net debt, it does not include borrowing by local authorities, nor does it net off assets such as the foreign exchange reserves.

    The main reason why the liabilities of the national loans fund increased in 1987–88, despite the public sector debt repayment, was because sterling was drawn from the national loans fund to finance a substantial rise in the gold and foreign exchange reserves. There are, however, a great many differences between the two concepts, and a full explanation is given on pages 530–537 of the November 1988 Bank of England Quarterly Bulletin.

  AGRICULTURE, FISHERIES AND FOOD

    Chlorine Bleaching
    Ms. Walley
    To ask the Minister of Agriculture, Fisheries and Food on what date he intends to publish his report on the investigations he has carried out within his areas of responsibility into chlorine bleached packaging, dioxins and food.

    Mr. Ryder
    My Ministry's food science laboratory has just completed its preliminary research into the migration of dioxins from food packaging material and the results are now being evaluated.

    Pests
    Mr. Ron Davies
    To ask the Minister of Agriculture, Fisheries and Food if he will place in the Library a copy of the Agricultural Development and Advisory Service research and development report, "Mammal and Bird Pests, 1985."

    Mr. Ryder
    The 1985 ADAS research and development report on mammal and bird pests is on pages 67–76 of the 1985 research and development report of ADAS. I am arranging for copies to be deposited in the Library as soon as possible.

    Hens' Eggs (Imports)
    Mr. Ron Davies
    To ask the Minister of Agriculture, Fisheries and Food what is the current level of import of hens' eggs; and if he will identify the main source of such imports by country and volume.

    Mr. Donald Thompson
    The latest monthly data from Her Majesty's Customs and Excise show that 39,910 boxes of hens' eggs (containing 360 eggs per box) were imported into the United Kingdom in January 1989. Of these 23,733 boxes came from the Netherlands, 7,478 boxes from the Federal Republic of Germany, 4,542 boxes from Denmark and 2,700 boxes from France.

    Food Irradiation
    Mr. Cohen
    To ask the Minister of Agriculture, Fisheries and Food what plans Her Majesty's Government have (i) to allow to be sold and (ii) to require labelling for consumers, foods and food ingredients which have been treated with ionising radiation: and if he will make a statement.

    Mr. Ryder
    I refer the hon. Member to the reply given by my hon. Friend the parliamentary Under-Secretary of State for Health on 21 February at column 600.

    Civil Servants (EC)
    Mr. Cryer
    To ask the Minister of Agriculture, Fisheries and Food what is the number of civil servants in his Ministry whose main task is work related wholly or mainly to the European Economic Community; and what is the gross annual cost of travel and accommodation to and from Brussels, Luxembourg and Strasbourg in connection with this work.

    Mr. Donald Thompson
    The work undertaken by my Department as a consequence of the United Kingdom's membership of the European Community cannot easily be distinguished from other work. It is not possible, therefore, to give precise information on the number of staff whose main task is work related wholly or mainly to the EC. However, we estimate that between one quarter and one third of the Department's manpower, including common service and support staff, are concerned directly or indirectly with duties arising out of EC membership. At 31 January 1989 this amounted approximately to between 2,500 amd 3,400 staff.

    The gross cost of travel and subsistence by Ministers and officials attending meetings of institutions of the European Community in 1987–88, the latest financial year for which figures are available, was:

    £

    Travel and allied charges

    480,058

    Subsistence

    291,313

    771,371

    The bulk of travel costs is recoverable from Community funds. it is not possible to identify costs relating specifically to meetings held in Brussels, Luxembourg and Strasbourg, or those on EC matters not held under the auspices of the Community.

    The 950 staff of the Intervention Board for Agricultural Produce are entirely engaged on work related to the European Community. The gross cost in 1987–88 of foreign travel and subsistence, almost all of which relates to meetings of institutions of the European Community, was £42,612.

    Tuberculosis (Deer)
    Sir John Farr
    To ask the Minister of Agriculture, Fisheries and Food (1) when he will introduce a scheme to make tuberculosis a notifiable disease so far as farmed deer are concerned;

    (2) when he expects to be able to announce details of a scheme providing for the notification, compulsory slaughter, and full cash compensation for farmed deer infected with tuberculosis.

    Mr. Donald Thompson
    I intend to introduce measures shortly to make TB in deer a notifiable disease. The question of a compulsory slaughter with compensation scheme is being considered in the light of the response to the recent consultation letter seeking views on the possibility of an industry-funded arrangement.

    Internal Drainage Boards
    Dr. Cunningham
    To ask the Minister of Agriculture, Fisheries and Food if he will list the names of those internal drainage boards which are not covered by the
    251
    constitutional and electoral arrangements contained in schedule 2 to the Land Drainage Act 1976, by virtue of the fact that they were constituted before 1930; and what steps have been taken to apply schedule 2 electoral arrangements to these boards.

    Mr. Ryder
    The following internal drainage boards are not considered to be covered by the constitutional and electoral arrangements in schedule 2 to the Land Drainage Act 1976:

    Othery, Middlezoy and Westonzoyland

    Lower Axe

    Lower Brue

    Stockland

    Upper Axe

    Upper Brue

    West Sedgemoor

    Bridgwater and Pawlett

    Cannington and Wembdon

    King Sedgemoor and Carey Valley

    Langport

    Information was last provided in 1985. Since then, one internal drainage board has been abolished and another, Wilberfoss and Thornton Level, is currently being reconstituted.

    Dairy Quotas
    Mr. Barry Field
    To ask the Minister of Agriculture, Fisheries and Food what plans he has to amend the Dairy Produce Quotas Regulations 1986.

    Mr. Donald Thompson
    My right hon. Friend, the Minister, laid before Parliament on 10 March the Dairy Produce Regulations 1989, which replace similar regulations made in 1986 and amended in 1988 and earlier this year.

    The new regulations introduce changes to the quota transfer rules, including new procedures for the appointment of arbitrators in cases of dispute. They take into account changes in European Community legislation which affect the calculation of liability to supplementary levy. A number of redundant provisions, most of them relating to the allocations of new quota rights, have not been re-enacted. Other changes have been made to clarify the meaning of certain provisions in the light of experience.

    Cook-chill Food
    Mr. Thurnham
    To ask the Minister of Agriculture, Fisheries and Food what recent representations he has received on the marketing of cooked-chilled food; and if he will make a statement.

    Mr. Kenneth Clarke
    I have been asked to reply.

    My Department has received various representations on the marketing of cook-chill foods and, as I told the House on 21 February at columns 873–74, we are considering the making of regulations.

  EMPLOYMENT

    Skills Shortage
    Mr Andrew Smith
    To ask the Secretary of State for Employment what long-term plans he has to counteract the skills shortage in the south east of England.
    252
    Mr. Nicholls
    The steps taken by the Government to tackle skills shortage in all regions are set out in the training section of the White Paper "Employment for the 1990s" published in December.

    Training Places (Ardrossan-Saltcoats)
    Mr. Wilson
    To ask the Secretary of State for Employment how many employment training places were allocated to the Ardrossan-Saltcoats area; how many have been filled; and if any change in the number of allocated places is proposed.

    Mr. Nicholls
    The information requested is not available in the form requested. In the Training Agency's Ayrshire, Dumfries and Galloway area office, of which the Ardrossan-Saltcoats area forms a part, there are currently 4,088 places available. Of these 2,526 were filled at 3 March. After just six months this is a very satisfactory take-up of employment training by unemployed people who are clearly attracted to a high quality programme. There are no plans to reduce the number of places in the Ayrshire, Dumfries and Galloway area.

    National Dock Labour Scheme
    Mr. Squire
    To ask the Secretary of State for Employment whether he will bring forward proposals to repeal those provisions of the national dock labour scheme which provide for registered port employers to be fined or imprisoned unless they use registered dock labour on cargo-handling work.

    Mr. Nicholls
    The Government's position on the scheme remains unchanged, as my right hon. Friend the Prime Minister confirmed in the House on 19 January 1989,Official Report, columns 481–82.

    Over-50s (Employment)
    Mr. Barry Field
    To ask the Secretary of State for Employment if he has any plans to meet the director general of the Confederation of British Industry to discuss the employment of workers, aged over 50 years by British industry; and if he will make a statement.

    Mr. Nicholls
    My right hon. Friend has no immediate plans to do so, but I am arranging to meet the appropriate CBI employer panel in the near future to discuss the issue of employment of older workers. It is both irresponsible and unfair to discriminate without justification on grounds of age. I am encouraged that the Confederation of British Industry is seeking to draw to all employers' attention the implications of current demographic trends, and in particular the decline in numbers of young people.

    Job Clubs, Bristol
    Mr. Stern
    To ask the Secretary of State for Employment if he has any plans to encourage the introduction of more job clubs in the Bristol travel-to-work area.

    Mr. Lee
    As announced in my right hon. Friend the Secretary of State's reply to my hon. Friend the Member for Bury, North (Mr. Burt) on 27 January 1989,Official Report, column 810, the job club network is being streamlined to take account of the present unemployment picture. The employment service is currently assessing the

    253
    number of job clubs needed in the Bristol travel-to-work area and a decision is expected soon. More effective use of existing facilities, rather than additional job clubs, will be a key feature of the assessment. However, it is planned to substantially increase the number of participants in job clubs in the Avon area from around 1,300 members in 1988–89 to around 2,500 in 1989–90.

    Child Care Facilities
    Ms. Richardson
    To ask the Secretary of State for Employment, in the light of his projection in the White Paper "Employment for the 1990s", that home working is likely to increase, what child care provision he is anticipating to cater for the needs of homeworkers with children in the under-fives age group.

    Mr. Nicholls
    Questions relating to day care provision for the under-fives are a matter for my right hon. Friend the Secretary of State for Health.

    Tourism
    Mr. Gregory
    To ask the Secretary of State for Employment when he intends to publish the report commissioned from P A Management Consultants on tourism in England and the role of the British Tourist Authority; and if he will make a statement.

    Mr. Lee
    There are no plans to publish the report, which is still under consideration. An announcement will be made in due course.

    Public Service Broadcasts
    Mr. Andrew Bowden
    To ask the Secretary of State for Employment if he will make make a statement on the likely implications on public service broadcasts emanating from his Department of the White Paper, "Broadcasting in the '90s: Competition Choice and Quality."

    Mr. Cope
    There is no reason to suppose that the proposals in the White Paper will alter the present arrangements whereby public service messages are broadcast by the BBC. It will be for the new channel 3 and 5 licensees to consider whether they will broadcast such messages. The arrangements for paid Government advertising on television and commercial radio will not be affected by the proposals.

    Deaf-blind People
    Mr. Ashley
    To ask the Secretary of State for Employment what steps he is taking to find suitable jobs which can be carried out by deaf-blind people.

    Mr. Lee
    Deaf-blind people have access to the full range of employment and training services provided by or through my Department, including the specialist services for people with disabilities. These include specialist assessment rehabilitation and placing provision for people with visual handicaps, training within employment training tailored to individual need, the special aids to employment scheme (which makes available the wide range of technical aids relevant to the needs of people with visual or hearing impairments), and the sheltered employment programme, which subsidises the employment of people with severe disabilities in sheltered workshops or in sheltered placements with employers.

  Civil Servants (EC)
  Mr. Cryer
  To ask the Secretary of State for Employment what is the number of civil servants in his Department whose main task is work related wholly or mainly to the European Economic Community; and what is the gross annual cost of travel and accommodation to and from Brussels, Luxembourg and Strasbourg in connection with this work.

  Mr. Cope
  The number of civil servants in my Department whose main task is work wholly or mainly related to the European Economic Community is 33, including clerical and secretarial staff. Of these, 24 staff are concerned with the administration of United Kingdom applications for grants from the European social fund. The gross annual cost in the year to 10 March 1989 of travel and accommodation to and from Brussels, Luxembourg and Strasbourg in connection with this work is £14,233.

  Textile Industry (West Yorkshire)
  Mr. Cryer
  To ask the Secretary of State for Employment what was the number of people employed in the West Yorkshire wool textile industry for each year from 1975 to 1989; and if he will make a statement.

  Mr. Lee
  The available information from censuses of employment is given in the table. Because of changes in the standard industrial classification and in the compilation of county data, the most recent September 1989 and 1984 estimates are not strictly comparable with those for earlier years. More up-to-date estimates from the September 1987 census of employment will become available later this year.

  Employees in employment in the woollen and worsted industry in west Yorkshire

  Thousand

  June1

  1975

  59·4

  1976

  54·8

  1977

  54·7

  1978

  52·2

  September2

  32·8

  1984

  25·6

  1 Jobcentre based information: 1968 Standard Industrial Classification (SIC), Minimum List Heading 414.

  2 Ward based information (ward boundaries as at September 1981): 1980 SIC, Activity Heading 4310.

  Note: Jobcentre and ward based aggregates are not strictly comparable. The former are based on an amalgamation of jobcentre areas, which may not be coterminous with the county boundary. There are also differences in the industry classification, 1968 SIC differs from the 1980 SIC, for instance, in including the manufacturing of pressed and woven felt and baize.

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

  Mr. Cope
  [holding answer 13 March 1989]: Expenditure in the Department of Employment group, including the Training Agency and the employment service, in each year from 1984–85 to 1987–88 on management consultancy was as follows:

  255

  £ thousands

  1984–85

  365

  1985–86

  365

  1986–87

  1,032

  1987–88

  653

  The estimate outturn for the current year (1988–89) is around £950,000.

  Information for the period from 1979–80 to 1983–84 could be provided only at disproportionate cost.

  Earnings
  Mr. Harry Barnes
  To ask the Secretary of State for Employment how many, and what percentage, of full-time female workers in Derbyshire earned less than the Council of Europe's decency threshold in the figures for the latest available year.

  Mr. Nicholls
  [holding answer 13 March 1989]: I refer the hon. Member to the answer that I gave the hon. Member for Glasgow, Ruthergen (Mr. McAvoy) on 8 March 1989 at columns 569–70.

  Statistical Staff
  Mr. Dobson
  To ask the Secretary of State for Employment (1) if he will give the latest figures for the number of staff presently employed, and full complement of staff including vacant posts, by grade, in the statistical divisions in the Manpower Services Commission; if he will differentiate between staff in statistical posts and staff in administrative posts; and if he will give the staffing complements by grade, and differentiated between statistical and administrative posts, proposed for 1989–90;

  (2) if he will give the latest figures for the number of staff presently employed, and the full complement of staff including vacant posts, by grade, in the statistical divisions in his Department; if he will differentiate between staff in statistical posts and staff in administrative posts; and if he will give the staffing complements by grade, and differentiated between statistical and administrative posts, proposed for 1989–90.

  Mr. Cope
  [holding answer 13 March 1989]: Staff of what was the Manpower Services Commission are now in the Training Agency and employment service of my Department. The information requested on staff presently employed is given in the table. The staffing levels for 1989–90 are not expected to be significantly different from current levels.

  Department of Employment—Staff in Statistical Divisions

  Grade

  Staff complement

  Staff-in-post January 1989

  Statistical Grades

  Head of Statistics

  1·0

  1·0

  Chief Statistician

  5·0

  5·0

  Statistician

  27·8

  27·6

  Senior Assistant Statistician

  11·0

  11·0

  Assistant Statistician

  11·0

  11·0

  Total Statistical Grades

  55·8

  55·6

  Administrative Grades

  Grade 6

  1·0

  1·0

  Grade 7

  2·0

  2·0

  Senior Executive Officer

  10·0

  10·0

  Higher Executive Officer

  27·9

  27·5

  Executive Officer

  65·5

  63·0

  256

  Grade

  Staff complement

  Staff-in-post January 1989

  Administrative Officer

  122·8

  110·6

  Administrative Assistant

  45·8

  26·7

  Senior Personal Secretary

  1·0

  1·0

  Personal Secretary

  6·0

  6·0

  Total Administrative Grades

  282·0

  247·8

  Other Staff

  Economist

  2·0

  2·0

  Senior Economic Assistant

  3·0

  3·0

  Economic Assistant

  1·0

  —

  Senior Research Officer

  3·0

  2·0

  Assistant Librarian

  1·0

  1·0

  Total Other Grades

  10·0

  8·0

  Total All Posts

  337·8

  303·4

  Employment Training
  Mr. Bill Michie
  To ask the Secretary of State for Employment whether, pursuant to his answer to the hon. Member for Ealing, North (Mr. Greenway) dated 17 January,Official Report, column 172, information on the numbers in employment training schemes in inner city areas has yet been made available.

  Mr. Nicholls
  The number of people on employment training at 3 March was 164,000; of these, 42 per cent. or about 70,000 were in training in inner city areas.

  Mrs. Fyfe
  To ask the Secretary of State for Employment what his Department treats as a reasonable amount for trainees on an ET scheme to spend on weekly travel from their home to their place of training.

  Mr. Nicholls
  [holding answer 10 March 1989]: ET trainees are expected to meet the first £5 of their weekly travel costs. Costs in excess of £5 a week are reimbursed in full.

ENERGY

  Ministerial Statements
  Dr. Thomas
  To ask the Secretary of State for Energy if he will make it his policy to be answerable in Parliament for statements made outside Parliament by Ministers in his Department on matters for which his Department has responsibility.

  Mr. Parkinson
  Ministers in charge of Departments are answerable to Parliament for statements made by Ministers in their Departments on matters for which they have responsibility.

  Public Service Broadcasts
  Mr. Andrew Bowden
  To ask the Secretary of State for Energy if he will make a statement on the likely implications on public service broadcasts emanating from his Department of the White Paper "Broadcasting in the '90s: Competition Choice arid Quality".

  Mr. Parkinson
  There is no reason to suppose that the proposals in the White Paper will alter the present arrangements whereby public service messages are broadcast by the BBC. It will be for the new Channel 3 and
  257
  5 licensees to consider whether they will broadcast such messages. The arrangements for paid Government advertising on television will not be affected by the proposals.

  Civil Servants (EC)
  Mr. Cryer
  To ask the Secretary of State for Energy, what is the number of civil servants in his Department whose main task is work related wholly or mainly to the European Economic Community; and what is the gross annual cost of travel and accommodation to and from Brussels, Luxembourg and Strasbourg in connection with this work.

  Mr. Parkinson
  There are 12 civil servants engaged wholly or mainly on EEC work and the cost of travel and subsistence for 1988 was about £6,000, most of which is reimbursed by the Commission.

  Dungeness B
  Mr. Cryer
  To ask the Secretary of State for Energy what was the cost of constructing Dungeness B power station; what is its percentage of availability for each year since completion; what is the total amount spent on maintenance and repairs since completion; and what is the current availability of the station.

  Mr. Michael Spicer
  This is an operational matter for the Central Electricity Generating Board. I have asked the chairman to write to the hon. Member.

  Reactor Welds (Bradwell)
  Mr. John Garrett
  To ask the Secretary of State for Energy if he will call for a report from Her Majesty's chief inspector of nuclear installations on his decision with respect to the use of ultrasonic methods to inspect reactor welds at Bradwell nuclear power station.

  Mr. Michael Spicer
  Inspections of the pressure circuit are part of the normal examinations carried out at each regular biennial inspection as required under the site licence. The Health and Safety Executive has accepted the Central Electricity Generating Board's proposal for a combination of ultrasonic and visual inspections as part of the programme of work during the shutdown of Bradwell for its biennial inspection.

  The nuclear installations inspectorate of the Health and Safety Executive will review the results of the inspections as they proceed. The nuclear installations inspectorate's consent will be required before the reactor can be restarted.

TRADE AND INDUSTRY

  Post Office
  Dr. Goodson-Wickes
  To ask the Chancellor of the Duchy of Lancaster when he last had discussions with Sir Bryan Nicholson of the Post Office; and what matters were discussed.

  Mr. Forth
  I meet the Post Office chairman regularly, and last did so on 1 March. We discussed a range of matters of current interest.

  Mobile Telecommunications
  Mr. Pawsey
  To ask the Chancellor of the Duchy of Lancaster what assessment he has made of the potential for expansion in the market for mobile telecommunications; and if he will make a statement.

  Mr. Atkins
  We see considerable potential. My announcement to the House on 26 January about personal telecommunications set out the steps we are taking to enable that potential to be realised.

  Car Batteries
  Mr. Andrew F. Bennett
  To ask the Chancellor of the Duchy of Lancaster if he will make a statement on import penetration of car batteries.

  Mr. Atkins
  Information on car batteries alone is not available. For automotive batteries in total, it is estimated that in the first three quarters of 1988, import penetration was approximately 30 per cent.

  Enterprise Initiative
  Mr. Oppenheim
  To ask the Chancellor of the Duchy of Lancaster how many businesses have participated in the Government's enterprise initiative scheme.

  Mr. Forth
  I am pleased to say that over 85,000 firms have "taken the initiative" by seeking detailed information about the self-help package of assistance available under the enterprise initiative.

  Inner City Task Forces
  Mr. Favell
  To ask the Chancellor of the Duchy of Lancaster when he last met the leaders of the inner city task forces; and what matters were discussed.

  Mr. Newton
  I last met task force leaders as a group at their half-yearly meeting in Liverpool on Friday 9 December. Our discussions ranged over a variety of matters, including the importance of developing the capacity of local groups and community organisations to build on task forces' work after the departure of the task forces themselves. I have subsequently met on other occasions the task force leaders in Preston, Rochdale, Doncaster, Hartlepool, Leeds and Middlesbrough.

  General Agreement on Tariffs and Trade
  Mr. Corbyn
  To ask the Chancellor of the Duchy of Lancaster if he will make a statement on the outcome of the latest round of the general agreement on tariffs and trade.

  Mr. Newton
  I refer the hon. Member to the reply that my hon. Friend the Minister for Trade gave to my hon. Friend the Member for Keighley (Mr. Waller) on 12 December at column 400.

  Sir Richard Body
  To ask the Chancellor of the Duchy of Lancaster if it remains the negotiating position of the European Economic Community, after the breakdown of the mid-term review of the general agreement on tariffs and trade, Uruguay round, that the principal of selectivity should be introduced into article XIX of the general agreement on tariffs and trade.
  259
  Mr. Forth
  The European Community is committed to seeking an improved safeguards clause under article XIX of the general agreement on tariffs and trade, which would permit effective action to be taken subject to agreed tests and disciplines. We consider this will help strengthen the general agreement on tariffs and trade and may facilitate the process of trade liberalisation by providing a more reliable "safety-valve". One of the key issues in the negotiations will be whether safeguard action can be taken selectively. It is the Community's view that this possibility exists. However the Community has not expressed a firm position on this issue in the current multi-lateral trade negotiations, believing it to be important that all options should remain open for discussion at this stage of the negotiations if a comprehensive solution is to be found.

  Electrical Goods
  Mr. Wareing
  To ask the Chancellor of the Duchy of Lancaster what is the current balance of trade position in electronics and electrical goods.

  Mr. Forth
  In 1988, exports of electronic and electrical goods amounted to £11·4 billion while imports were £15·3 billion, leaving a crude trade deficit of £3·9 billion.

  Hearing Aids
  Mr. Andrew Welsh
  To ask the Chancellor of the Duchy of Lancaster what study his Department has conducted into the number of people buying hearing aids privately.

  Mr. Forth
  None. Such surveys are not carried out by this Department but I understand that the number of hearing aids privately dispensed each year is approximately 80,000.

  Mrs. Rosie Barnes
  To ask the Chancellor of the Duchy of Lancaster how many representations he has received concerning the conduct of private hearing aid dispensers.

  Mr. Forth
  My Department has received three representations concerning the conduct of private hearing aid dispensers in the last year.

  Trade Deficit
  Mr. Teddy Taylor
  To ask the Chancellor of the Duchy of Lancaster if he will initiate an inquiry into the causes of the size of the United Kingdom's trade deficit with the European Economic Community in relation to that of the rest of the world; and if he will make a statement.

  Mr. Newton
  We have no plans to do so.

  Ms. Primarolo
  To ask the Chancellor of the Duchy of Lancaster with which European Economic Community members Britain's trade is in deficit.

  Mr. Newton
  In the 12 months to January the United Kingdom was in deficit on visible trade with Belgium/Luxembourg, Denmark, the Federal Republic of Germany, France, Italy, the Netherlands and Portugal.

  Single Market
  Mr. Thurnham
  To ask the Chancellor of the Duchy of Lancaster what recent representations he has received about preparations for the single market in 1992; and if he will make a statement.
  260
  Mr. Forth
  We constantly receive an encouragingly high number of representations from all sectors of British business. All have warmly welcomed the continuing high priority which the Government are giving to completing the single market and the steps that we are taking to encourage British business to take action to prepare for the challenge ahead.

  Mr. Hoyle
  To ask the Chancellor of the Duchy of Lancaster what recent estimate his Department has made of the effects of 1992 on the manufacturing sector.

  Mr. Atkins
  The single European market will present opportunities and challenges for a wide range of United Kingdom business sectors. Realising the potential gains to any one sector of the economy will depend on the flexibility of United Kingdom firms in that sector in responding to the removal of the barriers.

  Mr. Allan Roberts
  To ask the Chancellor of the Duchy of Lancaster what recent estimates his Department have made on the effects of 1992 on Britain's regions.

  Mr. Atkins
  The completion of the single market means greater freedom of trade, and many studies have demonstrated the benefits of that. The single market will bring opportunities for business in all parts of the country. We are seeking to ensure that business in every region takes the necessary action to respond effectively to the opportunities and challenges ahead.

  Overseas Assets
  Mr. Butler
  To ask the Chancellor of the Duchy of Lancaster what is the current net value of British companies' overseas assets.

  Mr. Forth
  The latest available estimate relates to the end of 1987. The book value of direct investment abroad by United Kingdom companies at the end of 1987 was estimated to be £91 billion. The book value of foreign direct investment in the United Kingdom was estimated to be £53 billion and the net book value of overseas direct investment at the end of 1987 was estimated to be £38 billion.

  Copyright
  Miss Emma Nicholson
  To ask the Chancellor of the Duchy of Lancaster what are the Government's plans to ensure that the provisions of the Copyright, Designs and Patents Act 1988 are riot vitiated by the European Economic Community in legislation arising out of the European Economic Community Commission's Green Paper "Copyright and the Challenge of New Technology."

  Mr. Forth
  The provisions of the Copyright, Designs and Patents Act 1988 were adopted after careful consideration with all affected parties. Consultations are continuing on matters arising from the Commission's Green Paper. We shall therefore be well placed to represent the interests of the United Kingdom in negotiations on any proposals for Community legislation in this area.

  Barlow Clowes
  Mr. Michael
  To ask the Chancellor of the Duchy of Lancaster what progress has been made towards
  261
  obtaining reimbursement for those affected by the British-based and Gibraltar-based elements of the Barlow Clowes organisation; what initiatives have been taken by his Department in the last six months; what initiatives he will now take to seek a speedier resolution of outstanding problems; and if he will make a statement.

  Mr. Newton
  On the matter of reimbursement for investors in Barlow Clowes, I understand that an interim payment of 75p in the pound was made to a minority of investors in the United Kingdom fund (Barlow Clowes Gilt Managers) before Christmas. The remaining investors in the United Kingdom fund received an interim payment of 25p in the pound in January. The position for investors in the Gibraltar fund (Barlow Clowes International) is not as promising but I understand that the liquidators hope to make a small interim payment to those investors as soon as possible this year.

  Developments have also been taking place on the roles played by some of the other parties involved in this case. My right hon. and noble Friend has invited a number of regulatory bodies to examine Sir Godfray Le Quesne's report and see whether there were matters for them to consider. The Financial Intermediaries, Managers and Brokers' Regulatory Association has undertaken its own investigations and recommended that disciplinary action be taken against 19 of its members involved with the case, of which three have been suspended. Those suspended are the Investments and Pensions Advisory Service Ltd. and D. C. Wilson and Gordon Pettie Advisory Services. The Investments and Pensions Advisory Service is in liquidation following a winding up petition by the Securities and Investments board and D. C. Wilson has gone into voluntary liquidation.

  On 4 January the Institute of Chartered Accountants in England and Wales announced that a committee of inquiry was being set up under the joint disciplinary scheme to look into the role of the auditors involved in this case.

  The Parliamentary Commissioner for Administration is looking into complaints that he has received about the handling of the Barlow Clowes case by my Department. The timing of the Commissioner's work is a matter for him, but my Department is co-operating with him and we shall consider carefully any report that he may make.

  Manufacturing Investment
  Mr. Matthew Taylor
  To ask the Chancellor of the Duchy of Lancaster what is the latest figure for the level of manufacturing investment; and if he will make a statement.

  Mr. Atkins
  In 1988 manufacturing investment, including leased asset and at 1985 prices on the provisional estimate, amounted to £11 billion, nearly 10 per cent. higher than in 1987. In his Financial Statement and Budget Report, my right hon. Friend the Chancellor of the Exchequer forecast further strong growth in business investment. This is supported by the Department of Trade and Industry's latest investment intentions survey and that conducted by the CBI.

  Dr. Moonie
  To ask the Chancellor of the Duchy of Lancaster when he expects manufacturing investment to return to its 1979 level.

  Mr. Atkins
  Manufacturing investment in real terms in 1988 on the provisional estimate was close to its 1979 level 262
  and 10 per cent. higher than in 1987. In his Financial Statement and Budget Report, my right hon. Friend the Chancellor of the Exchequer forecast further strong growth in business investment. This is supported by the Department of Trade and Industry's latest investment intentions survey and that conducted by the CBI.

  Trade Figures
  Mr. Dykes
  To ask the Chancellor of the Duchy of Lancaster if he has held recent discussions with his European Economic Community counterparts in the Council of Ministers on problems associated with different trade figures in the United Kingdom and other member states and on comparative statistics and measurements in these various figures.

  Mr. Newton
  No. There will be discussions in the Council of Ministers later this year on a proposal for an EC Council regulation on the statistics of trading between member states after 1992. If my hon. Friend has a particular problem in mind perhaps he would write to me.

  1992 Campaign
  Mr. John Marshall
  To ask the Chancellor of the Duchy of Lancaster if he will make a statement about the achievements of his 1992 campaign.

  Mr. Forth
  Since the campaign was launched the DTI has handled around 200,000 requests for further information. Now over 90 per cent. of firms throughout the country recognise the significance of the single market challenge and around 50 per cent. of British business is taking action or considering steps to prepare for the single market.

  Cellular Radio
  Mr. Moss
  To ask the Chancellor of the Duchy of Lancaster what steps his Department has taken to relieve congestion in the cellular radio network.

  Mr. Atkins
  My right hon. and noble Friend the Secretary of State for Trade and Industry has already announced the extension of the availability of 400 radio channels, until now reserved for Ministry of Defence use save in central London, out to the area embraced by the M25 and five miles beyond.

  Hearing Aid Council
  Mr. Sims
  To ask the Chancellor of the Duchy of Lancaster when he last reviewed the Hearing Aid Council's code of practice.

  Mr. Forth
  The Hearing Aid Council Act does not require or permit the Secretary of State to review the council's code of practice. The Act requires the Secretary of State to approve the code proposed by the council and any amendments that it proposes to it. The Secretary of State can make his approval conditional upon certain modifications.

  Action for Cities
  Mr. Irvine
  To ask the Chancellor of the Duchy of Lancaster how many offers of assistance have resulted from the action for cities presentations.
  263
  Mr. Newton
  More than 400 of the firms represented at the seven action for cities working breakfasts held during 1988 expressed an interest in supporting the Government's inner city initiatives.

  CBI
  Mr. Lord
  To ask the Chancellor of the Duchy of Lancaster when he last met the Confederation of British Industry; and what matters were discussed.

  Mr. Flannery
  To ask the Chancellor of the Duchy of Lancaster when he last met the Confederation of British Industry; and what was discussed.

  Mr. Atkins
  My right hon. Friend the Chancellor of the Duchy of Lancaster last met the CBI on 24 November 1988 when he spoke at its conference on "Business Opportunities in Urban Regeneration".

  Imports
  Mr. Squire
  To ask the Chancellor of the Duchy of Lancaster whether the Government have any proposals to reduce imports by stimulating greater United Kingdom production in specific sectors.

  Mr. Atkins
  Is it not for government to tell industry what to produce or how much. The greatest encouragement to buy British is the availability of competitive British goods and services. My Department's policies are geared to helping businesses achieve this.

  1992 Hotline
  Mr. Curry
  To ask the Chancellor of the Duchy of Lancaster how many calls have been received to date by his Department's 1992 hotline.

  Mr. Forth
  Our 1992 hotline has received over 117,000 calls since it opened on 18 March 1988.

  Alnwick and Amble
  Mr. Beith
  To ask the Chancellor of the Duchy of Lancaster what recent representations he has received about assistance from the United Kingdom or European funds for the Alnwick and Amble area.

  Mr. Atkins
  I have received representations in favour of the Alnwick and Amble travel-to-work-area's claims to assistance from the Community's reformed structural funds. I had already put a case on behalf of the area to the European Commission. The Commission announced on 8 March its intention of designating Alnwick and Amble travel-to-work-area for assistance under the funds' new objective 2.

  EC Regional Development Fund
  Mr. Knox
  To ask the Chancellor of the Duchy of Lancaster what is the value of grants allocated to England from the European regional development fund since its inception.

  Mr. Atkins
  A total of £1,602 million.

  Interest Rates
  Mr. Kennedy
  To ask the Chancellor of the Duchy of Lancaster what is his estimate of the cost to manufacturing industry of the rise in base rates since April 1988; and if he will make a statement.
  264
  Mr. Atkins
  The information requested is not available for manufacturing industry separately. The hon. Member should bear in mind, however, that a one percentage point increase in interest rates, even if sustained for a full year, costs companies far less than a one percentage point increase in pay settlements.

  Mr. McFall
  To ask the Chancellor of the Duchy of Lancaster what is his latest estimate of the annual cost to industry of recent rises in interest rates.

  Mr. Atkins
  The cost to industrial and commercial companies in the year to date of the changes in bank base rates, compared with the cost if they had remained the same as a year ago, is estimated to be about £0·8 billion. The hon. Member should bear in mind, however, that a one percentage point increase in interest rates, even if sustained for a full year, costs companies far less than a one percentage point increase in pay settlements.

  Mr. Allen McKay
  To ask the Chancellor of the Duchy of Lancaster what representations he has received on the effects of current interest rates on industry.

