Sitting of 4 May 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 (By Order)
  Order for Third Reading read.
  To be read the Third time on Thursday 11 May.

  REDBRIDGE LONDON BOROUGH COUNCIL BILL (By Order)
  Orders for Second Reading read.
  To be read a Second time on Thursday 11 May.

  KING'S CROSS RAILWAYS BILL (By Order)
  Order for Second Reading read.
  To be read a Second time on Monday 8 May at seven o'clock.

  SCRABSTER HARBOUR ORDER CONFIRMATION
  Mr. Secretary Rifkind presented a Bill to confirm a Provisional Order, under section 7 of the Private Legislation (Scotland) Act 1930, relating to Scrabster Harbour; And the same was read the First time, and ordered to be considered upon Wednesday next and to be printed. [Bill 134.]
Oral Answers to Questions
  NATIONAL FINANCE

    Inflation
    Mr. Wallace: To ask the Chancellor of the Exchequer what is his estimate of underlying inflation in the British economy; and if he will make a statement.
    The Chancellor of the Exchequer (Mr. Nigel Lawson): The underlying inflation rate, as measured by the retail prices index excluding mortgage interest payments, was 5·7 per cent. in March.
    Mr. Wallace: Does the Chancellor of the Exchequer accept that inflation, as measured by the RPI, is only one measure of the inflationary tendencies within the economy? Does he accept that the huge deterioration in our trade account and the fact that unit cost are rising faster than those of any of our competitors, are other indicators? Is not the underlying trend much higher than he has been prepared so far to admit?
    Mr. Lawson: No, I do not accept at all that the underlying trend is higher than I have been prepared to admit, although I certainly accept that it is too high and that it is necessary to get it down. That is what the tightening of the monetary policy over the past year has been designed to achieve. I accept also that it is perfectly true, as the hon. Gentleman says, that the rise in imports is a sign of excessive pressure of domestic demand in this country. Again that is addressed by the same tighting of monetary policy and the raising of interest rates that has occurred and that is now clearly having an effect.
    Mr. Bill Walker: Does my right hon. Friend agree that it is only the policies of my right hon. Friend and the Government that give us any hope of reducing the present rate of inflation—both underlying and otherwise? If one were to incorporate any of the policies offered by the Opposition, the effect would be exactly the opposite. Inflation would go up.
    Mr. Lawson: My hon. Friend is right. We do not know very much about the Opposition's policies. We have heard a few leaks. We understand that a little bit more is to be published quite shortly. I dare say that it will be as evasive and as elusive as what has been offered so far. Nevertheless, we are looking forward to it with great interest and we shall examine it very carefully. In the meantime, what we have to go on is the Opposition's record. Their record is clear. When they were in office, inflation averaged over 15 per cent.
    Mr. Gordon Brown: But why is inflation twice what it was last year and twice what it was when the right hon. Gentleman became Chancellor of the Exchequer, pledged to eliminate it? Why is it that, even after housing costs are excluded, inflation is 50 per cent. higher than it was last year, when in Japan it is 1·2 per cent. and in Germany 2·7 per cent? Will the Chancellor tell us why his anti-inflationary policies have been so unsuccessful?
    Mr. Lawson: The comparison that inflation is 50 per cent. higher than it was last year, is a rather absurd one. By the same token, the German inflation rate is 150 per cent.

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    higher than it was last year. In that case, according to the hon. Member for Dunfermline, East (Mr. Brown) we are clearly doing very much better than the Germans are. The phoney figures that he continually scatters across the Dispatch Box carry no weight at all and just make him something of a laughing stock. The reason for the rise in inflation is quite clear. It is that domestic demand has been rising excessively and that the money GDP has been rising excessively. I make no apology to the Opposition whatever, because the underlying rate of inflation today, even though it is far too high, is still lower than it was in the lowest month that the Opposition ever had during the whole of their period in office.

    Business Investment
    Sir Michael Shaw: To ask the Chancellor of the Exchequer what are the latest figures for the growth of business investment in the economy.
    Mr. Lawson: Business investment in 1988 was 14¼ per cent. higher in real terms than in 1987.
    Sir Michael Shaw: Does not the continuing rapid rise in business investment underline a steady confidence in the actions and policies of my right hon. Friend? Does it not also point to a continuing confidence in the greater prospects for growth in business and employment in Britain in future?
    Mr. Lawson: I am grateful to my hon. Friend for what he said. I am sure that he is absolutely right about the climate of long-term confidence that has been created in this country throughout business and industry, certainly given the continuance of the present Government, and that is of fundamental importance. Business investment has been one of the most encouraging aspects of the overall economic scene. Business investment now—that is, the figures for last year, the most recent ones we have—is now at the highest proportion of GDP that it has ever been since records began. Indeed, during the whole of the 1980s, total investment in this country has grown faster than in any other major European country.
    Mr. David Howell: Is not one of the reasons for the current trade deficit the enormous growth in business investment in the economy? That means that our cities and our industries are being re-equipped and modernised at a fantastic rate. Given that for the past 20 years critics of British economic management have said that the one thing we really need is a rapid growth of investment, can my right hon. Friend begin to explain what on earth all the grumbling from the Opposition is about?
    Mr. Lawson: My right hon. Friend asks a very good question, but I feel that it is not a question for me to answer. Perhaps it is a question for the right hon. and learned Member for Monklands, East (Mr. Smith). My right hon. Friend, who understands these matters very well, is absolutely right. It is striking, for example, that both last year and indeed the year before, the most rapid growth in all imports was in imports of capital goods. Capital goods are part of the investment boom and will provide increased capacity, increased growth and increased exports in the future.
    Mr. John Smith: Can the right hon. Gentleman explain why the Government always seek to disguise the sad fact
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    that on the latest available figures, investment in manufacturing industry is lower than it was in 1979? Is it not the case that the failure to invest in that crucial, tradeable sector of our economy is the main reason why we now face a horrendous balance of payments deficit, the biggest since records began?
    Mr. Lawson: No, that is not so. Indeed, manufacturing industry is in a far stronger position than it has been for a very long time. It is striking that manufacturing output today is well up on what it was when we first took office, whereas when the Labour Government were in office, manufacturing output fell; it did not rise at all. As for investments, the quality of investment is also important —[Interruption.] Yes, and the quality of investment has improved immeasurably, as is seen by the rate of return on capital and the fact that manufacturing profits are higher than they have been for a very long time and total business investment—and all forms of investment matter, not just manufacturing investment which is part of the story but not the whole story—total business investment is a higher proportion of total output than ever before since records began.

    Shareholders
    Mr. Mans: To ask the Chancellor of the Exchequer what is his latest estimate of the total number of shareholders in the United Kingdom.
    The Paymaster General (Mr. Peter Brooke): Including holders of unit trusts, 10 million people own shares; 22 per cent. of the adult population.
    Mr. Mans: I thank my right hon. Friend for that answer. Does he agree that increased share ownership is giving individuals a personal stake in the success of British industry? Will he encourage his right hon. Friends the Secretaries of State for Energy and for the Environment to include employee share ownership plans in the offers for sale of the electricity and water industries?
    Mr. Brooke: I unhesitatingly answer yes to my hon. Friend's first question. As to his second question, the Government welcome the opportunity which privatisation of the water and electricity industries will provide for employees to take a stake in the future of their company. My hon. and learned Friend the Minister responsible for water announced on 15 March that there will be special share offer arrangements for employees of the new water plcs, which will include free matching priority and possibly discount share offers. Further details will be announced in due course. Arrangements for employees of the electricity supply industry will be announced at a suitable date closer to the flotations of the electricity companies.
    Mr. Butterfill: Has my right hon. Friend noticed the recent opinion poll which shows that 20 per cent. of all adults in this country would be interested in buying electricity shares when the industry is privatised? That would amount to 6 million people, making it the most popular flotation ever achieved and one that is likely to be massively over-subscribed.
    Mr. Brooke: I have not seen the opinion poll to which my hon. Friend refers, although I have heard about it. I share his endorsement and reaction to it.

    Investment and Consumption
    Mr. Brazier: To ask the Chancellor of the Exchequer what has been the rate of growth of (a) total investment and (b) total consumption over the past seven years.
    The Chief Secretary to the Treasury (Mr. John Major): In the seven years to 1988, total consumption grew, in real terms, by 25 per cent., while total investment grew over twice as fast—by 54 per cent.
    Mr. Brazier: Does my right hon. Friend agree that total investment has grown so much faster than consumption not only as a result of the level of confidence that business feels in the Government's economic policy, but as a reflection of the fact that there is some remaining overmanning from the grotesque levels that we inherited when we took office? Does my right hon. Friend further agree that it is a healthy feature of economies at this stage of development, such as those just ahead of us like America and Japan, that employment moves as a result of investment from manufacturing to the service sector?
    Mr. Major: My hon. Friend is right about the confidence of industry. As my right hon. Friend said a moment ago, total investment is now higher as a proportion of gross domestic product than it has been for many years. On the future of manufacturing industry in particular, the Department of Trade and Industry investment intentions survey forecasts further investment growth in 1989 of 11 per cent. My hon. Friend is right on overmanning, but he should observe that not only has it fallen in many industries, but has done so at the same time as employment has grown in the service industries and in other industries.
    Mr. Beith: Does the Chief Secretary realise that few people outside his own supporters—and not all of those—believe that the enormous switch in capacity from consumption to export will take place on a scale sufficient to wipe out our balance of trade deficit? Does he find it possible to believe that that will happen when world trade is expected to slow down? He is presuming that exports will rise 4 per cent. a year faster than imports.
    Mr. Major: Invariably, there are Doubting Thomases about. We shall have to wait and see. Exports have been doing extremely well in recent years and there is every sign that that will continue. The hon. Gentleman will welcome that when it comes about for it will be a considerable achievement by British exporting industry.
    Mr. Soames: Is my right hon. Friend able to quantify the proportion of the trade deficit that is accounted for in inward investment?
    Mr. Major: There is a substantial amount of capital inward investment, which reflects, to a large degree, the confidence of external investors in the management of the British economy. On the balance of trade, a substantial part of the growth in the trade gap relates to the growth of investment in goods for production and investment.

    International Monetary Fund
    Mr. Burt: To ask the Chancellor of the Exchequer when he last attended a meeting of the International Monetary Fund; and what was discussed.
    Mr. Andrew Mitchell: To ask the Chancellor of the Exchequer when he last attended a meeting of the International Monetary Fund; and what was discussed.
    Mr. Lawson: I attended the interim committee meeting of the IMF in Washington last month. Much of the discussion focused on international debt, where several countries, including the United States, had made new proposals. The committee agreed that the IMF should set aside a portion of its lending to help finance debt reduction in countries which are pursuing appropriate economic reforms, including in particular removing barriers to inward investment. But the committee also stressed that official creditors should not substitute for private lenders.
    Mr. Burt: I thank my right hon. Friend for that reply. May I urge on him the need to continue the step-by-step, case by case analysis of the debtor countries, as he will recognise that there is strong support from Conservative Members for careful consideration and good giving to those countries which are doing their best to improve their economic position, but that there is no support for giving to countries that refuse to learn the economic facts of life?
    Mr. Lawson: My hon. Friend is absolutely right. The conditionality which has always been a part of IMF lending and of other international financial institution lending under the debt strategy is absolutely vital. If these countries are not going to take steps to put their own economic houses in order, really they will get nowhere at all and any lending will be completely fruitless. In many cases it is the conditions attached to the loans, as a result of IMF programmes which these countries have to implement, which are more important than the amount of money that is being lent itself. I realise that in many countries they feel that, politically, it is very difficult to take the measures that are necessary, but the plain fact is that unless those measures are taken, they are never going to get their economies to recover.
    Mr. Andrew Mitchell: While we all applaud the valuable efforts that have been made by the IMF in terms of Third world countries' debt reconstruction and relief and the considerable efforts made by my right hon. Friend in generating new ideas in that respect, will he treat with some scepticism the recent calls at the IMF sub-committee that quotas should be increased by up to 100 per cent., bearing in mind that at the moment IMF resources are at an all-time high?
    Mr. Lawson: Yes, my hon. Friend is right. There is really no case—no objective case, no logical case—for a substantial increase in IMF quotas. The International Monetary Fund is fully able with its existing resources to continue to do what it is necessary for it to do and I pay tribute to the work that it does do in order to pursue the debt strategy. But it is wrong to talk soley, or even mainly, in terms nowadays of the IMF because the overwhelming problem that is being addressed at the present time is the problem of the big debts run up by Latin-American countries, which are overwhelmingly debts owed to commercial banks in the private sector. This is a matter which the commercial banks have got to sort out with the countries to whom they have lent the money and they are going to have to accept that the amount of debt has got to be reduced and they have got to make themselves responsible for that debt reduction.
    Mr. Worthington: The Chancellor should face up to the fact that our contribution to the Third world has fallen from 0·59 per cent. to 0·28 per cent. during the period of this Government and that many Governments who are in desperate circumstances have had responsible policies. Although the greater environmental consciousness of the Government nowadays is to be welcomed, the fact is that there will be no future for people in this country or anywhere in the world unless we assist Third world countries to deal with environmental and population issues. The Government will be harshly judged in the future for their callous attitude towards assisting countries with much worse problems than our own. Does the Chancellor agree?
    Mr. Lawson: No, I do not agree, not merely because we took the lead in the initiative to help the very poorest countries of sub-Saharan Africa—the very poorest countries in the world—with their debt problems. But further than that, in the first place what matters even more than economic aid, although we give a substantial amount of aid, is investment in those countries. The United Kingdom invests more in private investment in developing countries than the whole of the rest of the European Community put together. That is our record and it is a very good one. I shall say one other thing to the hon. Gentleman who has asked that question, and to Opposition Members: the two things above all that they need are private overseas investment—the Labour party has always been hostile to overseas investment of any kind—and the other thing is to open our markets to the goods from those countries and, again, it is the Labour party that has always been hostile to that.
    Mr. John Smith: What possible reason can the Chancellor give for halving overseas aid during the period of this Conservative Government? We are constantly told that the Government have an economic success, which many of us doubt, but if they do have an economic success, why can they not at least maintain the aid to the poorest countries instead of halving it, which the Chancellor must admit is what they have done?
    Mr. Lawson: Economic aid has increased.

    Rates (Increases)
    Mr. Harry Greenway: To ask the Chancellor of the Exchequer what has been the impact on the real personal disposable income of (a) pensioners and (b) others, of the latest rates increases; and if he will make a statement.
    Mr. Major: The information available on the domestic rate poundage as set by local authorities in England for 1989–90 indicates that average domestic rate bills have risen by 9·3 per cent. There is no information available on likely movements in real disposable income for particular groups between 1988–89 and 1989–90.
    Mr. Greenway: Does my right hon. Friend agree with me that high rates, which occur so often in Labour areas such as Ealing—where rates this year have gone up by no less than 32 per cent., added to the 65 per cent. increase of two years ago—damage pensioners and everybody else, including industry and employment? Although I welcome the fact that pensioners get pension increases well in line with inflation, they are severely damaged by the way in
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    which the Labour party squitters their money away in great expenditure. Does my hon. Friend join me in that view?
    Mr. Major: The message that my hon. Friend gives me is that he regards Ealing council as a loopy council. I am happy to join him in that condemnation. My figures for the rate increases were slightly different from those given by my hon. Friend. My understanding is that Ealing has budgeted to raise its spending by 16 per cent. in 1989–90, and the domestic rate bills have risen by 31 per cent. following a 72 per cent. rates increase only two years ago. That shows a substantial disregard for pensioners, who are in fact protected by the substantial rate rebates that we have provided for them.
    Dr. Marek: Could the explanation be that this 9·3 per cent. increase that will have adverse effects on pensioners, as mentioned by the Chief Secretary, is brought about by the fact that, at current prices, rate support grant in 1987–88 was £10,059 million, and in 1988–89 it was only £9,687 million? Local authorities had no alternative but to make up for this increase in Government taxation in order to preserve services. Is this not yet another reason why taxation as a percentage of GDP is higher now under a Tory Government than it ever was under the previous Labour Administration, and why the Tory Government are the Government of high taxation.
    Mr. Major: If the hon. Gentleman believes that, I despair for him. He will never persuade anyone else to believe that. He speaks for the party of high taxation, as I speak for the party of low taxation. I will explain to him why rates go up so much, and disproportionately, in Labour-controlled authorities. It is because they waste a good deal of their money, and they do not control it properly. It is as straightforward as that.
    Sir Anthony Grant: If the daft proposals for rate reform, of a local income tax and capital value proposed by the Opposition were implemented in my constituency—and I think in that of my right hon. Friend—the burden would be more than twice as much as the community charge. Does my right hon. Friend agree?
    Mr. Major: I understand that. That is not a unique proposition for, if many of the policies of the Opposition were carried out, the tax burden generally would go up dramatically for taxpayers as well.

    Private Medical Treatment (Tax Relief)
    Mr. Allen McKay: To ask the Chancellor of the Exchequer what recent representations he has received concerning his proposal to offer private medical tax relief.
    Mr. Major: A number.
    Mr. McKay: If the word "targeted" is not to appear as an emotional word giving the appearance of efficiency coupled with compassion, will the Minister explain to the House—and possibly to Back Bench Conservative Members, to whom it has not been explained sufficiently—how, under the guise of cutting child benefit and targeting those in greater need, he can logically at the same time advocate a policy of giving tax relief to those on medical insurance, as that seems to be targeted to the better off?
    Mr. Major: The hon. Gentleman is entirely wrong about the proposal being targeted to the better off. The proposal before the House that I have no doubt we will debate shortly in Committee on the Finance Bill, to provide tax relief for medical insurance premiums, tackles a real problem. In a ring fence way it will help many elderly people who wish to continue medical insurance cover on retirement but who are unable to do because they have lost the benefit of the employer scheme. At the moment of retirement their income tends to fall and their premium tends to rise. We are seeking to retain the capacity for these people to sustain and retain the medical insurance they have previously had. That is entirely fair and reasonable, and I support it thoroughly.
    Mr. Neil Hamilton: Will my right hon. Friend confirm that the likely savings in public expenditure will exceed the cost to the Treasury of the tax relief itself when it is fully running? Has my right hon. Friend noticed that the Labour Members are celebrating a decade of Thatcherism by trying to ditch their own vote-losing policies and adopt a pale pink version of ours? How long will it be before they adopt this policy also?
    Mr. Major: It is certainly true that, as my hon. Friend said, the Opposition have learnt that there is a sea change in attitude in this country, and they tend to tack behind it. It will certainly be another decade or more before they are remotely likely to form a Government of any sort. I reiterate what I said a moment ago. I agree that this measure is likely to prove a very good bargain for the taxpayer.
    Mr. Madden: How can the Chief Secretary justify poor pensioners having to apply for means-tested benefits when rich pensioners who apply for medical tax relief will not even have to fill in an application form?
    Mr. Major: The justification is that we provide benefits for those pensioners who need them. The hon. Gentleman should welcome that.
    Mr. Robert G. Hughes: Will my right hon. Friend confirm that this move affects a relatively small number of people who have been receiving tax relief on private medical insurance? Does he agree that they with to continue with private medical insurance, but are mystified about why Opposition Members wish to deny it to them, and regard the Opposition's announcements as mean-minded and rather tawdry?
    Mr. Major: It is certainly true that, at the moment, a small number of pensioners are elegible to benefit—about 600,000 to 700,000. There is no mystery about the Opposition's hostility to private provision and self-provision. It is traditional.
    Mr. Chris Smith: Has the Chief Secretary seen the response of the Royal College of Nursing, which describes the proposal as having no economic, social or medical justification? Instead of providing tax subsidies to those few who are rich enough and well enough to benefit from private medical insurance, should not the Government spend the money on basic, desperately needed improvements to the Health Service as a whole, for the benefit of all pensioners?
    Mr. Major: The hon. Gentleman might have been on a different planet for the past year. He may not have noticed
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    that, in the last public expenditure round, the National Health Service had its largest ever increase in resources, of £2·5 billion. A further £2·5 billion was agreed last year for next year's increase in the National Health Service provision, and that is before we re-examine the matter in the public expenditure round next autumn. The Labour party never provided remotely the same amount of facilities for the National Health Service.

    Manufacturing Productivity
    Mr. Charles Wardle: To ask the Chancellor of the Exchequer what are the latest figures for the growth of manufacturing productivity in the economy.
    Mr. Brooke: Productivity in United Kingdom manufacturing grew in the three months to February 1989 by 6½ per cent. on a year earlier.
    Mr. Wardle: Is it the case that, for most of the 1980s, growth in manufacturing productivity has been faster in this country than in the other G7 countries, whereas, in the mid to late 1970s, we were at the bottom of the league? If growth in productivity is to continue, will it not require sane pay settlements, competitive manning levels, and sustained investment in new technology?
    Mr. Brooke: I can confirm the figures which my hon. Friend quoted. If he were to take the comparison back to 1960–70, he would also be accurate. I endorse also what he suggested as a recipe for continuing success.
    Mr. Henderson: Does the Minister accept that manufacturing productivity is an inadequate test of economic success? Car companies such as Rover and Ford, which have improved manufacturing productivity, have been unable to meet current demands using component manufacturers in this country because of their lack of investment over the past 10 years. The improvement in manufacturing productivity in Ford and Rover has led to the sucking in of imports, principally from Europe.
    Mr. Brooke: I would be the first to agree with the hon. Gentleman that manufacturing productivity is not the end of the story. The story which I told was an outstanding one—one in which I should have thought that the hon. Gentleman would have taken pleasure in terms of the achievements of this economy.

    CBI
    Mr. Cran: To ask the Chancellor of the Exchequer when he next intends to meet the director general of the Confederation of British Industry; and what will be discussed.
    Mr. Major: My right hon. Friend meets the director general of the CBI from time to time, and a wide range of matters are discussed.
    Mr. Cran: Does not my right hon. Friend agree that British management must continue to resist excessive wage claims such as we are beginning to see, if for no other reason than the need to continue to improve our international competitiveness? Does he agree, further, that management must show leadership and ensure also that their own snouts are not too deeply in the pay trough?
    Mr. Major: I am not sure that I would put the second part of my hon. Friend's question in precisely that way, but I certainly agree with the underlying sentiment. I do not defend unustifiably high salary increases, whether for directors or for the work force. That should be clear. On his substantive point, there must be a clear danger to industry and competitiveness if wage costs outstrip productivity growth. It is an important function of management to make sure that they do not.
    Mr. Robert Sheldon: When the right hon. Gentleman meets the director general, will he explain to him something that he himself seems to be reluctant to accept—that is, how he hopes to reduce the balance of payments to a reasonable level with a high pound and high interest rates?
    Mr. Major: I am bound to say to the right hon. Gentleman, in terms of the strength of sterling, that it is a matter of record that some of the countries with the strongest exchange rates over a lengthy period—Japan springs immediately to mind—have an extremely good exporting performance.
    Mr. Jack: When my right hon. Friend next meets the CBI, will he discuss the encouraging trends towards higher levels of exports from the United Kingdom? Will he give industry every assistance to increase the amount and value of our exports?
    Mr. Major: We are certainly delighted to see the increasing trend in exports. We wish that to continue. The most important thing that we can do for industry, whether in regard to exports or internal sales, is to get firm control of inflation. That is central to our policy.
    Mrs. Fyfe: When the Minister next meets the director general of the CBI, will he place on the agenda the concern of the Equal Opportunities Commission about the taxation of workplace nurseries? Will he further tell the tigress that her cubs were better looked after than the vast majority of working women's children are after 10 years of the tigress being at No. 10?
    Mr. Major: That may well be a matter that the director general would wish to discuss. I shall bear the hon. Lady's comments in mind.

    World Bank
    Mr. Arbuthnot: To ask the Chancellor of the Exchequer when he last attended a meeting of the World Bank; and what was discussed.
    The Economic Secretary to the Treasury (Mr. Peter Lilley): My right hon. Friend the Chancellor met the president of the World Bank in London on 26 April; discussion covered a wide range of issues.
    Mr. Arbuthnot: Did my right hon. Friend emphasise the importance of encouraging underdeveloped countries to attract private capital investment to assist in their development?
    Mr. Lilley: My hon. Friend is absolutely right to emphasise that point, which was mentioned earlier today by my right hon. Friend. The United Kingdom has an exceptionally good record on this. Over the last five years, direct private investment, which is of immense value to
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    underdeveloped countries, from this country totalled £6·6 billion, averaging £1·3 billion a year. That is the best help that this country can give many developing countries.
    Miss Lestor: Noting the fact that official Government aid as a proportion of GNP has fallen from 0·52 per cent. under Labour to 0·28 per cent. under this Government, which represents a loss in real terms of 20 per cent.—I wish the Chancellor would listen, because he got his figures wrong—will he bear in mind the week after next, when discussing the replenishment of the World Bank international development assistance, the fact that it is important that donor nations give generously? Will he support the growing demand that IDA loans should be converted into grants? Will he pursue that policy for all future assistance to the poorest countries?
    Mr. Lilley: I know that the hon. Lady takes a great interest in these matters: indeed, I have discussed them with her. I do not think that she is correct in assuming that the total benefit or even the major benefit that this country can give underdeveloped countries is limited to official aid. I know that she will join me in welcoming the fact that Britain was the first country to pay in full its contribution to the recent increase in the general capital increase of the World Bank, which is on the lines of the sort of thing that she was welcoming. I would place even greater emphasis on the importance of encouraging trade and private investment in developing countries.
    Mr. Hind: Next time our right hon. Friend meets representatives of the World Bank, will he ask them to consider which of the two major parties in this country is likely to close the gap between our exports and imports and therefore make Britain a much stronger economy—one with record levels of investment and one with productivity four times larger than that of the last Labour Government or the one with the crackpot policies of the Opposition?
    Mr. Lilley: I expect that my right hon. Friend will cover a wide range of subjects, including those mentioned. He will, of course, want to reassure the leader of the World Bank that Britain will not have a trade policy that seeks to rectify a balance of payments situation by excluding trade with the underdeveloped countries, as is often the wish of the Opposition.

    Personal Disposable Income
    Mr. Atkinson: To ask the Chancellor of the Exchequer what has been the annual average rate of growth of real personal disposable income since 1983.
    Mr. Brooke: Real personal disposable income has grown by 3 per cent. per year, on average, since 1983.
    Mr. Atkinson: How much have real incomes increased since 1979? Will my right hon. Friend confirm that since 1979 the British people have enjoyed greater prosperity than ever before in our history thanks to the economic policies of—[Interruption.]
    Mr. Brooke: I can confirm exactly the effect that my hon. Friend was seeking to achieve at that precise moment.
    Mr. Ian Taylor: Does my right hon. Friend agree that taxation rates at the higher level are a critical factor in judging whether the entrepreneurial spirit will exist in

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    society? Does he agree that rates at the top level of 50 per cent. and abolition of the cut-off point for national insurance are likely to damage the entrepreneurial spirit and have a long-term adverse effect on the economy? Is he aware that that is the latest policy statement of the Labour party?
    Mr. Brooke: I entirely agree with my hon. Friend. It is a tribute to both my right hon. Friends that the effect of 10 years of this Government has been to produce a reduction from 83 per cent. to 50 per cent. in the thinking of the Opposition.

    Take-home Pay
    Mr. Watts: To ask the Chancellor of the Exchequer what has been the increase in the real take-home pay of a man on average male earnings between 1978–79 and 1989–90.
    Mr. Brooke: Real take-home pay for a married man with two children on average male earnings is expected to be 31 per cent. higher in 1989–90 than in 1978–79.
    Mr. Watts: Does my right hon. Friend agree that the most significant features of that unprecedented improvement are that the benefits have been enjoyed by people at every level of income and that over the past six years real disposable personal income has grown at a rate of more than 3 per cent. per annum?
    Mr. Brooke: My hon. Friend shows by his question that he knows even more about the subject than I do. However, I entirely confirm to the British people his very welcome figures.

    Interest Rates (Small Businesses)
    Mr. Ted Garrett: To ask the Chancellor of the Exchequer what assessment he has made of the impact of interest rate rises since 1988 on small businesses.
    Mr. Lilley: Inflation is the greatest threat to the prosperity of small businesses, which will therefore greatly benefit from the Government's firm anti-inflationary policy.
    Mr. Garrett: Does the Minister not agree that what he has stated is exactly the statement made by the Small Business Research, Trust? Having said that, will he not do anything about it. One of the biggest problems facing small businesses is debt collecting. Will the brains of the Treasury think of some way in which the larger companies can pay their debts on time to the small businesses which operate for their benefit?
    Mr. Lilley: I am not at all surprised, and I welcome the fact that the Small Business Bureau endorses our attitude towards inflation and not that of the Opposition. Perhaps, that is because we have been successful in encouraging the growth of new businesses. During the past year, the number of businesses trading has increased by more than 1,200 every week. On the question of debts suffered by small businesses, the scheme that we introduced in the Budget before last has been a great help to the small companies which have chosen to take advantage of it.

    Inflation
    Mr. Gow: To ask the Chancellor of the Exchequer when he expects to achieve his target of zero inflation.
    Mr. Lilley: The Government's ultimate objective remains price stability. The medium term financial strategy assumes that the annual rate of inflation in the GDP deflator will be down to 2½ per cent. by 1992–93, consistent with its objectives for money GDP.
    Mr. Gow: Could my hon. Friend accelerate the meaning of the word "ultimate"? Will he please ensure that the policy of the Treasury is to bring about that policy which is attainable—zero inflation and no rises in prices?
    Mr. Lilley: I agree with my hon. Friend both as to the destination and as to the route, but I cannot give him a different timetable.
    Mr. Barron: Have the past 10 years been worth it for a reduction of 2 per cent.?
    Mr. Lilley: It has been immensely worthwhile to get rid of a rate of inflation that averaged 15 per cent. under the last Labour Government and which has reached 5 per cent. since 1983.

  PRIME MINISTER

    Engagements
    Mr. Malcolm Bruce: To ask the Prime Minister if she will list her official engagements for Thursday 4 May.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall be having further meetings later today.
    Mr. Bruce: Will the Prime Minister accept that many of us who do not share her views, nevertheless acknowledge that it is a considerable achievement to be in No. 10 for 10 years? [HON. MEMBERS: "Hear, hear."] Does she also accept that many people feel that she is now going too far and that she only listens to people whom she describes as "one of us"? Would it not be better for the country and for her if, in future, she went around with her eyes and ears open and her mouth shut?
    The Prime Minister: Then why does the hon. Gentleman ask me a question so that I have to open my mouth to answer it?
    Mrs. Ann Winterton: May I ask my right hon. Friend, as one grandmother to another, whether she agrees that the stability of our society is based greatly upon the strength of the family unit? Does she further agree that, when we reform our present outdated Sunday trading law, we should not throw the baby out with the bathwater, but should retain the traditional character of the British Sunday as a family day for rest, recreation and corporate Christian worship?
    The Prime Minister: I think that we must form a grandparents club in the House of Commons. I think that there would be rather a lot of people in it—and all of them would agree with my hon. Friend that the importance of the family is vital to the health of our society and that it is

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    vital to uphold it. [Interruption.] The family existed as a unit in society long before there was such a thing as child benefit, because people took responsibility for their own families.
    With regard to Sunday trading, I think that my hon. Friend will agree that the present law is not fair and not consistent; however, I hope that, before any Bill was ever brought in, there would be virtual agreement in the House on what it should contain.
    Mr. Kinnock: Would the Prime Minister be good enough to recall for us today the prayer of St. Francis of Assisi?
    The Prime Minister: I think that one has achieved that prayer and brought a great deal of harmony where there was a fantastic amount of discord under the last Labour Government.
    Mr. Kinnock: It bears repeating:
    "Where there is discord may we bring harmony,
    Where there is error may we bring truth,
    Where there is doubt may we bring faith,
    Where there is despair may we bring hope".
    Can the Prime Minister tell us why, in 10 years, she has failed to live up to a single one of those principles?
    The Prime Minister: Perhaps the right hon. Gentleman will remember the discord in the winter of discontent of 1979, when, under Socialism, there were strikes in the hospitals and one could not even get the dead buried. Perhaps the right hon. Gentleman will realise that there is now faith in Britain overseas—[Interruption.]—and perhaps he will realise that the social services are at a level of efficiency and generosity which has brought hope and a higher standard of living than people have ever known before.
    Mr. Nicholas Bennett: Does my right hon. Friend agree that the last thing this country needs is a national dock strike, a strike which would lead to imports being held up and coming in after the strike was over, thereby damaging our export potential? [Interruption.] Does she recall that, when national dock strikes and other strikes which damaged the economy took place under Labour, the Conservative party supported the then Government in opposing them? What does she think of the statement made by Labour Members that, if there was a strike, they would have to support it?
    The Prime Minister: I earnestly hope with my hon. Friend that there will not be a strike. The national dock labour scheme is being abolished so that the ports to which it at present applies can have a much more prosperous future when it has gone, as can all the people who work in industries in the hinterland. It will be greatly to their advantage. Any strike on behalf of the dock labour scheme would bear extremely heavily on all the other people in the economy who work steadily and well to produce Britain's prosperity and the prosperity of their families.
    Mr. Ted Garrett: To ask the Prime Minister if she will list her official engagements for Thursday 4 May.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Garrett: The House will have noted that the Prime Minister splurged about patriotism when replying to the previous question. Is the right hon. Lady aware that there
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    are many anniversaries this year, including one that I consider to be important—the 40th anniversary of the formation of the Council of Europe? Tomorrow, Finland will be the 23rd country to join.
    Will the Prime Minister ensure that the vast Government public relations machine highlights the importance of that organisation relative to the other organisation which I can hardly bear to mention but which is based in Brussels? Is she aware that the Council of Europe, which is composed of 177 elected Members of Parliament from the countries concerned, of which Britain has 18, can do infinitely more for the general well-being of this country than can the European Economic Community? Is she further aware that, for that reason, many of our interests in the broader spectrum of Europe coincide with the 23 rather than with the 12?
    The Prime Minister: I am grateful to the hon. Gentleman for those remarks. I agree that the Council of Europe represents a far wider swathe of Europe than does the Community and that it does an excellent job. I particularly pay tribute to the work done by hon. Members of this House in the Council of Europe, which is also particularly active in human rights and in keeping contact with many countries which would otherwise feel left out of the European Community. I share the hon. Gentleman's sentiments, and I thank him for expressing them.
    Q.4. Mr. Thurnham: To ask the Prime Minister if she will list her official engagements for Thursday 4 May.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Thurnham: Will my right hon. Friend bear in mind the way in which the strength of the economy has helped the sick and the disabled, whose real benefits have nearly doubled in the last decade? Does she agree that much more work lies ahead, especially to help find families where needed for the 5,600 handicapped children still in institutional care?
    The Prime Minister: I agree that greater prosperity has enabled us to do far more for the disabled. Indeed, when we came to office, expenditure on the disabled was £1·8 billion a year. It is now £7·3 billion, and helps many more people. In particular, the mobility allowance has been made non-taxable. We have increased spending on the mobility allowance by nearly six times.
    With regard to finding new families for handicapped children, I should like to pay tribute to what my hon. Friend has done and to the great lead that he has taken on the matter. Grants have been made to a number of voluntary agencies, in particular to the British Agency for Adoption and Fostering, which next week launches a new family-finding campaign entitled "Families Forever". We wish it well in this great work.
    Q.5. Mr. Chris Smith: To ask the Prime Minister if she will list her official engagements for Thursday 4 May.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Smith: Will the Prime Minister tell us what the British balance of payments position was in 1979, and what it is likely to be in 1989? How proud is she of the change that she has brought about?
    The Prime Minister: I am very proud indeed of the fact that this country has overseas assets of enormous dimensions, which have gone up over the past 10 years and which, together with economic policies, enable people to keep confidence in this country, and enable us to import many goods for higher investment to give higher productivity in future. That is a situation that was never attained under the last Labour Government.
    Mr. Gorst: During the course of her busy day, will my right hon. Friend have time to address herself to what she might be able to announce to the House on 4 May 1999 as her major achievements in the next 10 years?
    The Prime Minister: Not today, but I hope very soon to be giving some thought to that prospect.
    Mr. Sillars: To ask the Prime Minister if she will list her official engagements for Thursday 4 May.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Sillars: May I refer the Prime Minister to her earlier remarks about the increased overseas aid given by Britain? Is she aware that that does not apply to the colony of Hong Kong? Will the right hon. Lady acknowledge that there has been a serious breach of our moral obligations to the Chinese population in Hong Kong? Will she and the Government seriously take on board a review of the present policy, which denies those people the fundamental right of a vote in a democratic country?
    The Prime Minister: I am delighted that the hon. Member seems to think that in Scotland there is much greater faith in the United Kingdom.
    Mr. Sillars: That is not a reply.
    The Prime Minister: Ah, but it is a reply. The hon. Member did not say that Scotland lacked faith in the future of the United Kingdom, and I quite understand why, because Scotland has benefited enormously from a higher standard of living. I am so glad to recognise that, on this our 10th anniversary.
    The lease on Hong Kong ends in 1997 and we did extremely well to negotiate an agreement with China to keep the present capitalist regime going for the next 50 years. I believe that that is much welcomed in Hong Kong. The hon. Gentleman must have run out of original ideas, because he repeats the same question that he has asked before, and I give him the same answer.
    Mr. Butterfill: To ask the Prime Minister if she will list her official engagements for Thursday 4 May.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Butterfill: In view of the appalling incompetence and maladministration of the European Commission revealed by the Court of Auditors' report, does not my right hon. Friend agree that it is extraordinary that it
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    should seek to extend its activities to language training and to the medium-term transport infrastructure fund? Does she not feel that it would be better employed looking after the matters for which it already has responsibility, in particular, removing the barriers to takeover bids that presently exist in the European Community?
    The Prime Minister: I agree with my hon. Friend that we need to be on our guard against the Commission's attempts to extend existing Community competence into new areas. That seems to happen a lot at present. I agree with him that one area where t could usefully make more use of its existing powers would be in ensuring fair competition in Europe. For example, a number of countries still give heavy subsidies to industry, although they pay lip service to fair competition. Italy, Germany and France still give heavy subsidies to industry, and if they really believe in fair competition in 1992, those subsidies will have to go. More effective use of existing powers and competence should have priority over trying to extend that competence or dreaming up yet more institutions.
    Mr. Alfred Morris: If the NHS White Paper is such a huge success, as the Prime Minister persists in claiming, why was the visit of the Secretary of State for Health to the Vale of Glamorgan such a disastrous flop? Does the right hon. Lady still expect her 10th anniversary to be marked by victory in the vale?
    The Prime Minister: I hope that we shall achieve victory in the vale. We deserve it. I hope that one factor will be the Government's excellent record on the Health Service. As pointed out at Question Time on Tuesday, for every El spent on the NHS by the previous Labour Government, this Government have spent £3. There are more doctors and nurses and they are better paid, more patients are treated and each doctor has a smaller list. The right hon. Gentleman should help us to put the facts across instead of the fiction released by the Opposition.

    Questions to Ministers
    Mr. Speaker: There has been a resurgence in the number of open questions being tabled to departmental Ministers. The practice has been that the Chair will not call supplementaries to questions to a departmental Minister about that Minister's meetings or visits which do not state their purpose reasonably precisely. That has most frequently occurred on questions about future meetings or visits, but it equally extends to questions about past events, especially when it appears from the Minister's original answer that no recent meeting or visit of the kind mentioned in the question has taken place.
    I exercised some latitude in allowing supplementary questions on some borderline questions of that kind yesterday and today, but with the great congestion that we now have at Question Time nearly every day, it would be advantageous if I ceased to call supplementary questions on such questions, in the hope that they will cease to be tabled.

Business of the House
3.31 pm
Mr. Frank Dobson: May I ask a question about some meetings next week? Will the Leader of the House tell us what the business will be for next week?
The Lord President of the Council and Leader of the House of Commons (Mr. John Wakeham): The business for next week will be as follows:
MONDAY 8 MAY—Timetable motion on the Dock Work Bill.
Motion to take note of EC document on smoking in public places. Details will be given in the Official Report.
The Chairman of Ways and Means has named opposed private business for consideration at Seven o'clock.
TUESDAY 9 MAY—Consideration in Committee of the Finance Bill.
WEDNESDAY to MAY—Consideration in Committee of the Finance Bill.
At the end on Wednesday, motion relating to the personal equity plan regulations.
THURSDAY 11 MAY—There will be a debate on a Government motion to approve the White Paper "Working for Patients" (Cm. 555).
FRIDAY 12 MAY—Private Members' motions.
MONDAY 15 MAY—Until Seven o'clock, private Members' motions.
The Chairman of Ways and Means is expected to name opposed private business for consideration at Seven o'clock.
[Debate on Monday 8 May:

Relevant European Community Document

4225/89 plus Corrigendum

Smoking in public places

Relevant Report of European Legislation Committee—HC15-xvii (1988–89) para 3.]
Mr. Dobson: I start by registering the Opposition's deepest objections to the guillotine motion on the Dock Work Bill. The Bill was produced with no warning to anyone, on the same day that the White Paper on the dock work scheme was printed. It was rushed into the House and now, apparently, it is to be rushed to a guillotine. The Leader of the House introduced a record number of guillotine motions in the previous parliamentary Session and it looks as though he is trying to break his own record.
I go on from that to welcome the debate in Government time on the future of the National Health Service, for which we have been asking for a long time. But when shall we have a Government statement and a debate on the report on care in the community, because there is a clear relationship between proposals for caring for people in the community and any changes in the NHS?
In addition, when are we likely to have the long-promised debate on the Government's proposal to substitute student loans for student grants?
Finally, let me go back to a request that I made a week or two ago for a debate on the growing public concern over Government and public bodies' spending on publicity and advertising. In particular, will the right hon. Gentleman arrange for the chairman of the Tory party to come to the House to tell us when the Tory party will pay back to the water rate payers of the Thames water authority area the
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money that they paid to put an advertisement in the Conservative document advertising 10 years of this dishonest Government?
Mr. Wakeham: The hon. Gentleman asked me five questions about the business for next week. He first, as I would expect him to do, registered his disagreement with the proposal for a timetable motion on the Dock Work Bill, but he has to recognise that his hon. Friend the Member for Oldham, West (Mr. Meacher) said during the Second Reading debate,
"The Bill involves just one proposal".—[Official Report, 17 April 1989; vol. 151, c. 62.]
I recognise that it is a proposal which the Opposition are committed to resist by all means at their disposal, but in view of this I think it sensible, at a relatively early stage in the Committee, to seek to draw up a timetable for future debate. I shall be tabling the motion later today and I can tell the House that it will allow a very generous amount of time for consideration of the Bill both in Committee and when it returns to the Floor of the House.
I am grateful to the hon. Gentleman for thanking me for arranging the debate on the Health Service next week, which will take place on a Government motion. He referred again to the Griffiths report but, as I said last week, we have recently had a debate on this issue. I do not rule out the possibility of a further debate but I do not think it would be sensible to have another debate in the near future as the Government have not yet reached final conclusions on its proposals on this matter.
With regard to student loans, again, I have told the hon. Gentleman that the best time for a debate will be when the current discussions with the financial institutions have been concluded, and that is not yet.
With regard to the last point, I know that the hon. Gentleman has been trying quite hard to stir up a certain amount of interest in this matter of money spent on publicity but, as he well knows, these matters are covered by very strict rules and I reject entirely the view that the Government do not stick strictly to the rules that have been agreed.
Sir Fergus Montgomery: May I draw my right hon. Friend's attention to early-day motion 348?
[That this House deplores the animal suffering caused by the uncontrolled growth in the dog population, resulting in the destruction of an estimated 1,000 dogs in the United Kingdom every day; seeks to promote responsible dog ownership and to reduce the number of unwanted and abandoned stray dogs; is concerned about the cost in social and financial terms of environmental pollution and of accidents caused by dogs, and of attacks on livestock by dogs; supports the establishment of a nationwide dog warden service dedicated to the protection and control of dogs; and calls upon Her Majesty's Government to implement a national dog registration scheme as it is empowered to do under Clause 37 of the Local Government Act 1988.]
It has been signed by 233 hon. Members from all parts of the House and refers to the dog registration scheme. I remind my right hon. Friend that this is national pet week. We have a reputation for being animal lovers in this country and yet 1,000 healthy dogs are destroyed every day in the United Kingdom. I wonder, therefore, whether my right hon. Friend could find time next week to debate this important issue.
Mr. Wakeham: I recognise the concern, but the Government have made it clear that they do not consider that a registration scheme would do anything to assist dog welfare or control. I have to tell my hon. Friend that there are no plans to implement section 37. I recognise his concern about a debate, but I cannot promise him one in the immediate future.
Mr. James Wallace: The Leader of the House has, on a number of occasions when defending the introduction of guillotine motions, referred to the precedent set by the right hon. Member for Blaenau Gwent (Mr. Foot) when he guillotined five Bills in one day. Does the right hon. Gentleman see some future Government of a different hue using as a precedent the guillotining of the Dock Work Bill after only 25 hours of debate in Committee, or are they so drunk on the anniversary spirit that they believe that this Government will go on for ever and ever?
Mr. Wakeham: The hon. Gentleman, if he was present yesterday and listened to the speech by his hon. Friend the Member for Argyll and Bute (Mrs. Michie), will know that she indicated that she would prefer guillotines to be brought in earlier even than I bring them in.
Mr. Teddy Taylor: Can the Leader of the House take early action to stop next week's business being frustrated or unduly delayed by filibusters from silly busters? Can he also give an assurance that next week he will not seek on Friday, as he did last Friday, to restrict the discussion of important Euro-measures to one and a half hours on the one day when there is plenty of time for discussing them? Will he bear in mind the Prime Minister's important words about the need to give more time to these Euro-measures and not to restrict the time unduly?
Mr. Wakeham: My hon. Friend raises a number of points but I must deal first with the debate yesterday. I would have thought that that had done more to stop it happening again than anything else. While it was an achievement to speak for four hours, it was an even greater achievement to be quite so boring for that length of time.
As my hon. Friend knows, I am not happy about the way in which the House deals with European legislation, and that view is held by many other people. I am having discussions to find out how the House would like the scrutiny of European legislation to be improved. I hope that it will not be too long before we have helpful suggestions from many people, including the Chairman of the Procedure Committee and the Chairman of the European Scrutiny Committee—both of which Committees are examining that issue.
As to last Friday's motion, I do not consider that we slipped anything through. It seems to me that we tabled that motion in the proper fashion. The House approved it, which I think is excellent.
Mr. Peter Shore: Reverting to the subject of the Dock Work Bill, can the Leader of the House cite any precedent outside an emergency or an emergency powers Bill when a guillotine was introduced within three weeks of publication of the Bill itself? Are not the Government's action adding insult to injury? What kind of response does the right hon. Gentleman expect from the dock workers of this country?
Mr. Wakeham: I believe that the right hon. Member for Blaenau Gwent (Mr. Foot), who is sitting just to the hon. Gentleman's left, when he was Leader of the House, introduced a guillotine after the Second Reading of one Bill, so I do not think that my action is unprecedented.
Sir Peter Emery: Will my right hon. Friend join me in encouraging right hon. and hon. Members having ideas about European legislation and how the House should deal with it to extend their thinking to the Procedure Committee, which at this moment is trying to find ways in which it can assist right hon. and hon. Members and the House generally to give greater consideration to European matters?
Mr. Wakeham: Provided that that is not an invitation to right hon. and hon. Members who would like to take all European legislation out to the North sea and sink it., I agree to my hon. Friend's request. The restrictions are such that we cannot find a great deal more time to debate European legislation, but we can find a way of using the existing time more effectively.
Mr. Eric S. Heller: This morning, the Prime Minister said on early morning TV that over the past 10 years the Government have improved the quality of people's lives. Can the House have an early debate on precisely that point? The Prime Minister can then explain how the quality of life has improved for those people who sleep each night in cardboard boxes because they are homeless. She can also explain to the House how the unemployed in my constituency and in other parts of the country are much better off under the present Government. She can explain how people's lives have been improved by cuts in social security benefits. She can explain how the Government have destroyed the nation's stability. The worst crime of all is that they have destroyed the stability of the nation. The Prime Minister should come to the House and explain those matters, so that we may challenge her and give the opposite view—rather than the right hon. Lady going on some nonsensical TV programme in the early morning.
Mr. Wakeham: I know that the hon. Gentleman feels strongly about the views that he expresses in the House. However, if he will examine the business for virtually the whole of next week, he will find that every one of the measures proposed by the Government is about improving the quality of life. I refer to the Finance Bill, and to our proposals for the National Health Service and for improving the efficiency of the docks. They are all about improving the quality of life, so I reject the hon. Gentleman's assertions.
Mr. Nicholas Baker: Is my right hon. Friend aware that a White Paper on changes in structure plans has still not been presented? Does he agree that there must be a debate before the Government introduce legislation on that subject? If so, when will that debate take place?
Mr. Wakeham: I recognise the importance of that subject and acknowledge that my hon. Friend has addressed me about it on more than one occasion. I wish that I could be more forthcoming. I cannot promise a debate early in the future, but I shall certainly bear his point in mind.
Mr. Doug Hoyle: I draw the attention of the Leader of the House to early-day motion 638, signed by 136 hon. Members, which deals with the de-recognition of trade union rights by Midland bank.
[That this House condemns the Midland Bank for unilaterally withdrawing bargaining and representative rights from the Manufacturing, Science and Finance Union and regards this as a denial of civil liberties and the rights of the employees concerned in that they are unable to be represented by the union of their choice; and calls upon the Midland Bank, as a so-called listening bank, to listen to its employees and to reverse this unwarranted, controversial decision forthwith and to return to the non-confrontational, co-operative industrial relations which it previously enjoyed with the Manufacturing, Science and Finance Union.]
Does the right hon. Gentleman agree that people should have a right to join a trade union of their choice, that there should be a right to recognition for that union, and that the listening bank is not listening to its employees? Will he ask his right hon. Friend the Secretary of State for Employment to make an early statement?
Mr. Wakeham: I certainly cannot promise that and, from the mutterings that I hear from my right hon. Friend the Secretary of State for Employment, I do not think that he is very much in the mood. It is entirely for employers to decide which union, if any, they wish to recognise for collective bargaining purposes. I see nothing wrong with that at all.
Mr. Rupert Allason: Does my right hon. Friend share the concern of many Devonians and other people in the west country, in particular that of my constituents, about the outflow of untreated raw sewage into the sea? Does he agree that the subject merits early debate before the privatisation of the water companies? Will he give urgent consideration to having such a debate as soon as possible?
Mr. Wakeham: I cannot promise my hon. Friend an early debate. I recognise that it is an important subject. However, a great many of the provisions in the Water Bill are designed, in the main, to improve the quality of our water.
Mrs. Alice Mahon: Will the Leader of the House find time for an urgent debate on manufacturing? Will he tell his Front Bench colleagues to stop pretending that a trade deficit in manufacturing, which it is forecast will amount to between £18 billion and £20 billion by the end of the year, is not serious? It is very serious and it matters to this country. When the oil runs out, how on earth shall we earn our living without a decent manufacturing base?
Mr. Wakeham: I should have thought that the hon. Lady, with her usual ingenuity, would be able to make some of those points in the debates next week on the Finance Bill, but that is not a matter for me. Her view of the trade deficit is perhaps a bit one-sided. I do not think that she recognises, for instance, that three quarters of the trade deficit arises from investment in productive equipment and from improving the manufacturing facilities of our country. That is something which was not achieved under the last Labour Government.
Mr. Ivan Lawrence: May I draw my right hon. Friend's attention to the one area in which the last 10 years
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of Conservative Government have been a conspicuous failure—the failure to do anything about the indescribably filthy approach to this place in the underpass under Bridge street? It has gone on for years. At a time when the tourist industry is beginning to get into full gear, once again tourists are faced with what looks like a Third world country's pathetic attempt to clean up the approaches to the centre of democracy. Will he do something about it, please?
Mr. Wakeham: I agree with my hon. and learned Friend's analysis that there is too much litter about. I am not sure whether my responsibilities for organising next week's business quite fit into dealing with that matter, but I shall make inquiries and find out whether I have any responsibilities for it.
Mr. Michael Foot: Since the right hon. Gentleman seems so eager to cite precedents to defend his action over the guillotine, could I ask him to respond to the invitation that I have given to him on many previous occasions—I am sure that he must clinch the matter now, in view of what he has previously said—to hold a debate so that the House can see exactly what is the contrast between the measures that we introduced, for which I was responsible, and the right hon. Gentleman's far more frequent guillotines? Many more guillotines have been introduced by him than were introduced by any previous Government. Does the right hon. Gentleman not recognise that it is particularly offensive to impose a guillotine on the dock labour scheme, since the Government completely refused to hold any negotiations whatsoever with the unions concerned before the Bill was introduced?
Mr. Wakeham: The right hon. Gentleman is a formidable debater, but it seems to me that he will need all his skills if he is to develop the case that he developed earlier this week, that a lame duck Labour Government, of which he was a member, had a greater moral right to insist on getting their measures through Parliament than that of a Government who have achieved three decisive popular victories in a row. The right hon. Gentleman's theory, that the less support one has the more Bills one should be able to guillotine, is certainly a novel interpretation of the constitution.
What is more—I have some more news for the right hon. Gentleman—he will be on very shaky ground indeed if he presumes in the debate that he is urging me to hold to teach business management to me. He is the only Leader of the House since the war to have lost a guillotine motion. We all remember his guillotine days in 1976, when he could not get one of his Bills through, even with a guillotine.
Mr. Ivor Stanbrook: Now that the Bar Council, the Law Society, the Society of Apothecaries and Uncle Tom Cobbleigh and all have had their say about the Lord Chancellor's proposals for the reform of legal services, which I personally support, when will the House of Commons have a chance?
Mr. Wakeham: We had a debate late at night on the Lord Chancellor's salary order. Apart from my own, I thought that my hon. Friend made the only other sensible speech.
Mr. Roland Boyes: Is the Leader of the House aware that this year we are

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celebrating a vitally important anniversary—the year of photography? What initiatives do the Government plan this year? If they have no suggestions, will the right hon. Gentleman consider allowing still photography in this place? If we are to have television, it seems ludicrous to allow television and not still photography, particularly when there are very fine and brilliant photo-journalists in Britain. Led by The Independent and followed by others, there is very sympathetic treatment of photography in newspapers. Will the Leader of the House produce some suggestions, not necessarily today but perhaps next week?
Mr. Wakeham: The first thing I can say to the hon. Gentleman is that my right hon. Friend the Prime Minister is certainly giving the photographers of the world plenty of practice in taking good family snaps at the moment. I agree that his point is a serious one. The Select Committee considering the televising of our proceedings is examining these matters and it would be quite wrong for me to give my views as to how that Select Committee should reach its conclusions in its report, which it hopes to do very soon. However, the hon. Gentleman has raised a serious point which we shall have to consider carefully.
Mr. Geoffrey Dickens: I very much support the recent application by the hon. Member for Liverpool, Walton (Mr. Heller) for a debate on the past 10 years under my right hon. Friend the Prime Minister. Such a debate would give us the opportunity to explain to the nation how in those 10 years we have given power to parents, trade union members and council tenants. We have attracted inward investment and changed people's attitudes so that young people now want to run their own businesses. We could also explain how people now want to own shares in the company in which they work, and how difficult we find it to help people when they have the handicap of a Labour-controlled council.
Mr. Wakeham: I am grateful to my hon. Friend for his support for the hon. Member for Liverpool, Walton (Mr. Heffer), although I do not know whether the hon. Gentleman sees it in quite the same way. However, I do not see a way of finding time for a special debate on the points he raises, although a number of them could well be made in the business already set down for next week.
Mr. Harry Cohen: I urge the Leader of the House to think again about arranging that debate on the past 10 years. Perhaps it would give the Opposition the opportunity to raise questions about the increasing public squalor of hospitals being closed, homes not being built, public cleaning not being properly financed, unemployment having doubled, inflation rising rapidly, at twice the rate of our industrial competitors, homelessness having gone through the roof and many other issues. Will the right hon. Gentleman think again, as we would welcome a debate on the past 10 years?
Mr. Wakeham: I recognise that there is popular support for such a debate. We all have our own statistics to quote on such occasions, but I am not moved. I cannot find time to arrange such a debate next week.
Mr. Harry Greenway: Will my hon. Friend look at early-day motion 767?
[That this House strongly deplores the proposed all out strike of London Underground staff from 8th May with the severe inconvenience and suffering it will cause for the
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London public and the economy of London; and urges all concerned to think again and to continue to try to resolve their problems round the negotiating table, remembering that no problem is too large to be insoluble by responsible and fair negotiations.]
It tackles the serious matter of the proposed Underground strike for next Monday, which will cause huge damage to the economy of London and huge inconvenience and suffering to Londoners. Can we have an early debate or a statement, whether or not the strike takes place?
Mr. Wakeham: I certainly welcome the motion and I regret that there may be industrial action, rather than negotiation. Of course, the resolution of the dispute is a matter for the board and management, but I hope that the unions will take into consideration the many millions of people who have to use the Underground and think again before taking industrial action.
Mr. Tam Dalyell: Would next week be a good time for a debate on the quality of life in Whitehall? On a minor matter, can the Leader of the House explain how an Under-Secretary of State at the Home Office can appear on the BBC and talk about disallowed private notice questions, when the rest of us certainly cannot? Can he explain why it is that so mighty a personage as Mr. Bernard Ingham now refuses to meet the Institution of Professional Civil Servants.. which wants some kind of code of ethics? Can he tell us whether we can assume that it is now all right for a private secretary to the Prime Minister to authorise the improper disclosure of Law Officers' letters?
Mr. Wakeham: I have nothing further to add on the bulk of the hon. Gentleman's questions, except to say that I cannot arrange a debate on them next week.
Mr. Edward Leigh: On the subject of the right hon. Member for Blaenau Gwent (Mr. Foot), does my right hon. Friend recall that the right hon. Gentleman was only able to impose his will—
Mr. Speaker: Order. Questions must be about a debate next week.
Mr. Leigh: We have a guillotine debate next week, Mr. Speaker. I was simply recalling that the right hon. Gentleman could impose his will on England simply because of his majority in Scotland. Does that not drive a coach and horses through the argument that English Members such as myself should not be allowed to vote on Scottish matters? Those who live by the unitary guillotine should die by it.
Mr. Wakeham: I am most reluctant to bring forward guillotine motions at any time because it is better that debates are settled by negotiation. However, they have to be brought forward by all Governments, and a unitary Parliament means that every hon. Member can vote on them equally.
Ms. Marjorie Mowlam: Will the Leader of the House consider a debate next week on the intolerable situation in Cleveland, arid elsewhere, where there are delays of up to eight months before Department of Social Security leaflets reach voluntary sector outlets, from which people can learn what benefits are available? I asked the right hon. Gentleman a question about that two months

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ago and I would appreciate it if he did not advise that I write to the relevant Minister or ask a private notice question because I have obtained no information from those sources, short of being told that citizens advice bureaux have a special relationship and can obtain the information in a couple of days. Other organisations, such as housing trusts and agencies for the disabled, need that information so that people who need benefits can obtain them. This intolerable situation should be dealt with quickly.
Mr. Wakeham: I promise the hon. Lady that I shall look into the matter as soon as I leave the Chamber.
Mr. Nicholas Bennett: Notwithstanding the remarks of the hon. Member for Orkney and Shetland (Mr. Wallace), who has been noticeable by his absence from the Dock Work Bill Committee, will my right hon. Friend bear in mind the fact that Conservative members of the Committee welcome next week's timetable motion? Is my right hon. Friend aware that the hon. Member for Great Grimsby (Mr. Mitchell) spoke for two hours on Tuesday morning and was interrupted by the Chairman 10 times to be brought back to order, that the Member for Liverpool, West Derby (Mr. Wareing) was brought back to order nine times in five minutes by the Chairman for tedious interruptions and that the hon. Member for Great Grimsby admitted that the Opposition were merely trying to delay the Bill? The timetable motion is long overdue.
Mr. Wakeham: I excuse the hon. Member for Great Grimsby (Mr. Mitchell) because he must have found it a novel experience, when speaking in Committee, to have a large audience, rather than appearing on Sky Television.
Mr. Tony Lloyd: Will the right hon. Gentleman again turn his mind to the question of a debate on the Government's 10-year record? Will he take into account the fact that I have just taken to Downing street a delegation of people from all over the country—not just from the poor cities of the north—and that one member of that delegation carried with her a loaf of day-old bread? She bought it from a shop in Manchester which was selling it cheaply because people in that area cannot afford to buy fresh bread. Should Parliament not take such cases on board after 10 years of Thatcherism?
Mr. Wakeham: As the hon. Gentleman knows, he can quote a particular case and I cannot look into the details of it at the Dispatch Box. He also knows that the standard of living of all sections of the community has risen substantially under this Government.
Mr. Kenneth Hind: Will my hon. Friend take on board the advice of the right hon. Member for Blaenau, Gwent (Mr. Foot) that all is fair in love, war and parliamentary procedure? Will my right hon. Friend have mercy on Conservative members of the Committee considering the Dock Work Bill and not be diverted from his intention to guillotine the Bill which will abolish a monstrous system?
Mr. Wakeham: I believe that the time has come to deal with the Bill in an orderly fashion and that that would be to the benefit of the House. I do not think that, secretly, the Opposition disagree with me quite as much as they say.
Mr. Max Madden: Will the Leader of the House tear himself away from the Conservative party's celebrations of 10 years of Thatcherism and consider the problems of the victims of Thatcherism and the organisations that are trying to help them, such as the citizens advice bureaux? Has the Leader of the House seen early-day motion 710 about the citizens advice bureaux' golden jubilee?
[That this House notes that it is 50 years since the foundation of the Citizens Advice Bureau Service throughout the United Kingdom; and takes the opportunity of its Golden Jubilee to congratulate and thank all workers past and present, voluntary and paid, Management Committee members and professional supporters who have given help throughout the years, to ensure that citizens have access to independent, free, impartial information and advice on a confidential basis, in order that they will not suffer through ignorance of their rights and responsibilities.]
Does he know that the citizens advice bureau in Bradford celebrates its golden jubilee in September but that it is now on the brink of collapse because of cuts in its funding and uncertainty about future funding? Does the Leader of the House realise that its staff are working in intolerable conditions and that clients have to wait an average of two hours to be seen? As more and more Government Departments are urging the victims of Thatcherism to consult the citizens advice bureaux, it seems high time that the Government provided some funds to enable the CABs to carry out the help that the Government are making their victims seek from such organisations?
Mr. Wakeham: I do not look upon the hon. Gentleman as the most objective observer of the scene, but the Government congratulate the National Association of Citizens Advice Bureaux on its 50 years' service in providing information and advice to the public. I am sure that the whole House will wish to associate itself with that early-day motion.
Mr. Bill Walker: Will my right hon. Friend bear in mind the question that was asked earlier about access to this House, and may we have an early debate on that and related aspects? My right hon. Friend will be aware that in the 10 years of this Government, conditions and other aspects relating to hon. Members' activities have improved dramatically and out of all recognition. However, one problem still remains. Many of us are required to use the tube from Heathrow to Westminster and during the summer months we sometimes have to stand most of the way, often with heavy luggage—[Interruption.] I know that some colleagues may not give a favourable response to this, but my right hon. Friend will recollect that when I first became a Member of the House I had to wear a spinal jacket. Indeed, I still have problems with my spine as a result of my flying accident, and because of that I and other hon. Members in similar positions find such journeys difficult. Will some consideration be given to that aspect of our problems?
Mr. Wakeham: I certainly recognise the concern expressed by my hon. Friend. However, I do not see an early opportunity for a debate on the subject that he has raised, important though it is. I should have thought that my hon. Friend could find an opportunity of raising that matter, perhaps on the Adjournment of the House, which would seem more appropriate.
Mr. Tony Banks: Does it not smack of the "Iron Handbag" to have a sittings motion moved on the first day of Committee on the Dock Work Bill, which will also now have a guillotine motion moved on Monday, after only a few hours' debate? As the Government clearly do not want any amendments to be made to that Bill, thus leaving the Opposition to make all the running and allowing Conservative Members to sit in the Committee doing their constituency work and taking no part in the Committee proceedings, would it not have been more honest to consider that Bill on the Floor of the House? Are not the Government making a mockery of the Committee stages of Bills by allowing that to happen upstairs on the Committee Corridor? As we are talking about procedure, when are we to have a debate on private Bill procedure, a report on which we debated a few weeks ago?
Mr. Wakeham: I cannot promise a debate on the second subject in the near future. We had a good and interesting debate, with divided views from hon. Members of all parties and a pause to consider those views is the right thing.
I do not know how the hon. Gentleman conducted himself when he was in the late-lamented, or the not-lamented Greater London council—
Mr. Banks: Democratically.
Mr. Wakeham: —or whether he was a Member of the House under a Labour Government, but it does not seem a particularly strange idea that the Government should bring forward a Bill and be keen on having it enacted without too much amendment. That seems a perfectly normal sort of proceeding for a Government. It is the Opposition's job to propose amendments to Bills. That is perfectly reasonable, and I do not see what the hon. Gentleman is complaining about. The question is whether we are allowing enough time for the process to be dealt with decently and reasonably, and we think that we are.
Mr. Roger King: Notwithstanding my right hon. Friend's reply earlier concerning the prospect of a London tube strike commencing Monday, will he arrange for the Secretary of State for Transport to make an early statement to the House about how he intends to tackle the increased congestion that such a prolonged Underground strike might cause? Some proposals could include the lifting of parking restrictions on motorists, ensuring that busways are kept open, and seeing that there is extra space for commuting road coaches to be parked off street. If this is a prolonged stoppage, such measures will probably be found necessary.
Mr. Wakeham: If there is a need for a statement, my right hon. Friend will come to the House and make one. However, as I said in my earlier reply, the negotiations are between the management and the union. It is not for my right hon. Friend to make statements about those matters. The matters raised by my hon. Friend are important, and appropriate statements will be made if that is the best way of proceeding.
Mr. Tam Dalyell: On a point of order, Mr. Speaker. It arises out of a question.
Mr. Speaker: No, we will have the statement first.

Risley Remand Centre
4.6 pm
The Secretary of State for the Home Department (Mr. Douglas Hurd): With permission, Mr. Speaker, I will make a statement about the incident at Her Majesty's remand centre Risley.
At 6.15 pm on Sunday 30 April, as inmates in B wing were being unlocked for evening association, a prison officer was confronted by an inmate brandishing a weapon who demanded the officer's keys. The keys were not surrendered, and the staff on duty withdrew from the landing leaving 17 inmates unlocked. These inmates then put up barricades and smashed cells. This incident was contained.
On the morning of I May, two officers were trapped on a landing in D wing by inmates who again erected barricades and caused systematic damage. The officers were released by staff breaking through the outer wall of the building after the trapped officers had locked themselves in a cell.
Inmates than broke through on to the roof of D wing. They had control of two landings, and access to the roof space and the roof. Staff retained control of the remaining landings of the wing. Yesterday, the inmates agreed to come down, provided that they were photographed and their solicitors were informed. This was agreed, and they were returned to custody at about 7.45 pm.
I am sure that right hon. and hon. Members will wish to join me in paying tribute to the bravery of prison service staff in containing this incident. There have been injuries to officers, but fortunately none of them has been very serious. I am also grateful for the immediate and highly professional help provided by the police.
Two hundred and fifteen inmates were moved from Risley to other prisons. I have set in train an urgent inquiry into the disturbances which will be conducted by Mr. Ian Dunbar, the regional director for the south-west. A police investigation is also under way. Criminal charges and prison disciplinary proceedings will depend on that investigation.
The shortcomings at Risley provide no justification for the destruction and violence which took place and which made those shortcomings worse. As 1 have told the House, I broadly accepted the criticisms made by Her Majesty's chief inspector of prisons following his inspection of Risley. We have embarked upon a refurbishment and rebuilding programme which will transform the establishment. The refurbishment programme was due to be completed by autumn this year. That was a much-needed temporary improvement. We have decided to rebuild Risley entirely and the construction of new house blocks will begin at the end of August. Plans are for it to become a modern local prison holding both sentenced and remand prisoners, and work has already begun to this end.
Risley is overcrowded, but it is not undermanned. The staff-inmate ratio has improved even allowing for the effect of the fresh staff changes. Thinking more widely, we are taking steps to reduce both the number of people remanded in custody and the time taken to deal with cases awaiting trial. It is too early to draw any firm conclusions on the long-term effect of these measures on the people on remand, but the remand element in the prison system grew more slowly in 1988 than in any of the previous five years.

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This year, the number of remand prisoners has actually fallen. The average remand population is about 500 lower so far during 1989 than the average last year.
The damage and lost places at Risley are a setback at a time when, in other respects, there are signs of more settled times in the prisons. The total prison population has been roughly steady for several months, new places are becoming available to relieve overcrowding, and staff are being recruited in large numbers and used to better effect. There are opportunities here that we do not intend to let slip.
Mr. Roy Hattersley: No one should either defend the violence at Risley or react to it in a way which might incite similar action in other prisons and remand centres during the summer. It is in that spirit that I ask the Home Secretary some questions about Risley.
Will the right hon. Gentleman confirm that the latest report on that remand centre, which he does not intend to publish, shows his Department to have been slow in implementing Judge Tumin's proposals to improve a prison which the judge himself described as barbarous and squalid? Does the Home Secretary understand that the real problem is remand and its contribution to overcrowding? Blandly to assert, as the Home Secretary did, that Risley is overcrowded, like many of our local prisons and remand prisons, is to make a statement of staggering complacency. Overcrowding is the Government's responsibility.
In his statement today, the Home Secretary played his usual statistical tricks. Certainly the number of remand prisoners is slightly smaller than it was a few months ago, but I am sure that the Home Secretary will confirm that it is twice as high as it was in 1979. Will he confirm that, over the past 10 years, the number of remand prisoners in British gaols has risen from 5,000 to 10,000? As 40 per cent. of those men and women will either be found not guilty or awarded non-custodial sentences, their frustration is understandable, to say the least, particularly as the length of time spent on remand has more than doubled over the past 10 years.
Therefore, once again, I ask the Home Secretary whether he will take the necessary action to reduce the remand population. First, will he introduce generally in England the rule which works successfully in Scotland—that all remand prisoners are brought to trial within 110 days? To talk of pilot schemes, as I am sure the Home Secretary will, is to misunderstand the urgency of the problem.
Secondly, will he use his influence to ensure that the courts are more consistent in granting bail? It is not a matter for the courts alone: as the Home Secretary knows, the Government can play a decisive part in the matter. Will he further increase the number of bail hostels which are available for remand prisoners?
Thirdly, does the Home Secretary not yet understand that what happened at Risley earlier this week is the direct result of the Government's penal policy—sending too many people to prison, keeping them there for too long, and failing to take the—
Mr. Nicholas Budgen: Whose job is that?
Mr. Hattersley: It is the job of people who legislate for long prison sentences and who will not give appropriate advice on appropriate prison sentences.
Does the Home Secretary realise that the Government are responsible, by failing to take the steps which could have resulted in the number of remand prisoners being reduced from its present intolerable level?
Mr. Hurd: I am grateful for the right hon. Gentleman's first point, which is quite correct. I have read press reports, as has the right hon. Gentleman, of a later report by an inspector to the chief inspector, but I have not seen such a report. If the right hon. Gentleman forwards it to me with his comments, of course it will be considered. For the reasons which I have given, I believe that we have acted promptly on the criticisms of Risley in the chief inspector's report, both as regards the immediate refurbishment which I have described and the long-term transformation of the prison into a local prison.
The right hon. Gentleman concentrated on the remand population. He is perfectly right—there is no news in that. Over recent years, the population has grown both absolutely and as a proportion of the total. What is news and what I have imparted to the House, although the right hon. Gentleman has some difficulty in accepting it, is that, recently, in the total prison population as with the remand population, there has been a small improvement. The right hon. Gentleman is concealing his obvious satisfaction with that. He should be glad that the trend which he has advocated for a long time is just faintly beginning to appear. I would not put it higher than that.
The right hon. Gentleman went on to the details. Time limits are important. It is not a pilot scheme that we are introducing. What we are doing, in accordance with the permission given us by Parliament. is introducing time limits throughout England and Wales. On 1 April last year, they were extended to Wales and nine English counties, which included the Greater Manchester and Chester circuit, of relevance to Risley. On 1 June this year, they will be extended to most of the rest of England, including Merseyside, Cumbria, Lancashire, Staffordshire and West Yorkshire. The principle of time limits is not a matter of pilots: it is being applied. As time limits begin to work, they reduce delays. As they reduce delays, it will be possible to tighten them further. That is advice that I took a long time ago.
Equally, with hostels, there will be people whom magistrates might be willing to send to a bail hostel but to whom they would not be willing to give perfect freedom while they are awaiting trial. We are building up the bail hostel programme. There will be 500 extra places in bail hostels by 5 April 1991. The right hon. Gentleman did not mention bail information schemes, but the spread of such schemes from court to court makes it more likely that magistrates will have information about individual offenders which may lead them to feel that they can grant bail. He did not mention electronic monitoring. We are beginning trials in Nottingham, north Tyneside and Tower Bridge this summer to see if that technique can make a contribution to bringing down remand.
I hope that the right hon. Gentleman does not wish to convey the impression—I do not think he does—that magistrates are wrong in many cases in denying bail. There are two occasions when bail comes up in the House. The first is after an incident like this, when everyone says that too many people are remanded in custody. The other is

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when someone on bail commits a fearful offence. Then I am told from all sides of the House that the Bail Act 1976 is far too lax. The Bail Act is about right. There is a presumption for bail. In certain circumstances magistrates are entitled to deny it. I do not think that anyone who has watched the events of the last four days at Risley could reasonably deny that, for the protection of citizens, it is inevitable that quite large numbers of people awaiting trial will be, and should be, remanded in custody.
Mr. John Wheeler: Is my right hon. Friend aware that there is a general welcome on the Government side of the House for his statement and in particular for the remarks that he has just made about the proposals to reduce the remand population and improve the prison service as a whole? Does he accept that there is a recognition of the important part played by prison staff at Risley under the leadership of the governor at this difficult time? They did very well in controlling the situation. Will he confirm that the staff ratio at Risley is perhaps the highest that it has ever been in many years, at 1·5? Does he accept that it is most welcome that that rather unhappy institution is to be rebuilt? When it is rebuilt, will he ensure that the locking mechanism is electronic, so as to avoid the seizure of keys which led to the beginning of the incident? Will he accept that his contribution to improving the prison system by a huge 46 per cent. increase in expenditure this year is the highest ever?
Mr. Hurd: I am grateful to my hon. Friend. The point about the locking system is relevant and is one that Mr. Dunbar will want to cover. My hon. Friend is right about the staffing level. Obviously the fresh start changes and the abolition of a lot of overtime affect it, but even since fresh start, whereas the number of prisoners went down between 1988 and 1989 from 690 to 580, the number of staff went down by only 10. That is why the ratio of staff to inmates has improved.
Mr. Doug Hoyle: Will the right hon. Gentleman accept that it is with sadness and sorrow that I rise on this occasion? I want to joint in the tributes to the prison officers who showed bravery in difficult circumstances.
Will the inquiry's findings be made public? How will the inquiry affect the plans to change Risley into a local prison, which should come to fruition at the end of June or the beginning of July? Will the right hon. Gentleman see whether Risley could be rebuilt in less than eight years? Will he accept that a warning was put in the log on the Friday that disturbances were likely on the Sunday? Am I correct that there were only 25 discipline officers on duty on Sunday evening? If the right hon. Gentleman's reply is that many of the prisoners were locked away, is it not a fact that the locking away of prisoners like animals brings about such an incident?
Does he not agree that the remand system cannot be all that perfect when 5 per cent. are found to be innocent and 35 per cent. do not receive a custodial sentence? Is there not something gravely wrong with the system?
Mr. Hurd: As the Member of Parliament for the constituency, the hon. Gentleman has taken a close and constructive interest in Risley during the time that I have been responsible for it. I have asked Mr. Dunbar to prepare and present his report in the usual way, which is as a report to me. I doubt, therefore, whether it should be
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published. I will ensure, however, that the hon. Gentleman in particular, but the House in general, receive a summary and the conclusions.
There will be no change or delay in the conversion of Risley into a local prison. The hon. Gentleman knows from his knowledge of the subject that that will take time, but there will be no going back on that.
I have nothing to substantiate the hon. Gentleman's remarks about the log, although I, too, have heard such reports. The log and the number of discipline staff available at the relevant time are obviously matters for the inquiry. I believe that the hon. Gentleman will agree—as I have heard the representative of the Prison Oficers Association say—that, even if there had been a substantial number of extra staff, that probably would not have averted what happened.
No one would claim that the remand system is perfect or that mistakes are not made in bail decisions. I have stated our measures to reduce to the minimum the numbers remanded in custody. However, I believe that it is clear that, even if all those measures were entirely effective, it is right and inevitable that, for the protection of the citizen, a large number of people—perhaps those accused of violent offences—are remanded in custody by the magistrates. We must find places for them.
Mr. Nicholas Budgen: Will my right hon. Friend remind the House of the number of people in the last recorded year who committed offences while on bail? Is it not a fact that if a person is refused bail, he has the opportunity to reverse that, perhaps wrong, decision by appealing to a judge in a Crown court? However, if the public interest is not adequately safeguarded by magistrates who grant bail too easily, there is no appeal. Will my right hon. Friend not listen to the suggestions of the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) and, above all, avoid administrative interference in the discretion of the magistrates in deciding whether to grant or withhold bail?
Mr. Hurd: I cannot give the figure for which my hon. Friend has asked. However, he is right to say that it is precisely the number of such incidents that causes a great deal of public controversy and pressure on the Bail Act. The Bail Act makes it clear that the responsibility is with the courts, and that must remain so. The Bail Act is as clearly tilted towards a presumption of bail as is satisfactory and safe. There is room for greater concordance in magistrates' decisions on the granting of bail, but that is a matter for the magistrates. I want to create other options among which magistrates can choose, so that they are not left with just a choice between leaving X completely free while he awaits trial, or locking him up in such a place as Risley. The whole point of electronic monitoring and of bail hostels is to give magistrates a rather wider discretion than, in practice, they sometimes have now.
Mr. Robert Maclennan: I gladly join in the tribute paid to the officers and the police in their handling of this episode, but I express great concern that the Home Sectetary has betrayed again his gross complacency about those held on remand in this country. I draw his attention to the fact that, in each year that he has been Home Secretary, more than a score of young people have committed suicide on remand and that last year, on average, 11,439 prisoners were held on

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remand, which was an increase on the previous years. What is it that makes him so complacent and so shameless in seeking to defend the small steps taken as adequate to deal with a national scandal? Why does he do so little—by his own admission, a mere 500 additional places in bail hostels by 1991—to solve this appalling situation?
Mr. Hurd: The hon. Gentleman is being silly, which is not characteristic. I am not the least complacent, either about the prison system in general or about the remand population in particular. What I have listed is a series of measures—I believe unmatched in the past—for improving a deeply unsatisfactory situation.
I must remind the House that, although it is perfectly right for the reasons I have given—I believe that most of the House accept them—that we should take measures to reduce the remand population where possible, the other side of the equation, which the hon. Member for Caithness and Sutherland (Mr. Maclennan) persistently ignores in all our debates, is that the citizen requires protection. If we were to change the law and lean on the magistrates so that a larger number of people who may be accused of violent offences were given bail—
Mr. Hattersley: Most of them are not violent.
Mr. Hurd: Hon. Members will have seen what happened on the roof of Risley and what preceded it. Without prejudging any particular cases, what people have seen on their television screens during the past few days has reinforced the notion held by most of them that—I state again—it is inevitable and right that quite a substantial number of people awaiting trial will need to be remanded in custody. It is realistic to say that, not complacent. We must provide adequate, decent, austere places for that purpose.
Mr. Kenneth Hind: My right hon. Friend has handled the situation at Risley extremely well and I am sure that most of my hon. Friends would support him, the police and the prison authorities in the action that they have taken.
There are lessons that we can learn from this particular incident. Before 1995, my right hon. Friend plans to provide a further 25,000 prison places. Does he consider that there is a strong argument for dividing the prison system from the remand system and that we should look carefully at the system operated in many American cities, where remand centres are close to court centres? At those centres, alienation is reduced by improving the standards of family and legal visits and by improving the standard of care. We should accept at the same time, however, that there are people who are a danger to the community and who are likely to offend or intimidate witnesses, and that such people need to be kept in custody.
Mr. Hurd: I entirely agree with my hon. Friend that we need to be open to new ideas within the framework that he has suggested—that we should consider the design, construction and management of remand centres. I made a statement on that a few weeks ago. Because our situation is serious, I believe that we should be ready to learn and listen, as the Select Committee on Home Affairs recommended to us.
Mr. Alfred Morris: Is the Home Secretary aware that, during the disorders at Risley, inmates were taken from there to Strangeways prison in Manchester? What further strain did that impose on the staff and prisoners alike at a gaol that is already dangerously overcrowded? What can he say today to allay the fears of those in Manchester who feel that, unless further action is taken soon, we shall have still further ugly scenes at the Manchester prison?
Mr. Hurd: The right hon. Gentleman is right, and it applied not only to Strangeways but also to Armley prison in Leeds, both of which are operating in great difficulty in terms of overcrowding. An absolutely necessary result of the action that was taken by some of the inmates at Risley was that others had to be moved quickly to where there was just space to accommodate them. We have had to use a few police cells but, for reasons with which the right hon. Gentleman will agree, that is a highly unsatisfactory practice, and we kept it to a minimum.
Undoubtedly, the action taken by the inmates has put a strain on other, already crowded prisons, such as Strangeways, as the right hon. Gentleman says, and there can be no denying that. We must now pick up the pieces and restore the accommodation at Risley, and at the other places which are now becoming available thanks to the programme which we have set in hand and which the Opposition have consistently denounced.
Mr. Teddy Taylor: Does the Home Secretary appreciate that, while most people are aware of the huge effort that he has made to get more resources for the prison building and reconstruction programme, many people felt heartily sick to see the prison governor on television stating publicly that he had agreed to the full demands by the prisoners' so-called shop stewards, which included their being photographed by a particular newspaper as they disengaged from their costly vandalism? How much damage was caused? Does my right hon. Friend accept the principle that those who committed acts of vandalism should be strongly disciplined?
Mr. Hurd: I cannot assess the total damage, but it was clearly substantial. I said in my statement that a police investigation was in hand and that criminal proceedings, and possible prison disciplinary measures, would obviously need to be considered as a result of that investigation.
My hon. Friend is wrong about the so-called negotiations. There was no negotiation on matters of substance. It was simply a matter of timing and who should be present when they came down. He is also astray on the question of photographs. We are not allowed by law to take individual photographs of unconvicted prisoners. It may prove satisfactory that, at the request of the inmates, we have been able to do so.
Mr. Eric S. Heffer: Is the right hon. Gentleman aware that the situation in Liverpool prison is now rather bubbling because of what happend at Risley and that 60 remand prisoners have been transferred there? It is true that 30 detached staff have been put into Liverpool prison, which is already overcrowded and understaffed. Is the right hon. Gentleman further aware that the first reaction of some of the prison inmates in

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Liverpool was, on exercise, to stage a sit-down? Clearly, immediate action must be taken by the Government to get rid of unnecessary remand prisoners.
I do not know all the answers. I wish I did. There must be some immediate action; otherwise the situation in Liverpool could get very difficult indeed. We are already aware of the terrible overcrowding and conditions in that prison. I urge the right hon. Gentleman to look into the matter seriously and to act quickly to avoid difficulties that otherwise are likely to arise.
Mr. Hurd: The hon. Gentleman puts the point fairly. When inmates create that type of damage and put out of action that amount of space at Risley, there is bound to be a strain elsewhere, and the right hon. Gentleman described the strain at Liverpool. The remarks of his right hon. Friend the Member for Sparkbrook were wise in that respect. and I hope that no one, whether hon. Members or leaders of the POA, will give any encouragement to the copycat notion, which is always a danger in prisons when events such as this occur.
I have listed the measure that we are taking to provide possibilities for the courts other than remand in custody, but I do not believe it would be right for us to ask the House to change the Bail Act or for the Government to give instructions to the magistrates to go against what, in their judgment, case by case, they believe to be necessary for the protection of the right hon. Gentleman's constituents and others.
Mr. Tony Favell: Is my right hon. Friend aware that there is an answer to the problem? It is to introduce private sector involvement into the running of remand centres and the taking of prisoners to and from court—the type of measures that my right hon. Friend announced four or five weeks ago. Can he announce the timetable for those steps? Will he take it from me that many of his hon. Friends deeply resent the attacks made on him by the hon. Member for Caithness and Sutherland (Mr. Maclennan) and the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley)? My right hon. Friend has done more to ease this problem through the introduction of time limits than any Home Secretary for 40 or 50 years.
Mr. Hurd: My hon. Friend is being unfair. The hon. Member for Sparkbrook was in one of his statesmanlike modes this afternoon and I do not need protecting from him on this occasion. As my hon. Friend said, I told the House some weeks ago that, following the Select Committee's report, the possibilities of private management of remand and of escort duties are well worth pursuing. I told the House of the steps that we were taking to pursue those possibilities. It will require a change in the law if they are to be effected.
Mr. Tony Worthington: I ask the Secretary of State not to set his face against any further change in the clarity of advice to the courts or the training of magistrates. It is worrying that 40 per cent. of those on remand are either found not guilty or do not receive custodial sentence. I hope that, when the Minister of State addresses the Centre for Policy Studies on sentencing in a few weeks time, he will bring with him some ideas, or, at least, will not be as immoveable on this matter as the Secretary of State has been today.
Mr. Hurd: There is nothing immoveable about our position. I agree with the hon. Gentleman that the figure he quoted is worrying. Why has this situation arisen? Certainly, in some cases, magistrates feel that they do not know enough about the young man in front of them and therefore play safe and sentence him to remand in custody, as would the hon. Gentleman.
If sufficient information were immediately available to magistrates about the defendant's family background and job, which the bail information scheme gives, it would be more likely that magistrates would decide to give bail.
In addition, magistrates may feel that they are not happy for the defendant to be entirely free during that time. If it were shown that electric monitoring and the curfew principle worked, or if they knew that there was a well-run bail hostel in the neighbourhood, they could take either of those two options, rather than send a man on remand to somewhere such as Risley. We are not immoveable about considering such practices and possibilities, but are actively developing them. I hope that they are beginning to produce results.
Mr. John Greenway: I am sure that, having seen on television the events that occurred at Risley the public will be glad of the prompt action of the police and prison officers. I am sure that they were equally glad that the magistrates recommended that those people should be remanded in custody. I am sure that they will welcome my right hon. Friend's statement that the protection of the public must be paramount in deciding whether prisoners are kept on remand in custody. Does my right hon. Friend agree that, in tackling prison overcrowding with the range of measures that he has outlined, it is also important to take more action to classify remand prisoners? Not all the prisoners in Risley caused the damage.
One of the proposals in the Green Paper that was outlined some months ago recommended that more would be done about the classification problem. That is important if there are to be more bail hostels. One fifth of those in bail hostels abscond, which is not entirely satisfactory. I hope that my right hon. Friend will pursue this matter with the urgency with which he is pursuing the other measures.
Mr. Hurd: I entirely agree with my hon. Friend. On Friday I visited B wing at Hull prison, which has some of the same problems as Risley. One wing suffers from the same disadvantages of design. A large number of remand prisoners tend to bully others, while a minority are bullied. That is true of most remand centres, so categorisation is crucially important.
In my moment of irritation, I failed to pick up an important point made by the hon. Member for Caithness and Sutherland (Mr. Maclennan), on which my hon. Friend the Member for Ryedale (Mr. Greenway) almost touched: the problem of suicides. When a suicide occurs it is always a disaster and a tragedy, and even more so in prison than outside. That is why we have worked out, and are applying, the lessons which have, I hope, been learned. We must try to categorise and spot dangers as best we can, then try to communicate effectively with those whom we believe to be in danger. That is an important point.
Mrs. Alice Mahon: The Secretary of State will be aware that I recently made representations to his Department about constituents who have been in Armley. Given the seriousness of recent events and conditions

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there, I am staggered by the complacency that he and his Department have shown this afternoon. We shall never know whether the young people on remand in Armley who killed themselves were innocent or whether they were a danger to the public, because, sadly, they are now dead.
How many of the 215 prisoners who have been moved from Risley will go to Armley? Will the right hon. Gentleman confirm that his Department was warned that closing Thorpe Arch to young remand prisoners could lead to the recent tragedies in Armley? If others are to go to Armley and conditions there get worse, what special measures does he intend to take to alleviate those problems. How many more staff will he provide and what special measures will he take to try to prevent any more tragedies there?
Mr. Hurd: I have already volunteered, in answer to an earlier question about Strangeways, the information that some of the inmates of Risley were transferred to Armley. Whether detached staff follow them, as they have elsewhere, or how long they will have to stay, I do not know, but I shall let the hon. Lady know.
I hope that the hon. Lady will not be entirely captured by the argument that suicides and attempted suicides are the result of conditions, whether in Armley, Risley or anywhere else. I do not believe that that is so. The correlation is not clear. The hon. Member for Warrington, North (Mr. Hoyle) is nodding in agreement. That is clear if one looks at the individual cases. They have to be looked at carefully. Often it is the prospect of trial, the existence of charges, their shadow and, perhaps, the collapse of personal life that results which produces the outcome.
There has also been the story which got around in Armley, to which my hon. Friend the Under-Secretary of State drew attention—that a prisoner was more likely to be given bail if he did himself some injury. I am not denying that in some cases what the hon. Lady says may be true, but I ask her not to over-simplify. There are many reasons which may result in such a tragic decision, and we have to ferret them all out as best we can in advance. That will not always be possible, but that is what we must try to do.
Mr. Geoffrey Dickens: Does my right hon. Friend agree that when the Conservative party returned to power the then Home Secretary, my noble Friend Lord Whitelaw, announced one of the biggest prison building programmes that hon. Members have ever experienced, a momentum which future Administrations carried on? Does he also agree that, if the police make strong objections and it is right for a prisoner not to be granted bail, that must be in the public interest because there were strong reasons to suggest either that the prisoner might abscond or that he might abscond and commit further serious offences? Therefore, bail is given in the public interest according to the circumstances.
Does my right hon. Friend also agree that there are no votes in building prisons? He knows how angry I am about the remand prison proposed for Milnrow in Rochdale in my constituency, and how cross I have been that Rochdale council was too co-operative in those early days in talks with the Home Office. However, if it is in the public interest for prisoners not to receive bail, that has to be done. We cannot start changing the rules of the courts
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because of bricks and mortar, but we are doing more than any other Government, and the prisoners should understand that.
Mr. Hurd: I agree with all my hon. Friend's points. My noble Friend Lord Whitelaw, I think last week, opened the new prison at Garth. The latest example of the prison building programme. It has taken far too long to build prisons, partly because of planning difficulties. I shall look carefully to see what sites are available in my hon. Friend's constituency now that I know that I have his co-operation.
Mr. Tom Cox: Is the Home Secretary aware that, whenever we get prison disturbances, as we do quite regularly, he comes along and makes the identical statement that he has made today, to the effect that everything possible is being done? Why, then, is there such unrest within the prison service? He must know, his advisers must tell him, that, as any hon. Member with a prison within his or her constituency who has contact with that prison and the people who run it will say, there is always an underlying situation that could ignite at any time. Last week it ignited in Risley.
Until the Home Secretary realises that it is the numbers that are the root problem within our prison system, until we get the numbers down, until we get meaningful work in the prisons, until we get men and women out of their cells, where they are often locked up for hour after hour, we shall continue to have explosions within our prison service. When the Home Secretary faces the fact that the important thing is not building prisons but getting the numbers down there is a real possibility that we shall start to tackle the whole issue of the prison service in this country.
Mr. Hurd: Both I and my hon. Friend visit prisons regularly. When I do so, I always ask that I have a period alone with members of the POA and the board of visitors. So I think that I get as clear a notion as anybody of the underlying tensions and dangers which of course exist. The hon. Member is perfectly right to say that they are due, not wholly—because running a prison in a society with as many violent people in it as we and the rest of western Europe have is a dangerous business—but partly to overcrowding. That is partly the result of neglect in the past.
If I had taken the advice of the Opposition and stopped the prison building and refurbishment programme the position at Risley, instead of being serious, would have been a total disaster. It is precisely because we have a little hope, thanks to the modernisation programme, that we are able to make progress. But certainly we have to work towards the elimination of overcrowding. That is why I am glad, as I said at the end of my statement, that for the last few months the total population of the prisons has been roughly steady. Meanwhile, thanks to our programme, new places are becoming available, with the hope, despite the setback at Risley, that the position which the hon. Member describes will slowly improve.
Mr. Tony Lloyd: Will the Home Secretary accept that, while I agree with him that the level of violence cannot be justified by the disgusting conditions at Risley, it is quite disgusting that he is so clearly complacent about those conditions and the fact that they inevitably had an impact on the behaviour of those in Risley over the last four days? He quite fairly congratulates the POA on the role it has played this week, but that would come a bit

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better from him if he listened to those voices within the POA telling him that they do not feel that they have the resources or the training to deal with those who are mentally ill, are drug addicts or have any of the other behavioural problems found within an institution such as Risley. That is a significant part of the problem that has arisen there.
The right hon. Gentleman has been questioned and criticised by my hon. Friends about the conditions of remand prisoners in the north-west, and beyond the north-west, as a result of Risley. Can he tell the House, as he ought to, what steps he will take to alleviate the build-up of tensions at Walton, Strangeways, Armley and all those prisons in which pressure will have increased because of the events at Risley?
Mr. Hurd: We shall do this by detaching staff to meet the new responsibilities and limiting those responsibilities in time as much as we can. But that will depend on the assessment of how quickly we can bring the cells at Risley back into operation and what space elsewhere may be available. That is a major prison management task in the north, thanks to the action taken by the inmates at Risley,—[Interruption.]—by some inmates at Risley who have done a great deal of damage.
On the question of staffing, this is, as the hon. Gentleman rightly says, a matter which the POA constantly and naturally presses. Since 1979, the total of staff has risen by 45 per cent. while the number of inmates has risen by 16 per cent. In the last year, we have recruited 1,600 prison officers, of which 900 represent net growth, after allowing for retirement and wastage. Obviously, these are needed to man the new prisons. Although, as the hon. Gentleman says, this point is constantly argued, I do not believe that the record on staffing is bad. Staff time and talent is much better used than it was when the system depended on a great deal of inefficient overtime.
Mr. Hattersley: The Home Secretary says that he is a supporter of the 110-day trial rule, and claims to be its instigator. The right hon. Gentleman says that it has passed through its pilot stage and that he is happy that it is operating successfully in Manchester. Why does he not refute allegations of complacency by applying the 110-day rule all over Britain, and so automatically and inevitably reducing the remand population?
Mr Hurd: The right hon. Gentleman is wrong to talk about the 110-day rule. In England and Wales, the time limits are flexible; that is, they vary from place to place. I gave the timetable in which I am introducing those limits. Before one can introduce them sensibly, there must be discussions with the Crown prosecution service and with
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other people concerned, to ensure that they are fixed reasonably. I have experienced some difficulty with the right hon. Gentleman's own city. If he makes inquiries, he will discover why Birmingham said that it was difficult for it to accept the same kind of restrictions that I imposed on the rest of the west midlands.
That work must be done realistically, but it is being done. This afternoon, I announced the next stage, beginning on 1 June. When the whole of England and Wales is covered, we can begin, in the light of experience, to tighten and reduce the time available. That will have some effect on the remand population.

