Sitting of 16 May 1989

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

    Skill Training
    Mr. Jack: To ask the Secretary of State for Employment what plans he has to stimulate skills training in the tourism and catering industries; and if he will make a statement.
    The Parliamentary Under-Secretary of State for Employment (Mr. John Lee): Skills training is crucial to secure the quality and professionalism which the tourism and catering industries need to keep their competitive edge. The Government are helping across the full range of training programmes, including the youth training scheme, employment training and the newly launched business growth training, and are working with the industry through the tourism training initiative. The emerging network of training and enterprise councils will provide a further boost for skills training.
    Mr. Jack: I thank my hon. Friend for that encouraging answer. He will be aware of the excellent contribution being made to training in catering and tourism by Blackpool and Fylde college. Does my Friend feel that with more than 1,000 people coming into this industry every week enough is being done elsewhere to meet the industry's training needs?
    Mr. Lee: My hon. Friend is right about the Blackpool and Fylde college. The close liaison between the college and the hoteliers of Blackpool in tailoring training to fit employers' needs is widely regarded as exemplary. The industry is seeking to recruit nearly 1,000 new employees per week. There are far more people than ever before in training for our tourism and hospitality industries and there are an increasing number of courses right across the country, be we need even more.
    Ms. Short: Is the Minister aware that the problem of low pay is great and growing in catering and tourism? Does he not understand that the problem with the whole of the Government's strategy is that if they keep encouraging low pay, we cannot achieve higher standards of skill and the proper management of enterprise because the two aims are contradictory? When will the Government give up their obsession with low pay so that we can achieve decent standard in industry and employment?
    Mr. Lee: The hon. Lady asks the same question almost every Employment Question Time. The answer is that the industry increasingly is improving its remuneration package and far more people than ever before are realising the industry's potential for career opportunities.
    Dame Elaine Kellett-Bowman: Is my hon. Friend aware of the excellent courses available in catering and similar subjects at the Lancaster and Morecambe college of further education, which is one reason why unemployment in our area has fallen yet again?
    Mr. Lee: Yes, my hon. Friend is absolutely right. The courses at the Lancaster and Morecambe college are excellent and I have visited the college. I must point out that the college head was trained in my own constituency, at Nelson and Colne college, and I have a high regard for him.

    Statutory Wage Provisions
    Mr. McAvoy: To ask the Secretary of State for Employment if he will give details of which European Community countries have statutory wage provisions.
    The Minister of State, Department of Employment (Mr. John Cope): Five EC countries—France, Netherlands, Spain, Portugal and Luxembourg—have a statutory national minimum wage on various bases. Ireland and the United Kingdom have statutory minimum rates of pay in certain industries.
    Mr. McAvoy: Does the Minister agree that the. United Kingdom and Ireland are at the bottom of the league in terms of low pay for workers and protection for those workers? Should not the Government be trying to improve their record instead of undermining and trying to destroy the wages council structure?
    Mr. Cope: I rather agree with the report that Mrs. Barbara Castle produced when she was doing our job.
    Ms. Short: That is a bit old hat. It was 1968.
    Mr. Cope: She said:
    "The introduction of a national minimum will add to labour costs. This could in turn increase the level of unemployment."
    We are doing much better in employment than all the other countries of the European Community put together, and that is what counts most.
    Mr. Redwood: Will my right hon. Friend confirm that the Government will make strong representations against any increase in social regulation from Brussels which might damage employment-generating prospects and that they will be especially vigilant to preserve the flexibility of the English labour market?
    Mr. Cope: Yes, indeed, for the reasons that I gave in answer to the previous questioner.
    Mr. Nellist: I wonder whether the Minister remembers the Chancellor of the Exchequer saying on television on 28 April:
    "half average earnings in this country, which is poor; that's poor—half average earnings."
    Given that the wages council structure pays on average £30 less than the Treasury definition of poverty, why is the Minister still proposing to abolish the wages councils?
    Mr. Cope: We are consulting about the abolition of the wages councils and we shall consider the results of those consultations when we see them.
    Mr. Hill: Does my right hon. Friend agree that one of the great myths of the Community is that one can bring out statistics to prove that we should all abide by the same rules on salary and conditions of work and that almost anything that happens in the workplace can be regularised throughout the Community? Despite that myth, however, does he agree that each country has different living standards, different costs of living and different indices and that in the short term it is impossible to have a standard answer for every occasion when such foolish questions are asked of the Department of Employment?
    Mr. Cope: I agree that not only the statistics but the traditions of wage bargaining and similar arrangements are different in the different countries. They are not comparable one with another. However, all sorts of studies have shown that minimum wages tend to increase unemployment.
    Mr. Meacher: When the Secretary of State leapt to the defence of the Prime Minister's attack on the supposed European Socialist superstate, did he include in that the minimum wage provisions in the EEC? Is he aware that Britain is the only country in the EEC with neither a statutory minimum wage nor any statutory underpinning of collective bargaining, which amounts to the same thing? Do the Secretary of State and the Prime Minister not realise that the risk after 1992 is not of a Socialist superstate but of a capitalist jungle in which bad employers will compete, not by improving quality and price, but by driving down working conditions?
    Mr. Cope: I am surprised at some aspects of the hon. Gentleman's question. He spends a lot of time telling us that we are doing the wrong thing by introducing statutory controls and statutory arrangements into free collective bargaining, but he has just urged us to follow the example of European countries which have greater statutory controls on free collective bargaining.
    Mr. Sayeed: As those without jobs are the poorest in our society, should we not try to reduce the barriers to employment rather than increasing them?
    Mr. Cope: I entirely agree with my hon. Friend.

    Skill Centres
    Mr. Dalyell: To ask the Secretary of State for Employment if he will make a statement on progress towards the privatisation of skill centres.
    The Secretary of State for Employment (Mr. Norman Fowler): Preparations are well advanced to offer the Skills Training Agency for sale by private tender. All preliminary expressions of interest are being recorded by the Government's sale advisers, including the proposals for a management buy-out.
    Mr. Dalyell: What is the figure in the Secretary of State's brief for the amount that the Government hope to raise through the sale of skill centre land and buildings?
    Mr. Fowler: The straight answer to that is that we are taking advice from property advisers on that point. I am glad that we have now been able to employ property
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    advisers. They are in the process of valuing the sites and clearly the Government will want a fair price for those sites.
    Mr Paice: Will my right hon. Friend confirm that he will consider applications and proposals to purchase individual skills centres rather than just the national network? Will he also confirm that selling skill centres into the private sector will put them in a better position to provide the flexible response that the private sector has already clearly demonstrated that it is able to do?
    Mr. Fowler: I entirely agree, especially with my hon. Friend's second point. At the moment we have had about 40 expressions of interest in the purchase of skill centres, and they will be considered. It must be understood that the present position of the Skills Training Agency is not sustainable. About one third of the centres are seriously underused and are now making a loss approaching £20 million per year.
    Mr. Tony Lloyd: Will the Secretary of State confirm that the Deptford skills centre is on freehold land which already has B1 planning permission? Will he speculate on what that site will be worth on the open market in that part of London? What did the Minister of State mean when he told me in a written answer that he would make provision for the Government to share in any development gains—not to take them, but simply to share in those windfall gains? Why are the public not to have the full value of any increase in those assets?
    Mr. Fowler: It is certainly the Government's aim that the public should have the full value of the sites. However, I do not believe that it would be sensible for me to speculate about the value of a particular site, especially as we have just appointed a firm of surveyors to carry out the exact exercise required by the hon. Gentleman. Surveyors were appointed following a competitive tender, which is a sensible and businesslike approach.
    Mr. Harry Greenway: Will my right hon. Friend take note of the unsatisfactory situation at the Perivale skill centre in my constituency, which is managed from the Twickenham skill centre some considerable distance away although all the jobs and industry are in the Perivale area? Will my right hon. Friend seek to achieve the division of the management of those two skill centres before any privatisation?
    Mr. Fowler: It will not be before privatisation, because privatisation will take place over the next few months, but I will ask my advisers on the privatisation to take that into account.
    Mr. Dalyell: In view of the unsatisfactory nature of the Minister's reply, I beg to give notice that I shall seek to raise the matter on the Adjournment at the earliest opportunity.

    Disabled People
    Mr. Wareing: To ask the Secretary of State for Employment what plans he has to eradicate discrimination against disabled people in employment and seeking employment.
    Mr. Lee: It is in the employer's interest to adopt good policies and practices on the employment of people with

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    disabilities. My Department will continue to encourage and help them to do so through its disablement advisory service and other appropriate media.
    Mr. Wareing: The Minister's Department has not been very successful. Does the Minister realise that only 31 per cent. of disabled people below pension age are in jobs? Will he explain why it is illegal to discriminate in employment against a person because of colour or sex, but it remains lawful for any employer to discriminate against a person because of his or her disability? Will the Government legislate to do something about that problem?
    Mr. Lee: On the hon. Gentleman's first point, he will know that statistics are rather thin in that area—
    Mr. Wareing: There is the OPCS survey.
    Mr. Lee: The Department has therefore commissioned a study to provide information on the numbers, the distribution, the characteristics and the needs of people with disabilities in the labour market. We hope to have the results by the year end.
    The hon. Gentleman knows, because he has repeatedly asked for legislation in this area, that the Government do not favour a legislative approach.
    Mr. Evennett: Does my hon. Friend agree that it is much better to encourage employers and to give them practical help than to legislate?
    Mr. Lee: My hon. Friend is right. Through our mainstream programmes during 1987–88, we helped about 117,000 people at a cost of £193 million, and through our programme specifically geared to help the disabled we helped 78,000 people at a cost of £135 million.
    Mr. Alfred Morris: Do not the OPCS figures referred to by my hon. Friend the Member for Liverpool, West Derby (Mr. Wareing) shout of discrimination against disabled people? Is the hon. Gentleman aware that even those with jobs were found to be mainly on very low pay? What is the hon. Gentleman's response to the report of Dr. Eileen Fry on discrimination against disabled people in employment? What does the hon. Gentleman have to say about the case that is known to the Royal Association for Disability and Rehabilitation—RADAR—where a public employer recruited a disabled young woman only to exclude her from the superannuation scheme because of her disability?
    Mr. Lee: If the right hon. Gentleman writes to me about that particular case, I will look into it. On his earlier points, I repeat that the Government do not favour the legislative route. Nevetheless, as the right hon. Gentleman knows, we have instituted a major review of our whole approach to the disabled in employment and, of course, there is the earlier study to which I referred.

    Tourist Accommodation (Classification)
    Mr. Butterfill: To ask the Secretary of State for Employment what progress he is making towards agreement on a common classification scheme for hotels, boarding houses and self-catering accommodation throughout the United Kingdom.
    Mr. Lee: The tourist boards for England, Scotland and Wales have now agreed common criteria for their classification and grading scheme for serviced accommodation. The English and Scottish boards have reached
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    agreement on uniform criteria for self-catering accommodation. The English tourist board plans to begin inspections using the new criteria in September 1989, and to include the new classifications in accommodation guides for the 1991 season.
    Mr. Butterfill: I am most grateful to my hon. Friend and I am pleased to hear his answer, but it seems to imply that there will be different classification schemes for the catered and non-catered sectors. I should be grateful if he would confirm whether that is the case. If so, is it not rather unsatisfactory and likely to confuse the general public? Would it not be better to have a symbol common to both but different in some way, such as a filled-in crown for the catering sector to show that the inner man is being looked after, and an outline crown for the non-catered sector?
    Mr. Lee: My hon. Friend has written to me on that point. I understand that the English tourist board considered an outline crown symbol for self-catering, but it was rejected because it wanted to draw a clear distinction between serviced and self-catering accommodation. My latest understanding is that it is proposing a key containing a crown, so there is an element of compromise.
    Mr. Kennedy: Will the Minister use his offices to encourage the English tourist board to reach a final agreement on the matter? The Scottish self-catering sector is concerned that the general aim, which everyone should endorse, of a common crown system throughout the United Kingdom is to some extent being thwarted because of what is probably an unnecessarily severe view on the part of the English tourist board about the discerning abilities of the public with regard to self-catering and fully-supportive holiday accommodation, as the hon. Member for Bournemouth, West (Mr. Butterfill) said.
    Mr. Lee: The hon. Gentleman is right. We want to move towards common criteria. I should have thought that the hon. Gentleman would welcome the fact that the changes that I have announced move increasingly towards the Scottish system, in which the classification introduces a quality assessment—something that we do not have in England.
    Mr. Key: I thank my hon. Friend for his progress report, which will be welcome in Wessex where many farmers are seeking to diversify in that area. However, who is to bear the cost of the new classification and what plans does my hon. Friend have for revising and updating the guide, as that is a crucial aspect?
    Mr. Lee: We hope that in the long term the classification scheme will become self-financing, but in the short term, we estimate that it will cost about £468,000 net in 1989–90, which I hope will he reduced to about £300,000 net by 1992–93.

    YTS
    Mr. Ian Bruce: To ask the Secretary of State for Employment what reduction there has been in the number of people on YTS in the past 12 months; and if he will make a statement on the likely future trends of YTS.
    Mr. Cope: About 390,000 young people were in training on YTS in both March 1988 and March 1989. We

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    keep the scope and role of YTS under review to ensure that training for young people continues to meet the changing needs of the economy.
    Mr. Bruce: I thank my hon. Friend for that answer. I am surprised that nationally YTS numbers have not yet started to fall, although they have clearly evened out. In the south-east, and in my constituency of south Dorset the number on youth training schemes is declining as a result of demographic changes and extra jobs. As the number of people on youth training schemes declines, how can the current level of spending on training be redirected to other forms of training and to helping people to obtain a real technological education?
    Mr. Cope: We believe in improving the quality of training and we are trying to achieve that. In particular, we are having a greater drive towards youth training schemes resulting in qualifications. That is all part of the greater concentration on the outcome of training schemes. At present about 63 per cent. of those who complete youth training schemes gain qualifications.
    Mr. Alex Carlile: Does the hon. Gentleman agree that in Wales and some other regions there has been difficulty in finding suitable quality trainers for YTS? Will he ensure that the training and enterprise councils have sufficient funds to recruit trainers and to keep an ongoing check on the quality of training that they provide for young people?
    Mr. Cope: Yes. Part of the point of the training and enterprise councils is to involve employers more so as to improve the quality of the training offered, not only on YTS but on other schemes as well.
    Mr. Latham: As the construction industry training board is the managing agent for YTS in the construction industry, and as that industry's training record is abysmal, is it not clearly important that the construction industry training board should be retained?
    Mr. Cope: My hon. Friend will know that we have that matter under consideration, and that it follows from what was said in the recent White Paper.
    Mr. Fatchett: Given the question posed by the Minister's hon. Friend the Member for Dorset, South (Mr. Bruce) and the possible decrease in the number of YTS trainees, what measures will the Government take to ensure that 16-year-olds who find immediate employment on leaving school also find employment which guarantees training opportunities? If they do not, will there not be a danger that those youngsters will find themselves with no training, no hope and no future jobs?
    Mr. Cope: The labour market for young people is changing as their numbers decrease and their bargaining power in the market increases. However, the system should remain voluntary because not all young people want to be forced into a job that guarantees particular arrangements. That thinking underlies all our policies. It is also why we intend, as I said earlier, to improve the quality of YTS training.