  Mr. Atkins
  I have received a number of representations from business about the effects of interest rates on cash flow and investment. Investment intentions remain strong, however, and the representations show overwhelming support for firm action to curb inflation.

  Inward Investment
  Mr. Wood
  To ask the Chancellor of the Duchy of Lancaster what is his estimate of how many jobs have been created by inward investment since 1983; and if he will make a statement.

  Mr. Atkins
  According to the figures known to the Invest in Britain Bureau, since 1983 the following number of jobs have been created:

  Year

  Number

  1983

  15,546

  1984

  27,102

  1985

  26,331

  1986

  17,749

  1987

  21,301

  11988

  18,307

  1 For the first three quarters only.

  Industrial Research
  Mr. Ian Taylor
  To ask the Chancellor of the Duchy of Lancaster if he will make a statement on the current level of long-term industrial research being undertaken in the United Kingdom for which his Department has responsibility.

  Mr. Forth
  Statistics on expenditure on long term industrial research undertaken by United Kingdom industry are not available. However expenditure on basic research and applied research performed by United Kingdom industry was some £154 million and £1,100 million, respectively, in 1985. DTI expenditure on Frascati R and D for 1988–89, including support for industrial R and D, is estimated to be £274 million (excluding civil aviation launch aid). In line with the policy of moving away from support for near market industrial R and D, most of this expenditure will be on longer-term R and D.

  Overseas Companies
  Mr. Franks
  To ask the Chancellor of the Duchy of Lancaster how many overseas companies set up operations in Britain in 1988.

  Mr. Forth
  I refer my hon. Friend to the reply given to my hon. Friend the Member for Tatton (Mr. Hamilton) on 15 February at columns 245–46.

  Liquidations
  Mr. Ron Brown
  To ask the Chancellor of the Duchy of Lancaster how many companies went into liquidation during 1988; and if he will make a statement.

  Mr. Forth
  There were 9,823 company insolvencies in Great Britain in 1988. This was about 17 per cent. lower than the corresponding figure of 11,895 in 1987.

  Trade Surpluses
  Mr. Jack Thompson
  To ask the Chancellor of the Duchy of Lancaster in which sectors of manufacturing Britain had a trade surplus in 1979; and in which Britain had a surplus in 1988.

  Mr. Atkins
  In 1979 the United Kingdom had a crude trade surplus in manufacturing trade in the following classes of the standard industrial classification:

  Class 24

  Non-metallic mineral products

  Class 25

  Chemicals

  Class 26

  Man-made fibres

  Class 31

  Metal goods

  Class 32

  Mechanical engineering

  Class 34

  Electrical and electronic engineering

  Class 36

  Other transport equipment

  Class 48

  Processing of rubber and plastics

  In 1987, the last year for which data is available, industries with a trade surplus were:

  Class 24

  Non-metallic mineral products

  Class 25

  Chemicals

  Class 32

  Mechanical engineering

  Class 36

  Other transport equipment

  Company Liquidity
  Mr. Nicholas Brown
  To ask the Chancellor of the Duchy of Lancaster what is his latest estimate of company liquidity; and when it was last lower.

  Mr. Forth
  The liquidity ratio for all large industrial and commercial companies is estimated by the Department's survey to be 76 per cent. at the end of the fourth quarter of 1988 on a seasonally adjusted basis. This is the lowest figure since the end of the third quarter of 1982.

  Consumers
  Mrs. Clwyd
  To ask the Chancellor of the Duchy of Lancaster if he has any plans to increase the rights of consumers.

  Mr. Austin Mitchell
  To ask the Chancellor of the Duchy of Lancaster if his Department plans any new initiatives in consumer protection; and if he will make a statement.

  Mr. Dunnachie
  To ask the Chancellor of the Duchy of Lancaster if he has plans to bring forward legislation affecting consumer rights.
  266
  Mr. Forth
  We plan to introduce regulations under part III of the Consumer Protection Act 1987 (which came into force on 1 March) governing price indications at bureaux de change and the resale of electricity and gas by landlords. Proposals will shortly be made to implement two EC directives which require the selling and, where appropriate, the unit prices of foodstuffs and non-food products to be displayed.

  We intend to amend the law on the sale and supply of goods following the Law Commissions' report and plan to amend the Consumer Credit Act and related legislation as set out in the recent White Paper "Releasing Enterprise" (CM512). We shall also introduce revised regulations on pyramid selling.

  Mrs. Fyfe
  To ask the Chancellor of the Duchy of Lancaster when he last met representatives of the principal consumer bodies; and what was the content of the discussions.

  Mr. Forth
  I visited the Welsh Consumer Council on 27 October 1988, the Consumers Association on 6 February 1989 and the National Consumer Council on 7 March 1989. On each occasion a number of current issues relevant to consumers were discussed. I also intend to visit the Scottish Consumer Council on 19 May.

  Over the past six months I have also met the chairman of the National Industry Consumer/Consultative Councils to discuss matters within their areas of interest.

  Regional Preferential Assistance
  Mr. Win Griffiths
  To ask the Chancellor of the Duchy of Lancaster what has been the percentage change in real terms in regional preferential assistance since 1978–79.

  Mr. Atkins
  Expenditure in real terms on regional preferential assistance in Great Britain in 1987–88 was 56 per cent. lower than in 1978–79. Much of the reduction has arisen from steps taken to improve cost effectiveness in terms of creating jobs at a lower public expenditure cost.

  Civil Research and Development
  Mr. Clelland
  To ask the Chancellor of the Duchy of Lancaster in which Organisation for Economic Co-operation and Development countries the proportion of gross domestic product spent by Government on civil research and development has fallen since 1983.

  Mr. Forth
  Of the twenty OECD member countries showing figures for 1983 and 1986, Australia, Netherlands, Sweden and the United Kingdom recorded a fall in Government funding of civil research and development as a percentage of gross domestic product.

  Consumer Affairs
  Mr. McTaggart
  To ask the Chancellor of the Duchy of Lancaster when he next proposes to meet the European Commissioner with responsibility for consumer affairs; and what matters he will raise.

  Mr. Forth
  I hope to meet Commissioner Van Miert again at the Council of Consumer Ministers which is provisionally planned for 1 June. The Spanish Presidency have yet to finalise the agenda for the Council.

  Consumer Protection
  Mr. Graham
  To ask the Chancellor of the Duchy of Lancaster when he last met his European Economic Community counterparts to discuss consumer protection; and what was the content of the discussions.

  Mr. Forth
  Neither my right hon. Friend the Chancellor of the Duchy of Lancaster nor I, has yet had occasion to meet EC Community counterparts to discuss consumer protection. However, I have had general discussions on consumer issues with Commissioner Van Miert, and I hope to meet my Community colleagues at the Council of Consumer Ministers which the Spanish Presidency have provisionally planned for 1 June. I also hope to meet my French counterpart, Madame Neiertz, later this year for bilateral discussions.

  Trade Deficit
  Mr. Sean Hughes
  To ask the Chancellor of the Duchy of Lancaster which Organisation for Economic Co-operation and Development countries are running a smaller trade deficit as a percentage of gross domestic product than the United Kingdom.

  Mr. Newton
  OECD estimates for 1988 suggest that 12 countries ran deficits on their visible trade. In relation to their GDP, the following countries' deficits were smaller than that of the United Kingdom.

  Italy, France, Norway, Switzerland, the United States, Austria and Iceland.

  Trade Statistics
  Mr. Turner
  To ask the Chancellor of the Duchy of Lancaster if any changes are planned in the collection of trade statistics in preparation for 1992.

  Mr. Forth
  I have nothing to add to the reply given to my hon. Friend the Member for Rutland and Melton (Mr. Latham) on 21 February at column 546.

  Manufacturing Productivity
  Mr. McCartney
  To ask the Chancellor of the Duchy of Lancaster in which position Britain lies in an Organisation of Economic Co-operation and Development league table for manufacturing productivity.

  Mr. Atkins
  No reliable comparison exists for absolute levels of productivity between different countries. But available figures do show that in the 1980s the United Kingdom has had the fastest rate of growth of manufacturing productivity of all the major industrialised countries.

  Information Technology
  Mr. Ted Garrett
  To ask the Chancellor of the Duchy of Lancaster when he expects Britain to have a trade surplus in information technology.

  Mr. Forth
  I do not know what the pattern of trade in information technology will be in the years ahead. That is something which will be determined primarily by industry and commerce.

  Regional Policy
  Mr. Jim Marshall
  To ask the Chancellor of the Duchy of Lancaster if he plans to announce any new initiatives to benefit Britain's regions.
  268
  Mr. Atkins
  An effective range of measures designed to encourage enterprise and economic growth in all parts of the country is available from DTI under the enterprise initiative, with higher levels of assistance available to firms in the assisted areas and urban programme areas. Finns in assisted areas also benefit from assistance under the regional initiative.

  Macdonald Report
  Mr. Bell
  To ask the Chancellor of the Duchy of Lancaster what representations he has received on the Macdonald report on communications infrastructure.

  Mr. Atkins
  My Department has received a number of formal and informal comments on the communications steering group report "The Infrastructure for Tomorrow", sometimes referred to as the Macdonald report. The report was published in December as a contribution to the discussions on the United Kingdom's communications infrastructure needs.

  Competitiveness
  Mr. McAvoy
  To ask the Chancellor of the Duchy of Lancaster what recent representations he has received from industry on matters affecting competitiveness.

  Mr. Atkins
  Most contacts which my Department has with industry and commerce involve matters having a bearing on United Kingdom competitiveness.

  Hardwood Imports
  Mrs. Wise
  To ask the Chancellor of the Duchy of Lancaster what steps he proposes to take to prohibit imports of hardwoods obtained from rain forests.

  Mr. Alan Clark
  The subject is one of considerable and growing concern and I have had valuable and constructive discussions with Dr. Freezdilah, executive director of the International Tropical Timber Organisation, and emphasised to him that further measures, on a Community-wide basis, can not be excluded indefinitely if no progress is evident in the general field of conservation.

  Butane Gas Sales
  Mr. Cohen
  To ask the Chancellor of the Duchy of Lancaster how many retailers have been sent(a) his Department's guidance pack on the law in respect of the sale of butane gas canisters to minors and (b) his Department's warning notices on bulk packs of gas refills; what proportion of retailers selling these items this represents; and what response he has had on this matter.

  Mr. Forth
  The guidance packs for retailers, which give advice on how to recognise sniffers and refuse to sell solvent-based products to them, are funded by the Government and distributed by Re-Solv, the anti-solvent abuse charity, through trading standards departments of local authorities, and through the police. The intention is that all retailers should have a copy. There are some 290,000 retail establishments in the United Kingdom, and 300,000 guidance packs have been produced. Re-Solv has also devised a warning notice to retailers, for suppliers to put in bulk packs of butane lighter refills, and my Department has written to all known suppliers asking them to use them. The cost to suppliers is £9 per 1,000 notices.

  M.F.B. Russell and Co. Ltd.
  Mr. Nicholas Baker
  To ask the Chancellor of the Duchy of Lancaster, what documents relating to M. F. B. Russell and Co. Ltd. are currently in his safe-keeping.

  Mr. Atkins
  Following the making of a winding-up order against M. B. P. Russell and Co. Ltd. by the court the official receiver, who is an officer of my Department and of the court, recovered certain of the company's books and papers. Persons required under section 131 of the Insolvency Act 1986 to make out and submit a statement of the company's affairs may have access to these by arrangement and they may be inspected by creditors and contributories pursuant to a court order under section 155 of the Insolvency Act 1986.

  Bananas
  Mrs. Wise
  To ask the Chancellor of the Duchy of Lancaster what is the quantity of bananas imported in the most recent year for which figures are available into Britain from the Windward Isles; and what information he has on the percentage this is of the total banana exports of the Windward Isles.

  Mr. Forth
  The United Kingdom imported 128·7 thousand tonnes of fresh bananas originating from the Windward Isles in 1987. Information is not available on the percentage of total banana exports from the Windward Isles which this represents.

  Mrs. Wise
  To ask the Chancellor of the Duchy of Lancaster from which countries bananas are imported into Britain; and if he will make a statement about banana imports after 1992.

  Mr. Forth
  In 1987, imports of fresh bananas originating from Jamaica, Dominica, St. Lucia, St. Vincent, Belize and Surinam accounted for over 70 per cent. of United Kingdom total imports. A list showing all countries from which the United Kingdom imported bananas has been placed in the Library.

  Projections of trade levels are not available.

  Regional Development Organisation
  Mr. Tredinnick
  To ask the Chancellor of the Duchy of Lancaster what level of financial support he is offering to the Regional Development Organisation in England for 1989–90.

  Mr. Newton
  I have offered the five English regional development organisations £3·005 million in grant aid for their inward investment promotion activities for 1989–90, over £214,700 more than in 1988–89. I have allocated the grant aid as follows:

  Up to £

  Northern Development Company (in the North East)

  981,750

  Yorkshire and Humberside Development Association

  660,000

  INWARD Ltd. (in the North West)

  541,000

  West Midlands Industrial Development Association

  400,000

  Devon and Cornwall Development Bureau

  422,000

  In addition the Northern Development Company has also been offered grant aid of up to £200,000 for its wider activities aimed at the regeneration of the region.

  Rolls-Royce
  Mr. Stern
  To ask the Chancellor of the Duchy of Lancaster when his Department expects to make an announcement about Rolls-Royce's launch aid applications.

  Mr. Atkins
  After extensive discussions with my Department Rolls-Royce has decided to withdraw its application for launch aid for the development of the RB211–524J and 524L engines. The company considers that it will be able to finance the development from its own financial resources and from contributions from risk and revenue sharing partners. I wish the company every success with the launch of these engines.

  Industry Council
  Mr. Redmond
  To ask the Chancellor of the Duchy of Lancaster if he will make a statement on the Industry Council held on 6 March.

  Mr. Newton
  The Council, at which I represented the United Kingdom, agreed a common position on the financing of steel social measures and considered the use of the ECU in ECSC matters. The Commission made a statement on the restructuring of the Italian steel industry.

  The Council also agreed a new SPRINT programme for technology transfer, and discussed the further promotion of European standards for high definition television (HDTV). Informal discussion also took place on the Communities shipbuilding and textile industries, and on small and medium sized enterprises.

  Self-Employed Commercial Agents
  Dr. Blackburn
  To ask the Chancellor of the Duchy of Lancaster if he will make a statement regarding the implementation of the European Community directive on self-employed commercial agents.

  Mr. Atkins
  Our present intention is that the directive should be implemented by regulations under section 2(2) of the European Communities Act 1972. The regulations do not need to come into force before 1 January 1994 and will not be made before 1992.

  Where the directive allows member states discretion our present conclusions in the light of consultations are as follows:

  (a) Agents will be entitled to commission where they have an exclusive right to a specific geographical area or group of customers.

  (b) On the termination of an agency contract, the agent will be entitled to compensation for damage in line with United Kingdom practice and not an "indemnity".

  (c) The regulations will exclude from their scope those for whom acting as a commercial agent is a secondary business activity or for whom it is the sole business activity but still a secondary pursuit.

  (d) There will be no requirement for agency contracts to be recorded in writing except where one party to the contract requests it.

  (e) The maximum period of notice will be three months for a contract that has run three years or more.

  (f) The principal will be required to notify the agent concerned within a reasonable period of his acceptance, refusal or non execution of a transaction, and also that goods have been delivered to the customer.

  Nearer the time of making the implementing regulations, there will be further consultation as appropriate on the details.

  British Film Fund Agency
  Dr. Blackburn
  To ask the Chancellor of the Duchy of Lancaster what sum of money was passed to the Secretary of State on dissolution of British Film Fund Agency; and to what purpose the money will be used.

  Mr. Atkins
  The residual moneys amounted to £6,377·27. This sum is being passed to the National Film and Television school for investment in a loan scheme designed to support the development of commercial film projects by recent graduates of the school.

  Aerospace Industry
  Mr. Jack
  To ask the Chancellor of the Duchy of Lancaster what is the value to the north-west of England's economy of the aerospace industry.

  Mr. Atkins
  The gross value added (at factor cost) by the aerospace equipment manufacturing and repairing industry in the north west (standard region) as at 1986 was £693·3 million.

  Credit Brokers
  Mr. Blunkett
  To ask the Chancellor of the Duchy of Lancaster what plans he has to change the scope of the consumer credit licensing requirements contained in the Consumer Credit Act; and if he will make a statement.

  Mr. Maude
  I refer the hon. Member to the answer that I gave to my hon. Friend the Member for Skipton and Ripon (Mr. Curry) on 26 October 1988 at column 299.

  Mr. Shersby
  To ask the Chancellor of the Duchy of Lancaster (1) what has been the average annual cost of administering the licence system for credit brokers for each of the past five years for which figures are available; how many licences have been issued in each of those years; and what proportion of the cost has been borne by applicants for such licences;

  (2) how many licences for credit brokers have been (a) refused and (b) revoked during each of the past five years for which figures are available; and what is the current charge to an applicant for a licence to trade as a credit broker.

  Mr. Atkins
  The day-to-day operation of the consumer credit licensing system is the responsibility of the Director General of Fair Trading and I shall ask him to write to my hon. Friend.

  Balance of Trade (EC)
  Mr. Cryer
  To ask the Chancellor of the Duchy of Lancaster what is the current balance of trade in textiles(a) as a whole and (b) with other European Economic Community countries.

  Mr. Atkins
  The crude balance of trade in textiles (defined by standard international trade classification, revision 3, division 65) for 1988, shows deficits of £1,700 million for total trade and of £1,340 million with the EEC.

  Gas
  Mr. Michael Brown
  To ask the Chancellor of the Duchy of Lancaster, pursuant to his answer of 1 March,272
  Official Report, column 190, if he has estimated how long it will be before effective competition is introduced into the gas supply market in the United Kingdom.

  Mr. Atkins
  [holding answer 14 March 1989]: Implementation of the Monopolies and Mergers Commission's recommendations will encourage the development of competition in gas supply. In addition the MMC recommended that, towards the end of the five years initial period for the price schedule, the Director General should review its continued appropriateness taking into account the extent to which effective competition has by then emerged, or is likely to emerge, in the supply of gas in the United Kingdom.

  Mr. Michael Brown
  To ask the Chancellor of the Duchy of Lancaster, pursuant to his answer of 1 March,Official Report, column 190, if he will make a statement about the effect that the action taken, following the publication of the Monopolies and Mergers Commission report on gas prices, will have in the short and medium term upon the overall price of firm gas charged by British Gas to large industrial consumers.

  Mr. Atkins
  [holding answer 14 March 1989]: It will lead to similar customers being charged at the same rate In the short term, this may mean a reduction in price for some, an increase in price for others. In the medium term, there should be a reduction in the average price paid.

  Mr. Michael Brown
  To ask the Chancellor of the Duchy of Lancaster what information he has as to which markets large industrial users of firm gas operate in(a) Europe and (b) the world, other than the United Kingdom.

  Mr. Atkins
  [holding answer 14 March 1989]: I do not have information on export markets categorised according to their suppliers' energy use.

  Mr. Michael Brown
  To ask the Chancellor of the Duchy of Lancaster if he accepts the conclusion of the Monopolies and Mergers Commission that high United Kingdom gas prices are a cause for real concern, Cm. 500, paragraph 8.24; and if he will make a statement.

  Mr. Atkins
  [holding answer 14 March 1989]: We have made clear that we accept the conclusion of the Monopolies and Mergers Commission that British Gas's pricing policy has operated against the public interest in various ways including higher charges for those customers less well-placed to use alternative fuels or to obtain alternative fuels on favourable terms. Therefore we have acted on the MMC's recommendation on British Gas's pricing and contract policies in the supply of gas to large users.

  Mr. Michael Brown
  To ask the Chancellor of the Duchy of Lancaster (1) if he will make a statement about the conclusion of the Monopolies and Mergers Commission, Cm. 500, paragraph 8.23, that British Gas prices for firm gas are up to 80 per cent. higher than elsewhere in the European Community; and in what way the action taken will remove such a price differential in the short or medium term;

  (2) if he will make a statement about the conclusion of the Monopolies and Mergers Commission that since the latter part of 1985 prices for fine gas have fallen by 12 per cent. in the United Kingdom compared to between 30 per

  273
  cent. and 48 per cent. in other European Community countries, Cm. 500, paragraph 8.22; and in what way the action taken will prevent such price reduction differential reccurring in the short or medium term.

  Mr. Atkins
  [holding answer 14 March 1989]: The Secretary of State welcomed the report by the Monopolies and Mergers Commission and initiated action to implement its specific recommendations on pricing and contract conditions. These will bring transparency to gas prices for large users in the United Kingdom and thus encourage the development of competition in gas supply. With regard to other European Community countries, the European Commission is proposing legal action to require greater transparency in energy pricing, particularly for large industrial users.

  Mr. Michael Brown
  To ask the Chancellor of the Duchy of Lancaster, pursuant to his answer of 1 March,Official Report, column 190, what information he has as to whether British Gas supplies firm gas to large industrial consumers in the United Kingdom on terms which are more or less favourable than those available to similar consumers in the other main gas consuming countries of the European Economic Community; and if he will make a statement about the effect that the action taken will have in the short and medium term upon such terms.

  Mr. Atkins
  [holding answer 14 March 1989]: I refer my hon. Friend to tables 4 to 6 of the OFGAS study "The
  274
  EEC Industrial Gas Market". The immediate effect of the action taken will be to ensure the same price for large users with similar consumption in the United Kingdom as is the case in most of the main gas consuming countries of the European Community. In the medium term, there should be a reduction in the average price paid by large users in the United Kingdom.

  Mr. Michael Brown
  To ask the Chancellor of the Duchy of Lancaster, (1) pursuant to his answer of 1 March,Official Report, column 190, what information he has as to whether British Gas pricing policies in relation to firm gas have distorted competition since the latter part of 1985 between major industrial consumers in the United Kingdom on the one hand and those operating in the other main gas consuming countries of the European Economic Community on the other hand; and with what effect;

  (2) whether he has received any evidence that the difference in price for firm gas between the United Kingdom and the other main gas consuming countries of the European Economic Community has had an adverse effect on the competitiveness of United Kingdom companies; and if he will make a statement.

  Mr. Atkins
  [holding answer 14 March 1989]: I refer my hon. Friend to the results of the survey of British Gas contract customers given in appendix 5.2 of the Monopolies and Mergers Commission's report on Gas (CM 500).

Preamble
The House met at half-past two of the clock: The CHAIRMAN OF COMMITTEES on the Woolsack.
Prayers—Read by the Lord Bishop of Carlisle.

Archbishop Cranmer Quincentenary
Lord Sudeley Lord Sudeley asked Her Majesty's Government:
What proposals they have to mark the quincentenary of Archbishop Thomas Cranmer this year.
The Minister of State, Home Office (Earl Ferrers): My Lords, the Government have no proposals to mark the quincentenary of Archbishop Cranmer. I understand that the Church of England will mark the anniversary by a lecture in the Great Hall at Lambeth Palace on 31st October.
Lord Sudeley: My Lords, I thank the Minister for that Answer. First, why has the Post Office refused to issue a stamp marking Archbishop Cranmer's quincentenary when a stamp has already been issued commemorating the Welsh Bible? Will the Government consider being officially represented at the service at Westminster Abbey on 7th November to mark Archbishop Cranmer's quincentenary, at which the most reverend Primate the Archbishop of Canterbury will be preaching?
Earl Ferrers: My Lords, my noble friend Lord Sudeley is concerned that the Post Office has not published a stamp to mark the quincentenary. He will realise that that is the responsibility of the Post Office and not of Her Majesty's Government.
With regard to the service in Westminster Abbey, I have no doubt that any member of the Government who receives such an invitation will consider it. So far as I know at the moment, no such invitation has been received.
The Lord Bishop of Carlisle: My Lords, is the Minister aware that in addition to the lecture which I understand will be broadcast there are also services and lectures already planned in Southwell, Cambridge, and in Cranmer's birthplace, Aslockton? There is also a special Cranmer exhibition in the British Library from 6th to 21st October.
Earl Ferrers: My Lords, I am most grateful to the right reverend Prelate the Bishop of Carlisle for furnishing me with much information to which I was not privy before. I doubt whether many other noble Lords were. The right reverend Prelate has used this occasion to give a certain amount of publicity for what has been undertaken to commemorate Archbishop Cranmer and I am sure that the House is grateful for that.
Lord Cledwyn of Penrhos: My Lords, are the noble Earl and the House aware that all Welsh Presbyterians fully support the plans that the right reverend Prelate has announced?
Earl Ferrers: My Lords, I was not, but I now am.
Lord Sudeley: My Lords, will the Government entertain any proposals for a parliamentary service to celebrate the quincentenary of Archbishop Thomas Cranmer in St. Margaret's Church, Westminster? Are the Government aware of any proposals to erect a statue to Archbishop Cranmer in St. Paul's churchyard, similar to the statue already erected to John Wesley?
Earl Ferrers: My Lords, with regard to a service and whether the Government should do anything about it, we take the view that this is a matter for the Church and not for the Government. I have no information that I can give to my noble friend about a possible statue.

Bus Operators: London Airport Charges
2.39 p.m.
Baroness Burton of Coventry Baroness Burton of Coventry asked Her Majesty's Government:
Whether they are aware that the Civil Aviation Authority has received complaints from the Bus and Coach Council concerning proposed plans by the British Airports Authority plc to increase charges to bus operators taking passengers to London's main airports, and that these have been referred to the Office of Fair Trading, and, if so, whether they have been informed of the present position or received any indication that reference to the Monopolies and Mergers Commission is under consideration.
The Parliamentary Under-Secretary of State, Department of Transport (Lord Brabazon of Tara): My Lords, I understand that the Civil Aviation Authority and the Office of Fair Trading both received representations from the Bus and Coach Council towards the end of last year. The Director General of the Office of Fair Trading is making inquiries in order to establish whether a formal investigation is appropriate and whether a reference should be made to the Monopolies and Mergers Commission. We must await his decision.
Baroness Burton of Coventry: My Lords, will the Minister tell the House whether any of these proposed charges have been implemented already, and, if not, whether they are likely to be implemented before the Office of Fair Trading makes its report? If I were to give the Minister details of the charges proposed to these captive customers, I hope that he would be as horrified as I am. Does he know any of the figures involved?
Lord Brabazon of Tara: My Lords, on the first point of the noble Baroness, I understand that the BAA does not propose to bring in any of the new charges pending the findings of the Office of Fair Trading. I am aware of the scale of charges proposed. That is a matter for the BAA in the first place but it is now for the OFT to decide whether it should investigate.
Lord Underhill: My Lords, the Minister referred to complaints from the Bus and Coach Council which were being considered. Do I understand correctly that Section 36 of the Airports Act 1986 makes provision for relevant charges? In a later section it provides that if the CAA—not any other complainant—so thought, it is empowered to raise the matter with the Monopolies and Mergers Commission? Is that the position?
Lord Brabazon of Tara: My Lords, without reference to the Act I am not sure that I can confirm that position. However, the Airports Act 1986 opened up the industry to the competition legislation of the Fair Trading Act 1973 and the Competition Act 1980, to which the industry was not subject before the Act.
Baroness Burton of Coventry: My Lords, with reference to the Minister's answer, do the Government approve of the way in which the British Airports Authority exploits its monopoly position, especially since privatisation? Arising from that, does he know that the franchise charges at Heathrow and Gatwick are so high that duty free shopping there is among the most expensive in the world?
Lord Brabazon of Tara: My Lords, so far as concerns BAA exploiting its position, we are satisfied that the provisions for economic regulation in the Airports Act 1986 are sufficiently vigorous. They are subject to five-yearly reviews by the MMC on a wide range of the airports' business. That would encompass charging the proposed charges for coaches. Duty free is a commercial decision for BAA. I understand that its policy requires a saving of at least 40 per cent. on average UK high street prices. Duty free, of course, is a discretionary purchase on the part of the customer.
Lord Williams of Elvel: My Lords, would any reference to the Monopolies and Mergers Commission be under the Airports Act or under the Fair Trading Act? If it is under the Airports Act, can the Minister explain the role of the Director General of Fair Trading?
Lord Brabazon of Tara: My Lords, the Airports Act opened up the industry to competition legislation and made the Fair Trading Act and the Competition Act applicable to it, which it was not before. It is under those Acts that this reference was made.
Baroness Burton of Coventry: My Lords, can the Minister guide me? Is there any way in which we can find out when the Office of Fair Trading is likely to make this report to avoid our having continually to put down Questions to the Minister asking for the same information?
Lord Brabazon of Tara: My Lords, I cannot say I am afraid. That is in the hands of the Office of Fair Trading and is not a matter in which I can intervene.
Lord Underhill: My Lords, can the Minister confirm or deny whether the Civil Aviation
230
Authority has itself referred the matter to the Monopolies and Mergers Commission, because that would appear to be rather important?
Lord Brabazon of Tara: My Lords, I do not believe that the Civil Aviation Authority has referred this matter to the Office of Fair Trading. As I said in my original Answer, the Bus and Coach Council asked for this to be looked at. If I am wrong, I shall write to the noble Lord.

Firearms (Amendment) Act: Police Staffing
2.45 p.m.
Lord Swansea Lord Swansea asked Her Majesty's Government:
How many police forces have so far stated their intentions of taking on additional staff in consequence of the passing of the Firearms (Amendment) Act, and how many people this comprises.
Earl Ferrers: My Lords, the appointment of staff is a matter for individual chief officers of police. The information which the noble Lord requests is not kept centrally, and could be obtained only at disproportionate cost.
Lord Swansea: My Lords, I am disappointed by my noble friend's reply because the information that I have obtained indicates that police forces throughout the country are taking on additional staff greatly in excess of the estimate of 80 additional staff which was foreshadowed at the time the Act was introduced.
Earl Ferrers: My Lords, I had a funny feeling that my noble friend would be disappointed with that reply, but he will understand that chief officers are required to notify my right honourable friend the Home Secretary of the appointment of uniformed staff but not of the appointment of civilian staff. Therefore my right honourable friend does not know how many extra civilian staff have been taken on for these purposes.
My noble friend said that we expected 80 staff to be taken on. This was inevitably an assessment. we believed it to be a fair assessment and have no particular reason to think that the assessment was way out.
Lord Mishcon: My Lords, is the noble Earl aware that we on these Benches are still firmly behind the Government in their general policy in relation to the Firearms (Amendment) Act and very much hope that the passing of that Act will have a good effect on the Motion that the House is about to discuss?
Earl Ferrers: My Lords, I am grateful to the noble Lord, Lord Mishcon. When he rose, I d id not expect him to say that he was firmly behind the Government, because that is not a familiar posture. However, I am grateful to him for that. 'The Firearms (Amendment) Act was introduced to try to preserve the peace and to take proper precautions over

231
dangerous weapons. I hope that it will have that effect.
Lord Swansea: My Lords, further to my noble friend's reply, there is an uncomfortable feeling that this increase in bureaucracy, for want of a better word, will lead to a further swingeing increase in the fees for shotgun certificates. Can he confirm or deny that?
Earl Ferrers: My Lords, the fees for certificates and registration should be set at an economic level to recover the full costs of the licensing system. The costs of increased manpower will be offset by an increase in the shotgun certificate fees, which have not yet been set.
Lord Renton: My Lords, on that matter, would not a small but modest increase in bureaucracy be well justified if fewer offences were committed with firearms?
Earl Ferrers: My Lords, I think that my noble friend is right. There will be, as he puts it, a small but modest increase in bureaucracy, if by that he means the anticipated 80 extra people who will be required throughout the country to process this. I do not think that that figure is unreasonable.