Questions to Ministers
Mr. Tony Banks: On a point of order, Mr. Speaker. I refer to your earlier ruling about not allowing supplementary questions to open ministerial questions. Speaking for myself, I am concerned about that ruling, because it affects the ability of Opposition Members to catch Ministers on the hop. Were it not to apply, Opposition Members would have an opportunity to be somewhat more immediate in terms of the subjects that they raise in supplementary questions. As I believe that problems arise out of the use of syndicates of right hon. and hon. Members, would it not be better to act against such syndicates rather than move against open questions to Ministers, which give Opposition Members in particular an opportunity to put Ministers on the spot? Will you, Mr. Speaker, examine the question of syndicates? Perhaps the matter might be referred to the Procedure Committee for examination in greater detail.
Mr. Speaker: I enunciated nothing new today, for that has always been the rule. I merely drew attention to that ruling because there were five questions on the Order Paper early in the day that were clearly open questions. As the hon. Gentleman's second point, I am aware of the problem of syndicates. When right hon. and hon. Members are not present, very often it is because they have forgotten or that a syndicate has put in a question for them. I welcome the hon. Gentleman's referring that matter to the Procedure Committee, because that practice is not beneficial to our procedures.

STATUTORY INSTRUMENTS, &c.
Ordered,
That the Plant Health (Great Britain) (Amendment) Order 1989 (S.I., 1989, No. 553) be referred to a Standing Committee on Statutory Instruments, &c.
That the draft Legal aid (Functions) (No. 2) Order 1989 he referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Fallon.]

Orders of the Day

  Police Officers (Central Service) Bill [Lords]
  Order for Second Reading read.
  4.54 pm
  The Parliamentary Under-Secretary of State for the Home Department (Mr. Douglas Hogg): I beg to move, That the Bill be now read a Second time.
  The purpose of the Bill is to amend section 43 of the Police Act 1964 and section 38 of the Police (Scotland) Act (1967) so as to overcome difficulties that have arisen over the status of police officers seconded from their own forces to central service—that is, temporary service under the Crown.
  Most of those officers are engaged in training duties at the police staff colleges and district police training centres, but they also include the staff officers to the inspectors of constabulary, members of the police research services unit, and officers engaged in various liaison duties. Their numbers are relatively small. There are only some 600 police officers on central service in England and Wales and in Scotland out of a total police strength of 138,000. However, the services that they help to provide are vital to the efficiency of the police services.
  The problem, briefly, is this. Section 43 of the Police Act 1964 provides that an officer on central service is to be treated as though he were not a member of a police force for the duration of his secondment. The position is the same in Scotland. The effect is that a police officer on central service has no police powers, no right to wear a uniform, no protection under section 51 of the Police Act 1964, which makes it an offence to assault a constable in the execution of his duty, and no right to membership of a police staff association.
  There are occasions when seconded police officers need to wear police uniforms in public. Staff officers to the inspectors of constabulary need to do so when accompanying the inspectors on their visits of inspection. Officers at district training centres need to do so when they are in charge of parties of probationer constables outside the premises.
  An officer in police uniform would be expected by members of the public to exercise police powers if the circumstances demanded it. A central service officer would therefore find himself in a very difficult position if prompt action were needed that called for the use of police powers. He would be faced with the choice of ignoring his lack of police powers and taking the necessary action or deciding not to become involved. In such circumstances a constable, or most constables, would act instinctively as a police officer and take the necessary action—and I believe that they would be right to do so.
  We now face a problem, because, before 1964, there was no statutory provision for common police services. Such services were provided on an ad hoc basis, with the officers who were seconded to perform them remaining members of their parent forces. That was not a very satisfactory arrangement. Although the seconded officers were performing duties for which the Secretary of State was ultimately responsible, they were not answerable to
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  him. They were answerable to the chief officers of their parent forces. That produced a blurring of the lines of management responsibility and a potential conflict of loyalties.
  In 1964 the opportunity was taken to put central service arrangements on a more rational basis. As central services officers are performing duties for which the Secretary of State is ultimately responsible, it is felt—quite rightly—that they should be answerable to him. That, essentially, is what section 43 of the Police Act 1964 provides.
  It might be argued that, as the police service has been able to live with these problems for 25 years, there can be no great need for action to be taken to address them now. I do not think that that is the correct view. If there is a need for central service officers to wear police uniform in public when performing their central service duties, they should have the right to do so. If that means that they may occasionally need to exercise police powers when the circumstances demand, they should retain those powers.
  Like any other police officer, central service officers should be given protection against assault and they should have the right to belong to the appropriate police staff association.
  Mr. Teddy Taylor: Before my right hon. Friend leaves that point, can he say whether the Bill will apply to the small number of Police Act forces in ports, such as the Port of London police, who I understand were covered by the 1964 Act?
  Mr. Hogg: I concede that I do not know the answer to that question. I shall take guidance, and, if I am permitted to wind up, I shall give my hon. Friend a reply.
  I turn to the provisions of the Bill. Subsection (1) of clause 1 provides for the insertion of three new subsections after section 43(3) of the Police Act 1964.
  The new subsection (3A) gives police officers the right to wear uniform, the right to exercise police powers, if the need arises, and the right to remain members of the Police Federation. It also gives them the protection against assaults which is provided by section 51 of the 1964 Act.
  The new subsection (3B) makes the Secretary of State liable for any torts committed by central service officers in the exercise of their police powers. This liability is likely to arise very rarely, if at all, but a remedy for torts and a liability in tort must be provided.
  As central service officers are answerable in law to the Secretary of State for the performance of their central service duties, it seems right that he should be liable for any torts committed by such officers in the exercise of their police powers.
  The new subsection (3C) makes it clear that police officers who are seconded as advisers are to be regarded as being on central service. Subsection (2) of clause 1, provides for the Bill to have retrospective effect. This provision protects the position of central service officers who may in the past have acted—either from ignorance of the legal position or in what they regarded as the public interest—as though they possessed the powers and privileges of police officers. We have no records of any such cases, but there could be some. The position needs to be covered.
  Clause 2 deals with Scotland, where the present position is broadly the same as that in England and Wales. It is clearly desirable that the legislation relating to police

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  officers on central service should remain consistent on both sides of the border. Clause 2 implements that objective.
  This is a small Bill, but it is desirable and not, I believe, controversial. I commend it to the House.
  5.1 pm
  Mr. Barry Sheerman: This is one of the few occasions when the Opposition find very little to argue over. This is a non-controversial Bill. I do not intend unnecessarily to delay the proceedings by doing what comes naturally to most hon. Members—trying to spin out a long speech when a short one would do.
  The Opposition support the Bill. Most of us thought that the provisions were already incorporated in the existing legislation, and it comes as a surprise to learn that they are not. Most of the provisions are completely sensible. It is absolutely right that central service members should be able to wear uniform, have police powers and be members of the Police Federation or the appropriate staff association. It is also right that the police should be provided with protection against assault.
  Two small points have been drawn to my attention. The first concerns the nature of the disciplining of officers who are seconded to the central service. I hope that when he replies to the debate the Minister will answer that point in a constructive spirit. The Police Complaints Authority said recently that it is concerned about the fact that a large number of complaints against the police run into the ground because police officers take early retirement on grounds of ill health. I draw that parallel only because I understand that if someone is seconded to central service, disciplinary action cannot be taken if a complaint is upheld against him. Disciplinary action might be evaded if someone is transferred to central service. The legislation ought to cover such a possibility.
  Secondly, when a person is seconded to central service it is not entirely clear to us whether the provisions covering personal financial arrangements and outside business interests, which are incompatible with status as a police officer, will also apply to those who are seconded to central service. Does the Bill provide that the code of conduct that applies to police officers will also apply to someone who is seconded to central service? Those are the only two points that worry the Opposition.
  5.5 pm
  Mr. Michael Shersby: I wish first to declare an outside interest. I am the parliamentary adviser to the Police Federation.
  The Police Federation warmly welcomes the Bill. My hon. Friend the Minister has explained to the House that it enables police officers on central service to be treated as members of police forces for the jurisdiction of constables. It also makes them eligible for membership of the Police Federation and provides them with protection against assaults and the right to wear a uniform. Those are two important rights for any officer who is on central service.
  The Bill makes it clear that central service is temporary service under the Crown as it relates to those services that the Home Secretary provides to promote the efficiency of the police. It is therefore a short but nevertheless important Bill. I agree entirely with the Minister that the Bill needed to be introduced, and it ought to be passed by
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  Parliament. The fact that this unsatisfactory state of affairs has continued for some years is no reason for allowing it to continue.
  While it may seem astonishing to the man in the street that a police officer seconded from his or her force to central service may experience difficulty over status, that is indeed the case. As my hon. Friend told the House, there are some 600 police officers on central service in England, Wales and Scotland. The services in which they are engaged include the police staff colleges, the district police training centres, the forensic science laboratories and the staff officers to the inspectors of constabulary. They make an important contribution to the efficiency of the police service.
  The House will perhaps be surprised to learn that a police officer on central service ceases to be a member of a police force. That came as a surprise to me, and I have no doubt that it has come as a surprise to other hon. Members. He has no powers, no right to wear a uniform, no legal protection from assault in the exercise of his duty and no right to membership of the Police Federation or other police staff associations. That unsatisfactory state of affairs has existed for a long time and needs to be remedied.
  It is for that reason that clause 1(2) has retrospective effect. All hon. Members pause when they hear the word "retrospective". The purpose of the clause, however, is to safeguard those officers who have acted in the public interest as though they had had since 1964 the powers that are normally expected of them. I see this as clarification of the existing position rather than as the conferring of new powers on a retrospective basis.
  Although the Police Federation warmly welcomes the Bill, there are several points which I hope my hon. Friend will be able to clarify. It appears that, as a result of specifying the provisions in the proposed new section 43(3A), a person engaged on central service shall be treated as though he were a member of his police force. It follows that, in relation to the remaining sections of the 1964 Act, a person, as a result of the existing provisions of section 43(1), shall be treated as though he were not a member of the force in question.
  One of the principal purposes of the Bill is to provide that police officers on central service are treated as members of police forces for the purpose of eligibility for the Police Federation. Therefore, an important distinction must be made between the eligibility of officers on central service being members of the Police Federation and the Police Federation's rights to represent such officers for the purposes of negotiations or consultations.
  Let us consider for example the police advisory boards established by the Police Act 1964. Section 46(2) of that Act provides:
  "The constitution and proceedings of each of the Police Advisory Boards shall be such as the Secretary of State may determine after consulting organisations representing the interests of police authorities and of members of police forces and police cadets."
  Whereas section 46(2) makes reference to the Secretary of State determining the constitution and proceedings of each police advisory board after consulting the organisations representing the police forces, will my hon. Friend say whether the Secretary of State is under an obligation to consult the Police Federation in its capacity as

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  representing those members on central service, unless those officers are to be treated as members of their police force for the purpose of section 46?
  Furthermore, and perhaps more important, there are the provisions of the Police Negotiating Board Act 1980. As my hon. Friend will be aware, section 1 of that Act provides for the consideration by the board of questions relating to hours of duty, leave, pay and allowances, pensions, or the issue and return of police clothing, personal equipment and accoutrements. Similar considerations apply to the Police Negotiating Board Act 1980 as to section 46 of the Police Act 1964. Although central service officers may be members of the Police Federation, arguably the Police Federation may not represent their interests on the negotiating board without any amendment to the 1980 or 1964 Acts.
  I hope that those matters will be clarified during the debate and dealt with in Committee so that officers engaged on central service shall be treated as if they were members of their police force for the purpose of the Police Act 1964 and the Police Negotiating Board Act 1980. They are clearly very important to officers engaged on central service. I do not wish to detain the House any further, except to repeat that the Police Federation warmly welcomes the Bill and hopes that it will have a speedy passage through Parliament.
  5.12 pm
  Mr. Robert Maclennan: The only oddity about the Bill is that it has taken a quarter of a century to come before the House. It enjoys the support of hon. Members on both sides of the House and need not delay us long.
  I should like the Minister to amplify the reasons why the Bill is retrospective. It is somewhat odd that he has chosen to make the Bill operate retrospectively when, apparently, he is not aware of the number of incidents involving central service police officers who have acted as though they possessed the powers and privileges of police officers in each year since the Police Act 1964. I wonder whether his decision to legislate was taken in response to a general representation about the desirability of that change, which is obviously understood, whether or not there are outstanding cases that may be affected by the retrospective provisions.
  The Minister's written answer to my hon. Friend the Member for Orkney and Shetland (Mr. Wallace) suggested that he did not have the information that might have thrown some light on the reasons for the retrospective provisions, but the Minister did not address the matter directly this afternoon. Perhaps he will do so in his concluding remarks when he hopes to reply to the hon. Member for Southend, East (Mr. Taylor).
  It seems right that there should be no doubt that police officers on central service can use police powers that they would enjoy when attached to their force and that they should have legal protection against assault. Can the Minister say whether there have been cases in which that lack of cover has presented a problem? Clearly it is a problem theoretically, but we do not usually legislate to deal with theoretical problems.
  I am grateful to the Minister for clarifying the import of the Bill's provisions.
  5.15 pm
  Mr. John Wheeler: I shall speak briefly in support of the Bill. Like other hon. Members who have spoken so far, I warmly welcome the Bill, not only because it removes an anomaly in the Police Act 1964 and the Police (Scotland) Act 1967, but because it demonstrates the willingness of the Home Office to amend the 1964 Act where change is necessary to produce a more efficient and effective police service.
  The services concerned with the amendment to section 43 of the 1964 Act fulfil many valuable functions on behalf of individual police forces, and those services should be organised on a national basis. They include the police staff college at Bramshill into which my Select Committee on Home Affairs has recently inquired.
  It is clearly anomalous that officers in central service posts should not hold the historic office of constable. Although there may not have been many occasions when officers on central service have been called upon to perform police duties involving the exercise of jurisdictional powers, that is more likely to happen in future years, especially now that more than 600 officers of all ranks are involved in those duties—a not inconsiderable number.
  I mention that point because I feel that it is probable that the number of central service posts will increase as time goes on in response to those policing problems which clearly require a national response and a common solution. I note the growing importance being placed on the Association of Chief Police Officers achieving co-operation between the 43 police forces in England and Wales. It is for consideration whether a strengthened ACPO secretariat should become part of central services.
  The Bill also removes the Police Complaints Authority from its position as a central service. That change is supported by the authority, and will doubtless help to reinforce its perceived and actual independence.
  There are only two minor queries that I wish to raise. First, it does not extend to Northern Ireland. I fully appreciate the reason for that. As Northern Ireland has only one force—the Royal Ulster Constabulary—it has no need for combined central services.
  Nevertheless, from my visits to the police staff college at Bramshill, I am aware that some of the staff there are from the Royal Ulster Constabulary. Are officers from the RUC on the staff at Bramshill to lack the jurisdiction of constables and eligibility for membership of staff associations held by officers on the staff from England, Wales and Scotland? That point will be of particular interest to my hon. Friend the Member for Uxbridge (Mr. Shersby), who so ably represents the Police Federation of England, Wales and Northern Ireland.
  If a central service officer were to engender a complaint of misconduct while exercising the powers of a constable vested in him by the Bill, the question would arise as to who should take responsibility for the complaints process under the Police and Criminal Evidence Act 1984. Would the Secretary of State for England and Wales—the Home Secretary—or would the Secretary of State for Scotland be liable? Would the Secretary of State, who is liable in respect of torts committed by that officer under new subsection 43 (3B) of the Police Act 1964, be responsible, or would it be the chief constable of the force to which the officer was said to belong under subsection (3A)? I should be grateful for clarification from my hon. Friend on those two small matters.

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  My queries in no way detract from my support for this welcome measure. It is a short Bill and, as we have discovered, it is a non-controversial measure, but it represents a worthwhile improvement to previous legislation and it may pave the way for further developments in the police central services. It may thus contribute to the development of a more efficient and effective service, which we all wish to see.
  5.21 pm
  Mr. Douglas Hogg: I am grateful for the general support that hon. Members have given to the Bill. I will seek to respond to the specific questions raised. My hon. Friend the Member for Southend, East (Mr. Taylor) asked whether the Bill applies to ports police, of whom there are a small number of forces. Neither the Bill nor the Police Act 1964 apply to ports police. Ports police are set up under private legislation and the Minister responsible for them is my right hon. Friend the Secretary of State for Transport.
  The hon. Member for Huddersfield (Mr. Sheerman) raised a number of points, including the matter of business interests. It is true that a member of the forces may not carry out any business in addition to police duties. There is no specific parallel for officers on central service, but as far as we are aware, none of them has ever done so. Such conduct would be strongly discouraged. We have the sanction of returning such an officer to his own force where, of course the ordinary principles would immediately apply.
  The hon. Member for Huddersfield also raised related questions about disciplinary procedures, including whether a police officer could evade a disciplinary charge by being transferred to central service. Although there is probably no barrier in law to such a step, there are substantial practical barriers. An officer would not be appointed to the central service in such circumstances and if such a transfer happened through inadvertence, the officer would be returned promptly to the force from which he came.
  My hon. Friend the Member for Uxbridge (Mr. Shersby) raised several questions. Before answering, I want to say how pleased we are about his appointment as parliamentary adviser to the Police Federation and I am certain that the Police Federation will benefit enormously from the advice that he is able to give it. He is correct in saying that, under the Bill, officers are not members of their own force save to the extent that is preserved in the Bill. There are specific points that need to be considered on pay, allowances and conditions. The pay and conditions of service of police officers generally are, as my hon. Friend stated correctly, negotiated in the police negotiating board. Those arrangements do not apply to police officers on central service, whose conditions of service are determined by the Home Office. To that extent, his analysis of the position is correct.
  My hon. Friend's analysis of the Police Negotiating Board Act 1980 is also correct. Section 1(1)(b) of that Act provides for the staff side of the Police Negotiating Board to represent the interests of members of the police forces and police regulations apply only to members of police forces. Section 43(1) of the 1964 Act makes it clear that an
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  officer on central service is not a member of a police force during his period of secondment, so police regulations do not apply to him and his conditions of service are not a matter for negotiation in the police negotiating board. That is the position at present. and nothing in the Bill disturbs that. If my hon. Friend tables amendments, they will be considered, but I do not want to give any undertaking about the Government's response should he decide to do so.
  I must say to the hon. Member for Caithness and Sutherland (Mr. Maclennan) that I am grateful for his support for the Bill. He raised two related questions, one on assaults and the other on the more general question of retrospection. He was right, as I have made plain, to say that the Bill will be retrospective in its effect. The reason is that there have been cases in which officers engaged on central service have acted in the public interest as if they possessed the powers and privileges of members of a police force by, for example, wearing uniform and effecting arrests. It could be said in law that they had acted unlawfully and that, by effecting an arrest, either they had committed the tort of unlawful arrest—unless they had the powers of a citizen in the specific circumstances—or that they had conceivably committed an assault. Those are nice points of law. To cover them, and to prevent some of my colleagues from earning money that they do not deserve in litigation on such matters, the Bill is retrospective.
  Central service officers may also have benefited from insurance schemes and provident funds arranged by the police staff associations. One could raise a query about the lawfulness of those benefits. That would be a misfortune, and it is another justification for the Bill being retrospective. The hon. Gentleman also raised the question of assaults on central service officers. We have no knowledge of any such assault, but clearly such an assault is possible and it is right, as a matter of principle, that we should deal with it.
  My hon. Friend the Member for Westminster, North (Mr. Wheeler) raised the question of Northern Ireland. Neither the Bill nor the Police Act 1964 and the Police (Scotland) Act 1967 apply to Northern Ireland. It follows that Royal Ulster Constabulary officers who are at Bramshill as instructors will not be covered by the Bill. It may be possible to contemplate changes and we shall have to consider the scope of the Bill. If my hon. Friend wants the matter to be considered, we will consider it, but at this stage I cannot give any undertaking or commitment about the Government's response.
  My hon. Friend the Member for Westminster, North also asked a specific question about what would happen if an officer serving on central service were subject to a complaint arising from the use or misuse of his police powers. The answer is that he would be forthwith returned to the force from which he had come and the ordinary complaints and disciplinary procedures of that force would then follow.
  I hope that I have responded to all the questions asked of me. I am grateful to the House for the support that has been given to the Bill and I commend it to the House.
  Question put and agreed to.
  Bill accordingly read a Second time, and committed to a Standing Committee pursuant to Standing Order No. 61 (Committal of Bills).

Intra-community Frontiers (Control)
5.30 pm
The Secretary of State for the Home Department (Mr. Douglas Hurd): I beg to move,
That this House takes note of European Community Document No. 10412/88 relating to the abolition of controls of persons at intra-community frontiers; and endorses the Government's view that in considering the relaxation of frontier controls within the European Community the Government must keep in place necessary measures to control terrorism, drug trafficking and other crime, and immigration from non-community countries.
Mr. Deputy Speaker (Sir Paul Dean): I must announce to the House that Mr. Speaker has not selected the amendment in the name of the hon. Member for Thanet, South (Mr. Aitken) and his hon. Friends.
Mr. Hurd: The debate gives the House an opportunity to take stock of our position on the relaxation of frontier controls in Europe.
I should like to make one point at the outset. We believe that frontier checks will continue to be a useful, indeed an indispensable, part of the protection for our citizens against the evils of terrorism, drug trafficking and organised crime, and also against illegal immigration. The documents before us show divergence from the European Commission on this principle. We hold strongly to the validity of the general declaration annexed to the Single European Act, which stated:
"Nothing in the provisions of the Act shall affect the right of Member States to take such measures as they consider necessary for the purpose of combating terrorism, crime and the traffic in drugs."
That does not mean that our stance is unreasoning or that we are smugly satisfied with present arrangements. On the contrary, I believe that we are at the start of a period of steadily intensifying co-operation within the Community in police work and in many legal matters. For many years the meetings of the Trevi group of Ministers of the Interior and Justice were relatively few and routine. Now we meet often, for example in Madrid next week, and our programme of work has become formidable.
We in the United Kingdom are among the leaders in encouraging these forward moves, because I believe that they can add to the safety of our citizens. I shall give one or two examples. The more closely we work against the drug trafficker, the better aligned our laws are on extradition, the more effectively we can provide for the confiscation of the assets of convicted criminals in each other's countries and the more clearly we understand each other's policies on immigration and asylum, the more effective we shall be in protecting our own peoples. I hope that we shall spend the next two or three years before the end of 1992 not in jousts between lawyers or in loud rhetorical wrangles over the principle of frontiers, but in solid practical work together in strengthening that protection. This is a new dimension of Home Office work and it is becoming one of the most important.
I should like to make another important preliminary point. The debate and the documents are concerned only with frontier controls as they affect the movement of people but the Single European Act goes much wider. The House will have other opportunities to discuss, for example, the proposals made by my right hon. Friend the Chancellor of the Exchequer for reducing frontier formalities on the movement of goods.
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The Government welcome the production of a Commission report which pulls together a number of issues related to frontiers and the free movement of Community nationals. We also welcome the recognition given in the report, which has been in evidence in our recent dealings with the Commission, that practical problems require practical solutions. This has been the keystone of the Government's approach. This was the way we tackled the Single European Act and it is the way we are now approaching negotiations with our European partners on frontiers following the Single European Act.
Daily in my mind must be the constant battle that the police and Customs services of Europe are fighting against the evils I have mentioned—terrorism, organised crime and the traffic in drugs. The Commission's report misunderstands the value of these important frontier checks. Indeed, it says:
"anyone with intimate knowledge of these matters knows that the present frontier controls are ineffective".
I do not accept that. Indeed, common sense tells us that that is not the case. The functions and effectiveness of border controls vary a good deal from country to country, depending largely on matters of geography. It is obviously more difficult to maintain a full system of control at land borders than it is at natural boundaries. We find that ourselves in Northern Ireland. But it is strange logic to say that, because land frontiers are harder to check, there should be no checks at sea and air frontiers, where checks are fairer and more effective.
The contribution that such checks make to the fight against terrorism and serious crime cannot be assessed precisely, though it is clearly significant. The deterrent effect, for example, is bound to be impossible to measure, but we know that terrorists and criminals recognise the controls as a point where they are vulnerable. The intelligence gathered from observation or questions at frontiers can prove vital in piecing together a picture of a terrorist's or criminal's movements or plans. The frontier checks we operate provide a ready opportunity to arrest and charge suspected offenders and to seize illegal goods.
However, the frontier check is not the only weapon against terrorism and serious crime. We must aim at defence in depth, by which I mean defence forward of our own frontiers—in other countries, within the borders of our partners—defence within our own frontiers—in our own towns and cities—and, where necessary and reasonable, defence at our frontiers.
Increasing co-operation with our European partners is an important part of our policy. We entirely agree with the emphasis that the Commission's report places on collaboration to prevent and combat international crime and terrorism. However, we should not believe that improving the way in which European law enforcement agencies work together can be a full substitute for border controls. This work is worth while in its own right, and we shall certainly press ahead with it.
In the Europan Community this work is carried out, as I have mentioned, within the Trevi framework. We are active, too, within individual states. In January I signed an arrangement with my opposite number in Italy to provide formally for police co-operation—particularly against terrorism, drug trafficking and serious crime. We are talking to the French about a similar agreement, which I hope to sign later this summer. Of course, all that is on top of the more informal help that our police forces give each other day by day.

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We shall have to pay increasing attention to the prevention of drug misuse and to the enforcement of our laws against that in the coming months. In that respect, the value of frontier controls is again beyond doubt. Customs seized some 90 per cent. or more by weight of the heroin, cocaine and cannabis seized in the United Kingdom in 1987. It is clear that there is a significant trade in drugs within the Community. Last year about half the weight of cannabis and one third of the cocaine seized by Customs came from or through other EC countries.
Of course, we are not the only country to seize drugs at internal frontiers. It is interesting that, in 1987, French Customs made 36 per cent. by weight of their cannabis seizures at the Spanish border and 38 per cent. of their heroin seizures at the borders with their Schengen partners. So it is quite clear that strengthening the external frontier of the Community, although desirable in itself, would not by itself provide an adequate defence against drug trafficking. It would be ridiculous to argue that checks could not be made in the United Kingdom where it was easiest and most effective to do so, for example at our national frontiers. It would be ridiculous to argue that it is fine to catch a drug trafficker in Europe before he gets here; it is fine to catch him once he is in our city and towns; but the one thing we are not allowed to do is to catch him where it might be easiest to do so—at our seaports and airports.
Where there is precise intelligence, one can choose where the pounce on the drug traffickers should be made. It must be understood that a great number of these seizures are made at the frontier either cold—without precise intelligence—or as a result of profiling. That means that the seizures depend on officers being at the frontier to observe, select, question and examine. These checks should not be onerous or unreasonable, and I do not think that they are. They are not routine checks on every passenger. They are made because an officer's suspicions have been aroused by something he has seen or, sometimes, they are the product of random checks.
I believe that there is an increasing coming together of views on this point. There was some rather excited press comment a few days ago alleging that Sir Leon Brittan disagreed with the Government about the value of these border checks. In fact, what Sir Leon said was consistent with the Government's view. He said:
"The control of drug trafficking involves, amongst many other things, the ability to conduct checks wherever that may be necessary. This might be at the Community's external frontiers, at the present internal frontiers or anywhere else."
That was an important statement. His audience of British police officers acting against drug trafficking were reassured by what he said. He made it plain that nobody wants to deprive the forces of law and order of the right to check for drugs anywhere. When commenting on the changes needed at internal frontiers, he said that there would always be the possibility of a spot check here as anywhere else in the United Kingdom.
Mr. Teddy Taylor: Whether we agree or disagree with what Sir Leon Brittan or anyone else has said, will the Minister at some stage be saying whether these proposed directives on firearms, drugs, visas and extradition ought to be considered under the majority vote procedure or under unanimity? Could he also say clearly, so that the people of Britain will know, whether the
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proviso stuck on the annex of the Single European Act means that, even if unsatisfactory directives are passed, we can ignore them because of that annex to the Act?
Mr. Hurd: I would rather not give a blanket reply, since my hon. Friend mentioned a number of directives and they may fall under different articles of the Single European Act. My hon. Friend the Minister of State, who is to reply, will be able to deal with both the points raised by my hon. Friend the Member for Southend, East (Mr. Taylor).
Another matter that I know interests my hon. Friend is immigration. As I have said, there is a growing convergence of view on the question of frontier checks to protect citizens against particular kinds of crime. I believe that the problem of immigration is somewhat more difficult to solve. One important benefit of the Single European Act is, of course, the freedom of movement rights that it gave to citizens of the European Community. These rights reflect the high and growing common interest between all European partners. The right to freedom of movement for our own nationals to and fro in accordance with the provisions of the treaty is such a shared interest. Our partners give that right to our citizens and we give freedom of movement, for example, to the German business man or the Danish holidaymaker wishing to come to Britain.
However, nothing in the Single European Act conferred rights of free movement on non-EC citizens. That is our clear view, but others in the European Community hold a different legal view of the impact of the Single European Act on this problem. I believe that we need to set these legal divergences to one side, as I do not think they help with the practical problem. I do not think they will be easily or quickly resolved. We need practical solutions to the practical problems. We certainly would not quarrel with member states that have long land frontiers if they wish to operate their checks on non-EC nationals in their cities or workplaces. Equally, we do not expect to be criticised if we operate our checks on non-EC nationals at the water's edge. As we are an island, that is the sensible and practical place for us to do so.
Mr. John Wheeler: My right hon. Friend touches on a most important point. Does he agree that, for the suppression of illegal drugs and to control illegal immigration, it is essential to maintain our existing arrangements? Elsewhere in Europe, the countries and police systems of the Economic Community often have available procedural devices—particularly identity card checks and controls over who stays in hotels—not available to the United Kingdom. Were we to change or weaken the arrangements a t our airports or seaports, we would not have these other devices at our disposal.
Mr. Hurd: I agree with my hon. Friend. A country such as France, with an immense land frontier with hundreds of crossing points, some of them small roads—as applies between the North of Ireland and the Republic—has a real problem. Like everybody else, the French want to be protected against massive illegal immigration. The French Government might quite rationally decide that it is not sensible to put too much reliance on border checks but that it is better to have internal means of control. In a private Member's Bill debate, the House has discussed a compulsory identity card system and made its view clear.

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Thus, I do not think that that path is open to us. A voluntary system is slightly different, but would not solve the problem.
That is an illustration not just of differences of history, but of differences of geography that our partners in the Community as a whole need to take into account. For example, the Dutch, with their important seaports and airports, are conscious of this point. We are certainly not alone in stressing the importance of geography in these matters.
There is a difference between the legal views of this country and others in the European Community. However, that does not mean that we have to rest exactly as we are now. We have already made a change, by introducing a new immigration channel at ports and airports, fusing the British and EC channels. Hon. Members who have been through Heathrow and Gatwick in recent weeks will know that.
What we want to aim at—this is in line with what my hon. Friend was arguing—is that all EC nationals should enter this country with the minimum of immigration checks. There should not be a lengthy questioning procedure on entry to the United Kingdom for citizens of our Community partners or our own citizens. They all now have clear rights under the Single European Act. Citizens of our Community partners should be able to enter the country with the same ease as our citizens. There should simply be the normal requirement that one produces one's passport to show that one is who one says one is. In this case, a person would be shown to be an EC national. I believe that the new streamlined channel is a practical indication of our commitment to the spirit of the Single European Act.
Mr. Max Madden: Non-EC nationals who are settled here and in many cases have lived here for a long time are invariably required to obtain re-entry visas when they have travelled overseas. Will the Home Secretary give a clear assurance that, under any new arrangements, these people will not face more onerous procedures? Will he ensure that they have easier access to return to their homes and families in this country than at present?
Mr. Hurd: That position will remain entirely unchanged. There is nothing in the Single European Act or in anything that we are contemplating that would in any way make travel more difficult for the people the hon. Member has mentioned.
The Government's reaction to the report is, as I hope our reply to it makes clear, straightforward. We have a positive commitment to freer travel for Community citizens within the Community. We also have a positive commitment and a need to maintain the checks that are necessary and reasonable to protect our people against terrorism and other serious crime and to maintain the immigration control that we believe is necessary for good relations within our cities.
That is the message which I hope commends itself to the House and which we should try to carry forward in the network of discussions in groups within the Community over the next two or three years.
5.59 pm
Mr. Alistair Darling: I welcome the fact that the Secretary of State has been willing to explain some of the matters that have been discussed in the Trevi group over the past few months and years. However, several matters have been discussed in the Trevi group and other groups within Europe, but the Home Secretary has nut touched upon them. I hope that the Minister will answer some of our questions.
The document has quite far-reaching implications. Like many other EEC documents, it is not quite what it seems. The document will affect the rights of people to move in and to enter Europe. More importantly, it contemplates control of regulations and of policy passing to Ministers in Europe, and day-to-day decisions affecting the movement of people passing to officials hundreds, if not thousands of miles, away at outposts throughout Europe. Yet again, decision-making is moving from this country to the EEC. Ministers have it in mind to create a ring fence around Europe after 1992. They wish to create "fortress Europe". In the documents, they talk about a people's Europe, but, apparently, some people's rights will be more equal than others.
I will make a distinction between the control of crime, terrorism, drugs and so on and the movement of tourists, visitors, students and those who wish to settle in Europe. I agree that frontiers have an important role to play in the fight against crime, but it must be accepted that frontiers are not the complete answer. The Secretary of State will know that many people who are stopped at our frontiers have been followed or been under surveillance for, perhaps, many months beforehand, and the frontier is a convenient point at which to arrest somebody who is suspected of having committed an offence. Although the right hon. Gentleman said by way of introduction that the Chancellor may have something more to say about Customs control, Customs and frontier control go hand in hand in detecting the movement of those who will commit criminal offences.
More important than that, drug traffickers tend not to declare their purpose or occupation when they go through immigration control. Sometimes, the importance of frontiers can be over-estimated. However, it is not part of the Opposition's argument that this country should seek to remove its frontier control.
EEC nationals also have been guilty of crimes in the past. Under the proposals, they will be allowed to move more or less with impunity. In general, the proposals do not encourage me to believe that they will do anything greatly to assist the fight against international crime.
I now refer to the proposals as they affect the movement of people. Several problems are posed by the document. We must consider the effect of the ring fence around Europe. If anybody going to any European port of entry—for example, Athens, Amsterdam or wherever—is refused entry, they are refused not just for that country but for the whole of the European Community. Whether one is a tourist, visitor, asylum seeker, it does not matter. If an individual is refused entry in Athens, he is refused entry not just to Greece but everywhere within the EEC. That is an unsatisfactory state of affairs. The standards in each country are different, attitudes are different, and the tests and rules are different and, in many cases, quite subjective.
One can envisage a situation in which someone might arrive at a port of entry at the wrong time, at the wrong

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place, and meet the wrong officer, fall foul of that officer, and be refused entry, whereas, if he had arrived a few hours earlier and met a different officer, he might have been admitted. Some of the rules and regulations are quite arbitrary and open to different interpretations.
There is concern that, once refused entry, there is no immediate appeal. What appeal system is contemplated in the event that somebody is refused? There must be a clearly defined statement of what rules will prevail in Europe. It must be clear that the onus of proof is on the challenger. It should not be for somebody seeking to come into Europe to prove his case. There must be an appeal system which works and is seen to work. One of the difficulties in this country is that, often, individuals are told that, if they wish to appeal, they should go back to the country from which they came and appeal there. That appeal can take months if not years. It is not a proper appeal system in the true sense of the word.
Mr. Nigel Spearing: I apologise for not hearing everything that the Home Secretary said. One of the points which he did not cover was that, as many hon. Members with constituency interests know, we have a complex but necessary system in the United Kingdom. Is it expected that it will be harmonised with the rest of the EEC? If so, will the Commission and the Council, and not the House, make the rules?
Mr. Darling: My hon. Friend makes a good point. I was going to refer to it slightly later. The Home Secretary did not refer to what harmonisation is proposed. As the matter has been raised, I hope that the Minister will tell us which rules are to be followed. Are they to be those of the United Kingdom or of West Germany, for example? Their rules on asylum seekers are rather different. If we are saying that responsibility for admission to this country can pass to an immigration officer in other European countries, we should be sure that the rules are satisfactory. By no means do I suggest that the United Kingdom's immigration rules are anything like satisfactory. If we are to operate European rules, it must be made clear what those rules are, and they must be rules with which the country and Parliament agree and not simply a lowering to the lowest common denominator throughout Europe.
Mr. Teddy Taylor: Do I take it that the Labour party accepts that, if someone goes to any part of the European Community—perhaps through Greece, Italy or France—they should have an automatic right of entry into this country? Is that the implicaton? If not, what is the Labour party's view?
Mr. Darling: The hon. Gentleman misunderstands the position. I am not suggesting that that is what the Labour party is advocating. I am saying that that is what the document contemplates. When admitted to the EEC, one will be admitted to every country within it. Perhaps the hon. Gentleman might also appreciate that, in theory, after 1992 every citizen of the EEC could come to this country and live here with impunity. That is completely different from the situation which has prevailed. Opposition Members are saying that the situation which is contemplated in this document will lead to many more problems than will be solved.
Another major matter of concern is the exchange of information between member countries. It is convenient to refer to the discussions that have been taking place for
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some time among the Schengen group of countries—that is, France, West Germany and the Benelux countries. They aim to operate a common travel area by 1990. As those countries represent some of the major countries within Europe, it is fair to examine what the Schengen group are proposing. I suspect that the Schengen group is operating a blueprint for what will happen in Europe after 1992. Having regard to which countries they are, it is inconceivable that those countries would set up a system in 1990 only to see it set aside for something completely different two years later.
Schengen is a pilot study. I should be interested to know from the Minister whether this country has observers or participants within the Schengen group of countries. If we examine what Schengen is proposing, we will see what Europe will look like after 1992. It contemplates an exchange of information. From an excerpt from one of the Schengen documents which examine some of the conditions that might prevail after 1992, and the contemplated exchange of information, it is clear that an obligatory declaration in hotels will be necessary. The head of a place of lodgings must ensure that aliens—those who are not EEC nationals—must declare who they are. Those aliens will have to declare their identity to the head of the establishment.
The declaration cards are to be kept and passed to the appropriate authorities. The information is to be exchanged between authorities and presumably, therefore, between countries within the Schengen group. That is going quite a degree further than the residual controls referred to in the Home Secretary's memorandum published with the papers that we are debating.
Already within this country we exchange information about asylum seekers—where they have come from, where they propose to go, and where they were removed to. In a written answer the Minister of State told me recently that we do not systematically provide information. Of course we provide information. It concerns me that a large amount of information is being swapped around Europe and that those whose names are on the lists are not always aware of it.
A short time ago I visited the Harmondsworth detention centre. Having done so, I went to the intelligence unit, which I found very interesting. I found there a computer with over 300,000 names on it. They were the names of people who have had some adverse contact with immigration officials. Sometimes it was nothing more than a person being detained for a short period and then being allowed to go on his way.
That index can be accessed by any immigration officer in this country. Will the Minister of State tell us whether it is intended that immigration officers throughout Europe can access that computer? That would be a drastic extension of what is happening now. What safeguards are there at present? So far as I am aware, the Data Protection Act 1984 does not apply throughout Europe. Even if it did, it is woefully inadequate for this purpose.
Mr. Jeremy Corbyn: Is my hon. Friend aware that many people are very concerned about the existence of that computer and the number of names on it? Since it is not information about criminal acts, so far as I am aware, but information about the views of immigration officers on people travelling to and from this country, does he agree that it would be reasonable that

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that information should be made public and should be made available to the people whose names appear on the list?
Mr. Darling: I did not examine each of the 300,000 names, but I was given the opportunity to see how the system worked. The information seemed to be simply remarks made by officers, entered against the person's name. When I was there, I saw how it worked against one individual. When the immigration officer looked at the information, he saw that all that had happened was that every time that person had come into the country he had been stopped. As I was leaving Heathrow, so was he: apparently there was nothing that warranted his detention. If that is the sort of information that is recorded, I can see no reason why people cannot see it.
There is a serious implication if the information is to be accessed throughout Europe. A tourist coming from Torremolinos might find himself detained in a cell somewhere in Europe because the computer thought that he was a terrorist from Turin. That might happen, because mistakes can be made.
What about the landing card index at Lunar house? Anyone who goes there will find that the indexing system is not on the official tour. All landing cards are being computerised. There must be legislation governing the provision of information. People whose names are on these computers have a right to know what information is being held, by whom and for what purpose. If the information is to be available across Europe, before the Government agree to any proposals the House must be invited to legislate on the matter.
Mr. Madden: I was most interested in what my hon. Friend said about the computer list at Harmondsworth. He will know that the staff at Harmondsworth are employed by Group 4 under a contract that that company has recently won. My hon. Friend will also know that Group 4, like other security companies, is a subscriber to the Economic League. He will know that the Economic League is always successful in obtaining information through companies which subscribe to it. The mass of information held on the computer may well be available to the Economic League for purposes unknown but likely to be sinister. Does my hon. Friend agree that that should be investigated urgently and that there should be effective safeguards to ensure that the information is not passed to third parties, including the Economic League?
Mr. Darling: My hon. Friend raises an important point. The more information that is held on computers and the more that third parties that can get access to it, the greater the scope for abuse. For the sake of accuracy, I should point out that the staff in the intelligence unit are Home Office staff and are not employed by a private company. The Group 4 staff are employed in the detention unit at Harmondsworth.
On the common visa regime, I understand that the proposal is that all countries whose nationals require visas to enter any EEC country will be on one list. The Home Secretary should publish the list at the earliest opportunity. It would be useful to see it. I understand that additions are contemplated.
Visas by their very nature cause injustice. They are discriminatory. We require nationals from six countries to
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have visas. It is instructive to know why visas are required. On my useful visit to Heathrow I made inquiries about why, suddenly, queues build up for those from some countries but not from others. More flights come from New York every week than from Dhaka or other countries on the Indian subcontinent, yet more and more nationals from the Indian subcontinent were being stopped and queues were building up. The union for the immigration service put pressure on the Government to introduce visas.
When I asked what criteria applied, I was given an example by one senior officer. He said that he and his wife had gone out for dinner at a Thai restaurant the week before. He had noticed that there were more and more Thai restaurants and he had come to the conclusion that because Thai restaurants tended to have Thai staff, there was a chance that more Thais would seek to enter the country to work rather than to visit. Therefore, immigration officials had started to question people coming from Thailand. That is not the sort of objective criterion that we want for visas. When the list is published, we should see what criteria are to apply.
I understand that Turkey may find itself on the list of visa countries. That would be an interesting development, having regard to the fact that that country is seeking to enter the EEC within the next 10 years or so.
There are additional problems. Portugal wishes to maintain links with its former colonies. I give but one example. I understand that Portugal wishes to ensure that citizens living in Macau, a former colony, should be allowed to enter Portugal. If so, they would be able to enter the whole of the EEC. Yet, just across the water from Macau is Hong Kong, a colony of the United Kingdom. We do not propose to have the same arrangement. As a result, the visa regime will cause difficulties and anomalies. I will be interested to hear the Government's policy on that.
Visas also tend to encourage refusals. In the absence of a proper appeal system they can be discriminatory, which, I suspect, they are intended to be in many cases. When one looks at the entry clearance figures for grants and refusals, one is struck by how haphazard and discriminatory the policy can be. For example, a person from a black African country is 10 times more likely to be refused entry to this country than a person from South Africa. If we compare Australia and Pakistan, we find that the same number of applications are made, yet the refusal rate for Pakistan is far greater than that for Australia.
The visa regime brings me to a major problem with asylum seekers and refugees. As we know, sadly, the phenomenon of refugees is growing. The ring fence will cause problems. I understand that the Schengen group is thinking of fingerprinting applicants for asylum or refugee status. They may be required to carry identity cards. We should give much consideration to that.
Considering again the question of controls, I am concerned about what is proposed. I accept that the Secretary of State is not keen on identity cards and I accept the Government's word that we are not to have an ID card system, at least so far. Very often one Government pronouncement is followed swiftly by another from a higher and greater source. If we believe the report in today's Guardian, it appears that these matters are to be taken away from the control of the Home Secretary and are to be run from No. 10 itself.
Internal controls have serious implications. Frontiers have advantages because they avoid internal controls.

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What will happen to the 15 or 20 million EEC nationals who are legally settled here? Will they be subject to being stopped on entry and being asked to declare who they are? If we are saying that they are legally settled here and are free to set up businesses and so on, but that they may be subject to controls when leaving and re-entering the country, that is wholly undesirable. That is something that I would like the Minister to clarify.
It is all very well to say that we will not have compulsory identity cards in this country or, indeed, in Europe, but my fear is that some of our citizens and some people living in this country may be encouraged to have voluntary identity cards. Just like the banker's card, an identity card may not be compulsory, but it might be a good idea to carry it and certainly "not to leave home without it".
The controls envisaged by the Schengen group are quite far-reaching. One proposal suggests that aliens can cross external borders only at agreed points of entry and at fixed opening times, and that unauthorised external border crossing would lead to punishment or to a fine. Clearly Schengen is proposing far more than that to which the Secretary of State alluded. It is therefore important that the Minister should make clear the Government's policy for internal controls.
The document contemplates that decisions will no longer be made in this Parliament, but by Ministers. That concerns me, too, because under the Official Secrets Bill—shortly, I assume, to become the Official Secrets Act 1989—much of what is decided will be out of sight, out of mind and most certainly secret.
It appears that we shall see the creation of an industry of information-swapping, with no real supervision. It will create a ring-fence regime that will simply be a nursery for random decision-making, because many of the people making the decisions know that they will not be subject to review.
I shall refer to the document of the immigration service union, which it prepared last year in support of its pay claim, because it is indicative of the way in which random decisions are made. I hope that the Minister will pay special attention to this, because I made passing reference to it at the last Question Time and he was rather dismissive of my remarks. In support of wanting more money, the immigration service union said:
"For example, in Dhaka, one of the biggest immigration service-supported overseas posts, settlement cases are decided roughly on the basis of one issue, one deferral and one refusal for every three interviews conducted."
A practice whereby the first person who applies gets in, the next one does not and the third one is deferred does not appear to be an especially objective way of going about business. It does not inspire confidence. However, it does not surprise me to learn that, shortly after that, people were urging that Members of Parliament should have the right to intervene on behalf of their constituents whose friends and relatives were being further curtailed.
We need to state clearly the rights of movement, to know what rules will be established and to have a clear review system. We do not want to give a free hand to people who will discriminate and make arbitrary decisions without challenge. We are at risk—I put it no higher than that—of creating a bureaucracy that would be worthy of the Tsarist regime in its last days before the revolution. It is certainly not the people's Europe that is contemplated in the introduction to the document.
Mr. Teddy Taylor: Will the hon. Gentleman give way?
Mr. Darling: No, I shall not give way because this is a short debate.
We believe that the free movement of people should mean that people are free to move unless there is good reason to curtail, prevent or temporarily stop them. The onus must be on those who want to make that stop to make their case. Without clearly stated rules, without review, accountability and supervision, the proposals would bring limited benefit and many problems. They would, without doubt, create injustices. It is a matter that is sometimes out of public sight, but I hope that the Minister will deal with some of those problems in his reply and not simply confine himself to general statements.
We know from the working of our immigration rules and our own regime that great difficulties are caused and great injustices done. I do not want to see those magnified and manifested throughout Europe. That would be undesirable and would be one of the worst examples of what can go wrong when one creates a European-wide bureaucracy that has no effective control, because ministerial or civil service supervision is absolutely no substitute for proper supervision by Parliament.
6.13 pm
Mr. Teddy Taylor: It has been interesting to hear the two Front Bench speeches. However, I was astonished to hear at the end of what was obviously a well-informed speech, the hon. Member for Edinburgh, Central (Mr. Darling) complain of the possibility of a Tsarist bureaucracy which offered people no control of ministerial decisions. Instead, Ministers would sit around a table making decision that would affect the freedom and lives of us all. He said that was one of the greatest dangers facing us. He is, of course, right in what he said, but, if that is the case, why on earth did only a handful of Labour Members vote against the Single European Act from which that all stemmed? It was an inevitable consequence of the Single European Act that there would be majority voting on measures that applied to every citizen in this country and throughout Europe. Therefore, while that is a problem, we should realise that it is not one that has stemmed simply from the Government.
Mr. Spearing: The Tory Government put it through.
Mr. Taylor: Only a handful of Labour Members were there at that time. Of course I accept that it was put forward by the Government, but if there had been more than a handful opposing it, the result may have been different.
Mr. Spearing: The hon. Gentleman may be right, but, of course, the Single European Act of which he speaks, if my memory is correct, had its Second Reading in April 1986, but its Committee stage of the whole House and remaining stages in June or July. My recollection is that on most of those occasions very many more than a handful of Opposition Members voted against it. I hope that the lion. Gentleman will check what he has said.
Mr. Taylor: I have checked it many times. I can say that the hon. Gentleman was there fighting for parliamentary freedom, as he always does honourably. He was there for

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every vote, including an all-night vote on a Thursday through to a Friday. I just wish that more had been there to fight against something that is a big problem.
Just as interesting was the splendid speech of the Home Secretary, because we heard from him of the new change in the Government's attitude to Europe and to Europe measures. He used most unusual words about this communication. He talked about a divergence with Europe, he talked about misunderstandings by Europe and he pointed out that he could not accept some of the proposals put forward. There is no doubt that, over recent weeks, we have seen a change of heart by the Government—especially since the Prime Minister has made her concern clear about directives, the extent of directives and the extent to which those directives are unnecessarily bringing in harmonisation and the undermining of our liberty. However, what I believe everyone in the House and outside is entitled to know is exactly what we can do about the proposals in that communication.
When I first read the proposals, I thought that, unlike most of them, about which we can do nothing—once the Council decides something by a majority, it applies to Britain whether we like it or not—on this horrific programme, which would severely affect our national security, we could stop anything happening. That is because, as the Home Secretary rightly said, a general declaration is stuck at the end of the Single European Act:
"Nothing in these provisions shall affect the right of Member States to take such measures as they consider necessary for the purpose of controlling immigration from third countries, and to combat terrorism, crime, the traffic in drugs and illicit trading in works of art and antiques."
My understanding was that, because we put in that proviso, there was nothing that the Council of Ministers could do that would necessarily apply here if we thought that it was interfering with our national interests. On the other hand, what worried me was that it was far from clear from the Home Secretary's comments whether the annexe to the final Act is a matter that has the full force of law for us and for the Community. I hope that the Minister will make the position abundantly clear: is it or is it not a fact that, irrespective of what the Council of Ministers does, we can stick to that general declaration and basically ignore what is decided by the Council of Ministers?
I appreciate that this is a constantly changing situation. Although I know that the Home Secretary will give a sincere assurance on this point, because he is certainly one of the most honourable of our Ministers, we must accept that circumstances change. I can remember a Labour Treasury Minister giving an equally sincere assurance concerning the sixth directive. He said that, once the sixth directive had been approved, none of Britain's zero rates could ever be affected by any of the institutions of the Community. We know that that has been overturned at least twice recently, because of the expanding power and decision making of the European institution. We must know what was intended when we passed the legislation. Do the Government believe that they have the right to reject anything decided by the Council of Ministers?
We need to know whether the proposals on firearms control, drugs, visas and extradition ar subject to majority voting or unanimity. It is terribly important to find out. If unanimity is desired, we can call a halt if we consider that the proposals are nuts or are dangerous to our security. If
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majority voting is required, it means that we can do nothing about the proposals unless a lot of other member states agree with us. We are in a difficult position as the great majority of Community members are desperately anxious to push on with anything that they consider will lead to more European union and co-operation. Britain, of course, is becoming increasingly worried about the implications of such proposals. When the Minister winds up I hope that he will be able to tell us whether the proposals, individually or collectively, are subject to unanimity or majority voting.
The firearms proposals are serious. The House passed important new laws to control the use and the carrying of firearms and we have now introduced tough penalties. We need to know whether it is possible for the EEC to undermine those penalties by introducing harmonised proposals. Apart from the measures before us now, we know that there is a directive before the EEC currently on the mutual recognition of firearm certificates. Basically, that means that, if anyone wanders into this country as a visitor or for any other purpose, he can bring any weapon he likes with him so long as he has a certificate from his country. Therefore, it is okay for someone to wander down Oxford street with a Kalashnikov. Will the decision on that proposal be subject to majority voting or will it be subject to a unanimous decision?
The drug problem is even more serious. The hon. Member for Edinburgh, Central (Mr. Darling) spoke of central European countries where it is as easy to move within Europe as it is to travel between London and Manchester. Given that the harmonised proposals will affect such countries, imagine the potential for the drugs industry. I hope that the Minister will read the careful statement given by Mr. Giovanni Falcone, who is one of the brave leaders of the Sicilian magistrates. He is extremely concerned that the Single European Act and the proposals we are now discussing will lead to an extension of the Mafia's activities. We know that that organisation specialises in drugs and controls much of that industry.
It would be appalling if we had a common standard for visas, as that would be for no good purpose. I hope that the Minister will be able to give us some advice about what is said about extradition. The document before us is a communication from Lord Cockfield, who was our previous chap in Brussels. He said that one of the proposals would be a Community directive on extradition and crime. On page 28 of the communiqué, he referred to convention proposals that had been agreed by most Community countries.
The convention on extradition was ratified by Denmark. Germany, Greece, Spain, France, Ireland. Italy, Luxembourg and the Netherlands. It was not, of course, ratified by the United Kingdom. The first protocol was approved by almost everyone, but not the United Kingdom. The same was true of the second protocol.
The convention and the two protocols contain some terrifying proposals. If extradition is requested, the country concerned does not need to agree to it if it believes a political issue is involved. We know what that means to some countries. The proposals also affect capital punishment, as countries may reserve the right not to send someone back to another Community member state unless it has the assurance that capital punishment does not apply or, if it exists, will not be carried out. Obviously that would undermine any prospect of the House of Commons, if it so desired in the future, reintroducing capital punishment.

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Our law on capital punishment would be extremely strange if it applied to our countrymen only and not to those who had gone to other Community countries.
The argument about capital punishment may seem strange, but the Minister must know what is happening to our Sunday trading laws, because we are awaiting a decision from the European Court. I note that the Minister is smiling, which is rather surprising, but he will have seen the long comprehensive answers I have had from Ministers about that matter. Those answers have made it abundantly clear that, if people break the Sunday trading laws, it is now impossible in many areas to get an injunction to stop them.
The Minister of State, Home Office (Mr. Tim Renton): I agree that Sunday trading is an extremely serious subject. I was only smiling at the ingenuity of my hon. Friend who has managed to introduce that difficult subject into a short debate on EEC controls on the movement of people.
Mr. Taylor: This debate is short not because of lack of time, but because the Government slipped through a clever little motion on Friday to say that we could have only an hour and a half on this subject.
I am sorry that the Minister believes that I have been ingenious by discussing Sunday trading. Does he appreciate that people in Britain are concerned when they find that the laws they have passed are undermined or could be undermined by Euro-decisions?
We have also had proposals from the Belgian presidency about the way in which extradition is to be applied, which is rather strange, given how that country behaved about Father Ryan. The proposals under discussion today would undermine our freedom to control crime, drugs and immigration. We have a special problem regarding Macau. We have made a decision, rightly or wrongly, not to allow people to come here from Hong Kong, except in the most extraordinary circumstances. The Minister is aware, however, that anyone from an overseas territory held by an EEC state is entitled to come here. Macau, which is just around the corner from Hong Kong, is covered by that agreement. That arrangement will become even more relevant once the proposals go through.
It is encouraging that the Government are becoming concerned about the volume of European legislation. They are concerned that the institutions of the Commission and the Community are extending their powers and that more and more laws and Community decisions are being applied to this country whether we like it or not. The Minister must be well aware of some of the recent decisions reached by the European Court and the Commission, which will affect every person here. I hope that does not make him smile.
I know that we have a limited amount of time to debate the proposals, but, given their frightening nature, I hope that the Government will think carefully about what we can do about them. If the Minister sought to delay the discussion and implementation of the proposals, that would only hold things up for a while. Although we might jump up and down and make strong speeches about Euro-bureaucracy, we would be unable to stop the process because of the Single European Act.
Because there is such a great desire on the part of Germany, France and Italy especially, to press ahead to form a unified state, we should start talking seriously
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about the possibility of a two-tier Europe. That would be good for us and good for those who want to get on and establish that unified state. We should also be concerned that, where these issues are concerned, democracy is disappearing. On matters of immigration, firearms and the rest of it, the House of Commons is basically irrelevant since Ministers will sit around a table and decide what they consider to be appropriate.
This is a desperately serious situation. Even if the Minister disagrees with everything I have said and even if he wants to ignore my speech, will he please, please answer the two basic questions I asked the Home Secretary? Number one, does the annexe to the Single European Act mean we can do what we think is in our national interest, irrespective of EEC decisions? We know that such protection does not apply elsewhere, but I thought that it did in this regard. Is that true or not? Do we have the backing of law or not?
Secondly, will all these desperately important issues, including immigration control and firearms control, he decided by majority vote or by unanimity? Sadly, this is the only brief occasion we have to discuss these important matters. Parliament has ceased effectively to be the body which passes the majority of our laws. We now work under a different arrangement, under the Council of Ministers and the Commission. This is our one opportunity to ask questions. I hope that we shall receive clear answers.
6.30 pm
Mr. Robert Maclennan: It is always more agreeable listening to the Home Secretary speaking as a diplomat than when he is speaking as the atavistic exponent of his party's views on the maintenance of law and order. He was in the first vein when introducing this debate and made a relatively uncontroversial speech, as was appropriate in considering this subject.
Important though it is to make progress towards opening up the internal market, and to do so at the speed to which we are committed by our implementation of the Single Act, we must do so in a practical way, taking account of the differences which exist in respect of the handling of the major issues of crime, drugs and immigration, particularly from third countries, that prevail in the member countries of the Community.
The Home Secretary was less than frank when he spoke of the objective of this amendment to Community law as the progressive relaxation of frontiers. Indeed, it is impossible to read article 13 of the Single European Act as such an objective, for it speaks of the creation of an internal market without internal frontiers. There was little in the Home Secretary's speech that recognised the hope that that position will be achieved by 1992.
Nor was there more than a passing formal acknowledgement in the right hon. Gentleman's remarks of the desirability for this country, and in particular for our commerce and industry, of opening up these frontiers by that year, since the existing frontier barriers between the member countries of the European Community constitute a serious and major addition to the costs of exporting and place a considerable commercial burden on our enterprise which we would wish to see removed.
The possibility, of which the hon. Member for Southend, East (Mr. Taylor) spoke—of a two-tier Europe—would in almost no area be more unattractive than in this. The idea that the Schengen group should progress to

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the removal of intra-Community controls while we retain the barriers to trade which now exist, would put this country at a disadvantage which would accentuate our problems, by virtue of our geography, in trading on the periphery of continental Europe. It is right that we should take the opportunity of this debate to emphasise that that is the prime purpose of seeking to implement section 13 of the Single European Act in the manner that has been agreed in principle by this House.
Naturally, the attention of the debate so far has focused on the exceptional declaration which accompanies the Single European Act:
"Nothing in these provisions shall affect the right of Member States to take such measures as they consider necessary for the purpose of controlling immigration from third countries, and to combat terrorism, crime, the traffic in drugs and illicit trading in works of art and antiques."
The hon. Member for Southend, East was right to draw attention to the importance of that provision, and I do not believe that any British Government would have been ready to agree the Single European Act without such a declaration, for it is clearly necessary, in recognition of the historic differences in the manner of controlling immigration within the European Community, that provisions we made for removing frontiers should recognise that there are problems, some of which were mentioned by the Chairman of the Select Committee on Home Affairs, the hon. Member for Westminster, North (Mr. Wheeler), in an intervention.
I appreciate the Home Secretary's generally pragmatic approach to dealing with these problems and to his recognition that more will be achieved by co-operation than by striking attitudes. I hope that the negotiations will be conducted in that way rather than in the posture of Ministers wrapping flags round themselves and insulating ourselves from the process of the European Community.
The Home Secretary said that there had been something of a flap about the remarks made by Sir Leon Brittan. I agree that Sir Leon's comments—I understand that they were made in this country to a police audience—pointed the way forward. It was helpful of Sir Leon to say that, under the Commission's proposals, it would still be possible for the authorities to carry out spot checks at internal borders and that the abolition of green or red channels would not prevent that. That was a welcome interpretation of the Commission's views.
There are in the Government's memorandum occasions when it almost seems as though they are trying to pick quarrels with the Commission for the sake of it and are seeking to find differences where none exist. I cannot think that the Commission will take exception to the view that the Government express in paragraph 10 of the memorandum, where they say that the retention of minimum checks for the purpose of distinguishing British citizens or European Community nationals from non-Community nationals
"is compatible with the Treaty, and with the objectives adopted by member states collectively".
It is not correct to say that the Government in that matter are necessarily at odds with the European Commission.
The whole country is conscious that it is sensible to recognise that the police must be assisted in the fight against crime, particularly against terrorism and the growing menace of the importation of drugs into Britain, and that they should have power to stop and investigate at
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all convenient places, being places most likely to reveal breaches of the law or to apprehend malefactors, and the natural borders of our islands are such places.
What we are seeking to achieve by implementing the opening of our country's frontiers is in no way incompatible with allowing the police to continue to use those facilities. It is equally clear that it is not in the nation's interest for long queues of lorries and cars that impede internal traffic within the European Community to disappear in continental Europe while, at our frontiers, they remain as they are or become even longer. The Home Secretary is right to believe that that practical problem is surmountable. He drew attention to certain changes made in recent weeks to the channelling at our airports of those holding European passports. I am sure that such a pragmatic approach will commend itself to all hon. Members.
6.41 pm
Mr. Max Madden: I wish to register both appreciation and concern. My appreciation is for the fact that on this occasion the Home Secretary did not explicitly or implicitly attempt to slur the Labour party as in any way supporting terrorism or people who threaten the nation's security, peddle drugs or are otherwise involved in criminal activities. I also appreciate the fact that he did not accuse the Labour party of supporting illegal immigration.
However, my concern rests on the tone of the comments in the Government's explanatory memorandum about how they regard non-EC nationals, including non-EC nationals who have lived in this country for a long time. The document states:
"In the Government's view, checks on EC nationals (including British citizens) can and should be reduced to the absolute minimum required in order to distinguish them with confidence from non-Community nationals;"
That is a very neat summary of the Government's view that runs through all their immigration policies and procedure; it is that all those who are not British citizens, and, in this case, not EC nationals, are inevitably and, almost by definition, to be viewed without confidence. They are always to be suspected of being liars, intending to deceive and to circumvent by any means possible the legal procedures for entering this country.
The Government's explanatory memorandum also states:
"In the Government's view, therefore, the way forward is to combine measures to strengthen the external frontier of the Community, and other forms of co-operation between states, with such measures as are required at the national frontier to control the immigration of non-Community nationals into the United Kingdom."
I hope that when the Minister of State replies to this short debate, he will explain what that paragraph means. I am extremely concerned about what the phrase "measures as are required" means. The last paragraph on page 11 of the letter from Lord Cockfield states:
"A package of measures (identity checks, curbs on the use of forged travel documents and organised illegal immigrants traffic) is being studied by the Immigration Group."
Following my earlier intervention, the Home Secretary tonight gave a clear assurance that no significant changes will be made in the procedures relating to non-EC nationals, non-British citizens or nationals of third world countries, many of whom have lived in this country for a long time. We were told that they would not have to face any significant or onerous new procedures.

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As so often, I must tell the Minister that those people know that the Government regard them without confidence. They understand that the Government suspect them and that the Government, and many of their supporters, regard them as an unwelcome presence in this country. Therefore, I hope that the Minister will be able to reinforce and re-emphasise what the Home Secretary said about there being no new procedures.
The Home Secretary said that there are new channelling arrangements at Heathrow. Is there any possibility of a new channel being introduced for non-British citizens and non-EC nationals under those arrangements? It would be absolutely intolerable if that were the case and it is important that, when he winds up, the Minister gives a clear assurance that there will not be any new arrangements of that sort. Such arrangements would serve only to strengthen the alienation, and lack of trust and confidence felt by many non-British citizens and non-EC nationals who have good reason for wanting to travel through and outside the Common Market. Such people need that reassurance tonight, and I hope that the Minister will be able to give it.
6.47 pm
Mr. Jeremy Corbyn: On occasions such as this, I feel as though I am in a county council chamber discussing the possibility of sending a letter to Whitehall asking whether it would be good enough to consider our views. Due to the Single European Act and the way that the European Community operates, we have less and less power over what happens to this country's nationals or the movements of people within the EC.
In the Government's memorandum, reported by Lord Cockfield in October 1987, during the British presidency of the European Commission, they initiated the idea that there should be some harmonisation of immigration and refugee law throughout the European member states.
My hon. Friend the Member for Edinburgh, Central (Mr. Darling) made an excellent speech, in which he demonstrated the double standards that exist in the European Community. There is talk of free movement of EC nationals throughout the Community but no talk of free movement of peoples who are not EC passport holders, but who are legal, long-term residents of one of the member states.
It seems extraordinary that, when a pensioners' group in north London wishes to arrange a day trip to Calais, its members have to look around to see how many of them are Caribbean and cannot therefore go on the trip because they cannot obtain visas from the French embassy here in time. The same applies to Indian people and others. That is a serious and nasty experience for those people, because they do not have the same freedom of movement as others.
The British Government are hardly in a position to lecture others on this subject when we think back to the views that the Government have expressed and the legislation passed through this House, which has largely removed the rights of hon. Members to intervene on immigration matters. The Government passed the Immigration (Carriers' Liability) Act 1987 and have failed to face up to the many legitimate criticisms made of their attitude to refugees by the United Nations High Commissioner for Refugees.
Page 6 of the Government's response to the EC document says:
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"The Government accepts the need for closer co-operation between member states in asylum matters and, in particular, for an agreement on the determination of which member state is responsible for considering asylum requests."
I view that statement with an ominous feeling. I see behind it a levelling down of the treatment of asylum seekers to the lowest common denominator in Europe. The Government's attitude in the case of Viraj Mendis, when they refused to consider the offer of a third country, make me suspicious about that statement.
The Home Secretary's final comment on the EC document said:
"The conclusion of Immigration Ministers at Munich concerning airports, to which the report refers, was conditional upon agreement to abolish controls on non-EC nationals. As already indicated in this Memorandum, no such agreement has been reached."
I suspect that the Government do not plan to reach agreement. I and people in my constituency and others fear that there will be two standards throughout the Community in 1992.
I want to refer briefly to "The Migrant and Refugee. Manifesto" published at a press conference in the House this morning. That deals with real rights for 16 million people across Europe who are largely denied the same sort of rights that exist for EC nationals. They do not have rights of movement or, in most cases, the right to vote, despite the fact that they pay taxes, and often they do not have a right to employment. 'We are creating a two-tier economy in Europe, with the semi-legal economy of migrant workers in low-paid jobs in sweatshop industries being treated as second-class citizens throughout Europe.
The manifesto demands 10 points to be applied throughout Europe. They are the right to stay; the right to family reunion; free movement within the EC; full social and political rights; full legal rights; no to racism, fascism and police brutality; no to repatriation and deportations; no to economic racism; the right to organise independently, and an amnesty to all unauthorised workers. That would go a long way towards removing the fear that exists in many migrant communities in Britain and other EC member states. I hope that when the Minister replies to this brief debate he will refer to the general points in the manifesto, which I understand is being sent to him.
Mr. Maclennan: Does the hon. Gentleman accept the harmonisation of the law in the areas that would be necessary to give effect to those rights?
Mr. Corbyn: Yes, that is a fair point. My point was that the harmonisation of the law is taking place for EC nationals, but the same rights are being deliberately excluded from non-EC nationals resident in EC member states, partly as a result of the Government's actions. It is for those reasons that I hope that the Minister will give serious consideration to the legitimate points that have been raised on behalf of a large number of migrant and refugee organisations.
6.51 pm
The Minister of State, Home Office (Mr. Tim Renton): I am delighted to have the opportunity to reply to this short but interesting debate, particularly since I spent this morning at a place where in a few years' time we shall be looking carefully to see just how frontier controls and checks are working post-1992. I spent the morning at the Eurotunnel shuttle terminal at Cheriton and at the exhibition centre there. With me were senior immigration

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officials whose job it is to see how, at the shuttle terminal at Cheriton, we can streamline frontier checks while keeping what we consider to be the essential element of those checks when the Channel tunnel comes into action in June 1993. When it opens, the Eurotunnel, the largest building programme in Europe this century, will be a major contributor to, and beneficiary from, the single market that we are discussing.
I followed the speech made by the hon. Member for Edinburgh, Central (Mr. Darling) with interest, but he was in a muddle, although a well-meaning muddle, about the document. On the one hand he argued that the Commission's proposals were not effective enough. I remind him that in his open* remarks my right hon. Friend the Secretary of State stressed strongly that practical co-operation was often more effective than treaties. That practical co-operation between our police force and European police forces is developing all the time in such matters as the seizure of drug traffickers' assets, extradition and mutual legal assistance.
On the other hand, the hon. Gentleman was arguing that the document would be too effective. He talked about fortress Europe which, if it came into being, would have too stringent an effect upon the movement of people. I remind the hon. Gentleman and my hon. Friend the Member for Southend, East (Mr. Taylor), whose remarks I followed with the closest interest, that paragraph 8 of the Home Office statement on the Community document states clearly the areas in which we differ from the Commission. For example, we believe that
"the Communication and the report misunderstand and seriously under-estimate the contribution which frontier checks make to essential defences against terrorism, drug smuggling and other crime, does not accept that either the progress so far achieved, or the measures under contemplation, would justify the complete abolition of frontier checks within the Community; and differs"—
this may be the most important point that I shall address to my hon. Friend the Member for Southend, East—
"from the Commission on the implications of the Single European Act, particularly as regards the treatment of third country nationals."
The hon. Member for Edinburgh, Central implied that someone who had been refused entry at Athens might also be refused entry at Heathrow for that reason alone. That may be the case if the Commission's view prevails, but our firm view is that we shall continue to operate United Kingdom immigration controls at our ports and airports under British rules.
One point on which I must contradict the hon. Gentleman is that Group 4 does not have access to the computer services systems of the immigration service.
Mr. Darling: Will the hon. Gentleman give way?
Mr. Renton: If the hon. Gentleman will forgive me I shall not give way as I have very little time. [Interruption.] With the greatest respect, the hon. Member for Vauxhall (Mr. Holland) was not in the Chamber so he cannot know what the hon. Member for Edinburgh, Central said.
Group 4 does not have access to computer service systems of the immigration service. Information on the immigration service headquarters computer is registered under the Data Protection Act 1984. It is exempted from disclosure under exemption nine.
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The working group on immigration is considering a common list of persons who would be refused a visa by EC countries. The United Kingdom would, of course, require primary legislation in order to refuse a visa to someone simply at the request of another member state. It is clear from the present legal position that we cannot do that.
The Schengen approach, to which the hon. Member for Edinburgh, Central referred, envisages the abolition of all frontier controls and is probably more relevant between countries with large land frontiers with each other than in the case of an island such as Britain. We are not proceeding down the Schengen route. We are interested in what is being done. We understand that it intends to rely on internal controls, but we as an island do not need to do that, and, by tradition, we prefer not to.
The hon. Member for Edinburgh, Central asked about those who legally settled here as did the hon. Member for Bradford, West (Mr. Madden). There is no reason why, either in our or the Commission's view of 1992, a person settled in the United Kingdom should have any additional difficulty in returning here. I remind the hon. Member for Bradford, West, who has a particular expertise on immigration subjects, that we are talking today about controls and checks at frontiers, not about rights of residence. There is no question of 1992 affecting the right of a person now settled here to stay here.
There is nothing sinister about the exchange of basic information on asylum seekers, such as the number arriving, their nationalities, decisions taken, or what we know about organised illegal immigration. We remain completely responsible for the determination of asylum applications in the United Kingdom. The ad hoc group that covers that area is interested in trends, not in individuals.
My hon. Friend the Member for Southend, East, spoke on a subject about which he feels deeply and which he has raised with me before. Some of the topics dealt with in the Commission's report relate to goods—for example, licit drugs, works of art and antiques. Proposals in those matters would normally come under the qualified majority proposals. But in the basic area of the freedom of movements of people and their personal luggage our clear view is that the proposals must be made on the basis of unanimity. We have made that clear to the Commission in respect of its proposed directive on firearms, about which my hon. Friend particularly asked. We shall continue to press our view that that should be based on article 235, which relates to frontier controls and carries the power of veto, rather than on article 100A, which requires only a qualified majority.
I stress to the House that our approach to these matters is very much that of making the most progress possible towards 1992 and lifting the burden of frontier checks and formalities to the greatest possible extent for European Community citizens while retaining immigration checks for residents of third countries and the ability to prevent the movement of illicit drugs and terrorist weapons. This is practical progress in keeping with the importance we attach to the completion of the Community's internal market. I believe that this progress is of great value, not just in treaties and rhetoric but in expanding the markets for business and services for the Community market of 320 million people.
Question put and agreed to.
Resolved,

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That this House takes note of European Community Document No. 10412/88 relating to the abolition of controls of persons at intra-community frontiers; and endorses the Government's view that in considering the relaxation of frontier controls within the European Community the Government must keep in place necessary measures to control terrorism, drug trafficking and other crime, and immigration from non-community countries.

Public Procurement
7.1 pm
The Paymaster General (Mr. Peter Brooke): I beg to move,
That this House takes note of European community Documents Nos. 7496/88 and the Supplementary Explanatory Memorandum submitted by the Treasury on 24th October 1988 and 5909/89 relating to public works contracts and 10497/88 and the Supplementary Explanatory Memorandum submitted by the Treasury on 2nd May 1989 relating to compliance with Community rules on procedures for the award of public supply and public works contracts; endorses the view that revisions to Directive 71/305/EEC are necessary to improve public purchasing throughout the Community; welcomes the Government's endeavour to secure a statisfactory outcome in discussions on the proposal on public works contracts in the Council of Ministers; and supports the Government's intention to press for a means of improving compliance with Community rules on procedures for the award of public supply and public works contracts which places appropriate responsibility on Member States.
Madam Deputy Speaker (Miss Betty Boothroyd): I have to announce that Mr. Speaker has selected the amendment standing in the name of the hon. Member for Thanet, South (Mr. Aitken) and other hon. Members.
Mr. Brooke: The debate is about two of the proposals that the Commission has made with the purpose of opening up public procurement.
We debated the first of the Commission's proposals, which was intended to improve the supplies directives, in Standing Committee in December 1986. Later that month the Commission submitted the first version of its proposal to amend the works directive; a year later, it submitted a measure intended to secure compliance with that directive and with the supplies directives; and it introduced proposals to cover the so-called excluded sectors last autumn. We shall be debating the proposals on the excluded sectors on another occasion, but it has been agreed that it is appropriate to deal today with both the proposal to amend the works directive and that to improve compliance.
Although the proposal on works was submitted in December 1986, the Commission made significant changes to it about a year ago. The Select Committee on European Legislation considered that the amended proposal raised issues of legal and political importance and recommended it for debate. Unfortunately it was not possible to arrange a debate before the Council of Ministers adopted a common position. However, I did try to keep the Chairman of the Committee informed of developments in Brussels, and I am glad now to have the benefit of the views of the House before the directive comes to the Council for adoption on the basis of the re-examined proposals that the Commission has now submitted.
In the case of compliance, there have so far been only initial discussions in Brussels. It has already become clear, however, that the Council is likely to reach a common position that differs in a number of important ways from the Commission's proposals. I believe that what is emerging may prove more acceptable to the House than the Commission's proposal, but I have to say that the new texts will require very careful examination.
Before going further, I should like to say a word about the procurement directives generally. They were originally adopted long before the present programme to complete the single market. The works directive was adopted before

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we joined the Community. The existing directives were put in place because the Community wanted to provide a framework that helped ensure that the obligation under the treaty not to discriminate on grounds of nationality was fulfilled. The same purpose was behind the Commission's inclusion of public procurement in its White Paper on the internal market in 1985, and Heads of Government have since given support to the objective of opening up public procurement more fully.
Changes to the supplies directives have been in force since last January. Changes to the works directive are clearly in prospect—and we can expect measures to be adopted which will make it easier to enforce compliance. The Government have welcomed those initiatives because we believe that the administrative burdens that the directives may impose are outweighed by the contribution they can make to the achievement of a single market.
I accept that others may hold different views on the balance of advantage. A large number of people have helped us by commenting on the proposals and many have disagreed with parts of them. I greatly value the willing co-operation and assistance that they have given. I suggest to them that they changes that we are discussing to the works directive improve the chances of contractors in this country winning business in other member states of the Community and that it is to our advantage to ensure that adequate procedures are available to make sure that the rules are obeyed throughout the Community.
Mr. Teddy Taylor: What procedures?
Mr. Brooke: I repeat—to ensure that adequate procedures are available to make sure that the rules are obeyed throughout the Community. I appreciate that my hon. Friend the Member for Southend, East (Mr. Taylor) has put his name to the amendment and I am sure that he will speak to it in due course. I promise that I will respond to him at that stage.
I propose to highlight the main changes that it is proposed should be made to the works directive to make it more effective, and to draw attention to one or two points that we think will cause difficulty. I will then comment on the changes to the Commission's proposal to improve compliance that are now being discussed in Brussels.
The proposal to amend the works directive includes a number of changes which are similar to those adopted last year in relation to the supplies directive and which we were able to support. More time is to be allowed for contractors to respond to advertisements and to invitations to tender. Contracting authorities are required to publish notices of contracts they have awarded and to give explanations to eliminate candidates or tenderers on request. They are also required to publish the essential characteristics of works contracts above the threshold as soon as decisions on planning are taken. Other measures to improve transparency and to assist the monitoring of compliance include the retention of records and the provision of statistics.
Contrary to some suggestions, the proposal does not limit the use of the so-called restricted procedure. That is the procedure used by most of our contracting authorities and involves the selection of tenderers from those firms that express an interest. This reduces the burden on
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contracting authorities and also on contractors, since the cost of submitting tenders can be very high. Contracting authorities will need, of course, to be able to show that they make their selection of tenderers without discriminating against candidates from other member states.
There are exclusions for works declared secret, those that are subject to national security considerations and those that need to be procured under other international rules. The proposal replaces the previous limited exemptions from the open and restricted procedures by negotiated procedures involving one or more contractors, with a call for competition in some cases. This should reduce the incidence of single tendering and provide greater opportunities for contractors without imposing undue burdens on contracting authorities. Similarly, new provisions on the use of standards will increase the ability of contractors to compete throughout the Community while taking in from the supplies directive derogations that were negotiated there to protect value for money.
The directive is also amended to catch any form of contract for civil engineering or building works let by, to begin with, Government Departments and local authorities, but it is not intended to apply to contracts to be let by management contractors. The field of application is extended to encompass bodies which meet criteria for defining "bodies governed by public law" and to include rules on the award of concession contracts and the award of works contracts to third parties by concessionaires. In addition, authorities covered by the directive that fund more than 50 per cent. of the cost of a contract for civil engineering works or certain building works must make compliance with the directive a condition of the funding. The threshold, however, is to be raised to 5 million ecu—about £3·3 million at today's rates. The fivefold increase means a considerable lightening of administrative burdens on contracting authorities.
There are a number of improvements intended to benefit small firms. For example, the publication of contract award notices should help them to target main contractors. There is a separate provision allowing contracting authorities to ask tenderers to indicate any share of the contract that they intend to sub-contract to third parties. To make it clear that contractual freedom is not affected, the Council agreed to say in its common position that information given to the contracting authority is without prejudice to the question of where responsibility lies for the contract. The Commission, accepting a suggested amendment from the European Parliament, now wishes the provision to say:
"Without prejudice to the question of final responsibility."
This may be acceptable although we would prefer to see an explicit reference to contractual responsibility.
An area where the existing directive and the proposal were unclear was whether contracting authorities could require tenderers to be quality assured. It is important that they should be able to require that, since the Government mean to increase the use they make of quality assurance. The Council agreed that technical specifications should be defined in the directive to include requirements for quality assurance. It helped to be able to say that a standard on quality assurance had been adopted at European level that national standards bodies would be required to implement. It was a British standard, BS5750, that was adopted, and I pay tribute to those responsible for its development and for its acceptance internationally.