    Jobcentres
    Mr. Arbuthnot: To ask the Secretary of State for Employment how many people have consulted jobcentres in the last 12 months; and if he will make a statement.
    Mr. Lee: Precise information is not available. However, I would expect the total to be broadly similar to the 29 million inquiries recorded in 1985–86, the last year for which comprehensive information is available.
    Mr. Arbuthnot: What proportion of the inquiries received by jobcentres came from the unemployed and from job changers, and how many people were placed in jobs as a result of those inquiries?
    Mr. Lee: The last information that we have is from a sample survey in 1987, which indicated that about 83 per cent. of unemployed claimants used the jobcentre network. In 1988–89, 1·9 million job seekers, 1·5 million of whom were unemployed, were placed in jobs.
    Mr. Leighton: Are not the numbers of staff in jobcentres now being reduced? The Under-Secretary of State has an opportunity to provide a better service to the unemployed. Why is he throwing that away?
    Mr. Lee: I have to make the point—I am sure that the hon. Gentleman is well aware of it—that unemployment is falling substantially. Therefore, we obviously have to look at the jobcentre network. Having said that, we are at the same time trying to improve the quality of service for those individuals who are, sadly, unemployed. Even at present, the jobcentre network employs about 6,800 people.
    Mr. Devlin: Why does not my hon. Friend consider merging jobcentres and unemployment offices as quite a few people still seem to get lost somewhere between the two? It seems self-evident that people who are registering as unemployed should be directed at least to somewhere in the same building so that they can be found employment as quickly as possible.
    Mr. Lee: My hon. Friend has a good point. Obviously, we have been thinking about this, and there have been 79 pilot schemes in which we have considered the options for integrating unemployment benefit offices and jobcentres. As he will know, the employment service is intended for agency status.
    Mr. McAllion: Does the Minister not understand that one of the main barriers against people finding work at present is that more than 150 major United Kingdom employers are buying personnel management systems which claim, on the basis of a 15-minute pencil and paper test, to establish the honesty and emotional stability of job applicants? Does the Minister approve of employers taking such a crude approach or does he intend to do something to stop that abuse?
    Mr. Lee: With respect, I am not sure that I fully understood the hon. Gentleman's question. With regard to the employment service for which my Department is responsible, I should have thought that the placement figures that I gave earlier indicated the success of what we are trying to do.

    Employment Training
    Mr. Riddick: To ask the Secretary of State for Employment what progress has been made on employment training in Yorkshire since its inception; and if he will make a statement.
    Mr. Fowler: Employment training continues to make excellent progress in Yorkshire. Almost 20,000 people are currently in training. This reflects the success of employment training across the country.
    Mr. Riddick: Does not that reply show that employment training is proving highly successful in the Yorkshire area—perhaps more so there than in any other area of the United Kingdom? Would my right hon. Friend care to join me in congratulating the training agencies in and near my constituency—for example, the Kirklees chamber of commerce—for responding so positively to the challenges presented to them by employment training?
    Mr. Fowler: I entirely endorse what my hon. Friend says, particularly about Kirklees chamber of commerce, which I know and admire. I am glad to say that in Yorkshire generally, unemployment has fallen by an average 24 per cent. in the past 12 months.
    Mr. Hardy: There may be some effective operations in Yorkshire, but does the Secretary of State accept that he should be aware—if he is not, some of his colleagues in the Department should be—that there are grounds for serious concern in certain parts of Yorkshire, and certainly in the metropolitan area of Rotherham, which deserve serious attention?
    Mr. Fowler: I shall certainly look into any points that the hon. Gentleman wants me to consider. After only eight months in operation employment training now has about 185,000 people in training—the best start for any adult training programme that we have ever launched.

    Strikes
    Mr. Yeo: To ask the Secretary of State for Employment if he will make a statement on the work days lost through strikes in (a) February 1979 and (b) February 1989.
    Mr. Fowler: Nearly 2·5 million days were lost through strikes in February 1979. In February 1989, it is provisionally estimated that 58,000 working days were lost. In the year to February 1989, 3 million working days were lost. In the year to February 1979, 13·3 million working days were lost. It is in everyone's interest that this improvement should be maintained.
    Mr. Yeo: Does my right hon. Friend agree that one absolutely certain way of increasing the number of days lost through strikes would be to repeal the Government's employment legislation, as some union bosses want their lackeys in the Labour party to do?
    Mr. Fowler: That is entirely right. Those problems would be made even worse if any of the proposals on the extension of secondary action and secondary picketing were ever adopted in this country. The sort of proposals that the hon. Member for Oldham, West (Mr. Meacher) and the Labour party are putting forward represent a charter for strikes.
    Mr. Bidwell: Does it not appear that as we head towards a summer of discontent, employment legislation is taking this matter out of the hands of trade union leaders to such an extent that unofficial strikes are likely to increase enonnously, as inflation rises and the value of wages falls?
    Mr. Fowler: That is not true. The hon. Gentleman was drawing a comparison with the winter of discontent, when the headlines in February 1979 ran as follows:
    "Health warning as the rubbish piles mount up";
    "Ambulance men walking out";
    and
    "Strike in children's wards".
    That was the record of the Labour Government, of which the hon. Member for Oldham, West was a prominent member.
    Mr. Madel: Does my right hon. Friend agree that after 10 years of changes in industrial relations law, management still has a responsibility clearly to explain to each employee why a particular pay claim can or cannot be accepted? To that extent, does he agree that the country is looking to employers and unions in the electricity supply industry to work out a solution to their problem without industrial disruption?
    Mr. Fowler: Yes, what my hon. Friend says is wise. It is clearly not in the interests of the public or of anyone working in those industries that industrial action should take place.
    Mr. Heller: I ask the right hon. Gentleman to remember that there were no strikes in Hitler's Germany, or in Mussolini's Italy, or in Stalin's Russia, or in Franco's Spain, and that there are no strikes in any country in which legislation makes them illegal. Is the right hon. Gentleman aware that we are getting close to that in this country? People's rights to work or not to work in pursuit of decent conditions are being taken away from them. The right hon. Gentleman had better understand that sooner or later the workers' dam will break—they will not stand for this for ever.
    Mr. Fowler: What the hon. Gentleman has said is, with respect, utter nonsense. It will not be accepted by the vast majority of people in this country. When the hon. Gentleman talks about employment, the fact is that industrial action destroys jobs and does not create jobs. Many people in this country resent the attempt of the Labour party to put unions above the law again.
    Mr. Nicholas Bennett: Will my right hon. Friend not agree that workers' rights have actually been increased under this Government by making sure that they have a secret ballot before they are forced to strike? What does he think of the Labour party's proposals that strikes should start before the workers have been consulted?
    Mr. Fowler: The Labour party, and particularly the hon. Member for Oldham, West, have a great deal of explaining to do about those proposals, and I cannot understand the enthusiasm which appears to be coming from him and Labour Members for industrial action, which cannot be in the interests of anyone in this country.
    Mr. Strang: If the dock employers continue to refuse to negotiate collective agreements with the Transport and General Workers Union to replace the dock labour scheme and the registered dockers come out on strike, will the Government give the port employers the same unconditional support they gave British Coal during the miners' strike?
    Mr. Fowler: There is absolutely no reason for the TGWU to call out the dockers on strike action over the abolition of the dock labour scheme. The port employers

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    have offered talks at port level, which is a sensible step. The only people who will lose out as a result of industrial action in scheme ports are those in the scheme ports themselves, and I hope that will be remembered by all those working in them.

    Wages
    Mr. Clelland: To ask the Secretary of State for Employment how many firms visited in 1988, were paying below the legal wages council minima; and how many were prosecuted.
    Mr. Patrick Nicholls: Wages inspectorate statistics on compliance with wages orders are compiled on the basis of establishments rather than firms.
    In 1988, underpayments were found at 5,597 of the establishments visited. There were 10 prosecutions for underpayment offences.
    Mr. Clelland: Given the fact that 380,000 establishments are covered by wages councils, were not a disgracefully low number visited by inspectors last year? Why have the Government cut the number of inspectors by over 100 per cent.? Even on this small sample, over 17 per cent. of those visited were paying below the statutory minimum, so why were only 0·03 per cent. prosecuted? Is this not another example of the fact that under this Government there is one law for the employers and another for lower-paid workers?
    Mr. Nicholls: No. The hon. Gentleman's conclusion is as false as the statistics that he recited. The fact is that the wages inspectorate concentrates on those establishments which it believes to be underpaying. What it finds when it goes to many of these establishments is that there may be only two or three people being underpaid. If the hon. Gentleman is concerned about the number of prosecutions which take place, he should realise that the number of prosecutions has remained constant under this Government, as under the last.
    Mr. Hayes: Is my hon. Friend aware that even Left-wing economists are now saying that wages councils cause unemployment? Does he not agree that the major cause of poverty is unemployment?
    Mr. Nicholls: That is absolutely right, as my hon. Friend says. The link is indeed well made out. The difficulty with Labour Members is that they cannot see that no job is worse than low pay.
    Mr. Meacher: On the question of very low wages, who does the hon. Gentleman agree with? Does he agree with the Secretary of State for Social Security that wage poverty does not exist—in which case how are three quarters of a million workers caught in a poverty trap where they lose more than 70p of every extra £1 earned—or does he agree with the Chancellor of the Exchequer that workers paid less than half national average earnings are indeed poor—in which case, why have the Government prosecuted only 56 out of more than 88,000 establishments found to be paying illegally low wages?
    Mr. Nicholls: One of the hon. Gentleman's many troubles is that he seems to be prosecution-happy. The point about prosecution policy is that if on a visit it is found that there has not been a blatant disregard of the law but perhaps a mistake, obviously, prosecution may not
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    be appropriate. That was the reason—and the hon. Gentleman would have heard it if he had been listening—why I was able to say to his hon. Friend that the rate of prosecution under this Government has remained the same as it was under the previous Government. My right hon. Friend the Secretary of State for Social Security made a valuable contribution when he said that some people have a vested interest in poverty-mongering. From what we have heard it would appear that that includes the hon. Gentleman.

    Bank Holidays
    Gregory: To ask the Secretary of State for Employment how many representations he has received about changes in dates for national bank holidays; and if he will make a statement.
    Mr. Nicholls: A number of differing views have been expressed to my Department about public holidays, including the first Monday in May. The question of any changes raises several complex issues, which my right hon. Friend is considering.
    Mr. Gregory: My hon. Friend will have noted that there are no bank holidays whatever from the end of August until Christmas and that we have a plethora of them in the spring, which is disruptive for industry. Will he consider resiting or allocating one of those to the autumn? Perhaps we could do our duty by Nelson and make Trafalgar Day a national day.
    Mr. Nicholls: My hon. Friend makes a persuasive point, but there are probably two difficulties. One of them is to try to find some consensus about how the bunching of bank holidays might be accommodated, and the other is to find a place in the calendar to which a bank holiday might be more suited. Many people, probably the overwhelming majority of people, would rather celebrate a British occasion, such as Trafalgar Day, than some inappropriate foreign import such as May Day.
    Mr. Grocott: Does the Minister not agree that the important issue is not which days are being celebrated but how many days' holiday workers are entitled to? Does he further agree that holidays for British workers compare unfavourably with those in other European countries, both in terms of bank holidays and annual holiday entitlement? Is it not time that we had a minimum statutory requirement of six weeks?
    Mr. Nicholls: The issue is rather narrower than that. It is a question whether the present spread of bank holidays is appropriate or whether there is such a bunching that it would be better to dispense with the bunching. It is difficult to find a consensus about how the arrangements might be altered, and that is why my right hon. Friend is considering the matter.
    Mr. Fairbairn: May I suggest to the Minister a simple solution to the need for a national day? It is to change the title of 1 May to Union Day, because that was the glorious day upon which the Act of Union came into force.
    Mr. Nicholls: Not having a clapometer with me I cannot detect whether those who are in favour of Trafalgar Day outnumber those who are in favour of Union Day. Hon. Members will have to make up their own minds.
    Mr. Geraint Howells: Will the Minister consider making St. David's Day a national holiday for the people of Wales?
    Mr. Nicholls: Any alteration in the bank holidays which would give me the opportunity to spend more time in the hon. Gentleman's constituency would be most welcome, as the hon. Gentleman is well aware.

    Self-employment
    Mr. Rowe: To ask the Secretary of State for Employment if he will make a statement on the number of people currently self-employed in the south-east.
    Mr. Cope: In December 1988 there were 1,080,000 self-employed people in the south-east, including London, an increase of 112,000 over the previous two years.
    Mr. Rowe: Does my right hon. Friend agree that that is a remarkable and welcome achievement? Does he also agree that self-employment constitutes one of the very best opportunities for women to establish businesses of their own, that they are taking advantage of that in large numbers, and that even Opposition Members might welcome self-employment as a means of expressing in practical terms equal opportunities for women?
    Mr. Cope: Yes. The number of self-employed women has gone up by about 113 per cent. since 1979.
    Mr. Cryer: Could the Minister explain the basis of this estimated number of self-employed in the south-east? Could he also tell us how many self-employed businesses have gone into liquidation—have gone bust—as a result of the Government's high interest policies which are bearing down on the very small businesses that the Government are supposed to encourage?
    Mr. Cope: The hon. Gentleman knows that interest rates are very important in the control of inflation. I cannot give him a specific figure, because it is difficult to sort out the reasons why individual companies do not succeed. But there is a high success rate among self-employed people and among small businesses generally.

    Labour Statistics
    Mr. Sayeed: To ask the Secretary of State for Employment whether the labour force survey, European Economic Community and Organisation for Economic Co-operation and Development surveys show falls in United Kingdom unemployment; and if he will make a statement.
    Mr. Fowler: The latest labour force survey shows a fall in the number of people unemployed in the internationally agreed definitions of about half a million between the spring of 1987 and the spring of 1988. This confirms the sharp fall in unemployment recorded by the monthly claimant count. United Kingdom unemployment has fallen at a faster rate over the last two years than in any other major industrialised country.
    Mr. Sayeed: Can my right hon. Friend confirm that the measurement of unemployment as shown by the ILO and OECD figures, as well as by the latest labour force survey, reveals the number of unemployed as being lower than the number of claimants registered with his Department? Does
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    that not give the lie to the suggestion that the Government are fiddling the figures? Can he also inform the House of the number of long-term unemployed now compared with the number six years ago?
    Mr. Fowler: My hon. Friend is right on the first point, and we have entirely demolished the gloss that the hon. Member for Oldham, West (Mr. Meacher) has put on the definition. The number of long-term unemployed in January was 821,000, the lowest for more than six years.