Channel Tunnel Rail Link
2.50 p.m.
Lord Kennet Lord Kennet asked Her Majesty's Government:
Whether they intend to allow British Rail to decide on a route through Kent for the fast rail link before conducting any environmental assessment, and if so how they or British Rail can assess what is the most cost-effective route without an assessment of relative environmental costs.
Lord Brabazon of Tara: My Lords, British Rail has had quite detailed environmental assessments carried out by consultants and the route which they have now announced was heavily influenced both by these assessments and by the environmental criteria established by Kent County Council. They have also taken into account the estimated costs of different routes and different levels of environmental treatment. British Rail estimates that the costs of environmental protection on the chosen route amount to some £500 million or 30 per cent. of the total costs of the project.
Lord Kennet: My Lords, while it is clearly good news that British Rail has indeed obtained an environmental assessment of the whole complex of possible routes, can the Government assure the House that such an environmental assessment of all those routes which might have been reasonable will be before them when the Select Committees exercise their duty of looking after the country as a whole?
Lord Brabazon of Tara: My Lords, I cannot give the noble Lord the assurance that he seeks that a full
232
environmental impact study of each of the possible routes will be available. As I said in my original Answer, they were taken into account. There will now be a more detailed environmental assessment of the preferred route which will be completed by the time British Rail deposits a Private Bill.
Lord Underhill: My Lords, has not the Prime Minister stated that the costs of the link must be borne by its users? If that is correct, will the Government reconsider the position? Assuming that there is an environmentally satisfactory link, will it not be of value throughout the country including through passenger trains from far north of the South-East? Though freight trains will not use the link, British Rail state that it will enable far more freight trains to be used on the existing link, and 75 per cent. of its freight trains come from beyond the South-East. Is the new link not of national importance, so should not the cost of building the infrastructure be borne by the state as a whole?
Lord Brabazon of Tara: My Lords, the Government's view is clear. It is that the route should be financed by its users. If they happen to come from north of London they must share the proportion of the cost.
Lord Bruce-Gardyne: My Lords, I listened with interest to my noble friend's reply to the last question and found it most reassuring. Can he confirm that, regardless of the future escalation of the costs of the project—which on previous experience may be two, five or 10 times more—and the Government's insistence that under no circumstances must it be a burden on the taxpayer, the route will always be maintained?
Lord Brabazon of Tara: My Lords, I can give my noble friend the assurance that he seeks. At Question Time on 9th March my right honourable friend the Prime Minister said:
"It is Government policy that the users of the new line should pay for the full costs, including environmental costs"—[Official Report, House of Commons, 9.3.89; col. 1029.]
Lord Kinnaird: My Lords, can the Minister say whether, when leaving the London terminal, the link will be routed underground?
Lord Brabazon of Tara: My Lords, yes, the first part of the route from London will be underground. Noble Lords may have received a copy of British Rail's proposals for the Channel Tunnel rail link. If my noble friend has not received a copy I shall ensure that he does so.
Lord Annan: My Lords, is the noble Lord correct in saying that the whole of the rail link in London will be underground? Is he aware that the plan envisages the demolition of nine acres to the south-south-east of King's Cross station? The area contains a number of unlisted buildings, including some exquisite buildings which were erected at exactly the same time as King's Cross station, such as Keystone Crescent. Is the Minister aware that in the area there is a flourishing Italian community whose residents

233
came to this country at the time of Mussolini's dictatorship, thus escaping from the one indubitable blessing that he gave to Italy; that the trains ran on time?
Will the noble Lord look into the matter? Does he agree that there is almost no reason why the high speed trains should emerge from their tunnel in all their glory above ground when they could perfectly well emerge in the station area underground as they do in the termini in New York and, as they used to do, in the Gare Quai D'Orsai in Paris?
Lord Brabazon of Tara: My Lords, I did not say that the whole of the link in London would be underground. I urge the noble Lord, Lord Annan, to look at the proposals put forward by British Rail. When the Bill comes before Parliament there will be an opportunity for all such matters to be discussed and petitions to be dealt with.
Lord Kennet: My Lords, is the Minister giving the House the welcome news that the portion of the link which it is proposed to run from Waterloo from Peckham Rye is now to be underground? On the maps it is shown as running above ground at present.
Lord Brabazon of Tara: My Lords, no, I was referring to the new link to King's Cross. I urge the noble Lord to look at the maps and see what they show, rather than my trying to explain them in this House at Question Time.
Lord St. John of Fawsley: My Lords, is my noble friend aware that many people will support the noble Lord, Lord Annan, in his fears for the destruction of that historic part of London? Can the Minister assure the House that Keystone Crescent, which is as fine a crescent as Pelham Crescent, will not be destroyed, because that is my understanding?
Lord Brabazon of Tara: My Lords, no, I cannot give that assurance because I do not know whether it will be destroyed under the procedure. I cannot be an expert on every mile of the track. However, when the Bill comes before Parliament there will be an opportunity to examine all such issues.
Lord Cledwyn of Penrhos: My Lords, is the Minister aware that there is a widespread belief that the principle that the "users"—the word is not precisely defined—should bear the heavy cost is not equitable? Can he say whether that issue can be considered by the Committee when the Bill goes through Parliament.
Lord Brabazon of Tara: My Lords, I imagine that anything can be considered when the Bill goes through Parliament. However, it remains the Government's view that the user should pay. They will need to be convinced that the link is a viable concern before British Rail receives the go-ahead to submit a Bill.
Lord Kennet: My Lords, does the Minister agree that the Bill will stand a much better chance of passing through unmangled if Parliament is not
234
required to give a simple yes or no answer to one route, but is offered a number of alternatives from which to choose?
Lord Brabazon of Tara: My Lords, no, I cannot agree with that suggestion. I believe that to have a wide choice of routes would be a recipe for disaster and on that basis the Bill would stand no chance.

Crimes of Violence: Public Protection
2.57 p.m.
Lord Reay Lord Reay rose to call attention to the incidence of crimes of violence and the case for a full range of methods for dealing with them and for protecting the public, including support for an effective police force; and to move for Papers.
The noble Lord said: My Lords, the national crime statistics recently started to show some encouraging signs of improvement. In particular, the number of burglaries committed in the 12 months to September, 1988, fell by some 8 per cent., having also fallen in 1987. Burglary, although classified as a crime against property rather than a violent crime, is a much feared crime. One must sincerely hope that the development reveals a true change of trend.
Some other crimes against property also showed falls. However, violent crime, which accounts for 5 per cent. of all crime, rose during that period by 13 per cent. and by 12 per cent. in 1987. In the Metropolitan District violent crime rose in the three decades since 1957 by 100 per cent., 100 per cent. and 70 per cent. respectively. Whether the rate of increase continues to slow, the fact that it rises at all and the absolute levels that it has reached are surely unacceptable.
I should like to enter a caveat. The figures that everyone uses are those for recorded crimes. Actual crime rates can be considerably lower due to under reporting—
Noble Lords: Higher, higher!
Lord Reay: Under reporting may take place for many reasons. The authors of the analysis of the 1984 Home Office British crime survey took the view that during the 1970s, when the statistics of recorded crime showed an increase in burglary of 100 per cent., there had been an increase of only 20 per cent., the discrepancy being accounted for by an enormous increase in the reporting of burglaries. That was attributed to the rapid spread during that period of both the telephone and insurance of household goods, the former making reporting easier and the latter encouraging the expectation of some measure of redress.
It is also possible that the reporting of violent crime may have increased, especially domestic violence and rape, since a more sympathetic response has come to be expected from the police and the courts. The next British crime survey is due to be published by the Home Office in a few months' time and it will be interesting to see what commentary it gives both on the improved figures

235
for property crime and on the continuing poor figures for crimes of violence.
However, caution is in order when it comes to reading trends from a few statistics of recorded crime. One of the most significant developments in the field of the administration of criminal justice in recent years has been the increase in sentences for serious crime, both as a result of increased maximum sentences set by Parliament and the increased use of longer sentences by the courts. In the past four years sentences for crimes of violence against the person have risen by 20 per cent., for rape by over 60 per cent. and in the past two years for robbery by over 25 per cent. That trend goes back further to 1979 and the change of government in that year. Previous to that, the public was cold-shouldered as regards penal policies. The ideology ruled that crime was the fault of society. Today the public position has been largely restored—and not all will welcome that. However, it seems to me that the tide of public confidence could not be allowed to go on ebbing away from penal policy and that a reversal of policy was unavoidable.
That change of sentencing policy has resulted in a rising prison population for which the Government have had to cater with a massive £1 billion prison building programme. That is probably the largest prison building programme since imprisonment replaced transportation in the middle of the last century as the principal means of removing criminals from circulation in society.
Prison serves the essential purpose of excluding dangerous criminals from society, but to what extent sentences will act as a deterrent to others we shall probably never know precisely. In any event, imprisonment is by far the most expensive method of dealing with offenders and all too often prisons are places where minor criminals graduate into more important ones. As an indication of the expense of imprisonment, noble Lords may like to reflect on the fact that the ratio of prisoners to prison officers, even for our expanded prison population, is 2.5 per officer.
I am sure that the way forward for sentencing policy is the direction laid down in the Home Office's enlightened Green Paper entitled Custody, Care and the Community with the further development of the custom and practice of punishment in the community. Ideally, prisons should be reserved for those who commit the most serious crimes, perhaps for those who commit violent crimes. However, we are far from that point at present. Only 20 per cent. of the prison population are violent offenders. One of the major problems is what to do with the persistent offender. Today, such offenders are sent to prison in large numbers as much in despair as to what to do with them as for any better reason.
I warmly welcome what the Government have done to put more emphasis on the plight of victims. Too often in the past all "thinking of the victim" meant was increasing the term of imprisonment for the offender. Today some attention is paid to victims' real needs. In recent years the Home Office has tripled its funding of the National Association
236
of Victim Support Schemes, which now has over 300 local schemes affiliated to it. The Criminal Injuries Compensation Board paid out £45 million in 1987–88 and received 30,000 applications. In addition, courts are now required to give reasons if they do not award compensation to be paid by the offender in all cases where injury, damage or loss has occurred. Where the courts have hold of them, awards can be made from the proceeds of crime. Courts are now more sensitive to the needs of child abuse victims and the victims of rape. I am sure that greater consideration could be extended to the victms of other crimes.
I also approve of the general strategy of the Government in seeking to involve other agencies and groups in a feeling of responsibility for reducing the level of crime in society, whether by neighbours in Neighbourhood Watch, radio taxi drivers in Taxi Watch, licensees and brewers in the sale of alcohol, or business and ethnic leaders in the inner cities. I believe that the Government are right, as far as possible in modern conditions, to try to encourage where they can the development of a sense of community.
The Government have taken other initiatives, many of which will be fresh in noble Lords' minds: restrictions of knives and firearms, confiscation of drug traffickers' assets and restrictions on the sale and consumption of alcohol in public places. All those measures were introduced by the Government with the aim of containing violent crime and all are too recent for their effect yet to be measured.
If I could single out one for comment, perhaps I may say that everything possible must be done to see that the prohibition on the carrying of knives without good reason should succeed. It is, above all, the fear of the use of knives which is terrifying and demoralising for those who come up against it, whether as directly targeted victims or as helpless bystanders who are only too often castigated for not intervening. The habit of carrying knives is a form of street terrorism and should be stamped out. It may well be that the maximum penalty of £400, which the offender is more than likely not able to pay, is inappropriate for this offence.
Above all, the Government have distinguished themselves by their support of the police. Since 1979 there has been an increase in real terms in spending on the police of over 50 per cent., more than for any other public service. Police manpower has been increased in the same period by 13,000 officers and 7,000 civilians. In addition, 1,100 more officers will be added this year. Ways are also being constantly found of making more officers available for duty; for example, by the recent decision to privatise escort duty. That is a proposal which I favour, although I believe that in due course we should scrutinise carefully the regulation of the burgeoning private security industry. That is a great contrast with the state of demoralisation which pertained when the Government first came to power in 1979. The police are our front line against crime. They do a magnificent job and deserve all the support they can get.

237
I welcome the participation of all noble Lords in this debate but none more than that of my noble friend Lord Elton. Following the publication this week of his committee's report on discipline in schools, it will be particularly interesting now that his tongue is untied to hear what he may have to say on that crucial subject. I do not intend to say anything about it nor do I intend to say anything about the responsibilities of parents. However, I hope that other noble Lords will do so. Instead, I want to devote the remainder of my speech to describing the consequences of some research I made in London—I emphasise that it was restricted to London—and to some reflections prompted by it.
Robbery on the Underground in the past four years has caused much concern. Indeed, the noble Lord, Lord Harris of Greenwich, introduced a debate on the subject not very long ago. Accordingly, I arranged to visit the headquarters as well as one of the two sub-divisional stations of British Transport Police who, with the help now of officers from the Metropolitan Police, are responsible for policing the Underground. A very impressive closed circuit television system is being introduced. Whatever happens at any one of the points covered by the operational cameras at Underground stations, and whatever in the recent past has happened there, can be summoned immediately on to the screens at headquarters. The eventual aim is to cover the majority of British Transport's 250 stations, some of them with up to 15 or 20 cameras. This rather Orwellian system will, it is to be hoped, provide a substantial deterrent for a crime which is deeply damaging to London's reputation.
I also visited the police in Brixton—an out standing force in a heavily policed division which has one of the highest crime rates in London. I went out with their 23-man robbery squad which has had a considerable measure of success in reducing and containing street and off-street crime. Incidentally, a few days previously one of the squad's members, Constable Peter Lowton, had been grievously injured after being pushed under a bus while attempting to make an arrest, which indicates the danger of the squad's daily job.
The pursuit of these two lines of inquiry confronted me with the nature and the volume of violent crime which prevails in our inner cities and which threatens to seep out from there to poison life in the rest of the capital. It saddens me to have to say so, but it appears to be the case that the large majority of robberies committed in these areas is committed by black youths. By "black" I mean the West Indian African or Afro-Caribbean population, as it is variously called. Such is the volume of that crime—in 1987, 11,000 out of the total of 18,000 robberies of all kinds committed in London were street robberies—that even the total for all forms of robbery in London now gives the appearance of becoming black dominated.
Let me give some statistics. In figures released last week by the Home Office (the reference is Statistical Bulletin, issue 5/89 table 5) covering the Metropolitan Police District—where, let it be remembered, 60 per cent. of all robberies in the country take place—of those arrested for street
238
robbery in 1987, 61 per cent. were black and 34 per cent. were white. Another table, table B, shows that 85 per cent. of the blacks arrested were aged under 21. Table 5 also gives the figures for all robberies in the Metropolitan Police District.
The Lord Bishop of Manchester: My Lords, I am grateful to the noble Lord for giving way. In quoting these statistics, can he also relate them to levels of unemployment and poverty in the areas of which he is speaking?
Lord Reay: My Lords, the right reverend Prelate is down to speak later and he will have an opportunity to make the point. If he gives me a hearing I assure him that I shall give him one when he makes the point that he wishes to make.
Table 5 of the Statistical Bulletin also gives the figures for all robberies in the Metropolitan Police District. The ethnic breakdown for those arrested is as follows. In 1985, 50 per cent. black; 45 per cent. white. In 1986, 49 per cent. black; 43 per cent. white. In 1987, 54 per cent. black; 41 per cent. white. In all these cases a small minority only were committed by other races.
As regards Underground robbery. figures were made available to me by British Transport Police which show that of reported robberies, the ethnic breakdown of offenders as described by the victim (leaving out the small number of cases where this is not known) is as follows. In 1987, while 10 per cent., black 80 per cent., mixed (in mixed-race gangs) 8 per cent. In 1988, white, 10 per cent.; black 70 per cent.; mixed 19 per cent.
Street robbery has been concentrated, until now at least, in the inner cities. Ten or 20 times more street robberies are committed in a year in boroughs like Hackney, Harlesden or Brixton than in outer London boroughs or in police divisions within Westminster or Chelsea. Brixton is the worst division with 1,000 cases a year and half as many again of the technically non-violent crime of snatch theft—snatching handbags, and so on. That is a very substantial contribution to the total for robbery in London—indeed to the total for the country as a whole—for an area barely three square miles in extent.
For the most part, street robbery is committed locally with periodic forays into the Underground or to prey upon crowds at pop concerts or other events further a field. It is the product of a street-orientated criminal sub-culture whose members have no other employment but crime. They have their own drugs, their own weapons, their own language; and this reservoir is constantly being fed from the bottom with youngsters of 12 and 13. Such an environment, if permitted to flourish, breeds worse crimes.
The recent Home Office Research Study 106, Concerns About Rape, in a rare excursion into the subject of the ethnicity of offenders, analysed the result of two surveys into rape in the two London boroughs of Islington and Lambeth, which were chosen because they have high levels of recorded rape. In Lambeth, with a black population of 14 per

239
cent. of the total population, 72 per cent. of rape offenders were reported as black. In Islington, with a black population of 6 per cent., 43 per cent. of the offenders were reported as black.
Perhaps the figures I have given will help put to rest the corrosive myth that "over-representation", as it has come to be called, of an ethnic minority in the prison population is solely or principally due to racial prejudice in the administration of criminal justice and bears little or no relation to the actual commission of crimes. The Home Office study quite properly concludes with the observation that the figures involved in the studies on rape were small and that too much should not be read into them. It recommends that further study should be undertaken.
The Home Office, as we have seen, does not entirely suppress figures on crime in relation to race. In fact, I think the prevailing tendency is probably towards more open discussion. Nevertheless, these figures are hardly common currency. They are not published in the newspapers. It has been a forbidden subject. I found that the Metropolitan Police—I do not know if my contacts were typical—were immensely reluctant to discuss crime in terms of race. I respect and admire them for that. I completely accept the tremendous importance of promoting good relations between the police and the ethnic minorities. My visit to Brixton confirmed my view that the police have made great strides in this direction.
Nevertheless, I believe that the taboo should be broken. The discussion of race and crime should not have to be conducted either in a whisper or with Nazi slogans, with nothing in between; for to continue to cloak the subject with silence for political reasons is, for one thing, to confer a sense of immunity on the perpetrators of these violent crimes. To do that is monstrously unfair to those others who share those areas where crime is endemic, who have to live in bandit country, who cannot leave and who largely provide the prey for the criminals. It is also to fail in our duty to the vast law-abiding majority of the black population whose members have that much harder a task in setting their children on a lawful career.
I would not want discussions on the subject to be recriminatory. The ethnic minorities are here to stay. They are British. Forty per cent. have been born here. Young blacks in the inner cities must be protected from enrolment into the criminal sub-culture around them. They must be brought up to have lawful aspirations. We must ensure that it is realistic for them to have lawful aspirations. We must offer them a proper place in society; and they must be willing to take it. It will no doubt take generations and the dedication of many good men and women in many different professions in both communities. But it is an urgent task. It cannot start too soon. It requires all hands. My Lords, I beg to move for Papers.
3.20 p.m.
Lord Elwyn-Jones: My Lords, the House will be grateful to the noble Lord, Lord Reay, for enabling
240
us to discuss today a problem causing great concern and even creating a sense of fear in our community; namely, the high incidence of crime and particularly of crimes of violence. From certain passages in the noble Lord's speech one would have thought that the advent of a Conservative Government had reduced that volume and more or less resolved it. That is caricaturing it a little, but that is the picture. Sadly, that is not the factual situation.
Some comfort was derived recently from the fact that there had been a 3 per cent. decline in the number of crimes that had taken place in the past 12 months. But one gets little comfort from that 3 per cent. when the number of crimes recorded by the police in the year ended September 1988 was 3,786,000. That is the size and dimension of the problem now. It is 3 per cent. less than the figure for the previous year but in those terms, alas, very little by way of comfort can be derived.
That is especially the case when, as I believe the noble Lord indicated, that comparatively minute diminution has to be weighed against a substantial increase in most serious crime, particularly of crimes against the person. I shall give a few examples. I am only giving the years because of some of the observations of the noble Lord. In 1979 there were 629 homicides and in 1987 there were 688. The number of woundings and assaults almost doubled between 1974 and 1984. In 1979 there were 158 attempted murders and in 1987 there were 291. In 1979 there were 1,170 cases of wounding and in 1987 there were 2,471. I am not attributing the increase to the existence of a Conservative Government, but I am entitled to rebut the opposite doctrine put forward by the noble Lord.
Of the more serious offences against the person—namely, those endangering life—together with other more serious crimes in the field of personal violence, in 1984 10,700 cases were recorded. Worse has been happening since. I believe that the whole House agreed with the noble Lord when he indicated that the amount of officially-recorded crime is considerably less than the true whole picture of crime. Much violent crime is unreported. A British crime survey carried out in 1983 by Hough and Mayhew suggested that only about a quarter of wounding offences and sexual assaults is reported and little more than one-tenth of the robberies. So the situation is a serious one.
How has this crime been dealt with in the courts? It is as well to recognise at the very outset that the courts, the police, the probation service and the prisons—all that machinery of justice—comes into the picture only when the crimes have been committed. The Motion before the House does not embark on an analysis of the causes of crime. But the noble Lord gave his own views as regards some of the causes. Among other things he referred to the conditions in the inner cities which give rise to crime. The Prince of Wales said a year or so ago:
"the desperate plight of the Inner City areas is well known with the cycle of economic decline leading to physical deterioration and countless social problems. It is only when you visit these areas …that you begin to wonder how it is possible that people are able to live in such inhuman conditions".

241
That is the background to a great deal of inner city crime. In America in 1968, it is true, there was an examination by President Johnson of crime and civil disorder. He stated:
"The only genuine, long-range solution for what has happened lies in an attack—mounted at every level— upon the conditions that breed despair and violence. All of us know what those conditions are—ignorance, discrimination, slums, poverty, disease, not enough jobs. We should attack these conditions because there is simply no other way to achieve a decent and orderly society in America…".
The noble and learned Lord, Lord Scarman, agreeing with those conclusions, in his report on the Bristol riots, said that the words of President Johnson are:
"as true of Britain today as they have been proved by subsequent events to be true of America".
Therefore, looking at the causes of crime one has to recognise the harsh facts that have been reported on. I shall not go any further at this stage of the debate into the causes of crime, although it is vital that that should be ever present in consideration of these matters. In dealing with the crimes that have been committed, it has been pointed out by the noble Lord that over the past decade we have sharply increased our readiness to imprison offenders. That is undoubtedly so. In turn that has had serious consequences, one of which has been the soaring prison population, plus appalling overcrowding and low morale in the prison service. I believe that in this field we have something to learn from the European experience in countries not dissimilar to ours in the character of the crimes and the problems that those countries have to meet.
It is interesting that, whereas in West Germany the prison population has fallen by almost 20 per cent. since 1983, that of England and Wales has risen by 12 per cent. Yet West Germany, which is a country not dissimilar to ours, has shown that the prison population can be dramatically reduced and without risk to the public. Our levels of imprisonment are currently the highest in the EC. We have the most punitive courts in the EC. Therefore any suggestion or explanation for the increase in crime in this society that we have been soft on criminals is very wide of the mark. Indeed we head the prison population league table with 95.8 prisoners per 100,000 of our population. France has 88.9 prisoners per 100,000 of population. As a proportion of our population, we in the United Kingdom have more people in prison than any other European country. It is not therefore a lack of severity of treatment and use of imprisonment that is at the root of our problems. We face the fact that the number of prisoners continues still to rise. That tendency has been marked in the course of the past decade.
The statistics of NACRO show that the average length of a prison sentence imposed on an adult male rose from 10.9 months in 1983 to 15.1 months in 1987. This is why the prisons are becoming more and more full. I am not for the moment talking about violent offenders. They present a special and dangerous challenge to our society which must be addressed with due severity for that reason. However, far less than a quarter of those in prison have committed crimes of violence, robbery or sex. Three-quarters of our prisoners are free from the
242
taint of violence. The matter has been dealt with in our courts by that severity of outcome. Curiously little attention seems to have been given to the exhortation of the Lord Chief Justice in 1980 in the case of Upton. He exhorted the lower courts to be sparing in the use of custody, saying that,
"the time has come to appreciate that non-violent petty offenders should not be allowed to take up what has become valuable space in prison".
I give the Government due credit for recently making clear in their Green Paper Punishment, Custody and the Community that the time has come for society to try to deal with more offenders in the community rather than in prison. That has been declared but we still await the pursuit of that line of approach. For non-violent offenders there are already available in our penal system many constructive and hopeful alternatives to prison. I refer to greater use of community service orders, probation, day centres, intensive supervision for young offenders, and so on. Those alternatives to prison are now available.
Experience seems increasingly to show that such measures to deal with non-violent offenders of the run-of-the-mill kind would be likely to protect the public more effectively from crime than what I submit is the present excessive use of custody. A saddening feature of the present position is that the degree of recidivism among prisoners should be so high. Overall, more than half the males and one-third of the females in prison are recommitted to be tried for fresh crimes within two years of their release from prison.
Sadly, the rate is even higher for teenage offenders, two-thirds of whom reoffend within two years. The highest rate of all is for 15 and 16 year-old boys leaving youth custody centres. That is a sad image and picture. It would appear that harsh punishments, in particular the widespread use of custody for juvenile offenders, has little deterrent effect on those subjected to them. Indeed, 70 or 80 per cent. of juveniles leaving young offender institutions are reconvicted within two years. There are no easy solutions to the problems that we face.
What of violent offenders? Clearly, they must be dealt with with due severity to mark the seriousness of what they have done. A term of imprisonment is normally necessary in such cases if only to put the offenders out of circulation for a while and for the protection of the public. However, once that has been done and they are in prison, what is then needed for them as much as for any other prisoner is the provision of better facilities in our prisons for work training and for education. Unhappily, the overcrowding of the prisons means that the opportunities for hard-worked prison officers to engage in rehabilitation are very limited indeed.
Efforts are made and there have been many cases where, as a result of the remedial proceedings that are available within limits, once-violent criminals have been through the training and have been greatly helped. Even now some emerge able to play an honest and continuing part in our society. However, as the Carlisle Report says—and I am delighted to see that the noble Lord, Lord Carlisle of Bucklow, is to address us—much more should be done in our

243
prisons to prepare inmates for their eventual release. I hope that we shall hear from the noble Lord on that and similar topics.
The conditions in our prisions make remote the possibility of rehabilitation. The report to which I have referred quotes the observations of Sir Alexander Patterson and describes him as,
"the most influential prison commissioner of the inter-war years".
He says that people are sent to prison as punishment and not for punishment. I hope that we shall not lose sight of that basic guidance. The report asks, and does not answer, whether the Pattersonian dictums are still valid. Perhaps when the noble Earl comes to reply to the debate he will answer that question.
The problems that we face in this area are serious ones. The Motion refers to the need for support for an effective police force. That need will, I am sure, be generally accepted in the House. I expect that there will be general support too for regular community policing. A police constable on his own beat builds up links and gets to know the area; and the area gets to know him. That is a well-known and well-established benefit. I ask the noble Earl whether there are enough police constables to make a reality of local community policing. A report of the GLC panel of inquiry in 1984 said:
"A police presence in uniforms being around, showing that the police do really care what happens on the estate, has had a salutary effect".
I suspect that that statement will be generally agreed in the House. The police can also contribute to crime prevention through the assistance of crime prevention officers and advisers on security of dwellings. Indeed, I know that we who reside in Brighton have found them to be extremely co-operative and their help extremely valuable.
When we come to the end of the story, the truth is that the challenge of crime is something which faces every individual and every family in the community. Therefore it is up to all of us to play our part, perhaps, without being too pompous about it, in our own personal family and school behaviour and also in a general sense. It is not a problem which can be left to the police and the courts; it is a problem that the people of this country must face. Indeed, we have faced graver dangers in the past, and we can also face this one.
3.40 p.m.
Lord Harris of Greenwich: My Lords, perhaps I may begin with an apology because I am afraid that I cannot be here at the end of the debate. I apologise to the House for that. All that I can say in my own defence is that this is the first time that I have had to use that form of words since I have been in the House. However, so far as I am concerned, it is unavoidable.
I certainly join with the noble and learned Lord, Lord Elwyn-Jones, in thanking the noble Lord, Lord Reay, for having raised an issue of the highest public importance. I think that we all recognise that crimes of violence have risen in a most alarming fashion over the past decade. Indeed, the number of
244
robberies has risen during that period by 150 per cent; the number of cases of rape has also risen by 150 per cent; and the overall number of cases of violence against the person has risen by somewhere in the region of 80 per cent.
On the London Underground, to which the noble Lord, Lord Reay, referred, robberies have doubled in a period of only two years. Moreover, there has been a menacing increase in the number of cases of sexual assault. Therefore it is little wonder that in such a situation a public opinion survey has indicated that more than half the women who use the London Underground feel concern, and sometimes alarm, when they do so.
I do not propose to go over the ground covered in our recent debate on the position of the London Underground. All I shall say is this. I do not think that it is any longer sensible to have two separate police forces doing basically the same job: one, a force of 28,000 working above ground; the other a very small force of 400 working below ground. It seems to me that within the next few years we shall have to look very seriously at that question and consider whether it would be sensible to absorb the police on the London Underground into the Metropolitan police, in the same way as has been done at London Airport.
I believe that the rising level of public concern about crime is entirely justified. I think that the public deserves a calm, rational analysis of the situation; not the foolish pretence that any one political party has simple answers to the situation. I must say, with the utmost of respect to the noble Lord, Lord Reay, that it really does not help us at all when we talk about demoralisation of the police—or whatever it was—in 1979. That rhetoric is appropriate to weekend speeches, but it is not necessary in this House.
We must recognise that governments have the greatest difficulty in managing the economy—over which they do have some control. The idea that they can control the level of crime when very few people agree about what causes it is, in my view, absurd. I propose to divide what I wish to say into three parts: first, the disturbing drug situation in the United Kingdom, which has a significant effect on the level of crime; secondly, the relationship between the police and the private security industry—to which the noble Lord, Lord Reay, again referred—which also has implications in the fight against violent crime; and lastly the question of police resources.
I turn first to the drugs situation in the United Kingdom. As I have indicated, this has the most direct relationship with the level of violent crime; for, in order to satisfy their craving for drugs, many of the young users become involved in street robberies and burglaries in order to raise money to purchase either heroin or cocaine. The severity of our problem can hardly be exaggerated. In 1979, 43 kilograms of herion were seized by Customs and Excise and 21 kilograms of cocaine. However, in 1987, the last year for which we have final figures, herion seizures had risen to 180 kilograms. That is an increase of just about 400 per cent. compared with 1979. In the case of cocaine, seizures rose from

245
the 21 kilograms in 1979 to 346 kilograms—that is a rise of 1,500 per cent.
Let us assume for a moment that our customs authorities are as skilled as are their colleagues in the United States, where they are able to intercept somewhere around 10 per cent. of the drugs destined for the American market. One can then begin to make some calculation about the profits which are being earned by the illicit drugs industry in this country. In 1987, calculating on the basis of the estimated street value, the heroin industry in Britain had a turnover of somewhere in the region of £420 million, and the cocaine industry had a turnover of around £850 million. What we are discussing here is an industry which can be compared in size to some of the largest public companies in this country.
I believe that a great deal has been done in an attempt to check the activities of the criminals involved in trafficking in narcotics. Indeed it is now one of the highest priorities in the police service. Regional crime squads have developed strong drugs branches and there has been an improvement in collaboration between the police and Customs and Excise, although it is only fair to say that a great deal remains to be done.
I believe that the Drug Trafficking Offences Act 1986, with its provisions enabling the courts to seize the assets of drug smugglers, will, in the longer term, be of considerable benefit. But, in my view, we should not underestimate the difficulties here. In order to track down the assets of the leaders of the illicit drugs industry, prolonged investigations are often required. The people with whom we are dealing are often protected by batteries of lawyers and accountants who are highly skilled in disguising the trail which leads to the bank accounts of those involved. Such investigations are often manpower intensive, so far as concerns the police, and, as we all know, police resources are limited.
I turn now to the relationship between the police and the private security industry. This is clearly relevant to the serious problem of armed robberies directed against security vehicles, the guarding of offices and now, I think for the first time, some residential areas as well. New firms are opening up throughout the country and it may well be that their responsibilities will grow. Indeed, it has already been pointed out that they may be involved in a number of contracts with government agencies, including the Home Office, and therefore it is right for us to take the matter extremely seriously.
Clearly a well-organised and professional private security industry can play a useful role in this country. However, I am increasingly concerned about evidence which shows that parts of the industry employ people with substantial criminal records; that many such people have been convicted of crime while in their present occupations; that many associate with known criminals; and that a substantial number of people in the industry appear to be entirely unqualified.
If professional criminals have associates in the industry, they can be provided with highly sensitive information. They can be told of the timings of the deliveries of cash and of the security precautions
246
of client firms. When guarding buildings they can identify the place where money and valuable property is held.
Only last year, the Association of Chief Police Officers carried out a survey of its members which reinforced public concern. The report showed that in over 320 cases the employer or the employee had criminal records, and substantial numbers of others had been convicted of crime while being employed by the security companies or were believed to be involved in criminal contact.
Since then, we have had dramatic new evidence of the risks that we run as a result of having an entirely unregulated private security industry.
Just as anyone can establish a private security firm without any recognised qualifications or inquiry as to whether they are people with a good reputation, so anyone else can open a private safe deposit centre. Only a few months ago we saw the result of that in the case of Regina v Viccei and others at the Central Criminal Court.
In that case, a bogus robbery was staged at a private safety deposit centre in London. It is still not known how much was stolen because many of those robbed did not complain to the police. That was hardly surprising because a number or them were drug smugglers, money launderers and thieves. Large quantities of cocaine had been stored in the safe deposit boxes at that centre together with substantial sums of cash which was waiting to be laundered. It could be that as much as £15 million to £20 million was involved.
I found the Government's response to that matter rather surprising. I had assumed that following the enactment of the Drug Trafficking Offences Act they would be eager to close that massive loophole whereby sophisticated criminals were able to store their loot in absolute safety. But I proved to be wrong. All I received from the Minister on 13th February when I raised the matter in the House was a brief statement about the merits of self-regulation. I find it exceptionally difficult to see how, in the situation that I have described, self-regulation by itself makes any sense whatever. I have already given the House clear evidence about the involvement of numbers of criminals in the private security industry. The Knightsbridge safe deposit centre raid, with the involvement of international narcotic traffickers, makes unanswerable the case for some form of public regulatory system. I hope that the Government's doctrinaire enthusiasm for self-regulation will not prevent them from taking these steps that are clearly necessary to deal with what I and many others consider to be a serious problem.
I come now to the issue of police resources. I do not for a moment believe that every police force in England, Wales and Scotland requires an immediate increase in manpower. That would be going altogether too far; but a number of forces, including the Metropolitan police, still have establishments which are considerably short of being realistic.
In London, there is an ever present threat of renewed IRA and Middle Eastern terrorism. That requires a strengthened Special Branch. There are major surveillance operations against target

247
criminals which absorb the attention of scores of experienced detectives. There is the continuing problem of jury nobbling at the Central Criminal Court and elsewhere. Each time a jury has to be protected, 72 police officers have to be attached to it to ensure that the jurors are not approached by professional criminals. That is a serious problem. The noble and learned Lord, Lord Hailsham, was well aware of that problem when he was Lord Chancellor. I regret to say that the situation seems to be as unsatisfactory as ever. In addition to those pressures on Metropolitan police manpower, there is the constant and understandable demand for more police officers on the streets. There is a need to build up the strength of the Fraud Squad where, as the Metropolitan police Commissioner said in his last annual report:
"Demand consistently exceeds investigative resources".
There is little point in us belabouring the European Commission and our partners about their response to the fraud problem within the Community when cases involving over £4.7 billion were being investigated in London alone during 1987 and when the police do not have adequate resources to enable them to respond adequately. If we do not deal with this problem of serious fraud, some of it being drug-related we may end up by doing serious damage to our country.
I recognise of course that there never have been enough policemen and there probably never will be. Demands will always outstrip resources. That is why we must re-examine our approach to the Special Constabulary, an issue raised by the noble Lord, Lord Orr-Ewing, in a parliamentary Question only a few weeks ago. As I said then—noble Lords opposite said the same thing—I find it a little odd that the Government have allowed the strength of the Special Constabulary to decline during their period of office. The Minister will recall that he had a rather uncomfortable time in the House when he attempted to justify that situation in the exchanges which then took place.
As the House will recall, the already low figure in 1978, when there were 16,952 special constables in England and Wales, fell to 16,209 at the end of February 1987. In Scotland, the situation was far worse. There was a fall from 3,134 to 1,747. The Minister tried to push the responsibility for recruitment onto the shoulders of chief constables. I am bound to say that he missed the real issue which is that the Home Office and the Scottish Office have a clear interest in stimulating recruitment to the Special Constabulary. That could relieve the burden, which is at present substantial, which faces the regular police service.
We need an imaginative national campaign designed to encourage our fellow citizens to come forward to offer their services to the community. What conceivable argument is there against doing that? The Minister has, as we all know, direct ministerial responsibility for the police. I hope that on this occasion he will respond to what I believe was the overwhelming view of the House when the noble Lord, Lord Orr-Ewing, spoke to his Question on 20th February.
248
In conclusion, perhaps I may say that I believe that, although the general crime situation remains fairly sombre, there have been some signs of hope. There have, for instance, been notable reductions in street crime in some areas of London where it has been dangerously prevalent. But we must face the fact that many in our society remain haunted by the fear of violent crime. We have elderly people who are too fearful to answer their doors and young mothers who barricade themselves in their flats in high-rise buildings. An increasing number of women are not prepared to walk the streets at night. I believe that the whole quality of life for many people in our country is being damaged by anxieties of that kind. That is why we require the whole-hearted collaboration of the entire community in our struggle against serious crime.
4 p.m.
The Lord Bishop of Manchester: My Lords, I think that we are agreed on all sides of the House on three points in this debate. First, we give a warm welcome to the fact that the noble Lord, Lord Reay, has raised this important issue for us. Secondly, violent crime has been rising and statistics are incontrovertible on that point. Thirdly, as the noble and learned Lord, Lord Elwyn-Jones said, there are no easy solutions. We are discussing very complex and difficult subjects this afternoon.
I agree with the last speaker that the quality of life in Britain is being seriously damaged at present and the situation seems to be getting worse. Young women have the right to walk the streets of our towns and cities in safety after dark. People have the right to travel on public transport late at night without the fear of being mugged. When those kinds of fears abound then the situation is critical.
I wish to divide what I have to say into two parts. One is perhaps best termed "short-term" in the field of crime prevention. The second is the longer term issues and the deeper currents in society of which we should be aware.
On the short-term front, we are all agreed that the maximum number of police who can be effectively deployed in any area or on special tasks is a policy which we support, although there are always limits on finance in any field. There are also the endeavours now going into research on security, both personal security in homes and security in public buildings and such matters. Then there is the easy availability of the substances which lead to such crimes. Drugs have already been dealt with in the speech by my predecessor in the debate.
I am very conscious that when I look across from my house in Salford I can see the steeple of my own parish church still shrouded in scaffolding, 18 months after the church was broken into by some groups of drug-affected or glue-sniffing youngsters. They quite deliberately set the place on fire and burned it down. Sadly, this is only one of a number of fires in churches which have taken place in my diocese. In years gone by there were certain religious restraints or convention restraints preventing people from carrying out those crimes. I am afraid that those days are in the past.