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The Council also agreed to amend the provision in the Commission's proposal relating to abnormally low tenders. That required contracting authorities to ask for written explanations in such cases, but it was putting an unnecessary burden on contracting authorities in cases where they were prepared to accept the offer. The changes now made will limit the obligation to ask for explanations, and take them into account, to cases where the contracting authorities consider rejecting such an offer.
Another area in which improvements have been made is the acceptance of variants. The proposal now says simply that where the criterion for the award of the contract is that of the most economically advantageous tender, contracting authorities may take account of variants that meet their minimum specifications, which they must state in the contract documents together with any specific requirements for their presentation. A proposal to limit the rejection of variants now says only that rejection is not allowed on the sole ground that a variant has been drawn up by reference to European standards, or the like, instead of those to which the contracting authority had referred.
Two provisions that pose difficulties for us result from amendments that the European Parliament proposed to the common position and which the Commission has taken into its re-examined proposal. The first would allow contracting authorities to impose conditions for participation aimed at assisting the fight against long-term unemployment or for the employment of young people. But that could be only in the context of programmes agreed by the Commission.
The background is that last September, in deciding on a case brought before it by a court in the Netherlands, the European Court of Justice pronounced on the position under the existing directive. It found that the directive allowed member states to make their own rules on public procurement provided they were compatible with Community rules and that, subject to national rules, contracting authorities were free under the directive to impose conditions relating to the use of the long-term unemployed—provided there was not discrimination, direct or indirect, against firms from other member states. The nature of the condition would have to be mentioned in the tender notice published in the official journal.
What is now proposed would limit the freedom of member states to forbid conditions of the kind that it mentions. Conversely, the provision might prevent the use by contracting authorities of other conditions for participating in a contract procedure. The proposal also changes the balance of responsibilities by letting the Commission rather than national courts decide in the first instance whether a condition is discriminatory. Finally, the meaning of the expressions "operational programmes" and "competent authorities" is unclear. For these reasons, that provision is not one that we could support.
The second provision that causes us difficulty is a requirement on contracting authorities to state where information can be obtained on the employment conditions applicable where the work is to be carried out, and to require tenderers to state that those conditions have been taken into account in their offers. That provision involves just the kind of administrative burden we want to avoid. Clearly it is important that contractors should make their offers with the necessary knowledge of the environment in which they would be working. But that is best done by the firms themselves making inquiries or
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having inquiries made for them. Making it a requirement for contracting authorities to state the source or sources of the relevant information assumes knowledge that they may not have, particularly of works to be carried out elsewhere. If they make errors of omission, it could lead to confusion over liability. The solution that the Council found in its common position was to say that contracting authorities may indicate the sources of the relevant information. If the provision is mandatory, there may need to be safeguards for contracting authorities.
Mr. Teddy Taylor: Can my right hon. Friend say what will happen procedurally'? He says that the European Parliament proposed two changes to the common position that Britain does not like. What will happen next? Will there be a majority vote, or must there be unanimity? If there is not unanimity, will we have to scrap those proposals? My right hon. Friend is right in the thick of it, and it would help the House to understand those matters if he will explain what will happen to those two unacceptable amendments.
Mr. Brooke: I shall answer my hon. Friend's question, but I want to make absolutely certain that my reply is correct. I shall respond to his point later.
Before moving on from the works directive, it may be helpful to refer to the position on negotiations with those who submit tenders. The Council agreed with the Commission to publish a statement on the extent to which negotiations can take place where there is competition based on open or restricted procedures. Negotiations will be ruled out where they are likely to distort competition, but it will be recognised that discussions can properly take place for the purpose of clarifying or supplementing the contents of tenders or the requirements of contracting authorities. We regard it as important to ensure that contracting authorities can hold such discussions in their pursuit of value for money.
The proposal for the directive to improve compliance does not relate only to the works directive, but applies to the supplies directives as well. Getting better compliance has long been the Commission's objective, and member states have shared it. Most, of course, are fairly certain that there are not undue problems in their own countries. They say that what they need is to be sure that others are following the rules. The United Kingdom can justifiably claim that it has a good record in observing the rules. That is not the point. For suppliers and contractors to have the necessary confidence to go out and get the business, they need to be satisfied that their bids will be properly and fairly considered.
That is what the proposal on compliance is intended to ensure. At its heart is a set of requirements that member states must ensure are fulfilled in each country. They come down to saying that procedures shall exist to enable firms who may feel aggrieved to obtain reviews through judicial or other procedures. Putting it that way enables the Commission to cope with different practices in the various member states. But it is worth pointing out that the Commission is showing itself insistent on ensuring that, whatever the system, there is a completely independent element within it.
The Treasury describe in the latest supplementary explanatory memorandum how discussions in the Council machinery are pointing towards significant changes in the proposal. I regret that it was not possible to provide the

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memorandum until a day or so ago. However, it shows the very latest position in the Council, and I shall say more in a moment about how we see the position on one or two points.
Rather than take up time by examining the way that the proposal developed at every stage, let me describe some key points in the version now being discussed. The latest form of the proposal still provides for damages to be available to persons harmed by an infringement, but leaves the decision on how damages are to be calculated in the hands of member states. We believe that that is right. We do not believe that, as the Commission originally proposed, it should be possible to claim compensation in respect of forgone profits or lost opportunities.
The proposal in the form that the Council is now discussing no longer gives the Commission a power to intervene as of right in court proceedings, as the Commission originally intended. Instead it provides that member states may require that the leave of the court is obtained before the Commission presents its observations. Courts in the United Kingdom can, if they wish, already invite the Commission to do that. Normally, however, they would expect to refer a question of European law to the European Court of Justice. We need to consider whether a provision pointing them in another direction is justified.
The proposal in its latest form does not give the Commission the power to suspend award procedures. Instead it includes a procedure whereby the Commission may notify a member state if it considers there is to be a clear and manifest infringement. It is recognised that the member state, in replying, may refer to the fact that review proceedings are under way. I know that some interests—such as the Confederation of British Industry—would prefer the main feature of the enforcement mechanism to be a system of audit. That idea is attractive, and I believe that it may have an important place in securing more open procurement in the excluded sectors, where directives on procurement have still to be adopted. However, I do not believe that we can hope to convince the Commission or other member states that audit can take the place of the kind of rules that we are now discussing in relation to Government Departments and local authorities. For one thing, we cannot, at least at this stage, expect to obtain the more flexible régime for the award of contracts that we hope to get for the excluded sectors, and which provides the main rationale for adopting the audit approach.
The CBI itself wants to establish what it calls a central complaints procedure that may include more than letting firms seek notification by the Commission in the way I have described. I shall be interested in how the CBI develops its thinking, but I note the difficulties that may arise in preserving the proper bounds of responsibility of the Commission and of member states. The CBI says that actions in the courts should always take place after contracts are awarded. I ought to point out that the courts in this country can already step in before that point.
I know that hon. Members may have a number of other concerns with both the compliance proposal and that on works. I should like to say a word or two more about the Government's view. The Government share to the full the wish to avoid unnecessary bureaucracy. I believe that the changes made to the Commission's original proposal to
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amend the directive on works go a long way towards getting rid of the rigidity that makes life difficult for purchasers. Many of the points that are raised apply, in fact, more to supplies than to works. Then there are those who would prefer the directive to impose obligations of a social kind on contracting authorities. The Government believe that it is not appropriate for a procurement directive to do this, and that view is shared by a number of other members states.
Hon. Members may ask whether the works directive, even when it is amended, is likely in practice to increase competition. So far, the number of contracts awarded to non-national firms has been small. The number will grow, but we should not expect figures like this to tell the whole story. Increasingly, contractors are looking at other ways of breaking into new markets, such as joint ventures and the acquisition of existing businesses. Such moves will be made easier by the provisions in the new directive that are designed to give greater openness to the process of awarding contracts.
Some of those who have commented to us on the Commission's proposal on compliance have been concerned about the risk of expensive litigation. The point is a fair one, though, of course, it arises because of the wish, which we share, to give suppliers an opportunity to take up complaints. The courts will be able, within the terms of the Commission's proposals, to deal with frivolous actions. There may be a case for making this explicit, while avoiding unnecessary harmonisation of national provisions. In relation to the excluded sectors, the Commission has itself made it clear that it recognises the extent to which commercial enterprises may be vulnerable to litigation, and will take that into acount in making its separate proposals on the enforcement of any rules on procurement that may be adopted for those sectors.
As for the present proposals on compliance and works, the Government believe that they include features that it is practicable to include in new directives soon and that it is worthwhile to try to do so. Subject to seeking the changes I have mentioned in the proposal for works, the Government propose to join other member states in agreeing to adopt the directive. As for compliance, we believe that there are important benefits to be obtained, and we therefore propose to work with the Commission and other member states to produce a system that puts responsibility on member states, where it belongs.
7.23 pm
Mr. Teddy Taylor: I beg to move, as an amendment to the motion, at the end to add:
'and would welcome the provision of a speedy and effective system of arbitration in cases where contractors consider that they are not being afforded fair and equal rights to tender and to secure public purchasing contracts.'.
I am afraid that my hon. Friend the Member for Thanet, South (Mr. Aitken), who is one of the most conscientious Members of the House, was expecting the motion to be debated later in the evening. I am therefore moving the amendment on his behalf. I apologise for the fact that my hon. Friend is not here, but I remind the House that he is one of the most conscientious Members in his attendance at Euro-debates.
I hope that the Government will accept this brief and non-controversial amendment. We are all of the view—whether one is critical or uncritical of the EEC—that anything that can bring about free trade in Europe should

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be supported 100 per cent. If the 1992 programme will achieve that aim, we shall all be very happy, particularly if it does not bring protectionism with it.
What worries me, my hon. Friend the Member for Thanet, South and others, is that there have been many assurances of this nature in the past. However, for all kinds of reasons—certainly not through the Government's fault —nothing has happened. Hon. Members will recall that after the Prime Minister returned from Europe she told us that she had received a firm assurance that the EEC would impose spending controls. Unfortunately, they did not work because the Commission was still able to use crazy accountancy devices. The Court of Auditors report which has just been published shows that, while budget expenditure was expected to increase by 3 per cent., it actually increased by 25 per cent. We expected good things to happen. Sadly, they did not happen—not because of the Government but because we did not check everything out.
We have also encountered problems with 1992 itself. The insurance industry, in which I am involved, expected exciting things to happen in connection with free trade, but sadly the directive illustrates that free competition will be very limited. We have received assurances in the past about fraud. I know that the Minister is taking a personal interest in the activities of the Mafia. He will have read the recent statement by the leader of the magistrates in Sicily that he fears that the directive might lead to an extension of the nasty activities of the Mafia. The Mafia used to be in charge of crime, prostitution and the drugs industry in Sicily, but we understand that it is now engaging in other activities because money from the common agricultural policy is much easier to come by. Whether or not that is true, fraud is a problem.
We are worried that all these excellent measures will add to the costs of contracting authorities, councils and public bodies. They will have to provide a great deal of information and go through all kinds of procedures which may not work. That is IA by it would help enormously if the Government felt able to provide an easy arbitration procedure. If a British contractor felt that he was being discriminated against unreasonably, or that he was being treated shamefully by a public authority, he would then be able to do something about it.
The Minister probably knows about the example that I intend to mention. If he does not, he should speak to his right hon. and learned Friend the Foreign Secretary or to the Secretary of State for Transport. Southend wanted to be able to fly a plane to Ostend and then to run a bus from Ostend to Frankfurt. We were told that we could do so; European Community legislation on the subject was clear; we could go ahead right away. The Minister knows what, sadly, happened. We had to appeal to the Foreign Secretary who went to see Mr. Genscher, the Foreign Affairs Minister in Germany. They talked about it, but nothing happened. Then the Foreign Secretary approached the splendid Minister of State at the Foreign Office. She tried terribly hard. She took infraction proceedings—which I do not understand, but other hon. Members will. Unfortunately, nothing happened.
With some of my friends on Southend council I then flew to Bonn. There, together with the splendid British ambassador, we went to see someone who, we were told, was the head of the German transport department. We had a frosty meeting with him. We found that he was not the head of the department; he said that he was in charge
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of the Berlin airlift. When I told him that the Berlin airlift ended over 30 years ago he told me that there were residual problems.
The point is that, although the law was clear, we battled on for four years and got nowhere. After the four years were up and when it seemed that something was going to be done, we found, sadly, that the poor firm had gone bust.
I know that the Minister is battling hard for Britain, as he always does. He is fighting for jobs and for the good of Britain in the Community. However, it will not help Britain if lots of extra bureaucratic controls are imposed. Something must be done about it.
I am worried about the proposal that all these matters should be referred to the Commission. The Minister must be aware of what happens when matters are referred to the Commission. There are all kinds of discussions, meetings and procedures. If my right hon. Friend is in any doubt about that, he should talk to the boss of Amstrad, Mr. Alan Sugar. He will tell my right hon. Friend what he thinks about the Commission.
All we want is easy access to easy arbitration. We do not need a great court system, but we should have a small number of highly qualified arbiters. They should not have the right to change a contract, as that is extremely difficult, but they should have the right to impose penalties and perhaps to award compensation. It is crucial that there should be an easy method of access to prevent organisations such as the German Lander, which have behaved rather strangely in the past, and to stop some of the sillier local authorities—perhaps some of the British local authorities—from showing discrimination where there should be freedom. Therefore, I hope that the Minister will appreciate that the amendment does not bind the Government in any way. 1t does not tell them to stand on their head and to throw out the regulations.
We all agree that free trade and the extension of freedom to purchase would be good, but there is not much point in putting extra burdens on industry unless we discover that the system works. Therefore, I hope that the Minister will accept the amendment and start a new process of good will and co-operation in the House of Commons so that we can all fight together for British industry and British jobs.
7.30 pm
Mr. Stuart Holland: I begin by saying that the Opposition welcome the amendment and we hope that the Government will accept it.
Mr. Quentin Davies: The hon. Member for Vauxhall (Mr. Holland) uses the first person plural to describe the Labour party. Will he tell us why only one Labour Member is present for a debate on a very important issue?
Madam Deputy Speaker: Order. That is not relevant. As this is a timed debate, we should make some progress.
Mr. Holland: I am sorry that the hon. Member for Stamford and Spalding (Mr. Davies) cannot count. Two Labour Members are present on a day when the Conservative ranks appear rather thin, and we do not have to stretch our imagination to discover why.
The amendment welcomes the provision of a speedy and effective system of arbitration when contractors consider that they are not being afforded fair and equal rights. I should have thought that the Government would

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accept the amendment. Who could be against speedy and effective systems—the Government have told us that they do not favour bureaucracy—and who could be against fair and equal rights? The amendment is limited in that it is not highly specific in the manner in which the hon. Member for Southend, East (Mr. Taylor) demanded that legislation concerning the Community should be. We shall not push the matter to a vote, but we certainly support the amendment and we urge the Government to accept it.
We are very glad to know, or to see in the press, that the House may soon adopt new methods for Community legislation. It would have been interesting had the Minister been able to refer to the reports in the press and to give us some indication of the way in which such legislation will be considered. Perhaps he will do that when he replies to the debate. If it is the case that the House will receive earlier information on proposals to the Council of Ministers, it will be possible, through discussion and debate, as is classic in the House, to influence the legislation through amendments. Instead of getting legislation which is already six months out of date, the House might have the chance to consider it in advance.
Yet again, we are having a short debate on the legislation, although its provisions are wide-ranging. There are half a dozen articles and various sub-clauses covering more than two and a half pages of text, and that is on tendering alone. They do not concern the other provisions which have been proposed by amendments in the European Parliament and which have aroused considerable concern elsewhere.
The proposals include the issue of abnormally low tenders and how to cope with them, and the advertising thresholds for small and medium-sized firms. They seek to address the abuse of a dominant position in the internal market in tendering by big business. Classically, larger firms can put in lower prices on a contract and squeeze out small and medium-sized firms. The raising of the threshold, which we regard as perfectly reasonable, will make it possible for small and medium-sized firms to get contracts without the bureaucracy which would otherwise be involved in awarding those contracts. That provision also applies to the information on sub-contracts, and we welcome it. In other words, it should be open to small and medium-size firms in practice to bid for sub-contracts on large projects.
However, we are disappointed by the Government's response to some of the proposals by the European Parliament about special provisions on long-term unemployment and the employment of young people. It also is striking that the Minister did not refer to special provisions for contracts in assisted regions of the Community. It is perfectly clear why the Government are opposed to that. They say that they are concerned about changing the balance of priorities in the Community towards the Commission.
In an intervention, the hon. Member for Southend, East asked the Minister about the implications for the Single European Act, for majority voting and for article 100A. The Minister said that he was not prepared to reply to that, but an answer is necessary and it has to be yes or no. Either it is consistent with the Single European Act or it is not.
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The Government are causing difficulties, or claim difficulties in other respects, when the contractors must reveal sources of relevant information when the contracts are submittee. Why do the Government have such difficulty with contracts which are designed to reduce long-term unemployment or to assist employment for young people? The Minister's speech, and certain background information contains arguments claiming that the Commission has not published the costs which various procedures would entail.
Perhaps the Paymaster General can answer the following question: what cost implications of awarding such contracts on a regional basis have the Government estimated? What is the cost to the Community of awarding contracts to local firms in a region of high unemployment, whether that is an inner-city area, an industrial region in decline? What costs are involved in doing that? In many cases the costs may be marginal in direct terms, but in indirect and social terms they can contribute to the regeneration of inner-city areas or industrial regions in decline, or stem the further decline of such regions. They can also bring hope through work and training, especially to the young who otherwise increasingly are persuaded that they have no hope of training or of getting a job.
We find it deplorable that the Government cannot support those objectives. Also, the Paymaster General's statement to the House about business and competition were, frankly, amazing. When he talked about competition, I thought that we would get at least a line or two of rhetoric about the thrusting entrepreneurs of the Government's mythology. Not at all. According to the notes I took at the time, the Minister said that there will be an increase in joint ventures and the acquisition of existing business. Is that what the Government have in mind as a result of that provision?
If it is, it means an increase of concentration and centralisation in the construction industry in the Community as a whole. Without provision for giving exceptional treatment to contracts either in the assisted regions or on social grounds, that is precisely the consequence of the measures before us. It has been seen in the past in other industries. In the United Kingdom there has been concentration in the construction industry. It is especially easy for big firms to achieve, as it is characteristic of the construction industry that firms themselves do not own all the equipment they use, but hire it on a sub-contract basis. It will, therefore, be open to the bigger firms in construction to bid for the bigger projects throughout the Community in a manner that will not be possible for small and medium firms whose own construction activities are in particular localities—whether southern Italy, Catalonia, Liverpool, the north-east, or Scotland.
The consequence of the provision is related to a philosophy of 1992 and the internal market that comes across clearly from what the Minister said—that the Government support the market dimension of the proposal, but not the social and regional dimensions although they are crucial to offset the concentration of the construction business into fewer hands in the Community. In that sense, the Government show themselves, regrettably, more concerned for the private interest than the public interest, more concerned for profit than for people and more concerned for big business than small business.

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This approach is typical of the Government's general approach in the Community towards the 1992 proposals. The provisions should include the amendments concerning derogation for contracts in regions of high unemployment. They should be supported rather than opposed. Also, in practice, there is a strong case for such public contracts to ensure that equal opportunities are respected by the contracting firm, and that the firms awarded the contract should expect to have regard to the environment and sound environmental practices.
We have heard a great deal from the Government about the environment. Why did the Minister say nothing about that? Many of the schemes on which bids will be made in the Community will have environmental consequences and many of them will be major infrastructural schemes. Where is the provision to ensure that there is concern for protection of the environment in those schemes? Where is there any concern to ensure that contractors on a project such as the Channel tunnel, who may disturb the environment in either an urban or rural area for several years, will have any obligation to those living adjacent to the project whose lives may be disturbed? In those respects, the Government speak with one voice at an environmental conference in London and with another voice when there is a low attendance at a debate in this Chamber on Community legislation.
There is a consistent trend behind the Government's approach. It is consistent with the interview given a few days ago to Le Monde by the Chancellor of the Exchequer who, after all, has responsibility for this legislation, as is made explicit in the background memorandum. The interview concerned the 1992 proposals and the proposals for economic and monetary union in the Community. The Chancellor said that the Government supported the internal market proposals, but rejected the view of the Prime Minister of France that an internal market without a social dimension would he simply a jungle, or a house open to the winds. The Government will increasingly have to address the issues of the social dimension, whether they like it or not. There will be an increasing expectation that they should be concerned with areas of high unemployment, with the social implications of legislation and with matters of the environment.
The issue was put well in an article in today's Financial Times by Joe Rogaly, who writes:
"The mistaken belief that Britain has undergone a true revolution … lies behind the Bruges view that European integration can be allowed to go far enough to meet the trading needs of the partners—but certainly never so far that what has been achieved in Britain since 1979 will be overturned by corporatists and social democrats ruling from Brussels after 1992. Like so many other difficult equations of the 1980s, this one is all solved with mirrors. The reality is that Britain has little option but to move, ratchet by ratchet, with the rest of the EC; the bombast, which is based upon a sense of continued ideological superiority, is entirely in the opposite direction."
As can be seen in this legislation, in rejecting the social dimension and preferential programmes for the regions, the Government and the Prime Minister have shown that they are out of date, out of touch and out of line with the rest of the Community.
On a personal note, the Prime Minister said that she had not spent 10 years in Britain rolling back the frontiers of the welfare state to see them now roll forward in Europe. It may be known to the House that I shall be accepting a post in the Community and I shall be working there with others in Europe to help ensure that they do
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precisely that. The social, regional and industrial policies that Europe needs can be formulated and mobilised, and widely supported by other Governments in the Community.
7.47 pm
Mr. Hugh Dykes: The Opposition spokesman concluded his remarks on a rather interesting and dramatic note. It is interesting to reflect briefly that, only a few years ago, he was a strong anti-Marketeer.
Mr. Holland: Although it may be a footnote of history, 1 must point out that my first employment on leaving university was to be an economic adviser to the then Prime Minister, Harold Wilson, on European Community affairs. I advised him then that the Community was neither a sabre-toothed tiger about to shred the nation state nor a springboard for federalism. I not only advised him to apply to join, but assisted indirectly with some of the negotiations. It would have been better if we had had successful negotiations in the 1960s on better terms than it was later possible to achieve.
Mr. Dykes: That was a long response. Coming back to 1970 and afterwards, when we did broadcasts together in French, the hon. Member for Vauxhall (Mr. Holland) was not keen on Europe. It is interesting to see the change in the Labour party's attitude. I hope that that will not be mirrored in my own party in terms of adverse changes of attitude to the European Community. I am sure that it will not be. The Conservative party remains genuinely, fundamentally and profoundly a quintessentially European party. I welcome the conversion of the Labour party's official spokesman and Labour Members and their developing enthusiasm for Europe—even if it is for rather negative reasons. It is part of a general realisation that the Community is here to stay, is a good thing, that membership of it is an outstanding historic development and a good thing for this country—
Mr. Teddy Taylor: Rubbish.
Mr. Dykes: The country is settling down at long last to the facts and realities of Community membership, like other member states, and the country and its official representatives are gradually and with increasing self-confidence getting used to working with foreigners. They are realising—it is a monumental surprise to some —that, like us, foreigners are human beings with needs, hopes, aspirations, desires and requirements, and that they are people we can trust and on whom we can rely in a developing Community.
Many people in the other member states will be saddened if they think that this country is at variance with their views or at odds with them on too many things. However, I believe that the press is exaggerating on that and that that will not happen because even in a House of Commons so overloaded with work and too much legislation, common sense will break through. However, it would be a pity if that manifested itself in a number of limited areas because the other member states welcome the intellectual and practical contributions that this country can make. One always gets that impression when visiting them and talking to their people.
Several agreeable things are happening right now about these directives. I pay a sincere tribute to the way in which my right hon. Friend the Paymaster General has handled

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them. As the only member of the Select Committee on European Legislation present in the Chamber, I pay a particular tribute to my right hon. Friend for the way in which, in difficult circumstances and with a short timetable, he kept us informed of the changes at the last stages, including his rather dramatically written letter of 2 May, which was appreciated by members of the Select Committee.
Another agreeable manifestation is that this debate is taking place—good Lord, I don't believe it, no it can't be —at 7 o'clock in the evening. It would be nice if it could last for longer than an hour and a half when we are debating such a complex area.
Mr. Teddy Taylor: Hear, hear.
Mr. Dykes: I hear my hon. Friend the Member for Southend, East (Mr. Taylor) expressing his agreement on that. Whatever their original view about the Community, its membership, the history thereof and the future, more and more hon. Members want the House of Commons to get to grips with more effective scrutiny. Indeed, there has been press speculation about that.
I am a most enthusiastic European. I am the kind of sensible person who carries ecu travel cheques on the continent. Although they are accepted in only a limited number of outlets at the moment, the future is long term and we should wait to see what happens with those developments. European money would be practical for all member states in due course and that, too, is a long-term development.
I have always been strongly in favour of effective and profound scrutiny. It is not right for the press or hon. Members to be pessimistic about that and to say, "We are swamped and overwhelmed," or "We cannot handle it." With the mechanisms that we employ and augment from now on and depending on the recommendations of the Select Committee on Procedure on the ideas that are to be promoted soon, both through the usual channels and publicly by the Leader of the House—and perhaps by the Labour party and the other Opposition parties also—the House of Commons and the House of Lords, in so far as it is involved, can engage themselves properly, without great difficulty, in those aspects of scrutiny and do the job properly. That will not be done by whingeing and moaning about every single item that emanates from Brussels and saying, "Here is yet another manifestation of bureaucracy," because that is usually a totally inaccurate and emotional comment. Instead we should concentrate on the important things when we are dealing with the legislative instruments that come before us.
I hope that we can get the mechanism right and have it at the appropriate last stage, rather than considering these legislative instruments like the several stages of a Bill in our own domestic legislation and, therefore, dealing with them repetitively. We should go back to the great policy areas of the development of European policy and consider the European Council as the supreme policy body, and not regard its policies simply as issues for the Council of Ministers to vote on, either by majority of unanimity, depending on the Commission's suggestions.
Although the Paymaster General will say that this is not his province—I hope that he has the chance to pay some heed to this issue, although I appreciate that he is making
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notes on all sorts of complex points relating to the directives—I stress that, to do what I have suggested, we need our European Supply days. We need all-day debates. We should send more provisions into Committee, if they are minor. We need debates like this, in the afternoon or the early evening, not late at night. We need greater attendance at such debates and I hope that that will come in the future. We should not necessarily give these matters more severe treatment just because they come from Europe than we give our own secondary legislation. It is absurd to think of a deserted House dealing with domestic secondary legislation and saying "That does not matter —it is not important," because, of course, it is important. However, European matters are different and we are still getting used to the substance and the chemistry of them, which is always a complex task.
I would go into these documents in detail if there were more time. Again, it is a pity that an hour and a half is the maximum time for a debate on such complex areas. These provisions are an extremely good example of where the Community is getting it right and where the British Government and, I hope, the British Parliament, are getting it right in terms of our responses to these matters. I agree very much with what my right hon. Friend the Paymaster General said about the documents.
Despite being an enthusiastic European, I hesitate about some of the amendments proposed by the European Parliament. As we know, they are not enforceable by that institution; they are only suggestions which may or may not be incorporated. I am glad that there is now a forcible Commission approach to achieving a single market for public supply contracts, works contracts and equipment contracts. There will be many bumpy moments on that stony, rocky and difficult path. Incidentally, I hope that when my hon. Friend the Member for Southend, East, is rightly pleading for British companies to get contracts in Italy or Germany in the future, he will plead hard for a German or an Italian company to get a contract in Britain on the same basis—
Mr. Teddy Taylor: Or an American company.
Mr. Dykes: Yes, and others, wherever they may be, but we are thinking at the moment of the European Community and its component member states.
We need a completely fair-minded and balanced approach to these matters, and not double standards that depend on an emotional nationalism, which is the obvious temptation. I have noticed that some of my hon. Friends, who are gung-ho free-market people in terms of domestic policies, always become massively interventionist if their own constituencies are affected by free market manifestations or by the closing of a business. They then become superb interventionists of the most ferocious blood-tooth kind when defending—[Interruption.] I shall not allow my hon. Friend the Member for Southend, East to tempt me, because I would be getting out of order. If my hon. Friend will be patient, I shall come back to him on another occasion. Perhaps I shall even write to him, if that is not something that only Ministers can say. Perhaps Back-Bench Members can say, "I will write to my hon. Friend." That may be the proper way to do it, but I shall have a conversation about this with my hon. Friend in due course.
Sometimes unwittingly, but usually consciously and cynically, people can have double standards. If we are to

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accept an open market in public supply contracts, it must be genuinely open. It must be a market in which we accept the rough with the smooth and where foreign companies can come here without our being surprised and disconcerted by the efficiency of their approach. Perhaps in future, contracts will start to be expressed in ecu. Public authorities in different member states could ask for the contracts to be expressed in ecu. Gradually, if ecu prices are posted, both in the manufacturing and contracting sectors and in the retail sector, in hotels, restaurants and shops, perhaps we shall gradually see a development, at the margin, of that European currency, alongside the currencies of all the member states.
Turning to the documents, at long last the Community is on the march. This has been a complex area with immensely complicated legal implications to be worked out by lawyers in all the member states. I agree with the general approach taken by my right hon. Friend and the Government on this matter and that we should keep this issue unbureaucratic, open and flexible so that we can ensure that the provisions are based on genuine commercial criteria from the contracting parties and the sub-contractors.
Obviously, much complicated negotiating remains to be done by representatives of Her Majesty's Government on these matters, especially in respect of the second directive to which my right hon. Friend referred. I wish my right hon. Friend well on that. We are now seeing the growing maturity of the House of Commons, which at long last is beginning to understand that Jacques Delors was misquoted when he referred to his famous 80 per cent. If one re-reads his words, one will find that he said that only the Bundestag and the House of Commons were doing anything like a little bit, or perhaps a bit more than a little bit, of effective, but none the less inevitably circumscribed, scrutiny.
He also said that if the Parliaments of the other member states did not adopt similar mechanisms, the parliamentarians of those member states and the populations represented by them would wake up with a rude shock and a sense of surprise and deception later when they realised that more and more decisions were being made collectively on behalf of the member states by the Council of Ministers, voting increasingly on a majority. What a terrible and frightening thought is a majority voting system, which used to be called by the old-fashioned word "democracy". I do not see why that should not work just as well in Europe as it does on a national scale.
7.59 pm
Mr. James Wallace: This is a joyous occasion not only because we are dealing with a European matter at a relatively appropriate time of the evening but also because, whilst there is not unanimity, there is a fair amount of common ground in the Chamber. I am surprised that I find myself in considerable agreement with what the hon. Gentleman the Member for Harrow, East (Mr. Dykes) said, since his European enthusiasm has been shared over many years by members of my party. He spoke about the parting comments of the Member for Vauxhall (Mr. Holland). He will go to his new employment with the best wishes of all hon. Members.
One of the most surprising aspects is that I found myself having much in common on a European matter with the hon. Gentleman the Member for Southend, East (Mr.
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Taylor). He said that, if the creation of a single market improves free trade, it is to be welcomed. We share that view. I also shared his anxiety that, if there are some concealed bumps in what is otherwise meant to be a level playing field, they, too, should be rooted out.
I recall raising in the House almost a year ago, in a debate on shipbuilding, a contract that a local authority in my own constituency was placing for the building of some ferries. It received a very attractive tender from a company in another Community country that was believed to have been subsidised many times over, to a far greater extent than any subsidy allowed to a British company tendering for the same contract. We look forward to companies of different countries being able to tender for public contracts on equal terms.
I also share the concern expressed by the hon. Member for Southend, East on the question of implementation of these proposals. The motion says that the Government intend that the principal responsibility for ensuring compliance will rest with the member states. In this country, we have a good record of complying with directives, although we might argue about their terms before they are ultimately passed. However, I suppose we are concerned about compliance with the directives by other member states. It is probably not profitable to point accusing fingers, but we must be confident that other member states will comply properly.
I realise that we have been presented in this debate with very technical papers, and I apologise to the Paymaster General if I did not follow all that he said. I was not sure that he said much about the attitude of other member states to compliance. I would welcome anything he might say on that in reply.
I hope that in 1992 the single market created will not just be for the benefit of big business. If the single market is to achieve its purpose, small businesses must share in the benefits. The Paymaster General referred to major contracts for smaller businesses being considered. That would allow small businesses to tender for sub-contracts, a move that is welcome. Moreover, the raising of the threshold will allow many small businesses to tender for and win more contracts.
I wonder whether more can be done to bring to the notice of smaller businesses the types of contract being put out for tender in many different parts of the Community. In my own constituency, many small businesses would not be aware of possible opportunities. In these days of information technology, perhaps some central agency could disseminate information about the Community. Very often, a lot of information is fed in, but perhaps we could look at improving the dissemination of information from the centre. If that helped to draw attention to business opportunities, it would be most welcome.
The raising of the minimum level for contracts is also welcome, as it will relieve a burden felt by many local authorities. To tender and advertise on a wide scale imposes an administrative burden, as well as advertising costs. The Minister said that, under the new provisions, companies would have more time to respond to advertisements. In circumstances in which a contract has to be placed very quickly, what are the requirements? If something has to be done the day after tomorrow, one cannot expect advertising on a wide scale. However, when the time scale is 10 days or 20 days, it is a greyer area. In other cases, perhaps as a result of flooding or some other

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natural disaster, an immediate response is required by a public authority. In such cases, advertising fully throughout the Community is inappropriate.
I refer, finally, to the delegations proposed by the European Parliament. As I understood them, they were for contracts that had regard to programmes agreed by the Commission in connection with the long-term unemployed and young people. I cannot see anything particularly mandatory in those provisions. However, perhaps the Government could have a second look at the matter.
While it is necessary that the benefits of 1992 be shared by big and small businesses, it is most important that benefits be shared by all areas of the Community. The honeypot triangle of Paris, Frankfurt and London should not receive all the benefits. Many remoter areas also wish to share the benefits that will flow from the free market of 1992. Community programmes are involved. There need not necessarily be any question of discrimination between competing companies of different nationalities. If, for example, the contract related to the number of young people likely to be engaged in a project, I have no doubt that an appropriate tender could be submitted by a French, Italian, or British company. There is nothing inherently discriminatory that would militate against such a situation.
Mr. Dykes: Does the hon. Gentleman accept that it would be better to establish those conditions on a non-discriminatory basis in terms of the promulgation of the contract for which the tender was sought by the public agency concerned in whatever country, with the advertisements thereof in the press and elsewhere?
Mr. Wallace: I believe it would be better if those who were competing for the tender were well aware of what was involved. I would be grateful for anything the Paymaster General can say about this matter in reply.
It is gratifying that we are making progress in this area. Some worthwhile changes have been made. I hope that the Paymaster General will respond positively to the reasonable and practical suggestions of the hon. Member for Southend, East. What was suggested would import into the matter a certain degree of independent compliance. Certainly, if the matter is pressed to a vote, I will be disposed to support the amendment.
8.8 pm
Mr. Peter Griffiths: It is easy to express the pious hope that there will be free competition and many opportunities for companies in any country in the Community to seek to offer their services elsewhere. It is not particularly difficult to draw up directives or legislation which state those objectives and express the hopes and ideals which are unanimously supported in the House. However, it is particularly difficult to ensure compliance with those objectives when they are expressed.
I will not digress from the subject in hand, but surely it is the experience of Her Majesty's Government that it is difficult to guarantee real competition in tendering for contracts put out by public bodies, even in one country. It is difficult to avoid the feeling that there are elements of discrimination. There are elements of political favouritism. If it is difficult in one country, it will be even more difficult
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in Europe. Nevertheless, I welcome what my right hon. Friend said about the approach which the Community is taking and which Her Majesty's Government are supporting. The directives on procurement and compliance are a move in the right direction. No one will object to that.
Every speaker in the debate has referred to 1992 and the single European market. The directives are not specifically related to 1992. Regardless of 1992, they are essential, but they will be more important after that date, because we may expect a growth in the number of large projects which spread across national frontiers. River or tunnel projects, for example, will involve more than one Government, perhaps several municipal authorities, and other statutory bodies in different countries, all of whom will have an interest in one contract.
I appreciated the comments of the hon. Member for Vauxhall (Mr. Holland). He referred to the construction industry. The directives are not specifically related to 1992, nor are they limited to the construction industry. Public works projects of the scale envisaged in the directives will involve a wide range of industries. Therefore, they are of far greater importance than digging holes and laying bricks and mortar.
I fear that political complications will arise. They will not only be that companies based in the United Kingdom may find it difficult to obtain compliance on the mainland of Europe, although that is what we tend to think when we discuss such matters. I agree that the directives apply to mainland companies seeking opportunities in public works contracts in this country. That is to be welcomed. However, it is an important reminder for companies in this country which are worried about their opportunities to obtain overseas contracts that they must compete harder in future because compliance with the directives documents will mean that their overseas competitors will have better opportunities.
There is no doubt that disputes will arise from time to time between companies seeking to tender and authorities putting out contracts for tender. That is why I shall say a word in favour of harmonisation—a word which often raises people's hackles. This is a case in which harmonisation can only do good. The closer the contracts drawn up between countries coincide, the better. My right hon. Friend the Paymaster General said that tendering documents will be drawn up according to the regulations in member countries, as long as they are acceptable under the broad control and rules of the Commission. That still leaves a good deal of room for misunderstanding and variation.
I should like to see standard forms of tender and contract. In response to the hon. Member for Orkney and Shetland (Mr. Wallace), I should like to see standard forms of advertising. It should be recognised that project advertisements should not be geared so that they give different results in different countries. Journals and newspapers do not always have the same readership. The closer we can get to standard forms of tender, contract, and advertising the better.
It will be important to make it clear in advance to small companies that they should look for contracts not only in this country but in Portugal, Greece and places where they might not normally look. Their attention should be drawn to where they will find contracts. The associations to which

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many small companies belong have a responsibility to provide a service to their members to tell them where they should look for opportunities.
I commend the amendment moved by my hon. Friend the Member for Southend, East (Mr. Taylor). If disputes arise, we will be able to try to deal with them relatively cheaply. We will need a quick system so as not to get bogged down in legal systems which could be complicated because they operate in more than one country. An arbitration system could be the solution to that problem: I hope that the Paymaster General will consider that proposal. If he does not find the amendment acceptable, I hope that he will look for some quick and easy way whereby a relatively small firm can complain quickly and effectively if it considers that its genuine attempt to provide a service at a competitive cost and of the highest quality is rejected on what appear not to be purely economic grounds. I commend the directive and my hon. Friend's excellent amendment.
8.17 pm
Mr. Brooke: With the leave of the House, I shall reply to another of our admirable debates. The hon. Member for Vauxhall (Mr. Holland) has announced that he will shortly leave the House, but he has not informed us of precisely when. I hope that there will be many such debates in which he continues to take part before his departure for Fiesole. All hon. Members wish him well there.
The hon. Gentleman and I are former members of Balliol college, Oxford. The departure of any member of that category from the House is a matter of regret for some hon. Members. There was formerly in the college a club called the Hursteron Protaron club, which, once a term, lived its life exactly backwards, and started with a whisky and soda first thing in the morning and ended up with porridge late at night. In this instance, it would be more convenient for the House if I reply to the admirable speeches in their correct order rather than the reverse order.
We will miss the hon. Member for Vauxhall when he eventually leaves us. My hon. Friend the Member for Southend, East (Mr. Taylor) and I will regard him in Fiesole as one of our potential informants on developments in Italy within the Community. We look forward to dispatches from those parts.
My hon. Friend the Member for Southend, East referred to procedures. The version of the proposal as it now stands is in the supplementary explanatory memorandum. It shows the latest thinking within the Council working party. It is described in articles 1 and 2. I am replying also to my hon. Friend the Member for Portsmouth, North (Mr. Griffiths). Specifically, the review procedures are to be available to suppliers and contractors who claim to be disadvantaged. There will be notification to member states by the Commission if it considers there to be a clear and manifest infringement which could follow complaints from those who felt that they had been disadvantaged. There will be an investigation by the Commission using its own resources.
As to the question of process, the proposal is now to be considered by the Council. It can be amended at any time by the Commission or by the member states acting unanimously. It can be adopted as a whole by qualified majority voting in the Council. We do not yet know which other member states share our concerns about the
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proposed articles on conditions for participation and information on working conditions, but other member states have been expressing views as we worked through the matters, and a number of changes that have been made flow from alliances that we have formed with other member states.
My hon. Friend the Member for Southend, East moved an amendment on behalf of cur hon. Friend the Member for Thanet, South (Mr. Aitken). I do not wish to fall back on the traditional escape route of Ministers responding to amendments by referring to the wording of the amendment, but if my hon. Friend examines the wording, he will see that there is a touch of "Alice in Wonderland" in the provision about fair and equal rights to secure public purchasing contracts. It is the case in "Alice in Wonderland" that everyone should have prizes but it is a difficult exercise to achieve in a competitive process.
The amendment suggests arbitration as a form of administrative recourse. It would be premature to decide now whether that would be more appropriate than a system based in the courts. My hon. Friend will know of the deliberations of the House of Lords Select Committee on the matter. The proposal, as it is evolving, would allow a judicial system or an administrative system, or both. Existing remedies might suffice. On the other hand, some form of administrative tribunal or arbitration body might have advantages. That was the issue considered by the House of Lords Select Committee in its admirable report last year. It concluded that in the United Kingdom the tenderer should seek remedy in the courts. We all agree that contractors and suppliers should be provided with a speedy and effective remedy where they are harmed by a breach of the rules. That point was made by my hon. Friend the Member for Portsmouth, North.
It is essential to the proper operation of the market that companies have equal opportunities to compete for public contracts and that they should have confidence that if they are invited to submit a tender, it will be considered fairly. We will need to consider the means by which such remedies can best be provided. If it proves necessary or desirable to introduce legislation, the House will have an opportunity to debate what we propose. At this stage it would be premature to decide, so I ask my hon. Friend to withdraw his amendment. Having said that, I should be happy to receive representations from my hon. Friends when we get nearer to forming the conclusion on precisely what the remedies should be.
My hon. Friend the Member for Southend, East raised a question about costs. I agree about the importance of avoiding unnecessary bureaucracy, as I said in my speech. The process of negotiation has removed excesses in the original proposal, although I acknowledge that some difficult points remain, such as the requirement to specify the source of information on employment conditions. The basic procedures, such as making a clear decision on the requirements of contracting authorities and going to competition, are fully consistent with the principle of getting value for money. For major projects over £3 million it is not unreasonable to expect public bodies to have to go to competition.
If this is the last contribution of the hon. Member for Vauxhall to these debates, it is admirable that he fulfilled his usual tradition of raising the King Charles's head of large corporations. He drew attention again to small businesses, to which I referred earlier. The Commission's approach to disadvantaged regions is to assist small firms

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by other means. The Commission has spoken of a series of proposals such as an active policy on sub-contracting, but such measures would not be appropriate to a procurement directive. I acknowledge the interest of hon. Members in making sure that these opportunities are available to small business.
The hon. Member for Vauxhall rehearsed arguments of a social nature, as I expected him to do. He will know that the representations received by the Government, to which I also referred, were diametrically opposed to those that he rehearsed in his speech. As to his remarks about environmental consequences and the issue of joint ventures and acquisitions, the directive is designed to ensure transparency of fair competition and the ending of discrimination against non-national contractors. It does not and cannot deal with environmental issues.
The way in which the construction industry reacts to the opportunities that implementation of the directive presents is a matter of commerical judgment. In referring to joint ventures and so on, I was simply advising the House on what appears to be happening so far. It must be remembered that we are discussing multi-million pound contracts and that as a result of the increased transparency smaller firms will have better opportunities to operate as sub-contractors.
As this may be the last occasion on which the hon. Member for Vauxhall and I face each other across the Dispatch Box, I will remark, in a sense outside the debate, that I have been struck by the immense investment of the Japanese in research and development in the building and contracting industry. It is likely that we shall see the Japanese impose on that industry internationally what they have done to shipbuilding. I am not sure that it would not be sensible in those circumstances for European consortia to he put together to resist them.
In a characteristic peroration, the hon. Gentleman spoke of the United Kingdom's occasional isolation. On this issue we are not in a state of isolation. We have secured a number of changes already in the negotiations.
My hon. Friend the Member for Harrow, East (Mr. Dykes) made some kind remarks about my relationship with the Scrutiny Committee. He argued for a genuinely open market. I am grateful to him for what he said.
The hon. Member for Orkney and Shetland (Mr. Wallace) raised the question of compliance in other member states. They all accept our objective, but, as he says, it is a complex area. Some major hurdles have been removed by the Commission in indicating its willingness to accept changes, but there are still problems of ensuring consistency with national legal systems. One critical point is that the Commission is determined to make sure that there is a fair playing field. It is deploying more of its resources on that work and has taken a number of member states to the European court of Justice.
The principles of the compliance regime will be set by the Commission, but member states will be responsible for precise procedures. The procedures will be open and probably judicial; they will be closely monitored by the Commission. The advantage of leaving the detail to member states is that it enables account to be taken of particular national legal and administrative traditions and procedures.
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The hon. Member for Orkney and Shetland saluted the Government for their achievements in reducing the burden on local authorities. On emergency projects, in the case of an extreme and unforeseen emergency, the contracting authority can take immediate action without going through the normal procedures. He joined the hon. Member for Vauxhall in proceeding to what we regard as a somewhat slippery slope in terms of social conditions in the context of securing value for money. But I like the suggestion of finding a better system to make sure that opportunities are known throughout the Community. I hope that someone will take the entrepreneurial opportunity to achieve that objective, because it seems that such an opportunity would exist.
Mr. Dykes: Will my right hon. Friend respond positively to the idea of contracts being gradually and increasingly in ecus as well as in national currencies?
Mr. Brooke: The British Government in their separate actions have shown an enthusiasm for such ecu transactions and have regarded them as a much more sensible and practical way forward.
It was a delight to have the contribution of my hon. Friend the Member for Portsmouth, North. Those of us who are the cognoscenti and the aficionados of these remarkable debates tend to become a somewhat exclusive band of brethren. It is always extremely agreeable to be joined by someone new. I will look seriously at the standardisation of contracts, because of the economic advantage that will derive from them.
I ask my hon. Friend the Member for Southend, East to consider—
It being one and a half hours after the commencement of proceedings on the motion, MADAM DEPUTY SPEAKER put the Question necessary to dispose of them, pursuant to the order [28 April].
Amendment negatived.
Main Question put and agreed to.
Resolved,
That this House takes note of European Community Documents Nos. 7496/88 and the Supplementary Explanatory Memorandum submitted by the Treasury on 24th October 1988 and 5909/89 relating to public works contracts and 10497/88 and the Supplementary Explanatory Memorandum submitted by the Treasury on 2nd May 1989 relating to compliance with Community rules on procedures for the award of public supply and public works contracts; endorses the view that revisions to Directive 71/305/EEC are necessary to improve public purchasing throughout the Community; welcomes the Government's endeavour to secure a satisfactory outcome in discussions on the proposal on public works contracts in the Council of Ministers; and supports the Government's intention to press for a means of improving compliance with Community rules on procedures for the award of public supply and public works contracts which places appropriate responsibility on Member States.

STATUTORY INSTRUMENTS, &c.
Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &c.)
STATUTORY INSTRUMENTS, &c.

  BEEF SPECIAL PREMIUM
  That the Beef Special Premium (Protection of Payments) Order 1989 (S.I., 1989, No. 574), dated 23rd March 1989, a copy of which was laid before this House on 31st March, be approved.—[Mr. Alan Howarth.]
  Question agreed to.

Inner-City Schools (Chess)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Alan Howarth.]
8.32 pm
Mr. Michael Stern: I am most grateful for the opportunity to raise on the Adjournment the subject of chess in inner-city schools. About four years ago, in the first—and until this afternoon only—chess match played by a team from the House of Commons against non-Members since I was first elected in 1983, a team of hon. Members played a team selected from schools in the Inner London education authority. Half that team consisted of three brothers aged, from memory, eight, nine and 11, whose family had recently arrived from the Indian sub-continent. Between them they had only a few words of English, but they had been fortunate enough to go to a school which, although exhibiting all the other classic symptoms of inner-city deprivation, clearly had on its staff a chess maniac. The result was that those three boys had quickly learnt to use chess as a means of communication and self-expression. They gave us the surprise of our lives over the chessboard.
There is nothing new in all civilised societies in looking to education as a means of overcoming the poverty and the tendencies towards crime and drugs that are too often found in parts of our cities. When I say "our", I am referring to the cities of humanity, because it is a problem that exists thoughout the known world.
What is perhaps slightly more new is the growing belief that the game of chess can play a significant part in that educative process. It can do so not by attacking the visible difficulties that too often exist in such schools—such as the lack of pupil motivation, the high levels of truancy, the low expectations among pupils, the poor state of repair of many of the buildings and the lack of parental involvement —but rather it can assist teachers in their schools by providing and additional means of motivation, a demonstration of the ability of the mind to overcome obstacles and an encouragement to the use of thought to create order where none previously existed. Chess is not a panacea and it would be foolish to suggest that it could be. What I am suggesting is that it could be a useful tool. It could be one of many means to the end of improving the life chances of pupils in schools where life chances are all too few.
The emphasis on the game of chess, as a way of broadening the intellect, is not new. It was a slogan at the 1924 All-Union Congress of the Soviet Union that
"chess is a powerful weapon of intellectual culture".
Perhaps closer to home, the last keen chess player known to have lived at No. 10 Downing street—although it should be noted that the immediate predecessor of my right hon. Friend the Prime Minister was a keen amateur chess player—was Mr. Andrew Bonar Law, who, perhaps echoing the traditional view of the British public school, as satirised by Lindsey Anderson in the film "If", said:
"Chess is a cold bath for the mind."
Whether or not it is either of those, it is certainly not a sport. The British Government are right to separate the game of chess from all other games by allocating responsibility for it to my hon. Friend from the Department of Education and Science, who will be replying to the debate, rather than to our colleague, the Under-Secretary of State for the Environment and
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Minister with responsibility for sport. Sports such as football or basketball, or any of their many variants, have frequently acted as agencies for social change, lifting individuals out of a deprived environment and allowing them to act as an inspiration to others. Chess alone offers an intellectual route out, and is therefore much more attuned to the traditional values of education.
In raising this subject on the Adjournment, I am not asking my hon. Friend to plough more money into chess, as the Government already have an excellent record of pump priming in that respect and we as a nation have a proud record of sponsorship by individuals and companies in that area. Nor am I inviting my hon. Friend to put additional pressure on schools for the teaching of chess, simply to encourage more chess players. Our educational system clearly already works in that respect, since, as a nation, we rank an undisputed second to the Soviet Union in the chess world.
What I am suggesting to my hon. Friend is that there already exists across many of the developed nations a movement to begin to use the game of chess as an additional tool of the intellect in a deprived educational environment. I should like an assurance from the Minister that his Department will follow the work that is being carried out across the world with interest and commitment and will ensure that the results of that work, in educational terms, are applied as much in this country as elsewhere.
There is a great deal going on in this area and, in accordance with our tradition, we should be leaders. However, we can also afford to be followers.
Today marked an event n the history of the House when a combined team of hon. Members, Members of another place and Officers of the House—a total of 21 —received a thorough and entirely merited drubbing at chess by the reigning world champion, Mr. Gary Kasparov. I hope that today will, in fact, be remembered not just for that event, but for the public start of a process by which the most intellectual of games starts to he used more for the benefit of those in greatest educational need in this country.
8.37 pm
Mr. Tam Dalyell: I thank the hon. Member for Bristol, North-West (Mr. Stern), who initiated this debate and his colleagues outside the House for their hard work in making it possible.
The House usually listens to those who have personal experience. I should like to report to the Minister that in my four years at Bo'ness academy on the Forth, I ran a lunchtime chess club—I also ran football teams—for any boy or girl who wished to play, and usually 20 to 30 volunteered. I was extremely struck by the fact that not only did they enjoy themselves, but that learning to play chess created confidence among the most unlikely pupils. As the hon. Gentleman said, it is an entry into many other things. It is partly for that reason that we should take it seriously and find out what encouragement can be given by the Department of Education and Science.
I do not complain that there is not a Scottish Minister on the Front Bench, but, as a Scottish Member of Parliament, I know that it will be understood that the same things have been said to the Scottish Education Department, which will bear in mind the long correspondence—in which my hon. Friend the Member for Edinburgh, South (Mr. Griffiths), who is present, was

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also involved—with St. Andrew's house officials regarding help for the Scottish Chess Federation, which has done excellent work.
I emphasise that chess is of benefit not only to potentially clever pupils. I cannot refrain however, from saying that hardly anything challenges a clever pupil so much as—it possibly dates me—going through the games of Alekhline and Capablanca, more latterly the games of Botvinnik and Smyslov or the games of Fischer who appeared after my time at school.
The truth is that, from first hand experience, I believe that chess is valuable and should be encouraged. Encouragement is important because, at school, chess depends on teachers giving up their free time. Now is not the time to discuss the mood of the teachers and their difficulties with the Government. Suffice it to say that any encouragement that can be given to individual teachers to run chess clubs is valuable.
It is important where possible to have chess centres. that is why I greatly welcome the initiative that came to fruition this morning with the re-establishment in the City of London of a chess centre. That is a landmark and we are extremely grateful to the reigning world champion, Gary Kasparov, for taking the trouble to come to Britain to perform that opening. Talking of Gary Kasparov, it would be right to say a big "thank you" to him for coming to play Members of this House, Members of the other place, Clerks of the House and other staff associated with Parliament. It was an education in itself. I have never played anybody who moved P-R6 into my backyard with such effect and then pinned me for the rest of the match. It was a great lesson.
I know that other colleagues play chess repeatedly in the chess room. I do not play as I believe it would become an addiction and Members of Parliament have a few other things to do other than play chess. My chess is confined to playing my wife. I think of Julius Silverman, who educated us all. He was not only an excellent Member of Parliament but an extremely good chess player. My right hon. Friend the Member for Blaenau Gwent (Mr. Foot) is also a good chess player. I think of other hon. Members, some of whom have passed on, some of whom have retired, who get great pleasure from playing each other in the chess room under the portrait of Sir Watson Rutherford playing Mr. Bonar Law.
Insofar as an Adjournment debate can do it, let the message go out from the House that we are absolutely behind all those who brought Gary Kasparov here and who are responsible for popularising chess, particularly in the inner cities and in schools where it is most needed.
8.43 pm
Mr. Nigel Griffiths: First, I thank the hon. Member for Bristol, North-West (Mr. Stern) for securing the Adjournment debate and for focusing the attention of the House, and, I hope, that of the nation, on the value of chess.
In common with the hon. Gentleman and my hon. Friend the Member for Linlithgow (Mr. Dalyell) I rise bruised and battered having barely survived one round with the world chess champion. I have also profited from discussing with him the value of chess. I am pleased that today he was accompanied by the distinguished impresario
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of chess, himself a great player, Raymond Keene, and also by Mr. Jonathan Speelman, one of the greatest players in the world and a great tribute to British chess.
It is vital that we do not get smug or complacent about the standing of British chess. That we have reached such pre-eminence is largely a tribute to amateurs and the voluntary efforts of so many people.
I disagree with the hon. Member for Bristol, North West about the funding of chess. Frankly, I believe that it is woefully inadequate. It is time that we started—the Government are the Government to do it and today is the day to give that pledge—to fund chess on a proper basis. If such funding is provided, chess will be elevated into a great game for men and women and boys and girls. Those young people will have an opportunity to develop important faculties as well as channelling their energies in such a desirable and productive manner.
The Knights of Caissa, an organisation set up to bring together the youth of Britain, the Soviet Union and America who could take chess into schools and thus drive out the more malevolent influences from them, deserves this House's support and commendation. It deserves to be endorsed by the Minister. I hope that he will be able to give a commitment to consider the excellent programme and prospectus that that organisation has produced and that he will be able to give that project long-term backing.
A fortnight ago, I had discussions with the Scottish Chess Federation, which is perturbed about the precarious level of funding in Scotland. I am sorry that the Minister responsible for Scottish education, the hon. Member for Stirling, (Mr. Forsyth), is unable to be present to hear the pungent criticisms that have been made of Scottish Office funding of chess.
I do not want this debate to be a time for recriminations. Today I believe that we all want to celebrate the fact that the world champion is in Britain promoting chess—he has so many fans here. We should mark that occasion by recognising the need to promote chess in the voluntary sector with hard cash. I hope that the Minister is generous enough to endorse that need.
8.47 pm
The Parliamentary Under-Secretary of State for Education and Science (Mr. John Butcher): I congratulate my hon. Friend the Member for Bristol, North-West (Mr. Stern) on the timely nature of this debate. He has chosen a historic moment in the House's history and I cannot let it pass without entering into the record the results of the chess match between the world champion and hon. Members of the House. I have it on good authority that my hon. Friend lasted for 32 moves with Mr. Kasparov. I am also advised that my hon. Friend the Member for Gosport (Mr. Viggers), the hon. Members for Linlithgow (Mr. Dalyell), for Edinburgh, South (Mr. Griffiths), the hon. and learned Member for Fife, North-East (Mr. Campbell) and my hon. Friend the Member for Richmond and Barnes (Mr. Hanley) acquitted themselves well. I believe they are the Members who lasted the longest with their formidable opponent.
I hope that those hon. Members will be duly acknowledged in their constituencies for that particularly cerebral effort. We are not admired for many things, but I hope that, on occasions, we are admired for the type of brain power that was deployed this evening. I shall bring

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to the attention of my colleagues in the Scottish Office the comments made by the hon. Members for Linlithgow and for Edinburgh, South.
I am glad to have this opportunity to respond to my hon. Friend the Member for Bristol, North-West who appears here apparently none the worse for wear after taking on, with no more reinforcements than necessary, Grandmaster Kasparov earlier. I admire my hon. Friend's bravura and enthusiasm, if not his nerve, in even contemplating such a task.
We were indeed privileged to have Gary Kasparov here —evidence of the increasing warmth in our relations with his country as well as of the warmth of enthusiasm for that great game, for which he is such a notable ambassador.
As my hon. Friend said, chess is perhaps uniquely placed to cut across not only national and linguistic barriers, but those of sex, age, race, culture and background. The catalogue of social, cultural and intellectual benefits offered by chess is almost endless, and a number of them have been put forward this evening. I am surprised, therefore, and somewhat disappointed, to find that there are so few references to chess in great literature. But they seem to suggest that chess can throw some light on some of the deeper mysteries of human experience.
I do not expect my hon. Friend to agree with Henry James Byron's sharp statement, "Life's too short for chess." It all depends, I suppose, on how one plays the game—of life, or chess, as one likes. Thomas Huxley explored the chess metaphor richly when he said:
"The chess-board is the world; the pieces are the phenomena of the universe; the rules of the game are what we call the rules of Nature. The player on the other side is hidden from us. We know that his play is always fair, just and patient. But also we know, to our cost, that he never overlooks a mistake, or makes the smallest allowance for ignorance."
Equally intriguing is a quotation from Robert Browning, appropriately from a poem called "Bishop Blougram's Apology":
"And so we stumble at truth's very test!
All we have gained then by our unbelief
Is a life of doubt diversified by faith,
For one of faith diversified by doubt;
We called the chess-board white, we call it black.
'Well', you rejoin, "the end's no worse, at least';
We've reason for both colours on the board;
Why not confess then, where I drop the faith
And you the doubt, that I'm as right as you?"
Intriguing though that thought is, my use of this quotation should not be taken to imply that I do not have as much faith in the value of chess as does my hon. Friend. But let us not forget that this faith will never be universally shared. Some misguided people will reject chess as elitist or over-competitive or, for all its apparent peace and quiet, as too militaristic in its overtones, or too much associated with foibles such as sulks and temper tantrums, or of no more intrinsic educational value than, say, that other popular board game, Scrabble. At bottom, it is all a question of choice, which we prize highly, and there is no danger that people in Britain, in their millions, will not continue to make their choice in favour of chess as a supremely rewarding pastime.
My Department has for many years made an annual grant to the admirable British Chess Federation, and I understand that the federation is seeking to promote chess at all levels and for all ages through the schools and hopes to introduce new award schemes in the near future as well
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as producing a series of leaflets for school chess clubs, which will be in addition to its video on chess for children. So we have not been inactive in this matter.
Mr. Dalyell: How much was the grant last year?
Mr. Butcher: Speaking from memory, it was about £37,000.
Mr. Dalyell: I am not trying to catch the Minister out, but I put it to him that £37,000 is tiny compared with the potential good that could be done throughout the United Kingdom. Will he, after this debate, reflect whether a substantial increase could be made? It really would be value for money.
Mr. Butcher: I will deal with the question of funding and what has been called an endorsement of the game of chess, and I must be careful, as I shall explain, not to make it a sort of official Department of Education and Science programme. There are some aspects of chess in our schools, of which the hon. Member for Linlithgow will be aware, which would not be helped by an atmosphere of officialdom or of compulsion somehow creeping into it. The joy of chess is its voluntary nature and the fact that it becomes a pastime that develops into an exceedingly rewarding intellectual challenge.
Having explained that we have made a grant, the question is whether the Government should be doing more to encourage chess, particularly in inner-city schools, as implied by my hon. Friend. We must recognise that in schools chess is an extra-curricular activity, and many schools have active chess clubs. But some people might wonder whether it would be right for the Government to go any way towards promoting in schools specific initiatives in chess, thereby taking the risk of stifling the very essence of what makes pastimes most rewarding—its voluntary nature and the enthusiasm of individual motivation and commitment: indeed, the element of choice itself.
I know that my hon. Friend—and, I suspect, Labour Members—are far from suggesting a "state takeover" of chess. Anything that smacked of that would be anathema to us. Chess is fun, and intellectual fun. It is taken up by children voluntarily. Their interest may have been stimulated by a friend, a relative or a teacher. Chess is thriving, and those who are deeply committed to it and play it well—and those who may play it but infrequently and badly—regard it as a personal matter of choice and do not need official encouragement from the Department. The last thing we want to do—for those who may not have taken it up yet but have not closed their minds to it—is go any way towards suggesting that they should take it up because the Department thinks it would be good for them.
I hope that hon. Members do not think I am being negative. I am being positive by paying tribute to the vitality of the game, which has thrived and survived for centuries, and to the commitment of individuals who can inspire others with enthusiasm for the game and hence keep it alive in a way that no official edicts would hope to do.
The hon. Member for Linlithgow hinted at that very process in his involvement in chess at the academy of which he spoke. Surely, that atmosphere, the spark and enthusiasm that came from that process, did not come

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from an official programme designed to encourage him or to get youngsters to be interested in chess. They enjoyed the joy of discovery and they did so with great enthusiasm.
Mr. Dalyell: Is the Minister aware that in chess tournaments, inter-school matches and particularly inter-area matches, somebody must pay for the minibuses, the heating and lighting and all the other logistics that are involved? Can the Minister give a breakdown of the grant of £37,000?
Mr. Butcher: I explained the sort of activities that are supported. I cannot at this hour give the hon. Gentleman an account of how much went towards which kind of activity. I thought it would be helpful to indicate the range of activities that were supported. I will write to him with the detail he has requested.
My hon. Friend rightly refrained from putting forward chess as a panacea for the social and educational problems perceived to exist in the inner cities. I will mention some of the measures that my Department is taking to improve the standards of education and the quality of life for young people in the inner cities.
I need not dwell at length at the question of city technology colleges, but they are targeted precisely on inner-city school children to improve their life chances. Anyone who has any doubts about the ethos of CTCs should talk to the people where they are currently in operation. Indeed, the principal of the Nottingham city technology college is clear on the identification of the cohort of young people in inner cities who should receive the benefits of this form of education.
My hon. Friend will be aware that business has pledged over £34 million in sponsorship, an unprecedented response to an education initiative. We have also increased the educational building allocations for inner city areas. We are funding a project providing intensive management training for teachers in 45 inner-city schools. An education support grant programme has been running for a number of years with a view to improving urban primary schools. Many such programmes are taking place and the Government are aware that they must secure the best possible return, not merely in terms of cash but in terms of changing the life chances of young people and school-children in inner cities. That is what this is all about.
My hon. Friend vividly and entertainingly used the chess metaphor and the example of the disciplines of chess and what they bring to young people, by illustrating their benefit to young people in inner cities. Some people who are unfamiliar with the game may have regarded chess with some apprehension, because 32 pieces moving around 64 squares in a manner designed to confuse and confound all but a few may have mystified them. However, I am hoping that that mystification will be eroded and reduced in our society. Attitudes are changing. Chess is now seen by many, and rightly so, as a means of promoting logical, disciplined and independent thought among children.
This change in attitude has been reflected in the advances in the state of British chess. Twenty years ago the United Kingdom did not have a single grandmaster. We now have more than 10, and the figure is rising every year. In 1984, the English men's squad came second to the Soviet Union at the chess olympiad in Greece and went on
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to confirm its No. 2 ranking by again winning silver medals at the 1986 olympiad in Dubai and the 1988 olympiad in Thessalonika. There have also been numerous significant individual performances and several world titles in youth events. So we have come a long way in a relatively short space of time and the time is surely not far away when we will be challenging for the number one spot in the world.
I appreciate that there is also a Scottish dimension to this debate. I hope that Opposition Members will not mind if I remind my hon. Friend the Member for Bristol, North-West, although I am sure that he needs no reminding, of the immense progress that has been made in British chess over the past 20 years.
I know that there are many people whom we must thank for their sponsorship and encouragement that has enabled this dramatic improvement to take place, and I am pleased that my own Department has played its own part by providing support for the British Chess Federation through its annual grant to assist with administrative costs and the expense of sending British players to international tournaments. I am glad that my hon. Friend has emphasised the scope for further developments in chess, particularly with young people.
Mr. Dalyell: I should like to ask the Minister about the question of sending players on journeys to international tournaments. Will the Minister pass on the concern felt about that to the Scottish Office in the hope that it will reply by letter as to whether anything constructive can be done to help our promising chess players to travel?
Mr. Butcher: I am coming to that point in my penultimate observations. I said at the beginning of my comments tonight that I would draw to the attention of my Scottish colleagues the record of this debate. I shall do so and shall, of course, include the comment that the hon. Member for Linlithgow has just made.
I shall return to the reasons why we all endorse the lessons, disciplines and messages that come from chess. Chess players use their memory and their reasoning powers. They are strategists. It is of benefit to young people to develop and use those skills in the competition of an ancient game. I am happy to assure my hon. Friend that we shall look with great interest at the work to which he refers which is being done across the world to see what lessons can be learned and how they might best be promoted in the United Kingdom.
My hon. Friend said that there was nothing wrong with occasionally being a follower. We should like to learn from other countries' experiences, and I give an undertaking that my Department will keep an eye on matters to see whether any of the lessons learned abroad can be applied to the United Kingdom.
We also need to learn from the early experience of the chess centre in London, which could be a useful teacher for those who see education as a means of, at least, encouraging chess, in the various ways that we have tried to describe this evening. I mentioned the caveat earlier that, if chess became a state or DES-inducted exercise, it would lose something precious.
Mr. Dalyell: Can we receive an undertaking from the Department that it will monitor and take a sustained interest in the London centre initiative? It is terribly important to look at the benefits that may, and I believe will, come from having a centre where people can go, at almost any time of the day or evening, in order to play

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chess. All I am asking for is a sustained interest in this experiment, and to see whether it could be transferred to other cities if it was considered valuable.
Mr. Butcher: I thought that was more or less what I had said. We have here on our doorstep a facility that will be part chess workshop, part competition venue. It will, if you like, be a laboratory of intensive chess playing. Therefore, I have no doubt that the lessons that we may learn from that about ensuring the popularity of chess will be duly noted.
I shall also mention the comments made about the Knights of Caissa initiative of which I have received notification. I have looked at the paperwork that has come though so far. My understanding is that the initiative is to be pursued for two or three years and then the DES and presumably other organisations will be invited to meet those involved in the initiative and judge the lessons of that exercise. If that is to be their policy and phasing, I am pleased to endorse that initiative, given that those involved are clear that they are conducting a testing, piloting and trial exercise from which lessons will be learned. Therefore, that initiative will be followed up.
Once again, I thank my hon. Friend not just for what he has done tonight for the whole House through his arrangement of this historic competition, but in initiating a debate on a subject that attracts the most vehement and affectionate support from hundreds of thousands of people in this country.

Drug and Alcohol Abuse (Schools)
9.8 pm
Mr. Patrick Thompson: I am grateful for this opportunity of the Adjournment debate to speak on the subject of drugs and alcohol problems in our schools. I am also grateful to my hon. Friend the Under-Secretary for being present to reply. Normally when we debate, we nearly always talk about problems of engineering, skill shortages and so on. However, this topic, which I am sure my hon. Friend would agree is in many ways just as important, will produce a slightly different debate from the ones that we are used to.
As someone who was a schoolmaster for 23 years and who ran a chess team, I was also interested in the previous debate and I was tempted to intervene, but thought better of it. However, I support the general theme that ran through it. I listened to the speeches of my hon. Friend the Member for Bristol, North-West (Mr. Stern) and to the hon. Members for Linlithgow (Mr. Dalyell) and for Edinburgh, South (Mr. Griffiths). The hon. Member for Edinburgh, South referred to chess replacing other malevolent influences in schools. I do not know what he had in mind, but it certainly made me feel that this debate follows on naturally from the previous one. If drug abuse is not one of the malevolent influences that can creep into our schools, I do not know what is. There seems to be a link between trying to create good extra-curricular activities in good schools and considering the problems that our children can come up against in and out of school.
I have not come to this debate armed with statistics. However, there is no doubt about the social and physical harm that can, and is, done to young people by drug addiction, particularly if we consider the link between drug addiction and the AIDS virus, and the problems that that can bring to young lives. Therefore, we have a duty to protect our young people from becoming involved in any serious addiction.
It is perhaps appropriate that tomorrow the Bill that I have presented, the Amusement Machines (Protection of Children) Bill should, I hope, receive its Second Reading. That Bill deals with protecting young people from addiction. There is a link between the problems that exist in the amusement arcades and drug addiction. Therefore, it is appropriate that I should have the opportunity to mention that tonight in the Adjournment debate.
In Norwich, as in so many parts of the country, there are continuing drug problems. While we are talking about young people, I want to pay a particular tribute to organisations in Norwich which deal with the rehabilitation of young people who have become involved in drug addiction.
The Matthew project runs a helpline, and I have spoken about its good work in previous Adjournment debates. There is also the Life of the World Trust, which has now been established for some 20 years and has operated from centres in various parts of Britain to help in the rehabilitation of young people with drug problems. Its aim is to prepare those young people for a return to a normal lifestyle, free from their dependency on drugs. Over the past 20 years, the Life of the World Trust has been successful with hundreds of young people who have become involved in drug addiction. Hebron house has recently been established in Norwich, and it is doing continuing good work with ex-drug dependants.

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Although drug abuse has not been so much in the news recently, the problem has not gone away from our schools or from among adults. All the evidence is that the problem remains serious, not only in Norwich, but throughout Britain. The only up-to-date figures that I have been able to obtain this week refer to drug seizures for 1988. Customs and Excise officers seized a record £185 million worth of illegal drugs during 1988—an increase of almost 60 per cent. by street value on the previous year. I accept that taking seizure figures may not be the best way to try to determine a trend. After all, that can depend on the size of the haul and the circumstances in which the Customs officers were able to achieve it.
My hon. Friend the Economic Secretary to the Treasury, who is responsible for Customs matters, said recently that that 60 per cent. increase in the value of drugs seized during the past year reflects the increasing effectiveness of Customs and Excise efforts and—this is important—the growing scale of the threat. Therefore, although the problem has not been publicised a great deal recently, it would be wrong for any hon. Member to think that it has gone away. The trend is still adverse and that is why it is appropriate that we are having this debate tonight.
I am aware that the Government and the Department of Education and Science have been contemplating further initiatives to deal with drug and alcohol abuse in schools. Everyone has a role to play—families, schools, Churches and other leading figures and organisations in society.
At this stage, it is important to say bluntly that, just as illness is a sign of some sort of weakness within the individual involved—that is in no way to lay blame on that individual—so drug abuse is a sign of weakness, or even, to use stronger language, of decadence in some sections of society. After all, we can link the problems of drug and alcohol abuse with the problems of boredom, psychological disturbance, and so on. Therefore, wider issues are raised when we debate this topic.
It is not easy for any hon. Member to come up with a way to deal with these serious problems, but that does not mean that we have no responsibility—quite the reverse. We have a great responsibility, and the Department of Education and Science, with its responsibility for schools, also has a great responsibility. That is why I am looking forward to my hon. Friend's reply, bringing us up to date with the initiatives that the Department is preparing.
The effect of alcohol abuse among the young is also well known and serious. Longer-term health problems can arise as a result of alcohol abuse and behavioural problems are very much in the news at present. There are the lager lout phenomenon and the riot and crowd control problems. Without being too specific, many of the recent incidents in football stadiums and so forth are alcohol related. In addition, there is the problem of drink-driving and I want to pay tribute to the good work done by my right hon. and hon. Friends at the Department of Transport for their successful campaigns in tackling that problem.
I hope that my hon. Friend will be able to say more this evening about the initiatives that he has in mind, perhaps through the schools and the education system, for the prevention of alcohol, drug and solvent abuse. All those
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forms of addiction are linked. They cannot be separated one from the other. In addition, as I said earlier, we must link all those with the problem of AIDS.
The Education Reform Act 1988 introduced the national curriculum, which says that it is our duty to promote the spiritual, moral, cultural, mental and physical developments of pupils at school and of society, and also to prepare pupils for opportunities, responsibilities and experiences in adult life. If that is the aim within our schools, it must be right to consider ways in which we can prevent drug abuse and help our young people to have a better spiritual, moral and cultural preparation for life.
I hope not just that my hon. Friend will recognise the ways in which the Department of Education and Science, through administrative initiatives, can deal with those problems—I am sure that we shall hear a lot about that when my hon. Friend replies—but that he will recognise and confirm that the tone and quality of schools is of great importance in dealing with such problems. That is not to say that, when dealing with individual human beings, there will not be difficulties in the best of schools, but my general point, is that the tone of the school, the leadership of the head teacher, the quality of the teachers and the general way in which the school is run, are relevant when we are considering the malevolent problems that come into schools and affect young people. The old-fashioned term "discipline" is relevant to the quality, tone and success of our schools, and the way in which young people leave them prepared for life in every possible way.
It is important to recognise that, in addition to any initiatives that we shall be debating tonight, the organisation of schools, which we shall not have time to debate tonight, and the morale of schools and teachers are relevant to this subject. An extra-curricular activity such as chess, which we debated earlier, can be linked with other sporting activities to show how important that aspect of school life is in preventing the type of problems to which I am drawing attention.
Let me take this opportunity to pay tribute to the good work done by so many teachers. In particular, I want to identify those in my constituency of Norwich, North and in Norwich and Norfolk generally. They are doing good work in social and health education, about which we are particularly thinking this evening, and they are doing a great deal generally to help to improve the quality of education in schools in Norwich and Norfolk at a time of rapid change. I welcome those changes and the speed with which the Government have addressed themselves to educational problems recently, and I pay tribute to the teachers in Norwich and Norfolk for the way in which they are responding to them.
A ministerial group has recently dealt with alcohol abuse and during the past few days I had a chance to see the circular that has resulted from that initiative. Again, through my hon. Friend the Minister, I want to pay tribute to Ministers for that work. The circular and the results flowing from it must be good news.
However, let me inject a cautionary note. When I finish reading a circular I find that I am not imbued with the kind of enthusiasm with which I would like to be imbued. Even after six years as a Member of Parliament I only have to read a Civil Service circular to find that all my enthusiasm and interest in a subject has somehow waned. That does not necessarily mean—in case my hon. Friend should misunderstand me—that the circular is wrong or that there is a better way of doing it. It means that the circular and

451
the administrative initiatives, excellent though I am sure they are, by the Department of Education and Science must be followed up with enthusiasm at local authority level, school level and so forth.
I congratulate the Department of Education and Science on the work it has been doing in this area and I look forward to hearing more about recent initiatives very shortly. We have the booklet on drug misuse and the young, which I know has had very wide circulation in my constituency and throughout the country. We have had the initiatives on teaching materials to help with problems of drug abuse and so on. More recently, we have had the largest education support grant ever, which includes sums of money particularly targeted on dealing with the misuse of drugs. I gather that in my own county, Norfolk, over £21,800 will be put to that particular use in the coming year. This must all be good news, because it will help local authorities to develop a strategy for dealing with drug abuse through the mechanisms which they have available.
All this is part of the Government's imaginative and vigorous approach to education and I congratulate my hon. Friend the Minister on his part in that. I look forward very much to his reply and in particular to what he has to say about up-to-date initiatives to help with the very serious problems of drug and alcohol abuse in our schools.
9.21 pm
The Parliamentary Under-Secretary of State for Education and Science (Mr. John Butcher): First, I wish to thank my hon. Friend for bringing forward this topic tonight. As I hope to demonstrate, I shall respond very clearly to his invitation to indicate the major programme to be mounted in our schools.
First, I join him in the tribute that he has paid to the Matthew project and to the Life of the World Trust. I know that he takes a great interest in these matters and I am sure that, just as the people of Norwich are well served by him, so young people who may have a problem are served by those two bodies.
The scale of the problems of alcohol and drug misuse among young people has been highlighted by work done by Mr. John Balding at Exeter university. Surveys involving over 18,000 pupils in 1987 revealed that over 74 per cent. of fifth-year boys and 65 per cent. of fifth-year girls had consumed alcohol in the past week, with over 10 per cent. of the boys consuming the equivalent of more than 10 pints of beer. The same surveys revealed that up to 12 per cent. of fifth-year boys and 14 per cent. of girls had been offered cannabis or other more harmful drugs at some time during their teens. Those are chilling figures and reinforce our determination to help young people to avoid alcohol and drug abuse.
For the past six months I have been undertaking a review of all the policy issues which must come together in the formation of a plan to be applied in our schools to deal with the problems of alcohol and drug abuse. During that period I have chaired working meetings with drugs education co-ordinators and together we have assembled a great deal of information and know-how, and the co-ordinators have responded magnificently to my invitation to play their full part in the policy formation process.
I should explain that the DECs are in post in all English local education authorities, funded through education support grants and charged with the task of co-ordinating
452
education programmes for schools and colleges that disseminate the best practice in methods of reducing the risk of drug abuse by the young. I have also spoken to organisations such as TACADE, Kaleidoscope, the City roads rehabilitation centre and life education centres.
During those discussions and research activities it became very clear that through education we should increase the effort devoted to reduction of the demand for drugs; that we should create a generation of school children and young people who will turn their backs on dealers and pushers. It has also become clear that drug abuse, alcohol abuse and AIDS are related issues that can be tackled in a co-ordinated health education programme and that our future policy for school programmes should reflect this.
I said earlier that my hon. Friend's Adjournment debate was timely. It is so because I am now in a position to announce to the House the broad objectives and measures of our policy of demand reduction, which has benefited from the information-gathering stage I mentioned earlier. I can announce tonight a £7 million programme for the year 1990–91. Of this, £4 million will be used to support a new, broadened remit for drugs education co-ordinators, who will now be responsible for the provision of information and advice to schools on alcoholism and AIDS, in addition to their existing work on drugs. Funding for the co-ordinators—now to be called health education co-ordinators—has been guaranteed for at least three years in recognition of the fact that those programmes cannot be short-term programmes but will require a long and intensive effort by local education authorities and schools.
A further £3 million will be provided under the local education authority training grants scheme to fund in-service training of teachers covering the same key areas of health education.
I can also announce tonight a 10-point plan. I will deal with the salient points.
The first is the provision of information for parents, to be distributed via the schools, subject to the approval of school governors. The precise messages for parents will have to be agreed with local conditions in mind and will involve the co-operation of a variety of organisations, whose views will be sought.
The second point is to examine the effectiveness of existing health education and if necessary apply the lessons learned and modify the messages to young people.
The third is to integrate health education messages into the national curriculum in ways which are compatible with the foundation subjects and with existing programmes of personal and social education.
The fourth is the gathering together of examples of best international practice, with particular reference to the reasons for success or failure in other countries.
The fifth is the greater involvement of the private sector in the sponsorship of programmes on drugs and alcohol. An excellent example of this approach came from the Scotch Whisky Association, which supported a research project and an excellent conference on alcohol and young people.
The sixth is wider incorporation of health education issues in initial teacher training courses.
The seventh is development of further curriculum materials for teachers to build on the excellent work of TACADE, for example, with its drug-wise teaching pack.

453
The eighth is to secure better information on the health-related behaviour of young people. The ninth is to define in conjunction with the Department of Health specific and clear messages for different categories of young people—general messages for all young people at school, messages to those who are experimenting, messages to those who are indulging in regular or casual use, and messages to users with an addiction problem.
I am advised that concentrating on a particular substance or giving a high profile to a particular drug can be counter-productive. The best approach is for young people to be taught about the importance of a healthy lifestyle and a healthy body. They need to be given the skills to know how to resist pressures to misuse drugs and alcohol for health, lifestyle and social reasons. In a nutshell, our message to young people must be: "Stay healthy. Stay in control." Therefore, our tenth initiative is to give wider publicity to the stay healthy, stay in control message.
Those who follow this sad and unhappy issue will know that the drug pusher may not be obviously identifiable as a furtive, evil-looking character on a street corner. To those who may be susceptible, the pusher may currently be a friend. He may pose as a friend at a time when the potential victim has drunk too much and is offered a substance. We must ensure that people who find themselves in such situations recognise that moment and say no. If they do not say no, they may be on the first rung of the ladder to oblivion.
My hon. Friend is right to say that drink, drugs and AIDS are related. Someone who has drunk too much at a party may say yes to the substance that is offered to them. They may move on to harder drugs. They may eventually inject, share needles, and then face an increasing risk of contracting the virus that leads to AIDS.
I have said very little about alcohol, yet it is a wider problem than drugs. It affects young and old. Dr. Anthony Thorley estimates that 25 per cent. of acute hospital beds
454
for males are occupied by patients suffering from alcohol-related problems. A small but still too large proportion of young people seem to think that they can have a good time only through getting drunk. That phenomenon in itself raises a large number of questions. They merit a debate in their own right, and I shall not discuss them this evening. Nevertheless, we know that providing information on the effects of alcohol on health may not be enough. We must point out the bad effect of alcohol abuse on personal relationships, loss of respect from friends, and loss of appeal to the opposite sex. In other words, those messages are all relevant to the social preoccupations and self-esteem of teenagers and of young people.
I am particularly impressed by the campaign along those lines pursued through local radio commercials and advertisements in young people's magazines in New South Wales. The messages are strong and clear. Teenage boys, for example, are told:
"If you don't want to look like a jerk, don't get drunk."
That is the clear message, in the clear, Australian style. The campaign's messages imply also that a boy is likely to lose a girl friend if he insults her or talks gibberish while under the influence of drink. It is those very personal, very apt and very relevant messages that must supplement the informative process in health education programmes.
I am very grateful to my hon. Friend for raising tonight's topic. I hope that the House agrees that the programme I announced, which will cost £7 million, is a significant initiative. We shall monitor and manage that 10-point plan. I assure my hon. Friend that on such a serious issue, the initiative's management plan will be checked and assessed at regular intervals to see whether it hits its targets. It is on-going and will continue for three years. From that point on, if we find that we are winning, we may change the programme. I hope that that will be the case because, for the sake of our nation's children, we have to win.
Question put and agreed to.
Adjourned accordingly at twenty-seven minutes to Ten o'clock.

EDUCATION AND SCIENCE

  Schools (Expenditure)
  Ms. Richardson
  To ask the Secretary of State for Education and Science if he will publish a table showing the latest figure for expenditure per pupil on(a) books and (b) equipment and comparable figures for each year

  Expenditure per pupil1—England

  Primary

  Secondary

  Special

  Cash

  Real2 terms

  Index

  Cash

  Real2 terms

  Index

  Cash

  Real2 terms

  Index

  £

  £

  £

  £

  £

  £

  Books and equipment

  1978–79

  12·85

  26·25

  100

  24·40

  49·86

  100

  37·16

  75·93

  100

  1979–80

  14·33

  25·11

  96

  26·61

  46·60

  93

  41·78

  73·19

  96

  1980–81

  16·05

  23·71

  94

  29·26

  43·23

  93

  46·73

  69·04

  94

  1981–82

  18·16

  24·45

  103

  32·18

  43·32

  100

  51·09

  68·78

  100

  1982–83

  20·90

  26·28

  107

  36·53

  45·93

  106

  61·00

  76·69

  112

  1983–84

  22·79

  27·39

  104

  39·21

  47·12

  103

  68·24

  81·99

  107

  1984–85

  23·54

  26·96

  98

  42·53

  48·70

  103

  70·45

  80·67

  98

  1985–86

  24·91

  27·04

  100

  44·83

  48·67

  100

  88·84

  96·44

  120

  1986–87

  28·04

  29·45

  109

  57·15

  60·02

  123

  87·58

  91·98

  95

  1987–88

  30·67

  30·67

  104

  62·27

  62·27

  104

  98·73

  98·73

  107

  Books

  1978–79

  4·25

  8·68

  100

  7·16

  14·64

  100

  5·93

  12·12

  100

  1979–80

  4·69

  8·21

  95

  7·82

  13·69

  94

  6·73

  11·79

  97

  1980–81

  5·32

  7·86

  96

  8·08

  11·94

  87

  6·90

  10·20

  87

  1981–82

  5·91

  7·96

  101

  8·60

  11·58

  97

  7·09

  9·55

  94

  1982–83

  7·00

  8·80

  111

  9·89

  12·43

  107

  8·65

  10·87

  114

  1983–84

  7·14

  8·58

  98

  10·09

  12·12

  98

  8·68

  10·43

  96

  1984–85

  7·29

  8·34

  97

  10·15

  11·62

  96

  9·12

  10·44

  100

  1985–86

  7·49

  8·13

  97

  10·66

  11·58

  100

  11·46

  12·44

  119

  1986–87

  8·25

  8·66

  107

  13·13

  13·79

  119

  10·65

  11·18

  90

  1987–88

  8·99

  8·99

  104

  14·92

  14·92

  108

  12·21

  12·21

  109

  Equipment

  1978–79

  8·60

  17·57

  100

  17·24

  35·22

  100

  31·23

  63·81

  100

  1979–80

  9·65

  16·90

  96

  18·79

  32·91

  93

  35·05

  61·40

  96

  1980–81

  10·73

  15·85

  94

  21·17

  31·29

  95

  39·83

  58·85

  96

  1981–82

  12·25

  16·49

  104

  23·58

  31·74

  101

  44·00

  59·23

  101

  1982–83

  13·91

  17·48

  106

  26·65

  33·50

  106

  52·35

  65·82

  111

  1983–84

  15·65

  18·81

  108

  29·12

  34·99

  104

  59·56

  71·56

  109

  1984–85

  16·26

  18·61

  99

  32·38

  37·07

  106

  61·33

  70·22

  98

  1985–86

  17·42

  18·91

  102

  34·17

  37·09

  100

  77·38

  84·00

  120

  1986–87

  19·79

  20·78

  110

  44·02

  46·23

  125

  76·94

  80·80

  96

  1987–88

  21·68

  21·68

  104

  47·35

  47·35

  102

  86·52

  86·52

  107

  1 The figures are based on local education authority returns to Department of the Environment and pupil number returns to Department of Education and Science.

  2 The cash figures for earlier years have been repriced to 1987–88 prices using the gross domestic product (market prices) deflator.

  National Curriculum
  Mr. Fisher
  To ask the Secretary of State for Education and Science whether he will publish a table showing(a) the printing and publishing costs and (b) the numbers of all the documents circulated to schools, local education authorities and the general public concerning the national curriculum.
  174
  since 1978–79 in (i) primary schools, (ii) secondary schools and (iii) special schools in cash and real terms using an index of 100 for 1978–79.

  Mr. Butcher
  While local authorities' expenditure returns to the Department of the Environment show separate figures for books and equipment, these need to be treated with caution because of differing local authority practices in allocating expenditure between the two items. The table therefore shows spending figures for books and equipment as well as for books and equipment separately.

  Mrs. Rumbold
  The table lists DES documents concerning the national curriculum which have been published following the Education Reform Act 1988, with figures for printing costs and copies printed. The National Curriculum Council also publishes information and advice on the national curriculum.
  175

  DES Documents on the National Curriculum

  Date of publication

  Printing costs £

  Number printed

  School Curriculum and Assessment

  Draft Circular

  October 1988

  2,400

  1,600

  Final Circular 5/89

  February 1989

  18,000

  103,000

  Local Arrangements for the Consideration of Complaints

  Draft Circular

  September 1988

  600

  1,500

  Final Circular 1/89

  January 1989

  19,800

  82,500

  School Curriculum and Related Information

  Discussion paper on information requirements

  September 1988

  1,000

  1,300

  Draft Circular and regulations

  January 1989

  1,700

  1,600

  Section 19 of ERA 1988: temporary exceptions for individual pupils

  Draft Circular and Regulations

  April 1989

  28,000

  35,000

  Mathematics

  Proposals (on attainment targets and programmes of study)

  August 1988

  114,700

  100,000

  Draft Orders

  December 1988

  3,900

  2,000

  Statutory Orders and Associated Documents and Circular 6/89

  March 1989

  697,000

  318,000

  Science

  Proposals (on attainment targets and programmes of study)

  August 1988

  143,900

  120,000

  Draft Orders

  December 1988

  5,400

  2,300

  Statutory Orders and Associated Documents and Circular 6/89

  March 1989

  663,400

  318,000

  English (Primary)

  Proposals (on attainment targets and programmes of study)

  November 1988

  103,700

  170,000

  Draft Orders

  March 1989

  1,500

  1,500

  Design and Technology

  Interim Report of Working Group

  November 1988

  37,500

  15,000

  Modern Foreign Languages

  Draft Order and Circular

  March 1989

  1,200

  2,500

  Other Documents

  From Policy to Practice

  February 1989

  215,000

  600,000

  Ms. Armstrong
  To ask the Secretary of State for Education and Science (1) whether he will make it his policy to distribute copies to school teachers of the order for English, key stage 1 in the national curriculum, when he lays the order before the House; if he will ensure that such a distribution is completed before the end of the current school term; and if he will make a statement;

  (2) if he will make it his policy to ensure that all primary school teachers with responsibility for teaching English to children in key stage 1 of the national curriculum from September will have adequate access to the relevant programmes of study and attainment targets before the end of the current school term; if he will consider the practical difficulties facing primary school teachers in the case that such access before the end of the current school term is not achieved; what is the earliest date for the end of the current school term of which his Department is aware; and if he will make a statement;

  (3) what progress has been made towards making the statutory order for English, key stage 1 in the national curriculum since his reply to the hon. Member for Rugby and Kenilworth (Mr. Pawsey) of 17 March, Official Report, columns 357–58; whether he still expects to make the final order in May; what account he has taken in his plans of the approaching end of the current school term; and if he will make a statement;

  (4) what steps his Department is taking to ensure that all primary school teachers with responsibility for teaching English to children in key stage 1 of the national curriculum from September will have adequate access to the relevant programmes of study and attainment targets
  176
  before the end of the summer term; by what date he expects such teachers will have been provided with (a) adequate access to the relevant programmes of study and attainment targets and (b) such other relevant information as may be planned by his Department or the National Curriculum Council; and if he will make a statement.

  Mrs. Rumbold
  Following completion of consultations on the draft, my right hon. Friend aims to lay the final order for English in key stage 1 of the national curriculum before Parliament at the end of May. Immediately afterwards, he intends to send initial copies, with the accompanying statutory document and circular of guidance, direct to all maintained primary and secondary schools, nursery schools, special schools, local education authorities, teacher training institutions and other bodies. Bulk supplies will then be dispatched to local education authorities by mid-June for delivery to all primary and special school teachers. Further priced copies of the document will be available from Her Majesty's Stationery Office. This should enable schools and teachers concerned with English in key stage 1 to have details of the attainment targets and programmes of study well before the end of their summer terms. The National Curriculum Council plans to issue non-statutory guidance to schools during the summer.

  Higher Education
  Mr. Andrew Smith
  To ask the Secretary of State for Education and Science what estimate he has made of the
  177
  numbers of additional students who may participate in higher education as a consequence of the proposals to increase tuition fees announced in his consultative paper.

  Mr. Jackson
  The impact of higher fees will be one of the factors to be taken into account in revising student number projections from time to time. It will be for individual institutions to decide how to respond to the incentives to compete for and recruit students which our proposals offer.

  Encephalopathies
  Mr. Ron Davies
  To ask the Secretary of State for Education and Science if he will list the research being sponsored by his Department into transmissible encephalopathies.

  Mr. Jackson
  This Department is funding research on transmissible encephalopathies in animals, namely, on scrapie in sheep and bovine spongiform encephalopathy in cattle, at the AFRC Institute for Animal Health.

  Superannuation (Employers' Contributions)
  Mr. Simon Hughes
  To ask the Secretary of State for Education and Science to what extent and amount he expects local education authorities to offset the additional cost of the recommended pay increase for school teachers by means of the reduction in employers' contributions for superannuation; to what extent and amount this reduction in employers' contributions for superannuation relates to the employment of school teachers, as against other categories of employees; to what extent and amount this reduction in employers' contributions has been taken into account elsewhere in assumptions for block grant calculations; and if he will make a statement.

  Mr. Butcher
  The effect of the 1·4 per cent. reduction in the cost of employers' contributions to the teachers' superannuation scheme flowing from the report of the Government Actuary will be to reduce the salary bill of local authorities in England by about £100 million, of which the savings in respect of further education lecturers and other teachers not employed to work in schools will be about £15 million. The rate support grant settlement which preceded the Actuary's report assumed savings of about I per cent.