  PRIME MINISTER

    Engagements
    Mr. Evennett: To ask the Prime Minister if she will list her official engagements for Tuesday 16 May 1989.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today. This evening I hope to have an audience of her Majesty the Queen.
    Mr. Evennett: Will my right hon. Friend confirm that under her leadership Britain will continue to champion a Europe dedicated to enterprise, opportunity and freedom for all its citizens? Will she also reaffirm her resolve to fight any proposals from Europe designed to deprive this Parliament of any powers over taxation and the economy?
    The Prime Minister: Yes, I agree with my hon. Friend. Our vision of Europe is a vision of sovereign states co-operating freely in those things that we can do better together than we can do ourselves. We shall certainly resist proposals which would deprive this House of its premier standing on taxation—[Interruption.]—and no longer enable us to take our own decisions on taxation.
    Mr. Kinnock: Will the Prime Minister say whether Conservative candidates in the Euro elections should take their lead from her or from Henley?
    The Prime Minister: They will take it from the manifesto, which will shortly be published. I am sure that the right hon. Gentleman will read it most assiduously, and he might even agree with a great deal of it.
    Mr. Kinnock: Will the right hon. Lady, in compiling that manifesto, be consulting the right hon. Member for Old Bexley and Sidcup (Mr. Heath)?
    The Prime Minister: The manifesto will be prepared as previously—on our stance in Europe. We are very good Europeans and we shall work within the Community. Any country—[Interruption]—which gives £2 billion this year to the Community—our net contribution—which stations the number of troops in NATO that we do and which has its history with Europe as we have, is likely to be a very good European and have a vision of a free enterprise Europe based on freedom under the rule of law.
    Mr. Jacques Arnold: To ask the Prime Minister if she will list her official engagements for Tuesday 16 May 1989.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Arnold: In view of the disgraceful scenes of football-related violence last weekend, may I ask my right hon. Friend if she agrees that this problem will not go away and that firm action needs to be taken?
    The Prime Minister: I agree with my hon. Friend. The scenes last Saturday, when there were about 220 arrests—after Hillsborough—were absolutely appalling and utterly disgraceful, and we were all horrified by them. I believe that indicates that more steps need to be taken. There is a Bill before the House, with which we said we would go ahead on condition that it was an enabling scheme and that therefore it would come before the House before being finalised. It has other measures too, including the licensing of grounds. I believe that we should go ahead with that measure, which would be a vehicle for any further measures that it was thought necessary to take, without just waiting and doing nothing before the coming football season.
    Mr. Ashdown: Does the Prime Minister realise that the House of Lords spoke for the whole nation on the Water Bill last night? Will she accept the House of Lords decision or will she condemn the British people to drinking dirty water for longer?
    The Prime Minister: I believe that the Government have spoken for the whole nation in greatly increasing the amount of investment spent on improved water—investment far greater than under any previous Government. We shall look at that amendment. The question is whether it can be done in time. I hope, therefore, that the right hon. Gentleman will make it clear that the extra things that he is demanding will cost a good deal more money and will not complain when that price is exacted.
    Mr. Budgen: In view of the humiliating defeat suffered by the British Government and people last night in the EEC, when a directive concerning public health was foisted on us through a majority vote under the Single European Act, will my right hon. Friend undertake that this decision will be referred by the British Government to the European court or that the veto will be exercised?
    The Prime Minister: No. We shall consider the matter very carefully but, as my hon. Friend knows, under the Single European Act we agreed that, for the purpose of implementing the Single European Act and only for that purpose, the majority rule should apply in certain cases. What is a matter sometimes for the court to decide is whether a particular issue comes under the majority rule or whether it remains under article 100. It is that, which is maybe an issue, that we shall consider very carefully.
    Mr. McFall: To ask the Prime Minister if she will list her official engagements for Tuesday 16 May.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. McFall: It is exactly one year since the Prime Minister lectured the General Assembly of the Church of Scotland on how to be Christian. In the light of the statement by the Secretary of State for Social Security, which is appalling, that poverty in this country has now been eliminated, will the Prime Minister undertake that on her next visit to Scotland she will dispense with her "Sermon on the Mound", stop turning the other cheek and
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    address the problems of poverty which are still a reality for many hundreds of thousands of Scotsmen, women and children today?
    The Prime Minister: Surveys show that people at all income levels, including those in the bottom one tenth of income levels, are far better off than they were 10 years ago. What the hon. Gentleman and many of his colleagues would prefer is that the bottom tenth should be worse off provided they pulled all other levels down with them. That is an appalling doctrine.
    Mr. Hill: Will my right hon. Friend agree with me that when it comes to sovereign states working in unison there is no finer example than the Council of Europe? Indeed, only last week Finland joined, making a total of 23 countries. Does she agree that this is the genuine voice of Europe, the overwhelming voice of Europe; that it is the true parliamentary assembly of Europe and that the European Parliament needs to be told this time and time again?
    The Prime Minister: I agree with my hon. Friend that the Council of Europe does extremely valuable work and obviously goes a good deal wider than the European Community. We take a great interest in all its work, but we also belong to the European Economic Community. We are bound to it by treaty, the amended treaty, but we wish to see that in future it develops along the courses which we wish it to take and which we believe to be the right ones, and that it does not become too bureaucratic.
    Mr. Eadie: To ask the Prime Minister if she will list her official engagements for Tuesday 16 May.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Eadie: Can the right hon. Lady tell us what role she sees deep-mined coal in Scotland playing in the energy provisions of the United Kingdom? Does she support the proposal that deep-mined coal production in Midlothian should end despite the fact that there are very rich reserves of coal that would last well into the next century?
    The Prime Minister: The question will initially be one for British Coal. As the hon. Gentleman is aware, it is not only the reserves of coal that matter but whether they can be mined competitively, so that people are not overcharged for the electricity that comes from coal. The hon. Gentleman is well aware that the mine at Longannet will continue to be worked for Longannet power station. He is also well aware that there are other proposed closures because some pits have lost as much as £20 million recently, and we cannot allow losses of that dimension to continue. There is a major place in the United Kingdom for coal-fired power stations, and the major part of our electricity will continue to be generated by them for a long time to come.
    Mr. Ian Bruce: The whole House will have heard the sad news of the deaths of nine Royal Navy personnel in the helicopter crash in Africa, which comes hard on the heels of the deaths of two Royal Navy pilots who crashed in my constituency of Portland. Will my right hon. Friend take this opportunity to express the sympathy of the whole House to the relatives and friends of those victims? Will she also reflect that, in these times of peace, the people who have been peacekeeping with the Armilla patrol for the

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    past 10 years should be recognised, perhaps by a campaign honour—which seems to have been rather slow in coming to people who have been doing a magnificent job over many years?
    The Prime Minister: I am grateful to my hon. Friend. The whole House will wish to take advantage of his invitation to send its sympathy to the relatives of those lost in the crash to which he refers, of a helicopter that has been flying from HMS Brilliant, which had previously been on duty with the Armilla patrol. I am grateful to my hon. Friend for raising that matter. Other matters are being considered by the Ministry of Defence, but we would like to honour those who took part in the Armilla patrol and in its extremely important work in the international waterway of the Gulf.
    Mr. Allen McKay: To ask the Prime Minister if she will list her official engagements for Tuesday 16 May.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. McKay: Is the Prime Minister aware that after nearly two years of negotiations by some local authorities in south Yorkshire and in Scunthorpe, an agreement was signed five months ago for a £308 million aid concession from Europe? Is she aware that the Secretary of State for the Environment decided to break that agreement so that the aid will be widespread throughout the east of England? Does the right hon. Lady agree with the Secretary of State's action, which has deprived my constituency—which has a 20 per cent. male unemployment rate—of substantial aid, or does she disagree with him and accept that the money should be spent where the EEC said? If the Prime Minister does agree with her right hon. Friend, do we not risk losing credibility in respect of our use of EEC aid?
    The Prime Minister: No. Those EEC aid agreements must also take into account the Government's view as to how the money can best be spent. Every single pound spent by the EEC in this country is paid for by the taxpayers of this country. Over and above everything that we pay for, this year we shall pay £2 billion net to the European Community, so it is obviously very important that the Government's views are also taken into account.
    Dame Jill Knight: To ask the Prime Minister if she will list her official engagements for Tuesday 16 May.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Dame Jill Knight: Will my right hon. Friend take this opportunity to welcome the interest shown by hospitals throughout the country in achieving self-governing status? Will she stress once again to the House and to the country that self-governing status does not mean that hospitals are either opting out of the Health Service or going private?
    The Prime Minister: My hon. Friend is correct. No hospital will be privatised. Hospitals will be given the
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    choice, if they wish, to be self-governing, which means that they will have control over their own budgets so that decisions will be taken much nearer to the patient. which will in many cases mean far better value for money.—[Interruption.] Opposition Members dislike choice except when they choose to say that they like it occasionally. Whether or not a hospital becomes self-governing is a matter of choice.
    Mr. Skinner: To ask the Prime Minister if she 'will list her official engagements for Tuesday 16 May.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Skinner: On reflection, does the Prime Minister regret having used a three-line Whip and a guillotine to push the Single European Act through the House?
    The Prime Minister: No, I do not. We wished to have many of the directives under majority voting because things which we wanted were being stopped by others using a single vote. For example, we have not yet got insurance freely in Germany as we wished. We strenuously contest some decisions concerning animal and health regulations, which we believe should come under unanimity and that is our understanding. We are not quite certain what will be the judgment not of the Council of Ministers but of the European Court, which makes judgments on whether a particular matter comes within majority or unanimity if it is not clear on the face of the wording.
    Mr. Moss: To ask the Prime Minister if she will list her official engagements for Tuesday 16 May.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Moss: Is my right hon. Friend aware that Governments throughout the world are looking at ways to reform the provision of health care and that Poland and Hungary, to name but two Communist countries, are introducing methods of private insurance and charges?
    The Prime Minister: Certainly, many countries are looking at the rapidly increasing cost of health care. We recall that in 1977 Alec Merrison said that provision for health care in this country could take the entire income of the country, so we are all looking to get the very best value for money, not only in Poland and Hungary, but in Germany, Italy and other countries in the European Community. Those who take out private insurance pay their full share of tax to the National Health Service and by not using it and paying further for their own treatment they are taking a very great burden off the Health Service and should be thanked for doing that.

Charities Legislation (White Paper)
3.31 pm
The Secretary of State for the Home Department (Mr. Hurd): With permission, Mr. Speaker, I wish to make a statement about our plans for charities legislation. I have laid a White Paper before the House today.
It is about 30 years since the last major charities legislation. Since then the charitable world has seen substantial changes. The number of charities has grown enormously—with a corresponding increase in the funds flowing through them. That is welcome news. The part which charities and the voluntary sector play in meeting genuine need at home and abroad is increasingly impressive and important.
But that expansion makes safeguards essential. My right hon. Friend the Chancellor of the Exchequer and I jointly commissioned in 1987 an efficiency scrutiny of the supervision of charities. The scrutiny team, led by Sir Philip Woodfield, submitted its report in June that year. We welcomed the report. The White Paper now sets out how we propose to implement it.
We have also taken the opportunity to raise some fundamental issues relating to charitable status. They are difficult and we invite views on them.
The White Paper concerns England and Wales. My right hon. and learned Friend the Secretary of State for Scotland will be putting forward separate proposals. We shall be considering to what extent the changes proposed in the White Paper should be extended to Northern Ireland.
Our aim has been to strike a balance between freedom and control. Charities should be able to go about their business without unreasonable interference but within a framework which ensures that they are properly accountable to the public.
At the core of the White Paper are proposals to give the commissioners new powers in dealing with mismanagement and abuse. For example, there will be a new power for the commission—in the last resort—to transfer a charity's assets to another charity.
To enable the commissioners to concentrate on their new priorities we are proposing that the commission should be relieved of some of its present statutory duties. For example, we propose to relieve the official custodian of his responsibilities for administering charity investments, and we are also proposing that the commission should largely withdraw from its present responsibility for overseeing many charity land transactions.
Other major reforms are necessary to enable the commission to monitor charities adequately. It needs more information, and in particular financial information, about charities. In future all registered charities will have to submit fuller accounts to the commission each year. Accounts of all but the smallest charities will need to be professionally audited or independently examined.
The commission's register of charities has been criticised as out of date and of limited use. An accurate, up-to-date and accessible data base is needed in which the public can have confidence and which the commission can use as its basic supervisory tool. The White Paper provides for that.
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The Charities Act 1985 has improved the effectiveness of small charities. We believe that it would be right to build on the experience which has been gained by extending its effectiveness.
We have consulted widely on the reform of the law relating to fund-raising. We are proposing measures to clarify and simplify the present law on public collections and to deal with malpractice. We look to voluntary efforts to regulate the newer means of charitable appeal, such as telethons, but we propose to take powers to regulate these forms of appeal should this become necessary in future.
We believe that charities should make some contribution towards the Charity Commission's costs—now over £7 million a year. So we propose a registration fee of £25, and graduated charges for some other services. Small charities will continue to receive the commission's services free. We reckon that some 90 per cent. of the commission's costs will continue to be borne by the Exchequer.
The commission has already acted to carry out the recommendations of Sir Philip Woodfield which do not require legislation. It has improved its management and the efficiency of its procedures; it has developed its capacity to monitor and deal with abuse; and it is preparing the ground for computerisation. Those changes will fit the commission for the active exercise of the new powers that we propose, and I believe that the result will be a better service to public and charities alike.
The cost of the commission is only a small part of the Government's contribution to charities, and to the voluntary sector more generally. The proposals that we are putting forward will help to provide a framework within which the health and integrity of charities can be assured. Our duties in respect of grants to individual organisations go beyond this. Our immediate concern must be to ensure, on behalf of the taxpayer, that we get value for money and effective services in return. It is for that reason that I have today announced, in response to a written parliamentary question from my hon. Friend the Member for Daventry (Mr. Boswell) plans for a scrutiny of Government funding of the voluntary sector.
We shall take careful note of views expressed on the White Paper, both inside and outside the House. We hope then to bring forward legislation.
Mr. Stuart Randall: On behalf of the Opposition, may I thank the Home Secretary for his statement on the future of the Charity Commission.
We are uncertain about whether paragraph 5 of the White Paper goes far enough in dealing with abuse. Will the Charity Commission have all the powers that it needs to root out abuse? Have all the recommendations of the Woodfield report on the matter been included in the White Paper? If not, why not?
Paragraph 2.4 appears to leave open the question whether there will be changes in the legal meaning of charitable status. Will the Home Secretary say a little more about his feelings on that vital and central matter? Why have the Government decided to introduce charging for registration? Does not the Home Secretary accept that many very small charities might encounter financial difficulty with those proposals? Does he agree that charities would not receive services from the commission for those fees and that the real purpose of registration is merely legal recognition? Are not the Government being rather mean in making the proposals? Is it not the thin end of the charging wedge?