249
As regards alcohol, I am bound to say that I was sorry to note in the recent Budget that there was no price increase on alcoholic liquor. It seems to me that the Chancellor of the Exchequer had the usual opportunity to do something in that field which would help to reduce consumption of alcohol. Without a doubt, many crimes are alcohol-related. The availability of firearms and offensive weapons is something of which we must always be aware. We can be thankful that we are not in the same situation as in the United States; I find it almost impossible to understand the influence of the gun lobby over there.
Relief for victims also comes under the heading of prevention in the field of crime and there is the ambulance work related to serious crimes which have taken place. I am glad, as I think many of us in the churches are, that much more attention is being paid to victims than was the case in times gone by. I am President of the North Manchester Victim Support Scheme and I believe that such schemes do valuable work.
Perhaps I may say a word about penal policy to which reference has already been made. Surely sentencing must always have two main aims in a modern democratic society, especially one which has been influenced by Christian values. The first is the protection of society. That must be a foremost consideration. The other is the reformation of offenders, however that may take place. It is a matter of very deep concern to many of us that because of over-crowding in our prisons due to the strains on the prison service, far from prisons being places where people are reformed they can so easily be schools for crime, especially for young offenders. We need hardly remind ourselves how easy is the transition from the less serious crimes in a community, such as minor theft or vandalism, to more serious crimes involving offences against the person.
In that connection the role of chaplains of all denominations in prisons is absolutely vital at present. Many examples have been given to me by our own chaplains of men and women—men in particular—who have been turned away from a life of crime to become much more useful members of society. They did so in spite of the enormous pressures facing them when they went out into a society in which unemployment is high and where there is much poverty and temptations of every kind. I believe that our chaplains are able to preach the vital quality, or help people to understand the vital quality, of forgiveness which should be exercised both in personal life and in society as a whole.
I turn now to the longer term aims of combating violent crime in society. It seems to me that that is infinitely complex and affords an admirable subject for debate and discussion. Why do people turn to violent crime? Perhaps in this century there have been two great philosophical approaches to the subject. Both have contained important elements of truth but if taken and swallowed whole, so to speak, they can be very misleading.
One is the belief that people turn to violent crime primarily because of inherited characteristics. We could call this the psychological explanation after
250
the school of Freud and other psychologists. There has been some very disturbing genetic research into how inherited characteristics can have a powerful effect on the reasons why people turn to crime. If we take that line of thought, what is needed for the treatment of criminals or potential criminals is essentially psychological—the use of drugs and similar remedies.
The other great philosophical school is the one to which reference has already been made, I think by the noble Lord, Lord Reay in his opening speech. It is the school of those who would argue that all crime comes from social factors. In other words, bad housing, unemployment, poverty, broken homes and other factors inevitably lead to serious crime. Again, I believe that there is a great deal of truth in that. I shall make reference to it again in a moment.
It cannot be the whole truth. However important these various explanations are, something is missing. That is surely the element of personal responsibility in the way in which people turn to crime, including violent crime. Inevitably this would bring anyone wearing a dog-collar to use the good old-fashioned word which is now falling out of fashion—sin. It seems to me that we cannot escape from that in any consideration of penal policy. There must be that element of personal responsibility which must be addressed. I know that the Churches have been under some criticism these days for not standing firm on moral teachings and for neglecting the element of sin. I do not believe that that is so. What has been happening is that many people in the Churches—and that not only includes clergy but lay people too—have rightly been giving more attention to the other factors which I have mentioned, particularly social factors. But it must not be at the expense of the element of personal responsibility.
The gibe which has been directed against social workers and the clergy in the parody of the Good Samaritan would not apply. Noble Lords will remember that it is said that when a social worker saw what had happened when the man who was wounded had fallen among thieves, the immediate reaction was, "The men who have done this must indeed be in need of urgent help. We must find them". I do not think that that gibe is entirely justified.
I now turn to personal responsibility and to where the Churches stand on moral values. I shall quote from scripture. One finds the essence of this in St. Paul's Letter to the Galatians which discusses the influence of the Spirit. The desires of the flesh against the Spirit are listed by St. Paul as being immorality, impurity, licentiousness, idolatry, sorcery, enmity, strife, jealousy, anger, selfishness, dissension, party spirit, envy, drunkenness, carousing and the like. It appears to me that all of those vices would lead all too easily to violent crime. But the fruit of the Spirit is love, joy, peace, patience, kindness, goodness, faithfulness, gentleness, and self-control. St. Paul states that against such qualities there is no law.
That, it appears to me, is the great charter of the Christian Churches. I am not suggesting for one moment that many other religions do not subscribe similarly to high moral values in this matter. The Churches are not soft on sin, and should not be soft

251
on sin and personal responsibility. But we have to admit our own weakness which is that we are no longer in touch with substantial sections of society, including those young males who especially turn towards the kind of violent crime of which we have been speaking.
I come back to the point about society as a whole because I think that is fundamental. It is not enough simply to talk in terms of personal responsibility. If a society is constantly stimulated by high pressure advertising of all kinds and gives people the idea that that is what constitutes the good life, and if substantial sections of that society are held back from participating in various ways, some of the most intelligent and able among those people will undoubtedly go to take what others assume as their natural right. They will do that all the more when they see the kind of fraud which takes place at higher levels in society, to which reference has just been made.
I wish to say a few brief words to the noble Lord, Lord Reay, on the racist issue. I was grateful to the noble Lord for giving way so graciously at that point. All I wanted to say to him was that I think one should be extremely sensitive and careful when using statistics related to race. It is simply not right to use those statistics without at the same time pointing to the fact that among young blacks, for example, in many places in this country, the unemployment rate runs far higher than in other sections of society. I was grateful to the noble Lord to hear him say towards the end of that part of his speech that we must offer those people a proper place in society. That is the essential note with which I believe the noble Lord should have started his speech, before he gave us his catalogue of statistics.
We need to understand the conditions in such areas and the reasons people turn to crime. That does not mean that we should condone them. We need to take seriously also racial attacks which are a terrible blot on British society in these days. Too little attention has been paid to those attacks. But I return to what I believe is an essential moral issue which lies behind this debate. This must surely be a challenge to all of us in this House and elsewhere. It is a question of how we can build up an understanding of the right values in society and how we can communicate those values widely throughout society. It is my fear that some things which are taking place at the present time, and some of the directions in which we are moving, may be weakening those moral values rather than strengthening them.
In our minds at the present time is the broadcasting White Paper and the great danger of erosion of standards of public service broadcasting, which are vitally concerned with this matter. I leave the thought in the minds of your Lordships that a central issue behind this debate is where a society gets its moral values from and how these can be sustained. Violent crime is closely related to that.
4.14 p.m.
Earl Ferrers: My Lords, the House will be grateful to my noble friend Lord Reay for introducing this
252
debate today. It is a matter of very considerable importance. It was quite clear from my noble friend's speech that he had carried out much work and much research on the subject. His speech was indeed full of interest and fact.
Violent crime is something which concerns us all because it interferes with what people in civilised society prize as a fundamental right—the right to go about their business and their lives in peace and tranquility. That is why it is right and proper that your Lordships should discuss this matter today.
All too frequently we read in the newspapers, and see on the television, stories of lives which are ruined by violent crime. We ask ourselves what the world is coming to. We feel sympathy for the victims, anger at the perpetrators, and perhaps anxiety for the safety of our families and ourselves. These are real and compelling anxieties to which any government must respond. I was glad that the right reverend Prelate the Bishop of Manchester said there were no easy solutions; nor are there.
No one should underestimate the effect which crime has on those against whom it is perpetrated. It can be horrifying. It can be an experience from which, in some cases, people never recover. Nor should we underestimate the fear of crime. The noble Lord, Lord Harris of Greenwich, referred to that at the end of his speech, as did the noble and learned Lord, Lord Elwyn-Jones. I was glad of that. Perhaps only 1 or 2 per cent. of the population suffer from serious crime in their lives; but the other 98 per cent. wonder whether they are going to be part of the 2 per cent. The fear of crime therefore affects many more people than does crime itself. In my view that is an offensive assault upon the way of life of the ordinary citizen.
Fear is a force for evil. It is intrusive; it is debilitating; it is destabilising and it is very real. For all that, fear is often out of all proportion to the actual and statistical risk of becoming a victim. The fear of crime is in fact much worse than the risk of crime. But it is difficult to get that notion across without people feeling that a Government are being either dismissive or insensitive. We do not underestimate the power, and the fact, of fear. Fear of crime is a problem in its own right. It can have the gravest consequences, so that many people—particularly the elderly—feel that they cannot venture safely out of doors after dark.
A lot of fear—and perhaps some crime too—can be dispelled by proper lighting of houses and property at night. Burglars do not like to be seen, and householders take comfort when they can see. There is a strong argument for local authorities and others to ensure that the estates and flats for which they are responsible are adequately and better lit at night.
It is incumbent upon all of us—government, police and individuals—to do all that we can to reduce not only crime, but also the fear of crime, and to try to reassure people when the danger is less than that which they imagine.
It is for that reason that my right honorable friend the Home Secretary is setting up a working group of the Home Office Standing Conference on Crime Prevention under the chairmanship of Mr. Michael Grade to consider what can be done. I am

253
delighted that the chairman is such a distinguished member of the media, who knows how the media operate. He also knows what the pressures of reporting are, and the virtues and the effects of the different methods of portraying facts.
The working group will have difficult issues to consider. It may wish to consider, among other things, the role of the media. The transmission of the details of crime— often gruesome and frightening— is part of the bread and butter, some would say even the duty, of the media. So also, let us remember, is the reporting of success and achievement.
One of the best antidotes to fear is the sight of a policeman on the street walking quietly without apparent concern, as the noble and learned Lord, Lord Ellyn-Jones, mentioned. It is one of the most reassuring sights which the citizen can have, and it is a positive contribution to reducing fear.
My noble friend Lord Reay rightly referred to an area of increasing concern in the violence which appears on trains and in the Underground. Gangs of steamers going through carriages, terrifying the occupants and denuding them of their wallets and their valuables, is a quite unacceptable hazard of modern travel.
The nature of the Underground is such that the thief has a captive quarry. People who have been walking freely in the streets enter the Underground and immediately become cocooned within its labyrinth of tunnels and tubes. It is an excellent hunting ground for the wicked, and a convenient melee of people into which the perpetrators of crime can easily and quickly get lost—and then go undetected and unapprehended.
We feel a particular concern about the Underground as that may well prove to be an area into which crime could tend to move, and in which the fear of crime could therefore rise in a greater ratio. London Transport have recognised that danger and are recruiting and training 80 additional police officers for the Underground. Until they are in post the Metropolitan Police and the City of London Police have loaned 80 uniformed officers for use on the Underground. They became operational on 6th February. The Government have made £15 million available to London Underground Ltd. for the programme of passenger security measures to which my noble friend Lord Reay referred and which was recommended in the Department of Transport's report Crime on the Underground.
It is not surprising that people take their own steps to minimise fear, and we have recently seen the appearance of a group of people called the Guardian Angels. One is entitled to ask, in the words of 1066 And All That, "Are they a Good Thing?" Our view is that it is wrong for private citizens to adopt a policing role themselves. If they wish to do that they should become special constables, but we are all in favour of people acting as the eyes and ears of the police—being alert, helping others, being responsible. There is a great deal of public spirit around, and this is another manifestation of it. Our concern is to see that the efforts are properly channelled.
254
The police are in the front line against crime, especially violent crime. They give a high priority to preventing crimes of violence and to detecting those which have been committed. It is encouraging to see that the recorded figures for crime are down. Bad though those figures may be, we must keep in perspective that 94 per cent. of crime is against property—car thefts, vandalism, burglaries and so forth. Much of it is preventable. The typical crook is an opportunist teenager, who will take his chance with an open window or an unlocked car. The average citizen can do more himself to prevent the crime of which he complains, and which he fears.
Only 6 per cent. of all crime is violent crime. That may be too much, but about one crime in 20 is a violent crime. It is interesting that the figures for 1987 show that about 70 per cent. of the victims of wounding and assault were men aged between 16 and 39, and that only 1 per cent. of all the victims of wounding and assault were aged 60 or over. Therefore, despite all that we read, statistically the elderly are not a prime target.
The figures also show that 97 per cent. of all homicides and attempted murders are detected and cleared up. Seventy-six per cent. of woundings endangering life are cleared up, and 71 per cent. of rapes are cleared up. I suggest that those are impressive figures and that the police's ability to deal with that kind of crime is excellent.
We are anxious to maintain that record by giving the police the resources which they require. That is why we have ensured that over the past decade police manpower has increased by 13,000 officers. One thousand one hundred additional posts have been allocated for this year, with further substantial increases to follow. Since 1985 civilianisation has, in addition, released nearly 4,000 expensively trained policemen to return to operational duties. Expenditure on the police over the past 10 years has risen from £1,100 million to £3,700 million—an increase in real terms of 52 per cent.
The demands are of course limitless—and the pit is not bottomless—whether of people, of expertise or of finance. We must avoid moving towards the somewhat bizarre scenario where 50 per cent. of the population are in the police force and the other 50 per cent. are in gaol. As in all things, there is a balance to be maintained. Life has to be lived despite crime.
The final words of Lord Reay's speech were impressive. He said that all hands are required. That phrase has been repeated by inference by the noble Lord, Lord Harris of Greenwich, the noble and learned Lord, Lord Elwyn-Jones, and also by the right reverend Prelate. It is incumbent on all of us—government and people—to give the police our full support. We should give them credit for their achievement in tackling violent crime—often, let us remember, at great personal risk to themselves.
I am glad that my noble friend Lord Reay commended the police for their work with the ethnic minorities. I know that the commissioner gives a high priority to working with ethnic minority communities. The police have frequent meetings with political, religious and social groups representing ethnic minorities.

255
We expect a lot of the police. We expect courtesy, efficiency, coolness, integrity; and we expect them to be on hand whenever there is trouble. We expect them to know the law, to know how to treat prisoners in accordance with the statutes, to know when to be understanding and when to be firm, and at all times never to put a foot wrong. We expect them to rub shoulders with the underworld and not to be affected by it and, if I may say so, to rub shoulders with your Lordships and not to be affected by that either.
If any officer crosses that narrow band which separates right from wrong, enthusiasm from prudence or admonition from courtesy, the public's reaction, quite understandably, like litmus paper turns against them. It is a difficult row to hoe.
We sometimes forget that the police on occasion have to put up with fear, crime, personal assault, missiles, abuse and even spitting. Yet they are only men and women with the same emotions as the rest of us. Nevertheless, we sometimes expect them to have a super-human coolness and a case-hardened reaction which we might not necessarily find in ourselves if we were placed in the same position.
It is up to the police—both the managers of the police force and each individual officer—to ensure that the integrity of himself and of the force remains at all times high. Only then will the police receive the respect which they deserve, and only then will the nation have the respected force which it seeks and which it requires. It is two-way traffic, in which we are all involved. We have the best police force in the world. It is up to the police to keep it that way. But it is up to us—the general public—too to realise that, to value that, and not to subject the relationship to unreasonable stress.
Strengthening the police is important, but it is essential that the penalties for violent offenders should adequately reflect society's revulsion against crime. The right reverend Prelate referred to that subject and said that the purpose of sentencing was both protection and reformation. We have raised the maximum penalty for the most serious violent offences—including attempted rape and carrying a firearm in the course of crime—to life imprisonment.
The courts are punishing offenders more severely. Over the last three years the average sentence for using firearms to resist arrest has nearly doubled. Now 80 per cent. of convicted rapists receive a sentence of five years or more in prison—compared with under 50 per cent. in 1985.
It is one thing to catch offenders. It is another to see that they are given adequate sentences. But it is a third to try to prevent the crime in the first place. And that we can all do.
My noble friend Lord Reay and the right reverend Prelate the Bishop of Manchester referred to the particular problem of crime in our inner cities. However, whatever one may think there is no clear link between crime and unemployment. It is easy to imagine but statistics do not prove it.
Statistics do show that the peak age for offenders is 15 years, before the school-leaving age.
256
Nevertheless, we recognise the particular problems of the inner cities. That is why last year the safer cities programme was established. The programme, which is part of the Government's Action for Cities, will consist of 20 local projects. They will be set up over a three-year period in inner-city areas which are badly affected by crime. The object is to contribute towards the social and economic regeneration of these areas by reducing crime and the fear of crime.
The projects are run by committees which bring together local agencies such as the police, local authority and probation services, local firms and active citizens. The safer cities programme tries to generate a community response to crime—the sort of spirit which has resulted in the successful Neighbourhood Watch schemes, which have proliferated all over the country. They have proved to be successful in enabling neighbours and the police to co-operate together. They are an impressive illustration of how the public can come together to support the police. They need to be nurtured, and this is one of the objectives of the new crime prevention organisation called Crime Concern, which was launched last year with government support.
The Government can provide encouragement, advice and a certain amount of money; but the real effort and the real effectiveness come from the public and from the police. The Neighbourhood Watch schemes got off in a flurry of enthusiasm. It is another thing to ensure that they continue, and with the same enthusiasm. We cannot expect the police to deal with all crime on the basis that dealing with crime and preventing it is the police's business. It is the business of all of us. We must all, as individuals, be involved in commonsense behaviour and prevention, and that is why it is good when we see members of the public becoming involved.
It is necessary for sensible advice to be given to the public on how to protect themselves and their property. The Home Office has produced a handbook called Practical Ways to Crack Crime, and over 2 million copies of it have been distributed. It is not concerned just about home security—locks and bolts and mundane pieces of hardware— but it recommends simple precautions which people can take when they are out of doors, especially at night, in order to minimise the risk of assault.
Many women are terrified of the prospect of sexual assault, and especially rape. Sometimes one may be entitled to think that this form of crime is on the increase: but maybe it is because it is more frequently reported in the media than it used to be. Maybe it is because people are more prepared to come forward to report it to the police. Whatever the reasons, the facts show that most rapes are not committed, as is commonly supposed, by strangers in nasty dark alleys. Research suggests that most rapes are committed indoors and that, in most cases, the attacker is already known to the victim.
We call ourselves a caring society. But I sometimes wonder whether we are. If our standard of life is so high (which it is)and if as a nation we are more affluent (which we are) what makes /society/ violent —more violent, as it sometimes appears—than it used to be? There are many reasons, no doubt, for

257
this but research suggests that the crime figures do not tell the whole story and that the apparent rise in the statistics of violent crime is partly the result of a greater willingness to report certain offences to the police.
Rape and domestic violence are examples. Child abuse is another. If this is so, it is an encouraging development, for it is only when crimes are reported that the offenders can be brought to trial and the victims given the support which they need. And it is encouraging that the last two years have seen a substantial growth in the victim support movement. I was glad that my noble friend Lord Reay approved of that. Four-fifths of the country is now served by victim support schemes affiliated to the national body called Victim Support. These schemes, which are run largely by dedicated volunteers, last year gave comfort, help and advice to a third of a million people. It is a mark of the Government's confidence in them that we are providing over £2.5 million this year to enable some 200 victim support schemes to employ a paid co-ordinator.
The level of violent crime is unacceptably high, whatever comparisons may be drawn with the past. And one asks: what accounts for it? In the long term I think it must be attitudes. Attitudes are affected and moulded by experience and environment. Experience and environment are affected, at the start of life, by the homes and the schools in which the children are brought up. That does not mean that homes and schools are responsible for crime but it does mean that homes and schools have a heavy responsibility to bring the children up in a way in which they are not injected into crime, but in a way in which they reject crime.
The noble and learned Lord, Lord Elwyn-Jones, referred to some unattractive buildings in our inner cities, and he was right to do so. Homes are sometimes in vast high-rise concrete buildings which have little sympathy either for people or for beauty. Too often there is a soullessness about them. Dirt, darkness, graffiti, lack of love and care, whether of buildings or of people, are often the surroundings in which children are obliged to grow up, in which parents try to live and make a home and in which the elderly stay in fear. It is not surprising that crime flourishes, and that fear does too. These conditions need altering if we wish to alter the pattern of crime.
The Department of the Environment's estate action programme gives local authorities additional resources with which to improve the quality of life on run-down estates. The budget for 1989–90 will be £190 million. About a quarter of this is likely to be spent on a range of environmental improvements, such as landscaping, and about a fifth on measures to combat crime and vandalism, such as the introduction of concierge facilities.
The possibility of a link between television and behaviour has been the subject of extensive study and I am sure that that academic debate will continue for some time. But television is a very powerful medium in encouraging people to do that which they would not otherwise do. If it was not, why would advertisers spend nearly £2,000 million a year on doing just that? We have always taken the view that
258
broadcasters should exercise caution and that they should assume that their programmes may influence behaviour. I think that responsible broadcasters do.
It was in direct response to a growing public concern that the Government recently set up the Broadcasting Standards Council. The council is still in its early days but it has already published a draft code on the portrayal of sex and violence which will apply to all forms of broadcasting. It will monitor programmes. It will look into complaints, and it will be able to initiate research on how attitudes and behaviour are affected by the portrayal of violence on the screen.
Nothing in the sphere of human behaviour can have a simple answer, but what creates attitudes in children has an important part to play. A lot of violent crime is the result of heavy and stupid drinking— the macho image. This is nothing new in some respects. People always did get drunk and fights always did take place, but what has become known as the lager lout manifestation is new. Many young people now have more money to spend, and they spend more of it on drink. There are more pubs and clubs which cater specifically for young people, whose behaviour may be less restrained if there are fewer older people around. The Government are anxious to encourage sensible drinking. To this end we have advised the courts, the police and other agencies on the effective enforcement of the licensing laws, and on how to deal with alcohol misuse.
Each generation tends to think that its own conditions are worse than those of any previous generation. But I doubt if they are in reality. Our conditions are certainly different. Technology is different. Attitudes are different. The way of life is different. But the basic goodness in people is present in folk today, just as much as it ever was. But crime also is here, just as it ever was. Its methods, its manifestations and its practice twist and weave between the new opportunities which are open to it, whether by technique or technology, and the new constraints which the law seeks to place upon it.
Our task, in our day, is to try to ensure that crime is not glorified, to acknowledge that it is the responsibility of all of us—whether in its prevention or in its detection—and to ensure that the rule of law is always one step ahead of the ingenuity of the criminal. That is why the discussion of this topic today is so important.
4.40 p.m.
Lord Orr-Ewing: My Lords, my first task on behalf of the House is to thank the noble Earl, .Lord Ferrers, for his masterly and thorough coverage of this important subject. I wish to add one point on a matter dealt with by the right reverend Prelate the Bishop of Manchester whom I observe leaving the Chamber. I shall however raise it for the sake of the record. The right reverend Prelate expressed grave anxiety about lower broadcasting standards. I remind the right reverend Prelate, as did the noble Earl, Lord Ferrers, that a regulatory authority has been set up. The extra channels surely afford the Christian Church a wonderful opportunity—one which should not be missed—of passing on the message of Christianity far more widely than is

259
possible through existing terrestrial and satellite channels. I hope that the Church will not miss that opportunity; I hope that it will not always be looking backwards instead of forwards.
I add my congratulations to my noble friend Lord Reay for his initiative in opening the debate. I am glad that the Conservative Party selected it. It was three years ago, on 23rd April 1986, that the noble Baroness, Lady Faithfull, opened a debate on a similar subject. It is appropriate that after three years, with the growth of anxiety about street muggings and such like, we should reconsider the position and see what progress has been made.
We sometimes miss the point that it is not just in this country and Western Europe but all over the world that crime is increasing. There is some evidence that the annual figures may turn down. The worrisome element is that studies suggest that only one quarter of the total number of crimes are reported. However, the tendency to report crimes is increasing, and it is healthy that they should be reported to the police. We must not take too much comfort from slight rises or falls in the figures when currently only one quarter may be reported.
I want to concentrate on the police and support of the police. It would not be inappropriate to say a word about the police who look after the Palace of Westminster. We do not often have the opportunity to praise them. I do not know a more courteous, efficient or nicer lot of people. They have an amazing ability to recognise not only us but also our wives and our friends although some of us are not here as often as others. This is part of their training in thoroughness. We are very grateful to them for their services and their help in keeping order and decorum in the Palace of Westminster.
It is clear that criminals are becoming cleverer, more thorough in planning and more professional. The police have to out-match their performance in professionalism. I want to ask some questions. Is the police recruiting policy attracting enough high calibre people? Are enough graduates being recruited? Are we training and retraining the graduates to match the tasks of the future? Are we deploying them and all the police to the best advantage? Is the accelerated promotion scheme with the challenges presented adequate to match the quicker thinking, better trained, more adroit young people who may want to join the force? Is Britain providing the right leaders to become the chief constables of the future? What we want to ensure is that when senior policemen and chief constables appear on our television screens, they influence parents to say to one another that that is the sort of service that they would like their son or daughter to join, the sort of profession that they should take up to help the nation.
The strength of the police has increased immensely in recent years. In England, Wales and Scotland, it is around 140,000, comparable, we need to remind ourselves, to the strength of the army and very much greater than the strength of the air force or the Royal Navy. Given the considerable discipline, achievement and traditions of all four uniformed
260
forces, I wonder whether there are not lessons to be learnt one from the other.
The Government rightly, with all-party support, have given a high priority to the police with commensurate salaries. Earnings are considerable. The total inclusive annual cost of a Metropolitan police officer today is £30,000; outside London, it is £26,000. I have not been able to obtain the comparative figures for the army. But the figures for the police seem above what the army pays. It is of supreme importance that we use these highly trained, professional policemen in the best possible way.
I should like to ask first whether we are recruiting the right leaders for the future. For 20 years I served as the Member of Parliament for North Hendon. Within my diocese, to borrow a term from the right reverend Prelate, was Hendon police college which was founded by the first Lord Trenchard and abandoned shortly after the war by the Labour Government. I wonder whether that was a wise decision in the light of present experience. I acknowledge that Bramshill fulfils some of the functions very satisfactorily. I believe it is right to say that the Police Federation and others do not want to resurrect the cadet college. The three uniformed services are led by people of calibre, some of whom are promoted to serve in this House. I am sure that they would not be led by people of such calibre if we had abolished Sandhurst, Dartmouth and Cranwell. I ask my noble friend to consider again whether the equivalent of Hendon police college should not be established or, indeed, the college itself re-established to recruit the best people for the future.
I have obtained a copy of an admirable publication entitled A Career for Graduates in the Police Service. It is beautifully prepared. However, I gather from figures that I have been able to obtain that some results are not as good as one would hope. I am afraid that statistics are always out of date. It is strange that, as computers work faster and faster, statistics are slower and slower to emerge. All the statistics that I have date back to 1987. Under the standard entry schemes for graduates in England and Wales, 1,400 applied of whom just over 500 were accepted. Therefore, one in three was accepted. In the Metropolitan Police 274 applied and 116—a rate of one in two-and-a-half—were accepted. Those are pretty good figures.
The graduate entry scheme figures are disturbing. For England and Wales 950 graduates under the age of 30 applied to join the police, of whom only 17 were accepted. Of the 244 who applied to join the Metropolitan Police, only four—one in 60—were accepted. Either we are aiming the advertisements, such as they are, at the wrong people, or very much the wrong people are applying. Something is wrong with the figures. I ask my noble friend to examine the situation. In 1987 there were 6,863 graduates in a police force of 130,000. I wonder whether that is sufficient today. The police force is backed up now by over 40,000 civilians. That is a good tendency. I wonder whether that is sufficient today. I wonder, however, whether 6,863 graduates are sufficient in a force of that strength.

261
I turn now to recruiting for general entry. Here the figures are amazing. Of the 56,000 who applied in 1987, only one in 10—just over 5,600—was accepted. In the Metropolitan area, 10,000 applied and 2,000 were accepted. Again, I wonder whether standards are being set too high. Or are we attracting the wrong people?
There is some good news. There used to be a delay of eight months between a person applying and being notified whether he had been accepted or not. That led to some criticism in this House. On checking this morning, I was glad to find that a notice is now sent out within four months—the time is almost halved—to the person who has applied, notifying him whether or not he has been accepted. However, one cannot get on to the first training course for several months ahead. I asked what would happen if I were the right age and applied today. The answer was that I could not be taken on a training course after examinations until July.
We have stepped up the training courses from an intake of 160 every five weeks to 210. Again, that is good. The rewards are also good. A policeman aged 22 starts at £10,500 a year, including £2,000 extra in London for weighting and other allowances. It is not a bad way to start, and it is a very considerable career.
The noble Lord, Lord Harris, mentioned building bridges of understanding and co-operation between the police and the public all over the country. This is absolutely vital. The Neighbourhood Watch scheme started well, although I have the feeling from information that I receive that it is less successful than might have been hoped. It should be prodded, encouraged and stimulated. It seems a wholly healthy idea.
I turn again, as I did in February, to the question of the Specials. Here the position is very alarming. As has been said, in 1987 there were 16,000 in England and Wales. That is a substantial fall. Where once there were 17,000 men, the figure is now down to 11,000. I am glad to say that the figures for women have gone in the other direction. There were 2,000 women 10 years ago; there are now 5,000. But the fall away of figures for men is significant. I wonder whether it ought to be looked at and whether we ought to have a publicity campaign, as the noble Lord suggested. I asked questions. I was told that information was passed on by word of mouth and that it was not felt necessary to launch a campaign. In this day and age one cannot sell anything without a campaign. One needs a campaign to encourage the Specials. Once in the force, I hope that they will be given challenging jobs and not asked to mind telephone exchanges over the weekend.
One notices two policemen together on community patrol. On many occasions why should not one of those be a Special? I wonder too whether we cannot make more use of Specials in a host of other jobs. Should they not be called out in a crisis, as the Territorials are? Are exercises being undertaken to enable them to show that they are worthwhile and part of the police force? Should they not help in dealing with football crowds? I read recently that the bill for policing the Chelsea football ground—which is in Fulham and therefore the bill
262
falls on the ratepayers of Fulham, I am personally glad to say—was £1 million last year. Could not the Specials be used there? They are local. They know the form. They probably watch football when they are not on parade. Surely they could be used to alleviate the position?
I hear talk—I am sure that it is untrue—that overtime is so rewarding that many policemen would resent it if Specials took their place. I hope that that is untrue. I hope that it will be generally acknowledged that more use could be made of Specials and that a recruiting drive should be undertaken.
Could not traffic wardens pick up more of the humdrum activities the police have to undertake? I refer to the checking of road fund licences. Why should that not be done perfectly correctly by traffic wardens? Again, I wonder whether we ought not to make more use of mobile radios. Over a million people now have mobile radios in their cars. Surely, they are a natural eyes and ears of the police. My noble friend used that expression in his speech; it is right. Why not use the goodwill of the public. If one is stuck in a traffic jam and one sees something happen—a robbery or a grab—one is quickly able to report it. My car is not equipped with a mobile radio. But why should not numbers be given so that one can dial the equivalent of 999 and connect with a central police point so enabling the local police to be contacted.
Should we not also equip traffic wardens so that they could be eyes and ears of the police? There are many things to be done. I hope that we shall not forget, and the police will not forget—I know it is being emphasised—the importance of the police visiting schools. Under ILEA I am afraid there were some nasty rules forbidding the schools to allow the police in. I hope that the Labour Party will use all the strength it can to persuade the hard Left, which was in ILEA, to allow the police into the schools. We must build bridges of understanding, in particular with the young.
Our police force is a great one with a high reputation in all parts of the world. It is worthy of the best and most imaginative leadership and support. I have asked these many quest ions only in an effort to make it even better.
4.57 p.m.
The Earl of Longford: My Lords, we have listened to a series of very well informed speeches, including that of the noble Lord who has just sat down. Naturally I prefer the wise words of my acting Leader my noble and learned friend Lord Elwyn-Jones. However, I must at least join in the gratitude expressed to the noble Lord, Lord Reay, for his eloquent and thought-provoking speech. I disagree with him totally in what I think is his main point of view but this is a House of disagreements. It would be a very boring House if it were not. Later I shall explain myself more fully.
I am glad that the right reverend Prelate was able to put his remarks about the blacks in a certain perspective. I realise that he has done a lot of research with the help of the police. He has put that side of the argument. His material comes from them.