  Capital Projects (Kent)
  Ms. Armstrong
  To ask the Secretary of State for Education and Science what representations he has received about support for voluntary aided capital projects in Kent.

  Mr. Butcher
  Since the announcement of the capital allocations for education on 21 December 1988 my right hon. Friend has received two representations about voluntary-aided capital projects in Kent. These specifically concerned the Judd school in Tonbridge.

  Roman Catholic Schools
  Ms. Armstrong
  To ask the Secretary of State for Education and Science if he will list the capital loan approvals given for Roman Catholic aided schools in each of the last four years.

  Mr. Butcher
  Capital loans under section 105 of the Education Act 1944 have been made in respect of the following Roman Catholic voluntary aided schools:

  Financial Year

  £

  1985–86

  25 May 1985

  St. Mary Magdalene, Buckinghamshire

  45,226

  10 June 1985

  St. Peter's and St. Paul's, Redbridge

  30,245

  2 October 1985

  Corpus Christi High, Waltham Forest

  25,000

  25 October 1985

  St. Paul's High, Manchester

  25,000

  23 January 1986

  Corpus Christi High, Waltham Forest

  104,806

  1986–87

  11 July 1986

  St. Paul's High, Manchester

  85,094

  11 July 1986

  De Lisle, Leicestershire

  89,758

  13 March 1987

  St. Mary's, Leicestershire

  42,775

  1987–88

  Nil

  1988–89

  22 September 1988

  St. Paul's, Buckinghamshire

  25,000

  14 December 1988

  St. Paul's, Buckinghamshire

  211,688

  14 February 1989

  St. Joseph's, Derbyshire

  25,000

  20 February 1989

  St. Joseph's, Derbyshire

  83,383

  Teachers
  Mr. Nicholas Bennett
  To ask the Secretary of State for Education and Science if he will list for each local education authority the total number of teachers employed, the number who hold instructor status, the number who are graduates with no formal teaching qualification, graduates with a post graduate certificate in education, graduates with a bachelor of education degree and non-graduates with a teacher training qualification; what percentage each category represents of all the teachers in each authority; and what were these figures and percentages for the same categories in 1974;

  Mr. Butcher
  [holding answer 10 April 1989]: Information is not available in the full detail requested and is not all compiled on the same basis. Data on instructors and student teachers include both full and part-time staff, while those on the graduate status and teacher training of qualified teachers include only those in full-time service, and also relate to different time points.

  Table 1 shows the total full-time equivalent of full and part-time teachers and instructors employed by each local education authority in England and Wales in maintained nursery, primary and secondary schools in January 1988, and the number and percentage of these that were instructors or student teachers.

  Table 2 shows the breakdown of full-time qualified teachers in these schools by graduate status and teacher training, for each authority and at March 1986 (the latest date for which these figures are available).

  Tables 3 and 4 contain figures on the same basis for 1974. National totals only are available.
  179

  Table 1: Instructors and student teachers in maintained nursery, primary and secondary schools—January 1988

  Instructors and student teachers

  All teachers and instructors

  Instructors and student teachers as a percentage of all teachers and instructors

  (full-time equivalents)

  Barking

  46·5

  1,388·1

  3·3

  Barnet

  19·3

  2,545·3

  0·8

  Bexley

  12·9

  1,783·1

  0·7

  Brent

  28·3

  2,522·9

  1·1

  Bromley

  5·4

  1,979·2

  0·3

  Croydon

  23·6

  2,540·6

  0·9

  Ealing

  16·1

  2,345·6

  0·7

  Enfield

  21·8

  2,255·3

  1·0

  Haringey

  2·0

  1,827·3

  0·1

  Harrow

  192

  1,470·9

  1·3

  Havering

  43·3

  2,157·4

  2·0

  Hillingdon

  8·0

  1,808·1

  0·4

  Hounslow

  19·2

  1,862·7

  1·0

  Kingston

  2·5

  1,062·6

  0·2

  Merton

  3·0

  1,268·1

  0·2

  Newham

  41·7

  2,280·6

  1·8

  Redbridge

  21·3

  1,664·4

  1·3

  Richmond

  7·1

  958·4

  0·7

  Sutton

  6·1

  1,250·3

  0·5

  Waltham Forest

  44·3

  2,184·0

  2·0

  ILEA

  370·4

  20,020·0

  1·9

  Birmingham

  6·0

  9,574·6

  0·1

  Coventry

  50·7

  2,895·0

  1·8

  Dudley

  12·6

  2,713·2

  0·5

  Sandwell

  9·3

  2,841·6

  0·3

  Solihull

  13·9

  1,858·7

  0·7

  Walsall

  3·3

  2,830·9

  0·1

  Wolverhampton

  3·5

  2,597·5

  0·1

  Knowsley

  2·9

  1,669·6

  0·2

  Liverpool

  10·4

  4,701·4

  0·2

  St· Helens

  5·3

  1,818·5

  0·3

  Sefton

  7·7

  2,418·8

  0·3

  Wirral

  0·6

  2,949·6

  0·0

  Bolton

  16·4

  2,566·8

  0·6

  Bury

  5·1

  1,508·5

  0·3

  Manchester

  31·8

  4,444·5

  0·7

  Oldham

  6·0

  2,218·0

  0·3

  Rochdale

  5·0

  2,206·8

  0·2

  Salford

  0·6

  2,107·7

  0·0

  Stockport

  6·9

  2,528·5

  0·3

  Tameside

  0·0

  1,878·1

  0·0

  Trafford

  4·7

  1,706·1

  0·3

  Wigan

  13·2

  3,283·6

  0·4

  Barnsley

  1·3

  2,012·2

  0·1

  Doncaster

  17·1

  2,798·8

  0·6

  Rotherham

  18·5

  2,488·1

  0·7

  Sheffield

  15·5

  4,523·6

  0·3

  Bradford

  24·3

  4,945·6

  0·5

  Calderdale

  10·0

  1,837·0

  0·5

  Kirklees

  36·8

  3,725·2

  1·0

  Leeds

  30·1

  6,547·4

  0·5

  Wakefield

  9·8

  2,865·1

  0·3

  Gateshead

  14·1

  1,842·0

  0·8

  Newcastle upon Tyne

  2·8

  2,513·4

  0·1

  North Tyneside

  12·0

  2,082·0

  0·6

  South Tyneside

  8·0

  1,437·0

  0·6

  Sunderland

  9·5

  2,832·3

  0·3

  Avon

  6·2

  7,120·5

  0·1

  Bedfordshire

  36·5

  4,772·3

  0·8

  Berkshire

  26–6

  5,890·4

  0·5

  Buckinghamshire

  17·0

  4,948·7

  0·3

  Cambridgeshire

  15·3

  5,109·8

  0·3

  Cheshire

  69·8

  8,361·9

  0·8

  Cleveland

  19·6

  5,480·1

  0·4

  Cornwall

  20·1

  3,771·3

  0·5

  Cumbria

  8·4

  4,406·7

  0·2

  Derbyshire

  15·9

  8,352·6

  0·2

  Devon

  17·5

  7,109·2

  0·2

  Dorset

  8·0

  4,480·0

  0·2

  Durham

  41·5

  5,019·0

  0·8

  East Sussex

  14·2

  4,444·6

  0·3

  Essex

  159·0

  11,968·9

  1·3

  Gloucestershire

  5·8

  4,192·5

  0·1

  180 181

  Instructors and student teachers

  All teachers and instructors

  Instructors and student teachers as a percentage of all teachers and instructors

  (full-time equivalents)

  Hampshire

  86·5

  11,674·4

  0·7

  Hereford and Worcester

  11·7

  5,272·7

  0·2

  Hertfordshire

  65·6

  8,828·4

  0·7

  Humberside

  23·0

  7,895·0

  0·3

  Isle of Wight

  0·9

  973·0

  0·1

  Kent

  42·4

  11,784·1

  0·4

  Lancashire

  18·1

  11,828·0

  0·2

  Leicestershire

  26·0

  7,658·3

  0·3

  Lincolnshire

  18·6

  4,555·5

  0·4

  Norfolk

  56·1

  5,526·6

  1·0

  North Yorkshire

  27·0

  5,547·5

  0·5

  Northamptonshire

  48·0

  5,235·9

  0·9

  Northumberland

  4·3

  2,684·3

  0·2

  Nottinghamshire

  12·7

  8,702·1

  0·1

  Oxfordshire

  15·1

  4,102·8

  0·4

  Shropshire

  16·6

  3,594·8

  0·5

  Somerset

  5·1

  3,378·7

  0·2

  Staffordshire

  41·8

  8,745·8

  0·5

  Suffolk

  23·9

  4,928·7

  0·5

  Surrey

  14·9

  6,946·2

  0·2

  Warwickshire

  16·8

  4,084·8

  0·4

  West Sussex

  16·4

  4,817·1

  0·3

  Wiltshire

  9·8

  4,370·8

  0·2

  England

  2,270·4

  401,506·6

  0·6

  Clwyd

  12·6

  3,547·6

  0·4

  Dyfed

  10·4

  3,248·2

  0·3

  Gwent

  4·2

  4,038·2

  0·1

  Gwynedd

  1·0

  2,295·0

  0·0

  Mid-Glamorgan

  6·8

  5,449·0

  0·1

  Powys

  13·0

  1,203·2

  1·1

  South Glamorgan

  8·2

  3,454·6

  0·2

  West Glamorgan

  5·0

  3,440·2

  0·1

  Wales

  61·2

  26,676·0

  0·2

  England and Wales

  2,331·6

  428,182·6

  0·5

  Table 2

  Full-time qualified teachers in maintained nursery, primary and secondary schools by graduate status and teacher training—March 1986

  Numbers

  Percentages Trained1

  Trained1

  Untrained1

  Trained1

  Untrained1

  Graduates

  Non-graduates

  Graduates

  Non-graduates

  Graduates

  Non-graduates

  Graduates

  Non-graduates

  Total

  Barking

  638

  587

  68

  27

  1,320

  48·3

  44·5

  5·2

  2·0

  Barnet

  1,123

  858

  192

  88

  2,261

  49·7

  37·9

  8·5

  3·9

  Bexley

  738

  795

  82

  47

  1,662

  44·4

  47·8

  4·9

  2·8

  Brent

  1,083

  1,058

  241

  99

  2,481

  43·7

  42·6

  9·7

  4·0

  Bromley

  911

  883

  117

  47

  1,958

  46·5

  45·1

  6·0

  2·4

  Croydon

  931

  1,164

  130

  58

  2,283

  40·8

  51·0

  5·7

  2·5

  Ealing

  967

  909

  173

  59

  2,108

  45·9

  43·1

  8·2

  2·8

  Enfield

  994

  814

  122

  44

  1,974

  50·4

  41·2

  6·2

  2·2

  Haringey

  809

  747

  149

  51

  1,756

  46·1

  42·5

  8·5

  2·9

  Harrow

  676

  616

  102

  35

  1,429

  47·3

  43·1

  7·1

  2·4

  Havering

  924

  905

  131

  43

  2,003

  46·1

  45·2

  6·5

  2·1

  Hillingdon

  790

  725

  74

  26

  1,615

  48·9

  44·9

  4·6

  1·6

  Hounslow

  865

  732

  74

  44

  1,715

  50·4

  42·7

  4·3

  2·6

  Kingston

  474

  400

  47

  13

  934

  50·7

  42·8

  5·0

  1·4

  Merton

  570

  490

  63

  29

  1,152

  49·5

  42·5

  5·5

  2·5

  Newham

  991

  778

  121

  49

  1,939

  51·1

  40·1

  6·2

  2·5

  Redbridge

  747

  670

  102

  43

  1,562

  47·8

  42·9

  6·5

  2·8

  Richmond

  450

  349

  27

  15

  841

  53·5

  41·5

  3·2

  1·8

  Sutton

  520

  457

  68

  23

  1,068

  48·7

  42·8

  6·4

  2·2

  Waltham Forest

  850

  854

  121

  30

  1,855

  45·8

  46·0

  6·5

  1·6

  ILEA

  8,544

  7,809

  1,569

  658

  18,580

  46·0

  42·0

  8·4

  3·5

  Birmingham

  3,615

  4,932

  488

  150

  9,185

  39·4

  53·7

  5·3

  1·6

  Coventry

  1,156

  1,378

  138

  52

  2,724

  42·4

  50·6

  5·1

  1·9

  Dudley

  999

  1,432

  103

  36

  2,570

  38·9

  55·7

  4·0

  1·4

  Sandwell

  1,097

  1,625

  114

  52

  2,888

  38·0

  56·3

  3·9

  1·8

  Solihull

  756

  923

  83

  20

  1,782

  42·4

  51·8

  4·7

  1·1

  182 183

  Numbers

  Percentages Trained1

  Trained1

  Untrained1

  Trained1

  Untrained1

  Graduates

  Non-graduates

  Graduates

  Non-graduates

  Graduates

  Non-graduates

  Graduates

  Non-graduates

  Total

  Walsall

  1,194

  1,364

  135

  36

  2,729

  43·8

  50·0

  4·9

  1·3

  Wolverhampton

  1,036

  1,393

  123

  40

  2,592

  40·0

  53·7

  4·7

  1·5

  Knowsley

  665

  960

  63

  27

  1,715

  38·8

  56·0

  3·7

  1·6

  Liverpool

  1,546

  2,723

  199

  93

  4,561

  33·9

  59·7

  4·4

  2·0

  St· Helens

  740

  962

  63

  25

  1,790

  41·3

  53·7

  3·5

  1·4

  Sefton

  918

  1,288

  112

  43

  2,361

  38·9

  54·6

  4·7

  1·8

  Wirral

  1,085

  1,423

  117

  43

  2,668

  40·7

  53·3

  4·4

  1·6

  Bolton

  917

  1,322

  106

  35

  2,380

  38·5

  55·5

  4·5

  1·5

  Bury

  622

  744

  77

  24

  1,467

  42·4

  50·7

  5·2

  1·6

  Manchester

  1,839

  2,090

  220

  114

  4,263

  43·1

  49·0

  5·2

  2·7

  Oldham

  848

  1,098

  69

  28

  2,043

  41·5

  53·7

  3·4

  1·4

  Rochdale

  881

  1,117

  67

  38

  2,103

  41·9

  53·1

  3·2

  1·8

  Salford

  966

  1,106

  89

  43

  2,204

  43·8

  50·2

  4·0

  2·0

  Stockport

  979

  1,232

  101

  31

  2,343

  41·8

  52·6

  4·3

  1·3

  Tameside

  736

  1,021

  60

  24

  1,841

  40·0

  55·5

  3·3

  1·3

  Trafford

  548

  882

  75

  27

  1,532

  35·8

  57·6

  4·9

  1·8

  Wigan

  1,212

  1,744

  136

  43

  3,135

  38·7

  55·6

  4·3

  1·4

  Barnsley

  699

  1,275

  61

  19

  2,054

  34·0

  62·1

  3·0

  0·9

  Doncaster

  913

  1,620

  65

  30

  2,628

  34·7

  61·6

  2·5

  1·1

  Rotherham

  970

  1,345

  70

  27

  2,412

  40·2

  55·8

  2·9

  1·1

  Sheffield

  1,904

  2,326

  142

  53

  4,425

  43·0

  52·6

  3·2

  1·2

  Bradford

  1,883

  2,435

  174

  31

  4,523

  41·6

  53·8

  3·8

  0·7

  Calderdale

  669

  1,016

  71

  31

  1,787

  37·4

  56·9

  4·0

  1·7

  Kirklees

  1,277

  1,946

  128

  45

  3,396

  37·6

  57·3

  3·8

  1·3

  Leeds

  2,630

  3,159

  207

  49

  6,045

  43·5

  52·3

  3·4

  0·8

  Wakefield

  910

  1,760

  84

  28

  2,782

  32·7

  63·3

  3·0

  1·0

  Gateshead

  562

  1,138

  44

  18

  1,762

  31·9

  64·6

  2·5

  1·0

  Newcastle

  970

  1,352

  72

  16

  2,410

  40·2

  56·1

  3·0

  0·7

  North Tyneside

  873

  998

  44

  11

  1,926

  45·3

  51·8

  2·3

  0·6

  South Tyneside

  523

  949

  25

  16

  1,513

  34·6

  62·7

  1·7

  1·1

  Sunderland

  1,000

  1,713

  62

  25

  2,800

  35·7

  61·2

  2·2

  0·9

  Avon

  3,064

  3,282

  215

  60

  6,621

  46·3

  49·6

  3·2

  0·9

  Bedfordshire

  1,524

  2,416

  226

  83

  4,249

  35·9

  56·9

  5·3

  2·0

  Berkshire

  2,579

  2,512

  275

  65

  5,431

  47·5

  46·3

  5·1

  1·2

  Buckinghamshire

  2,071

  2,380

  241

  74

  4,766

  43·5

  49·9

  5·1

  1·6

  Cambridgeshire

  2,124

  2,431

  204

  78

  4,837

  43·9

  50·3

  4·2

  1·6

  Cheshire

  3,223

  4,158

  311

  62

  7,754

  41·6

  53·6

  4·0

  0·8

  Cleveland

  1,616

  3,308

  244

  77

  5,245

  30·8

  63·1

  4·7

  1·5

  Cornwall

  1,313

  1,919

  127

  41

  3,400

  38·6

  56·4

  3·7

  1·2

  Cumbria

  1,538

  2,286

  159

  51

  4,034

  38·1

  56·7

  3·9

  1·3

  Derbyshire

  3,357

  3,779

  270

  97

  7,503

  44·7

  50·4

  3·6

  1·3

  Devon

  2,722

  3,441

  235

  69

  6,467

  42·1

  53·2

  3·6

  1·1

  Dorset

  1,744

  2,156

  151

  54

  4,105

  42·5

  52·5

  3·7

  1·3

  Durham

  1,521

  3,341

  130

  40

  5,032

  30·2

  66·4

  2·6

  0·8

  East Sussex

  2,004

  1,813

  168

  48

  4,033

  49·7

  45·0

  4·2

  1·2

  Essex

  4,466

  5,968

  637

  212

  11,283

  39·6

  52·9

  5·6

  1·9

  Gloucestershire

  1,611

  1,952

  154

  47

  3,764

  42·8

  51·9

  4·1

  1·2

  Hampshire

  4,310

  5,726

  418

  152

  10,606

  40·6

  54·0

  3·9

  1·4

  Hereford and Worcestershire

  2,169

  2,727

  174

  56

  5,126

  42·3

  53·2

  3·4

  1·1

  Hertfordshire

  3,316

  3,756

  443

  114

  7,629

  43·5

  49·2

  5·8

  1·5

  Humberside

  3,063

  4,211

  306

  96

  7,676

  39·9

  54·9

  4·0

  1·3

  Isle of Wight

  354

  430

  36

  15

  835

  42·4

  51·5

  4·3

  1·8

  Kent

  4,242

  5,973

  621

  272

  11,108

  38·2

  53·8

  5·6

  2·4

  Lancashire

  4,284

  6,008

  352

  133

  10,777

  39·8

  55·7

  3·3

  1·2

  Leicestershire

  3,480

  3,691

  269

  107

  7,547

  46·1

  48·9

  3·6

  1·4

  Lincolnshire

  1,504

  2,409

  180

  59

  4,152

  36·2

  58·0

  4·3

  1·4

  Norfolk

  2,072

  3,018

  196

  64

  5,350

  38·7

  56·4

  3·7

  1·2

  North Yorkshire

  2,137

  2,801

  212

  47

  5,197

  41·1

  53·9

  4·1

  0·9

  Northampton

  2,302

  2,583

  200

  62

  5,147

  44·7

  50·2

  3·9

  1·2

  Northumberland

  938

  1,577

  76

  23

  2,614

  35·9

  60·3

  2·9

  0·9

  Nottinghamshire

  3,906

  4,319

  266

  102

  8,593

  45·5

  50·3

  3·1

  1·2

  Oxfordshire

  1,778

  1,908

  171

  48

  3,905

  45·5

  48·9

  4·4

  1·2

  Shropshire

  1,298

  1,931

  120

  37

  3,386

  38·3

  57·0

  3·5

  1·1

  Somerset

  1,394

  1,639

  99

  26

  3,158

  44·1

  51·9

  3·1

  0·8

  Staffordshire

  3,281

  4,864

  290

  161

  8,596

  38·2

  56·6

  3·4

  1·9

  Suffolk

  2,062

  2,489

  164

  78

  4,793

  43·0

  51·9

  3·4

  1·6

  Surrey

  2,501

  3,313

  334

  122

  6,270

  39·9

  52·8

  5·3

  1·9

  Warwickshire

  1,491

  1,973

  157

  41

  3,662

  40·7

  53·9

  4·3

  1·1

  West Sussex

  2,146

  2,084

  191

  62

  4,483

  47·9

  46·5

  4·3

  1·4

  Wiltshire

  1,743

  2,081

  127

  29

  3,980

  43·8

  52·3

  3·2

  0·7

  England

  156,981

  197,044

  16,909

  6,015

  376,949

  41·6

  52·3

  4·5

  1·6

  184 185

  Numbers

  Percentages Trained1

  Trained1

  Untrained1

  Trained1

  Untrained1

  Graduates

  Non-graduates

  Graduates

  Non-graduates

  Graduates

  Non-graduates

  Graduates

  Non-graduates

  Total

  Clwyd

  1,511

  1,812

  112

  23

  3,458

  43·7

  52·4

  3·2

  0·7

  Dyfed

  1,209

  1,775

  121

  18

  3,123

  38·7

  56·8

  3·9

  0·6

  Gwent

  1,639

  2,214

  136

  50

  4,039

  40·6

  54·8

  3·4

  1·2

  Gwynedd

  941

  1,214

  74

  14

  2,243

  42·0

  54·1

  3·3

  0·6

  Mid Glamorgan

  1,964

  3,061

  225

  33

  5,283

  37·2

  57·9

  4·3

  0·6

  Powys

  455

  619

  48

  9

  1,131

  40·2

  54·7

  4·2

  0·8

  South Glamorgan

  1,466

  1,616

  149

  19

  3,250

  45·1

  49·7

  4·6

  0·6

  West Glamorgan

  1,348

  1,921

  103

  15

  3,387

  39·8

  56·7

  3·0

  0·4

  Wales

  10,533

  14,232

  968

  181

  25,914

  40·6

  54·9

  3·7

  0·7

  England and Wales

  167,514

  211,276

  17,877

  6,196

  402,863

  41·6

  52·4

  4·4

  1·5

  1 Trained teachers are those who have completed a course of initial teacher training in the United Kingdom. Untrained teachers may therefore include some trained outside the United Kingdom.

  Table 3: Instructors and student teachers in maintained nursery, primary and secondary schools—January 1974

  Instructors and student teachers1

  All teachers and instructors1

  Instructors and student teachers as a percentage of all teachers and instructors

  England

  3,572·8

  406,522·8

  0·9

  Wales

  101·0

  26,984·8

  0·4

  England and Wales

  3,673·8

  433,507·6

  0·8

  1 Full-time equivalents·

  Table 4: Full-time qualified teachers in maintained nursery, primary and secondary schools by graduate status and teacher training—March 1974

  Numbers

  Percentages Trained1

  Trained1

  Untrained1

  Trained1

  Untrained1

  Graduates

  Non-graduates

  Graduates

  Non-graduates

  Total

  Graduates

  Non-graduates

  Graduates

  Non-graduates

  England

  69,796

  275,722

  21,268

  13,022

  379,808

  18·4

  72·6

  5·6

  3·4

  Wales

  5,691

  18,566

  1,135

  517

  25,909

  22·0

  71·7

  4·4

  2·0

  England and Wales

  75,487

  294,288

  22,403

  13,539

  405,717

  18·6

  72·5

  5·5

  3·2

  1 Trained teachers are those who have completed a course of initial teacher training in the United Kingdom. Untrained teachers may therefore include some trained outside the United Kingdom.

TRANSPORT

  Nuclear Materials
  Dr. Thomas
  To ask the Secretary of State for Transport whether the Council of Transport Ministers has received any report from the German Transport Minister, since January 1988, on irregularities discovered in the transfrontier transport of nuclear materials between the Federal Republic and Belgium.

  Mr. Bottomley
  We are not aware of such a report.

  London Underground Ltd.
  Mr. Spearing
  To ask the Secretary of State for Transport if he will place in the Library documents or publications produced by London Underground Ltd. or its predecessors which set out the terms of employment and related matters now in dispute together with its proposals, or decisions in respect of future changes to them and a description of relevant negotiations; and if he will make a statement.
  186
  Mr. Portillo
  This is a management matter for London Underground Limited.

  Air Travel Organisers
  Mr. Prescott
  To ask the Secretary of State for Transport how many prosecutions were initiated by the Civil Aviation Authority in 1988 against unlicensed persons offering accommodation on charter flights from the United Kingdom in breach of the air travel organisers licensing system; how many were successful; and what was the average penalty or fine imposed for(a) first offence and (b) repeated offence.

  Mr. Channon
  This is a matter for the Civil Aviation Authority. I shall ask the chairman to write to the hon. Member.

  Mr. Prescott
  To ask the Secretary of State for Transport if he has discussed the policing of the air travel organisers licensing system with the Civil Aviation Authority; and if he has any plans to ensure the tougher enforcement of the air travel organisers licensing regulations 1972.
  187
  Mr. Channon
  The operation of these regulations is a matter for the Civil Aviation Authority, which has, I understand, been increasing the resources devoted to enforcing them over the last two years.

  Automatic Ticket
  Mr. Cohen
  To ask the Secretary of State for Transport whether he will introduce legislation to prevent the computing type functions that currently check tickets and control the gates of automatic ticket machines from being developed to monitor the movements of individuals through the use of personal details recorded on the magnetic strip found on the reverse side of season tickets; and if he will make a statement.

  Mr. Portillo
  The matter of compliance with or enforcement of the Data Protection Act is a matter for the Data Protection Registrar.

  Mr. Cohen
  To ask the Secretary of State for Transport what information he has in relation to the instructions given to London Underground staff when congestion occurs at exit points controlled by automatic ticket

  Irradiated fuel exported

  Natural exported

  UF6 imported

  Enriched exported

  UF6 imported

  Fresh fuel exported

  1978

  —

  91

  —

  —

  —

  —

  1979

  —

  180

  —

  —

  —

  3

  1980

  —

  236

  —

  —

  34

  1

  1981

  2

  285

  —

  —

  31

  2

  1982

  3

  575

  —

  —

  19

  2

  1983

  5

  859

  —

  10

  35

  —

  1984

  1

  968

  528

  30

  19

  —

  1985

  2

  260

  960

  44

  17

  2

  1986

  3

  116

  —

  74

  19

  2

  1987

  2

  1,066

  —

  152

  —

  2

  1988

  0·6

  740

  156

  —

  17

  —

  All movements to and from the ports were by road except irradiated fuel which travelled by rail.

  Transatlantic Flights
  Mr. Alfred Morris
  To ask the Secretary of State for Transport what discussion he has had with the United States Transportation Secretary at his meeting last week about new transatlantic flights out of Manchester airport; what was the outcome; and if he will make a statement.

  Mr. Peter Bottomley
  My right hon. Friend stressed that Her Majesty's Government are anxious to make progress on negotiations over traffic rights between United States cities and Manchester; we are prepared to do any size of mutually beneficial deal. The Transportation Secretary promised that his Department and the State Department would now prepare themselves for another round of negotiations.

  Traffic Surveys (London)
  Mr. Gale
  To ask the Secretary of State for Transport (1) if he will detail the objectives of his Department's central London traffic surveys;

  (2) what will be the estimated cost of his Department's central London traffic surveys.

  Mr. Peter Bottomley
  Statistical surveys of traffic are undertaken on a regular basis in London in order to 188
  machines during peak periods, and as to whether staff are instructed to open the gates of the machines to relieve congestion.

  Mr. Portillo
  Station staff have strict instructions to open the gates if there is any threat to safety from congestion building up behind them.

  Radioactive Material
  Mr. Redmond
  To ask the Secretary of State for Transport if he will list by year for the last 10 years how many tonnes of radioactive material was imported via each of the Humber ports; how many tonnes were exported through these ports; what method of transport was used to transport the material to and from the ports; and if he will make a statement on the future plans for transporting radioactive waste through the Humber ports.

  Mr. Portillo
  The Department does not collect this information on a routine basis, but I am advised that the following shipments (in tonnes) were made through Immingham/Hull:

  monitor trends in average flows and speeds. Full details are given in the Department's "Statistical Bulletin (88) 39" which is available in the Library. The costs of these surveys are not recorded separately for the central London area, but for London as a whole the total cost for the two-year period to March 1989 was £370,000.

  In addition, statistical surveys are carried out for the development of proposals for road improvements. The Department carried out surveys for this purpose last month on the A13 trunk road in the London boroughs of Tower Hamlets and Newham. The estimated cost of these surveys is £200,000.

  Vehicles
  Mr. Henderson
  To ask the Secretary of State for Transport how many vehicles, and of what value, were purchased by(a) his Department, (b) British Rail and (c) other public sector agencies for which he is responsible in 1988; and how many of these vehicles were British made within the definition of British as set out by the Department of Trade and Industry in its arrangement on content with the European Community.

  Mr. Peter Bottomley
  [holding answer 17 April 1989]: The Department of Transport purchased 24 new vehicles in 1988—mostly for research or other specialist use—at a cost of £737,472. Eleven of these vehicles were United Kingdom-produced, on the definition employed by the DTI for statistical purposes, under which a vehicle is

  189
  classified as United Kingdom-produced if the United Kingdom content exceeds 50 per cent. of the ex-works value. These figures do not include second-hand cars used for impact studies, which are purchased at minimum cost.

  Details of vehicles purchased by British Rail or other sponsored bodies are not available within the Department.

FOREIGN AND COMMONWEALTH AFFAIRS

  Rain Forests
  Mr. Dalyell
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will seek to have rain forest issues and policy on the financing of nuclear power stations included on the agenda of the next meeting of the World Bank.

  Mr. Chris Patten
  The development committee of the IMF/IBRD has already agreed to discuss environmental issues at its next meeting in September. Meanwhile, the World Bank is intensifying its work on these issues, including its role in the tropical forestry action plan.

  The role of nuclear power is considered within the energy development plans of a few IBRD borrowing countries but its cost, high technology and demand on scarce human resources make it generally inappropriate at present for the vast majority of developing countries.

  Third-world Debt
  Mr. Jack
  To ask the Secretary of State for Foreign and Commonwealth Affairs at what conferences dealing with Third-world debt reduction his Department has been represented in 1988 and 1989.

  Mrs. Chalker
  The FCO has been represented at international conferences which discussed debt reduction at UNCTAD in September 1988, the IMF and IBRD annual meetings in Berlin in September 1988 and the spring meetings of the IMF and IBRD in April this year. It has also been represented at a variety of meetings organised by research, academic and private sector groups.

  Southern Africa
  Mr. John Evans
  To ask the Secretary of State for Foreign and Commonwealth Affairs, what representations his Department has received from international bodies in relation to a possible role for Britain in finding solutions to the problems of southern Africa.

  Mrs. Chalker
  None.

  South Africa
  Dr. Thomas
  To ask the Secretary of State for Foreign and Commonwealth Affairs if, during the recent visit of the Foreign Minister of the Republic of South Africa, he discussed the prospects of South Africa joining the nuclear non-proliferation treaty.

  Mr. Waldegrave
  Yes. My right hon. and learned Friend stressed the importance of South Africa joining the N PT as soon as possible.

  Ethiopia
  Mr. Faulds
  To ask the Secretary of State for Foreign and Commowealth Affairs whether Her Majesty's190
  Government have yet received the considered response from the Ethiopian Government on human rights concerns which they await.

  Mrs. Chalker
  No. We shall continue to press the Ethiopian Government on all human rights issues.

  Bophuthatswana
  Mr. Speller
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will recognise the state of Bophuthatswana as a self-governing country with a right of recognition similar to that of Swaziland.

  Mrs. Chalker
  No. Bophuthatswana is a homeland within the Republic of South Africa. Swaziland is an independent country.

  EC Directives
  Dr. Thomas
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many European Community directives have been implemented in each year since 1979.

  Mrs. Chalker
  I refer the hon. Gentleman to the reply given by my right hon. Friend the Lord President of the Council to my hon. Friend the Member for Leeds, North-West (Dr. Hampson) on 15 February, at col.203.

  Departmental Policy
  Dr. Thomas
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the successes of implementation of policy by Her Majesty's Government in foreign policy since May 1979.

  Mrs. Chalker
  I refer the hon. Member to my answer of 2 May, at col.34 to the question from the hon. Member for Newport, West (Mr. Flynn).

  Dr. Thomas
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the failures in his Department's policy implementation since May 1979.

  Mrs. Chalker
  I refer the hon. Member to the written answer of 28 April at col.710 of my right hon. Friend the Prime Minister to the question from the hon. Member for Newport, West (Mr. Flynn).

  China
  Mr. Harry Barnes
  To ask the Secretary of State for Foreign and Commonwealth Affairs what reports he has received from Her Majesty's Ambassador to the People's Republic of China on recent student and workers unrest; and if he will make a statement.

  Mr. Eggar
  We have received regular reports from Her Majesty's Ambassador in Peking on the recent unrest in China. We are continuing to follow developments closely.

  Palestine Liberation Organisation (World Health Organisation Status)
  Mr. Harry Barnes
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has received concerning the application by the Palestine Liberation Organisation for its observer status at the World Health Organisation to be turned into full membership; and if he will make a statement.
  191
  Mr. Eggar
  We are in close touch with a wide range of fellow members of the World Health Organisation, including European Community and western partners in Geneva.

  The 12 member states of the European Community have made their position clear in a formal note to the director general of the World Health Organisation. No member of the European Community has recognised the Palestine Liberation Organisation/Palestine as a state. Accordingly, we do not accept that the Palestine Liberation Organisation satisfies the criteria for membership of the World Health Organisation.

  We have also strongly advised the Palestine Liberation Organisation not to pursue its application.

  Death Penalty
  Mr. Harry Barnes
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has received from Amnesty International concerning the death penalty overseas; and if he will make a statement.

  Mr. Eggar
  We have on a number of occasions received representations from Amnesty International concerning particular cases involving the death penalty in various countries. We have recently received copies of Amnesty's new report on the death penalty worldwide. We are studying its contents carefully.

  Turkey
  Mr. Harry Barnes
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has received concerning Turkey's entry to the European Economic Community; and if he will make a statement.

  Mr. Eggar
  We have received a number of representations concerning Turkey's application to join the European Community. The application is currently being studied by the Commission. Once its opinion is available, the Council of Ministers will consider the application further. We shall take all relevant factors into consideration when assessing the application in the Council.

  International Monetary Fund
  Mrs. Ann Winterton
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement explaining the criteria upon which he bases his decision whether or not to support an individual country's application to join the International Monetary Fund.

  Mr. Eggar
  Membership of the International Monetary Fund is open to every state that is prepared to fulfil the obligations of membership contained in the International Monetary Fund's articles of agreement (a copy of which is in the Library). That is the criterion on which we base our decision.

  Mrs. Ann Winterton
  To ask the Secretary of State for Foreign and Commonwealth Affairs (1) whether he has been notified of any formal application submitted by the Angolan MPLA regime to join the International Monetary Fund; and if he will make a statement;

  (2) what recent representations have been made to him by the MPLA regime of Angola concerning any application which it may be making to the International Monetary Fund;
  192
  (3) whether it is his policy to establish pre-conditions before supporting the acceptance by the International Monetary Fund of any application for membership made by the MPLA-PT regime of Angola; and if he will make a statement;

  (4) whether he has any information about the likely date upon which any final decision may be reached by the International Monetary Fund upon any application for membership which it is currently considering from the Angolan MPLA regime;

  (5) whether it is his policy to have discussions with the United States of America concerning any application for membership which may be made to the International Monetary Fund by the Angolan MPLA regime; and whether he has any information concerning United States' policy towards any such application.

  Mr. Eggar
  Angola formally applied to join the International Monetary Fund in October 1987. We have told the Angolan Government that we support their application in principle and consider that it should be dealt with on it technical merits. We understand that the IMF executive board is likely to make a decision on the application in the next few months. United States' policy is a matter for the United States Government but they are well aware of our view that Angola's attempts to improve its relations with the West should be encouraged. We will be restating this at the meeting of the membership sub-committee currently considering Angola's application for membership.

WALES

  Bathing Water
  Mr. Gareth Wardell
  To ask the Secretary of State for Wales, if he will publish in the Official Report the estimated cost for each of (a) Tenby north, (b) Abersoch, (c) Llandudno west shore of (i) a long sea outfall, (ii) full sewerage treatment works with a short sea outfall and (iii) full sewerage treatment works with a long sea outfall to enable them to comply with European Economic Community bathing water directive 76/160/EEC; and when the appropriate solution will be put in place, giving the estimated date of commencement and completion.

  Mr. Grist
  The authority is currently reviewing its programme of remedial works, which aims to achieve compliance of all listed waters. The full cost of the programme has yet to be evaluated.

  General Practitioners
  Mr. Nicholas Bennett
  To ask the Secretary of State for Wales (1) how many general practitioners worked for the National Health Service in(a) Wales and (b) Pembrokeshire in each year since 1959;

  (2) what was the average number of people registered with each National Health Service general practitioner in each year since 1959 in (a) Pembrokeshire and (b) Wales.

  Mr. Grist
  [holding answer 3 May 1989]: The available information is given in the following table:

  193

  Number of unrestricted principals at 1 October

  Average list size

  Pembrokeshire

  Pembrokeshire

  Executive Committee

  Wales

  Executive Committee

  Wales

  19591

  n/a

  1,264

  n/a

  2,045

  19601

  n/a

  1,271

  n/a

  2,047

  1961

  51

  1,270

  n/a

  2,067

  1962

  n/a

  1,281

  n/a

  2,061

  1963

  45

  1,270

  n/a

  2,093

  1964

  48

  1,254

  n/a

  2,136

  1965

  45

  1,230

  n/a

  2,192

  1966

  45

  1,220

  n/a

  2,219

  1967

  44

  1,220

  n/a

  2,229

  1968

  45

  1,225

  n/a

  2,231

  1969

  48

  1,232

  2,068

  2,232

  1970

  48

  1,258

  2,069

  2,192

  1971

  48

  1,259

  2,048

  2,203

  1972

  52

  1,269

  1,908

  2,198

  1973

  52

  1,269

  1,940

  2,207

  1 As at 1 July.

  Dyfed Family1Practitioner Committee

  Wales

  Dyfed Family1 Practitioner Committee

  Wales

  1974

  160

  1,291

  2,051

  2,189

  1975

  162

  1,290

  2,028

  2,193

  1976

  161

  1,286

  2,063

  2,199

  1977

  161

  1,304

  2,062

  2,175

  1978

  163

  1,323

  2,019

  2,302

  1979

  166

  1,339

  2,019

  2,277

  1980

  169

  1,372

  2,000

  2,086

  1981

  172

  1,397

  1,958

  2,057

  1982

  180

  1,431

  1,885

  2,013

  1983

  182

  1,465

  1,864

  1,975

  1984

  188

  1,492

  1,811

  1,946

  1985

  194

  1,523

  1,770

  1,914

  1986

  197

  1,549

  1,750

  1,881

  1987

  205

  1,587

  1,699

  1,849

  1 Family practitioner committees took over from executive councils in 1974. Figures are no longer available centrally for Pembrokeshire, but are subsumed in the Dyfed family practitioner committee total.

AGRICULTURE, FISHERIES AND FOOD

  Research Institutes
  Mr. Cousins
  To ask the Minister of Agriculture, Fisheries and Food if he will list by standard region the research institutes operated for or on behalf of his Department and the total employment thereat; if he will give for each region the total number of such institutes and the employment therein; and if he will express the regional totals as a percentage of the national totals.

  Mr. Donald Thompson
  The information requested is as follows. In addition, my Department also commissions research with the Agricultural and Food Research Council and universities, which are the responsibilities of the Department of Education and Science, food research associations and others.

  Number of staff

  Regional totals1

  Northern

  Experimental Husbandry Farm:

  151/2

  —

  Redesdale

  Veterinary Investigation Centre:

  Newcastle

  14

  Penrith

  14

  194

  Number of staff

  Regional totals1

  Directorate of Fisheries research:

  3

  —

  Fisheries Radiobiological

  Laboratory, Whitehaven

  Total staff

  46½

  2

  Number of Units

  4

  7

  North West

  Veterinary Investigation Centre:

  15

  —

  Barton Hall

  Total staff

  15

  1

  Number of Units

  1

  2

  Yorkshire and Humberside

  Experimental Husbandry Farm: High Mowthorpe

  26½

  —

  Experimental Horticulture Station:

  57½

  —

  Stockbridge House

  Veterinary Investigation Centre: Thirsk

  13½

  —

  Total staff

  97½

  4

  Number of Units

  3

  5

  East Midlands

  Expeerimental Husbandry Farm:

  43½

  —

  Gleadthorpe

  Exprimental Horticulture Station:

  29

  —

  Kirton

  Veterinary Investigation Centre:

  Lincoln

  18

  —

  Sutton Bonington

  15

  —

  Total staff

  105½

  5

  Number of Units

  4

  7

  West Midlands

  Experimental Husbandry Farm:

  Drayton

  21½

  —

  Rosemaund

  25

  —

  Experimental Horticulture Station:

  47

  —

  Luddington

  Experimental Unit: Feed Evaluation Unit, Drayton

  8

  —

  Veterinary Investigation Centre:

  Shrewsbury

  16

  —

  Worcester

  20

  —

  Total Staff

  137½

  6

  Number of Units

  6

  10

  East Anglia

  Experimental Husbandry Farm:

  Arthur Rickwood

  21

  —

  Boxworth

  16½

  —

  Terrington

  27½

  —

  Experimental Unit: Field Drainage

  17

  —

  Experimental Unit, Cambridge

  Veterinary Investigation Centre:

  Cambridge

  15

  —

  Norwich

  15

  —

  ADAS Central Science Laboratories:

  5

  —

  Norwich

  Food Science Laboratories: Norwich

  43½

  —

  Directorate of Fisheries Research, Lowestoft

  331½

  —

  Total staff

  492

  21

  Number of units

  9

  15

  South East

  Experimental Husbandry Farm:

  30

  —

  Bridgets

  Experimental Horticulture Station:

  National Fruit Trials

  28

  —

  Efford

  54

  —

  Mushroom unit: Littlehampton

  2

  —

  195

  Number of staff

  Regional totals1

  Experimental Unit: Farm Buildings

  4

  —

  Development Centre, Reading

  ADAS Central Science Laboratories:

  Harpenden

  105½

  —

  Slough

  131½

  —

  Tolworth

  40

  —

  Worplesdon

  29

  —

  Veterinary Investigation Centre:

  Winchester

  10

  —

  Reading

  15

  —

  Wye

  10

  —

  Central Veterinary Laboratory:

  498

  —

  Weybridge

  Central Veterinary Laboratory:

  32½

  —

  Farringdon/Shinfield Cattle

  Breeding Centre

  Food Science Laboratories: London

  14½

  —

  Directorate of Fisheries Research:

  43½

  —

  Fisheries Laboratory, Burnham

  Total staff

  1,047½

  46

  Number of units

  16

  28

  South West

  Experimental Husbandry Farm:

  19½

  —

  Liscombe

  Experimental Horticulture Station:

  38½

  —

  Rosewarne

  Sub-station: Isles of Scilly

  1

  —

  ADAS Central Science Laboratories:

  5

  —

  Woodchester Park

  Veterinary Investigation Centre:

  Langford

  18

  —

  Starcross

  14

  —

  Truro

  12

  —

  Directorate of Fisheries Research: Fish

  25

  —

  Disease Laboratory, Weymouth

  Total staff

  133

  6

  Number of units

  8

  14

  Wales

  Experimental Husbandry Farm:

  38

  —

  Pwllpeiran and Trawsgoed

  Veterinary Investigation Centre:

  Aberystwyth

  11

  —

  Bangor

  10

  —

  Carmarthen

  14

  —

  Directorate of Fisheries Research:

  19

  —

  Fisheries Experimental Station, Conwy

  Total staff

  92

  4

  Number of units

  5

  9

  Scotland

  Central Veterinary Laboratory:

  18

  —

  Lasswade

  Torry Research Station, Aberdeen

  112

  —

  Total staff

  130

  5

  Number of units

  2

  3

  1 As a percentage of national total.

  Bovine Spongiform Encephalopathy
  Mr. Ron Davies
  To ask the Minister of Agriculture, Fisheries and Food if he will list all the research being sponsored by his Department into bovine spongiform encephalopathy and other transmissable encephalopathies.

  Mr. Donald Thompson
  My Department currently funds research on BSE at its central veterinary laboratory at Weybridge which covers epidemiological studies,196
  clinico-pathology, transmission experiments using a number of animal species, chemical pathology, genetics and semen collection.

  The cost of this work in 1988–89 was £764,000.

NATIONAL FINANCE

  Inflation
  Mr. Ted Leadbitter
  To ask the Chancellor of the Exchequer what is his target rate of inflation for 12 months' time; and if he will make a statement.

  Mr. Lilley
  The FSBR forecast that the inflation rate as measured by the RPI would be down to 4½ per cent. by the second quarter of 1990.

  Mr. Ronnie Campbell
  To ask the Chancellor of the Exchequer if he will list the countries of the Group of Seven whose inflation rates, including an estimate of housing costs, are below that of Great Britain.

  Mr. Young
  To ask the Chancellor of the Exchequer if he will list the countries of the Group of Seven whose inflation rates, including an estimate of housing costs, are below that of Great Britain.

  Mr. Lilley
  Only Canada treats owner-occupier housing costs in its measure of consumer price inflation in a similar way to the UK. The overall inflation rate in Canada is currently below that in the UK.

  Mr. Skinner
  To ask the Chancellor of the Exchequer when he expects the level of inflation to come down; and if he will make a statement.

  Mr. Lilley
  The 1989 FSBR forecasts that inflation will be 5½ per cent. in the fourth quarter of 1989.

  Mr. McAllion
  To ask the Chancellor of the Exchequer, what is his target rate of inflation for April 1990; and if he will make a statement.

  Mr. Lilley
  The Government do not set specific short-term targets for the rate of inflation. Tight monetary policy will ensure that inflation moderates from its current level. My right Hon. Friend forecast in his Budget statement that the RPI inflation rate would be 5½ per cent. in the fourth quarter of 1989, and 4½ per cent. in the second quarter of 1990.

  Mr. Andrew Smith
  To ask the Chancellor of the Exchequer if he will list the countries of the EEC whose inflation rates, including an estimate of housing costs, are below that of Great Britain.

  Mr. Fatchett
  To ask the Chancellor of the Exchequer if he will list the countries of the EEC whose inflation rates, including an estimate of housing costs, are below that of Great Britain.

  Mr. Norman Hogg
  To ask the Chancellor of the Exchequer if he will list the countries of the EEC whose inflation rates, including an estimate of housing costs, are below that of Great Britain.

  Mr. Lilley
  Only Ireland treats owner-occupier housing costs in its measure of consumer price inflation in a similar way to the United Kingdom. The overall inflation rate in Ireland is currently below that in the United Kingdom.
  197
  Mr. Morley
  To ask the Chancellor of the Exchequer what is the current rate of inflation.

  Mr. Geoffrey Robinson
  To ask the Chancellor of the Exchequer what is the current rate of inflation.

  Mr. Lilley
  The all-items RPI inflation rate was 7·9 per cent. in March; the underlying rate (excluding mortgage interest payments) was 5·7 per cent.

  Group of Seven
  Mr. Iain Mills
  To ask the Chancellor of the Exchequer when he next intends to meet his counterparts in the Group of Seven; and what will be discussed.

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

  Mr. Yeo
  To ask the Chancellor of the Exchequer when he last met the Finance Ministers of the Group of Seven countries; and what subjects were discussed.

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

  Mr. Lilley
  I refer my hon. Friends to the answer I gave to my hon. Friend the Member for Beaconsfield (Mr. Smith) on 6 April, at column 259.

  Mr. Budgen
  To ask the Chancellor of the Exchequer when he next intends to meet his counterparts in the Group of Seven; and what will be discussed.

  Mr. Boswell
  To ask the Chancellor of the Exchequer when he next intends to meet his counterparts in the Group of Seven; and what will be discussed.

  Mr. Ian Taylor
  To ask the Chancellor of the Exchequer when he next intends to meet with his counterparts in the Group of Seven; and what matters are due to be discussed.

  Mr. Lilley
  I refer my hon. Friends to the reply my right hon. Friend the Chancellor of the Exchequer gave earlier today to my hon. Friend the Member for Meriden (Mr. Mills).

  Equal Opportunities Commission
  Mrs. Fyfe
  To ask the Chancellor of the Exchequer when he last met representatives from the Equal Opportunities Commission concerning the 1989 Budget; and what matters were discussed.

  Mr. Brooke
  My right hon. Friend has not met representatives of the Equal Opportunities Commission recently.

  National Debt
  Mr. Patnick
  To ask the Chancellor of the Exchequer what was the net repayment of debt by the Government in 1988–89.

  Mr. Brandon Bravo
  To ask the Chancellor of the Exchequer what is his latest estimate of the level of public sector debt repayment in the last year for which figures are available; and what this represented as a percentage of gross domestic product.

  Mr. Andy Stewart
  To ask the Chancellor of the Exchequer what is his latest estimate of the level of public 198
  sector debt repayment in the last year for which figures are available; and what this represented as a percentage of gross domestic product.

  Mr. Lilley
  The public sector debt repayment in 1988–89 is provisionally estimated at £14·3 billion, equivalent to 3 per cent. of GDP.

  Mr. David Shaw
  To ask the Chancellor of the Exchequer what is the estimated saving in interest payments as a result of the public sector debt repayment over the last two years.

  Mr. David Martin
  To ask the Chancellor of the Exchequer what is the estimated saving in interest payments as a result of the public sector debt repayment over the last two years.

  Mr. David Nicholson
  To ask the Chancellor of the Exchequer what is the estimated saving in interest payments as a result of the public sector debt repayment over the last two years.

  Mr. Lilley
  The total public sector debt repayment in 1987–88 and 1988–89 was £.17·8 billion. As my right hon. Friend the Chancellor of the Exchequer said in his Budget statement, this is expected to reduce net debt interest costs by over £1·5 billion a year.

  Mr. Soames
  To ask the Chancellor of the Exchequer how much of the national debt has been paid off since June 1987.

  Mr. Jack
  To ask the Chancellor of the Exchequer how much of the national debt has been paid off since June 1987.

  Mr. Roger King
  To ask the Chancellor of the Exchequer how much of the national debt has been paid off since June 1987.

  Mr. Lilley
  The public sector debt repayment totalled £19·7 billion between June 1987 and March 1989.

  Take-home Pay
  Dr. Blackburn
  To ask the Chancellor of the Exchequer what has been the increase in the real take-home pay of a man on average male earnings between 1978–79 and 1989–90.

  Mr. Lilley
  I refer my hon. Friend to the reply given earlier today by my right hon. Friend the Paymaster General to my hon. Friend the Member for Slough (Mr. Watts).

  Labour Statistics
  Mr. John Greenway
  To ask the Chancellor of the Exchequer what has been the fall in registered unemployment since June 1987.

  Mr. Bellingham
  To ask the Chancellor of the Exchequer what has been the fall in registered unemployment since June 1987.

  Mr. Major
  Unemployment in the United Kingdom has fallen by 939,000 since June 1987.

  Mr. Robert G. Hughes
  To ask the Chancellor of the Exchequer what has been the growth in total employment since June 1987.
  199
  Mr. Major
  Total employment in the United Kingdom has increased by 1,152,000 since June 1987.

  Productivity
  Mr. Hind
  To ask the Chancellor of the Exchequer what has been the annual average increase in productivity for the whole economy since 1980.

  Mr. Lilley
  Whole economy productivity has increased, on average, by 2·5 per cent. a year since 1980, faster than any other major industrialised country apart from Japan.

  Mr. Burns
  To ask the Chancellor of the Exchequer what has been the annual average increase in productivity for the whole economy since 1980.

  Mr. Major
  I refer my hon. Friend to the reply my hon. Friend the Economic Secretary gave earlier today to my hon. Friend the Member for Lancashire, West (Mr. Hind).

  Mr. Allen Stewart
  To ask the Chancellor of the Exchequer what has been the annual average increase in productivity for the whole economy since 1980.

  Mr. Patrick Thompson
  To ask the Chancellor of the Exchequer what has been the annual average increase in productivity for the whole economy since 1980.

  Mr. David Davis
  To ask the Chancellor of the Exchequer what has been the annual average increase in productivity for the whole economy since 1980.

  Mr. Major
  I refer my hon. Friends to the reply my hon. Friend the Economic Secretary gave earlier today to my hon. Friend the Member for Lancashire, West (Mr. Hind).

  Mr. Anthony Coombs
  To ask the Chancellor of the Exchequer what are the latest figures for the growth of manufacturing productivity in the economy.

  Mr. Major
  I refer my hon. Friend to the reply my right hon. Friend the Paymaster General gave earlier today to my hon. Friend the Member for Bexhill and Battle (Mr. Wardle).

  Child Poverty Action Group
  Mr. Graham
  To ask the Chancellor of the Exchequer when he last met representatives from the Child Poverty Action Group: and what matters were discussed.

  Mr. Brooke
  My right hon. Friend has not met representatives from the Child Poverty Action Group, although he has seen their Budget representation.

  Mr. Turner
  To ask the Chancellor of the Exchequer when he last met representatives from the Child Poverty Action Group; and what matters were discussed.

  Mr. Major
  I refer the hon. Member to the reply my right hon. Friend the Paymaster General gave earlier today to the hon. Member for Renfrew, West and Inverclyde (Mr. Graham).

  Company Profitability
  Mr. Moss
  To ask the Chancellor of the Exchequer what was the rise in the profitability of non-North sea industrial and commercial companies in the latest year for which figures are available.
  200
  Mr. Quentin Davies
  To ask the Chancellor of the Exchequer what was the rise in the profitability of non-North sea industrial and commercial companies in the latest year for which figures are available.

  Mr. Major
  The net real rate of return for non-North sea industrial and commercial companies was estimated in the Financial Statement and Budget Report to have risen in 1988 to almost 11 per cent., its highest level for over 20 years.

  Shareholders
  Mr. Cash
  To ask the Chancellor of the Exchequer what is his latest estimate of the total number of shareholders in the United Kingdom.

  Mr. Peter Brooke
  I refer my hon. Friend to the reply I gave earlier today to my hon. Friend the Member for Wyre (Mr. Mans).

  Mrs. Maureen Hicks
  To ask the Chancellor of the Exchequer what is his latest estimate of the total number of shareholders in the United Kingdom.

  Mr. Norman Lamont
  I refer my hon. Friend to the reply my right hon. Friend the Paymaster General gave earlier today to my hon. Friend the Member for Wyre (Mr. Mans).

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

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

  Mr. Major
  The 1989 Financial Statement and Budget Report gave a figure of 39½ per cent. for the ratio of general Government expenditure (excluding privatisation proceeds) to gross domestic product in 1988–89. The corresponding figure for 1982–83 was 46¾ per cent.

  Balance of Trade
  Mr. Cousins
  To ask the Chancellor of the Exchequer what is his latest estimate for the balance of trade in manufacturing for the current year.

  Mr. Major
  I refer the hon. Member to the reply I gave to the hon. Member for Middlesbrough (Mr. Bell) on 19 April, at column 168.

  Mr. Lewis
  To ask the Chancellor of the Exchequer what is his latest estimate for the balance of trade deficit in the current year.

  Mr. Galloway
  To ask the Chancellor of the Exchequer what is his latest estimate for the balance of trade deficit in the current year.

  Mr. McWilliam
  To ask the Chancellor of the Exchequer what is his latest estimate for the balance of trade deficit in 1989.

  Mr. Major
  I refer the hon. Members to the reply I gave to the hon. Member for Derbyshire, North-East (Mr. Barnes) on 19 April, at column 168.
  201
  Mr. Knox
  To ask the Chancellor of the Exchequer what effect current interest rates are having on the balance of trade.

  Mr. Major
  The current level of interest rates is designed to slow the growth of domestic demand. The effects of this tighter monetary policy are already apparent in, for example, recent figures for MO, retail sales and the housing market. In time, the current account deficit will also start to narrow.

  Mr. Hunter
  To ask the Chancellor of the Exchequer if he will make a further statement on the United Kingdom's current trade deficit.

  Mr. Major
  The present trade deficit has primarily reflected the strength of domestic demand, particularly investment. The Government responded appropriately by tightening monetary policy and the effects of this are already apparent—for example, in recent figures for MO, retail sales and the housing market. As the growth of domestic demand slows, so the monthly current account and trade deficits are expected to fall.

  Exchange Rate Policy
  Mr. Doran
  To ask the Chancellor of the Exchequer if he will make a statement on current exchange rate policy.

  Mr. McAvoy
  To ask the Chancellor of the Exchequer if he will make a statement on current exchange rate policy.

  Mr. Buckley
  To ask the Chancellor of the Exchequer if he will make a statement on current exchange rate policy.

  Mr. Peter Lilley
  My right hon. Friend set out the Government's policy in his Budget speech, at column 296.

  Interest Rates
  Mr. Eadie
  To ask the Chancellor of the Exchequer what recent representations he has received regarding the level of interest rates.

  Mr. Flynn
  To ask the Chancellor of the Exchequer what recent representations he has received regarding interest rates.

  Mr. Worthington
  To ask the Chancellor of the Exchequer what recent representations he has received regarding interest rates.

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

  Balance of Payments
  Mr. Fisher
  To ask the Chancellor of the Exchequer what recent representations he has received on his balance of payments forecast included in the current year's Budget statement.

  Dr. Moonie
  To ask the Chancellor of the Exchequer what recent representations he has received on his balance of payments forecast included in the 1989 Budget statement.

  Mr. Major
  None.

  Employee Share Ownership
  Mr. Knapman
  To ask the Chancellor of the Exchequer what representations he has received on the introduction of tax relief for employee share ownership.

  Dr. Twinn
  To ask the Chancellor of the Exchequer what representations he has received on the introduction of tax relief for employee share ownership.

  Mr. Norman Lamont
  Tax reliefs encouraging the spread of employee share ownership have been in operation for up to 10 years and have enjoyed great success. A wide variety of representations and suggestions on the subject have been made over this period and have contributed to the many improvements introduced in nine out of the last 10 Budgets, and notably in that presented seven weeks ago.

  Company Car Taxation
  Mr. Riddick
  To ask the Chancellor of the Exchequer how many representations he has received concerning the proposed increase in company car taxation; and if he will make a statement.

  Mr. Norman Lamont
  My right hon. Friend has received about 50 representations concerning the proposed increase in the car benefit scale charges announced in the Budget.

  International Monetary Fund and World Bank
  Mr. Malins
  To ask the Chancellor of the Exchequer when he last attended a meeting of the International Monetary Fund; and what was discussed.

  Mr. Wilshire
  To ask the Chancellor of the Exchequer when he last attended a meeting of the International Monetary Fund; and what was discussed.

  Mr. Lilley
  I refer my hon. Friend to the answer my right hon. Friend the Chancellor gave earlier today to the hon. Member for Bury, North (Mr. Burt).

  Mr. Illsley
  To ask the Chancellor of the Exchequer if he will make a statement on the spring meetings of the International Monetary Fund and the World Bank.

  Mr. Lilley
  A wide range of matters was discussed, as set out in the interim and development committee communiqués, copies of which have been placed in the Library.

  Mr. Tredinnick
  To ask the Chancellor of the Exchequer when he last attended a meeting of the World Bank; and what was discussed.

  Sir Michael McNair-Wilson
  To ask the Chancellor of the Exchequer when he last attended a meeting of the World Bank; and what was discussed.

  Mr. Lilley
  My right hon. Friend the Chancellor of the Exchequer met the president of the World Bank in London on 26 April and discussed a wide range of issues.

  EC (Economic and Monetary Union)
  Mr. Beith
  To ask the Chancellor of the Exchequer if he will make a statement about his response to the Delors committee report on economic and monetary union in the European Community.
  203
  Mr. Lilley
  I refer the hon. Member to the reply my right hon. Friend the Chancellor gave to my hon. Friend the Member for Dulwich (Mr. Bowden) on 21 April, at column 327, and to the exchange between my right hon. Friend the Leader of the House and my hon. Friend the Member for Warrington, South (Mr. Butler) on 18 April, at column 181.

  Pensioners
  Mr. Stevens
  To ask the Chancellor of the Exchequer what representations he has received on the abolition of the earnings rule for pensioners announced in his Budget.

  Mr. Greg Knight
  To ask the Chancellor of the Exchequer what representations he has received on the abolition of the earnings rule for retirement pensioners which he announced in his Budget.

  Mr. Hanley
  To ask the Chancellor of the Exchequer what representations he has received on the abolition of the earnings rule for pensioners which he announced in his Budget.

  Mr. Major
  The abolition of the pensioners earnings rule was widely welcomed by interested individuals and organisations. In particular, the director general of Help the Aged wrote to my right hon. Friend after the Budget statement to record his appreciation of this and other Budget measures to help pensioners.

  Mr. Foulkes
  To ask the Chancellor of the Exchequer when he next expects to meet representatives from retirement pensioners' groups; and what matters he expects to discuss.

  Mr. Ernie Ross
  To ask the Chancellor of the Exchequer when he next expects to meet representatives from pensioners' groups; and what matters he expects to discuss.

  Mr. Robert Hughes
  To ask the Chancellor of the Exchequer when he next expects to meet representatives from pensioners' groups.

  Mr. Major
  My right hon. Friend has no current plans to meet representatives from pensioners groups.

  Visible Imports and Exports
  Mr. Allan Roberts
  To ask the Chancellor of the Exchequer what is his latest estimate for visible imports and exports in the current year.

  Mr Barron
  To ask the Chancellor of the Exchequer what is his latest estimate for visible imports and exports in the current year.

  Mr. Sean Hughes
  To ask the Chancellor of the Exchequer what is his latest estimate for visible imports and exports in the current year.

  Mr. Major
  The Financial Statement and Budget Report for 1989–90 shows a forecast for the volume growth in both visible exports and visible imports in 1989 of 5½ per cent. Forecasts of the value of visible exports and imports in 1989 are not published.

  European Finance Ministers
  Mr. Aitken
  To ask the Chancellor of the Exchequer when he last attended a meeting of European Finance Ministers; and if he will make a statement.
  204
  Mr. Brooke
  I refer my hon. Friend to the reply my right hon. Friend the Chancellor gave to my hon. Friend the Member for Dulwich (Mr. Bowden) on 21 April 1989, at column 327.

  Small Business
  Mr. Haynes
  To ask the Chancellor of the Exchequer what is his estimate of the impact of interest rate rises since 1988 on small businesses.

  Mr. Jim Marshall
  To ask the Chancellor of the Exchequer what assessment he has made of the impact of interest rate rises since 1988 on small businesses.

  Mr. Martlew
  To ask the Chancellor of the Exchequer what is his estimate of the impact of interest rate rises since last year on small businesses.

  Mr. Peter Lilley
  I refer the hon. Members to the answer I gave earlier today to the hon. Member for Wallsend (Mr. Garrett).

  Child Care
  Mr. Matthew Taylor
  To ask the Chancellor of the Exchequer what representations he has received on the taxation of the use of child care facilities.

  Mr. Norman Lamont
  My right hon. Friend has received a number of representations on the taxation of the benefit to employees of subsidised workplace nursery facilities.

  Business Investment
  Mr. Gerald Howarth
  To ask the Chancellor of the Exchequer what are the latest figures for the growth of business investment in the economy.

  Mr. Major
  I refer my hon. Friend to the reply my right hon. Friend the Chancellor gave earlier today to my hon. Friend the Member for Scarborough (Sir M. Shaw).

  Contingency Reserve
  Mr. James Lamond
  To ask the Chancellor of the Exchequer what allocations from the contingency reserve he is currently considering.

  Mr. Major
  Additions to programmes from the 1989–90 reserve have been, and will continue to be, announced after they are agreed.

  Money Supply
  Mr. John Townend
  To ask the Chancellor of the Exchequer what is the latest figure for the increase of MO.

  Mr. Lilley
  In the year to March 1989 MO grew by 6·2 per cent. in seasonally adjusted terms. Of this rise, 6 per cent. occurred in the six months to September. Since then the increase has been only 0·2 per cent. Though the postal dispute in the autumn may have affected the figures to some extent, there has clearly been a marked slowdown.

  VAT
  Mr. Amess
  To ask the Chancellor of the Exchequer what is the estimated annual yield on value added tax levied on hospital radio broadcasting equipment.
  205
  Mr. Lilley
  I refer my hon. Friend to the reply I gave to the hon. Member for Derby, North (Mr. Knight) on 20 February, at column 479.

  Private Medical Treatment (Tax Relief)
  Mr. McFall
  To ask the Chancellor of the Exchequer what recent representations he has received concerning his proposal to offer private medical tax relief.

  Mr. Clelland
  To ask the Chancellor of the Exchequer what recent representations he has received concerning his proposal to offer private medical tax relief.

  Mr. Norman Lamont
  I refer the hon. Members to the reply my right hon. Friend the Chief Secretary gave to the hon. Member for Barnsley, West and Penistone (Mr. McKay) earlier today.

  Institute for International Economics
  Mr. Eastham
  To ask the Chancellor of the Exchequer when Treasury officials last met representatives from the Institute for International Economics; and what matters were discussed.

  Mr. Nigel Griffiths
  To ask the Chancellor of the Exchequer when Treasury officials last met representatives from the Institute for International Economics; and what matters were discussed.

  Mr. Corbyn
  To ask the Chancellor of the Exchequer when Treasury officials last met with representatives from the Institute for International Economics; and what matters were discussed.

  Mr. Major
  Treasury officials met three members of the institute on 13 April to discuss a number of international economic issues.

  Job Creation
  Sir Fergus Montgomery
  To ask the Chancellor of the Exchequer what has been the growth in total employment since June 1987.

  Mr. Major
  Total employment in the United Kingdom has increased by 1,152,000 since June 1987.

  Drink and Tobacco Duty
  Mr. Teddy Taylor
  To ask the Chancellor of the Exchequer what estimate he has made of the reduction in taxation revenue in the event of the proposals for harmonised duties on drink and tobacco, as proposed by the Commission, being implemented; and if he will make a statement.

  Mr. Lilley
  Given the very large changes in taxation that the Commission's proposals would require, any estimates are subject to wide margins of error. In addition, the Government have made it clear on numerous occasions that they do not consider tax approximation to be necessary for the completion of the internal market, and implementation of the Commission's proposals would require unanimous agreement of the member states. With those qualifications, the latest estimate of the revenue loss in a full year from adoption of the Commission's proposals on drink and tobacco is some £3·9 billion.

  National Insurance
  Mr. Summerson
  To ask the Chancellor of the Exchequer what representations he has received on the changes in employees' national insurance contributions announced in his Budget.

  Mr. Bright
  To ask the Chancellor of the Exchequer, what representations he has received on the changes in employees' national insurance contributions announced in his Budget.

  Mr. Lawson
  The reforms of national insurance contributions that I announced in my Budget have been widely welcomed.

  Personal Disposable Income
  Miss Widdecombe
  To ask the Chancellor of the Exchequer what has been the annual average rate of growth of real personal disposable income since 1983.

  Mr. Norman Lamont
  I refer my hon. Friend to the reply my right hon. Friend the Paymaster General gave earlier today to my hon. Friend the Member for Bournemouth, East (Mr. Atkinson).

  Business Expenses
  Mr. French
  To ask the Chancellor of the Exchequer when he last considered raising the figure at which employers have to declare to the Inland Revenue the salaries, benefits and business expenses of employees and directors.

  Mr. Norman Lamont
  I assume that my hon. Friend is referring to the return of expenses and benefits which employers are required to make for directors and employees earning at a rate of £8,500 a year or more. All aspects of the tax system are kept under review. But the Government have at no time sought to increase the £8,500 threshold at which employees pay tax on benefits in kind since in principle all employees should pay income tax on the whole of their earnings whether received in cash or in kind.

  Budget Forecast (Error)
  Dr. Bray
  To ask the Chancellor of the Exchequer to what he attributes the error in his forecast of the current balance for 1988, made in his 1988 "Financial Statement and Budget Report".

  Mr. Major
  As noted in this year's Financial Statement and Budget Report, the difference between the published estimate of the current balance for 1988 and the forecast for 1988 made in last year's FSBR mainly reflected the unexpected strength of domestic demand, particularly investment, combined with very high levels of capacity utilisation in some industries.

  Drug Smuggling
  Mr. David Evans
  To ask the Chancellor of the Exchequer what resources are now devoted by Her Majesty's customs to the prevention and detection of drug smuggling; what were the totals of class A and class B drugs seized in 1988; and what were the comparable figures for previous years.
  207
  Mr. Lilley
  From April 1986 to April 1988 the number of Customs officers mainly engaged in the prevention of drug smuggling rose from 2,958 to 3,565, an increase of 20·5 per cent. 412·3kg of class A drugs were seized by Customs in 1985–86, 269·5kg in 1986–87 and 706·8kg in 1987–88, an increase of 71 per cent. over the period. The corresponding figures for class B drugs were 21,744kg in 1985–86, 20,231kg in 1986–87 and 23,448kg in 1987–88; an increase of 8 per cent. over the two years.

  Third World Debt
  Ms. Abbott
  To ask the Chancellor of the Exchequer if he will make a statement on the latest Group of Seven initiative on Third world debt.

  Mr. Lilley
  The Finance Ministers of the Group of Seven discussed Third world debt in Washington on 2 April. A copy of the press statement is available in the Library of the House, together with a copy of my right hon. Friend the Chancellor of the Exchequer's remarks to the IMF interim committee on 3 April.

  Foreign Investment
  Mr. McLeish
  To ask the Chancellor of the Exchequer if he will estimate the net flows of foreign investment into the United Kingdom in the form of(a) long-term direct investment and (b) short-term banking flows.

  Mr. Cox
  To ask the Chancellor of the Exchequer if he will estimate the net flows of foreign investment into the United Kingdom in the form of(a) long-term direct investment and (b) short-term banking flows.

  Mr. Major
  The most recent information on flows of direct investment and banking inflows into the United Kingdom has been published by the CSO in the March edition of Economic Trends. However, it is not possible to distinguish between long-term and short-term flows.

  All-seater Football Grounds
  Mr. Allen
  To ask the Chancellor of the Exchequer if he will introduce a levy on the football pools to pay for major football grounds to install all-seating arrangements.

  Mr. Lilley
  Pools promoters make substantial payments, akin to a voluntary levy, to the Football Trust. The Government have no intention of introducing a statutory levy.

  Football Pools
  Sir John Farr
  To ask the Chancellor of the Exchequer what was the total amount(a) staked on football pools in each of the past three years and (b) paid to the Government in tax in each of the past three years.

  Mr. Lilley
  Following is the information:

  Pool Betting (£ million)

  Stakes

  Duty

  1986–87

  598·2

  254·2

  1987–88

  647·5

  275·2

  1988–89

  656·1

  278·9

  Reply Paid Envelopes
  Mr. Madden
  To ask the Chancellor of the Exchequer which Departments issue reply paid envelopes to those 208
  required to supply information by law to the Executive; and what changes in policy there have been since 1979 in the issuing of reply-paid envelopes.

  Mr. Brooke
  [holding answer 2 May 1989]: There is no central policy. It is for individual Departments to decide whether it is appropriate for the cost of replies to official correspondence to fall on the sender or the general taxpayer. Information on current departmental practice is not held centrally.

  Investment and Consumption
  Mr. Butler
  To ask the Chancellor of the Exchequer, what has been the rate of growth of(a) total investment and (b) total consumption over the past seven years.

  Mr. Major
  I refer my hon. Friend to the reply that I gave earlier today to my hon. Friend the Member for Canterbury (Mr. Brazier).

  Additionality
  Mr. Dalyell
  To ask the Chancellor of the Exchequer what is the policy of Her Majesty's Government in relation to the system of additionality, by which public bodies in the United Kingdom receiving EEC money have United Kingdom taxpayers' money commensurately deducted.

  Mr. Brooke
  [holding answer 3 May 1989]: Receipts from the European Community budget are taken into account each year when the United Kingdom's public expenditure plans are decided. This enables United Kingdom public spending programmes to be set and maintained at higher levels than would otherwise have been possible.

SCOTLAND

  Council House Sales
  Mr. Stern
  To ask the Secretary of State for Scotland if he will give details of the current monthly level of council house sales in Scotland.

  Lord James Douglas-Hamilton
  Information returned to the Scottish Development Department shows that between October and December 1988 Scottish local authorities sold an average of 2,200 dwellings a month. Figures of sales in the first quarter of 1989 are not yet available.

  Speech Therapists
  Mr Sillars
  To ask the Secretary of State for Scotland how many speech therapists are available for Scottish schools; and of these how many are employed(a) in Strathclyde and (b) in Glasgow.

  Mr. Michael Forsyth
  Information is not held centrally in the form requested.

  Mr. Sillars
  To ask the Secretary of State for Scotland if he will list the schools in Glasgow to which speech therapy services are provided, showing the number of pupils requiring this service in each school, the number of hours of service provided to each school and the average hours given to each pupil in need.

  Mr. Michael Forsyth
  This information is not held centrally.
  209
  Mr. Siliars
  To ask the Secretary of State for Scotland which authorities in Scotland have statutory responsibilities for supply of speech therapists to Scottish schools; what recent discussions he has had with them; and if he will make a statement on Government policy on this matter.

  Mr. Michael Forsyth
  Statutory responsibility rests with education authorities to secure the provision of speech therapy for children whose record of needs specifies that requirement. The service is almost exclusively provided by speech therapists employed by health boards. In February last year I met the Convention of Scottish Local Authorities to discuss therapy services, including speech therapy services, for school children, and in March I met the chairmen of health boards who undertook to review the provision of services in their areas. I have repeatedly encouraged joint assessment and planning of services and in November 1988 published a planning council report about planning effective speech therapy services.

  Charities
  Mr. Foulkes
  To ask the Secretary of State for Scotland when he expects to publish his conclusions on the responses to the consultative memorandum on the supervision of charities in Scotland; and if he will make a statement.

  Lord James Douglas-Hamilton
  Soon.

  Dornoch Firth (Rail Crossing)
  Mr. Maclennan
  To ask the Secretary of State for Scotland when he next anticipates discussing with the chairman of British Rail the construction of a rail crossing of the Dornoch firth.

  Lord James Douglas-Hamilton
  My right hon. and learned Friend has no plans to do so.

  Forestry Policy
  Mr. Home Robertson
  To ask the Secretary of State for Scotland if he will make a statement on the progress of negotiations on forestry policy in the European Community.

  Lord James Douglas-Hamilton
  A common forestry policy as such is not being negotiated in the European Community. However, negotiations on a proposed forestry action programme are approaching their final stages, and the main United Kingdom objectives are likely to be met.

  Forestry Commission
  Mrs. Gorman
  To ask the Secretary of State for Scotland whether, when appointing Raymond Johnston to the position of chairman of the Forestry Commission, consideration was given to the possibility of preparing the Forestry Commission for sale.

  Lord James Douglas-Hamilton
  No.

  Rent-as-you-buy Scheme
  Mr. Kirkwood
  To ask the Secretary of State for Scotland whether he has any plans to announce a rent-as-you-buy scheme for council tenants in Scotland.
  210
  Lord James Douglas-Hamilton
  No.

  Electoral Register
  Mr. Harry Barnes
  To ask the Secretary of State for Scotland if he will list the percentage change in the numbers on local government electoral registers between 1987 and 1989 in(a) Edinburgh city and (b) Glasgow city; and if he will make a statement.

  Lord James Douglas-Hamilton
  I refer the hon. Member to table 3 in the Office of Population Censuses and Surveys "Monitor EL87/1" and to table 1 in the "Monitor EL89/ I", from which the percentage changes may be derived. Copies of these publications are in the Library.

  Mr. Harry Barnes
  To ask the Secretary of State for Scotland if he will list the percentage change in the numbers on parliamentary electoral registers between 1987 and 1989 in Aberdeen, Dundee, Edinburgh and Glasgow; and if he will make a statement.

  Lord James Douglas-Hamilton
  The change was 4·1 per cent. in Aberdeen, 2·2 per cent. in Dundee, 2·4 per cent. in Edinburgh and 4·4 per cent. in Glasgow.

  Mr. Barnes
  To ask the Secretary of State for Scotland, pursuant to his answer to the hon. Member for Derbyshire North-East of 27 April, if he will list the estimated percentages of 16 and 17-year-olds missing from electoral registers as potential first-time voters in each constituency in Scotland in 1987, 1988 and 1989.

  Lord James Douglas-Hamilton
  Information in the form requested is not available because population estimates are not calculated on a constituency basis. The estimated percentages for Scotland as a whole in 1987, 1988 and 1989 were 26, 27 and 26, respectively.

  Mr. Harry Barnes
  To ask the Secretary of State for Scotland (1) pursuant to his answer to the hon. Member for Derbyshire, North-East of 27 April, whether he has any plans to increase the percentage of 16 and 17-year-olds whose names are included as potential voters on electoral registers in Glasgow, Edinburgh and Dundee;

  (2) what plans he has to improve electoral registration in Aberdeen, Dundee, Edinburgh and Glasgow.

  Lord James Douglas Hamilton
  The preparation of electoral registers is the statutory duty of the electoral registration officers for the areas concerned. My right hon. and learned Friend is confident that their aim is to produce as comprehensive and accurate a register as possible, and proposes to support them as before with appropriate publicity campaigns.

  Scottish Educational Trust for UN and International Affairs
  Mr. Andrew Welsh
  To ask the Secretary of State for Scotland (1) what is the Government's policy towards the Scottish Educational Trust for United Nations and International Affairs; and if he will make a statement;

  (2) what contribution the Scottish Education Department has made to the 1989–90 publications list produced by the Scottish Educational Trust for United Nations and International Affairs; and if he will make a statement.
  211
  Mr. Michael Forsyth
  The Scottish Education Department has made no contribution to the 1989–90 publication list produced by the Scottish Educational Trust for United Nations and International Affairs. The trust's aims and activities do not come within current priorities for educational research-related funding.

PRIME MINISTER

  Child Sexual Abuse
  Mr. Allen
  To ask the Prime Minister if she will establish an interdepartmental committee to examine the sexual abuse of children.

  The Prime Minister
  There is already in existence the inter-departmental group on child abuse, comprising senior officials in Departments with responsibilities for children. It was established to develop an inter-departmental approach to child abuse, including child sexual abuse.

  Rain Forests
  Mr. Corbyn
  To ask the Prime Minister what further action Her Majesty's Government are taking to halt the destruction of the world's tropical rain forests.

  The Prime Minister
  As part of the forestry initiative the Overseas Development Administration has identified more than 20 countries where we are well placed to help. Discussions are already under way with, for example, the Government of Brazil and India; we have just agreed £40 million of new aid for India largely for the local costs of forestry projects. In addition the Overseas Development Administration is increasing its funding for forestry research and is encouraging British charities to put forward more forestry projects for joint funding. We shall be encouraging multilateral and other bilateral donors to increase their support for the sector.

  Monetary Union
  Mr. John Browne
  To ask the Prime Minister what representations she has received regarding proposals for monetary union in the EEC.

  Mr. Cash
  To ask the Prime Minister what representations she has received regarding proposals for monetary union in the European Economic Community.

  Mr. Malins
  To ask the Prime Minister what representations she has received regarding proposals for monetary union in the European Economic Community.

  The Prime Minister
  I have received a number of representations on this subject.

  Namibia
  Mr. Hunter
  To ask the Prime Minister if she will make a further statement on the process of independence in Namibia.

  The Prime Minister
  We remain fully committed to the implementation of the United Nations plan for Namibian independence. We are urging all those concerned to comply fully with the terms of the United Nations plan.

  EEC Commission President
  Mr. Teddy Taylor
  To ask the Prime Minister when she next plans to meet the President of the European Economic Community Commission.

  The Prime Minister
  I expect to meet the President of the EC Commission at the meeting of the European Council on 26 and 27 June.

  Low-Income Households
  Mrs. Clwyd
  To ask the Prime Minister if she will make a statement on the number of low-income households in Mountain Ash.

  The Prime Minister
  This information is not available.

  Engagements
  Mr. Barry Field
  To ask the Prime Minister if she will list her official engagements for Thursday 4 May.

  Mr. Stern
  To ask the Prime Minister if she will list her official engagements for Thursday 4 May.

  Mr. Pike
  To ask the Prime Minister if she will list her official engagements for Thursday 4 May.

  Mr. David Shaw
  To ask the Prime Minister if she will list her official engagements for Thursday 4 May.

  Mr. Harry Greenway
  To ask the Prime Minister if she will list her official engagements for Thursday 4 May.

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

ATTORNEY-GENERAL

  Female Legal Staff
  Mr. Vaz
  To ask the Attorney-General how many female(a) barristers, (b) magistrates, (c) solicitors, (d) judges, (e) recorders and (f) court clerks are (i) employed and (ii) qualified in the United Kingdom according to the latest available figures.

  The Attorney-General
  Such figures as are available for England and Wales are as follows:

  (a) Barristers
  As at 1 October 1988 there were 940 women practising barristers. In addition, 309 women employed barristers are recorded as paying the Bar subscription, giving a total of 1,249 known active women barristers.

  (b) Magistrates
  As at 1 January 1989 there were 12,214 women lay magistrates. In addition, there are eight women full-time metropolitan stipendiary magistrates; four women acting metropolitan stipendiary magistrates; and three women acting provincial stipendiary magistrates.

  (c) Solicitors
  In 1987–88 (the latest period for which figures are available), 10,062 women solicitors held practising certificates. In 1988, there were 13,046 women solicitors on the roll.

  (d) Judges
  There is one woman lord justice of appeal, one woman High Court judge, and there are 17 women Circuit judges.

  (e) Recorders
  There are 29 women recorders.

  (f) Court Clerks
  As at 31 December 1988 there were 12 women clerks to the justices. There are, in addition, 112 women chief clerks of Crown and County courts.

TRADE AND INDUSTRY

  Balance of Trade
  Mr. Wareing
  To ask the Chancellor of the Duchy of Lancaster what was the balance of manufactured trade in(a) 1978 and (b)

  Mr. Allen Adams
  To ask the Chancellor of the Duchy of Lancaster if he will give the balance of manufactured trade in(a) 1978 and (b)

  Mr. Strang
  To ask the Chancellor of the Duchy of Lancaster what was the balance of manufactured trade in(a) 1978 and (b)

  Mr. Pike
  To ask the Chancellor of the Duchy of Lancaster what was the balance of manufactured trade in(a) 1978 and (b)

  Mr. Alan Clark
  Trade in manufactures on a balance of payments basis was in surplus by £5·1 billion in 1978 and in deficit by £14·4 billion in 1988.

  Imports
  Mr. Boyes
  To ask the Chancellor of the Duchy of Lancaster if he will estimate the proportion of total manufacturing imports represented by production and investment goods in(a) 1984 and (b)

  Mr. Darling
  To ask the Chancellor of the Duchy of Lancaster if he will estimate the proportion of total manufacturing imports represented by production and investment goods in(a) 1984 and (b)

  Mr. Bell
  To ask the Chancellor of the Duchy of Lancaster if he will estimate the proportion of total manufacturing imports represented by production and investment goods in(a) 1984 and (b)

  Mr. Alan Clark
  The proportion of United Kingdom imports of manufactures on an Overseas Trade Statistics basis represented by production and investment goods was as follows:

  Per cent.

  1984

  76

  1988

  75

  Notes:

  (1) The figures exclude the more erratic items—ships, North sea oil installations, aircraft, precious stones and silver.

  (2) Production and investment goods are taken to be semi-manufactures (SITC 5 and 6) plus intermediate finished manufactures and investment goods (part of SITC 7 and 8, based on the United Nations broad economic categories).

  Poland (Investment)
  Mr. Flynn
  To ask the Chancellor of the Duchy of Lancaster if the renewed legalisation of Solidarnosc in Poland will affect United Kingdom export credit guarantees for industrial investment in Poland.

  Mr. Alan Clark
  [holding answer 27 April 1989]: The Government welcome many of the political and structural changes taking place in Poland. However, there will need to be a clear improvement in the economic situation too before any resumption of medium term export credit guarantees can be justified.
  214
  It is hoped that Poland can reach agreement with the IMF on an adjustment programme that can lead to such economic improvements. The Government intend to play a constructive role in seeking to establish an agreement between Poland and the IMF.

  ECGD short-term credit guarantees, and investment insurance against war and expropriation risks, continue to be available.

NORTHERN IRELAND

  Internal Market
  Mr. Sillars
  To ask the Secretary of State for Northern Ireland what assessment he has made of the total value to the latest available full year of public sector contracts in Northern Ireland of a character which will make them open to Communitywide bidding as part of the creation of the internal market.

  Mr. Ian Stewart
  The cost of assessing the value of public sector contracts in Northern Ireland to be opened to Community-wide bidding would not be justified. The EC is currently investigating the effects of applying procurement rules to contracts above various value thresholds in sectors excluded from existing Community directives.

  Rates
  Mr. John D. Taylor
  To ask the Secretary of State for Northern Ireland if he will make a statement on measures to reduce the rate of increase in regional rates.

  Mr. Ian Stewart
  I would refer the hon. Member to the reply I gave on 20 April, at columns 447–48 to the hon. Member for Londonderry, East (Mr. Ross). Two exceptional factors, the change in Exchequer support and the one-off credit balance in 1988–89 together accounted for 6·6 per cent. out of the 12·6 per cent. increase in the 1989–90 regional rate. The remaining 6 per cent. reflected substantial increases in public expenditure programmes in Northern Ireland in areas such as education and roads maintenance. The level of the Government support for rate relevant expenditure in Northern Ireland is at a very high level, 82 per cent. compared with 43 per cent. in England. The Government endeavour to strike a reasonable balance between the need for expenditure on central Government rate-borne services in Northern Ireland and the burden placed on ratepayers. However, the only practical way to reduce the impact upon ratepayers would be to reduce relevant public expenditure programmes in Northern Ireland.

  Mater Infirmorum Hospital, Belfast
  Ms. Short
  To ask the Secretary of State for Northern Ireland (1) whether the Mater Infirmorum hospital, Belfast, will become the main centre for gynaecology in central Belfast if the proposals of the complementarity study of the Eastern health and social services board are implemented;

  (2) what assessment has been made of whether the Mater hospital can provide a full range of care;

  (3) what steps are being taken to ensure that the Mater hospital can provide a service with regard to artificial techniques of contraception, sterilisation, tubal ligation, and related areas;
  215
  (4) what steps are being taken to ensure equal provision for women seeking care on a non-denominational basis under the proposals of the complementarity study of the Eastern health board;

  (5) what representations he has received suggesting that the proposals of the Eastern health board's complementarity study have not taken account of the special characteristics of the Mater hospital; and if he will make a statement.

  Mr. Needham
  The proposals for changes in the provision of acute services by the three Belfast teaching hospitals stem from the recent complementarity study report. The Eastern health and social services board has yet to decide how it wishes to proceed with the study recommendations. When it does I will wish to discuss the conclusions very fully with the board chairman.

  Health Education
  Ms. Harman
  To ask the Secretary of State for Northern Ireland what was the budget for health education in Northern Ireland for each year from 1978–79 to 1987–88, expressed as actual expenditure and as a percentage of total National Health Service spending in Northern Ireland.

  Mr. Needham
  The information is not available in the form requested as many of the services provided by health and social services boards include an element of health education which is not funded separately.

  Details of the Department of Health and Social Services budget spent directly on centrally financed health education are given in the table. This consists of the Northern Ireland pro rata contribution to the former Health Education Council and an additional £200,000 in 1987–88 to fund the launch of the "Northern Ireland Change of Heart" coronary prevention programme.

  £

  1978–79

  51,000

  1979–80

  106,000

  1980–81

  152,000

  1981–82

  200,000

  Highest and Lowest Number of Social Fund Applications: 11 April 1988—31 March 1989

  Social Security Office

  Lowest

  Highest

  Month

  Total

  Month

  Total

  Andersonstown

  May

  112

  February

  1,959

  Antrim

  July

  346

  November

  653

  Armagh

  May

  95

  March

  334

  Ballymena

  May

  293

  February

  526

  Ballymoney

  May

  81

  March

  246

  Ballynahinch

  May

  26

  March

  78

  Banbridge

  May

  55

  March

  249

  Bangor

  May

  124

  March

  263

  Carrickfergus

  May

  117

  February

  267

  Coleraine

  May

  196

  November

  463

  Cookstown

  May

  95

  March

  317

  Corporation Street

  July

  305

  March

  1,851

  Downpatrick

  May

  105

  November

  266

  Dungannon

  May

  88

  November

  436

  Enniskillen

  May

  93

  March

  445

  Falls

  December

  437

  February

  1,210

  Holywood Road

  May

  257

  March

  842

  Kilkeel

  May

  22

  March

  70

  Knockbreda

  May

  153

  March

  472

  Larne

  June

  151

  November

  295

  Limavady

  May

  131

  November

  264

  Lisburn

  December

  348

  March

  485

  Londonderry

  May

  298

  March

  2,284

  216

  £

  1982–83

  249,000

  1983–84

  257,000

  1984–85

  265,000

  1985–86

  270,000

  1986–87

  278,000

  1987–88

  491,000

  Pre-School Education
  Ms. Mowlam
  To ask the Secretary of State for Northern Ireland what is the percentage of children of pre-school age currently enrolled in state-run pre-school education in Northern Ireland.

  Dr. Mawhinney
  The information is as follows:

  All grant-aided schools1 per cent.

  Pre school age pupils in nursery education2

  13·3

  Three and four-year-olds in Education3

  45·3

  1 Both figures are expressed as a percentage of the three and four-year-old population at January 1988.

  2 Includes nursery schools and nursery classes in primary schools.

  3 Covers all three and four-year-olds in education, including those in nursery schools and nursery classes but excluding those in special schools.