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Does the Home Secretary feel that the White Paper goes far enough beyond the Charities Act 1985 in encouraging the large number of very small and ineffective charities to merge or to amalgamate?
Does he agree that rationalising the existing registration structure is still long overdue?
We welcome the proposal to allow the Charity Commission direct access to the courts for the first time instead of having to work through the Attorney-General. Will the Home Secretary tell the House how the relationship between the Attorney-General and the Charity Commission will work in practice?
Does the Home Secretary agree that if the commission is to be effective in tackling many of the unacceptable shortcomings in its organisation which were presented in the Woodfield report it will need resources? Will he assure the House that all the resources needed by the commission to modernise its organisation, including the means for regionalisation, will be made available?
Mr. Hurd: I am grateful to the hon. Gentleman, and will try to deal with his questions. His first point dealt with abuse. Chapter 5 of the White Paper sets out specific ways in which we believe that the powers of the Charity Commission could be strengthened, but there is a further and perhaps more substantial factor. It is not always understood that under the existing law the commissioners have the power to remove a body from the register of charities if there is evidence that it is pursuing its objectives in ways that are not to the public benefit. That is an important safeguard, and I believe that there is a strong case for clarifying it in law.
The hon. Gentleman talked about the legal definition of a charity, which is dealt with in chapter 2 of the White Paper. We have come to the tentative conclusion that the common law definition—the M'Naghten definition—is probably as good as any that could be worked out in statute, but the House and experts on the matter will no doubt wish to consider that conclusion.
If the hon. Gentleman examines the carefully regulated proposals for charging, I do not think that he will find that any charity, however small, could conceivably suffer financial hardship as a result of them. Yes, I believe that the 1985 Act deals adequately with the point about small charities.
We shall need to work out the exact procedures for the commission's direct access to the courts. If the hon. Gentleman wishes to pursue that point, I will gladly write to him.
Yes, the Charity Commission will need to strengthen its effort. A major part of the White Paper's purpose is to relieve the commission of a number of rather fiddling duties which are actually already the responsibility of the trustees of individual charities—I mentioned land transactions, for instance—so that it can deploy its resources for the important purpose of monitoring and investigation. That is already happening, in fact. The chief commissioner tells me that the commission has raised from 14 to 38 the number of people in the commission now engaged on that central task.
Mr. Tim Boswell: I congratulate my right hon. Friend on the comprehensive approach to the reform of charity law that he has set out this afternoon. Bearing
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in mind that this takes place on average once a generation, his apparent readiness to continue consultations widely until the very moment of the legislation is most welcome.
Will my right hon. Friend take into account one or two points of concern? The first relates to charging for the services of the Charity Commission. I accept that in principle, but will my right hon. Friend confirm that arrangements will be made in practice to ensure that the revenue is additional to that obtained by grant in aid so that the commissioners may use it, for example, for the promotion of development schemes and local reviews?
My second question relates to the linked issue of the review of funding of voluntary bodies. Will my right hon. Friend confirm that it is designed to secure more value for money rather than a reduction in the total amount paid to such bodies?
I understand that the White Paper contains no proposals relating to the Inland Revenue. Does my right hon. Friend accept that in the long run it must make sense to move towards a system whereby the registration of charities by the commission, and their acceptance of charitable status, is in parallel with and identical to their treatment by the Inland Revenue?
Mr. Hurd: I am grateful to my hon. Friend. He is right to stress the importance of the charitable sector, whose turnover is now £13 billion a year. A new charity comes to the commission for registration about every half hour of every working day; that is the scale of it.
I cannot give my hon. Friend the exact assurance for which he asks on charges. Charges will contribute about 10 per cent.—about £750,000—a year and will clearly add to the strength and effectiveness of the commission. M y hon. Friend also raised the question of the Government's contributions to the voluntary sector. Our aim is to ensure that the taxpayer, whom we represent, receives value for money. The Government contribution is now running at £293 million a year. If we add in all public sector contributions to the voluntary sector, the figure is £2 billion a year, but £293 million is a big enough sum. We need to look closely at the way in which choices are made and the criteria that are used.
I did not deal with taxation issues, but my hon. Friend knows about the closer relationship that has developed in recent years between the Inland Revenue and the Charity Commission. Nothing in the proposals will impede that.
Mr. Robert Maclennan: Does the Home Secretary propose to legislate to alter the rules and laws governing the right of charities to advertise and to broadcast direct appeals for funds, especially in view of the extensive use of telethons for fund-raising?
On the regulation of collections, does the Home Secretary accept that it would be undesirable that charities should have to accept more stringent control than other forms of collection? Does he intend to deal with that?
Mr. Hurd: My answer to the hon. Gentleman's first point is that we have no intention of dealing with that. Chapter 10 of the White Paper deals at length with the problem of fund-raising. The hon. Gentleman will know that there has been some concern about possible abuses of fund-raising. We propose certain changes, such as that all funds collected should be passed to the charity in whose name they have been collected and that there should be discussion about administrative expenses after that rather than deductions being made before the money has been

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passed to the charity. Chapter 10 contains one or two similar suggestions, but we are open to comments. I do not want to introduce unreasonable, extra regulations for charitable fund-raising, but there has been concern about it. If, when he looks at chapter 10, the hon. Gentleman feels that we have gone too far, or that we have not gone far enough, I am sure that he will let me know.
Dame Janet Fookes: What assurance can my right hon. Friend give us about adequate staffing for the Charity Commission? When the old Expenditure Committee looked at charity law, it found that there was not a single accountant to scrutinise accounts at that time.
Mr. Hurd: It is precisely those initial critical reports which led to the Woodfield scrutiny, which, in turn, led to the White Paper. The Woodfield scrutiny found that the Charity Commission was so bogged down in a number of relatively trivial duties imposed on it by statute that it was unable to do the job of monitoring and investigating, which was at the heart of its duty. That is why, without legislation, the Charity Commission has shifted its priorities and I gave the figures for those engaged in monitoring and investigation compared to the past. The commission understands the importance of accountancy and it employs members of that profession, as well as having access to the talents and activities of accountants whom it does not employ directly.
Mr. Robert Hughes: As the chairman of a small but important charity, the Bishop Ambrose Reeves Trust, I want to ask the Home Secretary about definition. Will he confirm that the future definition will be broadly the same as the present one, and that there will be no redrafting to exclude charities already accepted by the Charity Commission?
Mr. Hurd: If the hon. Gentleman looks at chapter 2, on which we spent a great deal of effort, he will see an analysis of definitions, beginning with 1601 and going on to Lord M'Naghten's definition of the four main heads of charity in 1891. We are inclined to believe that the hon. Gentleman is right and that it is better to rest on that than to try to devise some new statutory definition. It is a matter on which there are differing views and we have set out our provisional conclusion.
Mr. Jack Ashley: The Home Secretary has used the phrase "value for money", which is understandable, but will he assure the House that none of the proposals will bring undue pressure, financial or otherwise, to bear on the small charities, especially on those that help disabled people?
Mr. Hurd: When I used the phrase "value for money", I was talking about the £293 million that central Government give in different forms each year to the voluntary sector. That will be subject to the scrutiny that I announced in reply to a question from my hon. Friend the Member for Daventry (Mr. Boswell). Value for money for charities is a wider question and, although it does not involve value for money for the taxpayer in most cases, I can assure the right hon. Gentleman that nothing in the proposals will bear heavily on the smaller charities. Indeed, the existence of a good up-to-date register and of
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proper safeguards against abuse will help to build up the general health of the charitable sector, including the small charities.
Sir Charles Morrison: Is my right hon. Friend aware that if he were to step out of the corridors of power into the highways and byways he would discover that the taxpayer believes that he already receives good value for money from what he provides already to charities? Is he aware that, when my right hon. Friend introduces his welcome proposals to reduce abuse still further, the taxpayer will feel even happier without the necessity of the introduction of a charge which will upset the taxpayer as much as it will upset many small and medium-sized charities?
Mr. Hurd: The charging arrangements serve to provide a total of £750,000. This is a worthwhile exercise which will not bear hardly on the smaller charities as my hon. Friend will see if he looks at the proposed charges. Indeed, it will involve them usefully in the process. The £293 million that the taxpayer contributes direct to the voluntary sector is increasingly important. More and more we in the Home Office find activities that are performed best by the voluntary sector—indeed, better than they would be performed under a statutory scheme. However, we must ensure, both as regards our own voluntary service unit in the Home Office and more widely across central Government, that there are reasonable criteria and standards by which the money is expended. That is the purpose of the scrutiny.
Sir David Price: Is my right hon. Friend standing on the answer that he gave both to the hon. Member for Kingston upon Hull, West (Mr. Randall) and to the hon. Member for Aberdeen, North (Mr. Hughes) that he is satisfied with the current legal definition of "charities"? Is he aware that many of us feel that the definition is drawn far too wide and that we all have evidence from our personal experiences of organisations, often of a dubious religious nature, which enjoy charitable status, but which many of us feel should not enjoy the tax advantages that genuine charities certainly should enjoy?
Mr. Hurd: My hon. Friend's objections probably do not arise so much from the professed objects of the charity as from the way in which they carry on their activities and from what they do. That is why it is important that the law should make it clear that the commissioners have the power to remove a body from the register where there is evidence that it is acting in pursuit of its objects in ways that are not for the public benefit. If we can make that clear and strengthen that power, as we propose in chapter 5, we have a hope of meeting my hon. Friend's point.
Mr. Eddie Loyden: Does the Home Secretary agree that the definition of "political activities" can differ widely depending on the way in which one wants to interpret the activities of certain charities? Will he give an assurance that those charitable organisations that "campaign" against certain activities of the Government, such as, from time to time, the citizens advice bureaux, will not be affected by any legislation to be proposed by the Government?
Mr. Hurd: We set that out for discussion in the White Paper. The Charity Commission's guidance on that point is perhaps worth reading. It is not very long. It is broadly to the effect that
"governing instruments should not include a power to exert political pressure except in a way which is ancillary to a charitable purpose;
—the powers and purposes of a charity should not include the power to bring pressure to bear on the Government to adopt, to alter, or to maintain a particular line of action, although charities may present reasoned argument and information to Government;
—where the objects of a charity include the advancement of education or the power to conduct research, care must be taken to ensure that both objectivity and balance is maintained and that propaganda is avoided."
That is the Charity Commission's existing guidance, and it appears to meet the case.
Mr. Ivan Lawrence: Is my right hon. Friend aware that his proposals will be especially welcome to all genuine charities in this country because, if there is greater public confidence that all the money given to charities will go to charitable ends and that the charities are properly run, obviously, in our affluent society more people will give? However, I am not sure about the effect of my right hon. Friend's answer to my hon. Friend the Member for Eastleigh (Sir D. Price). Can my right hon. Friend assure the House that action against charities whose activities are against the public interest, because they are anti-social or oppressive, will be easier to take than it has been hitherto?
Mr. Hurd: The powers exist, but I do not believe that they are widely recognised, which is why we put stress on them in the White Paper. We also propose to strengthen them. My hon. and learned Friend will find that in paragraph 5.11 especially of the White Paper we propose those powers which bear, as he knows, on what registered charities actually do rather than attempting to redefine the definition of a charity.
Mr. D. N. Campbell-Savours: Is the Home Secretary satisfied that the arrangements that he wishes to introduce will deal with the widespread failure of many charities nationally to present accounts to the Charity Commission, as identified in the reports of the Public Accounts Committee and the National Audit Office, and the Charity Commission's failure to examine the accounts of 96 per cent. of charities in a particular year at which the National Audit Office looked? Will the right hon. Gentleman assure us that all charities will be required to submit their returns annually and that, if they fail to do so, they will be subject to penalty? Will he also assure us that the Charity Commission will have the resources to examine the accounts of a far greater proportion of charities than is currently the position?
Mr. Hurd: As a result of the work mentioned by the hon. Gentleman, and in which he probably participated, and the Woodfield scrutiny, it is proposed in the White Paper, and it will be an obligation under the law, that registrable charities should make an annual return of their accounts to the Charity Commission, and in the case of all but the smallest those should be audited. I have already given the numbers and how they are employed, which show that in advance of legislation the Charity Commission is shifting its resources to deal with those accounts.
Mr. Ian Gow: Did my right hon. Friend share my sense of shame when he read the report of the Comptroller and Auditor General and the Public Accounts Committee about the Charity Commission? Does he understand that, welcome and long overdue though these reforms are, they will amount to nothing unless my right hon. Friend is able at once to instil into the Charity Commission that level of competence and efficiency that has been so grievously lacking for far too long?
Mr. Hurd: I believe that that is already happening. If my hon. Friend went alongside the present Charity Commission—on behalf of the commission I warmly invite him to do so—he would find already a substantial change of the kind that he has advocated. Obviously it is limited in what it can do in advance of legislation, because the Charities Act 1960 to some extent imposed upon the commission a method of working and a choice of duties which are really not sensible in 1989, and probably my hon. Friend was right when he said that they have not been sensible for some years.
Mr. Tam Dalyell: As one who called for the reform of charities during several Finance Bills, may I defend the Charity Commissioners, who have an extremely complex job to do? I welcome the fact that the Home Secretary has introduced this White Paper and the manner in which he has put the proposals before the House.
With regard to Scotland and paragraph 11.4, what investigation of abuse has taken place? I imagine that it is the same in Scotland as in England. What has the Home Office found to be the major cause of this most worrying abuse?
With regard to paragraph 4.11 and the question of malpractice what appropriate publicity will be given to default markings and how will that be arrived at?
The Home Secretary referred to charity land transactions, but will that cover the thorny problem of inalienability? Is inalienability to be respected in relation to land transactions?
The Home Secretary referred to acting not to the public benefit, but how is the public benefit to be defined?
With regard to paragraph 4.12, how will assets be assessed? It is easy to load logical schemes on charities, but given that they have limited resources, will not they be overwhelmed by the sheer difficulty of working out proposals, particularly on the estimation of assets as outlined in paragraph 4.12?
Mr. Hurd: I am grateful to the hon. Gentleman, but I do not intend to venture into Scotland, which has a different system without a Charity Commission. As I have said, my right hon. and learned Friend the Secretary of State for Scotland will be making his proposals on that known fairly shortly.
I cannot add to what the hon. Gentleman has already spotted in paragraph 4.11. Default markings are clearly intended to give publicity to a failure on the part of the trustees and we shall have to work out in greater detail what form that publicity takes.
Land transactions are meant not to touch on the question of alienability or inalienability, but simply to withdraw from the Charity Commission the duties which it has now and which to a large extent duplicate the trustees' present duties.