263
For many years, since its foundation, I have been patron of the Melting Pot, an organisation in Brixton for young black people—well thought of, it would seem, by the Home Office. I ask the noble Lord when he replies to tell me whether he is prepared to meet the leaders of these people. I believe that an exchange of views—it would be a rather frank exchange—could be valuable both to the noble Lord and to the blacks.
Some noble Lords may remember an old fable about the fox and the hedgehog. Your Lordships may remember that the fox knew many very little things and the hedgehog knew one big thing. I shall be more like the hedgehog than the fox. I shall submit two or three general propositions. But I am bound to express pleasure at certain items in the speech of the noble Earl, Lord Ferrers. I shall reply to the general point of view later. However, he indicated certain steps that were being taken that were of a helpful nature. Naturally I am glad that if anything can be done for victims it is done. Some years ago I introduced into this House a Private Member's Bill to help victims. Mrs. Thatcher's party had just been elected. The Bill received a Second Reading, but the Government gave it no encouragement at that time. However, to use the phrase of Sir Winston Churchill, the Government seemed to have "trained on" in their attitude to victims, and I welcome it.
The first general proposition that I submit is one that will hardly be acceptable to anyone who replies for the Government. I put it this way. I am convinced that the penal policy of the present Government is fundamentally flawed. In case I have not made that plain I repeat it. I consider that the penal policy of the Government is fundamentally flawed whether it is expressed by the noble Lord, Lord Reay, or by the noble Earl, Lord Ferrers. I realise that he has "trained on" in certain respects because in his speech today he was not advocating the treatment for criminals that he enunciated on an earlier occasion when he was a free man. What he said was far removed from the point of view of penal reformers.
When I criticise the fundamental policy of the Government, I am not criticising the fundamental policy of the Conservative Party. There have been great Home Secretaries in the Conservative Party. Sir Winston Churchill, though he was a Liberal at the time—it may be remembered that he ratted and then he re-ratted—became a Conservative so he may count as a great Conservative Home Secretary. There was Sir Samuel Hoare, later Lord Templewood, who became President of the Howard League; and of course there was Mr. R. A. Butler, who showed a very progressive attitude in all such matters, and he had an attitude completely different from anything that we have had from the noble Earl, Lord Ferrers, or the noble Lord, Lord Reay.
Mr. Whitelaw, as he then was, as Home Secretary began very well. I have felt bound to mention before now, and others have mentioned it, that in 1981 he got into trouble. He was trying to persuade the judiciary at that time to reduce sentences. That is in the recollection of anybody who follows public affairs. It has been referred to many times since then.
264
I told the noble Viscount, Lord Whitelaw, that I would mention this matter. He tried to persuade the judiciary to reduce sentences and was given the "bird" in a very big way at the Conservative conference, despite his personal popularity. That was the end of him as a penal reformer and also the end of a progressive Conservative penal policy.
We have been told today with a certain pride by the noble Lord, Lord Reay, and the noble Earl, Lord Ferrers, that sentences have been increased. In other words, that is the complete opposite of the policy which the noble Viscount, Lord Whitelaw, when he was Home Secretary, tried to implement just a few years ago. That can hardly be said to spring from any profound Conservative philosophy. It was in deference to the howling at the Conservative Party Conference.
Noble Lords will hardly have come across this, but they might have done because the Daily Mail features it with a certain glee. The noble Lord, Lord Harris, who is not here, will remember it well. A certain Home Office official produced information for the Select Committee inquiring into murder and life imprisonment last November. The information produced astonished the noble Lord, Lord Harris, or so we are told in the record. This evidence was given by the official last November and I quote from the report:
"From 1st April until September 30th, in 63 out of 106 murder cases, the Home Secretary through the Junior Minister set a higher tariff [that means a longer sentence] than that privately indicated to him by the trial judge."
The Home Secretary, through his Under-Secretary, was stepping up the sentences passed by the judiciary:
"In 34 out of the 106 cases the Home Secretary accepted the judicial view"—
and in nine cases he reduced it. We must be clear in our minds—I make no apology for labouring a point of view different from that expressed by the fine array of Conservative orators—that this is the precise opposite of the policy for which Conservative leaders were agitating a few years earlier.
I wish to add one other quotation in this connection. This comes from an official Home Office research study, No. 89, on personal violence published in 1986. It states:
"The use by the courts of higher levels of incarceration"—
that is the policy recommended with glee by the noble Lord Lord Reay—
"sits uneasily with such objectives as economy, effectiveness and value for money. Perhaps however the infliction of just punishment and the marking of society's strong disapproval are seen as ends in themselves, not to be judged in terms of such worldly objectives as value for money and effectiveness in reducing crime".
I stress that last expression "effectiveness in reducing crime". I take that sentence to be purely ironical. The Home Office research body has before now demonstrated very carefully that higher penalties do not reduce crime. I believe we can take it that the report is indulging in as much sarcasm as is permitted to officials at the expense of the Government.
Punishment means the infliction of pain on somebody. Punishment intrinsically means that. If

265
it is necessary pain then it is part of justice. But if it is unnecessary pain, it is undiluted cruelty. These are necessary penalties to be inflicted. I am thinking particularly of the heavier penalties which to my mind are just mental cruelty. I should be ashamed to be associated with penalties of that kind.
I have expressed before now my sympathy with the good Mr. Hurd, the Home Secretary, struggling gallantly against the emotions of a party conference, and, it would seem, the Prime Minister who would like to see the restoration of capital punishment. Mr. Hurd has resisted that and I give him much credit for that, but I am afraid that he has had to give way all along the line in other respects.
I should like to speak a little more constructively. For many years I have known violent criminals personally through 50 years of prison visiting. Most of them have eventually renounced violent crime, but one of these violent criminals, whom I would call a friend—he is not the only one I would describe in that way—knows about this matter from the angle of people who have committed violent crime. He was sentenced in his time to several spells of imprisonment, having made use at some time of both a gun and a knife. He has not been in trouble for the last five years. He is a reclaimed man and I hope that he will always remain so. This man who has served all these sentences for violence is the kind of person we are talking about this afternoon. I asked him what he considered was the cause of violent crime. His answers were not very different from those supplied by my noble and learned friend Lord Elwyn-Jones, the right reverend Prelate and possibly the noble Lord Lord Reay. He began by asking a question. Having been educated at Eton and Oxford, I should hesitate to put the question in this way:
"Why is it that the working classes … commit nearly all the violent crime?"
This man, brought up in a very tough mining district put that question to me. His own answer was:
"Because of their poverty, their insecurity, their profound sense of frustration and their lack of education".
In one way or another most of us would agree that that is one considerable element in crime, particularly violent crime. But such an analysis does not explain one large question before us. It does not explain why violent crime should be increasing when on the whole poverty has been diminishing for some time since the establishment of the welfare state. This man provided an answer which I believe fits in with the views of many people who themselves are not violent criminals. He said that it can essentially be blamed on television. Young people now are subjected to greater temptations than he was, though his temptations were plenty and he gave way to them while he was growing up. Television has introduced a new element and has made it much harder for young people growing up in rough neighbourhoods to resist crime. He used rather a good phrase about it—it may have occurred to others but I had not heard it before. He thinks that meeting violent crime so constantly as entertainment and even comedy reduces the gravity of the crime. He believes that nowadays young people do not take the matter as seriously as he did, and he was engaged in many violent crimes.
266
Almost everyone will agree that some part of the responsibility for the increase in violent crimes, as in other crimes, must be put down to television. I supported the appointment of the noble Lord, Lord Rees-Mogg, referred to by the noble Earl, Lord Ferrers. I supported him as a man suitable for the job and I supported the idea of such an appointment. Certainly I shall not now go back on that decision. However, I am not as impressed as I should wish to be by the committee's first report. It is a huge document which I believe fails to make clear the difference between what is offensive to the public and what is corrupting. I know that it is difficult to keep the two issues separate. In my opinion, we shall never raise the moral standards which are applied by the television authorities unless we can improve the moral standards of the tabloid newspapers. I have said more than once in this House that, in my view, they have done more harm than has television in recent years.
We are left with the question: what is to be done about the tabloids? I have also said on previous occasions that I should like to see a figure analogous to the noble Lord, Lord Rees-Mogg, dealing with the tabloid newspapers in an advisory way. That is unlikely to happen but we are told that the Press Council will be much stronger and have more teeth. I have great confidence in its chairman.
I should like to end with the recognition that this is a mysterious subject. Thirty years ago I conducted an inquiry into the causes of crime for the Nuffield Foundation. Our verdict was inconclusive and it remains so. In doing so I received psychiatric, sociological and legal advice and the inquiry then found that in the long run the broken home was the largest single factor in crime. Since then there has been huge increases in the number of broken homes and in crime. I do not believe that the two can be separated, although I do not say that broken homes are the only cause for the increase.
Some people will say that it is due to the decline in religion. I hope that I carry the right reverend Prelate with me when I say that that suggestion has not been proved. I do not believe that religion can be said to have declined but is is arguable. However, it is certain that the Churches are coming together in a way which would have been inconceivable 50 years ago. There is much hope for the future and in the end it will spill over into the moral standards of this country and into a reduction in crime, violent or otherwise.
5.13 p.m.
Lord Boyd-Carpenter: My Lords, for almost the first time in my life I can happily agree with something said by the noble Earl, Lord Longford. It was the remark made in his concluding sentences. I agree that the Churches are coming together and that it has ceased to be the case that one church regards it as a merit or virtue to criticise another. That will strengthen the hold of the Christian religion on the public and undoubtedly it will help in the matter now before your Lordships. I am afraid that I cannot agree with much more that the noble Earl said.
The Earl of Longford: I did not expect that.
Lord Boyd-Carpenter: I am obliged. I have always noticed that the noble Earl is enormously thoughtful and considerate towards the needs and well-being of the criminal. However, I have noticed much less concern expressed on his part about the effect on the victim. He has always concentrated on the well-being of those who have committed crimes—many of them serious crimes. That is an admirable aspect of his views. But I have rarely heard him express concern for the innocent victim.
The Earl of Longford: Will the noble Lord give way?
Lord Boyd-Carpenter: It is the innocent victim with whom your Lordships are mainly concerned. Yes, I shall give way.
The Earl of Longford: My Lords, I promise that this will be my only interruption, but I must make it. Obviously the noble Lord was rightly meditating upon his own speech and was not listening to mine. I said that 10 years ago I introduced a Bill in this House in favour of the victim. I forget when the noble Lord joined us. Was he a Member 10 years ago?
Lord Hooson: Will the noble Lord give way?
Lord Boyd-Carpenter: I am sorry, but I cannot answer two noble Lords simultaneously. I am afraid that I lack the dialectical gifts to do so. The noble Earl is right. I remember his Bill. With respect, it was not an effective measure nor one which had the slightest chance of becoming law, as he knew perfectly well. I repeat that his manifest concern is often expressed for people who have committed atrocious crimes and it is well known in this House. It appears to me to detract from the balance of his remarks when dealing with this subject. If the noble Lord wishes to intervene I shall give way if he does not mind taking second place.
Lord Hooson: My Lords, not at all. I am sure that on reflection the noble Lord will agree that he was unfair to the noble Earl, Lord Longford. I recollect that in 1960–61 I was a member of a committee before I was a member of the other place. It dealt with the question of compensation for victims of crimes of violence and its chairman was the noble Earl.
Lord Boyd-Carpenter: My Lords, I am obliged. That does not alter in the slightest the fact that over the years—it is 28 years since then—the noble Earl has distinguished himself by continually raising the question of the convicted criminal. He did so this afternoon when he stated that the Government's penal policy was flawed because it suggested longer sentences. I shall deal with that matter in a moment because I believe that his reasoning on it is also flawed.
The noble Lord, Lord Hooson, pointed out that over the past 28 years the noble Earl has spared a thought for the victims. However, I believe noble Lords know perfectly well that that does not alter the fact that the noble Earl has been a devoted
268
supporter of the needs and well-being of the convicted criminal. I can respect that attitude and I understand his point of view, although I believe it to be wrong as a matter of emphasis. However, I am afraid that it is a fact.
The House is greatly indebted to my noble friend Lord Reay for raising a matter which is fundamental to all governments. Government was created in order that the individual should be protected by them and by laws enforced by them. If one goes back to the beginnings of civilisation one will find that that is the reason for the beginning of government. Therefore we are dealing with the fundamental question of the protection of the individual. The great concern which now exists in this country is not whether a limited number of violent criminals are treated in a way most conducive to their health and well-being. It is whether the public can be protected from violence and attack.
When I was young and in London I walked the streets without a thought that there might be danger to anyone. Your Lordships know that nowadays the threat of violence exists in the streets and in the Underground. That applies not only to London but to other great cities. The purpose for which government was set up—that is, the maintenance of order and protection for the ordinary citizen—is no longer being fully discharged. There has been a major change in the position of the individual. One used to believe that there were certain countries in the world which one despised because one might be in danger of attack on the streets. Unhappily, we now face that situation in this country.
What are we doing about it? Historically, whenever there has been a serious increase in crime, the powers that be, if they have been responsible and active, have increased the penalties. It has been the normal and, on the whole, experienced response to crime that those who commit crimes which are becoming more and more prevalent shall suffer even more severe penalties than they used to. There has been a move that way in most countries in the world and has been for centuries. It is still so in many countries. One small example which comes to mind is the very well run republic of Singapore which, when there was an outbreak of drug smuggling and trading on a large scale, the government of that country imposed capital punishment on drug smugglers and dealers and that had a dramatic effect in reducing the trade. Therefore, the traditional experience of the civilised world over the centuries is borne out by that example that the proper response to a growth in one sort of crime or another is to increase the severity of the penalty.
My noble friend Lord Ferrers took some credit—and was rebuked by the noble Earl, Lord Longford, for it—for sentences having been increased in respect of certain very unpleasant and frequently committed offences. However, the difficulty of that argument is that what the sentence may be is one matter, but the sentence actually served is another. I do not wish to weary your Lordships at any length but the abolition of capital punishment for murder undoubtedly weakened the structure of severe penalties for severe offences not merely for murder but down the scale. When capital punishment was

269
abolished, we were told, "Well, imprisonment for life is just as severe a penalty and is just as good a deterrent". That was an arguable view. To an imaginative person it may be just as bad to be locked up for the term of one's natural life as it may be to face an executioner in a few weeks' time. That is very much a matter of individual feeling. However, there is hardly such a thing now as imprisonment for life. Judges say with great solemnity, "You have committed a series of terrible crimes. You should go back to prison for life."
How many people actually serve life sentences? The other day I asked a Question covering the past 10 years of the noble Earl, which, with his usual courtesy, he answered. From that it appears that over the past 10 years in no year have as many as 10 prisoners on life sentences died in prison, whereas in every year but one in the past 10 years over 100 have been released. Taking the latest year for which statistics were given in my noble friend's Answer, seven life sentence prisoners served the life sentence inasmuch as they died in prison, whereas 100 were released. Therefore, it is beginning to be known and realised that the terror of a life sentence, the deterrent effect and threat of it is not a reality. Sooner or later those sentenced formally by a judge to imprisonment for life will be released.
The same applies to other severe sentences. Judges don their most formidable aspect and say to the man in the dock that he has done a terrible thing or a series of terrible things and that he will serve 10, 14 or 20 years. However, the experienced criminal knows perfectly well that he will not serve anything of the sort and that in considerably less time he will be released. That is a factor in the growth of serious crime.
Starting again with capital punishment, your Lordships may have observed the fairly recent case in which armed robbers kidnapped a bank manager and his wife and daughter. They threatened to kill the wife and daughter unless the manager produced the keys of the bank and opened it. When the robbers were arrested, one of them said, "Yes, we certainly would have killed them. It would only have meant another five years on the sentence". That is very revealing as to the effect, among serious criminals, of the abolition of capital punishment and the weakening of the sentences imposed.
I say to the Minister that although it sounds very good to say that one has increased the possible sentence which can be imposed for a number of serious offences, that does not establish the real deterrent effect or give the public the protection from future misdoings if it is known that the sentence will not be carried out.
Perhaps I may give an example. My noble friend will remember, because I asked him a Question about it the other day, the case of Mr. John Hope Taylor who, having killed one woman, was imprisoned for seven years. He was released shortly after four years and proceeded to kill another woman within a matter of months thereafter. When I asked my noble friend why this known violent man had been released while his sentence still had some two and a half years' currency to run, and why the public
270
and that particular woman, who he subsequently murdered, had not been protected from him, my noble friend said: Well, there are regulations under the earlier Act that because he had not actually bashed a prison warder when he was in prison, he was entitled to a certain amount of remission."
I suggest to my noble friend that faced with the very serious growth in violent crime, It is necessary to look at the question as to whether sentences should not be made to mean what they say. I know the problem of the Home Office. I know it is anxious to release people from prison because the prisons are overcrowded. With great respect to my noble friend—and I do not say this to him but to his predecessors in the Home Office—that is a situation which is largely due to the failure of the Home Office over the past years, faced with the situation in which it knew crime was rising, to provide additional prison accommodation. The record of the Home Office on that is not good and I know that now efforts are being made particularly by my noble friend, to restore that. I hope for that reason he will not allow the natural concern of the Home Office, the worry about the strain on the warders and the conditions of prisons because of overcrowding, to cause people who have been sentenced after a fair trial by an experienced judge to be released automatically before the sentence has expired. If the learned judge knows his business—and with great respect the majority of them do although there are so many now that there may be exceptions—then surely the sentence which he imposed should in general, and I do not say always, be implemented.
As I have tried to say a few minutes ago, given that we are faced with this growth in violent crime and given the normal reaction throughout history of societies to the growth of violent crime, then we require not only a paper increase by way of legislation in the nominal sentence which can be imposed but we also require the reality—and the reality to be appreciated by the criminal community—that the sentences mean what they say.
I hope that we may become rid of this idea—whether it is a question of parole on which my noble friend behind me will speak or whether it is a question of regulations to which the Minister referred—on the whole people should serve the sentence imposed on them. I believe that in that way there will be the deterrent effect and it will be made abundantly clear that crime does not pay. When we have criminals such as the one I quoted saying, "Well, even if I commit murder it is only five years on the sentence", one realises that one is dealing with a sophisticated, educated criminal class of people who can see through the farce of an apparently severe sentence which they know they will never have to serve.
I have just a few words to add on another subject —the police. I very much agree with what my noble friend Lord Orr-Ewing said about our admirable police force. It is probably the best in the world. The courage which individual unarmed policemen show when tackling armed criminals can only be enormously admired, whether one is in the armed forces or elsewhere. I also support what he said about the desirability of reviving some kind of system for

271
police cadets, like the Hendon cadet college which turned out so many admirable policemen. I do not know why it was abolished. There is every reason for restoring it.
I want to add something which I am sure some of your Lordships will not agree with. Some thought will have to be given to moving towards a national police force. Is there really in this day and age, on this small island, a case for having separate police forces? Whenever there is a serious crime or serious trouble Scotland Yard has to be brought in, in whatever part of the country the trouble occurs. Frankly, I doubt whether for serious matters of policing, at any rate, local authorities have very much to contribute. After all, we do not have a localised army, though we have regiments which have happy local connections. With a centralised police force the police units could have happy and proper local quasi-regimental connections. I wonder whether we would not have a police force even better fitted to deal with the problem of major crime today if the force were to be unified, very nearly as large as the army, larger than the navy and the Royal Air Force, with a centralised machinery.
We are being driven towards that possibility. There is a Bill coming to your Lordships about a central police establishment which, as I understand it, derives from the fact that it is necessary to have at least one police force that is not dependent on any individual force, whether metropolitan or localised. I know that there would be considerable understandable, sentimental and emotional regret in the provinces if we were to (if I may use the word) nationalise the police force. However, in view of the enthusiasm of noble Lords opposite for nationalisation, perhaps they will support such a proposal.
5.33 p.m.
Lord Carlisle of Bucklow: My Lords, I am sure that my noble friend Lord Boyd-Carpenter will forgive me if I do not follow him in his argument about the abolition of capital punishment. However, I should like to follow much of what he said about the gap that has arisen between the sentences passed by the courts and the actual sentences served. Indeed, I have a great deal of sympathy with his argument that that gap has now become too great and that steps should be taken to restore some meaning to the whole of the sentences passed by the courts.
Perhaps I may express, as other noble Lords have done, concern at the amount of serious crime and the growing rate of violent crime in this country. As the right reverend Prelate said, people have a right to go about their lives without fear for their own safety. We have a responsibility to ensure that that is possible. Obviously one welcomes the overall reduction in crime referred to by my noble friend Lord Ferrers, and particularly the reduction in the number of burglaries. It is often forgotten that although burglary may not be classed as a crime of violence it is a crime that gives great concern to people in this country.
Undoubtedly much burglary is opportunist, and because it is opportunist effective methods of crime
272
prevention can reduce the incidence of burglary. I believe we are seeing—and I congratulate the Minister—the beginning of a reduction in opportunist crime as a result of the real efforts that the Government have put into crime prevention.
However, the fact is, as my noble friend Lord Ferrers agreed, that while crime may happily be showing overall signs of reduction, serious crime and crimes of violence continue to increase. Although they may only be 6 per cent. of the overall volume of crime they undoubtedly are of major concern. Perhaps I may say to my noble friend Lord Reay that if one wishes to see the effect of the increase in crimes of violence one need only look at the speed of the increase in applications to the Criminal Injuries Compensation Board. Regrettably, the facts that he gave are one or two years out of date. The rate at which applications are received by the board is steadily increasing and they are substantially more than the figures he mentioned.
As has been said by, I believe, all those who have taken part in this debate, the causes of crime are extremely complex and diverse. Clearly they go far outside the remit of the Home Office as such. I merely make three comments. First, as regards the comments of my noble friend Lord Reay, the real issue is that crime is related to age. The alarming facts about the figures he gave for inner city crime are how much of it is committed by very young people and that the majority of crimes in this country are now committed by 15 year-olds.
Secondly, I am bound to say that I believe the excessive portrayal of violence inevitably leads to an increase in the incidence of violence, if for no other reason than that it reduces the sensitivity of people to the effects of violence, therefore inuring them to it and leading to acceptance of violence as a way of life. My third point takes up what the noble Lord, Lord Harris, said about the alarming effect of drugs on the volume of crime. From time to time I sit, as does the noble Lord, Lord Hooson, as a recorder in the criminal courts. The most significant fact is the vast increase in the proportion of normal, run of the mill cases coming before the criminal Crown Courts today which are in some way related to drugs—crimes carried out for the purpose of obtaining money to feed the dependence on or desire for drugs, or crimes committed by people when they are under the influence of drugs.
I turn to the more narrow issue of Home Office sentencing policy. I believe it is accepted that in general terms only 3 per cent., or at the most 7 per cent., of people who commit crimes actually come before the courts to be sentenced. In some way, therefore, the influence of sentencing is small. Clearly the more serious the crime the higher the clear-up rate and the higher is the proportion of people who appear before the courts and who therefore have the likelihood, as my noble friend Lord Boyd-Carpenter said, of being deterred by what the courts do. I believe it is relevant that there has been a significant increase in the average length of sentences, in particular that there has been a substantial increase in sentences of over five years. I believe the cause is that the courts are accurately reflecting both the increase in the volume of serious

273
crime that we are facing and the concern of the people at that volume of crime.
It follows that not only must those who involve themselves in violent and serious crime expect condign punishment, but inevitably that the Government have a duty to provide a prison building programme so that those sentences can be served. I accept what my noble friend Lord Boyd-Carpenter said and believe that the prison building programme being undertaken by the Government at the moment is essential however tolerant and humanitarian one's views may be on matters of penal policy as a whole.
In the last few minutes perhaps I may take up what my noble friend Lord Boyd-Carpenter said about the length of sentence that people actually serve in prison. With respect, I remind him and the House that other than those who are sentenced for murder or certain other indeterminate sentences, everyone who goes to prison for a determinate length of sentence, unless he is to die in prison, some day will come back to society. If one is to achieve the protection of society, surely the real issue is to ask what is the best method of returning that person to society that is likely to reduce the possibility of him committing further crime.
As the noble Lord mentioned, I have recently chaired a committee looking at the parole system. We recommended substantial changes in the system. Some of the Press reaction to the report was to suggest that we were in fact proposing that parole should exist for criminals who have committed serious crimes where it does not exist at the moment. The implication was that we were proposing eligibility for parole for those who at the moment were ineligible. Nothing could be further from the point. The eligibility for parole has existed in this country since the introduction of the Parole Act 1969. If one goes further back the eligibility for early conditional release has existed since the time of transportation. My noble friend Lord Boyd-Carpenter may be interested to know that at that time anybody sentenced to life imprisonment was automatically released after eight years and given a ticket of leave within Australia. That is a substantially shorter period of time served towards a life sentence than is being served at the moment.
Lord Boyd-Carpenter: My Lords, perhaps the noble Lord will allow me to interrupt for a moment. Does it not follow from that that though their freedom may not be of benefit to Australia, it caused no harm at all to their fellow subjects in England?
Lord Carlisle of Bucklow: My Lords, to a certain extent the noble Lord is right. The interesting fact is that when transportation ended and people were dealt with under penal servitude in this country, the same concerns began to be expressed as regards prisoners being released at a substantially earlier period than the sentence passed by the court, in exactly the same way as the noble Lord indicated in his speech. The whole matter was looked at by a Select Committee of the other place in I believe the 1860s or the 1890s.
The point I wish to make to the noble Lord—and I support him in what he is saying—is that for many
274
years the sentences passed by the courts and the sentence a person serves actually may mean two different things. In the system of today, any sentence of imprisonment over 12 months means that the person is eligible for parole after a third of the sentence has been completed. Provided that he behaves himself he comes out automatically at the two-thirds' point with the whole of the rest of the sentence remitted. So in fact a sentence of six years means in practice that even if a person does not get parole the sentence continues for only four years.
It is true that when Sir Leon Brittan was Home Secretary he said of the parole system that for those serving more than five years for drug trafficking, sex, arson or violence, he would only give parole either for a few months at the end of the sentence or in exceptional circumstances. That did not remove eligibility for parole. The fact remains that today all people are eligible for parole after a third of their sentence. Of those in the restricted categories 51 per cent. are still getting parole at some stage in their sentences and all of them come out without any control at all, even if they do not get parole, after two-thirds of their sentence.
It is that problem that we tried to address and suggested that instead it would be of greater advantage for the protection of the public that all people serving long terms of imprisonment, whenever they come out and whether they have obtained parole or not, should have some form of supervision on release from prison. The sentence should be given some meaning in that for 100 per cent. of the time of the sentence imposed by the court, even if the person was released at an earlier stage from imprisonment, he stood at risk of being returned to prison to serve the remaining and outstanding period should be commit any offence during that period. What we have said and what I suggest to the noble Lord in fact enhances the protection of the public from serious crime. It is that, rather than have a system where people may be released after serving one-third of the sentence—I concede in practice that no one is released, but it means that an immense amount of work is being done carrying out nugatory reviews in these cases—they are bound to be released after serving two-thirds of the sentence. On being released the worst cases get no supervision at all. A system we recommended was where parole eligibility should continue but not start until 50 per cent. of the sentence had been served, and supervision of those who got parole should go to 75 per cent. rather than 66 per cent. Those who came out at the two-thirds point, if they did not get parole, should still be on supervision for 75 per cent. of the sentence. All should be at risk if they re-offend to 100 per cent. That is a system that gives greater protection to the public.
We said, and we repeat it, that we believed that the principle as it worked at the moment was flawed in practice. We believe that the only serious test for parole when the case was reviewed at 50 per cent., should be whether the person continued to be a risk for committing further serious offences if released. I say to my noble friend that I believe there is concern about the gap that has grown up between the length of sentence passed and what in fact it

275
means in practice. I believe that part of our proposals would help to restore a greater degree of reality to the sentence as a whole.
Finally, I believe that I have been drawn further into talking about the report on parole by the comments made by my noble friend Lord Boyd-Carpenter who spoke directly ahead of me. I understand it is possible that there may still be a debate on the whole general issue of this matter at another stage. I believe that we are right to express our concern over the issue of serious crime. I suggest to your Lordships' House that, while recognising that those who commit serious offences are bound to go to prison for long periods of time, thought must be given to see how they can most appropriately be released.
5.48 p.m.
Baroness Macleod of Borve: My Lords, like other noble Lords, I am most grateful to my noble friend Lord Reay for initiating this debate this afternoon, for the enormous amount of research that he has done and for having given us the benefit of it with the up-to-date figures on crime of all kinds in our country. I also wish to thank my noble friend Lord Ferrers for telling us of some of the research that the Home Office has been doing and what it has found. I believe that some of the figures he has given have been worrying and perhaps eye-opening to most of us here in your Lordships' Chamber.
I shall not go over the figures again because several noble Lords have already done so. However, we must realise that the number of crimes of violence is increasing despite all that we are trying to do. On the other hand, the number of crimes against property is falling. Fewer shops are broken into, fewer people lose their cars—perhaps drivers are behaving more carefully at long last—and there are fewer burglaries. What worries me, and the point on which I should like to concentrate on this afternoon, is the fact that the peak age for all crimes of violence committed by both males and females is only 15.
The right reverend Prelate the Bishop of Manchester asked why the age should be 15. He thought that such behaviour might be inherited. That thought had not occurred to me, but obviously that factor is an important one. He also thought that the way young people were brought up might have a bearing on this issue. I suggest that the disadvantages caused by a child being brought up by one parent instead two has a real bearing on the crime rate among young people. I doubt whether noble Lords realise, as I have had to do from various experiences, how much influence a father has on his children. Male guidance and male authority are extremely important. I suggest in the presence of my noble friend Lord Elton that more male teachers should be encouraged to go into schools, even into the pre-preparatory schools. So many children are brought up with no male influence. The on-going problems of children who are deprived of a father whether through divorce or because the mother is unmarried, are incalculable. A mother who brings up one or more children alone has a mammoth task. I do not know whether up-to-date figures would
276
show that children who are brought up without a male figure are more prone to crime in their teenage years, but I suspect that such figures would show that they are.
I was for many years a juvenile court magistrate. I believe that there are enough methods of dealing with young offenders. However, making the punishment fit the crime and the offender is much more difficult. Magistrates should deal severely with habitual young criminals, although—and I have put this on the record before—for a first offence, and if loss of liberty is decided upon by the Bench, I would give a very short sentence indeed. I was especially interested to hear what my noble friend Lord Orr-Ewing had to say about the police. I agree with him that we owe a great deal to the police force in this country.
I wish that the Hendon cadet college, which produced so many admirable policemen and encouraged young people in this country, could be re-opened, whether at Hendon or somewhere else. I shall not give the figures because my noble friend has already given them; but I should like to emphasise the fact that police in uniform are special people. They are regarded not with fear, as used to be the case in my young days, but as figures to whom people can go for advice and assistance.
Many crimes are committed by people in possession of offensive weapons. The Criminal Justice Act 1988 covers a wide range of implements which if carried are illegal. I hope that the police will use their powers to stop and search because only by this means will criminals be too frightened to go out in possession of offensive weapons.
The noble Lord, Lord Reay, took the trouble to visit Underground stations and police stations. I reiterate what he said about far too few police officers being on view to the public in the Underground system. I hope that many more people will be asked to come forward and join the force as special constables. People of good will would like, if invited, to come forward and give of their services.
There are reasons why people become criminals. I should like to put one idea before your Lordships. Young people do not become criminals through boredom; but I believe that they are not given enough responsibility by society, by their parents if they have them, by their schools or by the environment in which they live. The other day I heard about a borough estate in London which had been especially clever in dealing with young vandals. It brought the young people together and gave them responsibility for a piece of ground in front of the estate buildings —their homes—or for a piece of the wall near which their homes were built. It was their responsibility to look after that piece of ground or that piece of wall. It became so precious to them that almost overnight the problem of vandalism ceased and a sense of responsibility grew up throughout the estate.
Many London boroughs have empty housing. Those boroughs also have homeless young people, many of whom are unemployed. I should like to suggest that those boroughs bring together the homeless unemployed and give each person a room. They should ask them to decorate the room under