  Social Fund
  Mr. Hume
  To ask the Secretary of State for Northern Ireland what information is available, for each social security office, on the highest and lowest month for social fund applications and allocations, indicating the relevant respective figures.

  Mr. Needham
  [holding answer 24 April 1989]: Information about the number of applications processed and the amounts awarded in each month is available in the Library.

  Information about the highest and lowest month for social fund applications for the period 11 April 1988 to 31 March 1989 (the latest date for which information is available) is as follows:
  217

  Social Security Office

  Lowest

  Highest

  Month

  Total

  Month

  Total

  Lurgan

  May

  148

  March

  785

  Magherafelt

  May

  82

  March

  375

  Newcastle

  May

  37

  March

  124

  Newry

  May

  229

  November

  555

  Newtonabbey

  May

  277

  March

  513

  Newtownards

  May

  75

  January

  246

  Omagh

  May

  124

  March

  333

  Portadown

  May

  111

  February

  325

  Shaftesbury Square

  May

  267

  March

  856

  Shankill

  May

  362

  March

  781

  Strabane

  May

  106

  March

  550

  Mr. Hume
  To ask the Secretary of State for Northern Ireland what information is available on the proportion of the social fund budget allocated in each social security office by the end of each quarter in the year April 1988–89, indicating the total monetary value involved.

  Mr. Needham
  [holding answer 24 April 1989]: Information about the amounts of awards made each month and the outstanding balance of the loans and grants budget for each social security office is available in the Library.

  Mr. Hume
  To ask the Secretary of State for Northern Ireland what figures are available for the year April 1988–89 on the total numbers of social fund applications and payments and the total value of payments in each social security office for maternity payments, funeral expenses, community care grants, budgeting loans and crisis loans.

  Mr. Needham
  [holding answer 24 April 1989]: Information about the number of community care grants, budgeting and crisis loan applications processed and the amounts awarded for each month since April 1988 is available in the Library.

  The information requested about the number and value of maternity payments and funeral expenses is not readily available and could be obtained only at disproportionate cost.

  Income Support
  Ms. Mowlam
  To ask the Secretary of State for Northern Ireland (1) if he will provide figures showing the estimated take-up rate for claims for income support payments under the severe hardship provision for 16 and 17-year-olds actively pursuing a place on the youth training programme;

  (2) if he will provide figures showing the estimated take-up rate for claims for income support payments under the severe hardship provision.

  Mr. Needham
  [holding answers 28 April 1989]: The information requested is not available.

  Arms (Terrorists)
  Mr. Winnick
  To ask the Secretary of State for Northern Ireland what information his Department has of countries supplying(a) arms, and (b) finance for arms to be used by terrorist groups connected with the so-called Loyalist Group in Northern Ireland; and if he will make a statement.

  Mr. Ian Stewart
  [holding answer 2 May 1989]: I am not in a position to comment on the possibility that any country may have supplied arms or finance to such groups.

ENERGY

  Departmental Policy
  Mr. Flynn
  To ask the Secretary of State for Energy if he will make a statement on the policy areas where his Department has failed to reach its targets since May 1979; and if he will identify why these failures occurred and set out how these failures will be rectified:

  Dr. Thomas
  To ask the Secretary of State for Energy if he will list the failures in policy implementation in his Department since May 1979.

  Mr. Parkinson
  My Department has been successful in implementing its main policy objectives since May 1979.

  Nuclear Material
  Dr. Thomas
  To ask the Secretary of State for Energy, pursuant to the reply to the hon. Member for Newport, West (Mr. Flynn)Official Report, 22 December 1988, column 439, if he will list those bilateral agreements, by date of completion, permitting International Atomic Energy Agency inspection of nuclear material in the United Kingdom; how often these inspections have been conducted; and whether any anomalies have ever been reported.

  Mr. Michael Spicer
  The earlier agreements with the IAEA referred to in the answer given to the hon. Member for Newport, West (Mr. Flynn) are as follows:Japan/United Kingdom: 15 October 1968—INFCIRC 125
  United Kingdom: 14 December 1972—INFCIRC 175

  Inspections under these agreements are carried out at regular intervals. After analysis of the inspection data the. IAEA has always concluded that the nuclear material present was in accordance with the declarations made by the United Kingdom.

SOCIAL SECURITY

  Actively Seeking Work Test
  Ms. Walley
  To ask the Secretary of State for Social Security whether the change in benefit requirements for the unemployed from being available for work to being actively seeking work will be used by local unemployment offices before its official implementation in October 1989.

  Mr. Lee
  I have been asked to reply. No.

  Income Support
  Mr. Redmond
  To ask the Secretary of State for Social Security what reviews he is carrying out on women who
  219
  may make a fresh or new claim for income support and housing benefit in respect of hostel accommodation after October; if he will ensure that they will not be placed on a lower benefit than currently when they claim board and lodging allowance; and if he will make a statement.

  Mr. Peter Lloyd
  I refer the hon. Member to my reply to the hon. Member for Halifax (Mrs. Mahon) on 27 April, at column 652.

  Social Fund
  Mr. Redmond
  To ask the Secretary of State for Social Security what plans he has under review for social fund officers to be redeployed on takeup campaigns; what resources he proposes to allocate to this purpose; and if he will make a statement.

  Mr. Peter Lloyd
  The Department has no plans at present to redeploy social fund officers specifically for the purpose of dealing with take-up campaigns. There are already sufficient staff employed in local offices to deal with variable levels of demand for social fund awards. In the event of a significant unexpected local increase in the

  Refusals of Social Fund loans and grants where selected reasons given, 1988–89

  Loans

  Grants

  number of refusals where selected reason given

  as a percentage of all refusals

  number of refusals where selected reason given

  as a percentage of all refusals

  Applicant

  not in receipt of IS

  35,589

  9·5

  13,689

  9·4

  not in receipt of IS for 26 weeks

  99,817

  26·6

  n/a

  —

  Amount > £30 (not travelling expenses)

  11,930

  3·2

  3,298

  2·3

  Inability to repay

  14,513

  3·9

  n/a

  —

  Insufficient SF funds, priority too low

  83,888

  22·3

  11,864

  8·1

  No serious damage or risk to health or safety

  22,455

  6·0

  n/a

  —

  n/a = not applicable.

  Mr. Flynn
  To ask the Secretary of State for Social Security if he will list the areas in which social fund allocations increased, decreased or remained the same from April 1989.

  Mr. Peter Lloyd
  A list giving the information requested has been placed in the Library.

  Sir Ian Gilmour
  To ask the Secretary of State for Social Security if he will monitor the effects of social fund loans on the living standards of income support claimants during the period when they are repaying them.

  Mr. Peter Lloyd
  We have recently commissioned the social policy research unit at York university to carry out a programme of detailed research on the social fund. This will include case studies of people who have taken out a social fund loan and will take account of the effect of repayment arrangements.

  Sir Ian Gilmour
  To ask the Secretary of State for Social Security (1) what is done to ensure that deductions made from the income support allowances of claimants repaying social fund loans leave them with enough income to meet their essential needs;

  (2) how quickly people who receive social fund loans are expected to repay them, assuming loans of (a) £50, (b) £100, (c) £150 and (d) £200.
  220
  numbers of social fund applications, the local office manager would manage resources according to competing priorites.

  Mr. Battle
  To ask the Secretary of State for Social Security if he will publish the number of refusals for social fund applications for both grants and loans, due to (i) applicant not being on income support, (ii) amount requested below £30 minimum, (iii) applicant not considered credit-worthy, (iv) applicant did not satisfy six-month qualification rule, (v) applicant not considered a high priority group, (vi) applicant not requesting a high priority item and (vii) insufficient funds in local office budget both actual and as a percentage of all refusals for the year April 1988 to March 1989.

  Mr. Peter Lloyd
  Provisional figures for the period 11 April 1988 to 31 March 1989 are set out in the table. The figures relate to the number of occasions on which the particular reason for refusal was used. It is possible for an individual application to be refused for more than one reason.

  Mr. Peter Lloyd
  The period and rate of repayments of a social fund loan do not depend solely on the amount of the loan. In agreeing repayment terms with the applicant before the loan is made, account is taken of the applicant's income, existing commitments and commitments which are likely to arise during the repayment period. Repayments are, however, expected to be completed within 78 weeks, although this can be extended to 104 weeks in certain circumstances. If an applicant finds difficulty in meeting the repayments, or if his circumstances change, he should discuss his problems with the staff of the local office.

  Sir Ian Gilmour
  To ask the Secretary of State for Social Security (1) how many and what percentage of children born in England during 1988 were eligible for maternity payments through the social fund; and what was the average payment made;

  (2) how many and what percentage of children born in Scotland during 1988 were eligible for maternity payments through the social fund; and what was the average payment made.

  Mr. Peter Lloyd
  The information is not available in the form requested. During 1988, 654,0001 and 66,0001 children were born in England and Scotland respectively, with 141,2311 and 18,3241 social fund maternity payments being made. These payments were set at a flat rate—£80

  221
  before 11 April 1988 and £85 thereafter—and were payable to income support and family credit beneficiaries, subject to a £500 capital disregard, for each child expected, born or adopted.

  1 Provisional figures.

  Mr. Madden
  To ask the Secretary of State for Social Security if he will state, for the financial year 1988–89, the proportion of social fund expenditure which has become the subject of civil legal proceedings on the ground of fraud.

  Mr. Peter Lloyd
  [holding answer 20 April 1989]: I regret that the information requested is not available.

  During the year ended 31 March 1989, however, 229 social fund cases were submitted for consideration of civil proceedings in England and Wales, and 13 in Scotland.

  Unemployment Benefit
  Ms. Walley
  To ask the Secretary of State for Social Security if there are any trial areas for the change in unemployment benefit policy due to be implemented in October 1989; and if he will make a statement.

  Mr. Peter Lloyd
  There are no trial areas.

  Income Support
  Sir Ian Gilmour
  To ask the Secretary of State for Social Security what is the minimum, net amount of income support payable to a lone-parent with three children under 11 years, after deducations for rent, rates, rent-rate arrears, gas-electricity arrears and social fund loan.

  Mr. Peter Lloyd
  The amount of income support payable in the circumstances described would depend on a number of factors, including the level of deduction for the social fund loan, which is at the discretion of an officer acting on behalf of the Secretary of State, and on the claimant's income. However, a hypothetical assessment, assuming income of child benefit and one-parent benefit with a social fund deduction of 5 per cent. and with no deduction for current rent, rates or fuel consumption, would be:

  £

  Personal allowance

  34·90

  Children's allowance

  35·25

  Lone Parent premium

  3·90

  Family premium

  6·50

  Applicable amount

  80·55

  1 Place of death

  Type of maternal death

  Total number

  Consultant Obstetric Unit

  Intensive Care Unit

  2Other hospital ward

  3Home

  4Elsewhere

  Direct death

  138

  38

  49

  24

  23

  4

  Associated with anaesthesia (all included in direct death)

  19

  4

  14

  1

  0

  0

  Indirect death

  71

  22

  16

  13

  14

  6

  1 Not always the place where the anaesthetic complication occurred. (No direct or indirect deaths occurred in GP units or GP maternity homes.)

  2 Includes neurosurgical units, medical and surgical wards, accident and emergency departments.

  3 None of the deaths at home were booked home deliveries.

  4 Includes two deaths in private nursing homes approved Under the Abortion Act.

  222

  £

  Deductions for arrears of housing costs

  1·75

  Deduction for arrears of fuel

  3·50

  Deduction for social fund loan

  14·02

  Total deductions

  9·27

  Income support payable

  44·33

  1 5 per cent of applicable amount.

HEALTH

  Mental Handicap
  Mr. Wigley
  To ask the Secretary of State for Health what funds were allocated from his Department For directly commissioned research relevant to mental handicap for each of the past five years; and whether he intends for those funds to be increased over the next five to 10 years.

  Mr. Freeman
  The funds allocated for directly commissioned research relevant to mental handicap for the past five years were as follows:

  Year

  £

  1984–85

  679,700

  1985–86

  709,100

  1986–87

  520,700

  1987–88

  771,100

  1988–89

  659,800

  The Department will continue to develop its research strategy in the field of mental handicap over the next five to 10 years.

  Maternal Deaths
  Mr. Wigley
  To ask the Secretary of State for Health if the figures on the number of(a) direct and (b) indirect maternal deaths in England and Wales in 1982, 1983 and 1984 in National Health Service hospitals without consultant obstetric units, and the number of these associated with anaesthesia, are yet available.

  Mr. Freeman
  In England and Wales between 1982 and 1984 there were 18 maternal deaths from anaesthesia and one in which anaesthesia contributed to the death. Information on where death occurred is not available in the precise form requested. However, we do have the following details:

  Hospital Beds
  Mr. Dobson
  To ask the Secretary of State for Health if he will give for each district health authority in England in 1987(a) the total number of beds in non-psychiatric National Health Service hospitals, (b) the total number of beds in private hospitals, nursing homes and clinics registered under section 23 of the Registered Nursing

  National Health Service non-psychiatric beds for 1987–88, beds in private institutions as at 31 March 1988, by district health authority

  District Health Authority

  Average daily available NHS beds (non-psychiatric)

  Beds in private institutions

  Beds in private institutions, as a percentage of NHS non-psychiatric beds

  Northern

  Hartlepool

  558

  164

  29

  North Tees

  688

  86

  12

  South Tees

  1,454

  282

  19

  East Cumbria

  874

  167

  19

  South Cumbria

  740

  172

  23

  West Cumbria

  571

  31

  5

  Darlington

  622

  623

  100

  Durham

  733

  139

  19

  North West Durham

  544

  8

  1

  South West Durham

  587

  55

  9

  Northumberland

  1,092

  68

  6

  Gateshead

  768

  25

  3

  Newcastle

  2,566

  130

  5

  North Tyneside

  666

  39

  6

  South Tyneside

  609

  n.a.

  n.a.

  Sunderland

  1,606

  136

  8

  Yorkshire

  Hull

  1,344

  194

  14

  East Yorkshire

  782

  387

  49

  Grimsby

  739

  167

  23

  Scunthorpe

  692

  308

  45

  Northallerton

  372

  303

  81

  York

  1,097

  640

  58

  Scarborough

  572

  493

  86

  Harrogate

  769

  1,078

  140

  Bradford

  1,750

  464

  27

  Airedale

  723

  1,124

  155

  Calderdale

  874

  355

  41

  Huddersfield

  836

  172

  21

  Dewsbury

  708

  38

  5

  Leeds Western

  1,957

  383

  20

  Leeds Eastern

  1,788

  678

  38

  Wakefield

  811

  79

  10

  Pontefract

  673

  57

  8

  Trent

  North Derbyshire

  1,051

  354

  34

  Southern Derbyshire

  1,767

  812

  46

  Leicestershire

  3,008

  859

  29

  North Lincolnshire

  1,124

  1,157

  112

  South Lincolnshire

  1,048

  587

  56

  Bassetlaw

  378

  175

  46

  Central Nottinghamshire

  1,162

  622

  54

  Nottingham

  2,608

  1,503

  58

  Barnsley

  848

  84

  10

  Doncaster

  1,151

  211

  18

  Rotherham

  899

  120

  13

  Sheffield

  3,324

  539

  16

  East Anglian

  Cambridge

  1,187

  403

  34

  Peterborough

  969

  89

  9

  West Suffolk

  947

  363

  38

  East Suffolk

  1,420

  315

  22

  Norwich

  2,017

  684

  34

  Great Yarmouth and Waveney

  779

  95

  12

  West Norfolk and Wisbech

  692

  190

  27

  Huntingdon

  443

  104

  23

  224
  Homes Act 1984 and (c) the number of beds in private institutions expressed as a percentage of the number of non-psychiatric hospital beds.

  Mr. Freeman
  The information requested is given in the table. As the distribution of private nursing homes is not controlled by the needs of the resident community to the same extent as NHS provison of services, comparisons of bed stock may be misleading, particularly at district health authority level.
  225

  District Health Authority

  Average daily available NHS beds (non-psychiatric)

  Beds in private institutions

  Beds in private institutions, as a percentage of NHS non-psychiatric beds

  North West Thames

  North Bedfordshire

  783

  265

  34

  South Bedfordshire

  772

  22

  3

  North Hertfordshire

  715

  289

  40

  East Hertfordshire

  614

  184

  30

  North West Hertfordshire

  747

  206

  28

  South West Hertfordshire

  666

  276

  41

  Barnet

  1,327

  403

  30

  Harrow

  734

  141

  19

  Hillingdon

  1,167

  120

  10

  Hounslow and Spelthorne

  1,097

  170

  16

  Ealing

  570

  329

  58

  Brent

  704

  72

  10

  Paddington and North Kensington

  943

  49

  5

  Riverside

  1,573

  710

  45

  North East Thames

  Basildon and Thurrock

  1,032

  n.a

  n.a

  Mid Essex

  1,076

  286

  27

  North East Essex

  1,013

  324

  32

  West Essex

  931

  199

  21

  Southend

  980

  397

  41

  Barking, Havering and Brentwood

  1,820

  324

  18

  Hampstead

  789

  185

  23

  Bloomsbury

  1,655

  1,142

  69

  Islington

  759

  30

  4

  City and Hackney

  1,338

  108

  8

  Newham

  842

  9

  1

  Tower Hamlets

  1,086

  135

  12

  Enfield

  789

  267

  34

  Haringey

  925

  307

  33

  Red bridge

  727

  268

  37

  Waltham Forest

  1,065

  n.a

  n.a

  South East Thames

  Brighton

  1,314

  1,502

  114

  Eastbourne

  842

  1,200

  142

  Hastings

  712

  1,084

  152

  South East Kent

  1,004

  673

  67

  Canterbury and Thanet

  1,175

  984

  84

  Dartford and Gravesham

  823

  116

  14

  Maidstone

  628

  396

  63

  Medway

  921

  207

  22

  Tunbridge Wells

  1,027

  810

  79

  Bexley

  561

  112

  20

  Greenwich

  1,130

  40

  4

  Bromley

  867

  563

  65

  West Lambeth

  968

  36

  4

  Camberwell

  1,144

  n.a

  n.a

  Lewisham and North Southwark

  1,425

  394

  28

  South West Thames

  North West Surrey

  720

  410

  57

  West Surrey and North East Hants

  668

  529

  79

  South West Surrey

  777

  773

  100

  Mid Surrey

  599

  448

  75

  East Surrey

  623

  740

  119

  Chichester

  574

  847

  148

  Mid Downs

  775

  790

  102

  Worthing

  931

  1,353

  145

  Croydon

  1,032

  735

  71

  Kingston and Esher

  634

  290

  46

  Richmond, Twickenham and Roehampton

  646

  453

  70

  Wandsworth

  1,207

  507

  42

  Merton and Sutton

  1,099

  587

  53

  Wessex

  East Dorset

  1,897

  2,221

  117

  West Dorset

  750

  327

  44

  Portsmouth and South East Hampshire

  1,608

  849

  53

  Southampton and South West Hampshire

  1,714

  624

  36

  Winchester

  698

  392

  56

  Basingstoke and North Hampshire

  697

  253

  36

  Salisbury

  675

  306

  45

  Swindon

  809

  287

  35

  226 227

  District Health Authority

  Average daily available NHS beds (non-psychiatric)

  Beds in private institutions

  Beds in private institutions, as a percentage of NHS non-psychiatric beds

  Bath

  1,733

  759

  44

  Isle of Wight

  474

  174

  37

  Oxford

  East Berkshire

  1,032

  800

  78

  West Berkshire

  1,316

  344

  26

  Aylesbury Vale

  727

  278

  38

  Wycombe

  702

  372

  53

  Milton Keynes

  406

  187

  46

  Kettering

  786

  39

  5

  Northampton

  1,046

  969

  93

  Oxfordshire

  2,063

  792

  38

  South Western

  Bristol and Weston

  1,464

  1,630

  111

  Frenchay

  951

  261

  27

  Southhead

  772

  676

  88

  Cornwall and Isles of Stilly

  1,360

  1,103

  81

  Exeter

  1,527

  815

  53

  North Devon

  577

  419

  73

  Plymouth

  1,709

  1,131

  66

  Torbay

  999

  837

  84

  Cheltenham

  861

  456

  53

  Gloucester

  1,221

  582

  48

  Somerset

  1,719

  842

  49

  West Midlands

  Bromsgrove and Redditch

  546

  206

  38

  Herefordshire

  674

  225

  33

  Kidderminster and District

  387

  139

  36

  Worcester and District

  803

  955

  119

  Shropshire

  1,733

  285

  16

  Mid Staffordshire

  744

  696

  94

  North Staffordshire

  2,016

  258

  13

  South East Staffordshire

  959

  273

  28

  Rugby

  213

  163

  76

  North Warwickshire

  503

  120

  24

  South Warwickshire

  923

  712

  77

  Central Birmingham

  1,421

  420

  30

  East Birmingham

  862

  135

  16

  North Birmingham

  574

  290

  51

  South Birmingham

  1,340

  222

  17

  West Birmingham

  1,343

  98

  7

  Coventry

  1,349

  75

  6

  Dudley

  1,219

  102

  8

  Sandwell

  854

  107

  13

  Solihull

  462

  82

  18

  Walsall

  799

  65

  8

  Wolverhampton

  1,221

  243

  20

  Mersey

  Chester

  792

  337

  43

  Crewe

  820

  170

  21

  Halton

  274

  98

  36

  Macclesfield

  568

  622

  no

  Warrington

  729

  107

  15

  Liverpool

  2,605

  871

  33

  St. Helens and Knowsley

  998

  232

  23

  Southport and Formby

  576

  1,185

  206

  South Sefton

  1,466

  309

  21

  Wirral

  1,541

  1,565

  102

  North Western

  Lancaster

  664

  230

  35

  Blackpool, Wyre and Fylde

  1,284

  880

  69

  Preston

  1,198

  224

  19

  Blackburn, Hyndburn and Ribble Valley

  1,132

  384

  34

  Burnley, Pendle and Rossendale

  967

  379

  39

  West Lancashire

  631

  90

  14

  Chorley and South Ribble

  244

  326

  134

  Bolton

  1,024

  228

  22

  Bury

  671

  422

  63

  North Manchester

  1,297

  104

  8

  Central Manchester

  1,153

  72

  6

  South Manchester

  1,869

  281

  15

  228 229

  District Health Authority

  Average daily available NHS beds (non-psychiatric)

  Beds in private institutions

  Beds in private institutions, as a percentage of NHS non-psychiatric beds

  Oldham

  786

  92

  12

  Rochdale

  645

  242

  38

  Salford

  1,306

  284

  22

  Stockport

  1,309

  1,028

  79

  Tameside and Glossop

  820

  112

  14

  Trafford

  582

  422

  73

  Wigan

  1,179

  72

  6

  Orthopaedic Treatment, North Staffordshire
  Ms. Walley
  To ask the Secretary of State for Health what steps he is taking to reduce the time out-patients in north Staffordshire have to wait for a first available orthopaedic appointment.

  Mr. Mellor
  Waiting lists and waiting times for orthopaedic treatment in north Staffordshire are being investigated by an independent management team. If the team identifies the need for an injection of funds, the regional health authority will be able to apply for an allocation from the £6 million reserved from the waiting list fund for districts with particular waiting problems.

  Waiting Lists
  Mr. Butler
  To ask the Secretary of State for Health what are the average waiting list times in days for National Health Service operations(a) nationally, (b) by regional authorities and (c) for Halton district health authority.

  Mr. Mellor
  The available information in respect of in-patients treated in surgical departments in National Health Service hospitals during the financial year 1987–88 is given in the following table:

  Median interval, in weeks, between the time an in-patient1 was placed on the waiting list and admission to hospital

  Location of hospital

  Weeks

  England

  6·6

  Northern Regional Health Authority

  8·4

  Yorkshire Regional Health Authority

  6·3

  Trent Regional Health Authority

  5·1

  East Anglian Regional Health Authority

  6·4

  North West Thames Regional Health Authority

  4·4

  North East Thames Regional Health Authority

  5·9

  South East Thames Regional Health Authority

  7·7

  South West Thames Regional Health Authority

  9·7

  Wessex Regional Health Authority

  7·3

  Oxford Regional Health Authority

  7·4

  South Western Regional Health Authority

  7·0

  West Midlands Regional Health Authority

  6·0

  Mersey Regional Health Authority

  6·5

  North Western Regional Health Authority

  6·5

  Halton District Health Authority

  3·1

  1 Ordinary admissions and day cases, booked and waiting list cases.

  Halton District General Hospital
  Mr. Butler
  To ask the Secretary of State for Health what is the length of the out-patient list for Halton district general hospital; and what is the length for each specialty within it.

  Mr. Mellor
  We do not collect information on out-patient waiting times centrally.

  Cervical Cancer
  Mr. Tony Lloyd
  To ask the Secretary of State for Health how many deaths occur annually from cervical cancer; and what estimates he has made of the reduction in that number if there were a 100 per cent. response to a call and recall system.

  Mr. Freeman
  There have been for several years around 2,000 deaths annually in England and Wales from malignant neoplasm of the cervix uteri and there were 1,903 deaths in 1987. Cervical smears taken every five years between the ages of 20 and 64 could reduce by more than 80 per cent. the number of deaths which would otherwise occur from cancer of the cervix.

  Electoral Register
  Mr. Harry Barnes
  To ask the Secretary of State for Health if he will list the percentage change in the numbers on local government electoral registers between 1988 and 1989 in(a) Kensington and Chelsea, (b) Manchester, (c) Liverpool, (d) Bristol and (e) Rochester upon Medway; and if he will make a statement.

  Mr. Freeman
  The information requested is given in the table:

  Percentage change between 1988 and 1989 local government electorates

  County district/London borough

  Percentage

  Kensington and Chelsea

  -4·3

  Manchester

  -4·2

  Liverpool

  -9·6

  Bristol

  -2·6

  Rochester upon Medway

  -11·3

  Possible reasons for changes in electorates were indicated in OPCS "Monitor EL 89/1", a copy of which has been placed in the Library.

  Encephalopathies
  Mr. Ron Davies
  To ask the Secretary of State for Health if he will list the research being sponsored by his Department into transmissible encephalopathies.

  Mr. Freeman
  The Department of Health is not sponsoring any research in transmissible encephalopathies.

  However, a committee has been set up by this Department and the Ministry of Agriculture, Fisheries and Food under the chairmanship of Dr. David Tyrrell to advise the Departments on research in progress or required on bovine spongiform encephalopathy and other transmissible encephalopathies.

HOME DEPARTMENT

  Hillsborough Disaster
  Mr. Kirkwood
  To ask the Secretary of State for the Home Department when he now expects Lord Justice Taylor to present his interim report on the Hillsborough disaster; and if he will make a statement.

  Mr. John Patten
  It is for Lord Justice Taylor to decide in the light of his inquiries whether there are matters which should be the subject of an interim report and if so the timing of it.

  Mr. Harry Barnes
  To ask the Secretary of State for the Home Department what discussions he has had with the Football Supporters Association since the Hillsborough tragedy; and if he will make a statement.

  Mr. John Patten
  None. It is of course open to the association to put forward evidence to Lord Justice Taylor's inquiry, or views to the Department of the Environment or the Home Office on matters within our responsibilities.

  Rapists
  Mr Nicholas Winterton
  To ask the Secretary of State for the Home Department what research is being carried out, or is planned, into the circumstances and treatment of mentally disordered rapists in prison and into ways of seeking to prevent them from reoffending.

  Mr. Douglas Hogg
  There is no research being carried out, or planned, which is solely concerned with mentally disordered rapists. However, a certain amount of research is being carried out (separately) on mentally disordered offenders and sexual offenders which may, inter alia, provide some information about mentally disordered rapists and possible ways of preventing them reoffending.

  With regard to research on mentally disordered offenders, I refer the hon. Member to the reply to a question by the hon. Member for Leyton (Mr. Cohen) on 20 March 1989 at columns 405–06

  As to research on sex offenders, the Institute of Psychiatry is carrying out a study of sex offenders in prisons. The purpose of this study (the results of which should be available later this year) is to try to identify factors in sex offenders' histories which appear to distinguish them from other types of offender and non-offender populations. It will be particularly concerned with rapists. The study may help in making decisions about which types of sexual offender are likely to benefit from treatment and which are not.

  Mr Malcolm Cowburn of the Nottingham probation service is carrying out an investigation and evaluation of the work being undertaken with sex offenders (including rapists) in prisons in England and Wales. The results of this study should also be available this year.

  Consideration is being given by the Department to carrying out a study of convicted rapists. The purpose of the study would be to describe the offenders and their offences in detail and to assess their treatment needs. A history of mental disorder would be noted as part of that description.

  Mr. Nicholas Winterton
  To ask the Secretary of State for the Home Department how many men are currently serving a sentence of imprisonment for rape; and what proportion of such prisoners are mentally disordered.
  232
  Mr. Douglas Hogg
  On 30 June 1988 about 1,070 males were serving sentences for rape offences, including attempted rape, in prison service establishments in England and Wales. Information on the number who are mentally disordered is not recorded centrally.

  Football Grounds, (Safety)
  Mr. David Evans
  To ask the Secretary of State for the Home Department how many(a) arrests and (b) ejections from the ground were made by the police before, during and after the games between (i) West Ham United and Millwall and (ii) Chelsea and Leeds United, played on Saturday 22 April.

  Mr. Douglas Hogg
  The Commissioner of Police of the Metropolis has provided the following information. Of the 94 people arrested in connection with the match between Chelsea and Leeds United, 59 were arrested before., 12 during and 23 after the game. Twenty eight people were ejected from the ground. Of the 24 people arrested in connection with the match between West Ham United and Millwall 15 were arrested before, seven during and two after the game. Twenty four people were ejected from the ground. Police figures do not distinguish between ejections made before and during a game.

  Drug Traffickers
  Mrs. Golding
  To ask the Secretary of State for the Home Department, pursuant to the oral answer to the hon. Member for Altrincham and Sale of 13 April,Official Report, column 1053, what account is taken of the sums confiscated from convicted drug traffickers in setting the allocations for (a) rehabilitation of drug offenders, and (b) the prevention of drug trafficking.

  Mr. John Patten
  We allocate funds to work against drug misuse according to needs and priorities. No direct account is taken of the varying and unpredictable sums confiscated from convicted drug traffickers in different parts of the country.

  Police National Computer
  Mr. Cohen
  To ask the Secretary of State for the Home Department whether he will place the invitation to tender documents for the new police national computer in the Library.

  Mr. Douglas Hogg
  No. Publication of these documents would be a breach of commercial confidentiality.

  Mr. Cohen
  To ask the Secretary of State for the Home Department whether he will describe the new facilities, applications or indexes that are envisaged for the new police national computer.

  Mr. Douglas Hogg
  The new police national computer will initially provide the police with the same facilities as are provided on the current system. No decisions have yet been taken about the provision of additonal facilities on the new computer.

  Mr. Cohen
  To ask the Secretary of State for the Home Department whether he will list the indexes and the data items contained within each index of the new police national computer.

  Mr. Douglas Hogg
  All names applications on the new police national computer may contain information in the following data classes:
  233

  Name

  Aliases

  Driver Number

  Place of Birth

  Date of Birth

  Sex

  Colour (White, Non-White, or Unknown)

  Ethnic Appearance

  Height

  Information Markers

  Address

  Home Force

  Marks and Scars

  Warning Signals

  Cross References

  Police Gazette Reference

  Date and Time of Last Update

  Each of the specific names applications may contain information in the following additional data classes:

  Criminal Name index:

  Criminal Record Office Number

  Fingerprint Indicator

  Criminal Record Weed Years

  Place first to notice

  Date first to notice

  Regional Cross References

  Fingerprint index:

  Henry Code

  Pattern Codes

  Ridge Counts

  Offence types

  Places to notice

  Wanted/Missing index

  Wanted/Missing number

  Force/Station code

  Class (the reason for the report having been entered)

  Reference to case papers

  Location of case papers

  Report date

  Incident date

  Expiry date

  Offence/Class qualification

  Date of Warrant

  Fine amount

  Court Name

  Offence location

  Power of arrest

  Warrant backed for bail

  Text

  Date entered on PNC

  Disqualified Driver index

  Disqualified Driver Reference Number

  Disqualified Driver Information Number

  Force/Station code

  Court Name

  Court Date

  Police Expiry Date

  DVLC Expiry Date

  Test Required marker

  Report Confirmed marker

  Prosecutions index (formerly known as the convictions index): Report type (either Impending Prosecution or Conviction)

  If impending prosecution:

  Fingerprint Indicator

  Photographic Indicator

  Force/Station code

  Crime Reference

  Date charged

  Bail/Custody indicator

  Weed Date

  If conviction:

  Fingerprint Indicator

  Photograph Indicators

  234

  Force/Station code

  Crime reference

  Court

  Disposed Date

  Offence

  Taken Into Consideration (Offence)

  Disposal

  Taken Into Consideration (Composite)

  The vehicles application on the new police national computer may contain information in the following data classes:

  Vehicle Identification number

  Chassis number

  Current Vehicle Registration Mark

  Previous Vehicle Registration Mark

  Foreign Vehicle Marker

  Stolen Vehicle Marker

  Vehicle Make

  Vehicle Model

  Vehicle Type

  Vehicle Colour

  Engine Number

  Vehicle Registration Office code

  Year and month of registration

  Date of last keeper change

  Owner name

  Owner Address

  Owner postcode

  Markers

  Date of Last Description update

  Time of Last Description update

  Force station code of description owner

  Force station code of description creator

  Force station code of last description update

  Date of recovery

  Force station code of recovery

  Police information may be added to these vehicle records in the form of one or more of the following report types:

  Lost or stolen

  Found

  Information

  Seen/checked

  Restricted

  Removed

  Correction

  These reports may contain information in the following data classes:

  Vehicle report type

  Vehicle report number

  Vehicle report text

  Reference number

  Earliest date of incident

  Latest date of incident

  Date of report creation

  Time of report creation

  Force station code of report owner

  Force station code of report creator

  Force station code of last update

  Date of last update

  Time of last update

  Report confirmed marker

  The stolen property index (formerly known as the chassis/engine index) may contain information in the following data classes about plant, trailers, caravans, engines, marine engines and motorcycle sidecars:

  Item number

  Fleet number

  Report type

  Report text

  Loser details

  Earliest date of theft

  Latest date of theft

  Item type

  Item make

  Plant type

  Item model

  Item colour

  235

  Engine capacity

  Reference number

  Force station code of report owner

  Force station code of report creator

  Force station code of last update

  Date of last update

  Time of last update

  Report confirmed marker

  The broadcast application enables forces to send messages to printer terminals in specified destination forces. The messages are stored for 24 hours after creation.

  The message log application automatically records the full details of all on-line transactions. The information is retained on the log for six months.

  Mr. Cohen
  To ask the Secretary of State for the Home Department whether he will describe the improvements in communications between police forces computers and the new police national computer; whether all police force computers will be linked into the new network; whether police forces will be able to transmit databases to each other and search other police computer systems; and whether he will make a statement.

  Mr. Douglas Hogg
  The new police national computer will be linked to all forces through the existing network, modified as necessary to ensure compatibility with the new equipment.

  We are discussing with the police service its requirements for a wider police network which would permit the exchange of information between forces, but no decisions have yet been taken about the scope of this network.

  Mr. Cohen
  To ask the Secretary of State for the Home Department whether the data protection registrar has been asked to comment on the facilities that will be provided by the new police national computer and network.

  Persons proceeded against for offences under the Obscene Publications Act 1959

  England and Wales

  1982

  1983

  1984

  1985

  1986

  1987

  Number proceeded against

  539

  757

  890

  540

  231

  154

  Total found guilty

  234

  370

  429

  225

  129

  93

  Absolute or conditional discharge

  9

  7

  13

  12

  3

  4

  Probation order

  —

  1

  —

  3

  1

  1

  Fine

  128

  248

  291

  130

  80

  63

  Community service order

  1

  3

  3

  4

  1

  3

  Fully suspended sentence

  38

  60

  77

  50

  20

  10

  Immediate custody

  58

  49

  42

  25

  15

  12

  Otherwise dealt with

  —

  2

  3

  1

  9

  —

  Number subject to forfeiture order

  1

  5

  6

  9

  14

  15

  Mr. Gerald Howarth
  To ask the Secretary of State for the Home Department how many items of obscene material were seized by police under section 3 of the Obscene Publications Act 1959 in England and Wales in each year since 1979.

  Mr. Renton
  Information about seizures of items under the Obscene Publications Act 1959 is not held centrally. The only information which can be obtained without disproportionate cost relates to the Metropolitan police, and is set out in the following table:
  236
  Mr. Douglas Hogg
  The data protection registrar has been consulted about the facilities which will be provided by the new police national computer.

  Criminal Injury and Damage Claims
  Ms. Walley
  To ask the Secretary of State for the Home Department what is the current situation concerning the widow of a common law husband with reference to entitlement to claims for a criminal injury and damage.

  Mr. John Patten
  Under the Fatal Accidents Act 1976 courts in England and Wales may award damages for financial dependency and funeral expenses to a common law widow who had lived with the man continuously for at least the last two years before his death. Awards under the criminal injuries compensation scheme are confined in such cases to funeral expenses. There is no general entitlement to compensation for damage, although the courts have power to order an offender upon conviction to pay compensation for damage he has caused.

  Obscene Publications Act 1959
  Mr. Gerald Howarth
  To ask the Secretary of State for the Home Department (1) how many prosecutions there have been under section 2 of the Obscene Publications Act 1959; and of those found guilty, what sentence was imposed in England and Wales since 1979;

  (2) how many orders have been made at magistrates courts in England and Wales to forfeit obscene articles under section 3 of the Obscene Publications Act 1959 in each year since 1979.

  Mr. John Patten
  Information held centrally for 1982 to 1987 is given in the table. Information prior to 1982 would involve disproportionate cost.

  Items seized by the Metropolitan Police under the Obscene Publications Act 1959, 1979 to 1988.

  Number of items

  1979

  1,170,752

  1980

  849,879

  1981

  554,862

  1982

  1,081,404

  1983

  2,071,190

  1984

  288,259

  1985

  286,511

  1986

  560,047

  1987

  813,243

  1988

  655,119

  Electoral Register
  Mr. Harry Barnes
  To ask the Secretary of State for the Home Department what plans he has to improve electoral registration in Kensington and Chelsea, Manchester, Liverpool, Bristol and Rochester upon Medway.

  Mr. Douglas Hogg
  The registration of persons entitled to vote is the statutory duty of the electoral registration officers for the districts or London boroughs concerned. I am confident that their aim is to produce as comprehensive and accurate a register as possible, and we intend to support them as in previous years with an appropriate publicity campaign at the time of the autumn canvass.

  Mr. Harry Barnes
  To ask the Secretary of State for the Home Department (1) if he holds information for any other countries on the use made by taxation authorities of electoral registers; and if he will make a statement;

  (2) if he holds information for any other countries on the use made by local authorities of electoral registers for their own financial purposes; and if he will make a statement.

  Mr. Douglas Hogg
  No.

  Mr. Harry Barnes
  To ask the Secretary of State for the Home Department if he will make it his policy to examine the impact of the community charge on electoral registration.

  Mr. Douglas Hogg
  I refer the hon. Member to the reply given to a question from the hon. Member for Nottingham, North (Mr. Allen) on 17 April at column 33.

  Community Charge
  Mr. Blunkett
  To ask the Secretary of State for the Home Department if he will publish(a) the full details of the police arbitration tribunal award of March as it relates to the introduction of the community charge and police officers' allowances and (b) the likely costs of this section of the award in 1990–91.

  Mr. Douglas Hogg
  The terms of the arbitration award were as follows:

  (a) No provision should be made by the police authorities to undertake payment of the community charge levied on police officers or their wives;

  (b) the present system of rent and rates allowances and compensatory grants should be remodelled as explained in our general considerations set out above; and

  (c) the process should take effect from April 1989 in Scotland and from April 1990 in England and Wales and also in Northern Ireland, as far as is practicable, bearing in mind that the community charge is not likely to be introduced there on that date.

  In its general considerations the tribunal concluded that the new police housing allowance, which is to replace the present rent allowance, should be determined for each force by
  "taking the current bill, which has been expressed as for rent and rates, and dividing it by the number of officers concerned".

  It will not be possible to calculate the costs of the award until the negotiations on a number of issues which the tribunal passed back to the police negotiating board for further consideration have been concluded.

  Parliamentary Boundary Commissions
  Mr. David Nicholson
  To ask the Secretary of State for the Home Department if he will announce the new membership of the Parliamentary Boundary Commissions for England and Wales.

  Mr. Hurd
  Mr. Speaker is chairman of both boundary commissions. The other members are as follows:

  Appointed by

  Boundary Commission for England

  The Hon. Mr. Justice Knox

  The Lord Chancellor

  Miss Sheila Cameron, QC

  The Home Secretary

  Mr. D. Macklin, MA

  The Secretary of State for the Environment

  Boundary Commission for Wales

  The Hon. Mr. Justice Anthony Evans

  The Lord Chancellor

  Mr. W. P. Davey, CBE, DL, IPFA

  The Home Secretary

  Mr. M. P. McLaggan, JP, DL, MA

  The Secretary of State for Wales

  The appointment of Mr. Justice Knox will expire on 31 December 1990; the other appointments expire on 31 December 1992.

EMPLOYMENT

  National Dock Labour Board
  Mr. Nicholas Bennett
  To ask the Secretary of State for Employment what was the cost of financing the National Dock Labour Board sports activities in 1987–88; and how much of this was financed through the employers' levy.

  Mr. Nicholls
  A total of £59,292 in 1987, all financed through the board's management levy on employers.

  Mr. Nicholas Bennett
  To ask the Secretary of State for Employment what was the levy income for the National Dock Labour Board for 1987.

  Mr. Nicholls
  [holding answer 3 May 1989]: The board's own management levy was £4,433,636. Levy received on behalf of the national voluntary severance scheme, administered by the board, was £2,047,046.

  Mr. McLoughlin
  To ask the Secretary of State for Employment if he will list the legal and professional fees incurred by the National Dock Labour Board in 1987.

  Mr. Nicholls
  [holding answer 3 May 1989]: Legal fees were £94,767 and professional fees were £13,030.

  Mr. Nicholas Bennett
  To ask the Secretary of State for Employment what was the cost to the National Dock Labour Board of financing the registered dock workers' national golf competition in 1987.

  Mr. Nicholls
  [holding answer 3 May 1989]: A total of £11,019.

  Mr. Janman
  To ask the Secretary of State for Employment how much was spent by the National Dock Labour Board in 1987 in legal fees on definitions of dock work.
  239
  Mr. Nicholls
  [holding answer 3 May 1989]: A total of £43,050.

  Jobstart
  Mr. Tony Lloyd
  To ask the Secretary of State for Employment how many people have used the jobstart allowance in each year since it began and for each standard economic region.

  Region

  From 1 July 1986 to 26 March 1987

  From 27 March 1987 to 25 March 1988

  From 26 March 1988 to 27 January 1989

  Northern

  694

  1,003

  765

  Yorkshire and Humberside

  992

  1,557

  1,121

  East Midlands and Eastern

  921

  1,288

  819

  London

  286

  292

  219

  South East

  572

  708

  371

  South West

  430

  639

  308

  Wales

  627

  1,131

  768

  West Midlands

  1,190

  1,696

  1,104

  North West

  1,890

  2,884

  1,794

  Scotland

  954

  1,493

  1,139

  Great Britain

  8,556

  12,691

  8,408

  Mr. Tony Lloyd
  To ask the Secretary of State for Employment if he will give details of the average length of stay of workers claiming the jobstart allowance.

  Mr. Lee
  The information requested is not readily available. However, it is estimated that in 1988 two-thirds of jobstart participants completed the 26 weeks of the programme. People who do not complete 26 weeks may cease to be eligible for the allowance for a number of reasons, including the wage rising above the limit allowed.

  Mr. Tony Lloyd
  To ask the Secretary of State for Employment if he will give details of the sectors in which jobstart allowance workers were based in 1988.

  Mr. Lee
  The information requested is not readily available and could be obtained only at disproportionate cost.

  Mr. Tony Lloyd
  To ask the Secretary of State for Employment if he will give details of the average jobstart allowance workers for each year since the start of the initiative; and if this includes the allowance.

  Mr. Lee
  The information requested is not readily available. However, an evaluation survey of the jobstart programme is currently being undertaken. Preliminary information from the study indicates that the average starting wage of jobstart workers in April and May 1988 was £67. This figure excludes the allowance.

  Unemployment Benefit
  Ms. Short
  To ask the Secretary of State for Employment how many claims of unemployment benefit have been disallowed on the grounds of refusal or premature termination of training in each month since September 1988.

  Mr. Lee
  Information is not collected in the form requested. However, in the six month period ending 31 December 1988, the total number of claims for unemployment benefit disallowed by adjudication officers on the grounds of refusal or premature termination of training, was 1,110.
  240
  Mr. Lee
  The numbers of people accepted on to the jobstart programme in each employment service region is shown in the table:

  Work Permits
  Mr. Mans
  To ask the Secretary of State for Employment what plans he has to review the work permit scheme; and if he will make a statement.

  Mr. Lee
  Changes in the labour market since the current rules for granting work permits were set in 1980 make it timely to review the operation of the scheme. We are concerned to see that the scheme, taking into account the interests of the resident labour force, provides as efficient service as possible to employers who need to employ people from outside the European Community. My Department has today sent a consultation paper to interested bodies inviting their view on proposals for increasing the effectiveness of the scheme. I have placed a copy of the paper in the Library. This review will also contribute to the Government's strategy of removing burdens from business.

  Industrial Action
  Mr. Nicholas Bennett
  To ask the Secretary of State for Employment what information he has as to the number of days lost in the United Kingdom and other Organisation for Economic Co-operation and Development countries by industrial action in the latest year for which figures are available.

  Mr. Nicholls
  [holding answer 3 May 1989]: The available information on working days lost from industrial stoppages, expressed as a ratio per thousand employees is shown in the table. The information covers OECD countries for 1987, the latest year for which comparative data is available. Comparisons between countries should be made with considerable care because of the different coverage of each country's statistics. Countries use different criteria for the exclusion of small stoppages from the statistics; public sector strikes are excluded in some cases, and some countries exclude workers prevented from working because others at their workplace are on strike. Further details are given in the article "International

  241
  comparisons of industrial stoppages for 1986" published in the Employment Gazette, June 1988, page 335, a copy of which is in the Library.

  Industrial stoppages working days lost per thousand employees' in all industries and services 1987

  Days

  United Kingdom

  160

  Australia

  220

  Austria

  2—

  Canada

  370

  Denmark

  60

  Finland

  60

  France3

  30

  Germany (Federal Republic)

  2—

  Greece

  970

  Ireland

  320

  Italy

  320

  Japan

  10

  Netherlands

  10

  New Zealand'

  270

  Norway

  10

  Portugal

  40

  Spain

  630

  Sweden

  —

  Switzerland

  —

  United States3

  40

  1 Employees in employment: some figures have been estimated.

  2 Less than five days lost per thousand employees.

  3 Significant coverage differences, the most important of which are: France and New Zealand exclude public sector strikes; New Zealand figures are for strikes of more than 10 working days duration; United States figures exclude disputes where less than 1,000 workers involved.

  Sources:

  Working days lost: International Labour Office (ILO) Yearbook of Labour Statistics 1988. Employees in employment: ILO and OECD publications.

  Information is not available for Belgium, Ireland, Luxembourg and Turkey.

DEFENCE

  United Nations
  Mr. Bowis
  To ask the Secretary of State for Defence what support his Department gives to the United Nations.

  Mr. Archie Hamilton
  My Department provides the following support to the United Nations:

  UNFICYP1
  One infantry battalion, one support regiment and a company of military police.

  UNTAG2
  One signals squadron and a small RAF reception assistance team.

  Republic of Korea
  One platoon from the Hong Kong garrison, which contributes towards the United Nations Honour Guard, and a small number of United Kingdom personnel in the headquarters of the Commonwealth Liaison Mission to the United Nations Command.

  British Forces Cyprus also provide logistic support for UNDOF3 and UNIFIL4 and there is currently an Army officer attached to the United Nations Field Operations Division in New York advising on logistics matters.

  1 United Nations Force in Cyprus.

  2 United Nations Transitional Assistance Group in Namibia.

  3 United Nations Disengagement Observer Force, Syria/Israel.

  4 United Nations Interim Force in Lebanon.

  Condor 2 Missile
  Dr. Thomas
  To ask the Secretary of State for Defence what information he has on the role played by the APV company of London, in the sale of missile propellant compounds to the Italian firm SNIA BPD via APV subsidiary APV Chemical Machinery Inc., of Saginaw, Michigan, United States of America, for use by the Argentine Institute of Aeronautic and Space Research in the development of the Condor 2 intermediate tactical missile.

  Mr. Waldegrave
  I have been asked to reply.

  There was no export to Argentina of this type from the United Kingdom. Exports by APV's American subsidiary are a matter for the American authorities.

  Defence Costs and Commitments
  Mr. Cohen
  To ask the Secretary of State for Defence how the latest United States plans for burden sharing will affect United Kingdom defence costs and commitments.

  Mr. Archie Hamilton
  We are not aware of any United States Governmant burden sharing plans that are likely to affect the United Kingdom's defence costs and commitments.

  Trident
  Mr. Andrew F. Barnett
  To ask the Secretary of State for Defence if he will make a further statement about command and control of Trident.

  Mr. Archie Hamilton
  No.

  Lance Missiles
  Mr. Flynn
  To ask the Secretary of State for Defence if, during the recent NATO nuclear planning Group meeting, the United Kingdom delegation raised the case for consideration of obligations under article VI of the nuclear non-proliferation treaty for NATO states party to the non-proliferation treaty, when evaluating the replacement of Lance nuclear-tipped short-range missiles in Europe.

  Mr. Archie Hamilton
  No.

  Radioactive Waste
  Mr. Flynn
  To ask the Secretary of State for Defence what scientific data were presented to the London dumping convention(a) in the years up to and including 1983 and (b) post 1983 on the potential environmental damage that might arise from the disposal at sea of (i) decommissioned nuclear submarine hulls, (ii) submarine reactor cores and (iii) low and intermediate-level radioactive wastes from the processing of military nuclear materials.

  Mr. Sainsbury
  The United Kingdom has presented no such data.

  Nuclear Submarines
  Mr. Flynn
  To ask the Secretary of State for Defence if, following the sinking of the Soviet Mike class nuclear submarine on 7 April, he will review the present safety of(a) United Kingdom nuclear-powered submarines and (b) United States nuclear-powered submarines afforded docking rights in the United Kingdom.
  243
  Mr. Archie Hamilton
  Measures to ensure the continuing safe design and operation of Royal Navy submarines are kept under constant review. In the light of what is currently known of the circumstances of the loss of the Mike class Soviet submarine on 7 April, the accident would appear to offer no specific lessons with regard to Royal Naval submarine safety. The safety of United States nuclear-powered warships is the responsibility of the United States Government. However, visits to this country by United States nuclear-powered submarines are covered by a written arrangement between the two countries.

  Diversion Airfields
  Mr. Redmond
  To ask the Secretary of State for Defence if he will list all the master diversion airfields used by the Royal Air Force and North Atlantic Treaty Organisation based aircraft in the United Kingdom and abroad.

  Mr. Neubert
  The Royal Air Force presently operates eight military emergency diversion aerodromes in the United Kingdom and one master diversion aerodrome overseas.

  These are:

  MEDAs

  RAF Leeming

  RAF Leuchars

  RAF Lossiemouth

  RAF Manston

  RAF St. Mawgan

  RAF Valley

  RAF Waddington

  RAF Wattisham

  MDA

  RAF Wildenrath

  Ascension and Falkland Islands
  Mr. Barry Field
  To ask the Secretary of State for Defence what is the total tonnage of fresh vegetables supplied to the Ascension and Falklands Islands from(a) England and (b) the Isle of Wight to date.

  Mr. Neubert
  Last year 375 tonnes of fresh vegetables were shipped to Ascension and the Falkland Islands from the United Kingdom. Our records do not enable the origin of the vegetables to be identified in the detail requested.

  Charities (Retail Prices Index Error)
  Mr. Andrew Bowden
  To ask the Secretary of State for Defence what payments were made to armed services charities from moneys arising from the error in the retail price index.

  Mr. Neubert
  Payments were made from Ministry of Defence funds, consequent upon the error in calculation of the retail prices index discovered in 1987, to the following charitable organisations for further distribution:

  £

  King George's Fund for Sailors

  282,000

  Army Benevolent Fund

  498,000

  Royal Air Force Benevolent Fund

  418,000

  Territorial Army
  Mr. Stern
  To ask the Secretary of State for Defence approximately how many United Kingdom employers now release staff for service in the Territorial Army.
  244
  Mr. Neubert
  It is not at present possible to provide an accurate assessment of the number of employers who release staff for TA service. In addition to the willingness of men and women to offer their services, the need to harness the wholehearted support of employers has long been acknowledged. For this reason we launched a major campaign in September of last year not only with a prime aim of stressing the importance of the TA, but also of making employers aware of the benefits which may accrue from employees' participation, ie improved qualities of leadership, discipline, self-reliance, communications and the acquisition of personal skills. One of the major initiatives in the early stages of this campaign was the circulation of a letter from the chairman of the National Employer Liaison Committee, Mr. Tony MacPherson, to over 600 leading companies seeking an active commitment to the Reserve Forces. The response to this letter has been overwhelmingly positive.

ENVIRONMENT

  Water Pollution
  Mr. Austin Mitchell
  To ask the Secretary of State for the Environment whether he will include in the Official Report his estimate of the proportionate contribution to the pollution of the water supply in toxic or other terms as defined by the European Economic Community regulations or otherwise made by (a) manufacturing industry, (b) agriculture, (c) sewage works and (d) domestic consumers of water.

  Mr. Howard
  Pollution incidents from manufacturing industry, agriculture and sewage treatments works rarely affect water supplies, because water undertakers take effective precautionary measures to prevent this. A few supplies are affected by nitrate pollution from agriculture and very low levels of pesticides have been detected in some supplies as a result of activity by a variety of bodies including local authorities, farmers and nationalised industries. Water in individual properties may have a high lead concentration because of lead communication and supply pipes. There have been occasional instances of pollution from chlorinated solvents derived from de-greasing activities or dry cleaning businesses. Further information about the quality of groundwater sources is contained in the report "Assessment of Groundwater in England and Wales" prepared for the Department by Sir William Halcrow and Partners Ltd. and published last December.

  Environmental Assessment
  Ms. Walley
  To ask the Secretary of State for the Environment if he will list those proposed developments for which, since 15 July 1988, the local planning authority has given an opinion that environmental assessment is required.

  Mr. Howard
  The following cases in which an English local planning authority has given an opinion under regulation 5(4) of the Town and Country Planning (Assessment of Environmental Effects) Regulations 1988 that environment assessment is required have been notified to the Department in accordance with paragraph 52 of DoE circular 15/88.
  245

  Local planning authority

  Proposed Development

  Date of opinion

  Leeds City Council

  Retail, etc, development Kirkstall Valley, Leeds

  11 August 1988

  Calderdale D. C.

  Sludge de-watering plant Bradley

  7 March 1989

  Newcastle City Council

  Gosforth Park housing development, Newcastle

  13 March 1989

  Peterborough City Council

  Residential and commercial development at Castor and Ailsworth, Peterborough

  31 March 1989

  Knowsley D. C.

  Incinerator for medical and hospital wastes, Hammond Road., Kirkby, Merseyside

  13 April 1989

  Proposed development

  Planning decision as notified to the Secretary of State under regulation 23

  Slough Borough Council

  Expansion of private power station, Slough, Berkshire.

  Planning permission granted 10 January 1989.

  South Oxfordshire District Council

  Brickworks, Southmead Industrial Estate, Didcot, Oxfordshire.

  Planning permission refused 11 January 1989.

  Peterborough City Council

  Private Electricity Generating Station, Peterborough.

  Outline planning permission granted 31 January 1989.

  North Tyneside District Council

  Synthetic resin plant, North Shields.

  Not yet notified.

  Cleveland County Council

  Toxic waste incinerator. Seal Sands, Cleveland.

  Not yet notified.

  Gateshead District Council

  Infill of former Wardley Quarry, Gateshead, Tyne and Wear.

  Not yet notified.

  Teesside District Council

  Clinical waste incinerator, Tyne Tees Wharf, Middlesbrough.

  Not yet notified.

  Durham County Council

  Hilton Lane opencast coal site, Hilton, Durham.

  Not yet notified.

  Wyre District Council

  Pumping station and sewage outfall, Fleetwood, Lancashire.

  Not yet notified.

  Wirral District Council

  Waste disposal site, Bromborough, the Wirral, Merseyside

  Not yet notified

  Leeds City Council

  Quarry extension, Castleford, West Yorkshire.

  Not yet notified.

  Doncaster Metropolitan Borough Council

  Waste treatment centre, Kirk Sandall, Doncaster.

  Not yet notified.

  Harrogate District Council and North Yorkshire County Council

  Harrogate/Knaresborough Southern Bypass.

  Not yet notified.

  Black Country Development Corporation

  Black Country Spine Road, Wolverhampton.

  Not yet notified.

  Corby District Council

  Private Electricity Generating Station, Corby, Northamptonshire.

  Not yet notified.

  Melton Borough Council

  New village (Kettleby Magna), Great Dalby, Leicestershire.

  Not yet notified.

  Northampton District Council

  New village, Wooton Fields, Northampton

  Not yet notified.

  Derbyshire Dales District Council

  Holiday village, Flash Dam, Matlock, Derbyshire

  Not yet notified

  Mansfield District Council

  Robin Hood Theme Park, Mansfield Woodhouse.

  Not yet notified

  246
  Ms. Walley
  To ask the Secretary of State for the Environment if he will list those developments for which an environmental statement has been provided under the Town and Country Planning (Assessment of Environmental Effects) Regulations 1988 and give the planning authority's decision in respect of each planning application with any conditions attached to the permissions.

  Mr. Howard
  Copies of the environmental statements have been sent to the Department under regulation 14(2)(B) in respect of the following developments:
  247

  Proposed development

  Planning decision as notified to the Secretary of State under regulation 23

  Boston Borough Council

  Steel rolling mill, Batteries Farm, Boston Lincolnshire.

  Not yet notified

  Broxtowe Borough Council

  Retail Park, Giltbrook, Nottingham

  Not yet notified

  Derbyshire Dales District Council

  Hotel, conference centre, funicular railway, etc, Matlock Bath, Derbyshire.

  Application withdrawn prior to planning decision being made.

  Castle Point District Council

  New settlement at Canvey Island, Essex.

  Not yet notified.

  Rochester-upon-Medway City

  Trading Port, BP site, Isle of Grain, Kent.

  Not yet notified.

  Rochester-upon-Medway City

  Liquefied Natural Gas terminal, BP site, Isle of Grain, Kent

  Not yet notified

  Tonbridge and Mailing District Council

  Distribution depot/light industrial development, Ditton Park Quarry, Aylesford, Kent.

  Not yet notified

  Medina Borough Council

  Marina, hotel and residential units, Port Marina, East Cowes, Isle of Wight.

  Not yet notified.

  Berkshire County Council

  Sandhurst/Crowthorne Bypass.

  Not yet notified

  Surrey County Council

  Waste disposal site, Hersham and Trumps Farms, Longcross, Surrey.

  Not yet notified.

  South Oxfordshire District Council

  Wallingford by-pass.

  Not yet notified

  Devon County Council

  Extension of landfill site, Kengsteignton, South Devon

  Not yet notified.

  Ms. Walley
  To ask the Secretary of State for the Environment if he will list those proposed developments since 15 July 1988 where(a) he has exercised his power to make a direction without an application under the Town and Country Planning (Assessment of Environmental Effects) Regulations 1988, (b) he has had to make a direction where a planning application has not been

  LPA

  Proposed Development

  Date of Direction

  Effect of Direction

  (a) Without application under the regulations:

  Lincoln City Council

  Business Park, Bishops Bridge, Lincoln

  13 April 1989

  EA required

  (b) in response to a request by a developer following a notification by a local planning authority that an environmental statement is required in respect of a planning application not accompanied by an environmental statement:

  1. City of Nottingham

  Retail park, hotel, etc. Babbington Colliery site, Nottingham

  2 September 1988

  EA not required

  2. London Boroughs of Newham and Waltham Forest

  Lee Cross Shopping Centre

  28 October 1988

  EA required

  17 November

  3. Wycombe D.C.

  Motorway Service Area, M 40, near High Wycombe

  1988

  EA not required

  4. South Buckingham D.C

  Shopping Complex, Tanhouse Pits, Iver, Bucks.

  6 December 1988

  EA not required

  Extension of sand and gravel workings, Stanwick Quarry, near

  5. Northants C.C.

  Raunds, Northants

  6 December 1988

  EA required

  6. Cambridgeshire C.C.

  Extension of sand and gravel workings, Barleycroft Farm, Cambs

  14 December 1988

  EA not required

  7. Thamesdown B.C.

  Industrial estate, Stratton St. Margaret, Swindon

  21 December 1988

  EA not required

  8. Essex C.C.

  Sand and gravel workings Mana Farm, Essex

  30 January 1989

  EA required

  9. North West Leicestershire D.C.

  Retail Park, Donington Park Motor Racing Circuit

  2 March 1989

  EA required

  10. North West Leicestershire D.C.

  Business/Office Park, Donington Park

  2 March 1989

  EA required

  11. London Borough of Lambeth

  Redevelopment of County Hall, London SE1

  14 March 1989

  EA not required

  12. Malvern Hills D.C.

  New village and industrial development, adjacent to Malvern Hills

  17 March 1989

  EA required

  13. North Devon D.C.

  Proposed Motor racing circuit at Bishop's Nympton, Devon

  27 April 1989

  EA required

  (c) in response to a request by a local planning authority in respect of its own development:

  1. Sedgfield D.C.

  Heighington Lane Industrial Site, Newton Aycliffe, County Durham

  13 October 1988

  EA not required

  248
  accompanied by an environmental assessment but the planning authority have notified the applicant that an environmental statement would be required; and if he will state the effect of those directions.

  Mr. Howard
  The following directions have been given by the Secretary of State:
  249

  LPA

  Proposed Development

  Date of Direction

  Effect of Direction

  2. North Warwickshire D.C.

  Infrastructure for industrial estate, Kingsbury Colliery site, near Tamworth

  17 October 1988

  EA not required

  3. Langbaurgh B.C.

  Ski lift and ski centre, Eston Hills Normanby

  9 December 1988

  EA not required

  Ms. Walley
  To ask the Secretary of State for the Environment if he will list those developments where he has been required to make a pre-application direction as to whether the development should be subject to environmental assessment and give the decision in each case.

  Mr. Howard
  There have been no such cases.

  Housing Co-operatives
  Mr. Turner
  To ask the Secretary of State for the Environment in view of the Housing Corporation's work with tenants' transfer and co-operatives, if he has taken any steps to ensure that the housing co-operative sector is represented on the board of the Housing Corporation.

  Mr. Trippier
  My right hon. Friend makes appointments to the board of the Housing Corporation so as to ensure that it has at its disposal the range of skills and experience necessary to fulfil its statutory functions.

  AIDS
  Mr. Chris Smith
  To ask the Secretary of State for the Environment when he expects to publish his guidance to local authorities in relation to their policies and practices for the housing of those with HIV and AIDS.

  Mr. Trippier
  Decisions have not yet been taken on any Government guidance. Advice is already available to local authorities in the Report "Housing and HIV Infection" published by the local authority associations' officers working group on AIDS.

  Dioxin Levels (Devon)
  Mr. Speller
  To ask the Secretary of State for the Environment if he will take steps to secure regular monitoring of dioxin levels from the incineration at Yelland in north Devon of sewage sludge and screenings; and if he will ensure that the results are made available to the local authorities concerned.

  Mrs. Virginia Bottomley
  Dioxin emission monitoring is extremely complex and expensive and results cannot be available for some time after the sampling period. We therefore believe that the appropriate way to control dioxin formation is to ensure strict control of combustion conditions and good abatement of particulates. This is in line with the recently agreed EC directive on new municipal waste incineration plant. Local authorities are responsible for the environmental regulation of incinerators of less than one tonne per hour capacity, such as the one at Yelland.

  Rating Reform
  Dr. Cunningham
  To ask the Secretary of State for the Environment (1) how much he plans to spend distributing leaflets to households on forthcoming changes to the system of local government finance; and if he will make a statement;
  250
  (2) how much he plans to spend on press advertising in May 1989 on the new system of local government finance.

  Mr. Ridley
  I refer the hon. Member to the answers which I gave him on 17 April.

  Dr. Cunningham
  To ask the Secretary of State for the Environment what plans he has to publicise the national non-domestic rate and the revaluation of non-domestic properties.

  Mr. Ridley
  I hope to announce shortly how I propose to inform the public of the effects of the statute creating the new business rate.

  Ancient Monuments and Archaeological Areas Act 1979
  Mr. Tony Banks
  To ask the Secretary of State for the Environment if he will extend the provisions of part II of the Ancient Monuments and Archaeological Areas Act 1979 to the City of London.

  Mrs. Virginia Bottomley
  We have no plans at present for designating areas of archaeological importance within the City of London. English Heritage has been reviewing the effectiveness of part II of the 1979 Act and has recently submitted advice, which we are considering.

  Roman Remains (London)
  Mr. Tony Banks
  To ask the Secretary of State for the Environment on what basis scheduled monument consent was granted to Hammerson Property Group for the Roman remains in Upper Thames street.

  Mrs. Virginia Bottomley
  A trial excavation of the site was undertaken by the Museum of London in 1988 and the results were evaluated by English Heritage. On the basis of that excavation an evaluation scheduled monument consent was granted to the developers on 22 December 1988 on condition that the Museum of London be allowed up to six months to carry out an archaeological excavation beneath part of Dominant House.

  Mr. Tony Banks
  To ask the Secretary of State for the Environment what estimates have been made of how much of the total Roman site under Dominant House and Fur Trade House will be destroyed if the proposed development in Upper Thames street by Hammerson Property Group proceeds.

  Mrs Virginia Bottomley
  I refer the hon. Member to the reply I gave him on 18 April 1989, column 77. It is estimated that the current area of excavation covers about 20–25 per cent. of the known area of the monument.

  Mr. Tony Banks
  To ask the Secretary of State for the Environment what information he has about the extent of the damage to the Roman remains on the Hammerson site in Upper Thames street caused by the 1964–65 building construction; and if he will make a statement.

  Mrs. Virginia Bottomley
  Less than 10 per cent. of the area of the current excavation was removed or disturbed by the construction of Dominant House in 1964.
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  Mr. Tony Banks
  To ask the Secretary of State for the Environment what discussions have taken place between his Department and the City of London regarding safeguarding the Roman remains on the Hammerson Propery Group site in Upper Thames street; and if he will make a statement.

  Mrs. Virginia Bottomley
  There has been no direct contact between the Department and the City of London on this matter. We have been represented throughout by our statutory advisors on archaeology, English Heritage.

  Scheduled Monument Consent
  Mr. Tony Banks
  To ask the Secretary of State for the Environment on how many occasions since 1979 he has withdrawn or suspended scheduled monument consent; and under what powers did he act in each case.

  Mrs. Virginia Bottomley
  None.

  Edible Doormouse
  Mr. Ron Davies
  To ask the Secretary of State for the Environment what information he has about the European distribution of the edible doormouse, or glis glis.

  Mrs. Virginia Bottomley
  I am advised by the Nature Conservancy Council that the edible doormouse, glis glis, has a wide-ranging distribution in central and southern Europe, including northern Spain, France, Germany,252
  Belgium, Luxembourg, Italy and Greece. The species was introduced into the United Kingdom in 1902 and is now found in the counties of Bedfordshire, Berkshire, Buckinghamshire and Hertfordshire.

  Naburn Hospital Site
  Mr. John Greenway
  To ask the Secretary of State for the Environment (1) what matters he took into account in agreeing to allow Selby district council to determine the further application by Paul Sykes (Developments) Ltd. to redevelop the former Naburn hospital site into an out-of-town shopping centre, contrary to the Greater York shopping policy;

  (2) what matters he took into account in reaching his original decision to allow Selby district council to determine the application by Paul Sykes (Developments) Ltd. to redevelop the former Naburn hospital site into an out-of-town shopping centre, contrary to the Greater York shopping policy.

  Mr. Chope
  [holding answer 27 April 1989]: In considering whether to call in the application for his own determination, my right hon. Friend the Secretary of State, had regard to Government policy, expressed particularly in PPG6 on major retail development and also to the shopping study carried out for the Greater York authorities, as updated by its author Harvey Coles and by G. L. Hearn. After careful consideration he concluded that there was no evidence that the vitality and viability of the city as a whole would be seriously affected.

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

National Debt Repayment
Lord Orr-Ewing Lord Orr-Ewing asked Her Majesty's Government:
What savings to taxpayers have accrued from the reduction in the national debt over the last two years.
The Secretary of State for Trade and Industry (Lord Young of Graffham): My Lords, the Government have made a net public sector debt repayment (PSDR) of £17·8 billion over the past two years. As my right honourable friend the Chancellor of the Exchequer announced in his Budget speech, this will save over £1½ billion a year in debt interest costs.
Lord Orr-Ewing: My Lords, does the Minister agree that that substantial saving has been a major factor in permitting the Government to spend an extra 40 per cent. in real terms on the health service and between 20 per cent. and 25 per cent. extra, again in real terms, for every pupil in our schools?
Lord Young of Graffham: Yes, my Lords. I hope that my noble friend will not think that I am being too self-centered when I say that the annual saving is rather more than the entire budget of my department.
Lord Jenkins of Hillhead: My Lords, as this day of all days we are being asked to think back over a 10-year span, can the Minister tell the House what has been the net debt reduction, if any, over the past 10 years and what has been the consequent saving in interest to the taxpayer taking those 10 years as a whole?
Lord Young of Graffham: My Lords, over the whole of the 10-year period there has not been a net reduction. However, it may be of interest to learn that the net public sector debt was just over half of GDP in 1979; namely, 50·s6 per cent. In 1989 the estimate is that it will be precisely 32 per cent.
Lord Barnett: My Lords, does the noble Lord agree that there would be an even greater benefit to the taxpayers and the community as a whole if, instead of reducing the national debt, the resources had been used to improve the quality of life for everyone by spending the money on the environment, general infrastructure, and so on? Is that not the policy of the Chancellor? Is it not part of his policy not to reduce the national debt; or is that not a policy with which the Minister agrees?
Lord Young of Graffham: My Lords, it is only by good housekeeping that we are in a position to be able to reduce the public sector debt. Perhaps I may remind the noble Lord, Lord Barnett, that each year the Government are spending more money on precisely the objectives that he outlined. Only by running the economy in the way that the Government have succeeded in doing for the past decade have we been able to see not only the reduction in the public debt but the amazing turnaround in our economy.
Lord Boyd-Carpenter: My Lords, can the Minister say how far one has to go back before last year to find a year in which there has been a net repayment rather than an increase in the national debt?
Lord Young of Graffham: My Lords, we have to go back a very considerable period, I suspect, since these figures were first kept to find a repayment in the order of last year's figure.
Lord Bruce of Donington: My Lords, I note that the Minister has refrained specifically from answering the precise Question put on the Order Paper by his noble friend. Is he aware that the cost of servicing the national debt in 1978–79 was £15·8 billion whereas in 1987–88 it was £17·7 billion and in 1988–89 it was £17·1 billion—all valued at 1987–88 prices? Does he not agree that it would be well worth while to answer his noble friend precisely and say that in point of fact the increase in the debt charge in the years to which the noble Lord, Lord Orr-Ewing, has referred was between £186 million and £574 million, depending on which document is relied upon—either the Financial Statement accompanying the 1989–90 Budget report or the Government's expenditure plans, both of which are issued by the Government?
Lord Young of Graffham: My Lords, I am not sure that I followed the question put by the noble Lord, Lord Bruce of Donington. I shall only say that in all these matters the relevant figure is the percentage of GDP. It is the proportion of the total resources of the nation that goes to pay off our debt. That is coming down and will continue to come down.
Lord Bruce of Donington: My Lords, in response to the Minister on that specific point, may I point out that in 1978——
Noble Lords: Order!
Lord Bruce of Donington: My Lords, is the Minister aware that in 1978–79 the debt charge as a percentage of GDP was 9·9 per cent. and in 1988–89 it is 10·28 per cent?
Lord Young of Graffam: My Lords, no doubt the noble Lord can seek and find individual figures taken from different tables issued by the Government, which I do not deny. However, the only relevant figure here is the proportion of national resources which have to go back to pay the debts of past generations. This Government are lifting from the future the burden of the debts of the past.
Lord Tordoff: My Lords, does the Minister agree that the answer to the question put by his noble friend Lord Boyd-Carpenter is 1968–69?
Lord Young of Graffam: My Lords, it may very well be, but not to the same proportion, which was my answer.
Lord Hailsham of Saint Marylebone: My Lords, before we prolong indefinitely this statistical game of ping-pong, may we reflect that the noble Lord, Lord Bruce, cannot have it both ways? The total borrowing may have increased, but by how much more would it have been increased if we had done a quarter of the things that the Opposition Front Bench has asked us to do?
Lord Young of Graffam: My Lords, since my noble and learned friend has asked that question, perhaps I may say in reply that if the PSBR as a share of GDP had remained at the 1978–79 level, cumulative borrowing today would be £90 billion higher than the outturn and increased debt service would cost us £9 billion each year. That is the measure of the difference.
Lord Stoddart of Swindon: My Lords, is it not a fact that while public debt has been reduced, private debt has increased very considerably indeed with detriment to the economy and in particular the balance of payments? Does the Minister agree that it would be preferable for the Government to ensure that their debt was kept under proper control; indeed, that they should not pay off the national debt so quickly but rather encourage private saving, which would help the general economic situation and the balance of payments situation in particular?
Lord Young of Graffham: My Lords, it is all a matter of perspective. I suspect that if one were sitting opposite it would appear to be to the detriment of the economy; if one were sitting outside your Lordships' House and looking at the real world, it would not.
Lord Peston: My Lords, the Minister said that what really mattered was the decline in the public debt. Is he saying that future generations will welcome the decline in public investment and the quality of the environment in which they will live because this Government have cut such expenditure in order to cut the national debt?
Lord Young of Graffam: My Lords, the noble Lord is too good an economist not to know that the Government have increased expenditure in all those areas in real terms. If he steps outside he will see that the quality of life is rising and not falling. Whether one considers water pollution or any other measures, it is clear that the environment is being improved.
Viscount St. Davids: My Lords, will my noble friend confirm that during their period in office the Labour Party added £40 billion to our debts which, according to my calculations, mean that we have to pay out £4 billion a year simply to service those
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debts? I think that my noble friend will agree that that is considerably more than twice his total budget.
Lord Young of Graffham: My Lords, it is nearly four times my total budget.
Lord Thorneycroft: My Lords, whatever else has happened in the past 10 years, is it not a rather cheerful fact that it has resulted in the Labour Party embarking upon a policy of trying to reverse almost every policy that they pursued before that period?
Lord Young of Graffham: My Lords, I think that that factor has not escaped the notice of those of us on this side of the House at least.

Pest Control: Birds
3.10 p.m.
Lord Stanley of Alderley Lord Stanley of Alderley asked Her Majesty's Government:
Whether they will resist any attempts to make it more difficult to control pests listed in Part II, Schedule 2, of the Wildlife and Countryside Act 1981, in particular magpies and carrion crows.
The Minister of State, Department of the Environment (The Earl of Caithness): My Lords, we have no intention at present of altering the provisions relating to species listed in Schedule 2 Part II of the Wildlife and Countryside Act 1981.
Lord Stanley of Alderley: My Lords, I thank my noble friend for that Answer. Is it true that the Commission believe that our pest schedule, as I call it, is contrary to their birds directive? Is my noble friend aware that he would have the wholehearted support of every shepherd, and indeed of every noble Lord who took an interest in drawing up that schedule in the 1981 Act, if he strongly resisted such a move?
The Earl of Caithness: My Lords, I am very well aware of the support from my noble friend and those who live in the countryside. However, anyone who is remotely concerned with nature and bird life would wish to see the continuation of a pest schedule.
Lord John-Mackie: My Lords, with reference to the concern for bird life, the magpie is the biggest possible killer of bird life.
The Earl of Caithness: My Lords, I hope that the noble Lord speaks for all the Opposition.
Lord Winstanley: My Lords, I am a wholly committed supporter of the Wildlife and Countryside Act. Does the noble Earl agree that it was not the intention of that Act that magpies should be permitted without let or hindrance to steal chicks and eggs from the nests of small birds which others of us have striven hard and long to protect and preserve? While I am not in favour of capital punishment for theft in general, should not an exception be made for the thieving and murderous magpie?
The Earl of Caithness: My Lords, an exception is made for the magpie. I am grateful for the support of the noble Lord, and I hope that of his party.
The Earl of Swinton: My Lords, is my noble friend aware that when the noble Lord, Lord Winstanley, refers to the Commission, he is not referring to the Countryside Commission which I know is wholeheartedly against the common magpie? I believe that he refers to the European Commission. Might it be worth while for my noble friend to hire a coach and to take the Commissioners up and down the motorways? They will then have an idea of the preponderance of these horrible magpies which live all over the land.
The Earl of Caithness: My Lords, an invitation has been offered by my right honourable friend the Secretary of State to the new Commissioner and to Mr. Brinkhorst to come and see some of the appalling damage that these pests do.

Brigade of Gurkhas: Future
3.14 p.m.
Lord Bramall Lord Bramall asked Her Majesty's Government:
When they will be ready to announce their plans on the future of the Brigade of Gurkhas.
The Minister of State for Defence Procurement (Lord Trefgarne): My Lords, we have repeatedly made it clear that we intend that there shall be a future for the Gurkhas after 1997, and hope shortly to be in a position to say something more about this.
Lord Bramall: My Lords, I thank the Minister for his quietly encouraging, although surprisingly somewhat cautious, reply. Does he agree that, whatever the longer-term plans for the shape of the brigade—and I agree that there are a number of factors to take into account—in the shorter term, while we still have responsibility for the stability and security of Hong Kong, while there are very real problems of recruiting and retention in the British Army, there can be no justification whatsoever for restricting the number and strengths of Gurkha units for which no recruiting problems exist?
Lord Trefgarne: My Lords, the noble and gallant Lord will not expect me to anticipate the Statement that is to be made in the not too distant future. However, I can assure him that all the points he has made are being very carefully taken into account.
Lord Irving of Dartford: My Lords, is the noble Lord aware that this matter has been under consideration for at least five years, and that many people appear to believe that the delay arises from a lack of commitment, despite what the noble Lord has said? This would be a very poor recompense for the excellent and courageous service that the Gurkhas have given to this country over a long period of time.
Lord Trefgarne: My Lords, the noble Lord is quite right. The contribution that the Gurkhas have made
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in past times to the effectiveness of the British Army is absolutely magnificent. The urgency is not so great as the noble Lord suggests because we shall be withdrawing finally from Hong Kong in 1997. It is in Hong Kong that Gurkhas are principally employed at the present time.
Lord Mayhew: My Lords, I welcome cautiously the Answer given by the noble Lord. Why is there no reference to the Brigade of Gurkhas and recruiting difficulties in this year's White Paper? Is he aware that the Defence White Paper this year is quite exceptionally skimpy and uninformative?
Lord Trefgarne: My Lords, the content of the White Paper does not exactly arise from the Question on the Order Paper. However, if the noble Lord is asking why there was no extensive reference to Gurkhas in the White Paper, perhaps I may revert to the reply that I have just given to the noble Lord opposite. The White Paper that has recently been published is the 1989 White Paper, and not that for 1997.
Viscount Slim: My Lords, in view of the demographic problems of recruiting that will affect the armed forces in the future, and the fact that the army already looks like being under strength, should not the noble Lord be advising his right honourable friend the Secretary of State to retain every Gurkha and not to consider slicing the numbers?
Lord Trefgarne: My Lords, as is known, the British Army has some modest recruiting problems at the present time. They are indeed no more than modest. I do not think that the size of the Brigade of Gurkhas is a relevant consideration. However, as I have already said, we certainly recognise the importance of the brigade.
Baroness Strange: My Lords, will the Minister agree that it can sometimes be more economical to employ Gurkhas?
Lord Trefgarne: My Lords, that is a rather more complicated question than perhaps my noble friend realises. The cost of employing Gurkhas very much depends upon where they are deployed.
Lord Eden of Winton: My Lords, the Minister has informed the House that we my expect a fuller Statement shortly. Can he give the assurance to the House that it will be before the Summer Recess?
Lord Trefgarne: My Lords, I cannot give a categoric assurance in the way that my noble friend requests. However, I can say that I shall be very surprised if that is not the case.
Lord Bramall: My Lords, is it not rather surprising that the Government have taken so long over this matter? As has already been stated, it is over three years since the initial announcement was made envisaging a continual role for the Gurkhas after 1997. The admirable parliamentary Select Committee report has been published for quite a long time. Can the Minister say why there has been this delay?
Lord Trefgarne: My Lords, there is no particular deliberate delay. As I said earlier, there is no particular urgency either, because there are no immediate plans for any change in the size of the Gurkha Brigade. What we are considering is the size of the Gurkha Brigade post-1997.
Lord Kennet: My Lords, while we are all very glad to know that there will be a future for the Gurkhas after 1997, can the Minister tell us whether that future will be with the British Crown?
Lord Trefgarne: My Lords, yes. In the future there will be a Brigade of Gurkhas within the British Army for as far ahead as we can foresee.
Lord Chalfont: My Lords, will the Minister assure us that if, after 1997, one problem is that of accommodation for the Gurkhas when they leave Hong Kong, he will investigate fully the possibility of stationing another battalion in Brunei, where the training facilities are excellent?
Lord Trefgarne: My Lords, all those possibilities will be considered. However, we have not reached a final conclusion. We shall announce it as soon as we have done so.

Armed Forces Housing
3.20 p.m.
Lord Bramall Lord Bramall asked Her Majesty's Government:
Whether, in view of their current difficulty in retaining men in the armed forces, they intend to reinforce their record as employers by introducing a house purchase scheme.
Lord Trefgarne: My Lords, we welcome the fact that servicemen, like other members of the community, aspire to own their own homes. We have taken a number of measures to help them to combine home ownership with the special demands of service life. We are examining a number of other ideas, including the possibility of setting up a scheme to help servicemen save towards the purchase of a house.
Lord Bramall: My Lords, I thank the Minister for that reply which I might describe as being of some help on the peripheral areas of the problem. Does the Minister agree that domestic and family problems relating to difficulties with housing continue to be one of the greatest incentives to leaving the services early? Does the Minister not agree that at a time of acute manning difficulties what is really required is a much more comprehensive scheme which will allow the soldier to save for his retirement home in a tax-effective manner without being forced to buy a home prematurely and at a time when he is being encouraged to live in government accommodation, often abroad? At present at the end of his service he has nothing to show.
Lord Trefgarne: My Lords, I do not believe that the noble and gallant Lord is right in suggesting that this matter is a key element in the retention affairs
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of the British Army or the other armed forces. While no doubt it is one of the considerations that soldiers and others take into account, it is certainly not the only one. We recognise that there is scope for improvement in the arrangements presently in place and that is why we are considering what can be done.
Lord Alport: My Lords, is my noble friend aware that in the garrison at Colchester certain of the married quarters have been made available for occupation by civilian families under the auspices of the local corporation? If there are surplus married quarters available, could not those quarters be made available for sale to servicemen at reduced prices to encourage them and to give them a chance to start on the home-owning ladder?
Lord Trefgarne: Yes, my Lords, I can reassure my noble friend on that. Surplus married quarters are always offered at a discount to the armed forces before they are placed on the general market.
Lord Ashbourne: My Lords, which of the services is most acutely affected by this problem of retaining skilled personnel, which is a very acute problem in my view? Are the Government taking fully into account the attitudes of wives when they grapple with this problem?
Lord Trefgarne: My Lords, in answer to the second of my noble friend's supplementary questions, yes, we always take into account the views of the whole family unit. Those views are often coincident with the views of the husband. As to the retention of skilled personnel, the problem of retaining highly skilled people is not confined to the armed forces. It is a problem which is manifest right across the British economy, within British industry and other organisations as well as the army
Lord Stoddart of Swindon: My Lords, the noble Lord said that housing and house ownership was not a key element. Is he aware that some of us disagree with him? He must be aware that in the next few years, when there will be enormous competition for young people, the question of house purchase and future housing will concern officers and men and their wives very much indeed and may well become a key element.
Lord Trefgarne: My Lords, I am trying to deal with the present situation. Of course I do not deny that the demographic trough, as it is called, will become more pronounced in the future and the armed forces will have to compete as vigorously as ever to attract their share of competent young people. The provision of appropriate housing will represent one of the elements that we shall have to consider. But I remind the noble Lord that we have a considerable estate of married quarters which are already available to serving personnel, whether they be officers, non-commissioned ranks or others, and those are very much an attraction to many young people.
Lord Irving of Dartford: My Lords, is the noble Lord aware that the failure to retain trained

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personnel is costly and the failure to recruit enough personnel is a serious disability to our defence effort? In view of the urgency of this matter, will he not only give serious consideration to the points made by the noble and gallant Lord, but equally bear in mind that other matters of pay prospects and conditions of service have to be considered if we are to meet the shortage of young people which will shortly arise and which will mean a worse position in respect of recruitment?
Lord Trefgarne: My Lords, I agree with the noble Lord. It will be necessary to ensure that the whole range of conditions of service available in the armed forces, not just the housing provisions, remain as attractive as we can make them if we are to continue to ensure that we recruit our share of the young people whom we shall need.
Lord Mayhew: My Lords, is the noble Lord aware that the problem of recruitment and retention of servicemen is of tremendous importance and of great interest to Parliament? I ask again, why is there no reference to this problem in this year's Defence White Paper? Is he aware that year by year this White Paper is becoming less and less valuable for informing Parliament and more and more of a public relations document?
Lord Trefgarne: My Lords, as far as I can ascertain, the noble Lord's view is unique to himself. The White Paper that we published at the beginning of this week has been widely welcomed by a wide spectrum of political opinion. I am sorry that that does not include the noble Lord. In fact at present the strength of the armed forces is close to the planned strength. Out of a total number of personnel of some 320,000, taking all the services together, overall we are less than 6,000 short, which is a tiny percentage.
Viscount Ridley: My Lords, does my noble friend not agree that the scheme suggested by the noble and gallant Lord, Lord Bramall, would be extremely cost-effective and will he examine it yet faster than he has so far?
Lord Trefgarne: My Lords, we are doing our best to bring this matter to a speedy conclusion. It is in our interests as well as those of our servicemen to ensure that we do that. I assure my noble friend that there will be no unnecessary delay.
Lord Dean of Beswick: My Lords, if the Government intend to put into operation a scheme to enable people in the armed forces to save towards the purchase of a house when they leave the armed forces, will they make sure that the factor in house price rises is taken into account? Otherwise the savings may be completely swallowed up in inflation by the time they are ready to leave the service and may well be worthless.
Lord Trefgarne: My Lords, the noble Lord is quite right. That is an important consideration, but adds to the complexity of any scheme we have to devise.
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That is why it is perhaps taking a little longer than some people would wish. I refer again to the scheme we have now for disposing of surplus married quarters to suitably qualified personnel. They are sold at a substantial discount—normally 30 per cent.
Lord Leatherland: My Lords, does the Minister think that it is time for another general increase in the pay of the armed forces? I remember when I joined in 1914 at a shilling a day, and as a company sergeant major only earned five shillings a day.
Lord Trefgarne: My Lords, I am happy to reassure the noble Lord that the pay is now rather more than five shillings a day.

Business
3.27 p.m.
Lord Denham: My Lords, it may be for the convenience of the House if I announce that the Committee stage of the Water Bill will be adjourned at approximately 7 p.m. for approximately one hour. During this adjournment the Second Reading of the Employment (Age Limits) Bill will be taken.

Business of the House: Debates, 17th May
The Lord Privy Seal (Lord Belstead): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the debates on the Motions in the names of the Lord Bancroft and the Lord McCluskey set down for 17th May shall each be limited to 2½ hours and that Standing Order 35 and paragraphs 10 to 13 of the Rules for the Conduct of Short Debates shall apply to each debate.—(Lord Belstead.)
On Question, Motion agreed to.

Prisons (Scotland) Bill [H.L.]
3.28 p.m.
The Lord Advocate (Lord Fraser of Carmyllie): My Lords, I beg to move that this Bill be now read a second time. It is a consolidation measure. It consolidates certain enactments relating to prisons and other institutions for offenders in Scotland, and other connected matters. It is pure consolidation and is intended to make no change in the existing law. If your Lordships approve, it will be referred to the Joint Committee on Consolidation Bills which will consider it and make its report to the House in due course. I beg to move.
Moved, That the Bill be now read a second time.—(Lord Fraser of Carmyllie.)
On Question, Bill read a second time, and referred to the Joint Committee on Consolidation Bills.