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I did not haul on board the hon. Gentleman's final point about paragraph 4.12, but I will, and I shall write to him on it.
Mr. Michael Morris: Is my right hon. Friend aware that one of the difficult areas in religious charities is created by the so-called cults, not so much because of their religious activities as such, but because of the way in which they impinge on society, families and individuals? I have not had the opportunity to see the White Paper, but is it his intention, under chapter 5, to address the rights of individuals and families within those organisations and how they may, in effect, escape from them?
Mr. Hurd: My hon. Friend puts that fairly. This matter has a long rather unhappy history. As he says, it is not so much the aim of a body that is called into question—it is difficult to argue about or define aims in statutes—but rather the way in which such organisations treat individuals. It is their activities in pursuit of the objectives that they define that is offensive to many people, and that is what we must concentrate on. The law already gives the commissioners stronger powers than most people realise to remove a body from the register if its activities are not for the public benefit, and we propose in chapter 5 to strengthen that in a number of ways.
Mr. Dennis Skinner: Does the Home Secretary recall the discovery about 12 months ago of the river companies that were laundering money to the Tory party? Under the proposals contained in the new report, will they be able to launder that money to the Tory party, disguised as charities? Has he noticed that the first recommendation says that the Chief Charity Commissioner should appoint a project officer'? There is a charity in here that needs a job, a national charity—the leader of the SDP. Is he going to show some charity? Here is a man who appeals to everyone. He should think about it.
Mr. Hurd: I have no recollection of the first point about which the hon. Gentleman tries to remind me. I am not sure whether the right hon. Member for Plymouth, Devonport (Dr. Owen) has quite the necessary element of charity in his own nature to make him suitable for the appointment.
Mr. Roger Gale: My right hon. Friend obviously recognises the genuine contribution made to charity by many religious organisations. Will he assure the House that he intends that the full weight of the law should now be brought, as it has not been previously, against quasi-religious and bogus cults which use charitable status as a tax haven and are nothing more than a front for international fraud?
Mr. Hurd: My hon. Friend will remember the statement that my right hon. and learned Friend the Attorney-General made about a particular case not long ago. I shall return to the central point of this issue; my hon. Friend was right about the concern that it arouses. We are talking about the activities of certain bodies which may have got on the charitable register. What we need to make clear and strengthen, as the White Paper proposals do, are the
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commissioners' power to remove an organisation from the register if it pursues its objectives in ways which do not benefit the public.
Mr. Alex Carlile: While it is reassuring to hear what the right hon. Gentleman said about the deregulation of cults that act against the public interest, does he recognise that, once registered, a cult can remain on the register for a considerable period, sometimes years, while it goes through a pyramid of legal procedures? Therefore, will he give the Charity Commission powers to examine and regulate religious charities before they are registered to ensure that they act in the public interest from the moment of registration?
Mr. Hurd: That is the purpose of registration. Due to the shift in its priorities, the Charity Commission will be increasingly able to monitor and investigate at an earlier stage. I shall look into the point made by the hon. and learned Gentleman about enforcement procedures because that is important.
Mr. Michael Latham: Is my right hon. Friend aware that those of us who served on the Public Accounts Committee for some years thought that the inquiry into the Charity Commission came to some of the most woeful findings that we have seen, which is saying something? The commission was extraordinarily complacent and passive, and needed a jolly good boot up the backside. Is my right hon. Friend satisfied that the proposals will instil into the staff the new attitudes which are required and which were certainly lacking then?
Mr. Hurd: Yes, Sir, I am.
Mr. Ian McCartney: Will the Secretary of State give some assurances about those charities which operate in the front line of social controversy, particularly in view of the recent statement by the Secretary of State for Social Security about the Low Pay Unit, Child Poverty Action Group, Shelter and War on Want? Will he give an absolute assurance that, when dealing with cults, the Government will not widen the issue into an all-out attack on charities such as those which I support and which campaign for social justice in the United Kingdom?
Mr. Hurd: I have already read to the House, and shall forbear doing so again, the guidance which the Charity Commission puts out about the political activities of charities. It is crucial for the health and reputation of the charitable sector that it should respect this guidance and not tread beyond it. Many of us have occasionally been worried by charities which seemed to tread beyond the clear guidance which I have laid down.
Mr. Andrew Rowe: Is my right hon. Friend aware that after that trailer I cannot wait to read his interesting document? Will he consider the possibility that, when a charity is under investigation, its fund-raising activities might be suspended? Will he also consider the fact that when small charities are asked to return their accounts on an annual basis, those accounts should be accepted in a simple form? If they are not returned, will the power to suspend or roll up those charities be used? In the past, the problem has been that, although the powers existed, nothing was done.
Mr. Hurd: I will look at my hon. Friend's first point. It might be considered rather high-handed and, perhaps,

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subject to judicial review, if the commission attempted to suspend a body's activities before making any findings against it.
As for my hon. Friend's second point, the whole purpose and thrust of the White Paper is precisely what some of my hon. Friends have urged that we should do—to brisk up the activities of the commission so as to strengthen its powers of investigation and enforcement.
Mr. Jonathan Sayeed: My right hon. Friend will be aware that some organisations have used their charitable status to hoodwink and to milk a kind-hearted British public in order to line the pockets of the organisers. They have used their charitable status as a vehicle to evade the proper payment of taxation. When there is clear evidence of a major abuse, can my right hon. Friend confirm that draconian powers will be used—including the repayment of tax that has been avoided by a so-called charitable organisation, and quite possibly the imposition of Mareva injunctions to freeze assets and the institution of criminal proceedings against the organisers?
Mr. Hurd: These matters often depend on evidence, and if my hon. Friend has evidence about recent activities of this sort, I am sure that he will let us or the police know.
The whole point of the existing law, which, I acknowledge, is rusty and creaking, of the reinvigoration of the Charity Commission which has already started, of the proposals in the White Paper, and of the legislation that we hope to introduce after it has been digested, is to safeguard the charitable sector by making it easier to spot and then to deal severely with any charity or individual connected with a charity who is tempted to act in the way that my hon. Friend has criticised.

EUROPEAN COMMUNITY DOCUMENTS
Mr. Speaker: With the leave of the House, I shall put together the two motions relating to European Community documents.
Ordered,
That European Community Document No. 10449/88 relating to Community financial procedures be referred to a Standing Committee on European Community Documents.
That European Community Documents Nos. 5211/88 and 10166/88 relating to health and safety be referred to a Standing Committee on European Community Documents.
—[Mr. Chapman.]

Private Residential Special Schools (Registration)
4.11 pm
Mrs. Gillian Shephard: I beg to move,
That leave be given to bring in a Bill to require the registration with local authorities of private residential special schools in respect of their use and residential facilities.
I am grateful for this chance to raise this important and topical matter in the House. It is important because it is about the welfare of children who are amongst the most vulnerable people in society—those with learning or behavioural difficulties or with physical or mental handicaps. It is important, too, because it concerns their placement in such schools by local authorities at tax and ratepayers' expense, and it is topical because, although the vast majority of these schools in England and Wales do a very good job, there have been some notorious cases in the past few years and recently which illustrate that, because of the current state of the law, those responsible have been unable to prevent such cases from occurring, to discover them promptly, or to take swift and effective action when they have been discovered. This Bill seeks to suggest ways of putting that right.
Children in need of special residential education are dealt with in one of three ways. They can be educated in a special school run by a local authority; they can be maintained by a local authority in a non-maintained special school, of which there are now 88 in England and Wales—they are non-profit-making concerns, usually run by trusts and in receipt of direct grant from central Government; or they can be educated, often on placement by a local authority, in a private residential special school.
Stringent requirements, in the form of the Education (Approval of Special Schools) Regulations 1983, govern the setting up and running of special schools run by LEAs and non-maintained special schools. Among other things, these regulations require that schools and their government be approved by the Secretary of State; that the premises must satisfy statutory requirements; and that non-maintained schools must not be run for profit. There are also requirements governing pupils' health, diet and religious worship. Regular reports have to be made to LEAs on statemented children and the teaching and care staff must be "suitable and sufficient".
In the case of non-maintained schools access must he allowed to representatives of local authorities which maintain a child in school, and the Secretary of State may withdraw his approval of a school if it fails to comply with the requirements either in these regulations or those in force under either section 10 of the 1944 Education Act or section 27 of the 1980 Education Act.
The contrast between these requirements and the regulations for the third category of school, the private residential school, could hardly be more striking, yet the same vulnerable group of children is involved. Private residential special schools are merely required to register and make annual returns under the Education (Particulars of Independent Schools) Regulations 1982. These, with their schedule, require information on numbers of pupils, details of public examinations, change of ownership and address, and any dismissals of staff on the grounds of misconduct. The numbers of statemented pupils, with staff qualifications, also have to be reported.

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Section 11 of the 1981 Education Act points out that where an LEA makes arrangements for the provision of a statemented child at an independent school, the Secretary of State must approve it as suitable for statemented children and must consent to the child being placed there. There are 170 such private residential special schools in England and Wales at the moment, and of these 135 are approved under this section.
Schools are approved as suitable as a result of an inspection by Her Majesty's inspectors, who expect the school to meet the same standards as local authority schools and, according to the Department of Education, the inspection covers all the arrangements for the welfare of the children outside the classroom. An inspector may be accompanied by members of the social services inspectorate.
I make no criticism of either Her Majesty's inspectors or social services inspectors, but it must be accepted that nowhere in the legislation are there any requirements other than those criteria laid down 40 years ago in section 71 of the 1944 Act, that registration may be refused or withdrawn if the premises are unsuitable; if the accommodation is unsuitable or inadequate; if efficient and suitable instruction is not provided, or if the proprietor or any teacher is not a proper person. There is no mention anywhere of the arrangements that should be made for the care and welfare of the children or for their physical or moral wellbeing.
I have already tried to draw the attention of the House to the contrast between the regulations for this category of school and those governing local authority or non-maintained special schools, but there is an even more striking contrast between the paucity of regulation of these special schools and the arrangements for registration, to be enacted, I hope, through part 8 of the Children Bill, now in Committee, for registered children's homes. These arrangements are comprehensive and drawn up in accordance with professional realities, and indeed, could apply to private residential special schools, were these not already registered under section 11 of the 1981 Education Act, yet, I repeat, the same group of vulnerable children is involved. If these children require the care and protection afforded to them by the provisions made for local authority and non-maintained special schools and for residental homes, they cannot and should not be denied that same care and protection if they happen to be placed by a local authority in a residential special school run privately.
Unfortunately, examples of disaster are not difficult to find. In Norfolk events at the Buxton Red House school five years ago and at the then Walker Foundation school
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in Burston caused immense concern. In Suffolk, tragically, at the Four Elms school, consistent abuse of the children was discovered to have taken place over a long period, and eventually the home was closed, but not before one distraught parent, who had learned that her mentally handicapped child had been regularly abused, arrived at the home and shot the teacher and officer in charge. Only last week, according to a press release from the West Mercia police, the co-proprietor of the Castle Hill school in Ludlow appeared before Ludlow magistrates on 14 charges of serious child abuse.
The law must be changed to allow more control to be exercised more effectively and with more accountability. If the state places children, especially vulnerable children, in a school at public expense, the state must provide an effective legal framework to protect them. To expect her Majesty's inspectorate or social services inspectors to perform a monitoring role at such schools when the law does not require them to do so and, in any case, her Majesty's inspectorate does not have the necessary expertise, is simply unrealistic. What is needed is expert monitoring carried out locally and on a regular basis.
The Bill therefore proposes that the Secretary of State for Education through her Majesty's inspectorate should retain responsibility for the education in private, residential special schools. Requirements for them should be brought into line with those expected of local authority and non-maintained special schools. The responsibility for registering the care, residential and welfare facilities of such schools should be placed with the social services department of the local authority in which the school is situated. Such dual registration would be welcomed by social services, would provide a balanced appraisal of the schools, retain a consistent role for both the Secretary of State for Education and for social services departments and, most importantly, would protect the interests of these vulnerable children. I hope that the House will support the Bill.
Question put and agreed to.
Bill ordered to be brought in by Mrs. Gillian Shephard, Mr. Andrew Mitchell, Mr. Ian Taylor, Mr. Simon Burns, Miss Ann Widdecombe, Mr. Tim Boswell, Mr. Anthony Coombs, Mr. Steve Norris, Mr. Keith Mans, Mr. David Evans, Mr. David Davis and Mr. Christopher Gill.