277
supervision and make it habitable. At the end of the day when they have learnt how to hang paper, paint walls and so on, the boroughs should give them those rooms at a low rent. That would encourage responsibility; and I believe very sincerely that that is what young people need. However, whether it will stop violent crime, only the future will tell.
I feel that I must conclude at this point, but there is just one thing I should like to say. The debate so far has been about violence and I have talked only about young offenders. However, I should like to pay a very warm tribute to the thousands of young people who respect the rule of law, who give help and service to the community and who help thereby to make our country a happier place in which to live.
6 p.m.
Earl Baldwin of Bewdley: My Lords, we are all grateful to the noble Lord, Lord Reay, for initiating the debate. I am especially grateful for the way in which he chose to word the Motion. In the context of the "full range of methods" for dealing with crimes of violence, I should like to draw attention to just one area of research to which I alluded briefly in the debate on food quality and safety on 1st March. I believe that the Home Office is aware of this kind of research and I should be most interested to hear the Minister's view upon it when he speaks at the end of the debate.
Your Lordships may wonder what food quality can have to do with criminal behaviour. The answer apears to be: "more than anyone would have thought likely 15 or 20 years ago". If I start with an obvious example of substances taken into our bodies, there is no difficulty in understanding the effect that drugs can have on behaviour, whether bought from a pusher or prescribed by a doctor. Alcohol can similarly affect conduct.
The phenomenon of hyperactivity in children is now quite well recognised and seems to be on the increase. In this case the child reacts strongly, often violently, to substances in food and drink. Artificial additives are prime culprits but ordinary foods are implicated as well. In an extreme case known to me personally—a lad of 20 years of age who lives just down the road—any contact with wheat, milk or sugar will drive him literally berserk: he beats up his mother, steals and smashes cars, or starts fires. That produces a nightmare situation for the family, where the chances of avoiding prison each time depend upon the magistrates acceptance of the link between diet and criminal behaviour. Fortunately, the connection is usually accepted by the court.
What is interesting about recent research is the link that keeps coming up with the refined, highly processed diet which is so common nowadays in Western society. It is a complicated field, in which it would be wrong to draw hasty conclusions as to whether refined sugar, excessive milk consumption, additives or other dietary factors bear the chief blame. The overall picture seems to show a lack of nutrients in terms of the vitamins and minerals needed for proper brain function; and that is made more serious by the increased absorption of toxic substances from a polluted environment, which is
278
the other side of the coin so far as concerns mental functioning.
In the early days, the quality of the evidence for this effect was not very strong. But since the late 1970s there have been many good studies, mostly in the United States, which have shown a dramatic decline in violent behaviour among prison inmates when given a more natural diet. A 45 per cent. reduction in antisocial behaviour was recorded among prisoners in Alabama on a whole-food regime, while similar trials in Los Angeles produced a 44 per cent. decrease and a city-wide ban on highly processed foods in all juvenile institutions. The most serious offenders showed the most improvement.
A US Department of Justice study showed a significant drop in bad behaviour and recidivism, simply on the removal of dairy products and refined sugar. One particularly interesting study involved 800,000 children in the schools of New York. They were looked at over a four-year period. In the first year, the added sugar in their school meals was greatly reduced; that is, in cereals, jams, ice-cream, and so on. In the second year the synthetic food colourings and flavourings were removed. In the third year there were no changes, and in the final year certain preservatives were removed. Improvements in academic achievement scores accompanied each of the dietary changes, while in the remaining year the scores stayed virtually the same. That was a study which looked at academic performance, but it is all of a piece with the evidence on behaviour. Both involve the action of nutrients and toxins on the brain.
The anecdotal evidence is that behaviour in the New York schools improved as well: also, incidentally, less food was wasted, more childen wanted meals and the healthier diet cost less to produce. All that has momentous implications, if it is substantiated, for food policy, medical research and the administration of justice. Perhaps for that reason the conclusions are being opposed in some quarters with rather more than the usual resistance to new ways of thinking. Besides, I dare say that many of us—if we are honest—feel a little lukewarm towards good advice, especially when it involves eating habits.
It is perfectly true that some of the research in this area has not been well conducted, and that really sound studies are difficult to carry out. But it is equally true that by now a lot of good research is pointing in the same direction and that the case has not been disproved. However, there has been a fair amount of what one can only call debunking research of a pretty poor standard, with accusations of over enthusiasm and extravagant claims which I do not believe stand up against the essentially sober approach of the better workers in the field who have no axe to grind and who, in many cases, started out as thoroughgoing sceptics.
Curiously, the ethics of this approach to criminality have been questioned. It is all right to put people in prison, but it is not all right to change their diet when they are there. That charge has been levelled at the one major study being conducted in this country with a group of severely disturbed 12 year-old to 18 year-old young people in the north of

279
the country. The study is being done with the subjects' agreement, has been vetted by the relevant ethical committees and involves a change to a diet along agreed guidelines for healthy eating, with some extra vitamins thrown in. One wonders what can possibly be the objection to a proposal that cannot do other than benefit those who are taking part, whatever the precise findings about violent behaviour that come out if it.
I shall take up no more time with what is only one aspect of the approach to criminal behaviour. It is interesting—I put it no higher—that the rise in violent crime, as also the rise in degenerative disease, has matched the rise in environmental pollution and the change towards an ever more unnatural diet. As Dr. Schauss, a leading American researcher, puts it:
"In recognising too much the psychological and socio-economic factors of criminal behaviour, is it possible that we have ignored the possibility that poor health or inadequate nutrition can be significant factors influencing antisocial behaviour?"
I look forward to hearing from the Minister what views his department holds on the evidence to which I have referred, and I should also like to know the source of his professional advice in such matters. If he is not yet convinced—that is fair enough—what steps would he like to see promoted, perhaps in conjunction with other departments, towards the verification or otherwise of what has been observed in studies so far? It is clear that if what we eat can often affect how we behave, we have at our disposal a means to get at some of the causes, instead of always reacting to symptoms, of disorder in society. It is a means that is cheap and conducive to the general health of the population. That, even if not the whole story, must be a desirable goal.
6.10 p.m.
Baroness Gardner of Parkes: My Lords, I should like to thank my noble friend Lady Faithfull for allowing me to change places with her. I must apologise to the House for the fact that I shall have to leave before the end of the debate because I have a long-standing engagement.
I especially want to speak in the debate because I want to put forward the problem of women who are often the victims of violent crime, which has dramatic social implications for them. It gives us great cause for concern and creates enormous fear for the women themselves.
Some years ago I was asked to speak to the City Women's Network, an interesting organisation of bright young, mostly executive women, many of whom were in the legal profession. I there met Janice Weston who became a good friend. It was upsetting when I picked up the newspaper and discovered that she had been murdered on the M 1. I am sure that your Lordships remember the case. She pulled up to change the tyre on her motor car, and her body was found there. More recently we have all read about the pregnant woman who went to call for emergency help on the telephone. In that instant, unlike in Janice's case, the criminal has been arrested. No one has yet been arrested for murdering Janice.
280
It is hard for women to comprehend such circumstances. One always thinks that it is someone one does not know and will never know. When instead one finds that a friend is involved, that is shattering. It is an experience that everyone has at some stage. One comes across someone who has been the victim of a violent crime.
For many older women the fear of violent crime is so great that they have self-imposed curfews. They shut themselves in at night and would not dream of going out. A recent television programme showed that many women, of all ages, will not go out alone at night because their fear is so great. Those are important examples. They have implications for the whole of our society. Many people have turned their homes, be they flats or houses, into small fortresses. We have recently had two terrible deaths. The people could not be saved because the fire brigade could not get in to rescue them. What are people to do? They want to feel secure in their homes and yet they are afraid that a fire may break out. There is a need to develop some type of barrier that a fireman can get through quickly in an emergency but which will still allow people to feel protected in their homes.
The frail elderly are advised never to display a notice in the window saying that they are frail or might be in need of help. That could, in itself, attract the undersirable person who might attack them. In London I have seen home beat police officers, who know where the elderly live, check to see that they are all right. That is reassuring. It provides real help to elderly people who live on their own. There are more elderly single women than men because there is a large proportion of elderly widows.
I heard a case yesterday in an industrial tribunal where a member of the London Transport staff had been attacked. He had defended himself. The case dealt with the extent to which one can defend oneself. The case was interesting. The man was attacked by someone who said that he was a karate expert. He said, "You are dead, man. You are dead." The ticket collector reached for the nearest thing to hand, which happened to be a piece of iron conduit. He did the assailant some damage and lost his job as a result. What is the answer? We were told that in that case the answer was for London Transport—the same presumably applies to other authorities—to give their staff more training on how to deal with that type of aggressive, frightening assailant.
When I was a GLC member, Southgate station was regularly closed because there was such violence and fear for the staff. When the police were called a lot of saw blades, which were sharpened into the most horrible knives that one could ever imagine, were thrown down onto the platform. Those are examples of the problems that people face all the time.
A great deal has been done by the installation of two-way radios on the buses and because the doors can be closed to prevent the bad person getting away. That has been a deterrent. If one can catch a criminal, the next one is deterred.
I had an interesting case in the magistrates' court last week. There was a queue of people waiting for a bus. When the first woman went to get on there

281
was a delay. Whatever she was saying to the bus driver took a long time, and the queue became restless. In the end the woman got on and sat down. Another small, interesting little woman, followed her and sat down at the other end of the same seat. The bus did not go. The driver came back and spoke to the first woman. She refused to answer any questions. The bus driver went away to call on his two-way radio. The second woman said, "Why don't you pay your fare, love, so that we can all get going?" The first woman turned around and clawed the little woman's face to such an extent that she still has the scar. She literally ripped her face open. Of course the case was found proved.
We realised that we should have to ask for social inquiry reports, but the woman's counsel had come already prepared for them. That woman was suffering from paranoia. She believed that everyone on the bus was persecuting her. What sentence could we pass? She had a history of committing repeated violent attacks on other people. Imagine if one happened to be the second little lady in the bus queue and thought one was being helpful, but found one was being attacked in that way. We had a difficult decision to make when considering how to sentence. The psychiatric report recommended no sentence. It said that the woman should be put on probation. However, she had not responded to probation previously. She had not responded to anything. Almost everything had been tried. In the end we gave her a conditional discharge because we felt that we felt that it would be hanging over her head for the following 12 months. If there was a further incident within that 12 months, the two matters could be dealt with together.
People who sit in magistrates' court constantly have to make difficult decisions. What are they to do with the cases that come before them? It is not easy to decide. We need a greater mix of magistrates. My Bench would like a greater representation from the ethnic minorities. It is very difficult to persuade them to apply. If there were more people it would be a help because it would be quite clear that there is a very well-balanced Bench.
The police presence and the home beat officer are also extremely valuable. Many of the cases of violence against women are not external but internal violence in their own families, their own homes and from people whom they know and even love.
I do not intend to comment on the merits of the case which we have all read about in the last couple of days which was of great concern to us. It was of the woman who said that she was afraid to give evidence because she had been threatened with further violence. My experience as a magistrate is that people are very often frightened to give evidence through fear of what will happen afterwards. That is a cause for concern.
The greatest help in dealing with crimes of violence is prevention and we should look at prevention above all else. We heard of the young people to whom my noble friend Lady Macleod referred. How much more are they stimulated and encouraged by the Duke of Edinburgh award scheme or the Operation Raleigh scheme. Any of these and
282
similar schemes using and enthusing the young are much better than any scheme that gives no hope.
There is a real problem for all doctors although it applies more particularly to women doctors in London. There are no-go areas where doctors are frightened to be called out at night and they have to be accompanied by a large dog or a driver and a large dog or they have a two-way radio or anything they can possibly lay their hands on. I speak as a past president of Women in Dentistry. Women dentists are concerned that under the new terms of service they may be obliged to go out at night to treat an emergency case. They are not worried about turning out for the genuine emergency case but it is a hazard that it might be someone with evil intent who calls them out at night. Then when they go to the surgery which is isolated there is no one there and they might face a real problem. There are instances of that which should be looked into in order to find out how to deal with or prevent them.
Too many cases in the magistrates' court at the moment have to be thrown out on the grounds that there is no case to answer. That is because the prosecution has been badly brought: it sometimes does not tie in with the crime of the person accused. I do not know whether it is a temporary blip but that is not good. It is important that if a crime is committed and a case is brought to court it should not be lost due to a mere technicality.
The only remaining point I wish to make is that in the London Metropolitan police there is a most interesting woman police officer whom I have met. She goes into the schools and to the women's groups and similar places to discuss self-help with women. I am not talking about self-help in terms of judo. We all know that one can learn such arts if one happens to have the right abilities, the time and the muscular skills—
Lord Elwyn-Jones: Strength.
Baroness Gardner of Parkes: My Lords, strength perhaps. She is teaching people to stop and think. The girl who was murdered on the train that came into Victoria station was murdered because she got into a carriage that was a closed dog box, as we used to call them. The carriage next door was open style with other people in it and with an escape route. The policewoman explains to women, "Don't pick the bad carriage. Just think a moment and go to the safer one. Don't walk down the badly lit, nasty back alley, go along the bright road with strong lights". Lighting is most important and gives people a great feeling of confidence.
I believe that we should all be alert. As regards the lady whom I described on the bus, one of our questions was, "Did any of the other passengers help you?" The answer was, "No". On a bus full of people no one stopped to help that little woman whose face was being ripped apart. That is something we must become more willing to do. I know that people who have intervened have been killed for doing so but if enough members of the public were prepared to stand up strongly and support the one person being attacked then it would be effective.

283
We must think about where we go, not taking unnecessary risks, having well lit streets, looking after our own homes and taking precautions to ensure against the casual intruder. I believe that we should be considering these methods of prevention as much as methods of punishing crime.
6.25 p.m.
Baroness Faithfull: My Lords, I thank the noble Lord, Lord Taylor of Hadfield, for allowing me to speak, I had exchanged places with the noble Baroness, Lady Gardner of Parkes.
Last week in the Library I read about the history of the police. What did I find? That in the 12th century every parish had three constables; they always went around together and there was a curfew two hours after sunset. Everyone had to be inside two hours after sunset and the three constables went round with their lanterns, singing so that everyone could get out of their way. Then the constables would not have to arrest them or do anything about them. I also noticed that every city had great gates; I come from Oxford and every college there has its great gates. They were to protect people from the beggars coming into the town. Violent crime has been around for a long time.
Before making the speech I had intended to give I wish to take up two points with my noble friends Lord Boyd-Carpenter and Lord Carlisle of Bucklow. Those of us who have had to work in prisons have found that a prisoner under a life sentence with no hope of ever getting out behaves extremely badly. He has no hope. What is the good of behaving well and co-operating? Even if he has a long sentence there is always the hope that a prisoner may be allowed out. I think that if my noble friend Lord Boyd-Carpenter were to speak to many prison officers he would find that they were worried about having to look after men with long prison sentences and no hope of ever getting out.
I agee with my noble friend Lord Carlisle that if prisoners are allowed out it should be under certain conditions. I believe that the best way is to ask one of the many organisations such as the Salvation Army to run hostels where the men may live and to which they must return. If they do not return the sanction is that they will go back to prison.
In my experience, violent crimes fall into three categories. They are: gang warfare; violent crimes committed on the streets or on the Underground, crimes on entering buildings and in the corridors of high rise flats; lastly, by far the greatest number are the violent crimes committed within the circle of the family—domestic crimes.
With regard to gang warfare, yesterday I was speaking to Mr. Dear, the chief constable of the West Midlands police force. He was paying tribute to the police who infiltrate gangs—a very dangerous activity that takes great courage. I say to the noble Lord, Lord Orr-Ewing, that it takes not only courage but intelligence and I wish to pay tribute to the police who do that work. Gang warfare is very difficult to understand because perfectly respectable people by day may join a gang in the evenings and at weekends.
284
Many of us wonder why that is. Then there are the violent crimes committed in the streets, the Underground and in the corridors of high-rise flats. Those crimes have been mentioned by many noble Lords.
When I was young I lived in the worst part of Birmingham. Strangely enough, the road where I lived was called Summer Lane, although it was anything but summery in its aspect and it certainly was not a lane. The police never went about in ones or twos; they went about only in threes. The police who were on duty in the evenings or at night went about in threes. I only mention that because the atmosphere the police are able to create, even when they are doing nothing but strolling around is quite incredible.
On the matter of domestic crimes, I want to ask my noble friend the Minister—I must apologise for not having given him notice of this matter—about the splendid research unit of the Home Office. The graphs and figures produced by that unit are quite outstanding. But does the research unit ever analyse the people who are found guilty of violent crime, whether it be violent crime caused by gangs, crime in the corridors of flats or crime in domestic circles? Is it possible to analyse the case history of the various different crimes committed so that one could develop knowledge and research data as to the type of people who commit crimes: We could then work out ways to deal with them.
In a debate on 23rd April 1986, the then Minister, the noble Lord, Lord Glenarthur, reported that there was a shortfall of 2,000 police and that it was intended to spend £2 million to remedy that. We should pay tribute to Her Majesty's Government that that has now been achieved, as the noble Earl, Lord Ferrers, revealed.
Inevitably, I must turn to the question of children and young persons. A child is considered to be a child up to the 16th birthday. He is considered to be a young person from the age of 17 to 18. Young persons who come before a court and receive a sentence are sent to a place which now has a most horrible name—it is called a young offenders institution. Such places used to be called youth custody centres. Those centres provide a minimum three-week sentence and a maximum one-year sentence. The institutions are provided for boys aged 14 to 20 and for girls aged 15 to 20.
My next point has already been mentioned in this debate. However, I must repeat that the peak age of crime for young people is 15 years. However, it is important to note that that crime does not refer to violent crime. The age of 15 is the peak age for general crime. After discharge from a youth custody centre, young people show no benefit from their stay in the centre. No less than 80 per cent. of them commit a further crime within two years of discharge. So I must ask whether we are really spending our money in the right way. Is this method of detention cost effective?
In the debate three years ago, we were told by the noble Lord, Lord Glenarthur, who was the Minister at the time, that a unit was set up at the Home Office which involved, I believe, 12 other departments.

285
That unit was set up to discuss mutual policy across the board in order to see how every department could contribute to a diminution of crime.
At the moment an extraordinary thing is happening. As a result of rate-capping and the fall in expenditure of local authorities, the child and young person service provided by local authorities has been diminished. Local authorities have reported to them by schools children who are giving a great deal of trouble in school. Under the education legislation and under the recommendations of the Warnock Committee, children with special difficulties, whether physical or mental, are supposed to be kept, if possible, in their own homes and in their own communities. However, some children really need specialised help from specialised staff in specialised places.
The position now, as a result of rate-capping and lack of money on the part of local authorities, is that local education authorities are not sending those children and young persons to the specialised places where they need to go. Most of those places are in voluntary homes. Very good voluntary homes exist where the numbers of occupants are falling. Children who need a particular skilled kind of help are not receiving it and are getting into trouble. They provide particularly difficult trouble in schools. They then come before the courts and get sent to a youth custody centre.
How is it that the unit at the Home Office, consisting of 12 different departments, has not discovered that one department is, so to speak, offering a service while another department is not taking the benefit of that? However, it would be only fair to mention a specific case. There is at Benson near Wallingford in Oxfordshire a place called Turners Court. That place has a farm, engineering rooms, art rooms and music rooms. However, the numbers attending that institution have fallen so gravely that a change of use is now being considered or a possible closure. Meanwhile, Huntercombe youth custody centre up the road from Turners Court is so full that it is overflowing. The boys at Huntercombe do not enjoy the benefits offered by Turners Court. The boys at Huntercombe are receiving a training, but it is a short one and it is not the same type of training as can be offered at Turners Court. Of the children who leave Huntercombe 80 per cent. reoffend within two years.
Is it not possible for the departments to get together so there is an overall policy for all young people? As has been said, the peak age for general crime among young people is 15. Turners Court is a magnificent place and offers a service which cannot be given because the local authority is not willing to pay for it. Therefore boys are being sent to Huntercombe. Further, a survey has been carried out of the boys at Huntercombe which revealed that 30 of them could be dealt with in another way. The Children Bill is before the House of Lords. I hope that that Bill will help in this regard. Nevertheless, I think we should take an overall look through all the departments to see how we are looking after our young people.
Last week I was invited by the West Yorkshire police to a conference at the police training centre
286
near Preston. The conference concerned the police and education. The conference was extremely interesting. It concerned the ways in which the police could best help the school liaison service by going into schools. The police are developing very great skills in going into schools. They are also developing that fine balance of friendliness with children but also authority over them. The children welcome them and are pleased to see them. I believe it is important that the police who go into the schools should get to know the parents and that the parents should come and meet the police. In that way children develop a feeling of security, trust and belief in the police. But here again we are up against the problem of resources. If there are to be more resources for the police, I plead that they should go to the police liaison education service.
We spend an enormous amount of money on our prisons and on dealing with adult crime. I believe that if we invested more money, more care, more thought and more planning in our child care services and young people, we would do the country an inestimable good.
6.40 p.m.
Lord Taylor of Hadfield: My Lords, I should like to thank my noble friend Lord Reay for his hard work and research in preparing an excellent opening address and for raising this very important subject. In the 13 speeches we have so far heard we have been advised that much good is being done and that it is very important that violence and the spread of evil should be resisted and cured. I do not want to repeat those points. Instead I should like to put a new idea to the House.
It was thought impossible to put men on the moon. Through brains, initiative and research the Americans succeeded in putting men on the moon. I suggest that our Government should approach the American Government and that the two governments should then invite the good countries of the world to form a working party to find a solution. I am sure that that could be achieved using the same principles which enabled men to go to the moon. My noble friend Lord Orr-Ewing said that violence and the spread of evil are just as bad in other parts of the world as they are here and that in many parts they are worse. I hope that this new idea can be given consideration and taken on board.
6.42 p.m.
Lord Elton: My Lords, at so late a stage in such a fascinating debate I almost hesitate to contribute because so much of merit has been said that there is little new to say. However, I have a particular perspective and I think it worth spending a moment to focus on my principal interest in the debate, which concerns young people.
My interest is not accidental. Apart from having been a teacher and a Minister responsible for young offenders and for the prison service, I recently chaired an inquiry into discipline in schools—not into violence, or violence outside schools. All those experiences have emphasised for me one or two simple matters. I think that it is worth reminding your Lordships of them. They will not have the

287
dramatic results of the initiative proposed by my noble friend Lord Taylor of Hadfield of some great international psychological conference but I believe that they lie at the root of the problem.
The whole of my experience, in a life which has on the whole recognised and made use of a firm framework of discipline as a necessary part of human endeavour, has emphasised for me the importance of the other side of that equation. The equation should be not just firmness, but firmness and affection. A great deal of the problem which your Lordships are considering this evening has its origins not five minutes before it happens, nor five months or even five years before it happens, but at the beginning of life. We have discussed what is done in terms of the deployment of skill and resources to protect citizens against crime in the place and at the time it happens, and I genuinely congratulate my noble friend the Minister on all that he has contributed on behalf of the Government. How much more effective would be a policy which was able to have its effect in the place and at the time when the person concerned began to be a criminal.
It is very clear to me, in part as a result of my inquiry, that a framework of rules is a necessary part of life at all stages and a most necessary part of life at its beginnings. A child needs a framework of reference in which to establish its own standards of conduct and the standards by which it judges and perceives the whole of life as it moves through it. That framework needs to be predictable and understood and it needs to be predictably and understandably enforced, in the nursery as well as in the classroom. I echo my noble friend Lady Macleod's concern with those matters. If a child does not receive understanding, patience and affection as well as discipline in the earliest days of its life it will bring into the education system a handicap which will also be a handicap to its school.
It is not easy to say how this could be established thoughout a whole community, but I believe that my noble friend was right to tell the right reverend Prelate the Bishop of Manchester that there is no correlation between unemployment and criminality. I looked with diligence for such a correlation when I was doing my noble friend's job. I can endorse the fact that it does not exist. However, I think that one could find a correlation between the level of stable marriages or other arrangements in the communities where most offenders are to be found and the number of offenders. The startling figures which my noble friend Lord Reay produced at the beginning of the debate would be susceptible of such an analysis. Therefore there is a social dimension, which I cannot now address but which falls into the province of the right reverend Prelate as much as into the province of other noble Lords. That social dimension relates to the moral aspects of criminality and—as my noble friend Lord Ferrers put it—the attitudes which form round criminality and determine whether a community supports or resists it.
I shall not dilate on my report—which I hope will be in the Printed Paper Office tomorrow although it should have been today—but shall ask what ought
288
to happen when things have gone wrong and crime has not been prevented in childhood but has been embarked on in youth.
I pause in that journey to point out the very alarming correlation that can be made between the figures given by my noble friend Lord Reay and those referred to by my noble friend Lord Carlisle. In a community in which a very large proportion of the people are offenders and in which there is an age band which includes a very large percentage of criminals, a stream of young people will go through a formative experience in which criminality is the norm and lawful behaviour is eccentric. The larger the proportion of that population becomes, the more dangerous is the threat posed to the stability of society as a whole. If criminality becomes the law and lawfulness becomes eccentricity, black and white are turned upside down in terms of morality and social behaviour and chaos results. That is a real problem which needs urgent attention.
What do we do with the individual cases? We throw them into institutions. If I am right, as I believe I am, in thinking that behind a great many of those cases lies a deprivation in youth which amounts to having been denied the experience of the affectionate concern of an adult in authority while engaged in organised activity with rules, that lack is not remedied by sending the individual to the kind of institution such offenders are normally sent to.
I therefore revert now to a theme with which your Lordships have been wearied by me before, and will be again. It chimes in with what the noble and learned Lord, Lord Elwyn-Jones, said about recidivism: that it is far better to divert people from custody than it is to put them into custody, because once they are in custody they are far more likely to reoffend then they are if you can treat them in some other way, if it is appropriate.
I can assure my noble friend Lord Boyd-Carpenter that I am not saying nobody should go to prison; nor am I saying that no one should serve a long sentence. What I am saying is that by sending someone to prison early in their life you are making it exceedingly likely that they will go back there quite soon and that somebody else will suffer as a consequence. Therefore I would urge on my noble friend the Minister once more the virtues of intermediate treatment, which means the engagement of young people under contract to the court—and the contract results in imprisonment if it is broken—to carry out some constructive operation under adult supervision in a caring situation. The result of that is a lower rate of recidivism and a greater rate of reclaim at far less expense. That must call upon my noble friend's official ear as I know the rest of what I say falls on his humanitarian ear.
There is always an administrative aspect to questions like this. I hope that my noble friend will address the problem which I saw in my time as a Minister: that is, that if things have not changed, the money which pays for intermediate treatment which in turn keeps people out of prison comes through a different department from the source which pays for the prisons. That department is relieved of clients by the use of intermediate treatment. In other words,

289
there is no financial incentive that I can see for the Home Office to promote intermediate treatment, because that is paid for by somebody else's Vote. I hope that my noble friend will address that.
I think the greatest merit of a speech at this time of night is brevity. I therefore conclude by saying once more that I believe we must have a balance. I am by nature a fairly fierce disciplinarian and I do not believe that discipline works unless it is fairly operated by people who have the interests of the subject of the discipline close at heart. I therefore commend to your Lordships what I hope is the interesting report of my committee, which has this at its heart. But, much more, it even looks at the question which the noble Lord on the Cross-Benches put before us about diet. I am afraid we were not as enthusiastic as he was and we were not persuaded; but we were persuaded sufficiently to recommend the Government to monitor the scientific research to which he referred. I am now in danger of riding a hobby-horse. I have said what I want to say, and I shall sit down.
6.53 p.m.
Lord Hooson: My Lords, it gives me a particular pleasure to follow the noble Lord, Lord Elton, and indeed to reflect on the statistics presented to us by the noble Lord, Lord Reay, earlier, that the ratio of prisoners to prison officers was 2.6. I think I have recollected that correctly. As he was speaking I wondered what the ratio was in some of those schools in the inner cities where we have these great problems with 15 year-olds in the classrooms and the teachers. It would be very much higher there than in the prisons. I therefore wondered, as I listened to the noble Lord, Lord Elton, and to the noble Baroness, Lady Faithfull, whether we are spending our money at the wrong end.
On the other hand, we all know, through the statistics which have been presented to us in this wide-ranging debate, that we have an enormous problem at the present time. We all know about the rise in the incidence of crimes of violence and the nature of that violence—for example, how it is gravitating these days to the Underground railway system and so on. All these things show us that we have an immense problem on our hands at the present time. What is more, I think it is going to become infinitely worse. I say with great respect to the noble Lord, Lord Taylor, who thought that with their skill and knowledge the Americans could devise a system that would provide a panacea to cure these ills immediately, that they do not seem to have done so in their own country. The incidence of crime there is very much higher and the incidence of violence is also much higher. If there is fear of violence here—and there certainly is—then the fear of violence in the United States, from which I returned a week ago, is infinitely higher. We are following them in so many respects that it seems to me inevitable that we are going to have more and more violence on our hands.
What are we to do about it? I have attended debates of this kind, as have the noble and learned Lord, Lord Elwyn-Jones, and the noble Lord, Lord Boyd-Carpenter, together with many other noble
290
Lords, not only in your Lordships' House but in the other place over many years; and one could have repeated some of the speeches we have heard today. Violence has always been a great problem, as the noble Baroness, Lady Faithfull, rightly said: it was so in the 13th century. But today it has reached an unacceptable level for our society. The great problem with debates of this kind today, when we rehearse various different views and so on, is that we do not succeed in bringing them together. For example, the diversity of view between the noble Lord, Lord Boyd-Carpenter, and the noble Earl, Lord Longford, is enormous. Obviously they both sincerely have an attitude and an approach to this subject which differ to a vast degree.
However, I think that today the problem has become so great and the theories about it are so numerous. For example, I agree with the noble Lord, Lord Carlisle—and here I may differ from many members of my party for all I know—that the influence of the television set and the amount of violence shown on it is bound to have a devastating effect. We all agree that environment is an important influence on us today, and today the most important environmental factor in many homes, regrettably, is the television set. What it does is to lower the threshold. It makes people acquainted with violence and it makes it become accepted as normality. In good homes there is of course a countervailing influence, as there is in good schools; but if that countervailing influence is not there then the influence of the violence shown on television is pretty enormous.
That is a view which I happen to share with the noble Lord, Lord Carlisle, but I would go on to suggest that at this juncture there must be a great deal to be said for a Royal Commission to look at this. I know it is very often said that a Royal Commission delays the question; it shelves it for three or four years, and of course these are problems which cannot be shelved. It seems to me that with the lowering of the age to 15 as the prime age now of committing crime—for crimes of violence I think it is much more likely to be something like 19—the problem is becoming increasingly urgent.
The noble Lord, Lord Reay, in his speech referred specifically to a sub-culture, and he may be right about that to a degree. I was recently in the West Indies and discussed some of the problems they had there in regard to crime. I have discussed the same question with youths in this country who have a West Indian background and with the parents. Their parents have said to me that we have here a much freer society and a more permissive society than they were used to at home. They said that their children sometimes reacted against their own parents within the West Indian community. If they are unemployed—and unemployment, plus the lack of educational facilities, is a factor in these matters—such things ought to be explored. We have often heard in this House that education is expensive. We should be reflecting today on the cost of ignorance, because so many of these people who resort to crimes of violence are incredibly ignorant, in my general experience of them. There are of course differences in that there are those who enter into calculated

291
violence and there is the violence that goes over the top in a domestic situation. I do not want to comment on the red herring introduced by the noble Lord, Lord Boyd-Carpenter, but I could disagree with him. He suggested that, whatever the sentence, it should be served. Recently to my astonishment I was prosecuting in a murder case where a very bright young man pleaded guilty to murder. He was taking a realistic and responsible view of what he had done. I took the view that he might have had a run on provocation. I do not know what the eventual recommendation would be in that man's case, but it seems miles away from the murder that the noble Lord, Lord Boyd-Carpenter, had in mind. It is therefore dangerous to generalise about these matters.
I suggest that we have reached the stage when a Royal Commission should look at the whole problem. What are the increased causes of crime among young people in the country? What is the influence of television? What, for example, are the effects of the different ethnic backgrounds and the reaction against them? I think that it is the reaction against them that the noble Lord, Lord Reay, had particularly in mind. What is the relationship of unemployment to crime, not only in inner London but in other cities where the ethnic minorities are very much smaller?
A great deal of research has been done. We should be careful before we enter upon a programme of fatalistic acceptance and simply spend more money on the police and on prisons. One of the greatest faults in the country today is that when a youngster is matriculating in crime we send him to a university of crime so that he can graduate there, because that is what many prisons have become. We should bear in mind the wise words of the noble Lord, Lord Elton, and wonder whether we are spending most of the money at the right end.
I have seen a great deal of crime in my life. I come from an area where there is very little crime. I was brought up and have always lived in a rural area. Except for the odd sheep stealing there is virtually no crime because everyone is part of the community and discipline is imposed, as the noble Lord, Lord Elton, would have it, with affection.
I should have thought that at the root of crimes of violence and the increase in them are young people who feel dissociated from society. They do not feel an affection for it, they do not feel assimilated by it and they are all affected by it in this way. I have lived too long to think that I know the simple answer to this. I do not. There is surely a strong case now for a broad Royal Commission to look anew at the whole problem and to co-ordinate and correlate what is known so far and bring forward recommendations which Parliament can consider.
7.3 p.m.
Baroness Ewart-Biggs: My Lords, although it seems a long time since the noble Lord, Lord Reay, introduced the debate, may I say how interesting I found his speech and the statistics that he gave. Although the statistics about the rate of crime among
292
the ethnic minorities were correct, I regret that he did not underline the importance of integrating these communities within our community by way of greater job opportunities, better housing and so on. However, I was happy that the right reverend Prelate the Bishop of Manchester did so in his speech.
We on this side were very encouraged by the content and indeed the tone of the speech of the noble Earl, Lord Ferrers, which showed a large measure of goodwill and genuine concern about the problems. If I may say so, I think that he avoided the unequivocal truth that nothing has happened in recent years to improve the situation in crime in general; in fact, rather the reverse has happened. The most significant statistics and the only ones I wish to quote are those showing on the one hand that the number of crimes against the person rose from 95,000 in 1979 to the quite alarming level of 153,500 in September 1988, and, on the other hand, a substantial increase in the length of prison sentences in the last five or six years.
My noble friend Lord Longford has drawn attention to the fact that the Home Secretary has intervened to set higher tariffs than those recommended by the trial judge in no fewer than 63 cases out of 106 murder cases. Although this may come as something of a relief to the noble Lord, Lord Boyd-Carpenter, it caused a shock to members of the Select Committee on Murder and Life Imprisonment on which I have the privilege to serve. When one puts the two sets of figures—those of increased crime and those of higher sentences—one against the other, the only logical conclusion to draw is that longer sentences do not deter. The Minister of State at the Home Office in another place can only be disappointed in the hope he expressed last year that increasingly savage sentences would act as a yellow card for anyone tempted to commit a violent crime. I fear that this is not the case. The noble Baroness, Lady Faithfull, made an important point about the difficulty of dealing with life prisoners in prison if they have no possible hope in front of them.
International comparisons are also significant. They show first, as is well known, that we imprison people for longer than any other EC country. Secondly, we have more community service orders. Thirdly, the recorded level of crime involving personal violence in England and Wales is slightly lower than that of most of our European neighbours. My noble and learned friend Lord Elwyn-Jones gave a good example of how Germany is managing to decrease the number of offenders and has halted prison building. That is much to be admired.
I wish to say a few words about some of the different forms that violence takes. I was very struck by Home Office research study No. 89, which showed that as many as half the offences of homicide are committed during quarrels and bouts of temper. That is a high proportion, and it is an area in which more preventive action could be employed. As a start, it is a fact that excessive drinking plays a big part in violent crimes. Knowing this, I can only agree with what the right reverend Prelate the Bishop of Manchester said. It seems unwise of the Chancellor not to have increased duty on alcohol which in itself would have made government concern about