Water Bill
3.29 p.m.
The Earl of Caithness: My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(The Earl of Caithness.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ABERDARE in the Chair.]
Lord Nugent of Guildford Lord Nugent of Guildford moved Amendment No. 43:
After Clause 3, insert the following new clause:
("Incorporation of statutory companies.
. Schedule (incorporation of statutory companies) to this Act shall have effect to make provision for the incorporation of a statutory company as the successor company of each water authority for the purposes of section 4(2)(a) below and for appointments under Chapter I of Part II of this Act and a company so incorporated is in this Act referred to as a "statutory company".").
The noble Lord said: A large number of consequential amendments have been listed with Amendment No. 43 and no doubt they will be noted. The substance of the amendments is contained in Amendments Nos. 43 and 47, the latter setting out the new schedule. The effect would be to substitute for the plc structure defined in the Bill the statutory water company as defined in the 1945 Water Act. The plc structure in the Bill is set out with the profits, dividends and charges controlled by the Director General of Water Services. If my amendment is agreed the director general and his new bureaucracy which will make such arrangements will become superfluous. The consequential amendments relate to the fact that he will then be removed from the Bill.
I point out to my noble friends that the amendments in no way challenge my party's manifesto to privatise the industry, as I have heard rumoured in some quarters. I recognise the necessity to privatise as a practical need to have access to the money market in order to finance the huge needs of the industry in its future capital programme. Private companies are the only answer to that.
Our amendments construct the new private companies on a more sound basis than exists in the Bill. It has operated successfully in this country since the middle of the last century. It continues to do so with the 29 existing private companies supplying a quarter of the nation's water. The statutory company raises its capital in the money market by fixed interest bonds which are usually redeemable at rates close to gilt edged. The 1945 Act governs the operation of these companies. Schedule 3 to the Act, which is substantially repeated in Amendment No. 47, specifies precisely their financial management. That includes the condition that the surplus cash from one year's trading must go towards reducing charges to the consumer in the following year. The audited accounts must be submitted annually to the Secretary of State for his approval. This financial structure has the prime virtue of assuring that the
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interests of the consumer come first. By implication, in effect he owns the equity of the industry.
With regard to the capacity of the bond market to absorb the sale of the water industry, I am reliably assured that it presents no problem. In present conditions, referred to during Question Time, of the Treasury redeeming national debt, there is a shortage of such stock.
Last Tuesday's debate showed the strength of anxiety about safeguards against the new water companies developing their extensive holdings of land and changing a great deal of the character of the country. The statutory water company gives the best safeguard of all because it is not a profit-making body. Therefore it does not have the incentive to do so, and in practice seldom has.
On Second Reading my noble friend the Minister quoted from the report of the Monopolies and Mergers Commission about the Southern Water Authority's proposal to take over the six statutory water companies in its area. It was to the effect that a statutory water company is not a useful model to follow because it lacks the profit incentive for managers to aim for cost reduction. The report reveals little evidence to support the criticism but it reached the tentative conclusion that the merger should not proceed, and it did not. If that is all the evidence that my noble friend the Minister can marshall against the competence of the statutory companies, noble Lords may conclude that their record is pretty good. That is especially so when set alongside the approval annually of each water company's annual report and accounts by successive Secretaries of State over the past 44 years. It is clear that if serious defects had occurred in the companies' management, then years ago a Secretary of State would have ordered a thorough review and inquiry into the working of the companies. No one has done so.
The truth is that the commission went outside its remit, as it confessed in its report, to express an ex-parte view on the national debate on privatising the water industry. The point is whether it is in the public interest for the water industry to be redesigned in order to make a profit. That is the issue which noble Lords present will decide this afternoon.
I turn to the plc structure in the Bill. As I see it, there are two main defects. Profit-making in the absolute monopoly of water is disliked by most people on ethical grounds. It has never been operated in this country. On a practical level, the scope for profit-making in water is virtually negligible. Indeed, if the scope for making a profit in water was as good as in British Telecom, which was so graphically described by the noble Lord, Lord Wyatt, in the Second Reading debate, I should feel tempted to override the ethical objection with the prospect for obtaining cheaper water services for our people.
In fact, the situation is completely the reverse. Growth in water consumption is virtually static—possibly plus 1 per cent. per annum—and equity shares without a growth factor is a contradiction in terms. Some of the subsidiary activities are growing but the total impact on the balance sheet is only marginal. Technological advance continues but,

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again, cost savings are only marginal. The existing profit level for the industry, shown last year as an aggregate figure by the 10 regional water authorities at £738 million, was the whole of that sum plus another £430 million in loan, giving a total of just under £1,200 million. It was spent on renewals, replacements and additions. So in terms of cash flow nothing was available for distribution as profit. I understand that the capital expenditure for the last year ended was similar to the cash position, at approximately £ 1,200 million. It is worth noting that the accountants' figure for depreciation for the water industry amounts to £1.5 billion per annum and confirms that there really is no profit in the industry.
When we look at the future capital liabilities we obtain an idea of the perspective. They include water supply; improved treatments to remove nitrates, pesticide traces and so forth; more stringent monitoring, especially with the new NRA standards; water supply mains which require rebuilding, relining and so forth; universal metering. We are talking about the expenditure of many billions of pounds on the water supply side of the industry.
When one looks at the sewage treatment and sewers side, the picture is even more horrendous. There must be the completion of the third of the long sea outfalls. Many inland treatment works must be rebuilt or new works built, especially in the northern half of the country. Sewers are falling to pieces in many parts of the country and they need renewing or rebuilding. Sludge disposal has up to date been fairly cheap, but will be much more expensive when the North Sea can no longer be used as a dumping ground. Incineration must be introduced and so forth. That is a huge capital programme which faces us. My rough guess at the cost over the next five years is in the order of £10 billion and continuing, with increased manpower coming in all the time for the new plant.
Again, the Minister is in an advantageous position. He has received reports from the Director General of Water Services on what is called the asset management plans of each of the 10 regional water authorities and water companies. That is required for calculating the K factor. However, can the Minister tell the Committee what is the expert forecast for capital expenditure for the next 15 or 20 years? Is my guess correct or is it perhaps far too low?
The reality is that the water industry faces huge capital expenditure on a range of essential improvements both in the interests of human health and the protection of the environment. Therefore, the financial prospect of these privatised water companies is a progression of annually rising water charges to meet that heavy annual programme of capital expenditure, plus of course inevitably a certain amount for inflation costs.
The Bill requires the Director General of Water Services to set the mysterious K factor at a level to give a reasonable return to the private shareholder. That is priority No. 1 in Clause 7 of the Bill. Therefore, increased efficiency by the future companies is rewarded by increased profit. That is the essence of the Bill. That means that the
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shareholder owns the equity of the industry and comes first before the consumer. I ask noble Lords to consider the reaction of the consumer next year when the new private companies go into action making large increases in charges from this programme which I have outlined and at the same time paying dividends to private shareholders, and in future years at least some companies will pay higher dividends. Those dividends and future higher dividends will be seen as coming out of the increased charges to the consumer. The outcry will be heard even here in Westminster, and heaven help the Secretary of State of the day who must try to explain to angry Members of Parliament and their constituents the complexity of the price fixing formula, the K factor.
For those who are interested, that is encapsulated in some 105 pages of Explanatory Memoranda which describes how it works. If the future Secretary of State can explain all that to angry constituents, he will be a better man than I thought. The constituent, and, indeed, the Member of Parliament, will be convinced that the shareholder is gaining at the expense of higher consumer charges, and it will be a sheer impossibility for them to be convinced that that is not so. That will be a permanent conflict between consumer and shareholder. That is inevitable in a no-growth industry. I should add that the workforce of the water industry regards the prospect of a strained, unhappy industry with great anxiety and it has my sympathies.
I need hardly add that the widespread complaint against annually rising charges, combined with increased dividends, will be blamed on privatisation and will rub off on our party. The fact is that that equity structure for a plc regulated by the Director General of Water Services is simply not robust enough to stand the strain which the future will bring to this industry. Our water industry is set on a course which we all want, of heavy capital expenditure for years to come. Against that background, it would be far safer to stick to the well tried and trusted model of the statutory water company, with fixed dividends and the consumer coming first, rather than engage in the experiment of this sophisticated plc structure, relying on the incentive of an exiguous profit. I beg to move.
3.45 p.m.
The Earl of Caithness: Perhaps it may be opportune for me to break with tradition and say a few words here. The Committee must be grateful to my noble friend Lord Nugent for so clearly setting out his amendments. I hope it will help if I explain the reasons why the Government have chosen the method of privatisation as set out in the Bill, for this is absolutely fundamental not only to our discussions today but also to our future discussions on the Bill and to the successful privatisation of the water industry as set out in our manifesto.
Perhaps I may recap on the amendments. They would adopt the statutory water company model, including control of dividends and reserves rather than prices, for the whole of the industry after privatisation. They would also delete from the Bill

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the Director General of Water Services, and leave the whole burden of economic regulation of the industry and protecting the consumers' interest to the Secretary of State for the Environment.
The amendments attempt to preserve what I will explain is an outdated form of incorporation of water companies and of water supply. They would apply this form not only to the 29 existing statutory water companies but to the successor companies of the 10 regional water authorities. These amendments are not minor surgery. How could they be, since they involve 236 consequential amendments, as well as the deletion of 21 new clauses and one schedule, and that is by no means the full extent of consequentials which might be needed? Although we have considered them today with the same constructive spirit which we demonstrated last Tuesday, I have to say that they would remove two fundamental planks of the Bill. To accept them would, we believe, benefit neither the customer nor the environment.
What are these two planks to which I have referred? One is that the economic regulation of the industry should be through price control, supervised by an independent Director General of Water Services. The second is that at least seven-eighths of services, including all sewerage services, should be delivered by Companies Act companies.
In the interests of the consumer, we strongly believe that there should be a control on prices rather than a control on dividends and reserves as the amendment proposes. One has only to ask any one of the 25 per cent. of the population of England and Wales who receive water from a statutory water company what happened this year when companies began to anticipate the new requirements which would be imposed by this Bill. Increases of up to 42 per cent. were made within the existing controls which these amendments would retain. Even higher increases would have been possible by the SWCs in some cases, without breaching their statutory controls on dividends and reserves. It is manifestly clear that this year's increases confirm that controls on dividends and reserves do not work as a means of price control. They do not protect the customer in the way that price control does.
The form of regulation which we are proposing will also have an inbuilt incentive to greater efficiency. The Director Generals of Gas and Telecommunications have already shown how consumers' interests can best be served through a price control system: one that allows the industry to be profitable if it is efficient but does not guarantee dividends if it is inefficient.
Members of the Committee will be aware of the success of Sir Bryan Carsberg as regulator of British Telecom in encouraging that organisation to improve its efficiency and keep prices down. He has expressed his strong support for price control. In a statement last July he said:
"price-cap regulation is simple to administer and can give a good assurance to customers about the future trend in prices, while also giving the supplier the incentive to become more efficient".
How much more necessary it will be to have such protection when we remember that the water
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authorities to be privatised will be dealing with sewage disposal as well as water supply
Perhaps I may give Members of the Committee an indication of the difference in scale. This year the water authorities plan to spend £1·43 billion. Last year the water companies invested £61 million in water supply compared with £450 million by the authorities. What is the significance of that? It is that the water authorities have three times the number of customers but have six times the amount of investment.
Given that moving from £61 million to £1·43 billion is a 23-fold increase, it will be particularly interesting to see whether the Labour Party will support placing such an open-ended commitment on the customers.
They might not heed my advice, so it is appropriate to remind the Committee that this issue was commented upon by the Monopolies and Mergers Commission in its report (Cmnd. 9765) on the Southern Water Authority and the six SWCs within its area published in April 1986. In particular I would draw the attention of Members of the Committee to the comments in Chapter 2, paragraph 12:
"While we do not regard the issue of privatising the water industry as within our remit the foregoing analysis leads us to offer one observation which may be relevant to it. This is that the existing statutory companies are not in our view a useful model to follow. Where private concerns have monopoly power over essential services, the need is to combine adequate safeguards for the consumer with some appropriate means of providing a profit incentive to management to reduce costs and increase efficiency. The form of regulation: i.e. by limiting profits and dividends, applied to the statutory companies conspicuously fails to meet this need".
Not only will the statutory water company model fail to protect the customer as we consider necessary, but the Monopolies and Mergers Commission report also condemns the model as inappropriate for privatisation. Chapter 2, paragraph 31 states:
"With regard to the companies we noted at the outset the unusual arrangements under which their directors and managements have no means of securing any growth in their shareholders' funds or in the price of the shares and hence none of the usual incentives of the private sector other than pride of performance and responsiveness to local opinion. We concluded therefore that this particular form of private ownership was not a useful model to follow".
Clearly the Government could not adopt a model which is so clearly flawed. It is a model which the statutory water companies themselves admit does not meet the needs of a modern company by curtailing many financial freedoms.
Furthermore, the SWC stock is the type of fixed dividend stock which appeals largely to certain sectors of the capital markets, particularly the financial institutions. It is unlikely that the smaller shareholders would be attracted to such stock. We have clearly stated in our manifesto that it is our intention to offer the water authorities for sale to the public. It is questionable whether a sale directed to the institutions would deliver that manifesto commitment.
It may help the Committee if I briefly expand upon the issues of companies law raised by the amendment. The statutory water company format is an out-dated method of forming a business. It is

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restrictive and prevents diversification. The amendments, if accepted, could bring us into unwelcome conflict with the European Commission. Under the Second European Directive on Company Law, all companies should be registered. Most other European countries have implemented this. We have not, but we are encouraging registration as opportunities arise. The Bill furthers that policy. Let there be no doubt: the creation of 10 large new statutory water companies could seriously undermine that stance.
I turn to another important part of our approach. The establishment of a new independent regulator for the water industry is a key component of the Government's plans. The regulator's function will be to ensure that neither the newly privatised nor the existing water companies can unfairly exploit their monopolies. The Director General of Water Services will protect consumers, compare the performance of the different companies and ensure that each company has clear incentives to improve its efficiency.
The director general will ensure that the companies carry out their functions effectively and that they can raise the finance they need to do so. He will be responsible for ensuring that companies comply with the conditions of their appointments. He will set explicit standards of service to the customer.
The general duties in this clause are based on, but not identical to, those in the Telecommunications Act 1984 (Section 3) and the Gas Act 1986 (Section 4). These duties provide an appropriate framework for the regulation of a privatised monopoly utility and one already approved by this Chamber.
Above all we must look to what serving the customer means in practical terms for the industry. Higher standards on water quality and sewage treatment will require substantial growth in capital programmes. We must free the industry from public sector financial constraints and give it proper incentives for economy and efficiency. Privatisation under price control provides this. With these changes the industry will be able to deliver the quality objectives we all want at least cost to the consumer. I know that many of the statutory water companies, and all the water authorities, now believe that price control is the right way forward.
The Earl of Halsbury: I support the amendments in the names of my noble friends and myself. My reason for, as it were, allying myself with my noble friend, as on so many occasions in the past, is my anxiety as an old public servant at the extent to which the Government are getting across the public with unpopular measures. They are in a situation half way through their term of office where they are on bad terms with the Bar, the Law Society, the general medical practitioners, the consultants on the National Health Service and now with the public at large as water consumers.
What the Government do is often right and I associate myself with the remarks of my noble friend. I do not oppose privatisation of water. In many respects the Government are going about it in the
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right way. However, I am disturbed by a kind of creeping Philistinism that is settling into government circles by constant reference to market forces as a remedy for everything under the sun without reference to their true relevance. I want to see the Government at peace with the public. I am not asking them to beat their swords into plough shares or even to turn a tigress into a turtle dove. I ask only that they listen to the wise words of my noble friend, who spoke with more authority on this subject than anyone in this Committee can because he was in charge of the whole show for year after year. Before the noble Earl joined the Front Bench, my noble friend was in charge of the water supplies of this country.
I have been told that the burden on draftsmanship might cause the Bill to fail this Session because of the consequential amendments it might entail. Does it matter whether we privatise this Session or next? What is important is to privatise rightly when we do so. The idea that anyone should make profits out of water and water supply is intensely unpopular with the public at large and I believe it to be intensely unpopular in this House. Water as water should be free for all, as God's gift to man to stop him dying of thirst. Only the connection, piping, recycling and purification should be charged to the consumer, together of course with capital services on the loan stock necessary to effect the rejuvenation of our sewage disposal services, and so on.
That is very much what I said on Second Reading and I do not intend to go on to make a Second Reading speech in Committee. I merely wanted to explain why I am prepared to fight this battle alongside my noble friend as an old companion-in-arms on many subjects. I commend the amendments.
4 p.m.
Lord Jenkin of Roding: I support my noble friend on the Front Bench in urging the Committee to reject these amendments. One must not allow the eloquence of my noble friend Lord Nugent of Guildford to conceal that these amendments, taken together, would not only, as my noble friend the Minister said, destroy two planks of the Bill but they would destroy one of the main purposes of the Bill; namely, to stimulate a significant increase in the efficiency of the water and sewerage undertakings by subjecting them to the disciplines of the capital markets.
Of course my noble friend Lord Nugent is right to say that water is a natural monopoly, but that does not mean that it is impossible to generate efficiency by exposure to the capital markets. The statutory water companies were described by the Monopolies and Mergers Commission in the report already referred to as,
"remaining examples of an unusual kind of commercial organisation".
As has been said, instead of the control of prices which the Bill provides for, the statutory water companies are regulated by control of dividends and reserves.
I shall not read the extensive passages from the Monopolies and Mergers Commission report which

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spell out why this is a thoroughly unsatisfactory way of regulating a monopoly. However, I would say this to my noble friend—and I say it with great diffidence because, as the noble Earl, Lord Halsbury, recognised, my noble friend speaks on these matters with great authority. I think my noble friend has recognised that the passage from the report which the Minister read out a few moments ago blows a major hole in the case for this group of amendments. My noble friend sought to explain it away, as he did on Second Reading (col. 594 of the Official Report), by suggesting that the remarks were made in the context of the Southern Water Authority's proposals to absorb a handful of companies in its area because it thought that it would improve matters. He also sought to argue that it was such a handful of statutory water companies that it was irrelevant and unrepresentative.
I say with great diffidence to my noble friend that he has allowed himself to be drawn into error. Contrary to his assertion, the report was not on a proposed takeover. On the contrary, as a study of the terms of reference from the Secretary of State will demonstrate, it was a routine reference on costs, efficiency and service. It so happens that the six water companies in the southern water area actually account for no less than one-sixth—over 16 per cent.—of the total turnover of all the statutory water companies. I therefore submit that they actually form a substantial and representative sample of those companies. Therefore contrary to what I believe has been a major plank in my noble friend's case, the report constitutes a very relevant argument on this amendment. The key opinion that has already been quoted again by my noble friend on the Front Bench, so far from being selective and unrepresentative, is actually spot on. The Monopolies and Mergers Commission has stated quite firmly that the statutory water company,
"is not a useful model to follow".
To accept this group of amendments would fly in the face of that authoritative and considered judgment.
Why should this be so? All the evidence points to the fact that profits control is simply less effective in regulating monopolies than prices control. Controlling profits does not mean, as my noble friend has suggested, that the benefits are passed on to the customer. It means that there are no incentives whatever on the managers to innovate, to improve efficiency or to cut costs. There are no financial spurs to efficiency. Shareholders have no reason to try to ginger up management because they already get the maximum dividend to which they are entitled. There is no threat of takeover and there is no pressure on costs. In effect, the statutory water company is a cost-plus operation.
That was recognised in the Monopolies and Mergers Commission's report, which says this:
"In terms of performance the company's costs and charges for water supply—with the exception of Portsmouth which has particularly favourable sources of water—are mostly well above those of the Southern Water Authority".
A comparison of the charges that have been made to consumers over the years shows that there have been periods when the water authorities were not subject to stringent Treasury controls and their
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charges rose faster than those of the companies. As every consumer from a water company knows, in the current years—I have to declare an interest as such a consumer—the charges have risen on average by nearly 23 per cent., which is far ahead of those of the water authorities.
We looked at the question of whether we might follow this model. I looked at it in the context of British Telecom's privatisation. The question was whether it would be more sensible to regulate by control of dividends and reserves than by control of profits. We took advice, and the advice we received from a range of authorities was exactly in line with that of the MMC. The regulation of an industry by dividends and reserves control simply is not an acceptable form. It does not generate incentives for efficiency and for cost-cutting; it provides no motive to the managers to go plugging away, to use the words of the MMC, constantly to seek improvements in efficiency.
If we were to accept these amendments this afternoon we should be flying in the face of a very great deal of valid economic opinion. Indeed, my noble friend gave the game away by an almost chance aside in a speech that he made concerning an amendment on land that was discussed on Tuesday. He said that in preference to an amendment moved by the noble Lord, Lord McIntosh, this would be a much better way. He said, as reported at col. 22 of the Official Report, that having it in the form of a statutory water company there would be,
"no incentive to develop this land".
My objection to this group of amendments is that there would be no incentives to do anything because the system simply does not generate them. As I said, water companies are essentially cost-plus organisations. I know that there are many Members of the Committee who have been members of boards of water companies. I know that my noble friend Lord Elliott of Morpeth has played a leading role in this field. It would be quite wrong to criticise the people who have been running these companies, many of whom have done a splendid job. It is not their fault that there has been this unsatisfactory form of supplying water; it is the fault of the model that they have had to operate.
This Bill gives the existing statutory water companies the opportunity to break out of the straitjacket in which they have been held. These amendments would put straitjackets on the rest of the industry. As my noble friend said, this has been a form of company organisation that dates right back to the middle of the last century. It would be a classic example of allowing the prisoners of the past to dictate the progress of the future. That cannot be right and I hope the amendments will be rejected.
Baroness White: I wish to remind the Committee of a remark made by the noble Lord, Lord Nugent of Guildford, during the Second Reading debate when he very rightly pointed out that it took Her Majesty's Government roughly two-and-a-half years from the time that they issued their original White Paper, on which he and those of us who know something of the industry commented, to realise that their original White Paper was completely

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misconceived and simply would not work. That was pointed out by the noble Lord, Lord Nugent, and as a result no doubt of some of the cautions which he adumbrated on that occasion, the Government realised that their original White Paper was entirely unworkable and inadequate. They have therefore amended it with the vital addition of the National Rivers Authority. It has taken four years for them to bring their consideration of these matters to fruition. They believed that they could do everything without a separate regulator, but they gradually realised that the noble Lord, Lord Nugent, was speaking sound sense based on experience and that they could not do what they wanted. They had to change their fundamental plan.
I remind the Committee that while it may be critical of some of the things that the noble Lord, Lord Nugent, has said—we have heard a very eloquent but critical speech from a former Minister, one of the extinct volcanoes of the Conservative Back-Benches—he is the man who really knows what he is talking about. Great stress has been laid, most particularly by the noble Lord, Lord Jenkin of Roding, on the MMC investigation into the Southern Water Authority and the six statutory water companies in its region. I have read that report. I am not sure how many other Members of the Committee have read more than a few selected extracts.
It is perfectly clear that the investigation made on that occasion, which was not directed specifically to the question of what was the best way of privatising the water industry, in a number of respects was not very deep or thorough. For example, there is the question of how one can possibly compare the characteristics and the efficacy of different water companies. I have before me the response made by one of the main water companies in that area. The response of the water company itself was not published but I have been able to obtain a copy. It says:
"Regrettably, discussions on the statistical analysis and interpretation were still in progress when the report went to press".
In other words, the companies make it quite clear that there are certain aspects of the report which were not fully discussed by them with the commission and still less accepted by them. The response goes on:
"However, using a simple system of ranking, the technique used by the commission throughout the investigation, it is apparent that all the companies, except Portsmouth, have an above average factor of difficulty, with three being in the upper quantile for all statutory water companies".
It refers to differences in operating costs and so on. They were quite obviously not fully discussed or adequately considered by the Monopolies and Mergers Commission.
I do not want to weary the Committee by mentioning other points but this is not a report from which one can take a few selected opinions—almost private opinions, one might say—of the members of the Monopolies and Mergers Commission. I am quite sure that other Members of the Committee who have had the opporunity of discussing the matter with some of those concerned with the investigation will bear me out in saying that this
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may have been a useful report in terms of what it was meant to be, but it is not a report on which the Government should have based a major part of their argument as to the desirability of the proposals in the amendments before us.
When it suits the Government's book they are willing to commend the statutory water companies. I have received, as I am sure have other Members of the Committee, some charming little leaflets by courtesy of the noble Earl, Lord Caithness. When it suits the Government's argument it is put positively. We are told:
"One in four people already get their drinking water from the private sector"—
from the 29 statutory water companies. They are perfectly all right for propaganda purposes but not when it comes to running the show.
I had a slightly wry smile when I saw the first claim in this document, that it will now for the first time be a criminal offence to supply water which is unfit for human consumption and that those convicted of such an offence may be imprisoned. For generations—a hundred years and more—we have managed to get by with civil offences being sufficient for supplying water unfit for human consumption. It is only when the entrepreneurial friends come in that we have to make it a criminal offence. No doubt that has occurred to the Minister, but I doubt whether it has occurred to his public relations advisers. The pattern proposed by the noble Lord, Lord Nugent, and those noble Lords who have put their names to the amendment, and others who may speak in its support makes it perfectly clear that water is different. The comparison with telecommunications, of which we heard a good deal from the noble Lord, Lord Wyatt, at Second Reading, and of which we have heard some more today from the Minister, does not fit the conditions of the water industry. It is a completely different ball game. It is an insult to the intelligence of Members of the Committee to try to persuade us that the conditions of the water industry are comparable in any reasonable respect with those of the telecommunications industry.
The proposed extraneous diversification of interests, of which the Bill is really in aid—cable television and the like which are so attractive to the Secretary of State—may or may not prove successful. In the early days some companies may possibly do some asset stripping by selling off land, but thereafter they will have to face the ups and downs of market forces. If the proceeds from charging for the basic services were sufficient to cover the costs—the enormous additional costs, as the noble Lord, Lord Nugent, rightly made clear—these extraneous activities would be unnecessary and irrelevant. But owing to the need for the additional expenditure to improve the system, it must surely be common ground that some external finance must be provided outwith the normal grip of the Treasury. Even on my Front Bench I hope we are agreed on that. We have a pattern with the statutory water companies which makes it possible to raise money in a responsible way, without indulging in a number of speculative and extraneous activities which many people in this country find unacceptable. Surely the

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middle road, which is what the noble Lord, Lord Nugent, and his supporters are proposing, is safer.
I felt disposed to quote in Latin but, in the presence of the noble and learned Lord, Lord Hailsham, I feel that my pronunciation might be different from his and I would hate to offend him. However, having read with attention the Monopolies and Mergers Commission report, on which so much of the Government's case appears to be based, I can only say that this is a feeble framework on which to base a major change for the worse in the management of a basic monopoly service.
4.15 p.m.
Lord Wyatt of Weeford: If these amendments are passed the whole of this important Bill, which has been passed in all its stages by the elected Chamber, will be destroyed. The amendments would create a totally different Bill and make it mean something quite different from what it means now. To take such a grave step in passing these amendments might be justified if the issue was fundamental to the future of the country; but it is not. It might be justified if the constitution itself was threatened; but it is not.
This Chamber often passes amendments which are improvements within the terms of a Bill itself. Often those amendments are rightly accepted by the Government and by another place. However, these amendments are not designed as improvements within the spirit of the Bill; they are designed to wreck it. Moreover, they have no merit. Their object is to produce a half-baked, half-privatisation on the unsatisfactory model of the 29 statutory water companies. The profit motive would vanish and without adequate price control there would be no way to stop the upward trend of prices over a long period of time.
The noble Lord, Lord Nugent, in his charming old-world speech, referred to the report of the Monopolies and Mergers Commission on the Southern Water Authority and the six statutory companies. However, he referred to it in a rather cursory manner. I think in fact that he took one sentence out of it and then departed for other more favourable pastures. When it referred to the statutory water companies, the report said:
"The normal incentives in the private sector for managers to keep plugging away at cost reduction in order (so far as competition or regulation will allow) to add to profits and achieve satisfactory growth in the price of the shares simply do not exist for these companies".
The noble Earl who spoke earlier on the amendment gave us a long quotation from another part of the report. I do not propose to recite that quote again, but the whole of the report gave a strong impression that the model of the statutory water companies was useless, and the commission had studied the matter in great detail——
Baroness White: It had not.
Lord Wyatt of Weeford: The commission certainly did; in fact, it took several months to do so. Moreover, the commission knows what it is talking about. The Bill fulfils the requirements of the report. There is nothing in the statutory water company
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model which can prevent a deterioration in efficiency. The statutory water company is simply placed on a cost-plus system and that always puts prices up and, in the end, cheats the consumer.
Under the provisions of the Bill, to give the Secretary of State the powers of a director general to protect consumers would not do anything at all to protect them. Governments are notoriously bad regulators. They act in the interests of governments and not of consumers. If regulation by government had been any good in the past they would have insisted long ago upon a customer code of practice which the wholly independent director general is intended to enforce. The Government could always have insisted upon an element of competition in fixing prices; but governments never do. There would never have been an Oftel, overseeing and improving for the consumer the affairs of British Telecom, if the company had still been owned by the Government. It is only because it is privatised that the Government now recognise, or will recognise, that they are incapable of regulating anything and therefore they must get an outside body to do it for them.
On Second Reading I said that the director general would fix the same prices everywhere. What I should have said was that the director general will fix prices on the same principles everywhere. It is true that prices will vary according to the particular circumstances of the privatised companies. But the basic notion is that the best improvements in efficiency in one company will be assumed to be incorporated in all the other companies. Moreover, if they are not, then the less efficient companies will incur the wrath of their shareholders by making lower profits than they should have done.
Under the scheme proposed by these amendments there will be no price control; there will only be a dividend control. Therefore, why on earth should any company bother to reduce the costs and increase efficiency? It will not receive any advantage from its profits in increased dividends or anything else. Those who support the amendments have a quaint Victorian belief that the water industry has no growth potential, except when we add to the population, which we do from time to time. That is clearly not the view of the privatised French water businesses. They have acquired control of 12 of our statutory water companies. They know that once the Bill has passed through Parliament intact the growth potential is enormous. Overstaffing and sloppy unbusinesslike approaches will be gone. There will be all kinds of lucrative activities connected with water just waiting to be exploited under privatisation. Of course I know that many people disapprove of that prospect.
There are great possibilities for providing, say, swimming pools, bathrooms and showers more cheaply for consumers but more profitably for the industry——
Lord Dean of Beswick: Pipe dreaming!
Lord Wyatt of Weeford: I am sorry to see that some noble Lords laugh at the simple pleasures of ordinary people. I prefer not to do so. The whole

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nation would welcome a reliable plumbing service which could be set up under privatisation. The desperate search for a cheap, effective, reliable and honest plumber haunts many householders. The business telephone directories give no indication as to which are the ones who will rip you off and which are the ones who will do the job properly at a reasonable price.
Lord McIntosh of Haringey: Perhaps I may intervene here for just a moment. Are not plumbers already private?
Lord Wyatt of Weeford: Yes, they are; I think that I am beginning to educate the noble Lord, Lord McIntosh of Haringey. When you get a larger and more reliable firm in the business then of course you will get a much more reliable service. That, in turn, will encourage the other privatised plumbers to smarten up and become more efficient. That is so obviously a part of competition that I should have thought even the noble Lord on the Opposition Front Bench would have understood it.
The advances in cabling for television and other communications can also be exploited. Many of our sewers are ready-made conduit pipes serving every home in the country. Moreover, our water authorities have great skills in disposing of waste. They could sell those skills profitably to the industries with waste problems, such as the great chemical companies. There is nothing whatever to prevent privatised companies buying into French water companies, or anyone else's water companies if they are for sale. It needs entrepreneurial vision to promote such matters; but the scope is enormous.
These amendments would take us straight back to the age where private profit was sneered at, when it was believed that bumbling local authorities and idle non-profit conscious officially appointed bodies should run our utilities. It might be argued that under the amendments privatised companies would invest their surpluses, which they were not allowed to give to shareholders, in greater improvements. Obviously they would invest some of the surplus in that way. However, the surplus would be far less because they would have no profit incentive to make it higher. In any atmosphere of nil dynamism waste would abound.
The amendments are a battle between the future and the past. If they are carried, not only would we as Members of this place be involved in an unpleasant and unnecessary constitutional clash with the other place, but we would also be declaring our faith in the outmoded business practices of nationalisation and quasi-nationalisation, and the subsidising of superfluous jobs, which led to our gradual and seemingly irreversible decline after the war until 1979. It was on this day 10 years ago that someone with rather different and rather more successful ideas came along. I oppose the amendments.
Lord Renton: I arrived at this debate without having made up my mind because I wanted to hear the case put forward on behalf of these amendments.
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Having heard the case, I feel obliged to oppose it. I do so for two main reasons arising, I must confess, out of the speech made by my noble friend Lord Nugent of Guildford, for whom we all have such high regard. The noble Lord said that the advantage of the statutory water companies which he proposes is that under the scheme consumers would in effect own the industry instead of the shareholders. That seems to me to be a complete fallacy. Indeed, it stretches the imagination because both under the kind of companies proposed by the Government and with the statutory water companies it would be the shareholders who own the company in each case. It is absurd to suggest that the consumers would own it. They will not be the shareholders.
The other fallacy is this: my noble friend says that the statutory water companies will not be making profits, but if we look to paragraph 2 subparagraph (e) of the schedule in Amendment No. 47, we find that it proposes to confer powers on the company to raise money by the creation and issue of share capital, including—this is in brackets—"ordinary shares". Dividends will of course be paid on those ordinary shares. The only way that the money for those dividends can be found will be by the statutory companies making profits. Therefore that seems to me to be somewhat of a quibble.
Lord Nugent of Guildford: If my noble friend will allow me, I sympathise with his query because that point seems odd. The kind of ordinary shares which the statutory companies can raise are those with a maximum dividend which may be paid on the share. They may pay a lower dividend but never one higher than the maximum fixed for that share. They are called ordinary shares, but they are a peculiar type of ordinary share. It is not an ordinary share, as my noble friend understands it. Perhaps I may put another point. I did not say that consumers own the industry; I said that they own the equity of the industry, and that is a different matter.
4.30 p.m.
Lord Renton: Perhaps I may deal with the last point first. Those who own the equity of the industry are those who own the shares; and the shareholders own the equity. Quite frankly, I think that what my noble friend said on that point reinforces the point that I was trying, inadequately no doubt, to put.
On the question of whether the dividend is to be a fixed dividend or a variable one, again I say that a fixed dividend, just like a variable one, has got to come out of profits. To say that this is a non-profit making body is a fallacy. I use the kindest word I can think of.
Lord McIntosh of Haringey: It might be helpful if I came in at this stage. I cannot conceal the fact that the Opposition are not wildly enthusiastic about the amendment. That will be obvious from what I and my noble friends said on Second Reading. We share the view of 80 per cent. of the people of this country who feel that the water industry should remain under some form of public control. The next Labour Government will seek to restore it to public control. Unless there be any doubt on the matter, if we have

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a choice between restoring what we call the "Nugent" model and the "Ridley" model to public control, we would act to restore the "Ridley" model to public control with much greater alacrity, because the abuses under the "Ridley" model of privatisation are much more serious than they are under that of the noble Lord, Lord Nugent.
If we were being cynical about this matter, I suppose that we should let the Bill go through without question, because there is no doubt, as the noble Lord, Lord Nugent, said when introducing the amendment, that the people of this country——
Lord Beloff: May I——
Lord McIntosh of Haringey: Perhaps I may finish the sentence—are strongly opposed to water privatisation, and if water is privatised under any form, but particularly under the "Ridley" model, they will blame this Conservative Government for the exceptional increases in prices which will undoubtedly occur.
Lord Beloff: This is purely for——
Lord McIntosh of Haringey: I give way to the noble Lord, Lord Beloff. I have not finished my remarks.
Lord Beloff: I wish to ask the noble Lord a question for the purpose of clarification. He said twice that any future Labour Government would restore the water industry to public control. Did he mean by that public ownership, because the two things are not identical?
Lord McIntosh of Haringey: I agree that the two are not identical. Our final choice will depend upon the final form that the Bill takes. Neither I, the noble Lord, Lord Beloff, nor the Minister know exactly what form privatisation will take and therefore we cannot give the precise prescription for correcting it afterwards; but correct it we shall.
I listened with great interest to the noble Lord, Lord Nugent. I appreciate his sincerity and his unrivalled knowledge of the water industry. There is no doubt that he argues from great strength when he says that over many years the statutory water companies have provided a service which has been appreciated by their customers and which has resulted in the passing of the benefits of improved management to those customers.
I thought that the Minister was less than fair when he referred to the increases in statutory water company charges in 1989. He made the point, correctly, that some of the statutory water companies have had increases of up to 42 per cent. in 1989. If he were to look at the reasons for those increases, he would see that significantly they are because of the threat of privatisation rather than for any other reason.
The Earl of Caithness: The——
Lord McIntosh of Haringey: Perhaps I may quote the West Kent Water Authority, which had the largest increase of 42p in the pound, of which 21p
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is to meet privatisation requirements. In his report, the chairman of the Eastbourne Water Company, which also had a significant increase said:
"I have never disguised my opinion that privatisation is completely unsuitable for the water industry. I am also extremely disillusioned by the Government's disadvantageous treatment of the statutory water companies".
I shall now gladly give way to the Minister.
The Earl of Caithness: The noble Lord is talking about a fallacy. He is well aware that one cannot privatise a company that is already privatised.
Lord McIntosh of Haringey: As is clear, the chairman of the Eastbourne Water Company was referring to the privatisation of the rest of the water industry. I shall gladly let the Minister see his statement if he wishes to.
As I said, the noble Lord, Lord Nugent, speaks with authority. Many of the things that he says strike home and strike a responsive chord with us. The essence of what he is saying is that under his proposals, which are not revolutionary after all, the shareholders would come before the customer. If it were as simple as that, the amendments would deserve the uncritical support of Members on all sides of the Committee.
Lord Nugent of Guildford: I did not say that the shareholder comes first; I said that the consumer comes first. It is under the Bill that the shareholder comes first.
Lord McIntosh of Haringey: I beg the noble Lord's pardon. What he strictly said was that under the Bill the shareholder comes before the consumer, and that his amendments were intended to correct that position.
Amendment No. 47 is of course the critical amendment because it contains the schedule providing the powers of the statutory water companies to be set up. I look at them with some care. Subsection (b) provides that the water companies could still dispose of land. Their incentive to do so may be less because they would not be able to pass on the proceeds of that disposal of land to the shareholders; they would have to pass them on to the consumers. However, they still have the powers.
Sub-paragraph (e) provides that the investment is still partly funded by borrowing. If that is the case, and if as sub-paragraph (h) says, the borrowing should provide a return of 10 per cent. to 12 per cent. on shareholders funds, according to the latest information that we have, that is rather more than the 8 per cent. on shareholders funds which is expected from the privatisation on the government model.
I think that the balance of the cost of borrowing money to the customers and to the shareholders is all very fine. There will be circumstances in which the noble Lord, Lord Nugent, is right, that the market is ready for more near gilts and it will be an easier flotation than that which the Government propose. I think that that is a case which may be strongly argued. However, whether the final interest rates

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will be on the side of the statutory water company model as opposed to the plc model is much more difficult to argue.
There are thus defects in the amendments proposed by the noble Lord and his friends, but when I compare them with the defects in the Bill, matters become very different. The noble Earl, Lord Caithness, in opposing the amendments said that what was being proposed in the Bill was a control on prices and not a control on dividends and reserves. But that is simply not the case. If we read the Bill carefully—and we shall have to discuss the clause later on today—we find that under Clause 7 the duty of the director general will be to secure a reasonable return on capital for the new water company plcs. That means in effect that the whole regulatory mechanism which we all recognise as being necessary for a privatised water industry is subordinate to the most important obligation on the director general which is to secure a "reasonable" return on investment.
What is a "reasonable" return on investment? If the Opposition had put down an amendment which suggested that anything should be "reasonable", we should have been laughed out of court. The Government Front Bench never has greater fun—supported usually by the noble Lord, Lord Boyd-Carpenter—than when opposing the idea that legislation should contain the word "reasonable" as a definition of a course of action defined by legislation. It does not make any sense. The noble Lord, Lord Boyd-Carpenter, is usually right when he says that when we do it. I am certainly right—and I look for his support—when I say it from these Benches today.
While the obligation on the director general to provide a reasonable rate of return is paramount—the noble Lord, Lord Nugent of Guildford, was quite correct in saying that it is paramount; he said that the K factor which sets the prices is, and I quote him, "priority number one" in Clause 7—all other considerations by definition are secondary. I gladly give way to the noble Baroness.
Baroness Blatch: On the point which the noble Lord makes about paying dividends to shareholders, does he not agree that it will not be possible to pay dividends to shareholders at the expense of not meeting standards set by the regulatory body, even to the extent of having the licence taken away if those standards are not met?
So the first requirement of the plcs will be to meet the required standards set by the regulatory body and have prices controlled by the director general before dividends are paid. I agree that if there is money left at the end of the day, then of course dividends will be paid to shareholders.
4.45 p.m.
Lord McIntosh of Haringey: The noble Baroness will have an opportunity to make another speech if she still wishes to do so. However, the crux of the matter in her argument is the phrase "having the licence taken away". We all know that the licence cannot be taken away. The new water authority plcs
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cannot be allowed to go bankrupt. An interruption in supply cannot be allowed either to industrial or to domestic customers for water. Therefore they have a very safe bed to fall back upon. Their safe bed is protected, as his first duty, by the Director General of Water Services. If anybody says that what the noble Lord, Lord Nugent, is proposing is cost-plus, that argument applies even more strongly to the Government's proposals.
The water company plcs under the Bill have innumerable opportunities to maximise their profits. They have secured agreement from the Government that if there is any unexpected investment requirement they will have what is laughingly called a cost passed through. In other words, they will have the ability to pass it on to their customers. However, if there is any unexpected reduction in investment, nobody is suggesting that the customers shall have a cost passed through. Nobody is suggesting that it is not the shareholders who will benefit.
The Bill is a cost-plus Bill. It provides for all the opportunities for feather-bedding of which the noble Lord, Lord Wyatt of Weeford, so strongly disapproves. It provides them all with the additional incentive that if anything goes wrong with the Government's calculations the shareholders will get an extra benefit. That is the fundamental reason why, with all our reservations, we shall vote for the amendment of the noble Lord, Lord Nugent. The way that the Government's Bill stands, it is, "Heads you win, tails we lose".
Lord Pym: I am one of those who does not think that the proposed plc structure is the appropriate one for the water industry with its peculiar characteristics. Water is not a suitable resource to make money out of, so it does not seem very sensible to introduce into its management entrepreneurial concepts that have money-making as their object. In any case, the opportunities for profit are small, partly because the growth potential is at least small; it is not nothing but it is small. Under the Bill those opportunities will in any case be created arbitrarily by the decisions of the Director General of Water Services.
Furthermore, there cannot be any effective competition, which is one of the hallmarks of the market economy. We hear much today about competition by comparison, the idea being that a few monopoly suppliers will be judged the best and the remainder will somehow be brought up to that standard. Whatever merits there may be in this technique for other industries, in the case of water it is probably impossible to apply it rationally because of the enormous differences in the circumstances of the various undertakings and the proportion of water they supply. There are very substantial regional differences: inherent geographic differences in the nature and cost of the supply of water itself; in population numbers and density; in types of users and topography. The regional undertakings cannot be compared exactly and they can only be compared at all on a basis of a collection of relevant facts and assumptions which must to some extent be ad hoc. I do not think that that can be called competition in any ordinary sense of the

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word. So I find the plc structure an unsatisfactory solution to the privatisation of water. Something better is required.
Fortunately we have the long history of the statutory water companies on which to draw. The Government have not failed to extol their virtues, holding them up as the successful privatised model that supplies 25 per cent. of our water, and clearly wanting the other 75 per cent. to be supplied on a similar basis. At least up until a few months ago I do not think Ministers' rhetoric allowed any other interpretation. But recently the Government have changed their tune. There is now a campaign running to decry the statutory water company pattern, and it is rather a tendentious one.
Reference has been made this afternoon to the Monopolies and Mergers Commission report. My noble friend Lord Caithness also referred to it. But as the commissioners themselves admit, they never addressed the subject of the privatisation of water properly, if at all; nor did they go into it fully. The noble Baroness opposite made that point. So I think that the opinion of the commission is, to say the least, superficial. Frankly it is not worth much. They also had some rather complimentary remarks to make about the statutory water companies. Therefore I do not think it is wise to discard, either lightly or indeed at all, a century of solid, proven experience which lies behind the statutory water companies. Contrary to what I think my noble friend on the Front Bench said in this debate, those companies have protected the consumer, as their record shows.
I believe that the statutory company model is particularly appropriate in the present rather unhappy state of the industry, arising essentially from years of underfunding. There is no dispute about the years of neglect under all governments and the failure to make anything like adequate investment in water. So there is a huge backlog to make good over the next decade or so. On top of that, it so happens that at this moment the European Community has decided that the standards of water supply should be upgraded significantly. Those two factors together mean the prospect ahead is one of far higher investment and expenditure than previously. That carries the inevitable corollary of substantially increased costs. In this situation, surely the political objectives must be to keep the increased charges as restrained as possible, although they are bound to be large, and to make them as acceptable as possible to the consumer.
The statutory water company pattern is surely the best way to achieve this difficult feat. It is a pattern whereby those companies have proved themselves able to reconcile consistently the interests of consumers and the interests of shareholders. Those companies are obliged to reinvest excess profits in their business or return them to the water ratepayer. What a contrast with this Bill. The task facing the Director General of Water Services is one of weighing in the balance the need to give a reasonable return on capital to the shareholder, on the one hand, and the need to protect the interests of the consumer, on the other hand. That task will prove, in my view, too difficult and too artificial to be satisfactory. I
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think my noble friend Lord Nugent of Guildford made that point very well.
There will also be the ever-present temptation to sell off the assets for the benefit of the shareholders, instead of using them for the benefit of consumers by ploughing them back or reducing debt. For all these reasons I support these amendments, but there is another fundamental reason why I do so; that is, the need to maintain the popularity of privatisation. It is a process that has brought many benefits to many people. But if, in a particular instance, millions of people found themselves disadvantaged, as they thought, by a privatisation measure, or felt that that privatisation was not appropriate or not successful, the casualty would very likely be privatisation itself. That is not a risk worth taking, and the risk does not have to be taken. This amendment is a better way forward and goes down a well-trodden path.
The Earl of Gowrie: Following my noble friend, I want to say that it is surely incontrovertible that privatisation has to be tried before it becomes very popular, because over the past 25 years of our history it has been a relatively novel phenomenon. I think too that my noble friend Lord Pym in a characteristically trenchant and persuasive speech neglected the fact that it is the chance of a reasonable profit that attracts funds for investment. He underplayed the argument of the noble Lord, Lord Wyatt of Weeford, that there are a number of people out there in the capital markets who believe very strongly in growth for the water industry, and want to achieve it not by ripping off the consumer, so to say, or by jacking up prices, but by looking to greater efficiencies and cost-cutting as well as opportunities for investment.
Whether I am right or wrong about that matter, I invervene not to make the point, but to make a different one and make it very briefly. The point has little to do with the merits of the Bill. As I have just indicated, speaking for myself, I have no objection to the Bill. I believe in the public ownership of water and much else, and my interpretation of the word "public" is closer to that of the noble Lord, Lord Wyatt of Weeford, than it is to the interpretation of the noble Lord, Lord McIntosh. It also seems to me eminently sensible to separate the regulatory functions of a great utility from the productive functions, specially nowadays when we are at last, thank goodness, beginning to attend more to our responsibilities for the environment.
I am, as I said, concerned less with the Bill itself than with the consequences of accepting the amendment of my noble friend Lord Nugent of Guildford. If the amendment of my noble friend were accepted, it would have a quite devastating effect on the Bill. I am of course aware that my noble friend believes he will not have a devastating effect on the principle of privatisation. However, he will damage this privatisation, this flotation, and therefore this Bill.
If the amendment were accepted, it would also have the secondary effect of precluding this Chamber from giving detailed scrutiny to the rest of the Bill. I suppose we could go through the motions of the

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rest of the Committee stage, but it would be hardly worth our while to do so.
Consider the effect of this amendment on the policy which the Government have set out to implement. The Government wish to privatise on the basis of price control. The amendment sets up a regime based on dividend control. The Government believe that the new water companies should be Companies Act companies or plcs. The amendment wants to make them all statutory water companies, to be outside the provisions of the companies legislation and, incidentally, outside the provisions of Community law. My noble friend made this point from the Front Bench.
The Government believe that the industry should in future be regulated by the Director General of Water Services, very much along the lines of other successfully privatised industries. The amendment removes the director general from the Bill and gives any regulatory function to the Secretary of State. My noble friend Lord Nugent talked of bureaucracy, but I cannot believe that such a suggestion would be less bureaucratic. The Secretary of State will not be a professional in water terms, and nor will most of his advisers.
The Government wish to privatise the water companies and float them on the market, as other utilities have been successfully floated, to the double benefit of the citizen whether as consumer or taxpayer. I speak as a non-executive director of a merchant bank among other things. However, I can tell the Committee that one does not need to come within a hundred yards of a merchant bank to guess that this amendment would make the chances of a successful flotation of the companies set up under it very slim indeed.
I have itemised what I find to be a devastating difference between the amendment of my noble friend and the Government's position. I make no criticism whatsoever—I simply would not have the nerve—of my noble friend for disagreeing with the Government. My noble friend has performed sterling service throughout his very distinguished career to this and every other Conservative Administration, as well as to the water industry. I think he is wrong, but of course he is entitled to oppose the Bill or to criticise the assumptions behind it. However, with great respect to my noble friend, I do not think it is right to use an amendment, not to improve the Bill or deal with something which the Bill has overlooked or not taken sufficiently into account, but to destroy the whole policy of the Government. I think that is wrong and I think it is dangerous in constitutional terms.
If I were in the shoes of the noble Lord, Lord Cledwyn of Penrhos, or of the noble Lord, Lord McIntosh of Haringey, and I were striving to change places with my noble friend on this side of the Chamber, I must say that I would think twice before I urged Opposition Peers to support an amendment which had quite so devastating an effect on a Government Bill, a Bill sent to us by the elected Chamber. I would worry a little about the signals that might send up for my own party's future. As my noble friend Lord Caithness said, the amendment is by no means minor surgery.
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I also think that it would be unwise for my noble friends, like my noble friend Lord Pym, to support this amendment, even if they are critical, as I happen not to be, of aspects of the Bill. I do so for this last reason. The Bill no doubt needs scrutiny. It no doubt needs more time spent on it. I cannot for the life of me see the point of scrutinising it further, of trying to deal with any of its detailed imperfections, if in effect we knock the stuffing out of the whole purpose for which it was designed. It is for this reason more than for any reasons concerning the merits of the Bill, which as I said I support, that I shall vote against my noble friend's amendment and urge the Committee to do the same.
Lord McIntosh of Haringey: Before the noble Earl sits down I should like to intervene because he made a direct challenge to me and to my noble friend Lord Cledwyn. I would not intervene again except for that reason. I said from this Dispatch Box that we would have to reverse the Bill of the noble Lord, Lord Nugent, as much as Mr. Ridley's Bill. Does the noble Earl not agree that from our point of view this could not be thought to be a wrecking amendment? It is something that we should have to deal with in any event.
The Earl of Gowrie: The noble Lord has quite a different interpretation from mine. I said that were I in the noble Lord's shoes I should think twice about doing so.
5 p.m.
Lord Ross of Newport: Having defended the 29 private water companies from nationalisation in 1978 and 1979, and having seen for myself at that time the very good job they did because I visited a number of them before agreeing to support them, I have no difficulty in saying that we have no problem in supporting the amendment put forward so ably by the noble Lord, Lord Nugent, this afternoon.
I do not know, and have never been able to understand, why the Government are so opposed to the use of fixed rate bonds. I thought that that was the right answer when they wanted to privatise the British Airports Authority. I should have thought that it was one of the solutions now that they want to privatise water. It is a method widely used in the United States and in Japan, which are very successful economies. Why on earth can we not do the same in this country? However, if the Government want to commit suicide, so be it. No doubt, on this day of all days, the tiger cubs will be expected to deliver.
Lord Campbell of Alloway: I wish to pursue the line taken by my noble friend Lord Gowrie, who on two matters of principle identified a conflict of approach between the Bill and these amendments. I agree with my noble friend that the argument goes far beyond the merits of this situation, which from my own experience I am not competent to judge. However, from where I speak I accept the rectitude of the Government's approach.
This conflict of principle infects the whole spirit and structure of the Bill. If carried, these amendments would require, no less, that the Bill

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be taken away forthwith for detailed scrutiny and massive redrafting. As my noble friend has said, in the result the exercise of the advisory role of your Lordships' Committee in effect is turned into resort to the delaying power. I respectfully suggest to Members on all sides of the Chamber that that would be a most unwelcome approach.
By convention sooner or later the Government must have their Bill; that is the convention of this Chamber. No doubt these amendments, if carried, would be rejected by another place. If they are carried, as the noble Lord, Lord Wyatt, suggested, they sow the seeds of constitutional conflict—and to what end? As a matter of practical reality what viable purpose could it conceivably serve, other than to engender a sterile conflict between the two Houses of Parliament?
But time is not on our side. There is a sense of urgency, not only in the interests of the consumers of the United Kingdom but also the pressure which is brought to bear upon us in the European Community to improve our standards. That sense of urgency is already recognised by the Government in the amendments which they propose to introduce to render the water authorities liable to prosecution if they fail to keep up with the EC timetable.
I do not take the political point as to whether this is in implementation of the manifesto commitment, whether to give shares to the public is or is not, or whether investment in water bonds at a fixed percentage by an institution is or is not. As I see it, that is quite beside the point. Nor do I take the technical point as to whether want of registration would constitute a breach of the second European directive on company law. Those technicalities are of minor and minimal consequence compared with the constitutional issue touched upon and first taken so well by my noble friend Lord Gowrie. The point that I take beyond that is that the delay involved in carrying these amendments is not only pointless but is wholly unacceptable.
Lord Howie of Troon: Speaking from this side of the Chamber, surely the noble Lord who has just spoken has exaggerated the dangers of delay. It is nice to see the noble Earl, Lord Gowrie, back in the Chamber. I have enjoyed his presence in the Chamber in the past. But when he referred to the speech of the noble Lord, Lord Wyatt, did he not recall—as I think I do—that the noble Lord said that this was not a matter of overwhelming importance? It is not. Since it is not a matter of overwhelming importance, not one of the great measures of state, the constitutional consequences do not arise with that weight which the noble Earl, Lord Gowrie, placed upon them. What would it matter if the privatisation of water were held back for a year, or even for two years? There can be nobody in this Chamber who thinks that that in itself would be a disaster.
The noble Lord, Lord Campbell, cannot really think either that it would be a disaster. Whether water is privatised this year, next year, or never the changes in standards which the European
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Community requires would have to be brought into operation. The money to bring them into operation would have to be found somewhere. It does not need a capital market to find it. Everybody knows that if those increased standards are required to be financed by the Government the Government could find the money. The Government already have the money. We are told over and over again what the surplus is and how it might well be used to repay the National Debt. Instead of repaying the National Debt it could be used to increase the quality of water. There is not the slightest urgency in the matter at all. The whole thing is an illusion.
It might be that the Government would be embarrassed were the Bill to fall and have to be reintroduced later. In my experience governments have been embarrassed by Bills which fell. I remember that in my days in another place there was a Bill to reform this House. It fell and had to be taken back. The Government were terribly embarrassed, but the world went on; it did not come to an end. Who will say that the world would come to an end if this Bill had to be taken back and had to be brought in maybe next year, maybe the year after or maybe never? The whole thing is ridiculous.
It is quite clear from the debate that we have had so far that the mode of organisation proposed by the noble Lord, Lord Nugent, is a highly satisfactory mode for this industry. I am stronger in its support than my noble friend Lord McIntosh, and I hope that, in the fullness of time, he will come round towards the sense of it, because here we have a situation where an organisation is shortly to be privatised, we believe, and maybe unprivatised at some time. The mode of privatisation which the noble Lord, Lord Nugent, has suggested is sound, proven and can be gone over again. The noble Lord, Lord Pym, and the noble Lord, Lord Elliott, know a great deal more about this than I do, though I am a civil engineer. There is no reason why the amendment should not be supported.
That brings me to my last point. What worries me about the Government's proposal is that it needs a regulator. Why does it need a regulator? It needs a regulator because the Government do not trust the plcs. If the Government did trust them not to raise prices beyond a reasonable extent, and not to produce profits beyond a reasonable extent, the Government would not require a regulator. Because they require a regulator the Government, to my mind, give away their case entirely and wholesale. The proven system now proposed again by the noble Lord, Lord Nugent, should be adopted and these amendments passed, and if the Government are embarrassed they will just have to get on with it.
5.15 p.m.
Lord Elliott of Morpeth: I should very much like to take part in this debate. I am open to correction, but I rather feel that I might be the only Member of your Lordships' House actively engaged at this time in the water industry. I am chairman of a statutory company and as such, of course, I declare an interest. In addition to that, I had the very great honour to be president of the Water Companies Association for no less than 12 years, so I have listened to the

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various criticisms of the statutory companies with some considerable interest today.
I would say to the noble Lord, Lord Wyatt, that, having heard his remarks about them, I feel he has never visited a statutory company, and as a vice-president now of the Water Companies Association I invite him to do so. I listened also to my noble friend Lord Jenkin. As Secretary of State, he was my guest on one occasion at the annual meeting of the Water Companies Association. On that occasion, if I remember rightly, my noble friend was very complimentary about the smaller companies as against the bigger authorities. I remember him saying that big is not necessarily beautiful. So again I was a little hurt today at his criticism of the statutory companies.
May I say to my noble friend Lord Nugent—and I so agree with everyone who said that he knows and enjoys, and rightly, the respect in this country of the entire water industry; he was an excellent first chairman of the National Water Council—that I am sorry I cannot support his amendment today. On personal grounds I am very sorry. The reasons why I cannot support his amendment I gave in my Second Reading speech, and I shall not repeat them. All I wish to do in this speech is to answer the two main criticisms that have been made today of the water companies.
I am most grateful to my noble friend Lord Pym because he more or less made my speech for me. His description of the water companies, like that of my noble friend when he opened the debate on the amendment, was an absolutely correct one.
For over 100 years, the companies in the area of their supply have given good service to the public. All 28 statutory companies—I know there are 29, but there are 28 in our association—have two great aims. First, there is consumer relationship and consumer service. They all take great pride in this and they are all very good at it. The second aim of each and every water company has been to keep its prices low, and that it has done.
The report of the Monopolies and Mergers Commission, which was mentioned first by my noble friend when he wound up the Second Reading debate and mentioned again today, as my noble friend Lord Pym quite rightly said, had praise as well as criticism for the statutory companies. But I wonder from where, in that section of criticism, they got their evidence, because so far as I am aware no inquiries were made of my company, and I do not know of any inquiries being made of any other company. I am very much in touch with the chairmen of all 28 companies. However, we received this criticism and I do not think it a fair one.
At the time of the production of the report of the commission, the 28 statutory companies, providing one-quarter of the water supply in England and Wales, were in practically every case producing pure, wholesome water, but at less cost than their neighbouring regional water authorities. I know that that is not a completely fair comment and I do not wish to score a point over the water authorities. There are quite valid differences between us, and the
292
picture varies. But I want to say that the Monopolies Commission's view of the statutory water companies is an unfair one.
Secondly, while I want to reply in some degree to the criticism that the water companies have used this financial year to raise their prices subtantially, may I just ask noble Lords to consider this point? We always kept our prices down so I pose the question: why in this year have we put up our prices? The answer is to be found in the changes for the water companies in the Government's proposals. The advice which the companies and their association have received from every source is that the water companies, if they do not convert to plcs after the passing of the Bill, will be judged in future as plcs. This is because the water authorities are to become plcs. Therefore we shall be expected to produce rates of return on assets at debt equity ratios appropriate to plcs.
This has been quite obvious to us for some time, and the only way to achieve acceptable debt equity ratios is to finance much more for future capital expenditure from charges and thus reduce the debt over a period of time. Of course, at this time, as we all know, there are tremendous extra capital requirements for bringing companies, as well as the proposed to be privatised authorities, up to European standards. I hope your Lordships will recognise that in these circumstances unusually large increases were inevitable. The new system of regulation which the Bill will bring into being—and I approve of it very much, as I said on Second Reading, because it is heavily in the interests of the consumer—is not to be brought into existence, so far as the companies are concerned, without considerable cost implications.
We are told constantly that the Bill before the Committee has nothing to do with the increase in prices which the water companies have had to impose. I simply cannot agree with that. It is a play on words, because it is the pending legislation which has led the companies essentially to raise their charges.
That is all I wish to say, but I hope that I have answered the two main criticisms of the water companies. I assure noble Lords of this. I know these companies and I know them well. I know their chairmen, I know many members of their boards and I know, particularly, the professional people employed in them. To suggest that they are laggardly, sluggish and lacking in incentive, effort and ambition is totally false. The 28 statutory water companies are very proud concerns, and I am very proud to be associated with them.
Lord King of Wartnaby: As noble Lords may know, I have had some experience in matters of privatisation. I must with all humility say that privatisation has vast and untold benefits to consumers and the workforce. It is, however, with regret that I must oppose the amendment proposed by my noble friend Lord Nugent. Over a long period of time he has been a true and tried friend of mine, and I disagree with him with some reluctance.
The amendment proposed by the noble Lord would seriously impair the effectiveness of this Bill.

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The careful balance between consumer protection and operational efficiency would be upset. I agree that companies must not be allowed to develop unrestricted profits from monopoly operations, but a cap on dividends and reserves is not the way to exercise control. To do so would remove an important spur to the efficiency of the operating companies with the possible consequence of an increase in the cost of water to the consumer. There will be occasions in certain market conditions when companies will prefer to raise capital by the issue of fixed interest stocks rather than by ordinary shares. However, to limit companies to the use of that financial instrument alone would deprive them of flexibility to the deteriment of the enterprise.
There is also a question of risk. Equity capital, often appropriately called risk capital, is the first protection for the creditor against loss which could arise in the event of an unforeseen operational problem. In difficult times equity shareholders may have to forgo dividends, and it is right that they should reap their rewards when times are good. Fixed interest capital is not satisfactory for this purpose. It would be so unattractive an investment that a very high interest rate may be required to be paid in order to get investors to buy the stock. This would defeat Lord Nugent's objective of a low return business. Restricting reserves is likely to be a recipe for waste, as companies having a good year look for ways to spend or tuck away profits in projects that they would not otherwise have thought of pursuing.
Why is it that the water industry in this country is in serious need of fresh capital investment? There are a number of answers to that question. One is that the public are increasingly and quite properly demanding with regard to matters affecting the environment. I believe that another reason for the need for capital is that water has been largely government-owned. Governments are, by their nature, bound to have difficulty in meeting the capital needs of the organisations which they own—and I speak from experience. I urge noble Lords to reject the amendment proposed by my noble friend Lord Nugent.
Lord Stoddart of Swindon: If I were merely concerned about the hard-nosed party political aspects of this Bill, I would advise that this amendment be rejected because undoubtedly this Bill is the most unpopular measure that the Government have ever brought forward. If this Bill is passed in its present form, it will do the Government considerable damage at the next election. Therefore, it would be as well from the Labour Party's point of view if the Bill went forward unamended.
I am not concerned about that matter. I am concerned about the continued benefit to the consumer and the continued well-being of the water industry. I have been quite appalled at the criticism voiced in this House against the public ownership of water. The noble Lord, Lord Elliott, very ably defended the statutory water companies. I should like to defend the municipalities and the other publicly-owned water undertakings in this country which have developed water supplies and delivered water to every part of the country in a very efficient
294
manner. I am certain that had this been left to private unregulated water companies or plcs, it is doubtful whether all parts of rural Wales, England and Scotland would now be served with piped water and in many cases with proper sewerage facilities. Public ownership has done a pretty good job up until now, and I believe that it would continue to do a good job and improve upon it.
It is quite clear that the Government are not prepared to leave the industry in public ownership. The noble Lord, Lord Nugent, is the foremost expert in these matters in the country with an enormous wealth of experience. His ability and commitment is recognised by all sides of this House and by all sides of another place. He has given the Government the opportunity to go down another route which would be more acceptable to all sides of this House, and much more acceptable to the water consumers, who are the electorate at large.
I hope that noble Lords opposite, particularly those who have a concern—and there are many of them—for the rural areas of this country, will support Lord Nugent's amendment.
Lord Belstead: I do not want to cut other noble Lords out, and I cannot possibly do so because we are in Committee. However, we have been discussing this amendment for two hours. It might be convenient if I were to say a word from the Government Front Bench towards the end of the debate. It will then be a matter for the Committee as to how we proceed.
We have heard from the noble Lord, Lord McIntosh, who I admire and enjoy listening to in complicated Bills of this kind, and from the noble Lord, Lord Stoddart of Swindon, some fairly hard words about the policy of the Government so far as the privatisation of water is concerned. I understand the views of the noble Lords. We differ between the two sides of the House on this matter.
I should like to say one word on that matter in reply. It is true to say that if one were to visit any of the existing water authorities these days one would find a great deal of renovation work in progress. One would find that a great deal of water and drainage pipework is being replaced, some of it more than a century old. It is a legacy from the past. Undoubtedly in the past, and particularly in the major industrial areas of this country, the system of financing capital works has not been equal to the task over the years. That was demonstrated all too clearly in the mid-1970s when the government of noble Lords opposite found that they had to make deep cuts in the capital programme of the water authorities. Before noble Lords opposite jump down my throat and ask what happened after that, under the Government which succeeded in 1979 investment remained at very much that level before it began to climb steadily in the 1980s.
I am most anxious from this side of the House to make one simple point. There is a genuine and a logical reason for believing that this enormous industry, with a very substantial workforce and a heavy capital programme, should be within the private sector, with the twin provisos, first that there

295
must be a regulatory body (which in this case is called the National Rivers Authority) responsible for water resources and for the quality of our rivers. That is something which, if I may say so, my noble friend Lord Nugent has very wisely, consistently and successfully pressed for over the past two years. Also there must be effective price regulation in the interests of customers.
At the beginning of this debate my noble friend Lord Caithness made the point that the Bill is drafted on two main foundations. One is that water services in the future, so we plan in the Bill, should be delivered by Companies Act companies; the other is that their prices should be controlled by an independent Director General of Water Services. However, the amendments that are now before the Committee would require the water services of the future to be delivered by companies set up on a very different basis. They would be set up on the basis of the main amendment, which is part of the huge group that we are now discussing; namely, Amendment No. 47. It would be a statutory model in which the companies would be subject to controls on their dividends and reserves but would not have price control and be answerable not to an independent director general but to the Secretary of State.
A crucial point which has become increasingly clear during our long debate this afternoon is that this is an issue which goes to the heart of this Bill. For example, the amendments provide no direct control of prices, and the customer would have no statutory protection against large year-on-year price increases. My noble friend Lord Jenkin of Roding referred to the very high price increases which had to be introduced this year by some of the existing statutory water companies, with increases running up to over 40 per cent. On that point I simply say that as drafted this is a Bill which would provide a control on what would otherwise be an open-ended mechanism. But by sweeping away the clauses which provide for the director general, these amendments would delete that vital price protection from the Bill; and side by side with the absence of any statutory price protection in these amendments goes an absence of any effective stimulus to efficiency.
As I understand these amendments, so long as restrictions on dividends and reserves are observed, there would be no direct control of prices and a company on the model proposed could always have a guaranteed return simply by raising its charges to the customer. The obvious disadvantage of this system has already been spotted by the Monopolies and Mergers Commission, whose criticism my noble friend Lord Caithness referred to in his Second Reading speech and again earlier today. It has been the subject of some exchanges in this Chamber.
The fact is that although many of the existing statutory water companies have faithfully served their local communities—and my noble friend Lord Elliott was absolutely right and justified in speaking with pride of what they have done—having listened to the evidence of my noble friend Lord Caithness in his speech, I am driven to the conclusion that in some cases the companies have been spending too little on their assets. Many Members of this
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Committee who have great experience of business would be the very first to say to me that sooner or later assets have to be renewed and additional capital raised, particularly for the substantial capital spending programmes, in order to achieve the higher quality standards that we all want to see.
Of course I understand the appeal of saying that profits ought not to be made out of water; but I follow the example of my noble friend Lord Renton in asking whether that is in fact the case today. Does it make economic sense? After all, neither the Treasury, with respect to the water authorities, nor the owners of the statutory companies have financed them simply out of philanthropy. Public sector or private, they have expected returns on their capital. We are now talking about a change in the manner of how those returns are regulated so that efficient companies are encouraged but customers have protection through control of prices. I believe that that is sensible and justified.
Therefore the Government feel very strongly that on this occasion they cannot agree with the amendment to which my noble friends and the noble Earl, Lord Halsbury, have put their names. We genuinely believe that to impose the statutory model not only on the 29 existing statutory companies but on the 10 successor companies to the regional water authorities is not the right way forward for the future.
There is however one further point about these amendments which troubles me very much. It arises from the intervention made in this debate by my noble friend Lord Gowrie. I think that my noble friend was perfectly justified in saying that the effect on the Bill of these amendments—and incidentally there are about 230 of them on the Marshalled List—would be devastating. My noble friend was not alone; other Members of the Committee have said very much the same. However, as my noble friend Lord Gowrie said, price control would be removed by these amendments as would the protection of the Director General of Water Services, thus incidentally, removing essential consumer safeguards from the Bill. The water companies of the future would have to exist, as I understand it, outside the provisions of the Companies Act and the Community law. And, having listened to my noble friend Lord King of Wartnaby, I must say that the prospect of 10 such companies appealing to private investors would be quite slim indeed.
If these amendments are accepted, the sheer scale of the redrafting needed to make the Bill consistent with them would be absolutely massive. Every clause dealing with the appointment, the regulation, the duties and the powers of the companies would have to be worked through, and to reconstruct the Bill on this principle might well require literally hundreds of additional amendments.
It is the constitutional right of this Chamber through its revising work to ask another place to think again. It is a right that, whenever possible, I always seek to uphold. Indeed—and it is more often said when sitting on the Opposition Benches—a claim very often made when we receive a Bill which has been guillotined in another place is that we shall give extra scrutiny to those clauses which have not

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been debated at all. However, in passing this amendment and the 200-plus consequential amendments, we should be standing that claim on its head for we should not be scrutinising the rest of the Bill line by line but in effect asking for a major manifesto Bill to be rewritten.
I question fundamentally whether in doing that we should properly be carrying out our revising function. It is for the Committee to decide; but in deciding let us remember the needs of the industry. We shall have to achieve higher quality standards in the foreseeable future and inescapably this will mean substantial growth in capital programmes. Many of the existing statutory water companies—and, incidentally, my noble friend Lord Elliott, who is the chairman of a statutory water company and spoke this afternoon—agreed with the water authorities that the way to achieve that is by privatisation under price control. Let us be absolutely clear. This amendment would kill that concept stone dead. I ask the Committee not to agree to it.
5.30 p.m.
Lord Nugent of Guildford: I am sure that members of the Committee from all sides feel that it is time to bring to an end our debate. First I must thank the speakers who have been good enough to support the amendment that I put forward.
I should like to deal with the point made with his customary diplomacy by my noble friend the Leader of the House, Lord Belstead. He implied that my amendment would wreck the Bill. My noble friend Lord Gowrie actually said it in those terms. I do not agree. I do not see how it can be said that an amendment which would put into the Bill a form of water company which has been in existence in this country for 150 years and in fact covered all our water supply companies in the last century can be a wrecking amendment. It would be an enormous change. I agree that it would be an appalling job to deal with all the consequential amendments. But I do not think that it is fair to say that it is a wrecking amendment; it is not. I am not sure that my noble friend Lord Gowrie quite understands the nature of this industry. Many noble Lords on all sides do understand it. Those of us who understand the nature of the industry can envisage how very badly this plc structure will fit on it.
First, it has been stated on all sides, that the plc structure denies that the incentive for public service is sufficient to run such bodies, although it has done so very effectively for 150 years. In winding up, my noble friend Lord Belstead spoke of the increased charges that the statutory water companies were considering making. There is an automatic safeguard there. If a statutory water company sets the charge too high one year the surplus that it makes must go, according to the statute, to reduce the charges the following year. Therefore the consumer has the best safeguard of all; and it has worked extremely well.
Nobody will wish me to repeat all the arguments again——
Lord Boyd-Carpenter: Hear, hear!
Lord Nugent of Guildford: My noble friend backs me up. I think it is about the only issue on which he has agreed with me today! We are talking about whether we believe that the profit incentive will suit this industry—which has never had it—better than the incentives of the past, of public service and the automatic system of adjusting in the interests of the consumer. It is a fact that the Bill puts the shareholder first, quite definitely, in Clause 7. The Director General of Water Services must ensure that there is a reasonable return for the shareholder, and the consumer then takes the consequences after that has been secured. That is a quite different priority from that of the statutory water company.
That is the issue that the debate has been about. My belief is that the statutory water company works well, and efficiently, and it gives a 100 per cent. safeguard to the consumer. I doubt very much whether the company as laid down in the Bill will do so. I commend the amendment to the Committee.
5.43 p.m.
On Question, Whether the said amendment (No. 43) shall be agreed to?
Their Lordships divided: Contents, 112; Not-Contents, 208.

DIVISION NO.. 1

CONTENTS

Addington, L.

Harris of Greenwich, L.

Airedale, L.

Hatch of Lusby, L.

Alport, L.

Hayter, L.

Ampthill, L.

Hirshfield, L.

Ardwick, L.

Hooson, L.

Auckland, L.

Houghton of Sowerby, L.

Baldwin of Bewdley, E.

Howie of Troon, L.

Birk, B.

Hylton, L.

Bonham-Carter, L.

Hylton-Foster, B.

Bottomley, L.

Irving of Dartford, L.

Bruce of Donington, L.

Jacques, L.

Buckmaster, V.

Jeger, B.

Callaghan of Cardiff, L.

Jenkins of Hillhead, L.

Campbell of Eskan, L.

Kearton, L.

Carmichael of Kelvingrove, L.

Kilmarnock, L.

Lauderdale, E.

Carter, L.

Lawrence, L.

Cledwyn of Penrhos, L.

Leatherland, L.

Cocks of Hartcliffe, L.

Listowel, E.

Craigavon, V.

Llewelyn-Davies of Hastoe, B.

Cross, V.

Dacre of Glanton, L.

Lloyd of Hampstead, L.

Darcy (de Knayth), B.

Lloyd of Kilgerran, L.

David, B.

Lockwood, B.

Dean of Beswick, L.

Longford, E.

Dormand of Easington, L.

Lovell-Davis, L.

Dunrossil, V.

Macaulay of Bragar, L.

Elwyn-Jones, L.

McCarthy, L.

Ewart-Biggs, B.

McIntosh of Haringey, L.

Ezra, L.

McNair, L.

Falkender, B.

Masham of Ilton, B.

Falkland, V.

Mayhew, L.

Fisher of Rednal, B.

Milner of Leeds, L.

Foot, L.

Mishcon, L.

Gainsborough, E.

Monson, L.

Galpern, L.

Moran, L.

Graham of Edmonton, L.

Mountevans, L.

Greenway, L.

Moyne, L.

Grey, E.

Nicol, B.

Halsbury, E. [Teller.]

Northfield, L.

Hampton, L.

Nugent of Guildford, L. [Teller.]

Hanworth, V.

Hardinge of Penshurst, L.

Ogmore, L.

299

Perry of Walton, L.

Stoddart of Swindon, L.

Peston, L.

Strabolgi, L.

Phillips, B.

Swinfen, L.

Pitt of Hampstead, L.

Taylor of Blackburn, L.

Ponsonby of Shulbrede, L.

Thurlow, L.

Pym, L.

Thurso, V.

Rea, L.

Tordoff, L.

Rochester, L.

Underhill, L.

Ross of Newport, L.

Wallace of Coslany, L.

Russell, E.

Walston, L.

Seebohm, L.

White, B.

Sefton of Garston, L.

Williams of Elvel, L.

Sherfield, L.

Willis, L.

Stallard, L.

Young of Dartington, L.

Stewart of Fulham, L.

NOT-CONTENTS

Abinger, L.

Ferrers, E.

Airey of Abingdon, B.

Ferrier, L.

Alexander of Tunis, E.

Forbes, L.

Alexander of Weedon, L.

Forester, L.

Annaly, L.

Forte, L.

Arran, E.

Fortescue, E.

Ashbourne, L.

Fraser of Carmyllie, L.

Bellwin, L.

Gainford, L.

Beloff, L.

Glenarthur, L.

Belstead, L.

Goold, L.

Benson, L.

Gowrie, E.

Bessborough, E.

Grantchester, L.

Bethell, L.

Gray of Contin, L.

Blatch, B.

Gridley, L.

Blyth, L.

Grimston of Westbury, L.

Boardman, L.

Haddington, E.

Bolton, L.

Haig, E.

Boyd-Carpenter, L.

Hailsham of Saint Marylebone, L.

Brabazon of Tara, L.

Braye, B.

Harmar-Nicholls, L.

Bridgeman, V.

Harris of High Cross, L.

Brocket, L.

Harvey of Tasburgh, L.

Brougham and Vaux, L.

Harvington, L.

Butterfield, L.

Havers, L.

Butterworth, L.

Hemphill, L.

Caithness, E.

Henley, L.

Camden, M.

Hertford, M.

Campbell of Alloway, L.

Hesketh, L.

Carnegy of Lour, B.

Hives, L.

Carnock, L.

Hood, V.

Carrington, L.

Hooper, B.

Cathcart, E.

Ironside, L.

Cayzer, L.

Jenkin of Roding, L.

Chelmer, L.

Kemsley, V.

Chorley, L.

Kenilworth, L.

Clinton, L.

Kimball, L.

Clitheroe, L.

King of Wartnaby, L.

Coleraine, L.

Knutsford, V.

Colnbrook, L.

Layton, L.

Colwyn, L.

Lindsey and Abingdon, E.

Constantine of Stanmore, L.

Long, V.

Cork and Orrery, E.

Lyell, L.

Cottesloe, L.

McAlpine of West Green, L.

Cox, B.

Mackay of Clashfern, L.

Craigmyle, L.

Macleod of Borve, B.

Cranbrook, E.

Macpherson of Drumochter, L.

Crickhowell, L.

Cullen of Ashbourne, L.

Malmesbury, E.

Daventry, V.

Mancroft, L.

Davidson, V. [Teller.]

Margadale, L.

De La Warr, E.

Marley, L.

De L'Isle, V.

Marshall of Leeds, L.

Denham, L. [Teller.]

Maude of Stratford-upon-Avon, L.

Derwent, L.

Dilhorne, V.

Merrivale, L.

Dormer, L.

Mersey, V.

Dulverton, L.

Middleton, L.

Dundee, E.

Monk Bretton, L.

Eden of Winton, L.

Monteagle of Brandon, L.

Elibank, L.

Morris, L.

Elliot of Harwood, B.

Mottistone, L.

Elphinstone, L.

Mountgarret, V.

Erne, E.

Mowbray and Stourton, L.

Erroll of Hale, L.

Munster, E.

300

Murton of Lindisfarne, L.

Selsdon, L.

Nelson, E.

Shrewsbury, E.

Norfolk, D.

Skelmersdale, L.

Norrie, L.

Slim, V.

Northesk, E.

Southborough, L.

Onslow, E.

Stanley of Alderley, L.

Oppenheim-Barnes, B.

Strange, B.

Orkney, E.

Strathcarron, L.

Orr-Ewing, L.

Strathclyde, L.

Oxfuird, V.

Strathmore and Kinghorne, E.

Peel, E.

Pender, L.

Strathspey, L.

Pennock, L.

Swansea, L.

Penrhyn, L.

Swinton, E.

Platt of Writtle, B.

Teynham, L.

Portman, V.

Thomas of Gwydir, L.

Portsmouth, E.

Thomas of Swynnerton, L.

Quinton, L.

Thorneycroft, L.

Radnor, E.

Tollemache, L.

Rawlinson of Ewell, L.

Torphichen, L.

Reay, L.

Torrington, V.

Redesdale, L.

Townshend, M.

Rees, L.

Trafford, L.

Reigate, L.

Trefgarne, L.

Remnant, L.

Trenchard, V.

Renton, L.

Trumpington, B.

Renwick, L.

Tryon, L.

Rochdale, V.

Ullswater, V.

Rodney, L.

Vaux of Harrowden, L.

Rollo, L.

Vinson, L.

Romney, E.

Watkinson, V.

Rootes, L.

Whitelaw, V.

Rotherwick, L.

Wigram, L.

Sackville, L.

Willoughby de Broke, L.

Saint Albans, D.

Windlesham, L.

St. Davids, V.

Wolfson, L.

St. Germans, E.

Wyatt of Weeford, L.

St. John of Fawsley, L.

Wynford, L.

Saint Levan, L.

Yarborough, E.

Sanderson of Bowden, L.

Young, B.

Savile, L.

Young of Graffham, L.

Selborne, E.

Zouche of Haryngworth, L.

Resolved in the negative, and amendment disagreed to accordingly.
5.55 p.m.
Clause 4 [Transfer of the water authorities' functions etc.]:
[Amendments Nos. 44 to 46 not moved.]
Clause 4 agreed to.
Before Schedule 2:
[Amendment No. 47 not moved.]
Schedule 2 [Schemes providing for the Initial Transfers]:
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Hesketh): moved Amendment No. 48:
Page 192, line 36, after ("provisions") insert ("and without further assurance").
The noble Lord said: These amendments are concerned with the schemes of transfer under Schedules 2 and 5. They concern the schemes being prepared by the water authorities for the division of their property, rights and liabilities in Schedule 2 between the successor company and the NRA, and in Schedule 5 between the existing appointee and the new appointee. The amendments to each schedule are similar and can be considered together.

301
The first, Amendment No. 48 which inserts:
"and without further assurance"
in paragraph 2(1) in Schedule 2 is to clarify that the transfer scheme effects complete transfer of property, assets and liabilities from the water authority to the successor plc or to the NRA without the need for any further requirements, such as conveyances or transfers. The equivalent Amendment No. 228 to paragraph 3(1) in Schedule 5 ensures the same for transfers between existing and new appointees.
The second and third amendments to Schedule 2, Amendments Nos. 49 and 50 which add two new sub-paragraphs to sub-paragraph (4) of paragraph 2, will allow schemes to include provisions to enable the NRA or the plc as appropriate to require production and safe custody of documents of title held by the other party relating to their rights in respect of land. Again an equivalent amendment is made in Schedule 5, Amendment No. 229.
The final amendments to these schedules, Amendments Nos. 51 and 230, provide that these schemes of transfer may make provision for arbitration and certification where there may be uncertainty in a scheme of transfer as to the rights of either the NRA or the plc, or the existing new appointee, as the case may be.
These amendments are technical amendments, designed primarily to facilitate the procedures for establishing and certifying proof of title of land transferred in schemes of transfer.
I must ask the Committee's forgiveness in not saying when I moved Amendment No. 48 that I was speaking to Amendments Nos. 49 to 51 and to Amendments Nos. 228 to 230. I commend these amendments to the Committee.
On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 49:
Page 193, line 23, leave out ("sub-paragraph (2)(c)") and insert ("paragraph (c) of sub-paragraph (2)").
On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 50:
page 193, line 26, at end insert ("; and the provision that may be made by virtue of that paragraph includes—

(a) provision for treating any person who is entitled by virtue of a scheme under this Schedule to possession of a document as having given another person an acknowledgement in writing of the right of that other person to the production of the document and to delivery of copies thereof; and

(b) provision applying section 64 of the Law of Property Act 1925 (production and safe custody of documents) in relation to any case in relation to which provision falling within paragraph (a) above has effect.").

On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 51:
Page 194, line 15, at end insert—
("(f) that disputes as to the effect of the scheme between the Authority and the successor company to which property, rights and liabilities are transferred in accordance with the scheme are to be referred to such arbitration as may be specified in or determined under the scheme;
302
(g) that determinations on such arbitrations and certificates given jointly by the Authority and a successor company as to the effect of the scheme as between the Authority and that company are to be conclusive for all purposes.").
On Question, amendment agreed to.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 51 A:
Page 194, line 15, at end insert—

("(f) that where persons who immediately before transfer were contributing to the Water Authorities' Superannuation Fund and employed by a successor body, it shall be the duty of that body to provide pension benefits that are no less favourable (including any provision for increasing pensions already in payment) than those which would have been enjoyed under comparative arrangements with the Local Government Superannuation Scheme.").