Private Residential Special Schools (Registration)
  PRIVATE RESIDENTIAL SPECIAL SCHOOLS (REGISTRATION) BILL
  Mrs. Gillian Shephard accordingly presented a Bill to require the registration with local authorities of private residential special schools in respect of their use and residential facilities: And the same was read the First time; and ordered to be read a Second time upon Friday 7 July and to be printed. [Bill 141].
Opposition Day
  10TH ALLOTTED DAY

    Government Publicity (Cost)
    4.21 pm
    Mr. Frank Dobson: I beg to move,
    That this House deplores the soaring cost of the Government's publicity machine; and calls for an end to its deployment for party political purposes.
    Mr. Speaker: I must announce to the House that I have selected the amendment in the name of the Prime Minister.
    Mr. Dobson: There is widespread and growing concern about the scale, propriety and timing of much Government publicity and advertising. It is an issue that goes to the heart of the relationship between political parties, the people, public servants and the state. In 1985 the Government acknowledged that in their evidence to the Widdicombe inquiry when they said:
    "The unregulated use by any public authority of highly developed media techniques, particularly for persuasive purposes with a strong political undertone, is perceived as a dangerous trend in a democratic society."
    At the time the Government were talking about local authorities. Since that statement, spending on Government publicity has soared. The regulations laid down to minimise the party political content in Government publicity have been partly ignored and secretly relaxed. It has become increasingly difficult to distinguish between Government publicity and Tory propaganda, in terms both of the content and of the personnel and agencies producing it.
    Since that statement was made, without the benefit of statute, industries owned by the public have run privatisation advertising campaigns co-ordinated with those of Government Departments and the Tory party. The only good feature of that is the growing public revulsion against some of the more patronising claptrap that they see on television. People believe that this has gone too far. In particular, they object to the £30 million of their money that is being spent on advertising by the water industry which has a monopoly product that none of us can do without. As The Economist asked last week:
    "Who benefits from the campaign? The ten authorities' tied customers will not get cleaner or cheaper water, merely bigger bills. The authorities themselves can hardly increase their sales or market share. Indeed, after the dry winter, some of them might be glad to be asked to supply less, not more, water."
    That advertising appears to have been counter productive because after the milk float water advertisement, some people thought that privatised water would be sold by the bottle. That may turn out to be right.
    Spending on Government publicity has continued to soar, and that fact cannot be disputed. Publicity spending by public bodies controlled by the Government will this year total well over £220 million. That is a lot of money. To give only one example, it would pay for building four big new district hospitals. Instead of that, it is all going on paper and television.
    About £120 million of that massive sum will be spent by Government Departments, and the rest by the armed forces, Government agencies and the water and electricity
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    industries. The £120 million spending by Government Departments is a sixfold increase on the £20 million publicity spending by Government Departments in 1979. No wonder the taxpayers are beginning to think that it has all gone too far.
    In 1987, according to The Daily Telegraph, the Government overtook Unilever as Britain's biggest spender on advertising. Strange to think that a Government who proclaim that they want to roll back the frontiers of the state insist that their propaganda rolls into the front room of every family in the land. The Government now spend so much on TV advertising that they get a special discount rate from the TV companies.
    In March of this year, the top five spenders on advertising were B and Q, £3·6 million; Renault, £2·2 million; the Department of Trade and Industry, £2·1 million; Midland bank, £2·1 million; and the water industry, £1·98 million. The Government Departments that spend most taxpayers' money on publicity include the Department of Employment, with £17 million, and the Department of Social Security, with £16 million.
    The Department of Social Security should spend money on publicity in an effort to raise the appalling take-up level of some benefits. It is trying to spend money now to increase the take-up that its incompetent advertising in the past failed to raise.
    This year, though, the star spender is the Department of Health, the spending of which is set to soar from about £10 million to about £19 million, an increase of 87 per cent. At the same time, the Department has given the National Health Service just 5 per cent. to cope with inflation. Yet the Secretary of State for Health has had the gall to go around the country complaining about the money that doctors are spending to campaign against the NHS review. The doctors have one singular merit that the right hon. and learned Gentleman does not have: they are spending their own money.
    Mr. Patrick McLoughlin: I could not understand from what the hon. Gentleman said whether he welcomed the increase in expenditure on advertising by the Department of Social Services.
    Mr. Dobson: There is no Department of Social Services in national Government. There is a Department of Social Security, which has misspent money on pathetic, rather trendy advertising that did not work. It is now halving to spend more money. It would be better, of course, if we saved the money now spent on advertising and gave people benefits which were easy to take up and were not dependent on advertising to get them taken up in the first place.
    The other big spender is the Department of Trade and Industry, headed by Lord Young, who is supposed to be the apostle of Government advertising. I suppose that that is because, being in the House of Lords, he is sure that, however much is spent on Government advertising, none of it will go on his election expenses. Wherever he goes, Government publicity expenditure soars. As the amendment refers to value for money, I suggest that the Government look closely at spending by the Department of Trade and Industry, because it is clear from the figures that the more that Department spends on advertising, the worse our balance of trade gets.
    It is not just the scale of the publicity machine that has changed; it has become much more party political. So

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    much so that in 1988 The Daily Telegraph, describing what had happened in election year 1987, referred to what it called
    "the Government's lavish publicity campaigns on such issues as job training and health education … little more than an expensive vote-catching exercise."
    You will note, Mr. Speaker, that the expense was borne by the taxpayer; the vote catching was to the benefit of the Tory party.
    But it is not just that the old regulatory arrangements are being ignored; they have been relaxed, and they have been relaxed furtively and in some cases secretly.
    The director of the Central Office of Information used to be the head of profession for Government information officers, the person to whom civil servants in information departments could turn if they had doubts about the propriety of what they were being asked to do. Earlier this year that role was handed over to Mr. Bernard Ingham, of whose relationship with professional propriety I shall say no more than that it was amply demonstrated in the Westland affair.
    Mr. Tristan Garel-Jones (Comptroller of Her Majesty's Household): What does the hon. Gentleman know about it?
    Mr. Dobson: The non-silent Whip the hon. Member for Watford (Mr. Garel-Jones) asks what I know about it. I read it in the report of the Defence Select Committee, on which there is a majority of his hon. Friends.
    Until recently the Central Office of Information had what was called a central role in advising on the propriety of Government publicity. In a change made early last year the Central Office of Information lost that central role in advising on propriety and it was handed over to, of all people, the Cabinet Office, the organisation which gave the world the phrase "economical with the truth". The change was kept secret from the Treasury Select Committee, which was then looking into the Central Office of Information. It was not even disclosed in the Treasury response to the Select Committee report when it was published in February this year.
    Finally, the Chief Secretary to the Treasury, we now understand, has been given a special role as a ministerial point of reference on publicity matters. He will advise on propriety. This would clearly be a difficult role for any Minister to fulfil. Obviously, it could not be carried out by anyone who was vindictive, petty minded or highly partisan. Instead, such a role, as we all realise, would require someone with breadth of vision and a willingness to respect the points of view and sensitivities of political opponents; a person capable of distinguishing between the interests of his party and the interests of the country as a whole. In other words, someone who likes mixing it could not possibly properly carry out that job. Hon. Members will be able to judge from his speech today the extent to which the present Chief Secretary meets these not particularly demanding criteria.
    Time after time Ministers, including the Prime Minister, have referred to the conventions published in 1985, but it took a series of questions before the Prime Minister eventually revealed two weeks ago that the conventions had been reviewed at the beginning of last year. Nobody had been told about that—at least, no one outside Government information offices. Notwithstanding
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    those recent changes, the Government conventions on publicity are still supposed to apply to advertising and press notices and other similar material. Section 4(ii) reads:
    "Content, tone and presentation should not be party political. The treatment should be as objective as possible, should not be personalised, should avoid political slogans and should not directly attack the policies and opinions of Opposition parties or groups."
    Those conventions were designed to protect the taxpayer and the public and to protect the integrity of public officials who may be asked from time to time to carry out party political tasks in the name of their ministerial masters or mistresses.
    Mr. Phillip Oppenheim: Relaxed though the hon. Gentleman considers those regulations to be, does he think that those relaxed limitations should be applied to local government?
    Mr. Dobson: As the hon. Gentleman ought to know, the unrelaxed regulations are applied by law to local government and it was the suggestion of the Treasury Select Committee that they should be applied by law to central Government as well.
    Mr. Frank Haynes: Does my hon. Friend agree that double standards operate among Conservative Members? Is he aware that not long ago the Strathclyde local authority in Scotland distributed cards to every household so that people would know of their entitlement to social security benefits? The Government criticised it for doing so, but now we can see how they operate double standards.
    Mr. Dobson: My hon. Friend is spot on, as ever. Having double standards is almost the least of the criticisms that I would make of some Conservative Members. Whenever local authorities throughout the country—mainly Labour, but not exclusively—attempt to increase the take-up of benefits by people who are badly off, they are criticised by a Government who themselves have incompetently spent millions of pounds on advertising while achieving some of the lowest take-up levels in the history of the social security system.
    In 1981, when a Conservative Government were in power, the Central Office of Information published a document on the role of Government information officers marked "For official use." I do not know whether the House of Commons counts as official use but I shall still make use of that document. It states:
    "If a Minister includes in a speech an attack on his political opponents, it would be improper for the Department to issue it as an official text or use the COI news distribution service to distribute it to Fleet Street. Such action would open the Minister and his Department to the charge of using taxpayers' money to further party political attacks. In this case the political attack would have to be omitted from an official handout, otherwise the text must be issued by the party's publicity machine."
    No mention is made of which party. It is rather like something from the Soviet Union in referring to the party. Official documents mean only one party—the Tory party.
    Those rules are being broken. Civil servants complain that they are forced to
    "expound half truths, produce dodgy material, and to leak in the Government's interests."
    We are back to No. 10 Downing street. If civil servants wish to complain about being pressurised, they can always

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    go to No. 10 Downing street and see Mr. Ingham, the head of profession, and see what sort of change they get. Everyone knows that the rules are not observed.
    Another recent example was a press release issued by the Department of Employment in September 1988 containing an attack by the Secretary of State for Employment both on the Leader of the Opposition and on the shadow Employment Secretary by name, in clear breach of the rules I have quoted.
    Mr. Tony Blair: Why was it not stopped?
    Mr. Dobson: Such practices are not stopped but are being encouraged.
    More blatant than that example was the concerted effort by the Department of the Environment's press office earlier this month to back up the poll tax leaflet campaign. The Department faxed syndicated articles to at least 15 local newspapers purporting to he written by the right hon. Member for Suffolk, Coastal (Mr. Gummer)—and for all I know, he did write them. Those articles had a standard content but incorporated local variations. Those sent to Nottingham newspapers contained an attack on my hon. Friend the Member for Nottingham, North (Mr. Allen). Those sent to Leicester included an attack on the chairman of Leicester city council's finance committee. The fax sent to the Leicester Mercury clearly came from the Department of the Environment's press office and was signed by Nick Gammage. Again, that was done in clear breach of the published conventions.
    Government press officers have also been pressured into what I can accurately describe as lying about statements made by my right hon. and hon. Friends and by me. On one occasion a radio reporter quite properly rang the then DHSS press office in my presence for its comments on a report that I issued. The press officer to whom the reporter spoke lied about the figures in my report. When I took the matter up with the Department's head of information, she sought to justify her colleague's lie, and no apology was forthcoming.
    Mr. Tony Banks: My hon. Friend highlights significant abuses of Government power. Had they been perpetrated by a local authority, there would be demands for its councillors to be surcharged. Can my hon. Friend say what recourse the taxpayer has to get back from Ministers some of the money that they are clearly squandering on abusive and offensive practices?
    Mr. Dobson: The taxpayer has no redress in such matters because the Government have no statutory authority to carry out any advertising; as far as I understand, they do it under their prerogative powers. There are no statutory restraints on what they do, but they have imposed statutory restraints on everyone else who might be involved in publicity.
    One recent publicity campaign cost a lot of money—more than was originally intended—broke the conventions and blurred the distinctions between the Government, the Tory party and its public relations advisers. As for value for money, which Lunderstand is the main interest of the Chief Secretary to the Treasury, it was a washout. I am talking about the launch of the National Health Service review, which was more unpopular after it was launched than it had been when it was just a leak.
    The campaign had no statutory backing and was scheduled to cost £1 million. It actually cost £1·4 million
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    —a 40 per cent. overspend. Unless the parliamentary answers on the matter are misleading, the vast bulk of the money was paid to one agency. I understand that in the trade, if an agency bids to do something for £1 million and spends £1·4 million, the extra £400,000 is paid by the agency and does not come out of the funds of those for whom it is carrying out the work. But that did not apply here. The money was spent on eight tele-conferences totalling £440,000, six road shows costing £179,000, communication packs at £302,000 and videos at £174,000.
    The rules say that publicity campaigns should not be personalised, but it has to be said that that campaign was heavily personalised around the Secretary of State. For example, copies of NHS Management Bulletin No. 19 were sent to all GPs. The envelopes containing the bulletin were marked in the way usually reserved by the Department of Health for letters notifying GPs of vital clinical matters such as outbreaks of infectious diseases or warnings about contaminated batches of vaccine. It may be appropriate that there was some warning, because the envelopes contained a document emblazoned with no fewer than five pictures of the Secretary of State. His name was mentioned 10 times on the first page and more than 30 times in total. However, it is a serious matter when, for the sake of trying to make sure that every doctor opened his or her bit of propaganda, the Government devalued the franking that they normally reserve for matters which are important to doctors and patients. If the Secretary of State wants to know why the doctors are so offended by what has been going on, that is one reason.
    But we should consider who mounted the campaign for the Government. That substantial contract was given to a little-known company, NML Presentations Ltd. The company's accounts show that it declared no dividend in 1986 or 1987. It made a loss in 1987, but its report said 1 hat the directors expected it to be profitable in 1988. The net value of its assets excluding motor vehicles was just £7,286. On the face of it, that outfit does not seem to have very much going for it, certainly not enough to justify getting a £1 million contract that the Government considered very important. But it did have one vital asset—it had close connections with the Tory party. Its ultimate holding company was Lowe Howard Spink and Bell plc—the Bell in question being Tim Bell, who masterminded the Tory general election campaign. It is a pity that he did not do that as badly as this campaign; if he had, we would all be better off.
    Many of the problems that Government Departments, some decent Ministers and a lot of decent civil servants face spring from what appears to be an increasing inability on the part of the Prime Minister to distinguish between the interests of the Tory party and the interests of the country. The motto seems to be that what is good for the Tory party is good for the country, and vice versa.
    Dr. John Reid: Does my hon. Friend agree that it is one of the supreme ironies of history that at the same time as the Tory Benches are praising President Gorbachev for trying to separate the party from the state, they are doing exactly the opposite in Britain? Did my hon. Friend ever think that the day would come when any political party in Britain would take lessons from the Soviet Union and would bring in corrupt practices using taxpayers' money?
    Mr. Dobson: I recall as a student having to learn about the government of various overseas states. I found it difficult to unravel the relationship between the Communist party of the Soviet Union and the Soviet Government because such a close, interwoven relationship had not occurred in western democracies. My hon. Friend is right. Perhaps it is not just Mr. Gorbachev who is learning something when he comes here; the Prime Minister seems to have been learning quite a bit about how to run the state when she goes there.
    The confusion between the interests of the Tory party and the state leads one to think of the one-party state which is a threat to our democracy, as the Government have said. The curious, interwoven relationship is best exemplified by the interchanges of publicity advisers between the Government, the Tory party and those industries scheduled to be privatised. As my hon. Friend the Member for—
    Mr. Harry Greenway: The hon. Member should not lose his place.
    Mr. Dobson: I have not lost my place. I hesitated because I was trying to remember the constituency of my hon. Friend the Member for Sedgefield (Mr. Blair). As my hon. Friend pointed out, Mr. Brendan Bruce used to be a senior executive of D'Arcy Masius Benton and Bowles, known as DMB and B, the agency that had the contract for the present softening-up round of the water campaign. He was recently appointed director of communications at Conservative Central Office, we understand, to mastermind the party's media coverage in the run-up to the next election. DMB and B, which was responsible for the Tory party political broadcast on the Health Service—that does not say a lot for it—and for the current phase of the Department of Trade and Industry 1992 campaign—that does not say a lot for it, either—is engaged simultaneously in a bid to get the contract for the Conservative party election campaign.
    Mr. Tim Bell, who has already been involved in these sordid matters, and who is a long-time image builder of the Prime Minister and the Conservative party, is now employed as a public relations adviser to Thames Water, the most profitable of the water authorities. Perhaps the Chief Secretary, when looking at getting value for public money, could tell us whether it was Mr. Tim Bell who suggested to Thames Water that it should spend some of my money as a Thames Water user to pay for a water privatisation advertisement in the booklet "Thatcher—the first 10 years" obtainable from the Tory Central Office at £1·95. I do not think that there has ever been a closer relationship between party and Government than that, even in the Soviet Union. The appointment of Mr. Bruce may eventually fulfil the headline in The Times in August 1987:
    "Propaganda role for Tory headquarters".
    That rather startled some of us who wondered what else would happen while the right hon. Member for Chingford (Mr. Tebbit) was chairman of the Tory party. [HON. MEMBERS: "Winning elections."] Are Conservative Members suggesting that they had a propaganda role at the time, or that they did not? I think that that press briefing—clearly from the Tory party to The Times—suggested that the Government would have to take over the propaganda role that it had ceded substantially to the public sector and the public purse in the run-up to the 1987 general election.
    Mr. Ian Gow rose—
    Mr. Dobson: I do not think that I should give way to someone to whom one of the Whips has run up and said, "Please intervene on Mr. Dobson's speech", or words to that effect.
    That brings me to the question of the timing of some of this spending. During general elections, by convention, all Government advertising is suspended, in the words of the Independent Broadcasting Authority,
    "to avoid any risk of controversy about the use of public money for electoral purposes".
    Mr. Gow: I am grateful to the hon. Gentleman for giving way. I think that he will want to adjust this part of his speech to take account of the judgement of the High Court, delivered this afternoon, in which both judges found in favour of the Government and against the London borough of Greenwich. Furthermore, an order of costs was made against the borough. Perhaps the hon. Gentleman, who referred to the matter earlier, will now adapt his remarks to take account of his new-found friends the judges in the High Court.
    Mr. Dobson: I was aware of the outcome of the case of Greenwich v the Department of the Environment before the debate began. The fact is that, as every Conservative Member knows, it is extremely difficult for anyone to succeed in an action against a Government Department, even over a breach of statute and even with the right hon. Member for Cirencester and Tewkesbury (Mr. Ridley) in charge of the Department. When what is being questioned is expenditure carried out under the royal prerogative, the chances of success in the courts are fairly poor, and they were always poor in this case.
    Let me point out to Conservative Members that the judge in the initial hearing said that he believed that aspects of the leaflet were capable of misleading people.
    Mr. Harry Greenway: If, as the hon. Gentleman predicted, the money of taxpayers and ratepayers of the London borough of Greenwich was so grossly wasted, why did the borough bring the action in the first place?
    Mr. Dobson: I did not suggest for a moment that the action of Greenwich council was a waste of time, effort or money. What the council did was observe and then seek legal advice on the basis that aspects of the leaflet were inadequate, and that one important aspect was mentioned in the Welsh leaflet but not in the English leaflet. The borough succeeded in the courts initially; now it has failed. The odds are against success in any court case against a Government who are relying on prerogative powers, as Conservative Members know. But there is always a chance, and it was wholly proper and reasonable for Greenwich council to do what it did.
    Dr. Reid: Does my hon. Friend recall the judgment by Judge McCowan some years ago, when he decreed that the interests of the state were synonymous with and identical to the interests of the Government of the day—a view also held, apparently, on the Conservative Benches? Does my hon. Friend recall that, when that judgment was put to a jury of 12 good men and true, they threw it out of court and released Clive Ponting?
    Mr. Dobson: It seemed to me at the time that any judge who, in advising a jury, came to the conclusion that the interests of the state coincided with the interests of those