293
excessive drinking clear. I know that many organisations concerned with alcohol are very upset that this did not happen.
We believe that the services for people with alcoholic problems should be increased. These services are given by Alcohol Concern, the Broadway Foundation and many others. We believe that preventive measures should be increased in respect of city centre violence when pubs and clubs close—a time when there is a great deal of violence and also violence that occurs on public transport and as well as football hooliganism. In that regard we should like to see improved co-operation between police, local authorities and the licensees of public houses to co-ordinate crime prevention measures rather than responding to individual instances on a one-off basis, as now happens. We see a need for increasing police supervision of premises and public houses at closing time. In some instances we feel that if conditions are imposed on premises that have a record of disorder their licences should be removed. There is another very important point. The big brewers are doing very well out of the lager lout. It is also true to say that teenagers have become the targets for advertising and that advertising rules are very often flouted.
The noble Baroness, Lady Gardner, spoke about violence on public transport. I was going to do so. I shall only stress the need for improved protection for drivers—which is what she was urging—for improved staff training in dealing with difficulties on public transport, and for an increased number of transport police.
To move to the serious question of racial attacks, there is growing evidence that racially motivated attacks take place frequently and that the number is increasing. Housing estates are a particular focus for such attacks. Many Asian families living on such estates are in a state of constant fear. Reports by NACRO's race issues advisory committee recommend that police should encourage the reporting of racial attacks and thereby increase the racial minority's confidence that some action will be taken. At the present time I do not think that they have such confidence.
I believe also that local authorities, as the bodies responsible for council estates, have a major responsibility for preventing racial attacks. For example, they could include a clause in tenancy agreements making racial harassment a ground for eviction. They would ensure that this was enforced. They could be prepared to rehouse families who have suffered racial harassment.
The noble Baroness spoke of the safety of women. This is a particularly important point: it is women who suffer most from violent attacks. I agree that self-defence classes are of great importance to women and that advice and support facilities for women known to be in deteriorating domestic circumstances should be provided by local authorities.
In general we believe very strongly that policies should be directed towards putting much more money into the environmental aspects of crime prevention, such as better street lighting, better
294
public transport and a greater role far local authorities. Not only would sch steps prevent the devastating and lasting effect that violent attacks have on the individual but they would also provide better value for money and be much more effective in reducing crime.
The cause of crime has been frequently touched upon. I have stressed the effect that drink has on crime. I can point to two causes, or perhaps irritants, stemming from government policies. First, the social security changes reduce the benefit entitlement of teenagers. Then there are the cuts in social security payments to hostel residents which I fear can only push young people towards the temptation of theft and crime.
I reaffirm that the responsibility, not only of the television services but of the tabloid press, in providing motivation for violence is most important. It is all very well to set up an independent inquiry under Mr. Michael Grade into fear of crime. This is to be welcomed. On the other hand it is a great pity that the Daily Mail and other tabloids do so much to promote fear through sensationalised reporting. I am glad that the noble Earl in his speech said as much.
I agree strongly with the noble Earl, Lord Baldwin. I am sorry that the noble Lord, Lord Elton, does not. I took an interest in research regarding diet that leads to crime. I was very convinced. Unfortunately I was also convinced that the sugar industry was not quite as keen as I was on the research continuing.
We all start from the same premise with regard to the overriding need of protecting the community. This is where the necessity of bringing down the reconviction rate which, as my noble and learned friend Lord Elwyn-Jones said, is just under 60 per cent. in the first two years of liberation, is so important.
Perhaps I may put forward one idea for improving regimes. It is regarding prisoners' pay. Has the Minister read the interesting report from the Prison Reform Trust which presents the case for increasing prisoners' pay which now stands as low as an average of £2.38 per week? That is lower than any of our neighbouring countries. The Prison Reform Trust argues that if it were raised to, say, £8.25—which is a personal expense element in income support—this would fulfil some important objectives. First, such an increase would remove a major source of discontent within prisons. Secondly, it would enable prisoners to contribute better towards victims' compensation. Thirdly, the experience of working would enable them to cope better on release from prison. I believe that the idea is worthy of consideration by the Government.
Lastly, perhaps I may comment on the reference in the Motion support for an effective police force. I believe that the Government have already put emphasis on the police in their law and order budget. Indeed, this budget spirals upwards almost at the same rate as the crime rate. The Minister said that in the last decade the increase has been 52 per cent. Surely the support that the police now need is through investment in crime prevention, as I have described, and in methods which are instrumental in providing evidence to make convictions of criminals

295
possible. I should like to ask the Minister whether he is satisfied that there are sufficient resources for the Home Office forensic science service. These resources, I understand, are thought at the moment to be inadequate. Also, the fingerprint service is said by the Audit Commission to be underfunded. Surely these two vital instruments for identifying the criminal should never be ignored.
I hope that the Government will take note of the important points that have been made during the debate. Many speakers have made it clear that the Government's penal policies should take a slightly different direction. There is need to adopt a more imaginative approach so that crime is put in the perspective of policies as a whole and the causes of crime tackled rather than just the symptoms. Most importantly, the Government should consider more seriously the probability that civilisation would be better protected by an approach which is less dependent on lengthy prison incarcerations.
7.19 p.m.
Earl Ferrers: My Lords, as I thought would be the case, we have had a most interesting debate. Your Lordships have endeavoured to contribute your views on a subject which concerns us all. When the noble Lord, Lord Hooson, said that he did not know the answer, with his experience of the criminal law, I can understand that very few of us think that we know the answer. He suggested that a Royal Commission might provide the answer. I rather fear that the Royal Commission may find the same problems as most other people have. I do not believe that there is a simple answer to this. We have to try constantly to seek a solution to it in what is after all a changing scene.
I was glad that the noble Baroness, Lady Ewart-Biggs, said that the police need support. They do. Thoughout the debate this afternoon there has been the feeling that the police need support. The noble Baroness referred specifically to the forensic science service and asked whether it had been given adequate support. A great deal of thought has been given to it, including an enhanced programme, and more staff are on the way.
Almost all noble Lords have said that violent crime is something which concerns us all and that sense of personal involvement has been very much to the fore in all the speeches. Some noble Lords have spoken about what might be called the roots of criminality—what is it that induces some people to behave in a way that seems anti-social to the rest of us, malicious or just plain evil? Some of your Lordships have concentrated on more strictly practical matters and some people have been concerned about what we do with the criminals when they have been apprehended, and asked whether it was right to keep them in prison. All the speeches this afternoon raise a multitude of questions. The best thing I can do is to try to respond to some of them. Inevitably that will not be true for all of them.
The noble and learned Lord, Lord Elwyn-Jones, was concerned about the high prison population. He wondered whether the sentencing policy was too
296
harsh. There is a wide range of factors which influence a violent offender and lead him to decide whether or not to commit crimes on his release from prison. The prison system can only make a limited contribution to reducing crime, but this does not mean that nothing can be done during a prison sentence. For example, specialist help and guidance is available from medical people, such as psychological help, and education and chaplaincy services are all available. But it is important that life inside the prison should be purposeful and should do all that is possible, given the facts of custody, to prepare the prisoner for life outside. I believe that it was my noble friend Lord Carlisle of Bucklow who said that one thing is certain: unless a prisoner dies in prison he has to come out again into life. Therefore what the right reverend Prelate the Bishop of Manchester said was very true, that a prison sentence must be both reformative and curtailing. It is a difficult balance to reach and many of your Lordships think that it should be different from what happens at present.
The report of my noble friend Lord Carlisle has indicated some alterations in that direction which could be made. We are in the process of considering his report and shall give our considered response to it later. The statement on the purpose of the prison service which has been issued by the prison service management to all staff is one of the means by which the approach is being carried forward. It states that it is the duty of the prison service to look after prisoners with humanity and to help them to lead law abiding and useful lives.
It is difficult. Those who commit serious violent offences have to go to prison and many will stay there for a long time. The courts are punishing crime more severely. That upset the noble Earl, Lord Longford. He did not think that it was a good thing. My noble friend Lord Boyd-Carpenter said, I think in a moment of aberration, that I took credit for that. The Government do not take the credit and I did not wish to infer it. Whether sentencing policy results in higher sentences is a matter for the courts and not for the Government. My noble friend knows that very well. My noble friend referred to the subject of his Question the other day about somebody who had been allowed out of prison and committed another horrific offence. I must reiterate to him and I am sure he realises this, that it is a fact of legal life that a person in prison is entitled to a remission. My noble friend Lord Boyd-Carpenter did not like that. But the fact is that if a person does not offend in such a way as to lose his remission, he is entitled to that remission and there is nothing that the Government or the prison service can do to avoid that person having his remission.
My noble friend may think that that ought to be different, but that is how the law stands at present. If no remission were ever given, if that were the scenario, what hope is there for an individual in prison? What encouragement is there for him to behave in anything other than an evil and a bad way? There must be a carrot.
Lord Boyd-Carpenter: My Lords, my noble friend recalls the case when, as the result of what he

297
described as the effect of the regulations, a man was released who under the judge's sentence would have been in prison for another two and three-quarter years. As a result of that a married woman was murdered and her husband widowed. All I suggested on that occasion and I still suggest is that regulations which can have that effect in the case of someone who was then known to be a very dangerous man should at least merit reconsideration.
Earl Ferrers: My Lords, I see my noble friend's point, but as I tried to tell him at the time he put the Question down, his criticism is not so much over the regulations but the fact that in his view the sentence should have been longer. He who gave the sentence knew perfectly well that the length of sentence given would include a certain period of time for remission. My noble friend is perfectly entitled to believe that if he had been the judge he might have given a different sentence.
Lord Boyd-Carpenter: My Lords, my noble friend really cannot get away with that. The point I put to him the other day and put to him again was that what operated and caused this release and therefore the death of an innocent woman were certain regulations made by the Government under a previous Act. All that I asked was that after that illustration of the effect of those regulations and in those circumstances the Government should at least reconsider the regulations.
Earl Ferrers: My Lords, my noble friend has made his point. I shall not pursue it any further, otherwise your Lordships will be denied the disagreeable experience of having me answer some more of your questions, but I shall do my best.
My noble friends Lord Boyd-Carpenter and Lord Carlisle made many interesting points about the length of sentences served. At present we are considering the report of my noble friend Lord Carlisle's committee and, as I have said, we shall be giving a response to that in due course.
The noble Baroness, Lady Ewart-Biggs, was concerned about violent crime, as were many of your Lordships. The tougher maximum penalties for violent offences is not the Government's only response to violent crime. Other measures include increases in police manpower, the targeting of high crime areas by the police, measures to deal with alcohol-related disorders, research and crime prevention and the crime prevention publicity campaign and its accompanying booklet providing advice on precautions to take. There are a number of ways in which the Government are trying to ensure that violent crime is dealt with.
The noble Lord, Lord Harris of Greenwich, referred to drugs and the problems associated with drugs. Violent crime associated with drug trafficking seems to be unusual and nothing like on the same scale as appears to be the case in the United States. There is likewise little evidence of actual violence occurring as a result of drug trafficking. But a number of research studies have nevertheless identified links between the misuse of drugs and certain types of acquisitive crime. Most of this
298
drug-related crime appears to be non-violent, being in the main burglary or petty theft, such as shoplifting, designed to fund the purchase of illicit drugs. That does not mean to say that I underestimate one little bit the problem of drugs and the likelihood that they might become an increased problem.
In order to deter would-be drug traffickers the maximum penalty for dealing in drugs such as heroin and cocaine has been increased from 14 years to life imprisonment. I dare say that that will disturb the noble Earl, Lord Longford, but perhaps it will encourage my noble friend Lord Boyd-Carpenter. Since the Drug Trafficking Offences Act came into force in January 1987 over £10 million in assets has been frozen and £2.5 million has been confiscated, including £450,000 in one case earlier this year. We are now making reciprocal agreements with other countries to make the powers of the Act even more effective. The first such agreement wilt the United State; was signed in February.
Although in this country there is no evidence of the so-called "designer drugs" which have caused concern in the United States, we have already extended the controls of the Misuse of Drugs Act 1971 to the substances which pose the main threat. Their manufacture or trafficking now attract the maximum sentence of life imprisonment.
The noble Lord, Lord Harris, who told me that he was unable to stay in the House this evening, referred to the figures for armed robbery. During the 12 months to the end of September, 1988, the incidence of robbery fell by almost 1 per cent. I commend to the noble Lord and others the crime figures for 1988 which are due to be published tomorrow. I do not propose to spoil your Lordships' enjoyment of reading them by divulging their contents now.
My noble friend Lady Gardner of Parkes said that witnesses are frightened to give evidence, particularly women, and that one must think carefully about where one goes. She is right in saying that many people feel frightened and in doing so she emphasised an important point.
The noble Baroness, Lady Ewart-Biggs, referred to racial attacks. The Government particularly deplore racially motivated violence which causes distress not only to the victim but to the whole community. Racially motivated attacks and harassment are intolerable in any civilised society and the Government and the police are committed to rooting it out.
My noble friend Lord Orr-Ewing referred to the recruitment of graduates. The standards applied to graduate entry into the police are deliberately high and that accounts for the small number of successful candidates as compared with applicants. It is open to unsuccessful applicants for the graduate entry scheme to apply under the standard scheme and many do so. If they are bright enough to pass the sergeant's examination before the age of .30, they will be eligible for consideration for the special course at Bramshill which is designed for officers destined for early promotion to senior rank.
A number of noble Lords referred to special constables, including my noble friends Lord

299
Orr-Ewing and Lady Macleod and the noble Lord, Lord Harris. There is no national advertising campaign for the recruitment of special constables because experience has shown that local recruitment campaigns are more efficient. Forces can capitalise on local events and personal contacts and use of the local media is more cost-effective. However, the Crime Prevention Handbook, which I mentioned earlier this afternoon and which has a wide distribution, contains brief advice on how members of the public can apply to join the special constabulary.
I wish to make clear the fact that we should like to see an increase in the number of special constables. Recently the noble Lord, Lord Harris, gave me a roasting—and he did so again today—because he believes that the Government are vacillating over the issue. It is not a question of vacillating; we wish to see the number of special constables increased. However, as I recently explained, one cannot force a person to become a volunteer, especially when he is unpaid. One of the reasons why people enter the police force is that they are paid. There is a difficulty but I hope that, after reading in Hansard what I have said, the noble Lord will digest the thought in a way in which he has not yet done.
My noble friend, Lord Boyd-Carpenter, referred to a national police force. His was a thought-provoking idea and he gave reasons for believing that it would be good. However, bigger is not normally best. There are difficulties because criminals can now move about the country so quickly. Drug trafficking is both a national and international crime and people can quickly fly from one end of the country to the other or use the motorways. Criminals cross the boundaries of different police forces. I understand my noble friend's remark that it appears to be unnecessary to have 40 police forces. However, I ask him to bear in mind that the basis of our police force is that it is part of the local community. The tripartite arrangement, whereby policing is carried out with the chief officer of police, the local authority and the Government financing it, is inherent in the way in which the police structure is drawn up. To alter that and introduce a national police force would be likely to break the tendons which hold the police forces to their localities. I accept that there are matters of substance raised by my noble friend and others which need constant care and investigation.
My noble friends Lord Boyd-Carpenter and Lord Orr-Ewing referred to the advantage of establishing a special officer cadre as there used to be at Hendon. That suggestion was tried but, for various reason, was found to be unsuccessful. Both my noble friends know that the suggestion does not find favour with the police force. Therefore, if the Government made those enormous alterations—that is, introduce a national police force and a new special officer cadre at Hendon—they would be upheaving the whole of the police system as it now exists. It may be necessary and desirable but at a time when we are going through many difficulties there is something to be said for having a certain amount of stability. In saying that I do not deny the advantages put forward by my noble friends in trying to obtain a force of senior police officers as highly and efficiently
300
equipped as possible in order to undertake the problems of policing now and in the future.
The noble Earl, Lord Baldwin of Bewdley, made a most interesting speech on diet. He said that what we eat affects what we do. It struck a chord with me because I once tabled a Motion for debate which was described as being "to call attention to the effect of chemicals on the human environment". I had done an enormous amount of preparation but was then sucked back into Government and the debate on my Motion never took place. When the noble Earl raised the issue I found it most interesting.
People are worried about the chemicals which they ingest and it is curious that we should often find ourselves more affected by the food which we ingest. People's reactions are different to various types of food. What is acceptable to one person may have an adverse affect on another. The subject introduced by the noble Earl taps on the fringe of science and knowledge about which many people are sceptical. I believe that a great deal more research must be carried out and I have an idea that it will produce interesting results. I can tell the noble Earl that I understand it is proposed to test the hypothesis regarding reducing the marginal malnutrition by means of a low sucrose diet and/or vitamin or mineral supplements. A controlled trial is to be conducted at Aycliffe community school under the supervision of the school's principal, who is an experienced research worker. We shall look forward to that with interest.
My noble friend Lady Faithfull asked whether the research unit at the Home Office evaluates people who commit crime, and their history. A great deal of research is done in that area of crime, although not necessarily on that precise subject. I shall read my noble friend's speech again and if there is a point of substance on research to which she referred and which I can answer, I shall contact her. If, on the other hand, she feels that there is a specific answer which she would like, perhaps she will contact me.
She was concerned that Ministries should get together and provide a place for young people. The departments work together in many ways to help young people. I know that this is an area about which my noble friend is very concerned and I shall be happy to look at any particular problems which she has in mind.
The noble Lord, Lord Taylor, said that if we can land a man on the moon, we can beat crime. I am not quite sure that I go along with that, but clearly there must be a great deal of international co-operation and we have that.
My noble friend Lord Elton said, in a most thought provoking speech, that crime starts at the beginning of life and that family life is at the foundation of society. I sometimes think that people say to children and, indeed, to themselves, "It is my life. I can do what I like with it". However, what people do with their lives affects others. It affects children, friends and families. Sometimes people forget that. My noble friend said that if criminality becomes the norm and lawfulness becomes eccentricity, black becomes white and you turn your values upside down. I thought that was a graphic description and

301
one which is very true, because once one's values are turned upside down one's sensitivities become capsized and dulled and nobody knows what is right or wrong.
I recall listening to a sermon 20 years ago given by a parson who was not particularly gifted in the pulpit. He said that what will destroy this world is not the atom bomb or the hydrogen bomb but the inability to discern between right and wrong. I believe that that may have quite an effect on a number of people who eventually find their way into crime.
This has been a rewarding debate on a highly important subject and many of your Lordships have made contributions which I know that my department and my right honourable friend the Home Secretary will consider with interest. I should like to conclude with the thought left in our minds by my noble friend Lady Macleod when she said that she would like to pay tribute to the many thousands of young people who contribute to society by helping people and looking after them. That is an aspect which we sometimes forget when we think about crime and what goes wrong. There are many more people who are doing good things. If that is so for young people, it is so for the older ones too.
7.45 p.m.
Lord Reay: My Lords, I should like to thank everyone who has taken part in this debate. Nobody wishes to introduce a major debate without a respectable number of speakers, and there has certainly been that. The second need which anyone has in introducing a debate on a controversial subject or a subject with controversial aspects like penal policy is sufficient support from one's own side, and I have been lucky enough to enjoy that in the greatest measure in contributions of the highest quality. I am immensely grateful to my noble friends for the efforts they have made.
The Minister made a very forceful opening speech which I thought was fired throughout by his own passionate interest in the subject, as indeed were his closing remarks. In particular, his opening speech showed his understanding of the lot of the policeman, which he described admirably, and the lot of those who live in fear. I am grateful to noble Lords who reacted to my speech. I refer to the right reverend Prelate the Bishop of Manchester, the noble Earl, Lord Longford, and particularly the noble Lord, Lord Hooson, who was willing to take up some of the issues which I raised in my opening speech and to carry them further. I should also like to thank the noble and learned Lord, Lord Elwyn-Jones, and the noble Baroness, Lady Ewart-Biggs, for their contributions from the Front Bench opposite.
I believe that we have had an interesting and immensely wide-ranging debate with plenty of controversy, both party and otherwise, and some vivid, compelling and disturbing accounts of the consequences of the excessive prevelance of violent crime in our society. I am thinking in particular of the contribution of the noble Baroness, Lady Gardner of Parkes. I am sure that we have all been given much food for thought by each other's
302
speeches. My Lords, I beg leave to withdraw my Motion for Papers.
Motion for Papers, by leave, withdrawn.

Royal Assent
The Deputy Speaker (Lord Murton of Lindisfarne): My Lords, I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts:
Consolidated Fund Act 1989,
Elected Authorities (Northern Ireland) Act 1989,
Prevention of Terrorism (Temporary Provisions) Act 1989.

Northern Ireland (Emergency Provisions)Acts 1978 and 1987(Continuance) Order 1989

  Northern Ireland (Emergency Provisions)Amendment Regulations 1989
  7.47 p.m.
  The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Lyell)The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Lyell) rose to move, That the draft order and the draft regulations laid before the House on 1st March be approved [12th Report from the Joint Committee].
  The noble Lord said: I beg to move that the draft Northern Ireland (Emergency Provisions) Acts 1978 and 1987 (Continuance) Order 1989 and the Northern Ireland (Emergency Provisions) (Amendment) Regulations 1989, which were laid before this House on 1st March, be approved.
  In introducing this order and the regulations I should like to explain briefly what the two Acts contain and say something about the specific proposals which we have brought before the House, taking account of the recommendations in the report of my noble friend Lord Colville. I shall conclude by explaining the security context in which the order and the regulations need to be considered.
  Perhaps I may begin with a brief word about the two Acts. I deal first with the 1978 Act. Essentially this performs three functions. It provides the security forces in Northern Ireland with extra powers to deal with the special problems of terrorism in Northern Ireland. These include powers to stop arid question, arrest, search and seize. It also provides powers to proscribe organisations and create offences such as training people in the manufacture or use of firearms or explosives, and displaying support for proscribed organisations. Finally, it provides the legal authority for the so-called Diplock Courts under which terrorist-type offences are dealt with by a judge sitting without a jury.
  Secondly, the 1987 Act introduced a statutory right for persons arrested under the terrorism provisions to have someone notified of their arrest and whereabouts, and to have access to legal advice. It also gave my right honourable friend the Secretary of State the authority to impose statutory time-limits

  303
  on pre-trial stages of proceedings and introduced a statutory scheme for regulating the security guard industry in Northern Ireland. The provisions of these two Acts which I have just described are all temporary and will, unless renewed by the order before us today, lapse on 21st March.
  I now turn to the basis on which we are proposing that the two Acts should be renewed. As last year, we are indebted to the review carried out by my noble friend Lord Colville. I pay tribute to my noble friend because, as always, his work was stimulating, incisive and very much to the point. Two of the recommendations in his 1988 report are relevant to today's proceedings. Significantly, he pointed to certain powers that can now be allowed to lapse. These all relate to the 1978 Act and comprise of Section 24, which gives the security forces the power to call upon assemblies of three or more people to disperse; paragraph 4 of Schedule 3 which allows the RUC to impose directions on the conduct of funerals; and paragraph 5 of Schedule 3 under which the Secretary of State can, by order, close licensed premises, clubs etc., for public order purposes.
  My noble friend Lord Colville indicates that each of these three powers can now be allowed to lapse, apart from one part of paragraph 4 of Schedule 3 under which the police can require people taking part in funerals to travel by car. That is a small but important detail. The Government welcome these recommendations and the order and regulations before the House today will give effect to them. I will not rehearse why my noble friend feels that these provisions can now lapse; his arguments are set out in his report. But these are important changes. Though not among the most controversial of the emergency powers, nevertheless any move to reduce the scope of these powers is a step in the right direction. The Government welcome the opportunity to let the powers lapse as an illustration both of our commitment to keep the powers under active review and also to keep them no longer than is strictly necessary.
  The other side of the coin is that we would not let the powers lapse if we did not think it safe to do so. We firmly believe that extra powers are necessary to defeat terrorism—I shall come to that in a moment —and we would not remove those powers if it would hinder the fight against terrorism. In this context, I draw attention to my noble friend's recommendation that when the Police and Criminal (Northern Ireland) Order becomes law the RUC's power of arrest under Section 13 of the 1978 Act can lapse. Thereafter, the police would rely upon the powers in the Prevention of Terrorism Act or the ordinary criminal law. The Government welcome and accept this recommendation which will be a further welcome reduction in the emergency law.
  I turn now to other main findings in my noble friend's report. In paragraph 1.4 he referred to:
  "a reluctant acceptance of the need to continue, in general, the emergency powers".
  He therefore believed that, in general, the powers continue to be needed—and so do we. But if it is important that the powers should be maintained, it is equally important that they should be used in a
  304
  fair and impartial manner. The Government and the security forces give this the highest priority. It is axiomatic that all statutory powers should be exercised correctly; but, in the special circumstances of Northern Ireland, it is doubly important that the emergency powers are used with meticulous care and sensitivity. This is an area to which we pay the closest attention. As my noble friend pointed out in paragraph 1.5, the battle for the hearts and minds of the community should be the paramount preoccupation of those who exercise the emergency powers. He says in his report:
  "It is quite unnecessary to say this to senior ranks in the police or Army headquarters, since they accept it and do their best to implement it".
  The noble Lord, Lord Fitt, was a moment ago vigorously nodding in agreement with my noble friend's remarks. The importance of good relations is emphasised in the training of security forces and in operational briefings at all times. That is emphasised to each and every member of the security forces.
  My noble friend Lord Colville also pointed out that one slip can wipe away many months of good work, so constant care and attention is needed. Nor should anyone underestimate the difficulties which the security forces face. They are often called upon to work in hostile or provocative situations where their lives are at grave risk. In such situations it is bound to be difficult for them to remain calm and impartial. However, all noble Lords who have any inkling of what goes on in Northern Ireland will know that they set high standards for themselves and strive ceaselessly to achieve them. I am therefore grateful to my noble friend Lord Colville for the way in which he highlighted this issue in his report. It deserves to be given prominence and certainly we regard it as a priority.
  Much has been achieved. The new Independent Commission for Police Complaints for Northern Ireland was set up last year and, as my noble friend mentioned, the Army has issued new instructions to stress the importance of dealing with complaints sensitively and properly. Within the last year my own department, the Northern Ireland Office, has also set up a committee to monitor more closely the nature, extent and handling of complaints by the public about improper, but non-criminal behaviour by members of the security forces. Together, we will continue to look for progress. Last year my noble friend Lord Colville commented in his 1987 report that he
  "gained the impression that the Act was being used with due reflection, moderation and commonsense".
  That is the target which we and all in Northern Ireland will continue to set ourselves.
  Elsewhere in his report for this year my noble friend Lord Colville returns to the question of certifying in. This refers to bail. This is the idea that, instead of defendants being tried before a Diplock Court, unless the Attorney-General decides otherwise, the presumption should be that they will be sent for a jury trial unless the case is certified into a Diplock Court. Since my noble friend's report last year, the balance seems to have shifted more in favour of this idea and, as it would be perceived as

  305
  a further step towards normality, we are certainly prepared to consider it seriously especially if we find that it is generally welcomed. Likewise, we will examine closely my noble friend's remarks about the video recording of terrorist interviews. There are, as the report indicates, substantial arguments against such a course but we will look at it again. As he did last year, my noble friend also draws attention to the way that the emergency law is split between the two emergency provisions Acts and the Prevention of Terrorism Act. My noble friend urges consolidation. I fear that any major restructuring of the legislation will, as my noble friend indicates, have to wait until approximately 1992 when the emergency provisions Acts will lapse. However, we will certainly examine his suggestion that some sort of simpler consolidation might be possible in the shorter term. Certainly your Lordships will welcome that.
  My noble friend Lord Colville also returned to the subject of murder and the possibility of bringing alternative verdicts of manslaughter. He remains concerned that, as the law stands, a person who uses lethal force in circumstances where some force was justified, but lethal force was excessive, can only be convicted of murder or acquitted. My noble friend advocates a change in the law to allow alternative verdicts of manslaughter to be returned. This is a large and important subject and is one which, as my noble friend indicates, has been placed before your Lordships' Select Committee on Murder and Life Imprisonment. We shall want to see what conclusions that committee reaches before making any judgments of our own. These are the main points in the report of my noble friend that I wanted to refer to at this stage. We will be looking closely at all his findings over the coming months.
  I promised to outline the reasons for introducing these measures this evening as well as the continuation of the two Acts. I wish to draw attention to security and the context in which we live in Northern Ireland when considering this order and the regulations today and especially why it is necessary to continue these two Acts. As your Lordships will be only too well aware, terrorism continues at a very high level in Northern Ireland. We experienced an up-turn interrorist activity some 18 months to 2 years ago, and that increased level of activity is sadly still with us. We continue to live with the legacy of the major resupply of weapons and explosives that came into Ireland from Libya.
  None of us needs to be reminded of the callous and brutal attacks that continue to take place. Last week, the night before these measures were debated in another place, three civilians were gunned down in the village of Coagh, County Tyrone. Hardly had that debate concluded but two soldiers were killed by a landmine near Londonderry, and six others were injured. Last week explosives and weapons were found near Scarborough, quite possibly intended for an attack on Members of the Government. In the past few days a Roman Catholic civilian has also been murdered by loyalist paramilitaries outside a bar in West Belfast. A private in the Ulster Defence Regiment was murdered when going about his job of delivering goods to a factoy in Dungannon. That was just yesterday. These are just
  306
  some of the most recent manifestations of the evil of terrorism in Northern Ireland and Great Britain. For each and every one of these examples is a personal tragedy to families. Unfortunately, that is all too-evident with terrorism. There has been similar activity in Gibraltar, Holland and Belgium. As I have indicated, it is not only the republican organisations that have been active. Loyalist paramilitaries have significantly increased their activities in recent months and have been responsible for a number of particularly horrific and callous killings.
  The Government call once again on all sides of the community in Northern Ireland to reject terrorism as well as asking them to give their unstinted and unremitting support to the security forces. In that respect I wish to pay my tribute and I am sure that of all noble Lords, to the members of the Royal Ulster Constabulary, the RUC Reserve and to every single member of the regular Army and the Ulster Defence Regiment who together with the judiciary, the courts and prison staff and many others in official and civilian life, have continued to stand firm against terrorism.
  There is no doubt that but for the unstinting and courageous efforts of the security forces for over 20 years the problems would have been much greater. Each and every one has worked unremittingly to save life and protect the community and they have done so at considerable personal cost. Of the 113 fatalities in Northern Ireland since the beginning of 1988 and to date, 38 were members of the Army and UDR and seven were members of the RUC and Reserve. We all feel deeply this tragic loss of life. And as I say, had it not been for the dedication of the security forces, the levels of violence would have been far higher. Last year the security forces recovered more ammunition than at any time since 1974. That is a year that will be very familiar to the noble Lord, Lord Fitt. Over 100,000 rounds and more weapons were recovered than at arty time since 1977. That is over 550 individual weapons of death and destruction.
  I have referred to some recent incidents, but a particularly sickening and shameful aspect of the situation over the past 12 months has been the murder of civilians inadvertently caught up in terrorist attacks. Let us not forget the three members of the Hanna family killed returning from holiday, as they crossed the border last July. Gillian Johnston was murdered in Fermanagh, it was said, in mistake for her brother. A grandfather and granddaughter were caught in a blast outside the RUC station at Benburb. Two elderly people who, acting as good neighbours, were killed by a booby-trap bomb in Londonderry. They were going in to check on a flat and as to why its occupant had not been seen. Both of them died by a booby-trap bomb. In the same month two others were killed outside the Falls Road swimming baths by a bomb meant for the security forces. All of these appalling attacks and others of a similar kind add a particular weight to the suffering in Northern Ireland. Only an organisation as cynical about the value of human life and civilisation as the IRA could apologise for these deaths but continue its campaign as before.
  These two aspects set out the general security context in which this evening's debate takes place. Terrorism continues both on the republican and loyalist sides of the community in Northern Ireland. With the security forces we meet those problems with determination. The past six months have shown that the Government stand ready to bring forward new measures to tackle terrorism. The security forces will continue to have our full support. This evening, discussing this order, I believe that it is right to pay tribute to the activities of the Garda Siochana and the Irish Army. In 1988 they recovered over 350 firearms, more than 100,000 rounds of ammunition and more than 1,1001bs of explosives, including 6501bs of Semtex, the popular name for the devastating explosive so beloved of terrorists. In 1989 they have made significant finds in the Counties of Offaly, Kilkenny, Monaghan and Donegal.
  That shows your Lordships how widespread are the activities of the security forces of the Republic of Ireland. The Republic's security forces have co-operated very closely with our own security forces. None of this would have been possible had the Irish Government not fully shared our aim of wanting to see terrorism defeated, and had they not been prepared to back up that aim with action. We look forward to continuing and ever closer co-operation with them. That is vital if our common enemy, terrorism, is to be overcome. We shall continue to work unremittingly for the normality which so many people want. We look to the day when emergency powers will no longer be needed; but I am afraid that in view of everything that I have spelt out, that day is still some way off.
  What none of us can ignore is that terrorism in Northern Ireland is a premeditated criminal conspiracy designed to thwart democracy and to undermine the rule of law by murder and intimidation. It is not a conventional problem that can be dealt with entirely by conventional means, and for the foreseeable future special measures will be needed. Our task this evening is to ensure that the security forces have adequate powers available to them to protect the community but that the rights of individuals are also properly protected. That requires a balance in the law. The order and regulations before us this evening will ensure that the necessary powers are available, but that they are no more than is strictly necessary.
  In that spirit and in the spirit of everything that I have presented this evening to your Lordships, I commend them to the House.
  Moved, That the draft order and draft regulations laid before the House on 1st March be approved [12th Report from the Joint Committee].—(Lord Lyell.)
  Lord Graham of Edmonton: My Lords, the House will be grateful to the noble Lord for the care he has taken in moving the orders. He will be aware that in another place my colleagues, who substantially share the noble Lord's analysis of the terrible problems of Northern Ireland, nevertheless came to the conclusion that they would not seek to deal
  308
  with them in the manner set out in the orders. However, we will not seek to divide the House. The noble Lord knows that there has been, if not a spate of legislation in respect of Northern Ireland, certainly more legislation in the past few weeks and months than during any comparable period that I can recall.
  Politicians are always delighted to have the opportunity to discuss matters about which they are deeply concerned, but when we discuss Northern Ireland the news is sombre, the matters with which we deal are terrible and the solutions are not within sight. I do not believe that the Government would be arrogant enough to say that they have the only solution or the best solution. They have responsibility for governing the United Kingdom and in the context of Northern Ireland they have to deal with problems of nightmarish proportions.
  I should like to pay tribute to the noble Viscount, Lord Colville of Culross, for a report which was stimulating, incisive and very much to the point. It was a most readable and easy to understand document. I do not have the experience of the problems and background of the Province of the noble Viscount, of the Minister and of the noble Lords, Lord Blease and Lord Fitt. The Minister mentions individuals, places and events, but to people like me that is all they are. However, to the noble Lords, Lord Fitt and Lord Blease, those are real places and real people. They know the individuals and their families. They know the schools and the churches.
  It is very easy to become emotional about the problems of Northern Ireland. When I was in another place there was a catalogue of atrocities. I would weep sometimes openly and very often silently when I listened to parliamentary colleagues from both sides of the House speaking in anguished terms about the realities of Northern Ireland. What we are discussing tonight is the state of life in Northern Ireland and the ways in which the Minister and his colleagues feel that they can best deal with the problems there.
  On Monday of this week I attended an event at Lambeth Palace at which the Princess Royal presented awards on behalf of the Butler Trust. This was set up to commemorate Rab Butler, a highly respected politician and senior Minister. The awards are given to the prison service, to men and women who serve not only the prisons in which they work but the communities in which the prisons are situated. It was with considerable pride that I saw officers from the Maze Prison in Belfast and Magilligan Prison receive those awards. I visited Magilligan two years ago. Those officers were doing a job which if not thankless was constantly being undermined by events over which they had little or no control.
  The Minister has considerable control over what happens in Northern Ireland and I shall be pressing him on one or two matters in a moment. The House could take the view that we should be devoting ourselves to some pressing economic matters. We have not been short of those in this House over the past few months. I refer to the positions at Short Brothers, at Harland and Wolff and at Gallachers.