The noble Lord said: The Minister has quite fairly dealt with the gravamen of the contents of the schedule and the supplementary provisions. We are seeking to add a new subparagraph to the schedule. We are concerned, as the amendment states, about the preservation of employees' pension rights. It would be helpful to the Committee if I were to remind noble Lords of the precise additional words that we want to add. They are:
"that where persons who immediately before transfer were contributing to the Water Authorities' Superannuation Fund and employed by a successor body, it shall be the duty of that body to provide pension benefits that are no less favourable (including any provision for increasing pensions already in payment) than those which would have been enjoyed under comparative arrangements with the Local Government Superannuation Scheme.)".
I am sure that all Members of the Committee will recognise the fact that not only they but employees of water companies are concerned and sensitive about the question of pensions. It is a question not only of enjoying a pension which has been earned but of making sure that it is as protected as possible. The purpose of the amendment is to place a statutory duty on the new water plcs and their associated bodies to provide a pension scheme which will be no less favourable than the statutory local government superannuation scheme.
I can anticipate the Minister's arguments: that, despite the massive number of words, he is disinclined to add more to the face of the Bill; that he does not doubt for one moment that the interests of the employees will be adversely affected; and that they will be no less favourable in the future.
Mr. Michael Howard, the Minister in charge of the Bill in another place, wrote to the NALGO trade union on 3rd April. It is significant to my argument because he said:
"I am not of the opinion that privatised companies should be statutarily bound to specific duties".
It is surprising that he does not believe that privatised companies should be statutarily bound to specific duties. There are generalisations, premises, hopes and anticipations but he uses the words "bound to specific duties". He continues:
"This is contrary to practice in the private sector where a trust deed is the usual means of protecting pension arrangements".
That may be the practice and the usual arrangement. The many thousands of employees in the company are asking the Government to write on the face of the Bill a provision which they presently enjoy. They

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are not asking for enhancement but for protection of that which they already have.
I know that the Government are proposing to establish what are called "mirror image" pension arrangements for successor bodies subject to trust deeds to be approved by the Secretary of State. I do not for one moment impute to the Secretary of State that he is careless or cavalier in his desire to protect the rights of employees. However, I cannot understand why it is not possible to add such a tiny protection for the employees, who in my view will make a real difference to the success of future water arrangements. In future a plc can decide to cease support for a scheme and close it and then replace it with an inferior scheme.
I have had the benefit of considering the arrangements for employees in the Royal Ordnance Factories and the dockyards, for example, where their status was changed from being protected by statutory undertakings. They were governed by an arrangement which the Government held out to be satisfactory. We know what happened to the workers in the Royal Ordnance Factories and the dockyards after their work was decimated and their interests badly affected.
If the Minister is looking for ways in which to ease the passage of the Bill through this House and to find acceptability in the country, he could make this tiny addition. I assure him that there will be many things which he will wish to monitor and consider in the future. He will certainly need to see whether the companies look after their employees in the same way as the present water authorities. He can avoid the need for that monitoring if he accepts the amendment.
Meaningful protection of employees' pension rights can come only from statutory measures. In my view this amendment should suffice in that regard. We are not saying that there is a general desire for future employers to dishonour agreements. The employees are saying, "Let us put that beyond a peradventure. Let us write on the face of the Bill the kind of amendment that we are proposing". I beg to move.
The Earl of Caithness: I assure the noble Lord, Lord Graham, that the Government are concerned that the former water authority employees' pension rights are protected and have given their assurance that there will be a scheme available to water authority employees who are transferring to a successor company which provides the same benefits at the same rate of contribution by the employees as for the local government superannuation fund at transfer date. This specifically includes full index linking. The assurance will be given effect through the mirror image scheme. That is a point to which the noble Lord indicated I would refer when he answered the question which he posed——
Lord Graham of Edmonton: And very well!
The Earl of Caithness: There may be room on this side of the Committee if the noble Lord wishes to come over to answer as well as to ask the questions.
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Employees who do not transfer to the water authorities' successor companies will be transferred to the National Rivers Authority and will be eligible to remain in the local government superannuation scheme. The mirror image scheme will be safeguarded under trust deed by trustees as is customary in the private sector. That is why statutory requirements on pension rights have not been included in any previous privatisation.
However, the trust deed will contain two provisions which will give members of the scheme particular reassurance about the protection of their future rights. These are, first, that the trustees of the mirror image scheme shall include at least two representatives of members. Secondly, while there remain potential beneficiaries of the mirror image scheme, it shall not be wound up or its benefits altered if any trustee objects.
The mirror image scheme will include the option to follow changes in the local government superannuation scheme. Such decisions will of course be made by the trustees of the scheme. Therefore, while I am sympathetic towards the concern for employees that underlies the amendment, I believe it to be unnecessary.
Lord Graham of Edmonton: I should like to be clear that the Minister is saying that representatives of the employees will form part of the trustees and that nothing will happen to a scheme which will be of disadvantage to them. I should like him to confirm that nothing will happen to that scheme even if one trustee objects. Perhaps on vesting day—or whatever term is used—the rights which a current employee enjoys will be transferred and protected by a trust deed and in future some of the employees who are affected by the scheme will be members of the board of trustees. In that situation we should like to know that nothing can happen to the scheme if one trustee objects. Can the Minister say that my rough understanding of the position is correct?
The Earl of Caithness: The noble Lord has the gist of my reply absolutely right. I should like re-emphasise exactly what I said. First, that the trustees of the mirror image scheme shall include at least two representatives of members. That covers the noble Lord's first point. Secondly, while there remain potential beneficiaries of the mirror image scheme it shall not be wound up or its benefits altered if any trustee objects.
Lord Graham of Edmonton: I am grateful to the Minister. Quite fairly he used a phrase which I had not picked up when saying that while there exists in employment some of the transferred employees, they will continue to have the right to protect the interests which were transferred.
The Minister will understand that I have received my advice from representatives of NALGO. They have drawn my attention to the fact that they continue to be sensitive about the matter, despite what happened in another place and the assurances that were given by Mr. Colin Moynihan. However, in fairness to the Minister, it may well be that there has been a misunderstanding. I shall certainly

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withdraw my amendment, consult those outside the Committee who may be helpful to me and return at a later stage if need be. However, at this stage I am satisfied with what the Minister said and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 2, as amended, agreed to.
Clause 5 agreed to.
Schedule 3 agreed to.
Clause 6 [Customer service committees]:
[Amendment No. 52 not moved.]
Baroness Strange Baroness Strange moved Amendment No. 53:
Page 5, line 20, leave out ("may") and insert ("shall").
The noble Baroness said: May I first apologise to Members of the Committee that I did not speak on the Bill at Second Reading. This is the first amendment which I have ever dared to move so I am tip-toeing into the water rather than diving straight in and I hope that the Committee will bear with me.
It seems to me that one of the chief purposes of the Government in bringing forward this Bill is to protect the interests of the consumer. To have smaller companies instead of a nationalised monopoly must be better for the man standing at the sharp, or tap, end. However, it is still a monopoly. In our complicated, largely urban society it is no longer feasible to go out to the spring, stream or pump at the well with a bucket to collect the day's supply of water. I do not and have not seen many people creeping home from the lake in St. James's Park with their buckets of water. We are pretty well stuck with the tap.
The word "may" gives me an instant picture of the director of the water board sitting with a daisy in his hand saying "Shall I set up a customer services committee? Shall I not set up a customer services committee? I may set up a customer services committee. I may not set up a customer services committee". The word "shall" gives the director a plain duty to do so.
Subsection (3) of the clause states that:
"It shall be the duty of the Director",
to set up CFCs. That sets it out quite clearly without ambiguity. Here there are no daisy petals. Surely, therefore, it would be logical also to put in the word "shall" at the beginning of Clause 6, as that is clearly what the Government want. I beg to move.
Lord McIntosh of Haringey: Perhaps I may add my support to the amendment so poetically moved by the noble Baroness. She has made it much clearer than could be said in ordinary prose that a customer service committee, or a consumer council as it is in other privatised industries, is an absolutely essential part of the regulatory process. That has been so in every single privatisation measure introduced so far by this Government.
It would be a tragedy if, through what I can only think has been an error of drafting, there should be
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any risk whatever that the consumer should not be represented in that way. I very much hope that the Government will see their way to rationalising the wording of this clause and agreeing to the amendment.
Baroness Phillips: I too should like to support the noble Baroness. As befits our sex she has moved the amendment with brevity and clarity so I shall not spoil the record by going on at length.
However, to support my noble friend on the Front Bench, this must have been an oversight. I cannot believe that the Government will not accept this amendment. I should be very surprised at that because consumer representation has a double advantage. It can not only carry through any problems but can also bring ideas, as we know only too well, whether one is talking about private industry or a state enterprise. I feel certain that without further ado the Government will accept this very modest amendment.
Lord Ezra: I believe that we must all be beholden to the noble Baroness for moving this simple but important amendment because the protection of customers' interests must be paramount. After all, we have already spent nearly three hours talking about the relationship between the consumer and the shareholder. At the very least, we should be sure that these customer service committees will be set up and that the wording in this clause will be made totally consistent and should reassure all those who are concerned about the protection and safeguarding of consumers.
6.15 p.m.
The Earl of Arran: My noble friend says that this is one of the first amendments which she has ever dared to move. This is one of the first amendments which I have ever dared to answer and therefore she has my sympathy. Perhaps I can set her mind at rest on this amendment which seeks to clarify further that customer service committees will be established.
As my honourable friend the Parliamentary Under-Secretary of State for the Environment explained in the other place, such an amendment is unnecessary because subsection (3)(a) already achieves the desired effect since it places a duty on the director general to establish customer service committees as soon as practicable after the transfer date for the purposes of allocating companies to them. I am advised that to impose a further duty would merely make the Bill defective. Furthermore, it would be incorrect to impose a duty in subsection (1) unless that subsection also determined the number of committees that are to be established and maintained. Since the number of committees may vary, this is not possible.
I should like to emphasise, therefore, that there is a clear duty to establish these committees, and that they they will be established. Given this reassurance I hope that my noble friend will feel able to withdraw this amendment.
Lord McIntosh of Haringey: Before the noble Baroness decides what to do, I say to the noble Earl that he would only have the nerve to make that reply in the absence of his noble friend Lord Renton. In common parlance the words "may" and "shall" means something different. If the Government are seriously saying that "shall" would imply an obligation to specify the number of customer service committees, that could easily have been solved by a much more conciliatory approach in saying that the number of customer service committees can be decided later. It was not necessary to respond in this way to the noble Baroness's amendment which anybody in common parlance would understand as meaning the possibility that customer service committees would not be set up.
I do not doubt that the noble Earl is legally correct and that his advice was honestly given. However, I doubt that it is wise to purse it in this way, and I wonder whether the Government would have been more tactful to have introduced a further amendment which could have enabled them to use the word "shall", which everybody understands.
Lord Ezra: I believe that the noble Lord, Lord McIntosh, has made a very important point. Legally this drafting may be technically correct but the interpretation by the very large number of people who will use the Bill when enacted could raise doubts. I ask the noble Earl at least to take back this amendment. If it requires some redrafting for legal purposes, perhaps the Government could return with a proposal at a later stage.
Baroness Strange: I should like to say to the Minister that that was a very unfavourable and illogical reply. I was very sorry to see such a lack of logic coming from the Government Front Bench. It may be legal but it is not logical. I hope that the Minister may offer me some comfort, although at present I intend to withdraw the amendment. However, I shall certainly return to this matter.
The Earl of Arran: I am assured that this is legally quite correct, as the noble Lord, Lord McIntosh of Haringey, said. However, I see that there is a little unrest and concern about this interpretation and therefore I shall bring it to the attention of our advisers.
Baroness Strange: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 54 to 57 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 57A:
Page 6, line 2, leave out ("Director as the Director") and insert ("Secretary of State as the Secretary of State").
The noble Lord said: In moving this amendment I must immediately apologise to the Committee for having failed to put my name to Amendment No. 52, which I should have done. It was the first of the amendments dealing with the roles of the Secretary of State and the Director General of Water Services and the establishment of customer service
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committees. It was my intention in moving Amendment No. 57 A to complement the amendments to be moved by the noble Lord, Lord Nugent, and it was for that purpose that I put my name to Amendments Nos. 55, 56 and 57. Unfortunately, I neglected to put my name to Amendment No. 52, which is the first occasion on which this matter arises. If the Committee will permit me, therefore, I should like to argue the case for this amendment as a token of the amendments to Clause 6 and to Schedule 4 which deal with the relationship between the Director General of Water Services and the customer service committees.
The problem that we have with the customer service committees as envisaged in this Bill is that they are not independent of the Director General of Water Services but dependent on him for their establishment, their constitution and their operation. We, and those who represent consumer interests generally in this country, feel that this is the wrong way to approach customer service committees and consumer councils. Indeed, there is an excellent precedent in the gas privatisation procedures and with the Gas Consumers Council for what ought to be done.
I remind the Committee that the Gas Consumers Council was to be set up by the Secretary of State; that is, in effect, the Secretary of State for Trade and Industry. It employs its own staff, though its staffing levels and conditions of service are subject to approval by the Department of Trade and Industry and the Treasury. We would not be so bold as to seek to question the Treasury intervention in these matters. However, the council is independent of the Director General of Ofgas. There is a very good reason for that. The regulatory function as established in all these measures, whether for telecommunications, gas or now water, is a clear and specific function but it carries with it the obligation of balancing the needs of all the interested parties in the gas, telecommunications or water industries. The director general has to take into account the interests of the water supply plcs and the various types of customer as well as the statutory obligations placed on him by government.
That is a quite different role from that of customer advocate. In the United States there has been an attempt to set up public utilities committees which combine the role of consumer advocate with the role of regulator. Over a number of years there has been considerable dissatisfaction with the way in which that works and a number of individual states have sought to separate what they call specifically the consumer advocate from the role of the regulatory body. They are right to do so. The consumer advocate has one function only, which is to represent the consumer against the considerable interests of the suppliers; and I remind the Committee that we have monopoly suppliers of water to domestic and non-domestic consumers.
In the gas industry it works. The Gas Consumers Council, set up by the Secretary of State independently of Ofgas, has had some notable successes in recent months. The Gas Consumers Council secured that the industrial pricing policy of British Gas should be referred to the Monopolies

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and Mergers Commission. It is the Gas Consumers Council which has secured that there should be a code of practice which is—and I say this as the husband of a former chairman of the National Gas Consumers Council—an improvement on any previous code of practice on the disconnection of gas consumers who are in arrears; in other words, the Gas Consumers Council achieved from British Gas a better deal for poor consumers than any previous consumer council had achieved from the old gas boards. Therefore, the model works in the legislation of this Government and it seems rational for this model, which does work, to be extended to the water industry.
It will be said to me that this model has not been imposed on British Telecom, and that is true. The Director General of Oftel has control of the consumer advisory committees which he has set up. However, it is noticeable in looking at British Telecom—and on Second Reading there was a stalwart defence of British Telecom by the noble Lord, Lord Wyatt of Weeford—that in the competitive atmosphere in which British Telecom works it is the director general himself who is taking the lead in protecting the consumer because he is acting in a far more vibrant, expanding and technologically changing atmosphere. That is a very different matter from water supply. As everyone agrees, water supply is a natural monopoly. Telecommunications in many of its aspects is not and for the consumer there is the protection of competition.
I suggest to the Committee that the analogy with British Gas is far better than the analogy with British Telecom. If the Government are making a choice as to which of their previous analogies they want to follow, it would be better for them to choose gas rather than telecommunications. For that reason we are seeking with this amendment, and would have sought with Amendment No. 52 if I had put my name to it—I shall gladly give way to the noble Lord if he wishes to assist me.
Lord Hesketh: Is the noble Lord also speaking to Amendment No. 67A?
Lord McIntosh of Haringey: Yes, I am speaking also to Amendment No. 67A, which is on the same point but referring to Schedule 4 as opposed to Clause 6. The point of both amendments, if I may make this clear to Members who do not have the Bill in front of them, is that Clause 6 deals with the principles of the establishment of customer service committees and Schedule 4 deals with the details.
In all these amendments we seek to establish that the Secretary of State rather than the director general should have responsibility for setting up the customer service committees. That is a logical and rational extension of existing government policy. I do not think that even the noble Earl, Lord Gowrie, could call this a wrecking amendment; and he carries the phrase "wrecking amendment" further than I have ever heard it carried before. I hope that the Government will be able to support the principle behind these amendments even though my oversight
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on Amendment No. 52 has made them technically defective. I beg to move.
Lord Ezra: The question of the independence of consumer advocacy is of vital importance. In this very complex legislation which is transferring a basic monopoly enterprise from the public to the private sector it must be seen that the consumer is protected as much as possible. The director has many functions to undertake in that respect but the consumer organisations that are set up under this Bill should be seen to be as independent as possible. It is for that reason that I support this amendment and I very much hope that the Government will be persuaded by the argument to accept it.
Lord Hesketh: Before replying I should make it clear to the Committee that, while I completely accept what was said by the noble Lord, Lord McIntosh, who gave a rather broader picture by explaining his support for Amendment No. 52, I shall be responding only to Amendments No. 57A and 67A.
Amendment No. 57A would provide for the Secretary of State rather than the director general to appoint members of the customer service committees. Amendment No. 67A would transfer to the Secretary of State the director general's responsibility for determining the amount of any compensation for loss of office paid to a chairman of a customer service committee.
In order for the director general to take customer interest properly into account in his role as the economic regulator and in ensuring that the quality of companies standards of operational services to customers are maintained and, where appropriate, improved, it is vital that he has the full and adequate briefing from the customer service committees. In these circumstances it is right and proper that he should appoint the members and chairman of these committees and that they should report to him. As a consequence the committees will carry the additional weight in investigating customer complaints and in taking up more general matters of concern to customers with the new companies. It would thoroughly confuse matters if the committees were to be responsible to the Secretary of State but with the director having a duty to protect customer interests and powers as an economic regulator to enforce that protection.
In our view, the director should also be responsible for deciding all aspects of the remuneration of the very people he appoints to the committees. I can assure the Committee that there is nothing new in the suggestion that compensation for loss of office should be determined by the person who made the original appointment. There are many examples of this in primary legislation introduced by both main political parties over the years. For these reasons I urge the Committee to resist Amendments Nos. 57A and 67A.
Lord McIntosh of Haringey: I appreciate that the Minister has been briefed on the specific amendments. It is entirely my responsibility to have widened the basis of the debate and not his. If he and the Government Front Bench think about the

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issue, you cannot actually separate Amendments Nos. 57A and 67A from the others. The whole point of distinguishing between consumer advocacy and regulation is not unknown to government. It could have been anticipated and it should have been in the light of the amendments put down by the noble Lord, Lord Nugent. He might well have said that they should not have been grouped with his earlier amendment. He would have been perfectly within his rights to do so at any time up until say midday today. If I had my name on the amendment I certainly would have objected to that grouping.
I should have thought that the Government would have taken this opportunity to attempt to defend the principle of subordinating consumer advocacy to regulation. If the Minister feels able to do so, I shall happily give way to him. Since he does not feel able to do so, it is necessary for me to seek the opinion of the Committee on this matter. It is right for us to establish as clearly as we can our support for the separation of powers between consumer advocacy and regulation and to see that that is enshrined in this legislation, as it was in the legislation for the privatisation of British Gas. If Amendment No. 57A meets with the approval of the Committee, I shall undertake to introduce the necessary consequential amendments at a later stage.
6.35 p.m.
On Question, Whether the said amendment (No. 57A) shall be agreed to?
Their Lordships divided: Contents, 52; Not-Contents, 141.

DIVISION NO. 2

CONTENTS

Addington, L.

Lawrence, L.

Airedale, L.

Listowel, E.

Ardwick, L.

Lloyd of Kilgerran, L.

Birk, B.

Lockwood, B.

Cledwyn of Penrhos, L.

Longford, E.

Cocks of Hartcliffe, L.

McCarthy, L.

Craigavon, V.

McIntosh of Haringey, L.

Darcy (de Knayth), B.

Monson, L.

David, B.

Nicol, B.

Dean of Beswick, L.

Northfield, L.

Dormand of Easington, L.

Perry of Walton, L.

Elwyn-Jones, L.

Phillips, B.

Ezra, L.

Ponsonby of Shulbrede, L. [Teller.]

Fisher of Rednal, B.

Foot, L.

Rochester, L.

Galpern, L.

Ross of Newport, L.

Graham of Edmonton, L.

Russell, E.

Hampton, L.

Russell of Liverpool, L.

Hanworth, V.

Stewart of Fulham, L.

Harris of Greenwich, L.

Stoddart of Swindon, L.

Hatch of Lusby, L.

Thurso, V.

Hayter, L.

Tordoff, L. [Teller.]

Hooson, L.

Underhill, L.

Houghton of Sowerby, L.

White, B.

Jeger, B.

Williams of Elvel, L.

Jenkins of Hillhead, L.

Young of Dartington, L.

Kilmarnock, L.

NOT-CONTENTS

Abinger, L.

Ashbourne, L.

Ailesbury, M.

Astor of Hever, L.

Alexander of Tunis, E.

Beloff, L.

Alexander of Weedon, L.

Belstead, L.

Arran, E.

Bessborough, E.

312

Blatch, B.

Marchwood, V.

Blyth, L.

Margadale, L.

Boardman, L.

Marley, L.

Brabazon of Tara, L.

Maude of Stratford-upon-Avon, L.

Bridgeman, V.

Brocket, L.

Merrivale, L.

Brougham and Vaux, L.

Mersey, V.

Butterworth, L.

Monk Bretton, L.

Caithness, E.

Montagu of Beaulieu, L.

Caldecote, V.

Monteagle of Brandon, L.

Campbell of Alloway, L.

Morris, L.

Carnegy of Lour, B.

Mottistone, L.

Carnock, L.

Mountevans, L.

Clinton, L.

Mowbray and Stourton, L.

Clitheroe, L.

Moyne, L.

Coleraine, L.

Munster, E.

Colwyn, L.

Murton of Lindisfarne, L.

Constantine of Stanmore, L.

Napier and Ettrick, L.

Cork and Orrery, E.

Nelson, E.

Cottesloe, L.

Norfolk, D.

Cox, B.

Norrie, L.

Craigmyle, L.

Northesk, E.

Cranbrook, E.

Nugent of Guildford, L.

Crathorne, L.

Onslow, E.

Cross, V.

Orkney, E.

Daventry, V.

Oxfuird, V.

Davidson, V. [Teller.]

Penrhyn, L.

Denham, L. [Teller.]

Portsmouth, E.

Dilhorne, V.

Radnor, E.

Dundee, E.

Reay, L.

Eden of Winton, L.

Redesdale, L.

Elibank, L.

Rees, L.

Elliot of Harwood, B.

Reigate, L.

Elliott of Morpeth, L.

Renwick, L.

Elphinstone, L.

Rochdale, V.

Erne, E.

Rodney, L.

Falmouth, V.

Rollo, L.

Ferrers, E.

Sackville, L.

Ferrier, L.

Saint Levan, L.

Forester, L.

Saltoun of Abernethy, Ly.

Fraser of Carmyllie, L.

Savile, L.

Gainford, L.

Selborne, E.

Glenarthur, L.

Shrewsbury, E.

Grantchester, L.

Skelmersdale, L.

Gray of Contin, L.

Southborough, L.

Greenway, L.

Strange, B.

Gridley, L.

Strathclyde, L.

Haig, E.

Swansea, L.

Hailsham of Saint Marylebone, L.

Swinfen, L.

Teviot, L.

Hardinge of Penshurst, L.

Teynham, L.

Hemphill, L.

Thorneycroft, L.

Henley, L.

Townshend, M.

Hertford, M.

Trafford, L.

Hesketh, L.

Trefgarne, L.

Hives, L.

Trenchard, V.

Hooper, B.

Trumpington, B.

Kemsley, V.

Ullswater, V.

King of Wartnaby, L.

Vaux of Harrowden, L.

Knutsford, V.

Waldegrave, E.

Lauderdale, E.

Willoughby de Broke, L.

Layton, L.

Windlesham, L.

Lindsey and Abingdon, E.

Wise, L.

Long, V.

Wynford, L.

Lyell, L.

Yarborough, E.

Macleod of Borve, B.

Young of Graffham, L.

Malmesbury, E.

Resolved in the negative, and amendment disagreed to accordingly.
6.43 p.m.
[Amendment No. 58 not moved.]
[Amendment No. 59 had been withdrawn from the Marshalled List.]
The Deputy Chairman of Committees (Baroness Cox): I must point out that if Amendment No. 59A is agreed to I cannot call Amendments Nos. 60 or 62.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 59A:
Page 6, line 5, leave out from ("the") to ("and") in line 11 and insert ("Secretary of State shall have regard to—

(a) the desirability of appointing a person who has experience of, and has shown capacity in, representing the interests of consumers of water and users of sewerage services in any area to which the Secretary of State has allocated, or is proposing to allocate, that committee.".

The noble Lord said: With this amendment we are seeking to have the interests of certain groups of people written into the Bill. Under the Bill as it stands the prime consideration seems to be the water or sewerage undertaker and not the consumer. The amendment requires that the Secretary of State shall have regard to:
"(a) the desirability of appointing a person who has experience of, and has shown capacity in, representing the interests of consumers of water and users of sewerage services".
We believe that this aspect must be made crystal clear on the face of the Bill. The purpose of the customer service committee is to protect the consumer and not to sympathise with the technical problems of the industry. There will be technical problems and they can be sympathised with, but in a Bill designed allegedly to be in the best interests of water users we are concerned that the consumers of water should have a place on the committee. It is not good enough that members of the committee should have:
"experience of, and have shown capacity in, some matter relevant to the functions of a water undertaker or sewerage undertaker or to the carrying out of those functions".
If anything, those would be a disqualification for looking after the interests of the consumer.
I hope that the Minister will consider making a concession on a point of which up to now the Government and their spokesmen have made great play. The interests of the water consumer should not only be adequately protected but also adequately represented. This would be a tiny concession. I beg to move.
Baroness Fisher of Rednal: I support my noble friend. The amendment refers to:
"the desirability of appointing a person who has experience of".
We all have experience of water, whether we use it for washing or for some other purpose. We are all consumers of water. I hope that when making these appointments the Government will bear in mind that women know something about water. They have a capacity to represent the interests of consumers. I said during a previous discussion on the Water Bill that only one woman is represented on the eight water authorities. I do not know whether or not she would be called a statutory woman. Today we are celebrating 10 years of a woman Prime Minister.
Lord Graham of Edmonton: Some noble Lords are!
Baroness Fisher of Rednal: I apologise to my noble friend. The Government are celebrating 10 years of a woman Prime Minister. This might be a birthday present which the Prime Minister would welcome on behalf of all women. It is an important point. Women will have "experience of" and will have
314
"shown capacity in", and they can represent consumers.
Baroness Strange: I should like to speak to Amendment No. 61 which is not quite the same as the other two amendments. It is a simple amendment. Two categories of person are to be included in the customer service committee. They are:
"persons who have experience of, and have shown capacity in, some matter relevant to the functions of a water undertaker or sewerage undertaker".
That is straightforward. These people will be the technicians and those with the know-how. Clearly they should be represented. The second category is those who understand the special needs of disabled people. Of course they should be represented. That goes without saying. However, this is a customer service committee we are talking about. We are all customers. As a matter of fact we are all domestic customers too. Surely if there are to be committees—my noble friend the Minister is going to ensure that there will be—and they are to be called customer service committees, they must represent all customers, some of whose interests might conflict with those who have experience of, and have shown capacity in, water and sewerage undertakings.
Perhaps I may quote briefly from Sir Frederick Corfield's Report published by the Selsdon Group in November 1988. He said:
"Since the protection of the consumer rests almost entirely upon the manner in which the Director General of Water Services performs his duties and in particular holds the balance between the interests of consumer and shareholder, it is, one would have thought, essential that the CSCs should be wholly independent and be recruited from people with particular knowledge of the needs and problems of different categories of consumers—metered and unmetered, domestic, industrial, agricultural and horticultural—rather than from people with experience of the functions of a water or sewerage authority and therefore likely to be more in tune with the problems of supply than with the standard of service required by the consumer. While a CSC thus orientated and with a staff selected by the Director General of Water Services may be expected to ease the burden upon him, that presumably is not the object of the exercise".
The CSCs need representatives from all sorts of organisations, and particularly local ones; for example, the Women's Institute, the Townswomen's Guild, Age Concern, Citizens' Advice Bureaux, local authorities, local members of the CBI, the National Farmers' Union, horticultural users, local hospitals and the community health council. All those groups are customers and they all need representation on the CSCs.
A similar privatised industry is the gas industry. In Section 2(3)(a) of the Gas Act 1986 it specifies that membership of the "Consumers' Council" should,
"include members who, by reason of their familiarity with the special requirements and circumstances of the different areas of Great Britain or of small businesses, are able together to represent the interests of the consumers of gas".
We are not all consumers or customers of gas; some of us buy electricity, oil, coal and some of us chop our own wood and have Tilley lamps. Moreover, some of us even have candles. However, we are all customers for water. Therefore, it seems self-evident that customer service committees should represent customers; otherwise they should be called something else.
Lord Hesketh: Amendment No. 59A would replace the requirement on the director to have regard to the desirability to appoint people to the customer service committees with experience or expertise of the water or sewerage industry, by a requirement on the Secretary of State to have regard to the desirability of appointing a person with experience or expertise in representing water and sewerage service customers. Before going any further, I think that I should point out to the noble Baroness, Lady Fisher of Rednal, that at present it is not the Government who will make the appointments; it is the director general.
Amendment No. 61 would similarly require the director general, in making appointments to the committees to have regard to the desirability of appointing people with such expertise and in particular in representing domestic customers.
The requirements in subsection (5) that the director should have regard to relevant expertise of water or sewerage undertakers and of the special needs of the disabled in making appointments to a CSC are not exclusive requirements. They are just two of the considerations the director will need to weigh in getting the balance right. There is no bar on membership by people with no such experience.
The director's touchstone will always be the need to appoint committees that can deal efficiently with the wide range of customer issues and complaints that CSCs are likely to face. As my honourable friend the Parliamentary Under-Secretary of State for the Environment explained in the other place, it is envisaged that the director will need to ensure that there is a similar balance of interests represented on these committees to those of the existing consumer consultative committees; in other words, a three-fold balance of interests between domestic customers, industrial commercial and farming interests and local authorities.
The arrangements for determining how this balance is to be achieved and who the customer representatives are to be, are properly matters best left to the discretion of the director general. It is clear that he will need to ensure that there is effective customer representation if he is to obtain the advice that he requires from these committees to ensure that customers' interests are properly protected. It is for those reasons, as I explained in relation to Amendments Nos. 57A and 67A, that the director should be responsible for making those appointments rather than the Secretary of State.
I believe that the noble Lord, Lord Graham of Edmonton, indicated that he felt the director was biased essentially in favour of the industry against the interests of the customer. In my view it is a misunderstanding of the Bill to see the director as being biased in favour of the industry against the interests of the customer. In Clause 7(2)(a) it makes it a primary duty of the Secretary of State and the director to ensure that the new companies properly carry out their functions; or, in other words, that they ensure the services to customers are properly provided.
While entirely agreeing that there should be customer representatives on these committees,
316
including representatives of domestic customers, I invite the Committee to reject the two amendments for the reasons I have stated.
Lord Graham of Edmonton: It is a continuing disappointment to me that the Minister relies upon generalities; such as, "properly to carry out the functions". It might satisfy the Minister to think that when the director general seeks to "people" the committees, he will make sure that there are people there who are able to carry out the functions from the point of view of the tripartite interests which he has just mentioned. I do not doubt his intentions. However, we are seeking now to demonstrate to the people outside this place—that is, every consumer in the land—that the Government are actually writing into the Bill the provision that among the people who will be on those committees there will be someone who is seen to be—to use a clumsy phrase—a consumer champion; that is, someone who is recognised as more of a consumer person than a technical person. I realise that it will not be easy to do so.
It is not an easy task to achieve a good balance when seeking to select people who are willing to give up time to do this work. It is of course very glib for someone to say, "We will have this person and that person". However, there are many bodies and organisations who should be represented. Indeed, I heard the noble Baroness, Lady Strange, run through a list of such organisations. She speaks from her knowledge and experience in the matter.
We are inviting the Government to demonstrate their good faith. It does not mean to say that we are decrying the integrity of the director general, or even that of the Government. However, we want to see the Government put their money where their mouth is; in other words, we want to see the Government put words where their mouth is. We want the consumers outside this place to realise that all the groups—besides the disabled and others which are specially sought out as being entitled to a place at this particular top table—are public consumers of water. The Government have failed lamentably to convince me on the matter. I believe that they have also failed lamentably to convince the public as to their true bona fides in ensuring that consumers of water will have their interests well looked after, not just by the Government or the director general but also by the people on these committees. I intend to press the amendment to a vote.
6.58 p.m.
On Question, Whether the said amendment (No. 59A) shall be agreed to?
Their Lordships divided: Contents, 54; Not-Contents, 116.

DIVISION NO. 3

CONTENTS

Addington, L.

Birk, B.

Ailesbury, M.

Blyth, L.

Airedale, L.

Broadbridge, L.

Ardwick, L.

Buckmaster, V.

Baldwin of Bewdley, E.

Cledwyn of Penrhos, L.

317

Cocks of Hartcliffe, L.

McIntosh of Haringey, L.

Craigavon, V.

McNair, L.

Dean of Beswick, L.

Monson, L.

Dormand of Easington, L.

Mountevans, L.

Ewart-Biggs, B.

Nicol, B.

Ezra, L.

Phillips, B.

Fisher of Rednal, B.

Ponsonby of Shulbrede, L. [Teller.]

Galpern, L.

Graham of Edmonton, L.

Rochester, L.

Hampton, L.

Ross of Newport, L.

Hayter, L.

Russell, E.

Hooson, L.

Russell of Liverpool, L.

Houghton of Sowerby, L.

Shannon, E.

Irving of Dartford, L.

Stewart of Fulham, L.

Jeger, B.

Stoddart of Swindon, L.

Jenkins of Hillhead, L.

Tordoff, L. [Teller.]

Kilbracken, L.

Underhill, L.

Kilmarnock, L.

White, B.

Listowel, E.

Williams of Elvel, L.

Lloyd of Kilgerran. L.

Willis, L.

Lockwood, B.

Winterbottom, L.

Longford, E.

Young of Dartington, L.

McCarthy, L.

NOT-CONTENTS

Abinger, L.

Hives, L.

Alexander of Tunis, E.

Hooper, B.

Alexander of Weedon, L.

Kemsley, V.

Annan, L.

King of Wartnaby, L.

Arran, E.

Knutsford, V.

Ashbourne, L.

Layton, L.

Astor of Hever, L.

Lindsey and Abingdon, E.

Beloff, L.

Long, V. [Teller.]

Belstead, L.

Lyell, L.

Bessborough, E.

Macleod of Borve, B.

Blatch, B.

Malmesbury, E.

Boardman, L.

Marchwood, V.

Brabazon of Tara, L.

Margadale, L.

Bridgeman, V.

Merrivale, L.

Brocket, L.

Mersey, V.

Brougham and Vaux, L.

Monk Bretton, L.

Caithness, E.

Monteagle of Brandon, L.

Caldecote, V.

Morris, L.

Campbell of Alloway, L.

Mottistone, L.

Carnegy of Lour, B.

Mowbray and Stourton, L.

Carnock, L.

Munster, E.

Clinton, L.

Murton of Lindisfarne, L.

Clitheroe, L.

Napier and Ettrick, L.

Coleraine, L.

Nelson, E.

Colwyn, L.

Norrie, L.

Constantine of Stanmore, L.

Northesk, E.

Cork and Orrery, E.

Nugent of Guildford, L.

Cottesloe, L.

Onslow, E.

Cox, B.

Oppenheim-Barnes, B.

Craigmyle, L.

Orkney, E.

Cranbrook, E.

Oxfuird, V.

Crathorne, L.

Penrhyn, L.

Cross, V.

Portsmouth, E.

Davidson, V. [Teller.]

Radnor, E.

Dormer, L.

Reay, L.

Dundee, E.

Redesdale, L.

Eden of Winton, L.

Rees, L.

Elibank, L.

Reigate, L.

Elliot of Harwood, B.

Rochdale, V.

Erne, E.

Rodney, L.

Falmouth, V.

Sackville, L.

Ferrers, E.

St. John of Bletso, L.

Forester, L.

Saint Levan, L.

Fraser of Carmyllie, L.

Saltoun of Abernethy, Ly.

Glenarthur, L.

Selborne, E.

Grantchester, L.

Skelmersdale, L.

Gray of Contin, L.

Southborough, L.

Greenway, L.

Strange, B.

Gridley, L.

Strathclyde, L.

Haig, E.

Teviot, L.

Hardinge of Penshurst, L.

Trafford, L.

Hemphill, L.

Trefgarne, L.

Henley, L.

Trenchard, V.

Hertford, M.

Trumpington, B.

Hesketh, L.

Ullswater, V.

318

Vaux of Harrowden, L.

Wise, L.

Waldegrave, E.

Wynford, L.

Windlesham, L.

Yarborough, E.

Resolved in the negative, and amendment disagreed to accordingly.
[Amendment No. 60 not moved.]
Baroness Strange Baroness Strange moved Amendment No. 61:
Page 6, line 5, at end insert—
("() the desirability of the persons appointed being persons who have the experience of and capacity in representing the interests of users of water and sewerage services, and in particular of domestic consumers.").
The noble Baroness said: I am not satisfied with what my noble friend the Minister said and so I should like to test the opinion of the Committee. I beg to move.
7.7 p.m.
On Question, Whether the said amendment (No. 61 ) shall be agreed to?
Their Lordships divided: Contents, 47; Not-Contents, 91.

DIVISION NO. 4

CONTENTS

Addington, L.

Lockwood, B.

Airedale, L.

Longford, E.

Ardwick, L.

McCarthy, L.

Baldwin of Bewdley, E.

McIntosh of Haringey, L.

Birk, B.

McNair, L.

Broadbridge, L.

Monson, L.

Buckmaster, V.

Moyne, L.

Cledwyn of Penrhos, L.

Nicol, B.

Cocks of Hartcliffe, L.

Oppenheim-Barnes, B. [Teller.]

Elliot of Harwood, B.

Ewart-Biggs, B.

Phillips, B.

Ezra, L.

Ponsonby of Shulbrede, L.

Galpern, L.

Rochester, L.

Graham of Edmonton, L.

Ross of Newport, L.

Hanworth, V.

Russell, E.

Hooson, L.

Russell of Liverpool, L.

Houghton of Sowerby, L.

Shannon, E.

Irving of Dartford, L.

Stewart of Fulham, L.

Jeger, B.

Strange, B. [Teller.]

Jenkins of Hillhead, L.

Tordoff, L.

Kilbracken, L.

Underhill, L.

Kilmarnock, L.

White, B.

Listowel, E.

Williams of Elvel, L.

Lloyd of Kilgerran, L.

Young of Dartington, L.

NOT-CONTENTS

Abinger, L.

Cork and Orrery, E.

Alexander of Tunis, E.

Cottesloe, L.

Alexander of Weedon, L.

Cox, B.

Arran, E.

Craigmyle, L.

Ashbourne, L.

Cranbrook, E.

Astor of Hever, L.

Crathorne, L.

Beloff, L.

Davidson, V. [Teller.]

Belstead, L.

Dundee, E.

Blatch, B.

Eden of Winton, L.

Boardman, L.

Erne, E.

Brabazon of Tara, L.

Falmouth, V.

Bridgeman, V.

Forester, L.

Brocket, L.

Fraser of Carmyllie, L.

Brougham and Vaux, L.

Glenarthur, L.

Caithness, E.

Gray of Contin, L.

Campbell of Alloway, L.

Greenway, L.

Carnock, L.

Gridley, L.

Clinton, L.

Haig, E.

Coleraine, L.

Hardinge of Penshurst, L.

Colwyn, L.

Hemphill, L.

Constantine of Stanmore, L.

Henley, L.

319

Hertford, M.

Penrhyn, L.

Hesketh, L.

Portsmouth, E.

Hooper, B.

Radnor, E.

Kemsley, V.

Reay, L.

King of Wartnaby, L.

Redesdale, L.

Knutsford, V.

Rees, L.

Layton, L.

Rodney, L.

Long, V. [Teller.]

Sackville, L.

Malmesbury, E.

Saint Levan, L.

Marchwood, V.

Selborne, E.

Margadale, L.

Skelmersdale, L.

Merrivale, L.

Southborough, L.

Mersey, V.

Strathclyde, L.

Monteagle of Brandon, L.

Swinfen, L.

Mottistone, L.

Teviot, L.

Mountevans, L.

Trafford, L.

Munster, E.

Trefgarne, L.

Murton of Lindisfarne, L.

Trenchard, V.

Napier and Ettrick, L.

Ullswater, V.

Norrie, L.

Vaux of Harrowden, L.

Northesk, E.

Waldegrave, E.

Nugent of Guildford, L.

Windlesham, L.

Onslow, E.

Wynford, L.

Orkney, E.

Yarborough, E.

Oxfuird, V.

Resolved in the negative, and amendment disagreed to accordingly.
7.15 p.m.
The Earl of Arran: I think that this might be a very appropriate moment at which to break for dinner. I suggest that we do not return to the Committee stage of the Bill before 8.15 p.m. I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Control of Pollution (Amendment) Bill
Brought from the Commons; read a first time, and to be printed.

Employment (Age Limits) Bill [H.L.]
7.17 p.m.
Baroness Phillips: My Lords, I beg to move that this Bill be now read a second time.
I must preface my speech by saying that I have no vested interest in the Bill. I am not seeking a return to the labour market, I have no intention of dragooning all 80 and 90 year-olds back to work. My interest in this matter stems from some six years ago when, quite unusually, five of my friends—all very distinguished people in jobs of some importance—were made redundant on account of their age. It is interesting that that age was precisely 50. What was worse, they were precluded from the jobs advertised for which they could have applied because all the advertisements said, "not over 45 years of age". That was my first introduction to the strange phenomenon from which we seem to suffer in this country: age discrimination.
Your Lordships will have noticed that if the other place wishes to be particularly insulting about this House, they refer to "the geriatric other place",
320
suggesting that there is something rather curious or undesirable about age. That is typical of the theme that runs through many areas. My first reaction to the plight of my friends was how cruel it was to be rejected because of one's age. My second reaction was different: what a waste of talents and skills which could be used. The more I have investigated the matter the more confirmed I am in the belief that in our society we waste material but, by golly, we waste people even more.
Over the years I have asked Questions of the Government on this matter. Quite recently I received some publicity on it and I was absolutely deluged with hundreds of letters. These were no crank letters but sensible ones stating the case and showing me how much wider the problem went than I had imagined. The letters came from colleges, professions and all groups, as well as from the trade unions—that is for the benefit of my noble friend Lord McCarthy on the Front Bench. I only wish that time permitted me to read some of the letters to you, such as one from a lady who said:
"I am 39 years old and increasingly frustrated by recruitment advertisements which stipulate an age limit of 35 years. I ask myself what happened to me on my thirty-fifth birthday. My brain cells did not die, I certainly did not lose the use of my faculties. I did not lose my energy, my confidence, my ability or my enthusiasm. I did decide to read for a degree and, four years later, having obtained an honours degree, I found I was too old".
I shall now just pick out some specimens to illustrate my argument. The British Association for the Advancement of Science announced that it had some special lectureships. One was offered at Brunel, another at Darwin, another at Kelvin, another at Lister and one at Lyell. The subjects covered were fairly weighty ones. But the association stated that lecturers must normally be below 40 years of age.
As an ex-teacher, I know that a class may contain 24 children who are all seven years old, but the only thing they have in common is their chronological age. Some are larger than others; some are smaller than others; some are more advanced intellectually; and some are more advanced physically. However, one certainly cannot use their age as a measurement. Nevertheless, society does that all the time.
The Latey Report made rather amusing reading. According to that report, people could achieve certain things at 15 and other things at 16, 17, 18 and so on. I cannot imagine what scientific basis there could be for those assertions.
Unilever UK advertised for an assistant manager. I must say that I am horrified by the kind of salaries that are being offered for such posts. The company seeks someone with an honours degree. The company also states that the applicant must be articulate, bright, resilient and have a sense of humour. I presume he must have a sense of humour to cope with the salary. Finally, the company states that the applicant must be under 26 years of age. I wonder where maturity is considered to start.
I shall also mention the example of tax inspectors. I saw an advertisement just recently for tax inspectors. The advertisement stated that applicants should not be older than 36 years of age. That seems to be another magic age. I always remember that when I worked in court I was fascinated at the way people picked ages out of the air.

321
So it is obvious that age discrimination goes on, and that legislation is necessary. I know it may be said, although not necessarily this evening, that the demographic curve means that the over 40s, and especially the over 50s are the best thing since sliced bread, and that suddenly they will return to the fold and everyone will want them. Someone will probably suggest that this legislation is not needed. However, I think that the present situation shows not a real change of attitude on the part of the employer, but simply a change brought about by necessity. It only needs another swing for us to be back to square one, and for age to be used as a discriminatory factor again.
As an employer, I know what employers want. They want the best person to do the job. We all know that younger workers cost less, but not many employers will be honest enough to admit that is the reason for rejecting older people. From our experience of anti-sex and anti-race discrimination legislation, we have learnt that legal changes alone cannot end discrimination. But at least legislation would give employees recourse against discriminatory practices.
As is so often the case, the legislation of the United States is ahead of us. There it is unlawful for an employer not to employ, to sack or to reduce the employment conditions of a person in any way because of his age. It is also unlawful to limit, segregate or classify workers in any way that would reduce their employment opportunities or adversely affect their status because of their age. Further, it is unlawful to reduce the wages of any worker because of his age.
I have found that employment is only one part of this story, but one has to start somewhere. Even if the Bill is not taken on board by the Government (although I hope it will be) I have started a campaign to which I shall return. However, I hope I can at least ask for justice. I am not talking about justice for any specific age, I merely wish to state that just as one's sex—or gender as we now delicately call it—is not a reason for being refused or accepted for employment, and just as race is not a reason for being refused or accepted, so age, equally, should come into that category. I beg to move.
Moved, That the Bill be now read a second time.—(Baroness Phillips.)
7.25 p.m.
Lord Rochester: My Lords, I am glad to support the concept underlying the Bill which was so lucidly introduced by the noble Baroness, Lady Phillips. If there is one person in your Lordships' House who has shown that she is very far from being geriatric, it is the noble Baroness. She has demonstrated how frequently advertisements for job vacancies specify an age requirement and particularly, that they state the person required should be aged between, say, 25 and 35. That obviously has a highly damaging effect on women in particular, for that is the very period when large numbers of women are out of the labour market bearing and rearing their children.
322
There is evidence too that age requirements, often for people aged between about 20 and 35, are especially prevalent in advertisements for jobs offering some kind of training; for example, for management and computer trainees, trainee accountants and trainee sales managers. This obviously has the effect of denying to older people the opportunity to train for a new career, just at the time when the Government and the rest of us are stressing the vital need for more and better training to enable this country to match our international competitors in 1992 and beyond.
In my view much more needs to be done if optimum use is to be made of the skills, actual and potential, of the older generation. From last September 600,000 training places were to be made available for the long-term unemployed. In the Government's White Paper Employment for the 1990s, published in February of last year, it was stated in paragraph 5.9 that one of the major objectives of the new training programme would be:
"to make it possible to meet the Government's guarantee of an opportunity to those aged 18 to 24 who have been unemployed for between six and 12 months, and the Government's aim of making available opportunities to all those aged 18 to 50 unemployed for more than two years".
A great many of those 600,000 places have not been filled. When the noble Lord, Lord Skelmersdale, replies I shall be grateful if he would say whether in these circumstances the Government will now consider making training places available to the 300,000 or so long-term unemployed who are aged over 50. I have given him notice of that question. I suggest that a positive decision on this point might help considerably to encourage employers to offer jobs to older people once they have been trained.
Mercifully there are at last signs that employers are beginning to face the demographic facts of life. By 1995, for example, there will be 1·2 million fewer 16 to 24 year-olds in the labour force than there were in 1987. That is a fall of over one-fifth. That means that in the 1990s job applicants will be choosing the organisations for which they wish to work instead of the reverse. Companies which have become complacent are having to recognise that if they are to survive into the next century they will have to expand their recruitment horizons. In doing so they will need to take account of the relationship between demography and the single European market. As the labour market in Europe opens up, countries like West Germany and Italy, which are facing demographic difficulties even more severe than our own, will seek to import skills and labour. In this sellers' market success will go to the countries making best use of their human resources. We must now do our utmost to ensure that the UK is among them.
I have had direct experience of problems associated with early retirement in a large industrial organisation, and have had occasion to observe the miserable waste of talent that that produces. I appreciate that if any group of people has to go to the wall overall it may be least damaging socially that it should be those in their fifties whose children have completed their education and struck out on their own. But that surely makes the case even

323
stronger for enabling those in that group who wish to embark on other careers to do so.
The central question in this debate is whether attempts to counter unreasonable age discrimination in employment can best be made through statutory requirements as absolute as those contained in the Bill that is before us. At a recent forum at St. George's House, Windsor, voluntary initiatives by employers were favoured as a way forward. It was there concluded that such an approach would encourage others to review their policies and practice while retaining their right to use age as a criterion when that was judged to be a necessary requirement. That approach was to be supported by a code of practice to facilitate the process, and by a national campaign to be led by the Government.
My guess is that when the noble Lord, Lord Skelmersdale, replies to the debate he will voice the Government's preference for a voluntary approach. Of course that is what we should all prefer, but, as I have had occasion to say before now, the trouble with voluntarism is that there have to be volunteers. To judge from the statistics volunteers do not yet seem to be coming forward in sufficient numbers. No doubt that was why, at the forum to which I have just referred, it was recognised that there might be a need to supplement best practice guidelines with limited legislation aimed at curbing the use of age limits and criteria in recruitment advertising.
If there are to be statutory sanctions against age discrimination the question arises whether any defences should be made available to employers. In the USA the Age Discrimination in Employment Act contains an affirmative defence permitting the employer to show that age is:
"A bona fide occupational qualification reasonably necessary to the normal operation of the particular business",
or that:
"the differentiation is based on reasonable factors other than age".
In the States public safety has become a key defence involving such occupations as airline crew, air traffic controllers, bus drivers, police and fire staff. The courts over there have consistently ruled that any increase in risks to others resulting from the abandonment of age-related employment criteria should be viewed as an important legal consideration in age discrimination cases.
For my part I would concede that where a firm can demonstrate that an effect of having no age limits would be unreasonably to distort the age distribution of its employees, that too might constitute a justified exception to the general rule. I should like to suggest that the noble Baroness, Lady Phillips, might consider possible amendments to her Bill covering such points.
For the moment this is a Second Reading debate in which we are discussing the general principle that is involved. I am happy to congratulate the noble Baroness on having brought this matter to our attention and, as I said at the outset, to support the concept underlying the Bill.
7.34 p.m.
Lord Seebohm: My Lords, I must declare an interest as President of Age Concern. I consider the principles behind the Bill to be very good indeed. I shall not go into the details because I am quite certain that if the Bill comes to Committee it will need considerable amendment. However, I believe that the general principles are absolutely right and should be given considerable attention.
I look at the matter from two angles, one social and the other economic. On the social side, many people who are full of energy and doing a first class job have to retire when they do not want to and when, in my view, it is quite unnecessary for them to do so. Shortly after I retired from business a young colleague who was still in the business came up to me and said, "How nice to see you again. Enjoying your gardening?" I could have knocked his block off. I could have explained that in the House of Lords we do quite a lot of spade work but the opportunities for doing much gardening are slight. I believe that many people lose a great deal of status and dignity when they retire, despite being full of energy.
Another sad aspect of old age is boredom. Many people who are full of energy could do other things if only they had the opportunity. I believe that the Government have made a very wise decision in allowing people to earn after receiving their pension. That is an enormous change, and I believe that it will allow a lot of people to take up interesting jobs which they have previously been inhibited from doing. That is a very great advance.
On the economic side, as has been explained by the two previous speakers, we are approaching an era when there will be a vast increase in the number of elderly people and a great reduction in those who are producing the goods and the wherewithal for the nation to survive. To waste the experience and valuable contribution to be made by people over the age of 65 seems to me to be a matter which we should look at very carefully. We have to be certain that we make the best use of all available labour and skills.
I am asking for flexibility. There are a great many details which have to be thought through before one can produce legislation. I concur very much with the view that was expressed to me recently by Age Concern. Age Concern would like to see the introduction of a flexible retirement system creating a wide band between the ages of 60 and 70 with entitlement to the state pension at, say, 60 for both men and women, with legislative safeguards precluding the dismissal of employees on the grounds of age up to the higher end of the scale. That may be asking for a little too much. On the other hand, I believe that more flexibility will be essential if we are to survive in the later 1990s because of the demographic change, which we know all about. It is a fact and we cannot change it.
I support the Second Reading in principle but I have no doubt that amendments will need to be made to the Bill.
7.37 p.m.
Lord McCarthy: My Lords, I am sure that we should all want to thank the noble Baroness for initiating this important debate asking why there is not a law to stop age discrimination. So far as I can see from the Bill which she has put before us she is concerned centrally with direct discrimination and not with indirect discrimination.That contrasts with sex discrimination legislation, for example. Nevertheless I think that it is very important that we should debate the matter.
I thank the noble Baroness for two particular reasons. First, it forces one to think through one's own position on this subject. Secondly, so far as I know there is no policy on the matter. There is certainly no policy in the Labour Party or, so far as I know, in the Labour movement. Therefore one is in the unique position of being able to say what one likes and think about the subject as one goes along.
I have tried to think through my own position by asking myself three questions about whether we should be in favour of acting to stop age discrimination. The first question relates to first principles. As an egalitarian, as a liberal, as a radical one normally believes that privilege requires justification. After all, that is the basis on which we have legislation on sex discrimination—a preference for employing men rather than women which is not rooted in their qualifications or merit is unfair to women. It requires justification and it cannot be justified. Similarly race discrimination has to be justified in precisely those terms. One would think that in terms of first principles therefore there must be a similar argument for doing something legally about direct discrimination on grounds of age. The only difference is that very few men become women and even fewer women become men, whereas we all pass through the funnel from youth to age so that there is some difference.
We are not discriminating, as it were, against a minority that cannot become a majority or a majority that cannot become a minority. We are proposing legislation for a process that affects all of us at different ages. But apart from that, it seems to me, on general principles, that there must be a case against age discrimination at any age and the legislation being proposed would defend and protect discrimination against the young, as it would defend and protect discrimination against the old, which is where it is a great improvement on the American legislation which, as I understand it, goes only one way.
So, what of the evidence for actual discrimination on grounds of age? Much of the evidence has been put forward by the noble Baroness tonight. I am bound to say that a lot of it is anecdotal. We lack the kind of large surveys which were done, for example, to establish the extent of race discrimination in the 'sixties and 'seventies. Then we have discrimination legislation on sex discrimination, and we did not really have that kind of legislation to establish sex discrimination. We generally thought that it existed.
In other countries—for example, the United States and Canada—there have been studies and those
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studies have shown that there is very substantial discrimination, which goes beyond the kind of discrimination that the noble Baroness mentioned where we all see it bristling in local newspapers which say in advertisements, "Young people preferred", "College leavers should apply", "Only school-leavers should apply" and so on.
But discrimination is much more difficult to test in areas such as promotion. There is evidence from other countries of very substantial discrimination. As has been said by previous speakers, there are special reasons why we should legislate now. The over-55s' activity rates have been falling since 1976, because the expectation of life and health statistics have been rising over the same period. Work on the whole is becoming less arduous and less strenuous in a large number of occupations, and therefore the arbitrary retirement ages which were fixed for administrative purposes in the 19th century are increasingly subject to challenge. As has been said by all previous speakers, another factor is the reduction in the number of young people coming on to the labour market in the next 10 years or so. For all these reasons, strong arguments can be placed for doing something about age discrimination at this moment.
So I turn to possible arguments against it. One argument would be that it is impracticable; that it is impossible; that you could not affect ages in promotion; and that it has been extremely difficult to do this in the United States. But, after all, in other areas, such as sex discrimination and race discrimination, we know that it is very difficult to do. We know that the success rate is small but positive. And if the fact that a law was not absolutely effective became a reason for not having a law, then we would have very few laws at all. In any case, a law of this kind would declare what the principles should be. It would declare what the country's position was and what the Government's position was. So I do not regard that as a real argument.
The second argument which we may be getting from the noble Lord when he replies, though I have no desire to anticipate what he says, is that it will create more problems than it will solve; that it will be just another burden on business, just another interference with the free market; that the efficiency of the entrepreneur requires the unrestricted application of discrimination. If that is the way the entrepreneur or the businessman thinks on that morning, then, once again, if we took those as arguments, as the Government sometimes do, we would be dispensing with sex discrimination and race discrimination, and dispensing entirely with unfair dismissal legislation and with all protective legislation including health and safety legislation as well. So I do not believe that that is a significant argument.
However, these are some arguments which concern me and which I would address to the noble Baroness. One argument concerns the consequences of an effective piece of legislation and the impact that that might have upon the criteria for redundancy and retirement. The basic criterion for compulsory redundancy now is age and service qualifications. The basic way in which one gets early retirement

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is by special inducements, improved settlements, improved pensions and separate payments in order to induce early retirement voluntarily agreed by the individual worker, or at least in many cases.
I am not certain whether this legislation would not, in fact, tell against that; whether one could have age and service qualifications for redundancy if this Bill became an Act; whether one could have special inducements for early retirement to avoid any redundancy at all under this legislation. After all, Clause 5 of the Bill states:
"It shall be unlawful to implement early retirement procedures with the intention of filling the vacancy thus created or an equivalent post arising from the vacancy thus created with a younger worker."
That is the basic objective of most age and service redundancy provisions, and of virtually all special inducements to early retirement, and there are arguments for having these procedures in place.
There are cases where employers wish to change the age profile of their organisations, when they feel that their age profile is slumped at one end and they want to change the overall age profile in order to bring in a more normal age profile. There are cases where they believe that there are very considerable demands on the part of older workers for redundancies. Can we give such special inducements if this legislation comes into effect?
These are the sort of questions that I should like to have answered, because, if we take age out as a legitimate reason for redundancy, then we are placing in the centre of our arguments for redundancy an argument of capacity. We are really saying that people must be dismissed on the employer's basis, because they are not quite as capable as people who are retained at work. Of course much redundancy is done in that way; the employer selects those workers whom he regards as less effective and less efficient. But most of us have thought that a rather inhuman way of doing it. Most of us have wanted to find some semi-objective standard and age and service qualifications have been accepted widely in industry as a rather civilised way of dealing with redundancy. I am concerned about how far legislation of this kind would involve some problem in that respect.
Finally, I come to the argument: can we afford it? It seems to me that there are no significant costs in virtually all that is suggested by the Bill—advertising standards, promotion practices, refusal of a job on the grounds of age. None of this is expensive. The expensive end of age protection, as has been said, is when one deals with retirement. If one wants a flexible retirement policy, if one wants to equalise the retirement age at, for example, 60, that is extremely expensive. But what is suggested here is worthwhile and useful and is a project which the Government would do very well to consider and to give time for.
7.48 p.m.
Lord Butterfield: My Lords, I wonder whether I may crave your Lordships' indulgence. I had hoped to insert myself between the noble Lord, Lord Seebohm, and the noble Lord, Lord McCarthy.
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Perhaps I may make a few remarks which are in general very much supportive of the fascinating Bill of the noble Baroness, Lady Phillips. I hope it is not thought inappropriate if I say it seems to me that this Bill is probably one of the most major Bills that I have seen introduced here for its potential social impact, since your Lordships so kindly welcomed me into this House.
I just wanted to say how much I agreed with my noble colleague Lord Seebohm, and Age Concern on the whole question of flexibility. I am sure that the noble Baroness, Lady Phillips, will not be distressed about that. There will be—and the noble Lord, Lord McCarthy, touched on this when he spoke about the age profile—some very intriguing problems. Noble Lords will not be surprised that universities which have security of tenure for many of their staff can only restructure if there is some kind of arrangement. However, that might be ruled out by Clause 5(1) which states that it shall be unlawful to implement early retirement with the intention of letting younger people into the posts. I hope that that point will be picked up.
The very important point concerning re-training is incorporated in the Bill. That there should be no age limits on re-training strikes me as a marvellous idea and one to which we should give enormous encouragement.
I am very anxious that we do not block the able young with very geriatric examples like myself who hang on and take retirement later and later. I am reminded of the remarks of the regius professor of medicine at Oxford, Sir William Osler. He referred to men but I know that he would have included women (in those days one only referred to the male patient). He said "a man is as old as his arteries". That is my view. I should like to express my gratitude to noble Lords for allowing me to interject in this debate. Perhaps I may pay a compliment to this House. I am very impressed by the high quality of the cerebral circulation of Members of this great House.
The Parliamentary Under-Secretary of State, Department of Social Security (Lord Skelmersdale): My Lords, the whole House (not just those few of your Lordships in the Chamber at this moment) will be most grateful to the noble Baroness, Lady Phillips, for introducing this Bill on a subject that is of mounting interest not only to all those concerned with the labour market and the future supply of skilled people, but also to those like the noble Lord, Lord McCarthy, who said he was forced to think this subject out from first principles. I do not think that anyone would disagree in their heart of hearts that age discrimination is unfair.
I should like to make it absolutely clear that the Government share the widespread concern about age discrimination in employment. As the noble Baroness Lady Phillips, pointed out, that is particularly important to older workers. Nothing can be more frustrating than feeling able to make a contribution but being denied that opportunity on grounds of age.
I have much sympathy with Members of Parliament in both Houses who are calling for action

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to be taken. In recent months there have been several occasions when the Government have been pressed to answer calls for legislation in this area, of which this Bill is the latest example. I can understand Members' motives, but I do not think that legislation would be the right approach, and the Government are particularly reluctant to support it until every effort has been made to persuade employers voluntarily to change their recruitment and other personnel policies. It is in their own interests to do.
The population aged 16–19 is already declining from its high point of around 3·7 million in the early 1980s and will reach a low of around 2·6 million in the mid 1990s—a reduction of some 25 per cent. That means far fewer young people entering the labour market. Unless employers make full use of the talents of older workers, the economy will suffer.
The noble Baroness, Lady Phillips, mentioned the Government as employers. The noble Baroness is quite right. The age limits on recruitment for Civil Service grades have been raised in many cases in recent years and are being actively reviewed in the light of the demographic changes of which I have just spoken.
I believe that at least some employers are beginning to recognise that fact. I understand, for example, that Tesco has helped solve its recruitment problems in the South-East through actively seeking to recruit older workers, including retired people. British Telecom is considering taking on and training older recruits to meet its need for skilled engineering staff. That may be because it is becoming increasingly concerned about the demographic changes. These changes are now a major topic in public debate, and rightly so.
However, I am afraid that despite some outstanding examples of good recruitment practices among such employers, a considerable change of attitudes is still called for. The noble Lord, Lord McCarthy, spoke of evidence in what I understood him to say was a non-Labour Party policy speech. I can tell the noble Lord that a recent survey of vacancies notified to job centres showed that 14 per cent. excluded applicants over 50. Interestingly, however, 12 per cent. of advertisements specified applicants over 25. Other surveys of job advertisements have shown considerably higher levels of discrimination.
Undoubtedly there remains a problem. The Government do not believe that people should be written off on grounds of age. Like other noble Lords, I ask whether this very prescriptive Bill is the right answer.
The Bill seeks to bring about five main changes and to make it unlawful, first, to specify an upper age limit in job advertisements, and in her speech the noble Baroness majored on that aspect; secondly, the Bill seeks to make it unlawful to refuse someone a job on the grounds of age alone: thirdly, to specify an upper age limit for training; fourthly, to include an upper age limit for promotion; and fifthly, to require a person to retire on the grounds of age alone. According to the Bill, that will be unlawful under any circumstances. The noble Lord, Lord Rochester, called it absolute, and I agree with him.
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I urge on behalf of the Government that there are some situations where it is reasonable for an employer to take age into account—for example, to ensure proper management succession planning. Firms cannot afford to have all their experienced managers retiring within a short period. The Institute of Personnel Management's code of practice recognises that age discrimination in recruitment can be justified to help sensible succession planning.
Ageing is relevant to capacity to do some jobs requiring physical fitness. The example of fire officers and police officers was cited, and one noble Lord mentioned airline pilots. In saying that, I accept the force in the argument that this point does not necessarily justify rigid age limits, as pointed out by the noble Lord, Lord Butterfield. However, the issue is not one on which there is a consensus in society.
Nor is there any consensus that compulsory retirement is in all cases wrong. I can see the strength of employers' arguments that in some cases it is necessary for their operations to have a mechanism which will ensure adequate opportunities for advancement of younger employees. I can also understand those who argue that in some redundancy situations it may be right to select for dismissal those to whom it may be possible to pay a pension. I did not quite follow the argument of the noble Lord, Lord McCarthy, in this connection. I would not like be so definite and so prescriptive as I felt the noble Lord was.
If there is to be legislation on this front I believe that it would need to be very different from that now proposed. As I have made clear, it would have to make provision for exceptions. The noble Baroness, Lady Phillips, mentioned the United States where the legislation provides for exceptions. To take account of possible exceptions in any legislation would be a difficult matter requiring long debate. In my view it would produce a law which was both complex and hard to administer. That is a further reason why the more flexible approach which is allowed by persuasion is preferable to use of law. I am sure that it would be right to make provision for trying first to resolve difficulties through persuasion and encouragement. Until this policy has worked through, the Government do not believe that legislation should be considered.
As the noble Lord, Lord Rochester, pointed out, we are taking every opportunity to raise the issue of age discrimination with employers and to publicise the demographic changes and their implications. For example, as the noble Lord said, the importance of utilising older workers is brought out prominently in the recent White Paper Employment for the 1990s, and has been the subject of several media interviews with my right honourable friend the Secretary of State for Employment and his fellow Ministers.
Staff in the Employment Department's Jobcentres are instructed to challenge age restrictions imposed on vacancies notified to them for which there seems no good reason, and to try to persuade employers to remove them. Even where an employer has insisted on an age limit, the instructions to staff make clear that this should not prevent them approaching the employer about a clearly suitable older candidate.

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The noble Lord, Lord Rochester, kindly gave me notice that he intended to request that we should open the employment training programme to people aged over 50. I fear that there is some misunderstanding. The programme is already open to the over-50s, as are job clubs and the Re-Start Programme. I believe that it has a valuable role to play in re-training older workers in obsolete skills and in giving them opportunities through the planned work experience elements of the programme to demonstrate to employers their capabilities in a work situation. It is true that the Government have a stated aim of offering within the lifetime of this Parliament help back into work for all those aged 18 to 50 who have remained unemployed for two years or more. We also regard it as important to provide opportunities for people over 50. I can assure the noble Lord that the employment training programme is equally available to people in that age group. Not only that, but unemployed people who wish to become self-employed can join the enterprise allowance scheme up to the age of 64. We shall continue and reinforce efforts to encourage better practices among employers and there is evidence that a change of attitude is indeed beginning.
I am glad that the noble Lord, Lord Seebohm, has recognised that we have just achieved a major objective in this field by abolishing the earnings rule for pensions in the recent Budget. By so doing we have already removed a major obstacle to older people who wish to continue working. However the basic issue is whether there should be legislation in this area. The Government share the view of the noble Baroness that age discrimination is wrong. it is both wasteful and unfair, but they believe that the voluntary approach based on persuasion is the right one and far preferable to legislation.
The noble Lord, Lord McCarthy, spoke about the effectiveness of legislation. There are many noble and learned Lords in this House who would be absolutely horrified if the Govenment were to support what I can only regard as public relations legislation. I think that the demographic trends allow us to put powerful arguments to employers based on their own interests. There are encouraging signs that the message is getting through and that the situation will continue to improve. Only if that approach has clearly failed could we consider the introduction of further restrictive legislation on employers at a time when companies need to be as competitive as possible to meet the forthcoming challenge of the single European market. For that reason I regret that the Government have grave reservations about legislating in this field. If this Bill proceeds I agree with those noble Lords who requested somewhat drastic amendment.
8.1 p.m.
Baroness Phillips: My Lords, I should first like to thank all noble Lords who have taken part in the debate on this Bill. I am bound to say that I expected opposition and all kinds of difficulties to be raised. I have never known any idea that I have had or project that I have started in which difficulties of
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many kinds were put forward. I am not a negative but a positive person. Therefore I have to say to the Government that I regret that they cannot do better. I had intended to make some nice remarks about them with regard to the earnings rule but I now have reservations on that point. I feel that I cannot withdraw the Bill, although I should be quite happy to have it amended.
I do not want to leave the matter to voluntary people and flexible moves. In my lifetime I have too often discovered that if matters are left in the voluntary sphere, the good employers will always take advantage of it and the bad employers will not.
The point made about Clause 5 amazed me. I have always thought that there has been a certain confusion between the state pension and retirement. So far as I know there is nothing whatever in the legislation to stop anyone working and receiving retirement pension. They are two totally different things. It seems that we have confused them by linking company pensions and such with retirement, but the original decision to have a retirement age was not connected.
I am speaking here about something which might have been called redundancy. Originally Clause 5 arose as result of the case of Mrs. Ann Clwyd and a Bill which was introduced in the other place three or four years ago. It was a case in which one of those Japanese employers about whom we are now so enthusiastic had invited anybody over the age of 30 to leave the company and give the job to a younger relative. Not unreasonably most of the 30 year-olds did not see the logic of that proposition. That was the occasion of this measure in the first place.
I understand that the cut-off age for airline crew is 29. By what reasoning has that age been selected? What evidence is there to show that at the age of 29 one's brain is not working very well and that eyes and hearing are not so good. By what are such things measured? There is no sure method. We all know people who are dead from the neck up at the age of 20 and others who are active and alert at 60.
It is significant that if anyone wants to work digging up a road or in the catering trade in the kitchens, nobody asks what is his or her age. It is only the good jobs for which that question appears to be relevant. If one is willing to do a job that is not very well paid or which is hard in some way, there is no age test there. The only qualification stipulated by the employer is that the person can do the job. Noble Lords will remember the lady who was sacked because at the age of 28 she was too old to sell hamburgers. I noticed that the noble Lord on the Front Bench did not consider that I had produced many examples of age discrimination. I could however have produced examples for over an hour. I know of many cases concerning a large number of people, and those instances are not necessarily anecdotal.
The lady who at 28 was too old to sell hamburgers was considered to have the wrong "age profile". I tested that theory out on my 14 year-olds who buy hamburgers, and in that situation the young do not notice whether the person serving is 28, 38 or 48. They want the hamburgers and that is all that they

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are concerned with. That shows how ridiculous is the "age profile", which is often conceived by someone who has a very unreal idea.
I take the point made by my noble friend Lord Seebohm and the noble Lord, Lord Butterfield, about flexible retirement. However, I still say that whether someone is one of 500 people who are asked to leave because of age or whether one is the only person who is asked to go there is a sense of rejection and a loss of dignity. Any such action must not be taken on the grounds of retirement.
The "age profile" has now crept into voluntary work. At a certain age one has to leave the magistrates' bench. Why? There is no evidence to support such retirement. Our judges do not have to retire; they can go on for ever. There is a case for far more investigation.
It would be nice to take away the Bill and say, "Splendid, we shall have all sorts of voluntary movements". Many years of dealing with legislation have shown me that that is not the way and that is why I want to take the plunge and urge acceptance of this Bill.
On Question, Bill read a second time, and committed to a Committee of the Whole House.
The Earl of Dundee: My Lords, I beg to move that the House do now adjourn during pleasure until 8.15 p.m.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 8.7 to 8.15 p.m.]

Water Bill
House again in Committee on Clause 6.
[Amendment No. 62 not moved.]
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 62A:
Page 6, line 11, leave out ("and").
The noble Lord said: I believe that it will be for the convenience of the Committee if I speak also to Amendment No. 62B. These amendments seek to have direct representation by adding the words:
"the desirability … including one or more persons representative of persons on low income".
I am sure that the Minister will agree that there are many individuals on low incomes. Water charges, and the concern by individuals about the impact of unhealthy water, impinge more heavily on those who are already suffering on low incomes. People can generally make economies in their cost of living. Many items can be considered and economies made. Even if one has a low income one needs food, clothing, essential furniture, housing, rent and so on. We believe that it would be fitting that such people should be represented on committees with responsibility, under direction laid down by the director general, for looking after consumer services. People with low incomes need special support.
I should remind the Committee that there are hundreds of thousands of people in the circumstances to which I wish to draw the attention of the Committee. A single parent on income support with two children aged seven and nine would receive £64·75 a week. That includes child and one-parent benefit. Out of that he or she would have to pay for food, clothes, fuel and household necessities, save up for essential furniture, bedding and so on and, because of the community charge brought in by this Government, pay 20 per cent. of general rates plus water charges. A single pensioner—and there are hundreds of thousands of those—aged 68 would receive £44·05 per week to meet the same list of outgoings. Finding the money for water charges would not be a light matter for such consumers.
We believe that the position of such unfortunate people can give an illuminating insight for a committee which is concerned with ensuring that the consumer and the water user receive a square deal. I know that the Minister is likely to ask how one defines low income—I have done that—and how does the director general set about contacting people allegedly to represent those with a low income. I admit at once that this will not be easy, but there are various voluntary and self-help organisations which could be consulted representing a number of groups: pensioners groups, single parent groups, claimants' organisations, trade unions with memberships in low paid occupations and so on. The amendment refers to "one or more persons", so the director general would be free to turn to more than one of these sources in a case of a given committee.
In essence, I am inviting the Government to say that people who are already disadvantaged by having to exist on low incomes should have a special place on the committees that we set up. I hope that the Minister will say something helpful on this amendment. I beg to move.
Lord Addington: I should merely like to say that it is reasonable that those on low incomes should have special representation. As has already been said by the noble Lord, Lord Graham of Edmonton, a much greater proportion of these people's income is being taken up by essentials. Thus if they have to meet the costs of such a basic commodity as water, consideration should be given to them in some way.
Lord Hesketh: Amendment No. 62A is consequential on Amendment No. 62B, which requires the Secretary of State to have regard to the desirability of appointing one or more people to represent those on low incomes. As I explained in relation to Amendments Nos. 59A and 61 earlier this evening, the requirement in subsection (5) that the director should have regard to the relevant expertise of water or sewage undertakers by making appointments to these committees is not an exclusive requirement. It is merely a consideration that he should bear in mind in ensuring that the committees deal efficiently with the wider range of customer issues and complaints that they are likely to face. This of course could include people on low incomes.

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It is envisaged that the director will need to ensure that there are domestic customer representatives on these committees. As I have said, the arrangements for determining what the balance of interests should be on these committees and who the customer representatives are are matters best left to the discretion of the director general. However, as I pointed out earlier, those on low incomes are clearly domestic customers and, by definition, as such are representative of one of the three groups that I have described: the domestic customers, farming and industrial interests and local authorities. What is important is that the committees should effectively represent all customers and efficiently deal with the wide range of customer issues and complaints that they are likely to face. In doing so they will need to take account of the interests of those on low incomes, just as they would any other group of indentifiable domestic consumers. For these reasons, we see no reason to single out this group in the way which the amendment seeks to do.
There is also the practical consideration of how persons representative of those on low incomes would be selected. I can assure the Committee that it must be absolutely certain that there is no question that those on low incomes are consumers as much as anyone else is a consumer or customer. The committees will be giving thought to those special requirements. I urge the Committee to resist these two amendments.
Lord Graham of Edmonton: I have no doubt that the committee will bear in mind the concerns of those on low incomes. In other words without any direction or guidance, it must be sensitive to that impact. But can the Minister tell us that in his heart of hearts he believes that people on low incomes will be invited by the appropriate authority to serve as members? There is a world of difference between saying that a committee peopled by the generalities that we have talked about are certain to think of the problems and having someone on the committee such as a single parent with two children of seven and nine. I doubt—I do not want to be offensive—whether a single person with two children of seven and nine is likely to be considered by the director general. I may be wrong. I believe that that person is so important in this context that someone in that broad category of income ought to be represented.
Let us leave aside the fact that neither the Minister nor I can pick or choose. But some people of that kind need to have their views represented and ought to be members of the committee. Does the Minister share my view? Will he go that far, or must these matters be left to the director general?
Lord Hesketh: To an extent, by definition, those who represent the domestic user and the consumer will think primarily at the start—because there is always an area of definition—of those who are closest to being marginalised and who are on a low income. That will be an area of particular interest. I assume that on that basis alone that interest will be to the forefront of their minds.
Lord Graham of Edmonton: It might be in the forefront of their minds when they are thinking about it, but I doubt whether they would think about it sufficiently to opt to come off the committee and allow someone who is in the forefront of their mind to opt to come onto the committee. I am not talking about people being inhumane. The realities that I have seen during my working life and in democratic organisations are that it is highly unlikely that people on low incomes will be invited to serve on committees of this kind. I realise that the Minister is unable to go further than he has. We may return to these amendments at a later stage. In the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 62B not moved.]
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 63:
Page 6,line 15, at end insert—
("(5A) Any customer services committee appointed by the Director under this section shall include not less than three persons appointed on the recommendation of local authorities in the area of the Committee.").
The noble Lord said: this is a further attempt to write into the Bill what the Minister has already said. He has envisaged that representatives broadly from three groups will be among those who will find their way on to the committee. One group consists of local authorities. We want the matter to be more specific. In another place Mr. Moynihan said that the Government envisaged local authority representation on the main customer service committees, although they could not provide for each local authority to be represented in its area. There is no question of each local authority within the area of the consumer service, which could be massive, being represented.
We can envisage a situation such as in the Severn-Trent area covering counties in the region, the non-metropolitan districts within those county areas and the multi-purpose metropolitan districts within the Birmingham and West Midlands conurbation. If the amendment were passed, given that three local authorities were represented on the committee, there is a way in which each could be represented. Those bodies represent different tiers of local authority. They would be invited to find a man or a woman whom they felt was competent to represent their interests. I believe that this is a reasonably straightforward case.
There are practical reasons why local authorities should have a direct link on the customer committees. First, there is still a powerful link in the minds of people between local councils and water. My noble friend Lord Stoddart made a powerful case in defence of the long involvement of local authorities in running our water organisations. There is certainly a link on consumer issues with public health responsibilities. Public health responsibilities will still remain substantially with local authorities. Secondly, it will enable customer service committees to have access to the reports of environmental health officers in the monitoring of drinking water quality. Thirdly, it will enable the sharing of information with consumers on matters concerning recreation.

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Fourthly, it informs the work of the customer service committees with experience on poverty issues and the impact of pricing on families and others on low incomes.
Even though the Minister says "we envisage local authority", we invite the Government to make sure because there is no guarantee and there must be some mechanism whereby that is done. It may be that a nod is as good as a wink. The director general may go out of his way to represent the local authorities or he may invite them to do so. The amendment does not put him to that trouble. We know that there is a proscription about the minimum and maximum number of people, but we wish to make sure that local authorities are represented. I beg to move.
8.30 p.m.
Lord Ross of Newport: I support the amendment. It is a limited request. I understand that there will be only one committee for each region. I am in the Severn Trent area which covers a huge area of Anglia and more, and the amendment asks for only three members. In the undertakings that were given in 1974 local authorities were given a majority on the executives of the regions. So the amendment is not asking for a great deal.
I agree that the committees must be kept down in size and that there is a limit of between 10 and 20 members according to the size of the area covered by the authority. It is a fact that if they are any good the elected members—and county council elections are taking place this very day—have contact with the general public. It is also a fact that people still go to their local councillors with an issue or a bind to make. At least we should have a semblance of local democracy in place if the amendment was accepted by the Government.
The Government have gone a long way. In a previous answer the Minister admitted that probably there will be some local authority representation. All we are trying to do is to tie that down to a sensible number and say that somewhere down the line there must be an essence of local accountability. It was the local authorities which originally ran the water companies and handed them over to the authorities on the understanding that they would have a majority in their management. That factor having been taken away in 1983, this mild request should receive the support of the Government.
Lord Hesketh: I appreciate the feelings in local government about the ending of the present arrangements for direct representation on customer committees as they currently exist. They have their roots in the local government origin of much of the water industry. But arrangements that were appropriate for public sector utilities are not necessarily appropriate for private sector companies subject to the range of statutory regulation which is provided for in the Bill.
The local authority associations have been consulted about how local authorities might continue to be involved in representing customers' interests on the new committees. However, the
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details of the appointment arrangements are a matter for the director general.
Earlier I went further than was indicated by the noble Lord, Lord Ross, when he said that I admitted that there might be some local authority representatives. In defining three clear groups one-third was local authorities' representatives. Therefore, if one takes a committee of 20 it is approximately six or one-third and, quite conceivably, that could be the example of the number of local authority representatives on it.
That was confirmed by remarks made in another place by my right honourable friend the Parliamentary Under-Secretary of State. On that basis, I believe that we have defined that we have a commitment to local authority representatives and we see no need for a statutory rigidity of the minimum of three local authority representatives. Although I agree in principle with the desirability of local authority representation on the committees—and I have now stated that fact on two separate occasions—I believe that the amendment will in no way be beneficial to the Bill.
Lord Graham of Edmonton: It was interesting that the Minister should look at a prospective committee of 20 against a background of three groups which would be represented, and say that six or seven members may represent local authorities. On the other hand, it is not guaranteed that they will be peopled by the three equal proportions. It could well be that in his wisdom the director general will say that in a particular area he will invite two local authority representatives or 12. Nothing is laid down. The Minister is applying equity in saying that if there are three centres of representation it ought to mean something like six or seven from each.
The amendment seeks to make the point that we believe that local authorities are important because of their historical links as well as their practical day-to-day value to the customer service committees and they need direct representation. However, the Minister has said as much as he is prepared to say tonight, and I shall withdraw the amendment and reserve the right to come back at another stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 63A:
Page 6, line 15, at end insert—
("(5A) The Director shall establish such number of divisional sub-committees of each customer services committee as he considers—

(a) appropriate to ensure appropriate representation of localities within the area of the committee; or

(b) expedient to enable the committee to fulfil any aspect of its functions.

(5B) A divisional sub-committee established under this section shall include representatives of local authorities in its area, who shall comprise not less than one quarter of the total membership").
The noble Lord said: The amendment provides for the creation of divisional service sub-committees in each area. It is not new ground but, as the noble Lord, Lord Ross, has pointed out, there will be

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some large geographical areas which will be covered broadly analogous to the existing water authorities. We are anxious to make sure that as many people as possible are involved in assisting professionals to run the business.
Thames Water Authority covers a massive area and it is difficult to envisage that someone is competent to represent the water consumers throughout that area. We are talking of volunteers who are not professionals. We do not suggest that there should be a precise number of divisional sub-committees in each of the customer service areas but that, where appropriate, the director should have the opportunity, the licence and the legal right to ensure appropriate representation of localities within the area of the committee. We believe that that will be helpful.
In paragraph (5B) of Amendment No. 63A we are ensuring that the people in any of the divisional sub-committees do not over-represent any particular area; they must be spread. Perhaps that is a forlorn hope. It is not designed to help the Government and their committee. However, in accepting the reality that the Bill will reach the statute book in one form or another, we are trying to provide opportunities for local people—little people—in small geographical areas to have an input into the way in which new water arrangements are made. I beg to move.
Lord Hesketh: I am sure that your Lordships will appreciate that there are considerable advantages in the arrangements under Schedule 4 paragraph (1) which would make the appointment of sub-committees permissible but not mandatory. The power of the customer service committees to set up local sub-committees, subject to the approval of the director, provides them with the flexibility in adapting to the needs of their areas and in minimising the burdens, especially of travel, on their members. The director general must of course consider constructively any request for the setting up of sub-committees. But he must retain the right to consider each case on its merits so that the most effective use is made of resources and, as my honourable friend the Parliamentary Under-Secretary of State for the Environment explained in the other place, to avoid any unnecessary proliferation of sub-committees.
This amendment also raises the issue of local authority representation and, as I have explained to the Committee in relation to Amendment No. 63, we envisage an element of such representation on the main customer service committees, although we cannot provide for each local authority to be represented, as the noble Lord, Lord Graham, also pointed out. To do so would make the committees unbalanced in the interests represented having regard to the need for effective as well as representative regional committees.
As my honourable friend the Parliamentary Under-Secretary of State for the Environment explained in another place, in our view it would be wrong to use the power to establish local and other sub-committees as a means of guaranteeing each
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local authority direct representation. The power to appoint sub-committees is there to assist the CSCs in carrying out their functions, as the last amendment of the noble Lord recognised in part.
The noble Lord spoke of a particular situation or a particular area of difficulty and "little people". We believe that if the director general sees a particular set of circumstances which justifies a sub-committee, which in many cases will be unique, that is an example of where he should act. I believe that we are flexible here and for that reason I ask Members of the Committee to resist that amendment.
Lord Graham of Edmonton: I do not intend to press the amendment. The Minister does not dispute any of the arguments which I invite the Government to consider would make these amendments appropriate. He has confidence that the director will be as perceptive as perhaps he and I to the needs of a locality and that, in the light of t he then ruling circumstances, in order to be helpful to himself, to ensure that the job is being done properly, he will act accordingly. I am bound to say that our experience over the years is that there is no substitute for a statutory or mandatory requirement in those circumstances.
The Minister and his colleagues have more than once referred to flexibility. There will be flexibility. All sorts of considerations could inhibit the director from bringing into being committees, not least expense because some expense will have to be borne. It could also be another centre of if not agitation, then a voice of anger at the way in which the service is being run.
We do not want to happen what we suspect could happen or is likely to happen; that is, cosy relationships established by men and women who are put on these committees at the behest and the gift of Ministers and directors. We do not like that but the Minister remains unmoved and I shall not press my amendment. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
8.45 p.m.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 63B:
Page 6, line 23, at end insert—
("(9) Nothing in subsection (2) above shall be taken as restricting a committee from:

(a) carrying out its functions in relation to licence holders allocated to it in co-operation or conjunction with one or more other committees; and

(b) considering matters which are relevant to customers of licence holders not allocated to it where similar matters arise with customers of licence holders which are allocated to it").

The noble Lord said: Amendment No. 63B still keeps us on Clause 6 and at the end of line 23 it adds a qualification to Clause 6(2). That subsection quite understandably says that the committee's functions—and we are back to customer service committees—should be restricted only to the companies allocated to it. Indeed one can see that it would be impossible to go away from that otherwise all customer service committees could be dealing

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with the services of all of the new companies which would clearly be unsatisfactory.
However, there is a strong case and good precedence for making sure that the customer service committee has the ability to look at the services of the company or companies which have been allocated to them in co-operation with other customer service committees. Clause 27 says that there can be, in effect, bilateral exchanges of information, which is welcome. We are not against the provisions in Clause 27.
However, we want rather more than that. Short of a national water consumer council which may not be appropriate when there are a number of separate plcs supplying water, we want the possibility of much freer co-operation between the customer service committees. In doing that, we are not doing more than going back to the guidelines issued by the Secretary of State to the old customer consumer consultative committees on water—guidelines for representation of consumer interests. In those guidelines—and it was this Conservative Government who issued those guidelines—the CCCs were permitted to consider such fundamental matters as charging and financial policy. They were also specifically given the ability to consider matters covering:
"an area wider than its own; for example, the general principal of charging for water services or planning for investment."
That is a very important and valuable principle, and one which it would be a pity to lose in this Bill, accepting entirely that the customer service committees should in their work be restricted to the activities of a single water company or group of water companies and accepting entirely for the purposes of this amendment that there is no place for a national committee because privatisation is to be carried out in this way. Nevertheless, a return to the principles of 1983 would be a valid extension of the abilities of the customer service committee to do its work effectively.
Ministers in another place indicated that there would be no difficulty in the chairman of the customer service committee meeting together formally or informally to consider matters of common interest. Of course that is welcome. They also indicated, as is clear from Clause 27, that the director general could arrange for the exchange of information between customer service committees. However, we believe that these amendments would enable customer service committees to act in co-operation or conjunction with one or more other committees; and to consider matters which are relevant to the customers or licence-holders not allocated to it would be a valuable and consistent addition to the power of customer service committees and would be a valuable additional protection for consumers. I beg to move.
Lord Hesketh: Amendment No. 63B seeks to ensure that the customer service committees (CSCs) could carry out their functions in relation to the companies allocated to them in co-operation with one or more other committees, and would enable them to consider matters which are relevant to
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customers of companies not allocated to them where similar matters arise in respect of customers of companies which are allocated to them.
As the noble Lord, Lord McIntosh, pointed out Clause 27(4) already provides for the director general to arrange for individual CSCs to exchange information where relevant to the carrying out of their functions. In addition to this the CSC chairmen could meet informally to discuss matters of common interest, again where necessary to the carrying out of their functions. In our view the Bill therefore provides for the necessary liaison between CSCs and therefore the first part of this amendment is unnecessary.
If the intention of the second part of this amendment is to enable the CSCs to operate at the level of national policy formulation then we believe that the amendment is inappropriate given the relationship between CSCs and the director general, and the regional structure of the industry itself.
As I have said in relation to earlier amendments on this clause, the CSCs are appointed by and report to the director general who is responsible for protecting customer interests. This is unlike the existing arrangements under which in the absence of any such director general the consumer consultative committees are appointed by the water authorities. Under the Bill the customer has a guarantee of an independent voice through the CSCs and the director. There is therefore no need for a separate body or national forum of CSCs to exist independent of him.
For these reasons, I consider the amendment to be unnecessary and I hope that the noble Lord, Lord McIntosh, will see fit to withdraw it.
Lord McIntosh of Haringey: As the noble Lord rose to his feet he knew that we would not be satisfied with that answer. He knew that because we have already made it clear, and have taken the opinion of the Committee on the matter, that we do not agree that it is appropriate for the role of consumer advocacy, which is what the customers service committees are doing, to be subordinate to the role of regulation. Therefore, we do not agree that it is satisfactory for the co-ordination and taking further of the activities of the customer service committees to be left entirely in the hands of the director general, as is proposed.
The Minister's answers are consistent with his wrong views about the relationship between consumer advocacy and regulation; and although we do not agree with them, I cannot say that we are exactly surprised by them. I do not propose at this stage to pursue the matter by taking the view of the Committee; but the value of these amendments has been that we have pointed once again to the inadequate protection of consumers when consumer protection is under the control of the regulator.
Fundamentally, the role of the consumer advocate should be completely independent of the regulator. The amendment proposed by the noble Baroness, Lady Strange, was a good indication of that. We shall have to return with amendments in one form

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or another at a later stage, but in the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 6 agreed to.
Schedule 4 [Customer Service Committees]:
[Amendments Nos. 64 to 67, 67A, 68 and 69 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 69A:
Page 197, line 2, leave out sub-paragraph (1) and insert—
("(1) A Customer Service Committee may, with the consent of the Secretary of State as to numbers and conditions of service, appoint such staff as it may determine.").
The noble Lord said: In moving this amendment, I speak also to Amendment No. 69B. Despite the error in comprehension of consumer protection which is evidenced on the Government Front Bench, I hope that this very minor, inoffensive pair of amendments might find some favour with Ministers.
We are not proposing any change in the relationship between the customer service committees and the director general. We are not proposing that the customer service committees should have any power to spend money other than with the authority of the Secretary of State and the Treasury. There is no threat to the public sector borrowing requirement. There is no threat to public expenditure White Papers. All we are saying is that the customer service committees should have the right to appoint staff to help them do their work, subject to any constraints that may be proposed. I cannot think of an amendment which is less offensive. I cannot think of an amendment which it would be more difficult for the Government to resist. I hope that they do not feel it necessary to do so. I beg to move.
Lord Renton: While not suggesting that the amendment should be made, I feel bound to point out that here we have an example of so-called legislation which is of an entirely administrative character. It is mere administrative machinery and one wonders why it should be the subject of law-making at all. But the Government have put it in the Bill as they put it into most Bills. This Bill of 387 pages is prolix enough without having to go into that sort of thing which could perfectly well be covered by departmental arrangements, short of legislation, and the cost of it carried in the ordinary way on the estimates of the department.
Having said that, and having listened to the noble Lord, Lord McIntosh of Haringey, I must say that I do not think that his amendment improves that undesirable situation.
Lord Hesketh: There is a certain thread which has run through the last few amendments, and I fear on this occasion I am not only going to be in error in front of me but also in error behind me—though perhaps in error on different grounds.
These amendments provide that the customer service committees rather than the director general
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would appoint the staff of those committees, subject to the consent of the Secretary of State and the approval of the Treasury.
The director will have a duty to protect the interests of customers of water and sewerage undertakers. We believe not only that he will be in the best position to ensure that the customer service committees have the money and manpower resources they need, but also that it will be in his own interests to ensure that they are properly and effectively staffed. It would compromise the collective independence of the director and the committees reporting to, and advising, him if the Secretary of State were to decide what resources the committees ought to have. The schedule, as drafted, rightly gives that task to the director subject to the normal scrutiny of the Treasury. That is the appropriate, integral approach. I trust the Committee will feel that it is not necessary to accept this amendment, and that the noble Lord, Lord McIntosh of Haringey, will consider withdrawing it.
Lord McIntosh of Haringey: My only response to that piece of gobbledegook is that I am tempted to divide the Committee simply because of the nature of the answer given to me. We are asking people voluntarily to serve on customer service committees. Many noble Lords here tonight serve voluntarily on all sorts of organisations in the public interest. They do not do so because of any hope of aggrandisement or profit but because they believe it to be a worthwhile job where they can make some improvement in the conditions of the people or the orgnisations with which the voluntary bodies are concerned.
People are asked to serve on customer service committees. If they are told that they cannot appoint the staff they need in order to do their job, even subject to the financial control of the Secretary of State or the Treasury, but that someone up above the director general—that sounds grand and remote; and it certainly is—with his administrative staff in some central place in the United Kingdom, whether in London or elsewhere, will appoint their staff, the idea of getting sensible people to give up their time voluntarily to do what is universally agreed to be a useful job becomes extremely difficult.
I gladly give way to the noble Lord.
Lord Lloyd of Kilgerran: I am sorry that I was not present when the noble Lord, Lord McIntosh, opened his remarks on this amendment but I arrived just before the Minister gave his reply. Then I read the amendment and I could not correlate that with what the Minister said in relation to the terms of the amendment. I strongly support what the noble Lord, Lord McIntosh, said in that respect. I thought that the Government were encouraging volunteer activities in many fields and surely this is an opportunity for the Minister—I know how difficult it is for him to make decisions off his own bat having regard to the nature of his brief—to at least take this amendment back and reconsider it. I thank the noble Lord, Lord McIntosh, for allowing me to intervene.
Lord McIntosh of Haringey: I should like now to give the Minister an opportunity to reconsider his position. We now have the reductio ad absurdum of this centralisation of authority and power in the hands of the director general with the castration of the power of the customer service committees. Has the Minister anything further to say to the Committee on this matter?
9 p.m.
Lord Hesketh: The noble Lord, Lord McIntosh, will clearly see that under "Financial provisions" in paragraph 5 of Schedule 4, customer service committees have to prepare financial statements. That of itself insinuates that they will be considering what they believe is an appropriate level of expenditure. The reason that the director general has to have an overall position is that at the end of the day he will be responsible for the money which is supplied by a Vote of Parliament. It requires parliamentary approval. That does not indicate that he is going to refuse to allow the customer service committees to consider what they think is an appropriate level of expenditure. I believe that provides rather a different picture of the matter to that which the noble Lord has presented.
Lord McIntosh of Haringey: It is one thing to maintain financial controls and we are not disputing that in making these amendments. Our amendments say very specifically that there are financial controls resting with the Secretary of State and the Treasury, and therefore accountability to Parliament is not at risk. But making a financial plan is not the same thing for a customer service committee as having the staff that it needs within these restrictions and appointed by itself to do its own work. It is an insult to the potential members of the customer service committee to suggest that they are incapable of doing that themselves.
9.2 p.m.
On Question, Whether the said amendment (No. 69A) shall be agreed to?
Their Lordships divided: Contents, 23; Not-Contents, 70.