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    who, for the time being, were in government was getting on to rather dodgy ground. As my hon. Friend has pointed out, however, the common sense of the Old Bailey jury overrode the rather peculiar and absolutist advice of the judge. [Interruption.] I have now got as far as provoking the ultimate Trappist, the Government Chief Whip. He has asked me whether I was pleased with the judge's judgment. The judge made no judgment in that case: it was the jury who made the judgment. What was wrong was the judge's advice to the jury.
    The Parliamentary Secretary to the Treasury (Mr. David Waddington): I was talking about the current case.
    Mr. Dobson: If the Chief Whip wants to ask me about this case he should understand, as a lawyer, that more than one judge has been involved. It was reasonable for me to assume that he was talking about the case involving only one judge.
    I can sum up my response to what has happened in court today by saying that it was perfectly reasonable for Greenwich council to challenge the Government, and most people in this country will be glad that it did so. Greenwich knew, however, as we all know, that the chances of success in an action involving the prerogative powers are not very good.
    Let me repeat what I said earlier, as it was shouted down before. During general elections, by convention, all Government advertising is suspended, in the words of the Independent Broadcasting Authority,
    "to avoid any risk of controversy about the use of public money for electoral purposes."
    I have been in touch with the IBA to find out whether it proposes to stop the Government and public bodies from advertising on television during the forthcoming European elections. The IBA tells me that that is a matter for the Government rather than for it.
    The convention that Government advertising stops during a general election is, of course, only a convention; it has no statutory authority, just as there is no statutory authority for the general conventions on Government advertising. Nor, for that matter, is there any statutory authority for the Government to advertise in the first place. The Government acted to restrict by law the use of publicity by local councils, and we believe that whatever restrictions are applied by law to local councils should be applied by law to Government Departments. We now call on the Government to cease their advertising and publicity throughout the period of the European election campaign, following precedents set in previous general elections. If the Government refuse to do that, we call on the IBA—in observance of its own code of advertising standards and practice, which states that no advertisement may be directed towards any political end—to prevent the showing of privatisation and other Government advertising during the European elections, because we are convinced that it is impossible to look on any such advertising as not being directed to a political end.
    Mr. Ian McCartney: My hon. Friend should refer to the six-week run-up to the local government election campaign, when £8 million was spent on advertising the privatisation of the water industry, which was a major issue in the elections. If the Government are prepared to spend that kind of money to promote themselves for local government, how much will
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    be spent to paper up the cracks between the right hon. Member for Old Bexley and Sidcup (Mr. Heath) and the Prime Minister over European issues?
    Mr. Dobson: I agree entirely with my hon. Friend about water advertising. However, it so irritates people that it is probably counter productive for the water industry and for the Government.
    In the longer term, the Government should give statutory force to the conventions governing Government publicity. In the meantime, they should change their behaviour and ensure that the existing conventions are enforced. They should reinstate the Central Office of Information as the centre of advice on propriety. They should publish full details of all publicity campaigns that they intend to mount. The contracts for Government publicity campaigns should be awarded only on the basis of open and competitive tenders. Above all, the Government should stop using taxpayers' money to promote party interests. Finally, they should direct the water and electricity industries to desist from their profligate and preposterous campaigns.
    Dame Elaine Kellett-Bowman: What about Greenwich?
    Madam Deputy Speaker (Miss Betty Boothroyd): Order. If the hon. Lady wants to make an intervention, perhaps she will say so.
    Dame Elaine Kellett-Bowman: The hon. Gentleman referred to taxpayers' money. Taxpayers contribute money to the borough of Greenwich, which spent money on a fruitless exercise.
    Mr. Dobson: Greenwich council is perfectly entitled to bring legal actions within the statutes, just as Governments are entitled to appeal against judgments—although it was not an appeal in this case. If we were to suggest that public authorities could not bring legal actions, we would apply that not only to local authorities, but to Governments. However, we are saying, in short, that publicity at public expense has gone too far and it is about time it stopped.
    5.1 pm
    The Chief Secretary to the Treasury (Mr. John Major): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
    "recognises the responsibility of Government to provide advice and information to the public; and commends the Government's firm adherence to the long standing conventions governing propriety and value for money."
    Let me make it clear to the House at the outset that I reject without qualification the criticisms made this afternoon by the hon. Member for Holborn and St. Pancras (Mr. Dobson). The worst thing that I can say, having heard his speech, is that the speech was worthy of him. In recent weeks, the hon. Gentleman has been engaged in what one can only call a campaign of misinformation and misrepresentation on a scale that merits parliamentary rebuttal. I am pleased, therefore, that he has at last brought his campaign to the House, so that it can be examined—pleased, but a little surprised that the Opposition regard this subject as more important than defence, when they have a brand-new review about which they want to talk. To express a concern about political propaganda and then to seek to avoid discussing their defence policy seems very odd.

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    I am surprised, too, that this artificial debate is more important than parading their new tax and public spending policies about which they have been boasting, or explaining their new policy of "activity funding" for the National Health Service, which caused such mirth in the House last week. If misleading propaganda concerns them, they might have brought those matters before the House, rather than the trivial conspiracy theories the hon. Gentleman has described.
    This debate was clearly timed to coincide with the court case brought by Greenwich council over the community charge leaflet issued by the Department of the Environment. As my hon. Friend the Member for Eastbourne (Mr. Gow) has already told the House, judgment has been delivered this afternoon. I understand that both judges gave unqualified support to the Government. The Government have always believed that the leaflet was clear, concise and accurate and we are pleased by the vindication of our position in the High Court. It is highly desirable that the public should have early information about the community charge and we are anxious to resume distribution of the leaflet. However, despite the fact that we are now entirely free to do so, as a result of the court's decision, we have given an undertaking not to resume distribution before tomorrow, during which time Greenwich council will consider whether to appeal. If it does appeal, we shall not resume distribution until the Court of Appeal has decided the case, provided that the appeal can be heard within the next few days. I am pleased to see that my right hon. Friend the Secretary of State for the Environment is here with us this afternoon while the House is informed that he and his Department have acted wholly properly.
    It has long been accepted by successive Governments that they have a responsibility to ensure that members of the public are properly and fully informed about their rights, entitlements, responsibilities and duties. One way of achieving that has been to use publicity and advertising in the press, on television and through leaflets. That responsibility has led to campaigns on matters such as crime prevention and benefit entitlements, which have run throughout the 1970s and 1980s. The hon. Gentleman seemed to oppose the advertising of benefit entitlement, although I recall many of his hon. Friends suggesting that the campaign might have been extended. There is nothing new about such campaigns and I trust that they are not a matter of contention today—indeed, we are often asked to increase them.
    Mr. Harry Greenway: Before my right hon. Friend leaves the subject of the leaflet, will he accept that it is urgent for delivery to be resumed as soon as possible as an honest means of countering the highly mendacious leaflets about the community charge put out by many Labour authorities at huge cost to taxpayers and ratepayers?
    Mr. Tony Banks: Which ones?
    Mr. Greenway: Greenwich and Ealing in particular.
    Madam Deputy Speaker: Order. I remind all right hon. and hon. Members that the motion and the amendment relate not to local authorities, but to the Government's publicity machine and cash.
    Mr. Major: I take your point, Madam Deputy Speaker, so I will not read the long list of Labour local authorities that have provided misleading information about the community charge. However, I accept without qualification what my hon. Friend had to say.
    Dr. Reid: Will the Chief Secretary accept that no Opposition Member is opposed to supplying information, especially on benefits, although I am surprised that he should cite that example? As my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) pointed out earlier, when Strathclyde regional council issued information on benefits, the Government were the first to criticise.
    Can the Chief Secretary tell us what information or useful function is provided by the large billboard hoardings we see throughout the country advertising the employment training scheme? Can he tell us why every firm used in the advertisements is also a huge financial benefactor to the Conservative party?
    Mr. Major: It must be clear even to the hon. Gentleman that the purpose of those advertisements was to bring the scheme to the attention of those who might benefit from it. The hon. Gentleman should welcome that advertising.
    Some elements of advertising have long been accepted and are not parti pris or contentious and nor are many other large areas of publicity. The Government have a clear responsibility to promote health education and safety campaigns and the extensive AIDS campaign is an example of that. Energy conservation and training programmes are further examples of the Government's responsible use of publicity, both to inform and influence behaviour. Other examples of more general information campaigns are those on road safety, Government recruitment and the statutory advertising that all Governments are obliged to carry out.
    The misinformation we have heard in recent weeks has been of two kinds. First, there have been comments about the propriety of expenditure and, secondly, about its cost.
    Mr. Dobson: If energy conservation is so important, why has spending on publicity by the Department of Energy—excluding expenditure on privatisation—been reduced?
    Mr. Major: The hon. Gentleman cannot play it both ways. He cannot on one hand complain about levels of expenditure and on the other hand ask for more. However, he has drawn attention to a point that needs to be clearly understood. The advertising in which the Government are engaged is legitimate, proper, necessary and serves a good and useful purpose.
    Mr. Tony Banks: Will the Chief Secretary give way?
    Mr. Major: I will give way a little later.
    I want to turn to the matter of propriety, because the hon. Member for Holborn and St. Pancras made some contentious comments about it. He told the House that the conventions on Government publicity had been secretly relaxed. I must tell him that they have not been, nor will they be. The basic conventions applied by successive Governments for many years have remained in place and their operation has been tightened up. The conventions have a clear purpose—to ensure that public funds are not used to finance publicity for improper or party political purposes. We are firmly committed to those conventions and observe them strictly on all occasions.