  309
  This is a suitable opportunity to pay tribute to ordinary men and women and ordinary trade unionists. They are subject to political pressure and intimidation. One or two nights ago the House discussed a Bill relating to councillors in Northern Ireland. I was a councillor in Enfield. I served with pride and had opportunities to broaden my knowledge. I can remember standing on the steps of Derry Town Hall and being told that it was the spot where the Secretary of State was struck down by a serving councillor. It is impossible to envisage such a state of affairs unless one understands the context. In that council chamber now sits a councillor who some years previously was sent to prison for blowing up the town hall. That is the background against which we are considering the order.
  When I was in Derry I took the opportunity to visit the Galliagh Consumer Co-operative Society. I saw there the endeavours of ordinary men and women who were aided and assisted by the Co-operative Development Agency, the Co-operative Union and by people who passionately wanted to see established on this large housing estate an enterprise which would grow up from the roots. It was assisted by the Government as such enterprises need to be. I remember the night that McGurk's Bar was blown up.
  Lord Fitt: My Lords, it was 3rd December 1971.
  Lord Graham of Edmonton: My Lords, that night has a special place in the folklore of Northern Ireland. I was in another bar and I remember hearing the noise of a bomb. I was dumbfounded and was told by the barman that it was "a big 'un". Fifteen people were blown to smithereens. I also remember that night because I was taken to a co-operative supermarket which had been severely damaged when what one can only describe as bandits held up the store and stole the money from the tills. To someone from the mainland this was unbelievable, but it was part of daily life of the people of Northern Ireland. Whenever we discuss the affairs of Northern Ireland we can always refer to terrible incidents. The debate last week in another place took place after the senseless killings at a garage. Why these things happen one does not know.
  Our criticism of the Government—it has to be a criticism—is that despite what the Minister said, which we accept—that is, the need for security and the need for support for security—there appears to be an imbalance between what is necessary for the Government in order to make the Province secure and what they are doing to try to reach a satisfactory political solution. At the end of the day, when one is able to defeat the gunmen on both sides of the religious or tribal divides, one must look forward to solving the matter politically. What we must do is to create an ambience in which there is a will to find a political solution. We make the general criticism that although words are spoken—for example, that the battle for the hearts and minds of the people in Northern Ireland should be a priority—and the Minister tells us that steps are being taken to ensure that the defence and security forces work towards that end, when one begins to look at the evidence
  310
  contained in the report by the noble Viscount, Lord Colville of Culross, one sees the difficulties.
  Tonight the Minister talked in terms of the tactless and rude comments in the report. Indeed, on page 3 we have two very good illustrations of that. The first one reads:
  "When a woman returns home having collected her children from school to find the security forces searching her home, having forced entry, and asks why they could not wait till her return, it is not good enough for a soldier to say 'It isn't a party: we do not need an invitation' ".
  Both of those facts could well be true; it is not a party, and we do not need an invitation. However, to say that to a woman in her own home when she comes home to find such a situation is not only tactless in the context of Northern Ireland, but it could also be tragic. I say that because one could very well be turning away a potential ally in the matter. The other illustration reads as follows:
  "In August 1988 one man was stopped and detained for periods between 15 and 45 minutes on 33 occasions, in or near Londonderry; during the month he was thus detained in total for 12 hours 40 minutes. Each time he was just released".
  Such events are happening this week, they happened last week, and they will happen next week. The Minister must tell us in the knowledge and light of the evidence, which if it is not irrefutable, is most powerful, what extra efforts are being made to deal with the situation. The emergency laws need to be clear, coherent and precise. I do not think that they are. In my view the Minister has made a fair attempt to justify every power which is required to deal with the dreadful problems in Northern Ireland. But when one is going outside the norm, and when one is looking to derogate from the norm, one must have powerful justification therefor.
  I wish to place on record a welcome to the new Chief Constable of the Province, Mr. Annesley, who has an enormous responsibility. He will go to the Province with a proven record, but a person who has not actually done the job cannot say, "I know exactly what it is", because Northern Ireland is unique and policing the Province is also unique in that context. I certainly wish him well. Similarly, I also wish Sir John Herman well in his retirement. He obviously had a most difficult period. I make no allusion whatever to the number of incidents in which he figured, and figured most prominently, but a policeman who has the task of undertaking the job of the Chief Constable in Northern Ireland must certainly carry our regard and sympathy in that way. Having concluded his stint in the Province, I certainly hope that he will be able to enjoy a satisfactory retirement.
  I conclude by saying that what the Government must give more attention to, besides dealing with security—and that is what the orders are all about—is the fact that the ordinary people of Northern Ireland desperately yearn to do what ordinary people do in Enfield, in Edmonton and in every part of the United Kindom. They would like to be able to look forward to the pospect of a decent job, a decent home, a decent education and a decent opportunity for their children, and their children's children, to grow up in an atmosphere which will enable them to feel not only that they are proud to live where

  311
  they live, but also that they can enjoy the opportunity of doing so for many years to come.
  So far as we are concerned, there appears to be a political lethargy about the way the Government are dealing wih the totality of their responsibilities. Indeed, it is in that context that I have spoken to these orders.
  Lord Bonham-Carter: My Lords, it is with some melancholy, I suppose, that I join in with this annual ritual, which has been so ably introduced by the noble Lord, Lord Lyell, and with the words spoken by the noble Lord, Lord Graham of Edmonton. It is of course a sad event that we should have to have such provisions. But, nonetheless, from these Benches, we feel bound to support their renewal.
  Since this time last year when the same ritual was followed, little has happened to provide us with reasons to celebrate and there has been little to encourage us to feel much optimism. Nevertheless I, like both noble Lords who spoke before me, feel that we are extremely fortunate here today to be assisted in our debate by the very able, articulate and constructive report by the noble Viscount, Lord Colville of Culross. It leads us through the immediate short-term problems which we are actually tackling today, and provides guidance which I find especially valuable.
  If there is one recommendation made by the noble Viscount in the report which I find particularly welcome, it is that where he suggests that the provisions of the two Northern Ireland (Emergency Provisions) Acts of 1978 and 1987 and the Prevention of Terrorism (Temporary Provisions) Act 1984 should be consolidated. I should greatly welcome that process in order to lead me through the complexities of the legislation. It would help me to find which powers arise from where.
  The suggestion of the noble Viscount that those laws should be consolidated strikes a chord in my mind and I am disappointed—although I comprehend the reasons why—that the Secretary of State feels unable to see any close prospect of consolidation. Having said that, it is impossible to disagree with the noble Viscount when he says that the emergency powers are necessary and that the security forces require our support, both in terms of their powers and of the equipment at their disposal. I also think that he is absolutely correct in saying that this annual debate, on what he describes as technical and fragmented pieces of legislation, is not a satisfactory way in which to look at the relations between this country and Northern Ireland. We really should provide ourselves, out of a sense of obligation to our fellow countrymen in Northern Ireland, with an occasion upon which we can examine in a more sympathetic and serious way the situation in that unhappy Province. We should examine the policies in this country which we have pursued, and which we will pursue, which are not directly tied to the restrictive emergency legislation which we have been forced to introduce in response to the emergency. The demands of the situation in Northern Ireland, and the relations between this country and that province, demand imagination, thought and
  312
  consideration. The debate that we are holding late in the evening, with few people present, is patently and clearly inadequate for that purpose. The fact that we are no further forward this year than we were last year or the year before in composing a positive and constructive policy towards that unhappy province indicates that we are not applying ourselves—not so much as a government but as a Chamber—with the seriousness and concentration that the difficulty and intransigence of the problem demand.
  If such an occasion is required, which I believe it to be, it cannot be too often repeated. I repeat what both previous speakers have said. Once the powers that we are discussing have been granted to the authorities in Northern Ireland, the way in which they are exercised, and above all the way in which they are perceived to be exercised, is all-important. In the battle for what the noble Viscount, Lord Colville of Culross, called the minds and the hearts of people, which is the battle that matters, it is their perception of the way in which those powers are exercised which will be crucial. That is, as his report indicates, a matter of discipline, training, tact, openness and flexibility on the part of the police, the armed forces and the authorities generally.
  I found it most encouraging to note the high priority that the noble Viscount, Lord Colville, gave to those attitudes and modes of behaviour, and the extent to which he was ready to recommend that certain provisions which were mentioned by the Minister in his opening statement should be allowed to lapse. It is right that we should be flexible. In particular, I welcome the proposals in the report such as those which recommend certifying-in as opposed to certifying-out in the case of the Diplock Courts; which recommend the movement towards jury trials; and which recommend that a serious technical examination of the difficulties and the ways and means whereby video tape recordings of interrogations take place should be undertaken.
  I genuinely believe that in connection with the perception of the people of Northern Ireland, the way in which interrogations are undertaken is a crucial element. Although there are difficulties, which I recognise, in the video taping of interrogations, nonetheless, if those difficulties could be overcome that would be a step forward in establishing confidence and diminishing the apprehension of those who find themselves in the hands of the authorities.
  By the same token, the noble Lord's proposals about the minimum use of force in Northern Ireland, and the possibility of a charge of manslaughter as opposed to murder, should be seriously examined. It is most unsatisfactory that a judge and a jury should have before them a young member of the armed services or the police, who has found himself in an extremely difficult situation, and who has shot a man, and have no alternative other than to convict him of murder or to acquit him. There is no third possibility. The proposals made by the noble Viscount, Lord Colville, are valuable and constructive and should be looked at carefully.
  All the noble Viscount's proposals are helpful. Nonetheless, they are all part and parcel of the

  313
  measures that we have had to take to keep the lid on the situation which we cannot solve in the immediate future. The only virtue of the provisions that we are extending is that they provide us with an opportunity, and the time, as the noble Lord, Lord Graham of Edmonton, said, to search for a political way through the dreadful tragedy that we have been witnessing for all those years.
  The fact that we have not found a solution does not mean to say that we cannot find one. The fact that we have not found one does not mean that we should not seek to find one. The fact that the Anglo-Irish Agreement exists is something upon which we should build and which we should not abandon. That is the foundation upon which the political solution may be built. The Government deserve congratulations on having made that agreement. We must not abandon our hope and our faith in it. We must use the provisions as an opportunity to discover the ways and means whereby political progress may be made.
  Lord Fitt: My Lords, over the many years since the onset of the present troubles, many people in Northern Ireland from both sides of the community have said to me that the English do not understand about them. "The English do not care about us. All these atrocities are taking place in Northern Ireland but the English do not really care." I have tried to tell them that that is not true of all the English, Scottish and Welsh people that I know. Anyone in Northern Ireland reading the report and the remarks that have been made this evening, will be made aware of the genuine concerns and compassion felt by those who have spoken so far in the debate.
  I refer especially to what was said by my noble friend Lord Graham of Edmonton. He brought vividly to my mind the awful tragedy that took place in McGurk's bar on that evening. He went on to say that the events, places and people concerned are known to me and to my noble friend Lord Blease. We know, and knew, the people who are being killed. I recall that evening on 3rd December 1971. I was doing what a lot of other people in this country do on a Saturday evening. I was sitting checking out the football pools. I lived in the area of McGurk's bar. It was in the Northern Ireland parliamentary constituency of the Docks which I represented for 23 years. I heard the echo of that terrible explosion. I immediately went to McGurk's bar and spent the rest of that long night trying to help the security forces to pull out the bodies with my bare hands. I knew everyone who was killed.
  That was not the only occasion with which I was involved. The noble Lord, Lord Graham, was right when he said that it takes a person from Northern Ireland to realise the intensity of feeling and emotion generated by those awful tragedies. That does not mean that the people in the United Kingdom are not concerned. The Minister catalogued all the terrible events that have taken place, even those within the past week. I was going to mention them, but it is unnecessary for me to do so now.
  We in Northern Ireland feel not only for the Northern Irish people who are being killed; we feel intensely about the young British soldiers and
  314
  members of the security forces who are killed trying to bring peace to Northern Ireland. When those two young soldiers were so brutally killed outside Derry last week, I had occasion to ring up their parents—one in Bristol and one in Portsmouth—and to tell them that as an Irishman I sympathised with them in their dreadful loss and condemned those who carried out those terrible murders allegedly in the name of Ireland.
  The debate is taking place against the dreadful background of a whole catalogue of murders. The noble Lord, Lord Lyell, has given us the times and dates. Yesterday afternoon here in London I watched the television and all it was concerned about was the Budget debate, both ITV and the BBC. At the very end of the programme the announcer said, "A UDR man has been killed in Northern Ireland". It seemed like a throwaway line as far as the media were concerned, but it was not a throwaway line to the widow and two sons of the UDR man. He was killed because he had been trying to defend Northern Ireland against terrorism.
  My noble friend Lord Graham of Edmonton took part in and I have read and listened to the debates in another place which take place annually on the introduction of this order. I remember that in 1973 when the order first went through the House of Commons I was a member of the committee that dealt with it. The order was brought in to replace the special powers Act which had existed in Northern Ireland since the inception of the state in 1920. When I was taking part in those deliberations I never believed that in 1989, all those years later, it would still be necessary to have this type of legislation to protect life and limb in Northen Ireland.
  The noble Lord, Lord Graham of Edmonton, said that the Opposition party in the House of Commons opposed this legislation because it did not appear to them that the Government were doing enough to bring about a political consensus in Northern Ireland. I am afraid that I have to disagee with my noble friend, although I do so in a most friendly way. I do not believe that any government since 1979—and not this Conservative Government—can be blamed for not bringing about a political solution to the Northern Ireland problem. Similarly, I do not believe that it was the fault of the Labour Government from 1974 to 1979 that they were unable to do so. They too tried to bring about a political consensus in Northern Ireland. I believe that the only people who can bring an end to the present impasse are the Northern Ireland politicians themselves.
  Here I must speak from experience and a strong feeling that I have. I disagree with what has been said by the noble Lord, Lord Bonham-Carter. I believe that the way in which the Anglo-Irish Agreement was negotiated and came into being, with the total exclusion and non-involvement of the majority community in Northern Ireland, led to the problems. They were not asked for their opinions, their questions were never answered and they were totally excluded from all the deliberations which led to the coming into being of the Anglo-Irish Agreement.

  315
  The minority community through the SDLP—the party which I formerly led—was very much involved. Their people were in almost daily consultation with the then government of the Republic, the Fine Gael Party led by Garrett FitzGerald. They were very much involved, their opinions were asked for and given. So the Protestant majority community felt totally and absolutely isolated. To say the least, that was bad public relations. Someone could have asked for the opinions of some of the Unionist community.
  I keep repeating that the Unionist population in Northern Ireland is not represented by Dr. Ian Paisley. There are many thousands of decent, moderate Unionists in Northern Ireland who are not religious bigots. But they want to cling on to their background, to remain British. They reject Paisley acting as their spokesman, but they were not included. That was totally unlike Sunningdale where in 1973 and 1974 I took part in the discussions. A considerable section of the Unionist community was represented there through Brian Faulkner, the former prime minister, who was then to become chief executive in the power-sharing government of 1974. The Unionist population were concerned, but, as we saw, the executive was brought to nothing by the activities of the extremists in the Unionist community. I know that the Anglo-Irish Agreement will never be accepted by the Unionist majority community, even the most moderate people there.
  That brings me to the question of what we do about the situation. The Government, particularly under the leadership of the present Prime Minister, cannot afford to be seen to give way to Unionist non-recognition or Unionist objections. The Irish Government feel exactly the same. They will say, "We were involved". The Unionists put it a different way, they say that the Irish Government have got their foot in the door of Northern Ireland and will not take it away again. That is the way they see it.
  Here we have the irresistible force and the immovable object. The SLDP in Northern Ireland and the Irish Government, with the support of this Government, will in no way renege on the Anglo-Irish Agreement. Once that agreement was in existence in its present form, it was a red rag to a bull even to the most moderate of Unionists. So what do we do? We cannot impose political solutions on Northern Ireland. The Conservative Government have tried over the past 10 years, as I know, to bring together the warring political factions. They have been unable to do so.
  Normally in these debates after I have spoken I go home in the depths of despair because there is no answer. Tonight I hope to be able to put forward something positive which I believe can break that logjam. At present the Unionist party and the Unionist, Protestant population are absolutely terrified that a very vicious genocidal war is being waged against them. I am not a Unionist, I am a member of the minority population in Northern Ireland. But I understand the awful feeling running right through the Unionist community, particularly in the border areas of Northern Ireland, where the murders are taking place so indiscriminately every
  316
  day of the week. The Unionist party is frightened. Its members see the IRA as emerging from the Catholic community, that community gives them protection, it succours them in the continuation of the war.
  I have said it before in the House of Commons as well as in this Chamber on a number of occasions. The overwhelming majority of the people in the island of Ireland are opposed to the IRA and its campaign of violence. I hope with all the fervour of my being that I am right. I am sure I am right because I believe passionately in the inherent peaceful and compassionate qualities of the Irish race as a whole. I hope that I am right.
  However, there must be some way of proving it. The Unionist community in Northern Ireland look at the ballot box. They say, "Over 90,000 people have voted for Sinn Fein candidates and those candidates are Sinn Fein elected representatives, they and their movement are in support of the IRA". The Unionist population say, "There are at least 90,000 people in Northern Ireland who give support to the campaign of violence which is being waged against me and my family". Do those 90,000 people really support the IRA in its murder campaign or do they vote for Sinn Fein for other reasons? Do they vote for them because they are better public representatives? Do they vote for them because they give them better working class representation? Do they vote for them because it is a way of casting a vote in protest? Why should some people vote for Sinn Fein?
  Both noble Lords, Lord Bonham-Carter and Lord Graham, have spoken about the Act, as has the Minister. The noble Viscount, Lord Colville, is to be congratulated for the painstaking way in which he looked into the operation of the Act. Paragraph 1.6 of the report of the noble Viscount has already been referred to by my noble friend Lord Graham of Edmonton. The noble Viscount, Lord Colville, stated in that paragraph:
  "in August 1988 one man was stopped and detained for periods between 15 and 45 minutes on 33 occasions, in or near Londonderry; during the month he was thus detained in total for 12 hours 40 minutes. Each time he was just released".
  The noble Viscount further stated:
  There are many more anecdotes, but I select these as being certainly true".
  So there is no doubt in the mind of the noble Viscount that that statement was true. If that is true, surely some action could have been taken. The noble Viscount does not say whether the RUC, the UDR or the army was the body which detained the individual. But whoever detained him, that body was certainly flagrantly abusing the whole concept of the emergency powers regulations which are meant to protect people and not to harass them. Could that be another reason why people are voting for Sinn Fein?
  What is the answer to this dilemma? Is there a way out of it? At the moment I know that the two communities, through their elected representatives, are going through the motions of wanting to talk, but on their terms only. The minority community states that it will only talk to the Unionist population once it has the Anglo-Irish Agreement to back it up.

  317
  The Unionist population says that it will only talk to the minority community if the Anglo-Irish Agreement is suspended in some way.
  Incidentally, I must say that some journalists in Northern Ireland are not being very helpful in this terribly dangerous situation. I read a report in one of the Irish newspapers just last week by a journalist who said it was strange that the Unionist population who engaged in such a tirade against the Anglo-Irish Agreement in late 1985 and 1986 should now be running around whingeing for a suspension of the agreement. He used the word "whingeing". That is no way to try to bring people into political discussion. It only gets their backs up. That reporter came from Dublin. If he does not know the effect his words had in Northern Ireland, he is not representative of the people I know.
  How can we bring the Unionists into political discussions without forcing them to appear to be engaging in abject surrender? I was at Sunningdale. Over a period of 72 hours we painstakingly drew up the Sunningdale Agreement. One part of the agreement said that the parties to the agreement would recognise the state of Northern Ireland. That was part of the agreement. We deliberately negotiated that to give confidence to the Unionist population. But within a few days of that agreement being signed a politician in the Republic of Ireland by the name of Kevin Boland took the Sunningdale Agreement to the High Court in Dublin. He said that we had no authority to recognise the state of Northern Ireland and that such a recognition went against Articles 2 and 3 of the Irish constitution.
  The parties to the agreement had to apologise in court. The court then decided that the Irish Government had no right to sign that agreement because it acted against Articles 2 and 3 of the Irish constitution. Can noble Lords imagine what that did to the Unionist population in Northern Ireland and how betrayed they felt? Noble Lords can appreciate that they would not believe the promises that I was giving them when I told them that the constitution of Northern Ireland was accepted and reinforced at Sunningdale.
  That brings me to what I regard as being a hopeful, positive proposal. Article 2 of the Republic's constitution states that the whole island of Ireland is the national territory. Article 3 states that pending the reintegration of the national territory, the Government will govern the 26 counties; in other words, the Republic of Ireland.
  Everyone in the Chamber will be aware that all political parties in the island of Ireland, with the exception of Sinn Fein, have condemned violence. All political parties, with the exception of Sinn Fein, have condemned the IRA and other paramilitaries. Only a fortnight ago Mr. Haughey, at his own Ard Fheis, speaking as the present Taoiseach of the Republic, said that recourse to violence to achieve that political objective had no place in the affairs of the family of Western parliamentary democracies. He was referring to the political objective of the reunification of Ireland. All the political parties in the Republic have renounced and denounced violence.
  318
  Here is a proposal which I believe should receive the attention of the Irish Government. I was speaking to a friend of mine in the Irish Republic who has nearly 30 years' experience of being an elected member of the Dail in Dublin. My friend's name is Jack McQuillan. He is now physically retired from politics, but he is still involved mentally. He is still concerned with the awful problem which has beset the island of Ireland. When my friend, spoke to me a fortnight ago he asked me whether it would not do a lot for Unionist confidence and for the people who want to know how the Republic feels about the problems in the North if the Irish Government were to agree to hold a referendum on a simple amendment to Article 3 of the constitution of the Republic. He said the amendment need contain only 17 words. He said it would not ask the Irish Government to do away with Article 2 or Article 3. But he said the amendment would include the words, "In the task of achieving the reintegration of the national territory, the use of force is rejected".
  Does that not seem very simple and reasonable, when all the political parties in the island of Ireland have denounced violence? What possible objection could there be against the inclusion of those words? There have been referendums in the Republic on divorce and abortion. Those are important subjects in their own right, but what more important subject could there be in the island of Ireland than to inform the IRA that it is not acting with the support of the Irish people? I believe that the inclusion of those words could have a dramatic effect on the whole political future of Northern Ireland.
  The Unionists may not grasp that opportunity with open arms. They may not say that it is a wonderful thing, because they would still object to the existence of Articles 2 and 3. But let us think how it would be if the people in the island of Ireland, whom we are told through their political leaders so detest the campaign of violence that is carried on in their name, were given an opportunity to go to the ballot box and to vote for the inclusion of those words. Those words would tell the IRA that it is not speaking for the people of Ireland and that it does not represent the people of Ireland. Where would the IRA go if that referendum were carried by a considerable majority? I believe it would be carried by a considerable majority. Where would the IRA go? What would its claims be? What would Noraid in America—which sends money to the IRA to murder Irish citizens whether Protestant, Catholic or people of no religion—have to say?
  If the Irish people had voted and freely expressed the view that they did not want to bring about the unity of Ireland by means of a campaign of violence being waged by the IRA, I believe that that would bring about a dramatic change in the face of politics in these islands. I cannot see anyone objecting to that. What possible reason could they give for objecting? The only people who would object to the inclusion of those words must believe in the continuation of violence. I believe that those people are in a very small minority in the island of Ireland.
  I have put forward that proposal tonight. It is not my proposal. It was originally made by Mr. Jack McQuillan who has now retired from politics but is

  319
  very actively trying to find a formula to end the awful tragedy of Northern Ireland. I believe that that is a positive suggestion. We have the Anglo-Irish secretariat, which meets regularly. I believe that the Government should raise the issue on the next occasion on which they meet the Irish Government representatives.
  If it is true that the overwhelming majority of the people in the island of Ireland are opposed to the IRA and its campaign, I want to see that fact translated into ballots. That would mean that the power of the ballot would have been seen to defeat the power of the bullet. We have waited for that for far too long in Northern Ireland. Let us now grasp the opportunity which presents itself.
  9 p.m.
  Lord Lyell: My Lords, we have had a fascinating debate on what appeared on the face of it to be an order and regulations which, as your Lordships have said, come up with monotony each year. Each time I have to announce the reasons for introducing the measures. The noble Lord, Lord Fitt, to whose remarks I shall return in a moment, has raised a most interesting concept. The noble Lord may not be surprised if his remarks go further than merely your Lordships' House.
  I am grateful for the kind remarks of the noble Lord, Lord Graham of Edmonton. His noble friends will recall their own actions when they sat on these Benches. Indeed, we were reminded of them by the noble Lord, Lord Fitt. The views of the noble Lord, Lord Graham, on the report of my noble friend Lord Colville are the same as I would wish to express; so I shall not repeat what the noble Lord said. We concur with his views as to the value of my noble friend's report. I hope that my noble friend will feel able to continue to give us his very valuable advice, written in such a clear, lucid and amusing way.
  There was one common thread running through the remarks of the noble Lord, Lord Graham, the noble Lord, Lord Bonham-Carter, and the noble Lord, Lord Fitt. While accepting the need for the measures which I have presented, they hoped for political movement and some activity which might bring politics in the Province back to what all of us here, and others elsewhere, regard—perhaps arrogantly—as normal. We are not subject to the pressures and tensions which affect many politicians in Northern Ireland.
  No one does more than my right honourable friend the Secretary of State and my honourable friend Dr. Mawhinney to try, by various discreet means which are well-appreciated and understood in Northern Ireland, to find common threads between many disparate ideas, characters and people in Northern Ireland. They are ceaselessly trying day by day, week by week, month by month, to find some common ground by which the political outlook in Northern Ireland can be improved. Their work reminds me of the famed Echternach wine dance that takes place in Luxembourg each year—three paces forward, two back, and the dance takes all day if one is lucky. I had better not mention wine in respect of one of the
  320
  honourable Members of another place who was so graphically portrayed by the noble Lord, Lord Fitt. I think that he will see the similarity.
  We do not abandon our wish to find political common ground. We shall continue to do so and that will be the core of the policy of this Government.
  The aim of all of us in your Lordships' House as well as those in Northern Ireland is a full return to normal political life as well as the eradication of terrorism, which has no part in political life or in a democracy. The Government work unremittingly to that end. I am sure that noble Lords will agree that the policy of this Government, and of every other government over the past 20 years, has been to tackle the security, political and economic problems together. That may appear impossible, but it does not stop us trying.
  Increased economic activity in recent years is characterised by the motto, "Belfast is buzzing". I had the opportunity of advising the House earlier this week of inward investment in the form of two valuable projects which will bring over 1,500 jobs to the Province. That particular aspect accords with the remarks of the noble Lord, Lord Graham, that ordinary people in Northern Ireland yearn for what his erstwhile constituents in Enfield also yearn for. Those thoughts are echoed by everyone in Northern Ireland. For my part, I believe that Belfast does not merely buzz. It is one of the liveliest cities that one could find anywhere on the face of this earth, in the evening and at midday. The shops are alive and commercial life is thriving. We hope it will go from strength to strength. It is a combination of all these aspects that the Government are addressing.
  The measures before us this evening require some comment. The Government recognise it is crucial that these powers are applied in a fair and impartial manner. I take on board what the noble Lords, Lord Fitt and Lord Graham, have said about the reportedly lamentable public relations between the security forces and one particular gentleman. I am sure that this particular case will be known to the security forces and that lessons will have been learnt on both sides. I venture to hope that this will not recur. I am sure that those points were forcefully brought out by my noble friend Lord Colville in his report.
  It is equally important that effective mechanisms should exist for examining cases and complaints such as the ones mentioned by your Lordships. We have put a great deal of effort into this and, as my noble friend Lord Colville also pointed out, a new independent commission for police complaints has been set up in Northern Ireland in the last year. New instructions have been issued to the army to try to remedy at least some of the problems. We are always trying to remedy the situation and make it better.
  The noble Lord, Lord Bonham-Carter, expressed the wish of many when he suggested the advantage of consolidating all the Acts and measures I have spoken of. There is a revised copy of the Northern Ireland (Emergency Provisions) Act 1978 which incorporates amendments made to it up to the end of 1987. I understand that it is available at Her Majesty's Stationery Office but, according to my

  321
  inquiries this evening, not yet available in the Printed Paper Office in your Lordships' House. I shall endeavour to see that it is made available as soon as possible. I shall then advise the noble Lord, Lord Bonham-Carter, so that he may have a copy. I have shared his bewilderment as I have searched my way from one Act to another.
  I am conscious also of the fact that it might be simpler if all the emergency legislation applying to Northern Ireland could be consolidated in one Act. However, this is not absolutely feasible in respect of the prevention of terrorism powers because these apply equally to the rest of the United Kingdom. However, as I said earlier, when the emergency provisions Acts lapse in 1992, consideration will certainly be given to incorporating into the new Act all those prevention of terrorism powers which apply only to Northern Ireland. I am sure that that will find great favour in your Lordships' House.
  The noble Lord, Lord Bonham-Carter, raised another aspect mentioned by my noble friend Lord Colville about video recording of interviews, particularly with terrorist suspects. My noble friend recognised that there were a number of serious potential difficulties over this aspect of video recording. He acknowledged that the balance was very difficult to achieve. The Bennet Report, on which the procedures for interviewing by the Royal Ulster Constabulary are based, rejected the idea. However, we shall certainly be examining the whole of this aspect, particularly in view of the very valuable comments made by my noble friend. Although unable to commit the Government to any further activity tonight, we shall certainly look at everything.
  As regards the political progress we yearn after, we have tried and continue to try to promote dialogue. However, we are able to achieve little by little changes in the political climate in Northern Ireland. There is now more willingness to consider the ideas of the Government, but, of course, this has to be done discreetly and tactfully in Northern Ireland. There may be some signs of compromise. Certainly,
  322
  I think there is more hope in regard to that aspect than there was when I last presented similar measures to your Lordships.
  The noble Lord, Lord Fitt, took us on a fascinating tour of Northern Ireland politics. I shall read his remarks with relish. There were many good comments among his remarks. He referred to Sunningdale and the events of 1974 in the same paragraph as he mentioned the events of 1985 and subsequently. However, I take his point. We shall digest what he said. We shall not stop trying to improve the political climate in Northern Ireland.
  As for the noble Lord's comments on the Irish constitution, it would be quite wrong of me to comment in any way. I am sure the noble Lord will be able to look after himself when comments come back, as they are almost bound to do. The noble Lord touched a common chord in all of us, and especially those of us who serve in Northern Ireland. He said that each night his thoughts were on the violence, how this was presented in the media and how it reflected upon everyone in Northern Ireland. I often feel exactly the same; so, I believe, do many of us in regard to Northern Ireland. However, there is always a glimmer of optimism. No one in your Lordships' House—and this also applies elsewhere —can let down the people of Northern Ireland in trying to help them find a solution. That is the object of the measures before us. I say on behalf of the Government that we shall not fail in the task. In that spirit I commend the measures to the House.
  On Question, Motion agreed to.

  Kingston-upon-Hull City Council Bill [H.L.]
  Reported from the Unopposed Bill Committee with amendments.
  House adjourned at a quarter past nine o'clock.

  SHARE OWNERSHIP
  SHARE OWNERSHIP
  ECOFIN COUNCIL MEETING, 13th MARCH
  ECOFIN COUNCIL MEETING, 13th MARCH
  MERCHANT AND TRADING FLEET STATISTICS
  MERCHANT AND TRADING FLEET STATISTICS
  BRITISH FILM FUND AGENCY: RESIDUAL MONEYS
  BRITISH FILM FUND AGENCY: RESIDUAL MONEYS
  TENANTS' CHOICE SCHEME:IMPLEMENTATION
  TENANTS' CHOICE SCHEME:IMPLEMENTATION
  ROLLS-ROYCE: LAUNCH AID APPLICATION
  ROLLS-ROYCE: LAUNCH AID APPLICATION
  SALMONELLA IN QUAILS' EGGS
  SALMONELLA IN QUAILS' EGGS
  PRISON DISCIPLINARY SYSTEM
  PRISON DISCIPLINARY SYSTEM
  PIPER ALPHA RIG: INSURANCE CLAIM
  PIPER ALPHA RIG: INSURANCE CLAIM