DIVISION NO. 5

CONTENTS

Addington, L. [Teller.]

McCarthy, L.

Airedale, L.

McIntosh of Haringey, L.

Buckmaster, V.

McNair, L.

Carter, L.

Monson, L.

Cocks of Hartcliffe, L.

Nicol, B.

Craigavon, V.

Ponsonby of Shulbrede, L. [Teller.]

Dormand of Easington, L.

Elwyn-Jones, L.

Ross of Newport, L.

Graham of Edmonton, L.

Russell, E.

Hacking, L.

Shannon, E.

Lloyd of Kilgerran, L.

Underhill, L.

Lockwood, B.

White, B.

NOT-CONTENTS

Alexander of Tunis, E.

Blatch, B.

Arran, E.

Blyth, L.

Barber, L.

Brabazon of Tara, L.

Beloff, L.

Brougham and Vaux, L.

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Caithness, E.

Monteagle of Brandon, L.

Campbell of Alloway, L.

Morris, L.

Carnegy of Lour, B.

Mountevans, L.

Carnock, L.

Murton of Lindisfarne, L.

Clinton, L.

Norfolk, D.

Cork and Orrery, E.

Norrie, L.

Craigmyle, L.

Onslow, E.

Crathorne, L.

Oppenheim-Barnes, B.

Davidson, V. [Teller.]

Reay, L.

Dundee, E.

Redesdale, L.

Elliot of Harwood, B.

Renton, L.

Faithfull, B.

Rochdale, V.

Falmouth, V.

Sackville, L.

Ferrers, E.

Saltoun of Abernethy, Ly.

Fraser of Carmyllie, L.

Sanderson of Bowden, L.

Gainford, L.

Selborne, E.

Grantchester, L.

Skelmersdale, L.

Hardinge of Penshurst, L.

Stanley of Alderley, L.

Harvington, L.

Strange, B.

Hemphill, L.

Strathclyde, L.

Henley, L.

Swinton, E.

Hesketh, L.

Teviot, L.

Hooper, B.

Thomas of Gwydir, L.

Kemsley, V.

Thomas of Swynnerton, L.

King of Wartnaby, L.

Townshend, M.

Knutsford, V.

Trafford, L.

Layton, L.

Trefgarne, L.

Long, V. [Teller.]

Trumpington, B.

Mancroft, L.

Vaux of Harrowden, L.

Middleton, L.

Waldegrave, E.

Monk Bretton, L.

Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.
9.10 p.m.
[Amendments Nos. 69B to 72 not moved.]
Schedule 4 agreed to.
The Earl of Onslow The Earl of Onslow moved Amendment No. 73:
Before Clause 7, Insert the following new clause:
("General functions in relation to land use planning
. Duties relating to consultation with regard to planning and environmental assessment matters, as defined by article 18 of the Town and Country Planning General Development Order 1988 and the Town and Country Planning (Assessment of Environmental Effects) Regulations 1988, and such other duties relating to functions under the Town and Country Planning Acts as the Secretary of State may from time to time determine, performed by a water authority prior to the transfer date shall, on that date, be vested in the Authority.").
The noble Earl said: However immaculate my argument and however bovine that of my noble friend on the Front Bench I have absolutely no intention of wasting the Committee's time by asking noble Lords to walk around in circles and vote. However, I do not think that my argument will be immaculate, and I am certain that my noble friend on the Front Bench will not reply in a bovine fashion.
Lord Trefgarne: Not moved!
The Earl of Onslow: In spite of the malarkying of my noble friend Lord Trefgarne in interrupting, I shall move my amendment. At the moment the water authorities are statutorily bound to be consulted on planning matters. With the separation of powers, water will be provided by the new water plcs and they will be policed by the National Rivers Authority. It therefore seems infinitely more sensible that consultation on planning matters should be applied to the NRA rather than to the water company plcs. Large chunks of land are involved, some of which

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are surplus and all of which must be carefully looked at. There are environmental and consultation considerations and there is a duty on the plcs to maximise their assets. It would be most invidious if those plcs had to be consulted on their own planning applications.
I have been briefed on this matter by the CPRE. Perhaps it looked round for a noble Lord who could be persuaded to sit up until 9.15 on a Thursday evening to put forward the amendment. It has an immensely strong case. The DoE circular 22/84 says that the water authorities should be consulted. Article 18 of the 1988 general development order describes the relevant water authorities as statutory consultees in the event of a planning application for the following developments: mining, works on the beds or banks of rivers or streams, mineral or oil refineries and storage facilities, wastes and refuse sites, cemetaries and all developments relating to the retention and disposal of sewage, slurry and so on for houses, buildings and caravans unless for a single unit of accommodation for fewer than 10 people.
I have letters from the chief planner of the South Tyneside Metropolitan Borough Council and from the director for planning and transportation of Northampton Borough Council, all of which express support for the idea that the NRA should be the consultative body. The plcs would face a terrific conflict of interest. Nobody is suggesting that the directors or managers of the plcs would be anything other than immensely honourable men but one cannot impose a duty of this kind on people who may have a conflict lof loyalty. I beg to move.
Baroness White: I have no intention of making a long speech on this matter because I raised it inadvertently on Tuesday without realising that the noble Earl, Lord Onslow, had tabled a specific amendment. I should say that we were both briefed from the same source. However, he was more energetic than I in this respect. Nevertheless, I hope very much that we shall receive a satisfactory reply from the Minister.
The only comment I would make on the speech of the noble Earl is that I hope he understands—as I think I am correct in saying—that the statutory consultations, if they were transferred to the plcs, would affect not only the development on their land but also development on other people's land of a certain nature. The issue goes much wider than simply the development of their estates. That is where a quite different kind of conflict of interest could easily arise and where I think it would be entirely improper for a private commercial company to be left in that position. I strongly support, as I hope my noble friend will, the proposal that any such status for statutory consultation should pass to the authority.
9.15 p.m.
Lord Renton: I wish to support my noble friend's amendment. Surely it is very important in planning matters that there should be continuity and that when Parliament is changing the structure of a public service that, nevertheless, the planning functions
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should continue so far as possible undisturbed. If we do not have continuity in planning matters, it is a threat to conservation. Moreover, it is unfair on individuals because people do not know where they stand. Uncertainty is therefore a bad thing.
I think that this amendment is commendable because it ensures that the planning consultations which will have taken place before the Bill comes into force will, under the new aegis, continue with the same effect. Therefore the amendment has the effect that it is both transitional and permanent. I think that we should warmly support it.
Lord McIntosh of Haringey: I too hope that the Government will find it possible to support at least the principle of this amendment. I say that even though I am not in any way confident about its wording. Indeed, I heard the noble Earl, Lord Onslow, say that he would not make us walk around in support of it. That is perhaps a pity since he has received support from all sides of the Committee. However, whether or not the wording is right, the principle must surely be sound: that the consultation rights which have been held by the water authorities, which are public bodies, should not be passed without amendment to private companies; otherwise we shall find that under the Companies Act the private companies will be in a privileged position in relation to other private companies. That seems to me to be a real difficulty which sets them apart from other private companies and which dilutes the effectiveness of the privatisation procedure. I am not saying that I am in favour of the privatisation procedure; but it is a distortion of privatisation to allow this change to go through without the protection proposed in the amendment moved by the noble Earl.
I hope that the Government will go far enough by saying that they recognise there is a valid point here and thus make it possible for the noble Earl to withdraw his amendment with good reason, and not just because he does not like walking around.
The Earl of Arran: In rising to my feet to speak to my noble friend's amendment, I hope that I shall be able to show him for certain that the Government Front Bench is not bovine, especially not on this issue. The proposed new clause as set out in Amendment No. 73 raises an important question about how the present statutory consultation arrangemnts under the Town and Country Planning Act are to be changed to reflect the creation of the National Rivers Authority. I hope to show my noble friend that the purposes behind his suggested new clause will be achieved without the need for specific provisions in the Bill.
Local planning authorities are currently required to consult water authorities before granting planning permission where the application concerns the types of development specified in Article 18 of the Town and Country Planning General Development Order 1988. The types specified are development which may affect rivers, streams and most development relating to the retention, treatment or disposal of sewage, trade waste, slurry or sludge. These relate to water authority pollution control functions which would be transferred to the NRA.

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The Town and Country Planning (Assessment of Environmental Effects) Regulations 1988 require certain projects which are likely to have significant environmental effects to be subject to an assessment of those effects before planning permission may be given. The procedures require the developer to prepare an environmental statement, making use, when appropriate, of information in the possession of relevant public authorities. On receipt of that statement, the local planning authority must consult on it as it does on the related planning application. The 1988 regulations specify that the bodies which must provide information and must be consulted shall be the statutory consultees specified in the general development order, together with one ro two others, including the Nature Conservancy Council, the Countryside Commission and HM Inspectorate of Pollution.
In order to maintain the present statutory position we intend to amend Article 18 of the general development order to provide for the NRA to be consulted in all cases where water authorities are consulted at the moment. This amendment to the GDO will also automatically ensure that the NRA is involved as consultee under the environmental assessment regulations.
Clearly, if in future it becomes necessary to involve the NRA in consultation arrangements beyond those which we will be providing for under the amendments to the general development order, we will not hesitate to do so. I hope that with those assurances my noble friend will agree to withdaw his amendment.
The Earl of Onslow: Is my noble friend saying that basically he agrees and that we do not need to do anything about the matter because it can be achieved by other means? If that is the case, I am delighted.
The Earl of Arran: Yes, I believe that to be the situation.
The Earl of Onslow: That is terrific. It is the second amendment that I have had accepted in two recent Government Bills. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 74 to 77 not moved.]
The Deputy Chairman of Committees (Lord Ampthill): I should tell the Committee that if Amendment No. 77A is agreed to I cannot call Amendments Nos. 78 to 88A.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 77A:
Page 6, line 34, leave out subsections (2) and (3) and insert—
("(2) The Secretary of State or, as the case may be, the Director shall exercise the powers mentioned in subsection (1) above, in the manner that he considers is best calculated—

(a) to ensure that the interest of every person who is a customer or potential customer of a company which has been or may be appointed under Chapter 1 of Part II of this Act to be a water undertaker or sewerage undertaker are protected as respects the fixing and recovery by that company of—

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

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

and, in particular, that no undue preference is shown, and that there is no undue discrimination, in the fixing of those charges and amounts;

(b) to ensure that the interests of every such person are also protected as respects the other terms on which any services are provided by that company in the course of the carrying out of the functions of a water undertaker or sewerage undertaker and as respects the quality of those services;

(c) to promote economy and efficiency on the part of any such company in the carrying out of the functions of a water undertaker or sewerage undertaker;

(d) to facilitate competition, with respect to such matters as he considers appropriate, between persons holding or seeking appointments under that Chapter;

(e) to secure that the functions of a water undertaker and of a sewerage undertaker are properly carried out as respects every area of England and Wales; and

(f) without prejudice to the generality of paragraph (e) above, to secure that companies holding appointments under Chapter 1 of Part II of this Act as water undertakers or sewerage undertakers are able to finance the proper carrying out of the functions of such undertakers.").

The noble Lord said: In Clause 7 we come to the real test of the Government's good faith in this privatisation Bill. In paragraph 57 of the White Paper (Cmnd. 9734) the Government said that under the proposed legislation the principal duty of the director general would be to safeguard the interests of customers. In a speech to the National Consumer Council last year the Minister of State said—I do not have his exact words—that the director general's job would be to hold the balance between the customers and the licensed water companies and their shareholders.
That is the basis upon which the Government have been arguing the Bill, both in another place and here, but that is not what the Bill says. The Bill says something different. The offending words are in Clause 7(2)(b), which states that the director general is,
"to secure that companies holding appointments under Chapter I of Part II of this Act as water undertakers or sewerage undertakers are able (in particular, by securing reasonable returns on their capital) to finance the proper carrying out of the functions of such undertakers".
Subsection (3) provides that the ensuing duties, which are concerned with charging, are "subject to subsection (2) above"; in other words they are subject to the duty,
"(in particular, by securing reasonable returns on their capital)".
Then Clause 8, which is concerned with the director's general environmental and recreational duties, is subject throughout to Clause 7. I shall not repeat at length the arguments made this afternoon, but fundamentally that means that the director general's principal duty is not, as the White Paper said, to safeguard the consumers' interests, but to secure a reasonable return on the undertakers' capital.
I am not here as the expert on capitalism. That is for the Government Front Bench; but if anyone has the duty, under a private enterprise system, to secure a reasonable return on capital, it must be the capitalist companies themselves and not the regulatory director general. Yet it is the director general who has this responsibility.
According to the Bill the responsibility overrides all other environmental and consumer responsibilities. That is in direct contradiction of all the assurances that have been given by Ministers and in White Papers and other publications throughout the run-up to the Bill. It is the ultimate exposure of the failure of the Bill to protect consumer and environmental interests. It is for that reason that we propose in Amendment No. 77A to replace Clause 7(2) and (3) by the words which are to be found on the Marshalled List.
I realise that at nearly 9.30 at night we shall not have the debate in principle all over again. I realise that it will probably be necessary at another stage of the Bill to draw together all the arguments which lead up to this critical point in the Bill. It may be necessary for us to find other ways to show your Lordships the extent to which, in the drafting of this legislation, the Government have departed from the assurances already given.
We have tried to overcome some of these difficulties by seeking to ensure that the freehold of the land would vest with the National Rivers Authority rather than with the new water companies. The Committee did not agree. The noble Lord, Lord Nugent of Guildford, tried to replace these obligations on the director general by statutory water company status for the new water companies. That would have achieved some of these objectives at least in part. The attempt in Clause 7—which is of course perhaps the most critical clause in the whole Bill—is another attempt to do that.
I do not expect the Government to welcome these arguments any more than they welcomed the other arguments. But it is necessary to say here and now that this is a switch sell. The Government, having put forward this Bill as an environmental measure, a measure to protect consumers, are departing drastically under Clause 7(2)(b) from the public undertakings that have been given.
If the Bill goes through unamended, and especially if this part of the Bill goes through unamended, the outrage of the British people when they come to realise what has been sold them will become apparent. The need for remedial action when there is a government which puts consumers and the environment first—which this Government certainly do not—will become more urgent. I beg to move.
Lord Renton: I shall be very interested to hear what my noble friend has to say about the amendment. The interesting thing is that it seems to be inspired by a pure Thatcherite philosophy of how to run a new business. Those are things that we do not often find in the propaganda of the party opposite. Of course, part of it is borrowed from the Bill as it stands and we agree with it:
"no undue preference", "no undue discrimination".
Then we are asked,
"to ensure that the interests of every such person are also protected as respects the other terms on which any services are provided".
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Then it refers to the "quality of those services".
Then there is an exhortation.
"to promote economy and efficiency",
and above all,
"to facilitate effective competition".
It is wonderful stuff. Again I think we are borrowing from the Bill as it stands:
"to secure that the functions of a water undertaker and of a sewerage undertaker are properly carried out".
Finally—and this repeats what is in the Bill—
"without prejudice to the generality"
of what has gone before, the
"undertakers are [to be] able to finance".
That goes back to our earlier discussion today. The amendment continues:
"the proper carrying out of the functions of such undertakers".
That is all splendid stuff. It is the kind of thing we should like to hear from the party opposite time and time again. However, I wonder whether it is really necessary because, as I understand it, those are the objectives of the Bill as clearly stated throughout. Therefore, despite the wonderful Thatcherite philosophy underlying this amendment, I would doubt whether it is necessary.
9.30 p.m.
Lord Jenkin of Roding: I must apologise for having missed some part of the debate as I was celebrating 10 years elsewhere. I listened to the noble Lord, Lord McIntosh of Haringey, with some interest. Here I beg to differ from my noble friend Lord Renton in that I detected in the noble Lord, Lord McIntosh, that atavistic hatred of the entrepreneur's profit which characterises the economic approach of the party opposite.
The fact of the matter is that the key words that have been left out are those relating to the need to secure a proper return on the capital employed. I come back to the argument that I referred to on Second Reading. The problem of the water industry has been to provide enough capital to carry out the improvements, the maintenance and the renewal that is necessary to provide the standards of water, the quality of water and the standards of the environment which the public increasingly demand. It has been the experience of both parties that one cannot expect the public sector, in competition with all the other demands on public capital, to provide the money that is necessary to do that.
Therefore, the logic is that one tries to raise that money from the private sector. In order to be able to do that, one must ensure that those who are going to put the money up obtain a reasonable return on their capital. If one does not do that, one will not obtain the money and one will stay in the same position.
It may well be that the noble Lord, Lord McIntosh, and his noble friends are right in saying that Clause 7 is the heart of the Bill. It is Clause 7 that will secure all the other objectives that the Chamber seeks to achieve in this Bill in respect of service to customers, quality of supply, the renewal of assets, the improvement of the environment and the safeguarding of all the other interests which will

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figure at some length, I suspect, in our debates. The new companies will be able to raise the capital needed to do that.
Of course in a field of perfect competition that can be carried out in a competitive environment. We recognise that here we face a surrogate for competition in the regulatory powers of the director general. It is the director general's duty under this clause to make sure that, in addition to all those other objectives, he can so use his powers to ensure a reasonable return on the capital which is put up. Otherwise the capital will not be forthcoming and the Bill will be a dead letter.
Perhaps the noble Lord, Lord McIntosh, wants the Bill to be a dead letter. Perhaps he wants to emasculate this Bill. I believe it is Amendment No. 80 in the name of the noble Lord, Lord McIntosh, which seeks specifically to remove the words:
"securing reasonable returns on their capital".
If those words came out of the Bill, we may as well all pack up and go home. I believe this amendment contains the kernel of what is wrong with the Opposition's approach to this legislation. I echo the words of my noble friend Lord Crickhowell at Second Reading; the more I listen to the debates on this matter, the more I am convinced that this Bill is the way we shall secure the objectives we all seek.
Lord Renton: As my noble friend said that he disagreed with me, may I set his mind at rest by saying that I entirely agree with him.
The Earl of Caithness: The noble Lord, Lord McIntosh of Haringey, although moving Amendment No. 77A and, I believe, speaking to Amendment No. 82, ranged very much wider than the amendments. At one stage——
Lord McIntosh of Haringey: I could hardly speak to Amendment No. 82 as the noble Lord in whose name the amendment is tabled is not present tonight.
The Earl of Caithness: As the noble Lord quite rightly said, Amendment No. 82 is in the name of my noble friend Lord Stanley of Alderley. It has the same effect as the amendment of the noble Lord, Lord McIntosh. His address to the amendment ranged much wider than the amendment itself. It was almost a clause stand part speech.
I wonder whether the noble Lord would like me to deal also with Amendment No. 80 at this stage, because much of what he said touched on that point. The noble Lord shakes his head; I shall therefore restrict myself to Amendment No. 77A.
The effect of Amendment No. 77A would be to dismantle the carefully structured framework of duties in Clause 7 so that most of the duties of the Secretary of State and director general would be regarded as having the same priority.
As we consider this Bill we shall find that many of the provisions are linked by a network of connections to other provisions in the Bill. Many of those connections can be followed back to this clause, which we can regard as being at the very centre of the Bill. It is this clause which will determine the
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relationship between the Secretary of State and director general on the one hand and the new water and sewerage undertakers on the other. This clause is crucial as it determines the climate for the water industry after privatisation.
Because it is so crucial I shall of course listen with very great care to what the noble Lord has to say. However, I perceive a difference of philosophy between him and ourselves on this side of the Chamber. I hope that my noble friend Lord Renton will not be misled by some of the honeyed words of the noble Lord. I was reassured by my noble friend's second intervention in which he supported my noble friend Lord Jenkin of Roding, because my noble friend Lord Jenkin was so right. The noble Lord, Lord McIntosh, dislikes the entrepreneurial spirit which has emerged. He is fully in favour of renationalisation. He prefers state ownership to decent regulation and control. He prefers a captive audience to the freedom of a private sector under strict regulation and control. He has a totally different philosophy.
Despite the honeyed words, the noble Lord is intent, if he can, on castrating this Bill to such an extent that it cannot work. If ever—and one would rue the day—the Labour Party came to power, they would renationalise water as quickly as possible, along with as much else in the private sector as they can lay their hands on in as short a time as possible.
I shall take one issue of fundamental difference between the noble Lord and myself. It is an issue on which I have so far refrained from commenting; the noble Lord has waxed lyrical about it. It is his complete misinterpretation of Clause 7(2). The noble Lord refers in particular to Clause 7(2)(b). He has not really brought to the Committee's attention Clause 7(2)(a). Clause 7(2) sets out the powers of:
"the Secretary of State or, as the case may be, the Director".
Clause 7(2)(a) states that one of the powers is:
"to secure that the functions of a water undertaker and of a sewerage undertaker are properly carried out as respects every area of England and Wales".
If a service cannot be properly carried out that is not in the interests of the consumer. The customer is right up front, quite contrary to how the noble Lord tends to portray the situation when he puts his spotlight, very negatively on Clause 7(2)(b). If securing that all the functions of the water and sewerage undertakers are properly carried out is not safeguarding the consumer, I do not know what is. Certainly the noble Lord's support earlier this afternoon for not having any price control is no support for the consumer.
As drafted in the Bill there are the two sets of duties in this clause, to which I have just referred. In subsection (2) are the two primary duties of the Secretary of State and the director. The first requires them to exercise their powers in the way they consider best calculated to secure that water supply and sewerage services are properly provided throughout England and Wales. That is a point on which I have already laid some emphasis. This obligation is twofold: first, there is an obligation to secure that the functions of water and sewerage undertakers are carried out in every part of England and Wales; Secondly, there is this important

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obligation to secure that those functions are properly carried out. The second primary duty, which we shall discuss in more detail in connection with Amendments Nos. 79 and 80, requires the Secretary of State and the director general to exercise their powers in the manner they consider best calculated to secure that appointed companies are able to finance the proper discharge of their functions.
These twin primary duties are backed up by a whole series of secondary duties. These relate to the protection of the interests of customers and potential customers in relation to charging and in relation to other terms of service; they require the Secretary of State and the director general to promote economy and efficiency in the way undertakers carry out their functions; they require the facilitation of effective competition, and this we shall come to when we discuss Amendment No. 87.
The creation of this dual framework is quite deliberate. It reflects the paramount importance for customers that companies are able to carry out their functions properly, and that to do this they will need to be able to finance those functions and earn a return on their capital. For that reason the duties in subsection (2) are a necessary precondition to the others. Similar, but not identical, structures are provided in the Gas and Telecommunications Acts and in the Electricity Bill.
I do not wish to detract in any way from the importance of the qualities in subsection (3); in particular, the duty to protect customers' interests as regards charging. All these are essential elements of the Bill. But the framework of duties simply would not work if, for example, it required the facilitation of effective competition to have equal standing with securing the proper provision of services. That would be the position if these amendments were accepted. Although the party opposite are keen to see the proper provision of services, I am surprised that they should want any of the other duties on the Secretary of State and the director promoted in such a way as to put that proper provision at risk. I hope that the noble Lord has listened with care, as I did to his words when putting forward the amendment, to what I have said in explanation of the Government's thinking behind this clause.
Earl Russell: Before the noble Earl sits down, may I ask him to correct an error? He referred to "the party opposite". There is more than one party opposite the noble Earl.
The Earl of Caithness: Yes, there are three parties opposite and the Cross-Benchers. So far only one party opposite has taken part. So far as I know, very few other parties have taken part except occasionally, I believe, the SLDP. The SDP have been notable by their absence.
Lord McIntosh of Haringey: I have listened with great care to what the Minister has said. I listened also to the noble Lord, Lord Renton, and the noble Lord, Lord Jenkin. If I am accused of being a Thatcherite by the one and of having an atavistic hatred of the entrepreneur by the other, I must be
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getting something right. As I spent more than 30 years, my entire working life, in private business—not in the public service—and of those more than 30 years nearly 25 years have been spent as an entrepreneur meeting a payroll, as the cant phrase goes, I do not take very kindly to being accused of having a hatred of the entrepreneur.
It is worth pursuing these amendments, because each time that we approach this matter the Government reveal a little more of their thinking and a little more of the priorities in their thinking, which is the crux of the matter. The Minister said to us that if we put the interests of the consumer on an equal footing with the interests of the water and sewage undertakers and their need to secure a reasonable return on capital, then we are putting at risk the whole of the privatisation procedure. I agree. That is exactly the position in which we find ourselves.
The whole run-up to this Bill consisted of the assertion that this was an environmental Bill and a Bill to protect the consumer. The Minister in his speech tonight has made it clear that that is not the case. He has made it clear that the priority must be—they cannot be equal—not that the companies themselves are responsible for securing a return on their capital, which is what I understand by capitalism, but that the director general, the Government, the regulatory system is responsible for securing that they have an adequate return on their capital. That is the essence of the Government's position and that is why I said this afternoon, and I repeat, that this is a no-risk situation for the investors in the water privatisation process and a no-win situation for the consumers.
The consumers will suffer whatever happens. The investors in the new water companies will never be allowed to fall by the wayside. In other words, they cannot act as capitalists. They cannot take the real risks that matter, which are that if you take the wrong decisions you go bankrupt. They cannot go bankrupt. They are not going to be capitalist organisations; they are going to be private monopolies supported root and branch by government regulation. The government regulation is not there to protect the consumer; it is there to protect the privatised water companies.
Each time we discuss this matter we get a little bit closer to the truth, and I feel that we are achieving something in clarifying the argument, even if we are not achieving anything in the vote. I am not proposing to take this amendment to a Division tonight. I disagree so profoundly with the position stated on the Government Front Bench that I believe that it is worthy of repetition in another form at another time.
9.45 p.m.
The Earl of Caithness: I am grateful to the noble Lord for giving way. I should like to put firmly on the record that this is very much an environmental Bill and it is very much for the benefit of the customer. It must be clear to all of us that customers cannot benefit from the services unless the efficient companies which provide those services are solvent.

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The inefficient companies can go to the wall. I ask the noble Lord to look forward in the Bill to Clause 23. In that clause provision is made for the inefficient company that does not provide the services.
I am sure that all Members of the Committee will understand that unless a provider of the services is properly financed, this situation will only deteriorate. Did the customer benefit in the late 1970s? In the last five years of the 1970s the customer had to put up with a massive reduction of expenditure—50 per cent. in real terms on sewage works. He had to put up with a massive increase in staff in the bureaucracy and a massive increase in the cost of water. That was a triple that no other government have been able to achieve. Surely we have all learnt from that situation. The only way to protect the customer and to provide a proper service is to make provision so that efficient companies are able to survive and inefficient companies are left to go to the wall.
Lord McIntosh of Haringey: I am sorry that I should have provoked the Minister to repeat that tired set of arguments. We will find an opportunity at another stage therefore to put on the record that the water authorities established under the 1973 Act have been consistently reducing their operating costs over the years and have been increasing their efficiency. That is well established, and it will have to be shown when the prospectus is issued for the new companies because the opportunities for further cost savings are severely restricted by the increases in efficiency that have taken place over the past 15 years. That was not the issue that I thought we were debating, but it is useful to have an opportunity to repudiate the statement which the Minister has just felt it necessary to make.
We will have to come back to this issue in a way which brings it home more clearly than perhaps I have been able to do at this time of night. The issue between us is becoming more and more clear. We are the ones, as the noble Lord, Lord Renton, said, who have the clear appreciation of the capitalist ethic. These are not partisan amendments, as the noble Lord quite rightly said. If it helps the noble Lord, they are drafted by the National Consumer Council. I have them in writing from the council. They are not intended to be socialist or capitalist in partisan terms. They are intended to do what the Government cannot do with the Bill as drafted; namely, protect the consumer and the environment.
Lord Stanley of Alderley: Before the noble Lord withdraws the amendment, may I say that I regret that I did not realise that my noble friend would take this amendment with Amendment No. 77. I thought that he would take it with Amendment No. 80. I have two points to raise on my amendment, but it is up to him to say whether he would rather that I spoke later than now.
Lord McIntosh of Haringey: Although it was grouped with mine, I was not able to refer to the noble Lord's amendment because he was not in the Chamber at the time. Perhaps he would prefer to
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take it separately. I beg leave to withdraw the amendment.
Amendent, by leave, withdrawn.
[Amendment No. 78 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 79:
Page 6, line 39, leave out from ("Wales") to end of line 45.
The noble Lord said: This amendment is another attempt to remove some of the offending words in this clause. It is not as drastic an attempt as in the previous amendment, but I hope that it pinpoints the essence of our argument. In moving the deletion of these words we seek to ensure that the important emphasis is on properly carrying out the functions of a water undertaking or a sewage undertaking rather than the return on capital.
As I said earlier, I listened with great care to the Minister when he referred to the inter-relationship between paragraphs (a) and (b) of Clause 7(2). He is more expert in these matter than I am. Perhaps he can say what is meant by:
"without prejudice to the generality of paragraph (a) above".
I do not quite understand what "generality" means there. So far as I can see, it does not mean that paragraph (b) is subordinate to paragraph (a).
The Minister's argument appeared to be that:
"to secure that the functions of a water undertaker and of a sewerage undertaker are properly carried out"
is in fact a prior obligation on the Secretary of State or the director to the obligation of:
"securing reasonable returns on their capital".
If, as a result of this amendment, he accepts that I agree with him that it is proper that the Secretary of State or the director, as the case may be, should have as the prime responsibility securing that functions of a water undertaker and a sewerage undertaker are properly carried out, and if he then agrees with me that it is the responsibility of the companies concerned by efficient management of their resources and their activities to secure their reasonable return on capital, we might be getting somewhere. Then we would be in the position whereby the role of government and the role of the regulator in ensuring that the consumers are protected by the effective carrying out of the functions of the undertakers is one thing, and the capitalist role of the water companies—and they are supposed to be capitalist companies—in securing their return on capital is another.
However, in the speech that he has just made the Minister appeared to be saying that it is the role of government and the regulator to perform both those functions. But they cannot be carried out; the risk must be the responsibility of the companies. Our amendment ensures that there is a proper distinction made between the role of government on the one hand and the role of the privatised companies on the other. I hope the Committee will agree that that is the rational approach. I beg to move.
Lord Renton: Before the noble Lord sits down, would he not agree that Amendments Nos. 79 and 80 overlap and to a great extent cover the point

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that he is making? Although they are not grouped together, would it not be better for us to dispose of them together?
Lord McIntosh of Haringey: They overlap, but the arguments that I wish to put on them are somewhat different. I am still trying to draw out of the Government some consistency between their public statements and the text of the Bill. Each time I have a go at it I get a little further. If it is at the expense of the Committee this evening I sincerely apologise. However, in my view I did not make progress last time.
I appreciate that the connection between Amendments Nos. 79 and 80 is that if Amendment No. 79 is agreed to, Amendment No. 80 cannot be put. No doubt the Deputy Chairman will put that to us in a moment. However, there are different points to be made about Amendment No. 80.
The Deputy Chairman of Committees: As the noble Lord who is moving the amendment has reminded the Committee, if this amendment should be agreed to I shall be unable to call Amendment No. 80.
The Earl of Caithness: The effect of Amendment No. 79 would be to delete from the framework of duties which determine how the Secretary of State and the Director General of Water Services exercise the powers specified in Clause 7(1) the duty at Clause 7(2)(b). This duty requires them to secure that companies holding appointments are able (in particular by securing reasonable returns on their capital) to finance the proper carrying out of their functions.
Before dealing with the specific amendments, it may help if I remind the Committee of the scope and purpose of this general duties clause. We shall come later in this Bill, in Chapter II of Part II, to the duties and responsibilities of water and sewerage undertakers—the obligations on them to supply wholesome water for example, and the requirement to provide a water supply on demand. Before that, Chapter I of Part II provides for the appointment of water and sewerage undertakers, and the enforcement of many of the duties that will apply to them through the Bill and the conditions of appointment. That chapter contains the requirements for the director general to keep all the appointees' activities connected with water and sewerage supply functions under review and for customer protection arrangements.
The Clause 7 duties bear on the Secretary of State and the director as they carry out all those functions in Chapter I of Part II, as well as certain other functions in the Bill. In other words it provides a framework which determines how the Secretary of State and director should exercise their powers as they impinge on the appointment of undertakers and on the enforcement of the water supply and sewerage functions.
It is essential to the water industry, just as it is for every other regulated industry following privatisation, that the regulators carry out their functions in a way which ensures that an appointed
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company can command the resources necessary to do its job properly. The environmental and water quality objectives which are important to both sides of this Committee could not be achieved if the appointed companies were unable to finance the necessary investment. That is why this clause balances the duty to secure that functions are properly carried out with the duty to secure that the companies that will be responsible for carrying them out can finance the accomplishment of their tasks.
Amendment No. 79, which would delete the whole of subsection (2)(b), would leave out any duty to ensure that companies holding appointments have the means whereby they will be able to discharge their functions. The noble Lord, Lord McIntosh, appears to will the environmental ends of the Bill, and he wishes I am sure to be satisfied that the companies will provide a proper service to the customers—at least I hope that he does. But he must also recognise that companies will have to have the means to achieve those ends. They must be regulated in a way which puts them in a position to finance the proper carrying out of their functions.
The effect of Clause 7(2)(b) as a whole therefore is to ensure that the Secretary of State and the director exercise their functions, for example in respect of limitations on price increases—I realise that that is a matter which Members opposite are against—in a way which allows an efficient company the financial resources to carry out its functions properly. It must be able to return a secure reasonable return on the capital it employs in support of its appointed functions.
Lord McIntosh of Haringey: I am afraid that that was not a successful amendment. It gained me no insight into the Government's thinking. I am sorry about that because I think that the relationship between Clause 7(2)(a) and Clause 7(2)(b) is a vital relationship for the Bill. In response to the previous amendments I thought that what the noble Earl was saying sounded interesting and could even have been hopeful. However, what he has now said is simply a repetition of what has been said earlier. I shall not detain the Committee any longer on this amendment. I beg leave to withdraw it.
Amendment, by leave, withdrawn.
10 p.m.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 80:
Page 6, line 43, leave out ("(in particular, by securing reasonable returns on their capital)").
The noble Lord said: The reason I put down this amendment separately and did not agree to a grouping was that in a sense this is a fallback. It is not so strong as Amendment No. 79 or Amendment No. 77A; but it gives me an opportunity to carry on an argument which I started, but was unable to conclude earlier this afternoon: that is, what is meant by "reasonable" in the phrase "a reasonable rate of return". I suggest that there could be three possible interpretations of "reasonable". I should like the Government to tell the Committee which they think is the appropriate definition.
The first alternative would be to continue with the present rate of profit in water and sewerage activities. The problem with that—as the noble Lord, Lord Jenkin, said a few minutes ago—is how would such a rate of return, reasonable as it might seem to the electors and the consumers, achieve the investment necessary for putting right our water and sewerage services? The cost of that, according to the Secretary of State, might equal between 7·5 per cent. and 12·5 per cent. in real terms over the next decade. That is the first alternative.
The second option would mean that we were talking about a rate of return analogous to the rate of return on utilities; in other words, a safe investment. The best analogies for that are in the United States, where utilities as safe investments in the private sector are fairly well established. What that is normally taken to mean is that they produce a rate of return of approximately 5 per cent. on current costs. The effect of that, the Secretary of State tells us, would be an increase of 25 per cent. in real terms over the next decade in the cost of water and sewerage services. That is the closest to the kind of reasonable rate of return which might have been achieved by the amendment of the noble Lord, Lord Nugent of Guildford.
The third alternative—it is important for the Government, if this is the way their minds are thinking, to be quite clear about this—would be a rate of return comparable to a rate of return on the equity market. That would mean, let us say, 15 to 25 per cent. on historic cost or, depending on what view we take of inflation, 8 to 10 per cent. on current cost. The problem with that—the Government really have to take a view on this—is that that would mean an horrendous cost to the consumer. He would be involved in an increase in real terms of at least 50 per cent., probably closer to 80 per cent., in his costs over the next decade.
Yet in the equity market—if these new water supply plcs are to raise their money in the equity market, as opposed to some fixed interest utility market—that is the kind of cost with which we are faced. What do the Government mean by "reasonable"? What is their assumption? The difficulty of the third assumption—which seems to me to be the only one which achieves the objectives clearly set out by the noble Lord, Lord Jenkin—is that, first, it has this horrific effect on prices to the consumer and, secondly, that it involves in itself a distortion of the free market, that we are now bringing into equity markets companies which do not have in themselves the kind of growth in profitability which equity markets normally expect. If the growth of the water business is increasing by perhaps 1 per cent. a year, how shall we achieve the growth of 5 to 10 per cent. which is normally expected in equity markets?
If there is to be any safeguard of the rate of return, which is what Clause 7(2)(b) requires, shall we not be encouraging some of these water companies towards over-investment, because the more one is investing the higher is the basis on which the rate of return will be calculated? There is a fundamental conflict between the concept of a reasonable rate of return—a
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guaranteed reasonable rate of return as being the responsibility of the director general—and the raising of money in a truly capitalist free market.
If it is to be the responsibility of the Government and the director, then we are in serious danger of the worst of both worlds. We shall have very expensive capital for investment purposes and we shall have cost plus as the basis of the day-to-day undertakings of the pricing of water and sewerage services. In other words, we shall have translated to the water industry all of the worst influences and examples of the armaments industry serving the Ministry of Defence and the drugs industry serving the Department of Health. I do not believe that if the British people truly understand the nature of what is being offered to them they will be any more enthusiastic than they have already shown themselves for privatisation in this form. I beg to move.
Lord Jenkin of Roding: I am tempted to my feet again. I believe that the noble Lord, Lord McIntosh, is making extraordinarily heavy weather of this issue. He gives the impression of someone who is erecting on the point of a pin an argument which is primarily based on fantasy.
He mentioned the drug industry. As a former Health Secretary—and a number of my noble friends have exercised the same function—I had responsibility for the pharmaceutical price regulation scheme. It has built into it the same concept of seeking to secure a sufficient return to the companies which supply the National Health Service with drugs in order to enable them to invest and, in particular, to carry out research which is necessary in order to secure that the industry shall remain at the forefront of competition.
Those who have been responsible in the Department of Health for administering the PPRS have never had any difficulty in negotiating and reaching an agreement with the pharmaceutical companies as to the bracket within which they should be looking, having regard to the particular risks that were being taken in relation to a particular drug. It does not appear to me therefore that in the present case there will be offered any significantly different task to the director general. His duty is to ensure that they have the resources with which to finance their operations.
The phrase in the Bill about securing an adequate return is, as it were, in parenthesis. I suspect that it is included ex abudanti cautela. Perhaps it may not need to be included on the grounds that it might or might not be implied. Therefore, in order to make the point clear beyond peradventure, the words are included. But the duty of the director general and the Secretary of State—we are talking primarily of the director general's obligations—is to ensure that water and sewerage undertakers have the resources with which to carry out their functions. That must be in the interests of the consumers. There can be no future for an undertaking which will be unable to have the resources that it needs to do its duty. Therefore, by indulging in stirring up fears and fantasies of horrendous increases in charges which are necessary to meet the situation. I believe that

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the noble Lord is making more complicated that which in practice will not be particularly complicated.
He asks: what kind of market it is likely to be? He must wait and see. My guess is—and no doubt the noble Lord has seen this argued in the financial press—that the shares of water undertakings may well form, in effect, a new segment of the market. The investor will be buying two things with his shares. He is buying a fairly certain, although not absolutely certain, stream of income because the water authorities have a pretty safe business. Therefore, that part of the business will not be very exciting but it should be fairly secure although there will be an element of risk. It will not be gilt-edged and will not be as secure as a class A debenture. However, it will be a fairly steady flow of income.
The second part of the share will be what the companies are able to do outwith the control of the director general and the Secretary of State in developing other businesses; for example, in the way in which Thames Water is currently developing a water bus service up and down the Thames. I believe that there is enormous scope for that sort of thing.
Noble Lords opposite have made some play about the mention sometimes made of cable television. The fact is, as was mentioned in the debate this afternoon, that to take a water authority into partnership with a cable authority is the wisest thing that could be done. There is then an adit into every single building that is served by water, and a fibre optic cable for an inter-active cable system can perfectly well be fed into a building through the sewers that go into the house. That is happening now and will happen a great deal more. That is the kind of additional business which the water company can get. Therefore, the shares of those authorities as they are traded on the market will form a new class and investors will have to make up their minds as to what they are to do.
This comes straight back to the point of the noble Lord's amendment. The water part of that, because it is a monopoly—and we have already discussed this at some length—has to have regulatory power over it, and of course the regulator has to ensure that, along with all the other objectives, he is setting limits on prices at a level which will secure a return on the capital so that the undertakers can finance their obligations.
Frankly, having seen this operating as it does by British Telecom where there is exactly the same position, there really is not the sort of phantasmagoria of difficulty which the noble Lord has conjured up for the Committee this evening. These words are essential in order to avoid doubt, and I hope that my noble friend will not be beguiled or frightened by the arguments of the Front Bench opposite into feeling that he must take this away and look again at it. I think the Government have it absolutely right.
Lord Lloyd of Kilgerran: It is always a great pleasure to follow the noble Lord, Lord Jenkin of Roding, because of his great experience in
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government matters. However, I must say that in my view his analogy with the pharmaceutical industry is totally false on this matter. I was a member of the Sainsbury Committee some years ago which studied the question of the cost of pharmaceuticals and initiated the PPRS. For the PPRS there was no question of securing reasonable returns on their capital in the same sense as in this Bill. In the pharmaceutical industry it was to secure reasonable returns to enable companies to carry out certain aspects of research in the public interest. It was not anything like returns on capital.
Like the noble Lord, Lord McIntosh of Haringey, I have been worried about what is meant by securing reasonable returns on capital. It seems to me that according to the argument that he has put forward, if those words are left in the Bill the cost for the consumer will increase.
Lord Renton: Surely the answer to that is that there has to be capital and fresh capital raised from time to time for development and in order to improve services, including improving the purity of water. Unless a reasonable return is obtained on capital already there it is going to be very difficult, and sometimes impossible, for one of these new companies to raise the further capital that is needed. That is why these words are so essential.
As to what is "reasonable", here I think that one must say—and I am ready to be contradicted—that a reasonable return is such a return as will enable fresh capital to be raised. If the return is not good enough—in other words, not reasonable—fresh capital will not be raised and development will not take place.
Lord Stanley of Alderley: I should apologise to the Committee. I specifically asked that my Amendment No. 82 should be taken with this amendment rather than with Amendment No. 77. Therefore, with the permission of my noble friend on the Front Bench, I will speak to my amendment now as it fits in much closer with the amendment that has been moved. Two points that have been raised are relevant.
The first—and I know I will be crossing swords with my noble friends Lord Jenkin and Lord Renton—is this. If you put a specific requirement in a Bill—and I am now talking about what we on the Back Benches call the Renton factor—it means that a lawyer when he looks at it only looks at that requirement and considers everything else less important. I have been told that on innumerable occasions by my noble friend Lord Renton when I have endeavoured to add something to a Bill. That is the first point I make to my noble friend Lord Jenkin; he is putting much greater priority on this return on capital than on any other aspect. In fact, the rest means nothing. I shall be interested to hear how my noble friend Lord Renton answers that point. When I next endeavour to put something specific in a Bill, I hope that he will not bully me too much.
Lord Renton: Perhaps my noble friend will allow me to intervene. First, he is making a very fair point and a proper challenge.
Lord Lloyd of Kilgerran: Perhaps the noble Lord will speak up as I cannot hear him.
Lord Renton: My noble friend has given way and to save time I am trying to answer his immediate point.
Lord Lloyd of Kilgerran: I understand that but I merely said that I could not hear what the noble Lord was saying as he appeared to be in close conversation with the noble Lord, Lord Stanley.
Lord Renton: I shall speak even louder than I normally do, which I should have thought was much too loud for the Committee's pleasure.
Lord Lloyd of Kilgerran: Never.
Lord Renton: Surely the answer to my noble friend Lord Stanley of Alderley, who has made a proper challenge to me, is this. Yes, I have often said that we should not be selective; when there are a number of factors to be borne in mind, if we bring out one in particular we are emphasising that at the expense of the others. However, there is an exception to every rule. I say that this particular factor of obtaining a reasonable return on capital makes an exception, and one which justifies its being an exception.
Lord Stanley of Alderley: I thank my noble friend. I shall remember that in future.
My second point runs straight on from that point. I accept that there is a real need for these plcs to have a good return on their capital, but surely any director who is worth his salt must realise that it is important that they should do so. If the director kills them off, he is killing the goose that lays the golden egg. Why include a specific item?
I have to say that I am with the noble Lord, Lord McIntosh. On this occasion my noble friend Lord Renton has not persuaded me, though he usually does. I shall now not have to speak to my Amendment No. 82.
The Earl of Caithness: Perhaps I may say to my noble friend Lord Stanley of Alderley that I see room on the Benches opposite if he feels that he is uncomfortable on this side of the Committee. I suggest to him that he reads what I said on Amendment No. 77A because I covered fully the two points that he raised. I draw his attention, as I drew the attention of the noble Lord, Lord McIntosh, to Clause 7(2)(a) rather than——
Lord Stanley of Alderley: I did listen to that part of it.
The Earl of Caithness: I do not know what part of the words that I spoke concerning Amendment No. 77A are referred to or what the noble Lord, Lord McIntosh said. Having been chastised by the noble Lord, Lord McIntosh of Haringey, for referring to my noble friend, when I turned around he was not in his place. Perhaps we may begin that again at a later stage if necessary.
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As we have already debated this subsection at length I do not need to say much more about it in response to this amendment. The effect of Amendment No. 80 and the deletion of the words,
"in particular, by securing reasonable returns on their capital'
would be to lose a form of words that we believe to be important for the water industry and the customer and which carries forward in an amended form the duty of the Secretary of State to statutory water companies in Section 12(6) of the Water Act 1973. I am sure that my noble friend Lord Stanley recalls those words well. It means in effect that something similar has been applied to part of the water industry for the past 16 years. That is the part of the water industry that was not nationalised during the Labour Government of the 1970s. But clearly the noble Lord, Lord McIntosh of Haringey, let the cat out of the bag concerning Amendment No. 43 when he indicated that because there was an operating company making a profit that was to be a target for nationalisation in the future.
Water is not the vehicle through which the water companies will be making a profit, it is the operation of the business in providing water supply to 99 per cent. of the country which is connected to the mains, and taking away the water that we dirty. In case any Members of the Committee have misunderstood what the duty does not mean. It does not mean that the Secretary of State and the director general will be obliged to exercise their powers of appointment and in particular by securing reasonable returns on capital in such a way that inefficient companies can secure a return on capital. They are required only to exercise their powers in a manner best calculated to secure that companies are able to do so. Whether a company actually secures a reasonable return will depend on its efficiency among other things.
The clause does not guarantee shareholders any particular return on their investment, and does not require the regulator to set or vary price controls by reference to any particular level of share prices pertaining from time to time. Share prices will in any event reflect considerations other than the revenue from the performance of appointed functions. For example, there will be scope for earnings from enterprise activities which are not related to the core functions. Perhaps more importantly, the concept of a reasonable return on capital relates to the return on the capital that the company applies to finance the proper carrying out of its appointed functions and not to the flotation price or the market valuation of company stock.
Lord McIntosh of Haringey: I sought to give the Minister an opportunity to answer the question: What is meant by a reasonable return on capital? In order to help him I suggested three alternatives; namely, a continuation of the existing rate of return; a utility rate or an equity rate of return. The noble Lord, Lord Jenkin of Roding, seemed to suggest that the reasonable rate of return would be a new market and somewhere between the utility and the equity rate of return. That seems a perfectly rational answer to give; but the Minister gave no answer at all. I wonder whether he is able to help the Committee.
The Earl of Caithness: I am delighted to try to elucidate further. The noble Lord will not be surprised to hear me say that we are considering very carefully what will be the appropriate rate of return for a stable utility industry in the private sector. A final decision has not been taken.
Lord Lloyd of Kilgerran: The noble Earl referred to the Water Act 1973 having certain words in it. Are the words exactly the same as those in this particular section of the Act? I am sorry that I have not got the Act with me, but I did not know that the Minister was going to quote from it.
The Earl of Caithnes: No. I said that the words were in an amended form.
Lord Lloyd of Kilgerran: As the noble Earl is relying strongly on the wording of the 1973 Act, can he give the exact words? I am sorry to press the Minister.
The Earl of Caithness: It is the amended form as in the Bill. I am afraid that I cannot at this moment give the wording of the 1973 Act.
Lord Lloyd of Kilgerran: I am dissatisfied that the Minister should produce an argument in favour of using in this Bill words from another Act. On an important matter like this he should come prepared with the actual words. He may be right. I do not know.
The Earl of Caithness: In that case, I sincerely apologise to the noble Lord. I have come equipped with thick files and now I have a book.
Lord Lloyd of Kilgerran: I am sorry to press the Minister but his brief is not up to scratch.
The Earl of Caithness: It has nothing to do with my brief not being up to scratch. It is entirely my fault. I have to limit the amount of material I bring into the Chamber. I have two red files with me. I know that those two files do not contain what the noble Lord requires. I hope to be able to give him an answer shortly.
Lord McIntosh of Haringey: I do not know whether it would be kind or cruel to give the Minister time to answer the question of the noble Lord, Lord Lloyd of Kilgerran, but I shall certainly not delay the Committee with that in mind. However, I shall delay the Committee for a moment longer because the persistent refusal of the noble Earl to give an answer to what seems to me to be a reasonable question is all too clear. If the Bill contains the words,
"a reasonable rate of return",
and if it is possible to interpret the words in a number of different ways, it is only proper for the Committee to have the right to interrogate the Minister about what the Government mean. The noble Earl said that the Government have not decided yet. They have not worked it out.
The Committee is being asked to buy a pig in a poke. We do not know what the answer is. We had a gallant attempt from the Government Back
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Benches to give us an answer. I respect the noble Lord, Lord Jenkin, for that attempt. By answering the question he made it clear that the Secretary of State's own estimates of the increase in real terms in water charges over the next decade were grossly inadequate. The Secretary of State's estimates were based on the assumption that the rate of profit would continue as it is now. The noble Lord, Lord Jenkin, is making it clear that we are talking about something between a utility market and an equity market. Therefore we are talking about a figure closer to a 50 per cent. in real terms. That is an honest answer at any rate.
Lord Jenkin of Roding: I do not see how the noble Lord can possibly draw the conclusion that he is now seeking to draw until he knows what the gearing of the companies will be, how much of the capital employed in the business will be represented by debt, which in exactly the same way as the debt existing at the moment will have to be remunerated by a payment of interest, and then how much will be left for equity capital and whether there will be preference capital. He cannot draw the conclusion that the rate of increase of charges will be this, that or the other on the basis of a view that might be taken—I have given my own view—of what will be the status of the equity part of a water undertaker's capital.
Lord McIntosh of Haringey: I agree entirely. The gearing will be absolutely critical. We shall put down amendments to that effect later on. However, that confirms what I am saying. Parliament is being asked to buy a pig in a poke. Parliament is being asked to approve of a privatisation measure without having any idea of the real financial terms on which this privatisation measure is being put forward.
Lord Jenkin of Roding: The noble Lord must not be allowed to get away with that. A few moments ago he was saying that there would be increased charges way ahead of what the Secretary of State is saying. Now he is saying that he does not know. Where is his argument? He does not appear to have one.
Lord McIntosh of Haringey: It is hardly my job to do anything other than seek to draw out the Government's argument. I am not seeking to draw the noble Lord, Lord Jenkin. He is not responsible for the Bill. I am asking the Government to give us straight answers about the cost to the consumer of this legislation. We are entitled to know what the cost to the consumer will be.
It is not good enough for the noble Lord, Lord Jenkin, to give us answers. We want the Minister to give us answers. We want those answers to take into account the most reasonable estimates possible of the gearing and to say whether any of the existing capital will be written off. That affects the amount the Treasury and the taxpayer will receive, which is another critical factor in deciding whether this is the right thing to do. We want to know what their estimate is of the rate of return which is likely to be necessary to achieve the required investment. All of

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those aspects which are absolutely critical to an assessment of whether this measure is justified are simply not known; or, indeed, if they are known, we are not being told about them. Therefore the only conclusion we can come to is that this is not the time to be carrying out a privatisation measure.
The amount of investment required to bring our water quality and our water effluent standards up to Community levels over the next 10, 15 or 20 years is unknown. Therefore the amount of investment and the rate of return required on investment from these water companies is unknown. In those circumstances, we can have no sound basis upon which to estimate the effect of this Bill on consumers or on the environment.
By the amendments we have been seeking to find out whether the Government were at least willing to give us some sort of estimate in this connection, instead of retreating behind the phrase, "We have not yet made up our minds". However, I still think that there is an opportunity here for the Minister to reply both to myself and to the noble Lord, Lord Lloyd of Kilgerran.
10.30 p.m.
The Earl of Caithness: I am delighted to take the opportunity so to do. Perhaps I may start by addressing the remarks made by the noble Lord, Lord Lloyd of Kilgerran. I shall read to him from Section 12(6) of the Water Act 1973:
"The Secretary of State shall not so settle or vary arrangements under this section as to oblige the company to fix their charges at a level which will endanger their ability, so long as their undertaking is managed efficiently, to provide a reasonable return on their paid-up capital, having regard to their probable future expenditure and to the need to provide for any contributions which they may lawfully carry to any reserve fund or contingency fund, to make good depreciation (in so far as provision therefor is not made by any such fund as aforesaid) and to meet all other costs, charges and expenses properly chargeable to revenue".
Lord Lloyd of Kilgerran: I should like to express my grateful thanks to the noble Earl for pointing that section out to me. However, I must apologise for giving him so much trouble at a time when he is so busy.
The Earl of Caithness: I can assure Members of the Commitee that it was no trouble at all; indeed, it was a pleasure to answer the noble Lord's question.
I turn now to the remarks made by the noble Lord, Lord McIntosh of Haringey. Looking at the matter from his position, I can quite understand the remarks he made. Moreover, if the noble Lord's party were ever to privatise an industry I would certainly wish to make exactly the same remarks to him at this stage of the proceedings. However, I can assure him that as soon as I have figures and as soon as we are able to work out all the costs—some of which, as he rightly suggested, we do not have at the moment—I shall be able to provide him with further clarification on the matter.
Lord McIntosh of Haringey: This Bill has been before Parliament since before Christmas. These are absolutely critical figures which have been
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consistently requested by my honourable and right honourable friends as the Bill passed through another place between January and April of this year. Ministers there could not give any answers and it seems that Ministers here are unable to do so. Yet, the answers are essential if we are to make a judgment, and if the people are to make a judgment, as to whether privatisation is necessary.
We are forced back to the conclusion that privatisation is being put forward on ideological rather than economic or financial grounds. We shall have to return to the matter and we shall do so at a time when more noble Lords are available to take part in the debate. In the circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 81:
Page 6, line 45, at end insert ("and
(c) to secure that companies holding appointments under Chapter I of Part II of this Act as water undertakers or sewerage undertakers are required to publish annual and three-yearly financial plans.").
The noble Lord said: We are seeking to extend the powers and functions of the director contained in Clause 7. We are seeking to secure that the companies which are to undertake the supply of water shall be required to publish annual and three-yearly financial plans. The amendment is designed to allow public scrutiny of the plans of water and sewerage undertakers so as to ensure that those undertakers make adequate provision for the investment needs of the industry and take adequate account of the need to implement the improvement of environmental concerns and satisfy consumers' needs.
I am not suggesting that the whole country should be privy to matters of a confidential nature on finance or planning. However, we believe that the public has a right to be kept informed of the state of play. Over the past three months the public has been subjected to a barrage of glossy advertisements and razzamatazz on television, which have been telling us just how marvellous the past 10 years have been and just how wonderful the next period will be with privatised water. We are not interested in that approach. We are concerned that there should be a proper presentation to the public of the privatised water companies' sensible and serious intentions with regard to their role. When they do that, they can be criticised. There will be defects and blemishes. Some individuals will take the opportunity to make points. They may well be political points.
Such public scrutiny is essential if the regulatory system is to work effectively. There is a need to ensure that the investment plans agreed with the Director General of Water Supply fulfil objective requirements at the time they are agreed and when they are implemented, and that the WS plcs' corporate plans do not rely on asset stripping for their implementation.
There are two sources of potential abuse which would be curtailed by such public scrutiny of corporate plans. I have given an indication of the kind of things that can happen. The Committee is

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aware that the delivery can fall short—not just in water, but in many other spheres—of what is proposed. I do not mean solely on the privatisation of a company. What is contained in a prospectus when it sees the light of day looks far more attractive than what is delivered.
I hope that the Minister and his advisers will say kind things about the public's need to be kept informed of the plans; and, secondly, I hope that the Government will want to ensure that the promises, which I shall accept for the purpose of this argument they support and want to see, are carried out. The Government should want to ensure that the plans, which must exist, are available for public scrutiny.
I know that not everyone will take the trouble to look at them, but there will be bodies that will be interested; there will be critics and there will be narks. Everyone should be entitled to study the plans. If the companies are enterprising and imperialistic, and are in the business of expanding their empires, they will have plans of which they will be proud; and I believe that they will be happy to defend them. The amendment seeks to lay down as a duty that the companies publish an annual plan and a three-yearly rolling financial plan to ensure that the prospectus upon which the public will be invited to invest, and to be satisfied that their interests will be protected, goes according to plan. I beg to move.
Lord Addington: This amendment effectively works on two levels. First, it allows the public to know what is going on within the bodies. Secondly, it makes sure that the environmental consequences are never completely squashed by those that are connected with the more directly financial parts of the company's activities. Thus I wish to support the amendment, because if the Bill is to be truly environmentally sound, we must never lose sight of the fact that there must always be environmental considerations in it.
The Earl of Arran: The purpose of Amendment No. 81, proposed by the noble Lord, Lord Graham, is, as he says, to require a condition in the instrument of appointment obliging appointed companies to publish annual and three-yearly financial plans. The requirement to publish such plans is not appropriate to a private sector company. The water authorities submit corporate plans to the department and the Welsh Office so that Ministers can assess their investment plans and exercise the usual public expenditure controls. In future the regime as set out in Chapter I of Part II of the Bill and the model instrument of appointment will apply. The Secretary of State will set the initial parameters of that regime, based upon limiting the level of charges, and the director will receive or be able to obtain all the information necessary to operate it. Information about levels of service and regulatory accounts must be published by the companies. But financial plans will be a matter for the companies, not for approval by the Government of formal publication. I ask the noble Lord, Lord Graham, to appreciate that point and in consideration of the circumstances to withdraw the amendment.
Lord Graham of Edmonton: The Minister, and I believe the Government, fail consistently to understand what we are driving at. That may be our fault. There is an option, not a duty, which I invite the Committee to consider: the plans are so well drawn, so sensible and so in accord with the promises that it would be in the interests of the company to assure the public from time to time that what the Government have promised will happen is happening. I am not talking about everyone being their own accountants and auditors but about telling the public that what the government wanted the capital for and what they were spending money on was broadly what they said they would do. If the public are not kept fully appraised of matters in that way, they will not only be denied the information but they would be entitled to be suspicious that the promises that were made were not being kept.
What the public will then discover is that not only is the quality of the service less than was promised, but the ability of the company to use or misuse its capital is greater than it might have been. Of course the companies will be subject to people taking an interest in what is going on, which they will resent. But it is a new world; this is not the typical privatisation of a nationalised company. We make the case that water is quite exceptional and the public are suspicious. Whether the Government like it or not, there is in general a distrust on the part of the public of the Government's interest in health and clean water in the future. That is a fact of life. The public are unhappy at the Government's proposals to privatise the water industry. I put it no more strongly than that. I do not want to use scare stories. As regards whether the public are for or against the privatisation of water, all the evidence we have been able to get objectively is that they are not in favour of the Government's plans.
No government spokesman, either in this Chamber tonight or anywhere else, can point to the evidence and say that the public are happy or accept the plans based upon what they now know. All I am saying is that the public would be less unhappy if they were satisfied that they were being kept fully in the picture.
I am not talking about running a company without investing money, or members of the public poking their nose in; I am simply talking about good, prudent 1990 common sense in respect of consumer education. However, the Minister quite clearly does not understand what we are driving at. We shall have to try to find another way of coming back on this. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 82 and 83 not moved.]
10.45 p.m.
The Earl of Shannon The Earl of Shannon moved Amendment No. 83A:
Page 6, line 48, at end insert—
("() to secure that all reasonable demands for water supply and sewerage services are satisfied;").
The noble Earl said: The Committee has spent rather a long time in discussing the higher flights of ethics, politics and finance. I am sorry, but I wish the Committee to come down to water.
My amendment speaks for itself. It merely places on record exactly what the water companies are there for. We have ploughed through the Bill up to Clause 7. We have discovered who appoints who and who consults with whom, all of which is done with masses of bureaucracy. We have argued about who disposes of land and all kinds of things. At last we have reached Clause 7. I was pleased to hear this clause called the "kernel of the Bill".
The rubric of Clause 7 states:
"General duties with respect to water supply and sewerage services".
That is the first mention that has been made of what the clause involves. But when we look at Clause 7, we find it does not say much about that. When the Minister was replying to Amendment No. 77A, I suddenly thought he was replying to my amendment. My spirits soared at one moment because the Minister read out Clause 7(2)(a). I noted very carefully what the Minister said. He said:
"to secure that all the functions of a water undertaker".
I thought grand! we are getting somewhere. Then of course the Minister correctly read out the relevant sentence on two further occasions and left out the little word "all". So the provision does not cover all a water undertaker's functions.
We are leaving the fact that someone is going to supply water purely to an assumption, but there is nothing here to say that anyone should supply it. My amendment does not only provide for that. If one is setting up a production plant in industry one will not be very bright if one does not constantly assess one's market and provide for its needs with a reasonable margin. All my amendment calls for is normal good management and for those practices to be followed.
The amendment reads:
"to secure that all reasonable demands for water supply and sewerage services are satisfied".
Without overloading the word "reasonable" too much, I think that is very reasonable. But what it does mean is that there should be an obligation on the water plcs, when they come into being, to carry out good management and make sure that they not only supply their customers as they stand, but that they should have a reasonable margin in hand in order to supply any increase in need. There is a precedent for this in the Electricity Bill where Clause 3( 1 )(a) makes exactly the same provision in respect of the supply of electricity. All I am saying is that perhaps we could do the same in respect of water.
Very possibly all ministerial briefs this evening are heavily stamped across the bottom, "Do not give way on this", and I do not suppose that I shall be any luckier than any other Members of the Committee who have moved amendments this evening. I presume that my amendment will be resisted. It could be resisted on the grounds that it is wrong. In that case the Government would be admitting that they believe in bad management, and that is not a very good advertisement if one will be trying to flog one's shares to the public. It will not go down well in the market.
The other argument could be that the answer is presumed to be elsewhere. If that is the case, I should like to know where. The Minister may be able to tell me exactly where it is not just assumed but where it is stated. Assumptions on the face of a Bill very often go wrong. Courts have totally different opinions and courts do not read what Ministers say. Therefore it should be stated, please. I am sure that the Minister will correct me if he knows where it is stated.
If the Minister's brief reads, "What about Clause 46?" please will he draw a line through it because it is not relevant. That clause merely says that if the companies do not do their job very well and they run short, they have to put domestic customers first. I do not object to that, I am merely suggesting that they should manage their businesses properly, as my amendment suggests. I beg to move.
The Earl of Caithness: Perhaps I can reassure the noble Earl, Lord Shannon, that the Bill already achieves the aims of his amendment. I think, with respect, that he is slightly missing the point. Clause 7 contains the general duties on the Secretary of State and the director not the duties on the water and sewerage undertakers.
The general duties on water and sewerage undertakers to maintain and extend their systems of water supply and sewerage are contained in Clauses 37 and 67 of the Bill. These general duties form the foundation on which more specific water supply and sewerage duties are built.
The important point is that these duties are enforceable by the Secretary of State or director under Clause 20 of the Bill. In considering whether to take action under Clause 20, the Secretary of State and director are bound by the duties imposed by Part I of the Bill, including the duty in Clause 7(2)(a), which requires them to exercise their powers in the way they consider best calculated to secure water supply and sewerage services are properly provided throughout England and Wales. I think that that will entirely meet the noble Earl's concerns.
As I have said, the structure of duties in this Bill is complex, and although based on the gas and telecommunications precedents, the different circumstances of the industries mean that the clauses in the different measures are not exactly similar.
The Earl of Shannon: I am grateful to the noble Earl for that reply. I shall have to look at what he said. I take it that there is an obligation to keep a margin in hand. Or is it just to meet future needs? Can the Minister tell us whether there is any provision that calls for a margin in hand?
The Earl of Caithness: Yes. I think that if the noble Earl turns to Clause 37(1)(b) on page 39 of the Bill, he will find the words:
"for maintaining, improving and extending"
—just what the noble Earl was looking for, I hope.
The Earl of Shannon: I have not been able to find my way—I am still at page 6. I shall look at it. I thank the noble Earl very much, and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Chairman of Committees (Lord Grantchester): Amendment No. 84 appears to be an alternative to Amendment No. 84A.
Lord Carter Lord Carter moved Amendment No. 84:
Page 7, line 1, after ("person") insert ("including in particular, those who are disabled or of pensionable age").
The noble Lord said: As the Deputy Chairman of Committees has said, these are alternatives. I shall speak to both. They are probing amendments intended to discover the reason for an omission from the Bill.
The amendments would impose a specific duty on the Secretary of State and the director with respect to water supplies and sewerage services to have regard to the need of consumers who are disabled or elderly. The amendments would bring the arrangements into line with existing provisions in other Acts covering gas, electricity and telecommunications. I shall not detain the Committee by quoting the relevant provisions in full, but in those Acts each of the sections which cover the general duties of the Secretary of State and the director include the phrase contained in the amendment. The Water Bill does not do so.
At Report stage in another place the Government introduced an amendment to Clause 6(5)(b) which ensures that the service committees shall have regard to the needs of disabled people. These amendments seek to ensure that the same regard will exist when charges are concerned and, as I say, they are intended to bring this Bill into line with other legislation. I hope that the Government will be helpful over this matter. I beg to move.
Lord Hesketh: I am conscious that the Gas Act 1986, the Telecommunications Act 1984 and the Electricity Bill have similar wording to that provided for in these amendments in respect of the quality of service provided. I should emphasise here the quality of service rather than price fixing.
It would be both impractical to operate and contrary to subsection (3)(a) to discriminate positively in price fixing in favour of the elderly and disabled. The proper way to assist these and other vulnerable groups in the community who may have difficulty in paying their water and sewerage charges is through instalment payment plans and in the case of those on low incomes through the assistance provided by income support and family credit. The industry operates a code of of practice under which advice is given to those in financial difficulties drawing attention to instalment plans and to the assistance which the DSS and advice which social services and voluntary bodies such as the Citizens' Advice Bureaux provide. All customers will be protected against overcharging by the annual limit on prices set initially by the Secretary of State.
An amendment to protect the interests of the elderly and the disabled would be more appropriately placed therefore in respect of subsection (3)(b), which inter alia concerns the quality of service. This would be consistent with the precedent set in the legislation concerning the other utilities to which both I and the noble Lord, Lord Carter, previously referred.
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Subject to this qualification in respect of price fixing, I have every sympathy with the concerns which lie behind these two amendments and I agree to consider whether a suitable amendment might be made following the precedents already set in order to ensure that these vulnerable groups in the community are properly protected in their dealings with water and sewerage undertakers. In the light of this undertaking, I hope that the noble Lord will be able to see his way to withdraw the amendment.
Lord Carter: I am grateful to the noble Lord. Am I to understand that the Government will be bringing forward an amendment at the next stage to subsection (3)(b)? In the light of that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 84A not moved.]
Lord Stanley of Alderley Lord Stanley of Alderley moved Amendment No. 85:
Page 7, line 13, after ("discrimination") insert ("against any class of persons").
The noble Lord said: This is a probing amendment. What I want to ask my noble friends is why this phrase which is contained in my amendment, and which was central to Section 30 of the previous Water Act, has been omitted from the Bill. I beg to move.
Earl Russell: I should like to make an apology to my noble kinsman Lord Stanley of Alderley for having been 10 minutes too late to put my name to his amendment. At this time of night, I shall confine myself to saying that I, too, should like to know the answer to his question.
The Earl of Caithness: I am happy to give the answer not only to the two noble kinsmen on opposite sides of the Chamber but to the rest of the Committee as well. My noble friend Lord Stanley referred to Section 30 of the Water Act. I am sure he will also recall similar words in Section 3 of the 1988 Act.
Clause 74 of the Bill provides the corresponding powers for water and sewerage undertakers to fix charges. It does not place restrictions on the exercise of those powers because the intention is, under Clause 7 and Chapter I of Part II of the Bill, to provide, for the the regulation of water charges through conditions in the model instrument of appointment of companies.
Clause 7(3)(a) of this Bill requires the Secretary of State and the director to exercise their powers under Chapter I of Part II so as to ensure that the interests of consumers of potential consumers are protected in respect of any charges made by the undertaker for its services. In particular, the clause places a duty on the director to ensure that no undue preference is shown, and that there is no undue discrimination, in the fixing of those charges.
Perhaps I may turn the attention of my noble friend to condition D3 of the model instrument of appointment. I am sure that he has seen it in the Library. He will find it at page 26. It makes provision

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that requires the appointee ensure that no undue preference is shown to, and that there is no discrimination against, any class of customer or potential customer.
11 p.m.
Lord Stanley of Alderley: I feel that there is a spy in your Lordships' House. My noble friend must have seen me creeping around the Library the day before yesterday in order to obtain paragraph D3. If he did not, he must have another spy. I have read that paragraph. For the moment, as my noble friend is no doubt one stage ahead of me, I will leave it until we come to discuss this matter in more detail under Clause 74. I beg leave to withdraw this amendment.
Amendment, by leave, withdrawn.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 86:
Page 7, line 20, leave out ("and efficiency") and insert ("efficiency and effectiveness").
The noble Lord said: My Lords, I beg to move Amendment No. 86 standing in the name of my noble friend. The effect of this amendment would be to add to the list of general duties of the director, and by inference the Secretary of State, the requirement to discharge their other duties in such a manner as to promote the operational effectiveness of water and sewerage undertakings as well as economy and efficiency.
When these matters were debated in another place, I was interested to see the manner in which Mrs. Emma Nicholson, the Member for Torridge and Devon West, sought to elaborate on the necessity in the consumer interest for those three elements. She likened the water industry in this respect to buying a cake. She said: "When I buy a cake, I expect the cook to have baked it economically so that the price is right, efficiently so that the icing does not run, and effectively so that my energy rises as I consume the best and purest British butter, eggs and flour."
The analogy is apt, and in relation to the water industry the distinction is obvious. Consumers should have a right to expect the service to be run economically so that the price is no higher than necessary, efficiently, so that supply failures and defects are kept to a minimum, and effectively so that resources are used in the best possible fashion to produce the highest possible standard of service.
I think that it is a matter of regret that the Government have not taken this recognition of consumer interest so far as to make provision for the promotion of the third of these expectations, which is effectiveness. That they have not done so evidences a singular misunderstanding of the fact that the interests of the undertakers after privatisation will not always or automatically be the same as those of consumers. The fact that profit may be a conflicting interest is recognised in the system of price control. That efficiency may be a conflicting interest is recognised in the customer charter. That effectiveness may be a conflicting interest is not, however, recognised. This amendment would put
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right that lack of recognition and so correct what we consider to be the Government's singular misunderstanding.
The misunderstanding could be cynically interpreted as a lack of sincerity in seeking to promote consumers—and there are doubtless many who would interpret it as such. I make no such allegation. We think that this is a worthy amendment, and we invite the Minister and the Government to add it to the Bill. I beg to move.
The Earl of Caithness: Amendment No. 86 would require the Secretary of State and director general in exercising their relevant powers to promote not only economy and efficiency in the way undertakers carry out their functions but also to promote effectiveness.
It may be helpful to remind the Committee of the scope of this clause. In the main the requirements of this clause will bite on the actions of the Secretary of State and the director general under Chapter I of Part II of the Bill—in other words, in the appointment of water and sewerage undertakers and in the enforcement of many of the duties that will apply to those undertakers through the provisions in the Bill and the conditions in the instrument of appointment.
In considering this amendment we are asked to consider whether the promotion of the effective performance of duties ought to be in the minds of the Secretary of State and director general as they make appointments and enforce duties and so on. I am bound to say that I agree with the proposition that effectiveness should be in the minds of the regulators. Indeed, the effectiveness of those who will provide our water and sewerage services is such an important quality that we decided not to include it in this list of secondary duties in subsection 7(3) but to incorporate it in the primary duties in subsection 7(2).
In our view, an action would be effective if it was successful in producing the desired result or effect; in other words an appointment would be an effective one if it resulted in the proper provision of water and sewerage services throughout the country. And that is precisely the effect of the primary duty in Clause 7(2).
I believe that I have no disagreement with the noble Lord, Lord Graham, and that is why the effect of his amendment is already incorporated in the Bill.
Lord Graham of Edmonton: I am grateful to the Minister for his explanation. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 87;
Page 7, line 22, leave out from second ("undertaker") to end of line 25.
The noble Lord said: This amendment seeks to remove paragraph (d) from Clause 7(3), which speaks of facilitating:
"effective competition … between persons holding or seeking appointments under that Chapter".
In a sense we do not care very much whether the paragraph is there or not, except that it is patent nonsense to pretend that there should be competition between these undertakers, the persons holding or seeking appointments. It is an insult to put into legislation the pretence, which has already been adequately exploded, that there is any real competition between them.
As has been said by many noble Lords from all sides of the Committee, water is a natural monopoly. It is a natural monopoly because, above all, the fixed costs of distribution—the costs of the piping and so on—are enormously higher than the marginal costs of distribution. The economic theory about monopoly—and I could go back further than Adam Smith but I do not think that in present company it would be welcomed—is that it brings with it higher prices, lower output and surplus profit at the expense of consumers. I do not think that anybody since Adam Smith, neither the more conventional economists nor the Marxist economists such as Joan Robinson, have questioned that view.
The Water Authorities Association, whose company chairmen at any rate have a strong financial interest in privatisation, has put forward a series of arguments seeking to show that there would be effective competition for consumers among the new privatised water companies. We have not heard very much of them in this Chamber since the Bill reached us and for a very good reason: they are all nonsense.
The idea that there should be comparative competition between companies on the basis of the capital market is patently absurd when we have been hearing from the noble Lord, Lord Jenkin, as well as from the Minister, that none of us has the faintest idea of the way in which the capital market will react to the privatisation of water. The idea that there should be competition at the margin between one water company and another in large industrial sites or in greenfield sites is not so much absurd as trivial. The idea that there should be competition in terms of return on capital for shareholders as between one and another is pretty absurd because it is already clear that the Government will not be able to set a single figure of K for all the new water companies or for the old statutory water companies. If there were a single figure of K which were applicable to all of them for prices, that might just about provide a measure of competition. However, that will clearly be impossible and we shall have different Ks for all these companies, or for groups of companies. I have no doubt that they will succeed in rationalising the position a little. If the Government cannot determine the appropriate price, how on earth can the shareholders or consumers do so?
We are saying that there is no such thing as competition. This is a natural monopoly. The competition arguments that have been put forward have no validity whatsoever. Let us not pretend by putting them in the Bill. Let us take out this quite unnecessary subsection. I beg to move.
The Earl of Caithness: I hope that the Committee will bear with me, even at this late hour of night. I want to give the noble Lord a full reply.
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Amendment No. 87 would remove the duty on the Secretary of State and director general to facilitate effective competition between those holding or seeking appointment as water or sewerage undertakers. The effect of this amendment would be to undermine the operation of the appointment structure proposed in Chapter I of Part II of this Bill and, for reasons for which I shall explain, ultimately the water consumer would suffer.
I do not argue with the general statement that water is a natural monopoly. For most of us, there will only be one undertaker and so the competition between companies to attract consumers to their product is not a competition that we shall ever see in this industry. The scope for competition—in the sense of competition between suppliers of other goods—is limited essentially to the boundaries of the areas served by the companies supply water and sewerage services. But in practice there will be significant competition between companies in the framework set out in this Bill.
In the financial markets there will be pressures to displace weak management, and the returns for shareholders in well managed companies will be a constant spur to efficiency and improved performance, from which both customers and shareholders will benefit.
Then there is competition between persons seeking appointments. In the first instance the successor water companies and the statutory water companies will be appointed as undertakers for their present areas of supply. On a later clause we shall discuss the possible termination of appointments. But if notice of termination of appointment is given, or in the event of the appointment of the special administrator to transfer functions to another company, the duty to promote competition between persons seeking appointments will be relevant and in the interests of consumers and members and creditors of the outgoing company alike. It has often been said that the water industry is the natural monopoly par excellence. That is true in the sense that it will be wasteful and disruptive to lay down systems of pipework to give domestic consumers a choice at the tap. It is worth remembering that the industry will find that not all its potential customers are bound to accept its services. Some industrial concerns are able to turn to alternative supplies, perhaps by extracting from a river direct rather than taking water from a water company. That choice will provide a spur to the privatised water industry.
In addition, the Bill provides a specific opportunity for direct competition between water service plcs on development sites where there is at present no water or sewerage infrastructure but where there is in future to be housing development, a shopping centre, an industrial estate, a factory development or even a new town. In such areas there will be an opportunity for companies which do not hold the appointment for the wider area to apply for the appointment to provide the new services.
Finally, there is yardstick or comparative competition. There will be 10 privatised water and sewerage businesses, which will be directly comparable with each other in the services they provide. Those 10 companies will additionally be

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comparable in the provision of water supplies with the statutory water companies. The ability of shareholders in the financial market, the companies' customers and the financial commentators, and, perhaps most important of all, the Director General of Water Services, to make direct comparisons between companies as to their standard of service, their efficiency and potential will be a most important area of competition. Privatisation will clarify the costs that the industry faces; objectives will be clear, as will the expenditure programmes needed to meet them.
There will be scope to make comparisons and assess performance and pressure on each company to demonstrate that its performance is effective and competitive. These therefore are several ways in which the competition will benefit the consumer, the shareholder and the taxpayer, but it will be important for the regulators to take account of the need to foster such competition as they determine the regulatory framework. We therefore strongly oppose the sentiment behind Amendment No. 87. I hope that the noble Lord, having listened to what I have said, will feel able to withdraw it.
Lord McIntosh of Haringey: I suppose this amendment has had an interesting result in that, although I fondly imagined that the phoney arguments that there would be meaningful competition for the privatised water industry were dead and buried, they have been exhumed by the noble Earl in his reply. The problem with this answer—an answer which closely reflected that given by the Minister in another place, that in practice there will be significant competition—is that the requirement for the competition to be effective is that the director must have some kind of performance review procedure. That is the meaning of this subsection, if it has any meaning in it whatsoever.
The trouble with the case for a performance review is that, first, the information required for the system to operate will not be available. Even the Audit Commission, which carries out the comparable performance reviews into local authorities, does not claim that its performance review does anything more than ask questions and help the local authority to ask questions, rather than provide answers. Secondly, it is clear that the director will not have the ability to make accurate comparisons between different water companies. If there was the ability to do that, it would be possible to have a single price determination factor for all the new water companies.
The Government have already abandoned that attempt and by abandoning it they have abandoned any attempt at meaningful competition between the new water companies. The fact is that the geophysical realities which exist in different parts of the country are overwhelmingly more important than the differences in efficiency between the different companies. Prices will be different for reasons which are completely outwith the ability of the new water companies to do anything.
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We cannot have any confidence whatsoever in comparative competition, which the Minister has revived again.
Lord Jenkin of Roding: The noble Lord is seeking, as he has before, to rubbish the concept of comparative competition, or emulation as it is sometimes referred to. Has he studied the paragraphs in the Monopolies and Mergers Commission report which was referred to earlier this afternoon where these matters are examined in some detail as to how far it is possible to produce comparisons, cost figures and performance indicators in a way which can produce meaningful comparisons between different authorities with different geophysical factors in different geographical areas and so on? It is all there. It can be done.
Lord McIntosh of Haringey: I have studied the relevant parts of that Monopolies and Mergers Commission report. I do not claim that I have read the whole thing, but the report was concerned with a single application of a single water authority and the statutory water companies within that authority. That is not the same as saying that it is possible to carry out comparisons across the whole country, which is what the capital market is supposed to do if there is to be meaningful comparative competition.
I repeat, if there were any way of having meaningful comparisons which would enable competitive judgments to be made, then there could be a single value for K across the whole country. The Government, having flirted with that idea, have totally abandoned it. Comparative competition is therefore a dead duck and ought not to be on the face of the Bill. This again is a matter which it is not appropriate to divide the Committee on at this time of night. I seem to be fated not to be allowed to wind up my speech.
The Earl of Caithness: I interrupt the noble Lord to make an important announcement which I am sure all Members present will wish to know. I should like to report that the dowager Lady Hesketh has taken Towcester and District as a Conservative gain. That shows our commitment to local government.
Lord McIntosh of Haringey: I am sorry that we have detained the noble Lord, Lord Hesketh, from the celebrations. I hope that she took it from a Democrat and not from a Labour councillor.
The Earl of Caithness: It was a Liberal.
Lord McIntosh of Haringey: I thought that that might be the case and it lessens the pain somewhat. I hope that the noble Lord, Lord Hesketh, will convey our totally non-partisan familial congratulations to the dowager Lady Hesketh.
Perhaps I may be permitted to conclude my remarks. It is totally inappropriate for this Bill to contain reference to a concept of competition for a privatised water industry which is a figment of the imagination of the chairman of the water authorities and certain people in government. I believe that the truth of that will come home very rapidly if and

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when the Bill becomes law. However, at this time of night I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Addington Lord Addington moved Amendment No. 88:
Page 7. line 25, at end insert—
("(e) to safeguard the quality of water.").
The noble Lord said: The amendment is introduced into Clause 7(3). The subsection sets out the criterion under which the director is to exercise the powers granted to him by the Bill. The amendment would require him to have the duty to exercise his powers to safeguard the quality of water.
In taking decisions as to pricing, he may have to consider proposals by the undertakers to spend money on water quality or on sewerage undertakers' improvements to their works. As his main concern is economy and fair pricing, he may say that expenditure should not be made but rather that prices should be reduced. Equally, in enforcing the duties to undertake, he may have need to conserve water quality matters. But if his concern is economy and efficiency, these matters will be left out of the question. He should have a duty to consider the need to safeguard the quality of water.
I do not believe that the amendment is out of place as the noble Earl, Lord Caithness, has reminded the Committee that the Bill is regarded as being environmental.
I should also like to add my congratulations to the dowager Lady Hesketh. I can hope only that she does not hold the seat for very long. I beg to move.
Earl Russell: I am surprised that the amendment is necessary. One would have expected a clause setting out the duties of the director—particularly coming from so consciously green a government—to include an assurance that it is necessary to safeguard the quality of water. I hope that when the noble Earl comes to reply he may possibly say, as did one of my friends after completing his final examinations, that he had left out all the obvious points because he thought that the examiners knew them.
However, more seriously, we are getting a certain series of words recurring regularly in Bill after Bill emanating from many different departments. In particular, there is an obligation to promote economy and efficiency. The use of the word "effectiveness" is taken very much in that context.
When I find a common form of words recurring over and over again in Bills which come out of different departments, I want to look for the common source. It is with that common source and the thinking behind it that I should like to try to engage tonight. I can recall the same issue coming up in the education Bill when I put down an amendment concerning the powers of the university commissioners. That was very properly shot down on the grounds that it was not sufficiently properly drafted. However, I believe that the quality of water is something in regard to the precision of which there cannot be very much doubt. That is something which is quantifiable and measurable, indeed, it is daily measured.
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We on these Benches have no objection to the notion of effectiveness. We want to ask, like Lady Bracknell, "to effect what?" because this is where we are not entirely confident of the Government's thinking. We have the same problem as with the word "efficiency" which is regularly used in government circles as a synonym for cheapness. We do not believe that that is the only way of being efficient. We do not believe that making profits is the only way of being effective, and we do not want a word like "effectiveness" in this Bill unless it is spelt out, unless the object which is to be effectively carried out is one in which quality matters.
The legislation of this Government seems to me constantly to be acquiring a more medieval flavour. It is developing a hortatory quality. They do not, at least, say that that which they wish to prohibit is to the high displeasure of Almighty God, but that sort of tone is emerging. A hortatory quality matters.
I shall take as an illustration the appointment of Mr. Bright to London Regional Transport. He was under an obligation to promote efficiency, economy and safety. His letter of appointment from the Secretary of State instructed him to promote economy and efficiency. It omitted to mention safety. We all know that that letter of appointment was listened to and that the consequences were serious.
We on these Benches would not like to see the same mistake made twice. Quality of water is an issue of safety and we should like that written into the Bill, so that we do not need to have a major report before money is spent on it.
The Earl of Caithness: The noble Earl, Lord Russell, said that he was surprised that the amendment was necessary. I must tell him that it is not necessary, for such an additional duty as is contained in this amendment would be otiose.
As I have said before, the fundamental duty in Clause 7(2) is to ensure that the functions are properly carried out. That phrase "properly carried out" carries with it the concept of functions being carried out in accordance with all the various duties under this Bill. Before the noble Lord, Lord Addington, spoke to this amendment, I was not sure whether the quality of water to be safeguarded under this amendment was drinking or river water. However, it does not matter what was intended, for elsewhere in the Bill the Secretary of State is bound to set drinking water quality standards and river quality objectives. In other words, there is no need to duplicate in Clause 7 every one of the obligations on the Secretary of State and director general which appear elsewhere in the Bill.
Lord Addington: The object of this amendment is to make sure that general water quality in all its facets is put down as a totem as early as possible and for that to be included in Clause 7. However, as the hour is late and I am fatigued, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Addington: I have a message from the noble Lord, Lord Lloyd of Kilgerran, that he regrets that he is not able to be here at this late hour, but that, in view of the debate, he has decided not to move Amendment No. 88A at this stage.
[Amendment No. 88A not moved.]
[Amendment No. 89 not moved.]
11.30 p.m.
Lord Addington Lord Addington moved Amendment No. 90:
Page 7, line 35, at end insert—
("Provided that the Authority may disregard any duty of an undertaker to exercise its functions in an economic and efficient manner where it considers it necessary to do so for the protection of amenity and the environment.").
The noble Lord said: I move this amendment standing in the name of my noble friend Lord Ezra. This amendment is to Clause 7(5), which effectively subordinates the authorities to the undertakers by requiring them to have regard to the duty of promoting economy and efficiency. Thus, if an authority wishes to promote a scheme to protect the environment in a particular area but an undertaker says that the scheme would make one of its functions less economical, the scheme may have to be abandoned. This amendment allows the authority to disregard these duties where it considers it necessary to protect the amenity and the environment. I beg to move.
Earl Russell: This is not an unnecessary amendment. When one considers the costs of a utility company it may often be found, in the short term, to be economical to lay down pipes, place reservoirs or build dams in a way which is thoroughly unsightly. Environmental groups may ask them not to do so, but with the Bill as presently drafted a company can say that it is entitled to do so and that it is under an obligation to discharge is functions economically and efficiently and that it cannot be done in any other way.
It can be done. I ask the noble Earl to take some trouble to inform himself on how these duties are discharged in California where there is some concern about these matters; in particular, the water company in East Bay—the East Bay Municipal Utilities Department, known most uneuphoniously as EBMUD. Despite its name, it does an excellent job of safeguarding the environment and securing access to it. I would be happy to know that anything as good could be done here, but I do not think that will happen unless more precision is given to the objectives, and the narrow interpretation of "economy and efficiency" is not given the sort of unique primacy which it enjoys at present.
Lord McIntosh of Haringey: I did not intend to intervene but I am tempted by the noble Earl's reference to East Bay, having worked nights in a canning factory in Emeryville at the foot of the Oakland Bay bridge one summer in 1957. As I remember it, my canning factory was sending out very nasty effluents into the bay. I am delighted to hear from the noble Earl that that is no longer possible.
The Earl of Arran: It will come as no surprise to the Committee that regrettably I am not too well informed about the state of California.
Perhaps I may briefly deal with the amendment. The Government fully share the general concern for the need to safeguard the environment and we are fully committed to an effective NRA as a strong independent environmental body to regulate the water environment. The powers that we are giving to the NRA in this Bill are quite sufficient to ensure that this will happen. But to be a responsible regulatory body, it is only right that the NRA should take full account of the concerns of the water undertakers. Sensible environmental policies cannot be developed by ignoring other interests, or pretending that they do not exist. What is needed is the information to make a balanced judgment, particularly where there may be a conflict between different interests.
We are satisfied that the present wording of Clause 7(5) provides the right balance. It recognises the particular importance of the water supply and sewerage businesses and that these must be fully taken into consideration by the NRA in carrying out functions. But it does not constrain the NRA from deciding in a particular case that some other concern, such as the protection of the environment, should take precedence.
I therefore hope I can persuade the noble Lord, with that assurance, to withdraw this amendment.
Lord Addington: I must admit that I should prefer stronger wording about protection of the environment throughout the Bill, so I cannot pretend to be completely happy with the Minister's response; but I am prepared to accept it at this stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 91 not moved.]
Clause 7 agreed to.
The Earl of Arran: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.
House adjourned at twenty-five minutes before midnight.

  SALMON DEALER LICENSING PROPOSALS
  SALMON DEALER LICENSING PROPOSALS
  FAMILY CREDIT FORMS: AVAILABILITY
  FAMILY CREDIT FORMS: AVAILABILITY
  KATYN MASSACRE
  KATYN MASSACRE
  PEACETIME EMERGENCIES: FUNDING
  PEACETIME EMERGENCIES: FUNDING