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    Nor do Ministers act without professional, independent advice from the Civil Service on propriety. Until July 1988, advice on propriety was the responsibility of the Central Office of Information. That responsibility was removed from the COI solely because of the changing nature of the COI's business relationship with Departments. The more contractual basis on which COI now operates made it inappropriate for it to act as an authoritative and final source of advice on propriety. The responsibility for this advice was therefore transferred to the Cabinet Office, which has traditionally been the source of advice in Government on other questions of propriety.
    That has been the case for many years under many Governments. The responsibility is not located where the hon. Member for Holborn and St. Pancras suggested. The responsibility is located in the machinery of Government division, within the Office of the Minister for the Civil Service, under the ultimate direction of the Cabinet Secretary, the head of the Home Civil Service. That is where the responsibility lies.
    The established conventions governing Government publicity remain unchanged, and publicity campaigns must continue to meet important tests. First, they must deal with a subject for which the Government are responsible and on which they need to communicate with the public. Secondly, they must provide good value for money. Thirdly, they must not be open to question that the primary purpose, or principal incidental purpose, of a campaign is party political advantage.
    The primary responsibility for ensuring that the conventions on propriety are observed, and that value for money is being achieved, rests with Ministers and their Departments. All Governments have accepted that. In the light of the strengthened guidance we have given, most issues under the conventions will in practice be sorted out in Departments, or between them and the COI. There will be a residual category of cases, not many, on which Departments look either to the Cabinet Office or to the Treasury.
    As the hon. Gentleman trailed, at ministerial level I have been asked to act as a point of reference on Government publicity matters, and am responsible for the adjudication of conflicting departmental approaches to the presentation of Government publicity. My services in that respect are seldom required but, if and when they are, I look to the machinery of Government division for advice on propriety, and to my Treasury officials on value for money. I should make it clear to Opposition Members that when I have been asked to make a ruling I have not hesitated to turn down a proposal which seemed possibly inconsistent with the guidelines. I or my successors with that responsibility will no doubt continue to do so if it seems appropriate.
    Several Hon. Members rose—
    Mr. Major: I give way to the hon. Member for Linlithgow (Mr. Dalyell).
    Mr. Tam Dalyell: Before we leave the question ofpropriety, does the Chief Secretary believe that his predecessor, Sir Leon Brittan—[Interruption.] I am asking a factual question. Does the Chief Secretary believe Sir Leon Brittan when he said that approval was given by Mr. Powell and Mr. Ingham for the improper disclosure of a Law Officer's letter? Does the Chief Secretary believe Sir Leon?
    Mr. Major: The hon. Gentleman raises this matter repeatedly but it is not within this debate and I have no intention of getting involved in that debate.
    Mr. James Wallace: Although the right hon. Gentleman was not the Chief Secretary at the time, he may recall that shortly before the last general election the Ministry of Defence issued a video and a publicity pack that not only argued why Britain should have an independent deterrent, but stated why it should be Trident as opposed to any other possible deterrent. Clearly that was politically contentious, no matter what the rights and wrongs of the matter were. What was the need for that information to be imparted to members of the public?
    Mr. Major: If the hon. Gentleman wants to run that sort of argument, I shall ask why, in the past, his party supported the publicity produced by Labour Governments on, for example, a new deal in Europe, on devolution—which is hardly uncontentious—and on the attack on inflation—"A Policy for Survival". The hon. Gentleman has wholly misunderstood the conventions and he is wholly and entirely wrong.
    Mr. Tony Banks: The hon. Member for Orkney and Shetland (Mr. Wallace) is not a member of the Labour party.
    Mr. Major: In early 1988—[Interruption.] Hon. Members may shout "Don't bring in the Labour party," but I do not need to bring in the Labour party and nor will the electorate for many years—if ever.
    Mr. Banks: I realise that the Minister is getting a bit hysterical, but I did not say, "Don't bring in the Labour party," I said that the hon. Member for Orkney and Shetland who was accused of being a member of the Labour party has never been a member of the Labour party.
    However, since the Minister has graciously given way, will he tell me what recourse the taxpayer has if he believes that money has been spent on something that is essentially party political advertising? In local government such people can go to the district auditor, so what is the machinery that allows the taxpayer to make a formal complaint? Finally—I know that the Minister will never give way to me again—why do all these Government publications have to include a picture of the Minister concerned?
    Mr. Major: On the central point in the hon. Gentleman's question, the recourse is the recourse that we are exercising this afternoon—the fact that Ministers are answerable to this House and to Members of Parliament. That is the central recourse and that is the distinction between central and local government—
    Mr. Bruce Grocott rose—
    Mr. Major: I shall give way to the hon. Gentleman later if he can contain himself for a moment.
    On the first of the three points to which the hon. Member for Newham, North-West (Mr. Banks) referred in his intervention, I was referring to the period of the Lib-Lab pact, and on his third point, as many of my right hon. and hon. Friends are highly photogenic, it seems entirely reasonable that their photographs should be on such publications.
    Mr. Grocott: Which does the Minister think is the most effective sanction—having to appear before this House in a debate or being bankrupted by surcharges?
    Mr. Major: If one appears before the House in such a debate or, in case of need, before the Select Committee on the Treasury and Civil Service and other Committees of the House, that is a significant sanction that cannot be beaten anywhere. It is a sanction that no Member of the House would overlook at any stage or would treat lightly.
    In early 1988, the Government reviewed the arrangements needed to ensure the compliance of Government publicity campaigns with the accepted conventions, as well as the role of the COI in those matters which I have already mentioned.
    The review confirmed that the conventions had stood the test of time well, and led to strengthened and tighter guidance to Departments. This covered the interpretation and operation of the conventions such as the use of public relations consultants and direct marketing, and the need for professionalism, both of presentation, and in making sure that publicity expenditure provided value for money. This covers aims, the means used, the cost proposed, and proper measurement of the results. The guidance was widely circulated to heads of Departments and Ministers and is available in the Library.
    The reality, therefore, is that the principles of propriety and value for money on which we operate are unchanged and fully observed—I repeat to the hon. Member for Holborn and St. Pancras that the principles are unchanged and fully observed—notwithstanding the general background of rapidly developing publicity techniques and the fact that the Government need to compete for attention with a vast array of messages from others. We have also clarified and tightened up the operation of these conventions and set new machinery in place to ensure compliance, both in terms of propriety and value for money. Nothing that the hon. Member for Holborn and St. Pancras has pointed to or can point to can shake that fact.
    Mr. Dobson: Why did it take the passage of 14 months and some questions from me before the fact that the review had taken place was disclosed and the document published?
    Mr. Major: There was nothing whatsoever secret about the review, which was predominantly about the internal workings of the COI and other bodies. The moment that the matter was raised, the documents were made fully available. Although I accept that in retrospect it might have been better if the Government had unilaterally produced them before the hon. Gentleman asked his question, the reality is that the moment the question was asked, the information was made available. However, it was essentially an internal review, predominantly about the role of Government Departments rather than necessarily about the conventions which remain unchanged.
    As the hon. Member for Holborn and St. Pancras mentioned the codes of conduct for local authorities under the Local Government Act 1986, he should put that in proper perspective. Indeed, if the rules and conventions that govern central Government operations had been observed as closely and honourably in local government, there would have been no need for the Widdicombe report and the subsequent legislation, but they were not observed.
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    The hon. Member for Holborn and St. Pancras mentioned publicity by local government on benefit entitlement. The reality is that Widdicombe was needed to correct abuse of the ratepayers by local authorities—predominately Labour—on a monumental scale. Quite apart from extravagance and inefficiencies, many Labour local authorities had also badly misused public money for advertising. Lambeth council spent thousands of pounds of ratepayers' money on anti-Government propaganda, and Haringey council ran an advertisement out of ratepayers' money that said that it would campaign for the next Labour Government to repeal all privatisation laws. The next Labour Government, mark you! So it was not even campaigning against Government policy. It was using ratepayers' money to campaign against Labour policy.
    Madam Deputy Speaker: Order. I must remind the Chief Secretary and other hon. Members that I have already put down a marker that the debate concerns the Government publicity organisation machine and does not refer to local government.
    Mr. Major: Of course, Madam Deputy Speaker, and I shall obey that injunction. I am happy to concede to the hon. Member for Holborn and St. Pancras that I obey it reluctantly in essence, because the amount of information, which indicates clearly the way in which Labour local authorities have behaved in recent years, is massive and deeply embarrassing for them. However, in any event, there is plainly no need for statutory control of Government publicity, because Ministers are firmly committed to the conventions, which have been fully published so that the House can always call on Ministers to justify their actions. That discipline cannot be applied to local government, and that is why legislation was necessary to deal with local authority abuses.
    The hon. Member for Holborn and St. Pancras made much of the increase in expenditure since 1979. But he is neither making sensible comparisons over time nor dealing with the merits of the expenditure. In cash terms, of course, he is right. Expenditure on behalf of Departments by the COI has moved from £35·4 million in 1978–79 to £151·6 million, including flotations, in 1988–89. There are good reasons for that increase. The elements that must be taken into account include general inflation over the period, the introduction of VAT on press advertising, and an even more substantial rise in the cost of buying time on television and radio and space in newspapers and magazines. For television, for example, which is increasingly important in effectively communicating to the public, that increase is estimated at up to two and a half times the general rate of inflation. In addition, there is included in those figures the new item of flotation advertising in pursuit of privatisations.
    The hon. Member for Holborn and St. Pancras and some of his hon. Friends have referred to the water authorities' current campaign as being "propaganda for privatisation". That attack is nonsense, and the water authorities have made clear that it is nonsense. We should be clear, too. The water authorities, like other nationalised industries, must make their own commercial judgment about corporate advertising within overall levels of finance set by Government. The present corporate campaign is run by the water authorities, and they pay for it.

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    The water authorities have made clear that the purpose of their campaign is to improve consumer awareness of the industry and the industry's image. Of course, it is true that, in planning it, the industry recognises that the circumstances in which it operates will change radically. It knows—subject to Parliament's approval—that it will be privatised and that its efficiency and standards of service will come under close scrutiny by consumers. Of course, it knows that. But, irrespective of that, it knows that the environmental concerns of the public are growing, and that it will have to meet those concerns. It knows, too, that a great deal of attention has been focused on the water industry in recent months and a great deal of nonsense has been talked about it and the services that it provides—often by the Opposition. It is its judgment that the current campaign will go some way to improving customers' knowledge of the industry and the Government share that view. The Opposition criticise the corporate campaign on entirely false grounds. The only reason that they do so is that they are opposed to the Government's policy towards the water industry.
    Mr. McCartney: Will the right hon. Gentleman give way?
    Mr. Major: I will not give way to the hon. Gentleman. This is a brief debate and I have given way on a number of occasions. I hope that on this occasion hon. Members will excuse me.
    Opposition Members, of course, dislike denationalisation—as I prefer to call privatisation—as a principle. We understand that. They prefer state ownership with rigid control. We understand that, too. That is the nature of their philosophy. That is why they have been critical of the spending on flotation advertising that has accompanied privatisation. I cannot agree with them about that. Flotation advertising campaigns are designed to publicise a forthcoming offer for sale, and convey information about the availability of prospectuses and the application procedures. The Government believe that it is important that the opportunity to gain a direct and personal stake in the future of British industry is given to all investors, large and small alike. It must, therefore, be brought to everyone's attention and not just to the attention of the large institutions, and those familiar with the markets. Indeed if it were not, the Opposition could rightly criticise us for that. But advertising on flotations is undertaken only after Parliament has approved the policy and in order to carry it out successfully.
    It is also eminently justifiable expenditure. All costs incurred by Government in relation to a privatisation, including advertising costs, are netted off against the proceeds that advertising the sale brings in. Nor is the advertising excessive. The overall Government cost of those advertising campaigns has represented only a small percentage of those proceeds—0·3 per cent. for British Telecom, 0·4 per cent. for British Gas, British Airports Authority and British Petroleum. They help the Government to get a good price for the sale and represent, therefore, a very good bargain for the taxpayer, and a popular one, too. More than 2 million people bought shares in British Telecom and around 5 million in British Gas, and the number of shareholders has tripled, largely due to the privatisation programme.
    Of course, some justified publicity takes place in areas of political contention, as the hon. Member for Holborn
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    and St. Pancras said. That is not new or unique to the Government. What is new, and I hope will be unique, is the hon. Gentleman's argument that, because he does not like the Government's policies, publicity for them is wrong. Provided the conventions are observed, that is not so. But, if we take his line, we find that the 1974–79 Labour Government, with its Liberal support, must have had some difficulty with the conventions. I wonder on the hon. Gentleman's argument whether their publicity on counter-inflation or selective price control would have passed a value for money test. I very much doubt it. Would their material on devolution for Scotland and Wales have got very far? I doubt it; that was hardly uncontentious then or now. The hon. Gentleman would have to argue that the European Economic Community referendum was done in order to get that Government out of a party political hole. That is the result of the hon. Gentleman's logic when applied to his own party when in government. However, I do not take that view. I exonerate the Labour Government of impropriety. The better view is the one that we hold. They took their responsibilies for the conventions on Government publicity expenditure seriously and responsibly, just as we do, and they took advice, just as we do, on propriety. The hon. Gentleman cannot have it both ways.
    Mr. Dobson: The right hon. Gentleman should concede that, both in the case of the money spent on the European referendum campaign and on the national devolution referendum campaigns in Wales and Scotland, money was provided for both sides to put their cases. In the document published in 1981, the then Government justified the Labour Government's expenditure on the counter-inflation campaign, because a very big majority of supporters of all the main political parties agreed with the points made in the advertisements. That does not apply to the contentious political advertising of this Government.
    Mr. Major: I think that the hon. Member for Holborn and St. Pancras has missed the point of what I was saying, which was specifically to exonerate the then Labour Government from impropriety in those advertising campaigns. That is what I expressly said just a few moments ago. What I said was that, if the hon. Gentleman criticises us now, he should have condemned the last Labour Government even more roundly. If he does so, in the spirit of Robespierre-like purity I can tell him that he was wrong about them then just as he is wrong about us now.
    The hon. Member for Holborn and St. Pancras set out a number of criticisms. None is justified. All should be rejected. Our systems ensure that spending must come from within departmental budgets, and that it meets strict tests of value for money and cost-effectiveness. All publicity expenditure is also subject to the scrutiny of the House, of the Treasury Select Committee, and of the Comptroller General in the National Audit Office. We welcome that, and, of course, that scrutiny will continue.
    In addition, the Government not only support the traditional principles of propriety and strictly observe them, but in recent months they have strengthened their operation and published the guidelines implementing them. The controls are rigorous and the propriety is absolute. The Opposition's criticisms are baseless, they are shallow, and I invite my hon. Friends to reject them.
    5.29 pm
    Mr. Brian Sedgemore: The Minister presented his case today with a grace and charm that few hon. Members can rival. He is more confident at the Dispatch Box than he is when he answers questions to the Treasury and Civil Service Select Committee, of which I am a member. I remember him telling me two years ago that he had had a hard life, with no education and that he was ignorant on complicated matters such as economics. Having heard him today, nor does he seem to know how to bring the Government's publicity machine under control.
    The Minister said a lot about water, but, if he will allow me, I shall make that my last point. My first point is that many years ago Bertrand Russell, the philosopher, wrote a prophetic book on the Government's attitudes on expenditure and publicity. The book was called "Mysticism and Logic". In it Bertrand Russell said:
    "Better the world should perish than that I or any other human being should believe a lie…that is the religion of thought in whose scorching flames the dross of the world is being burnt away."
    Today's debate is about the Government's rejection of Russell's rationalist creed.
    Much later Gerald Kersh, in a book called "Night and the City", caught the flavour of the Government's unacceptable treatment of and expenditure on propaganda and publicity when he said:
    "The habitual liar always imagines that his lie rings true. No miracle of belief can equal the childlike faith in the credulity of the people who listen to him: and so it comes to pass that he fools nobody as completely as he fools himself."
    Which Minister, I ask myself, will step forward today and admit to being Kersh's habitual liar? If truth prevails, there will be a positive stampede from the Government Benches.
    As I look at the huge and burgeoning amount of money spent on publicity by the Government, I am reminded of Swift's aphorism that
    "All political parties die of swallowing their own lies."
    But, of course, I try to be fair minded. I try to give the Government the benefit of the doubt. God knows, I try. But every time that I pick up a Government leaflet or see a television advertisement on a controversial issue, my mind turns first to she who is in charge at Downing street, and then to Somerset Maugham, who said of the constant wife:
    "She's too crafty a woman to invent a new lie when an old one will do."
    Then, as images of the villain of the piece—the Secretary of State for the Environment—whom people have tried to exonerate today, I am reminded of Harry S. Truman who, in an ugly mood, said of Richard Nixon:
    "I don't think the son-of-a-bitch knows the difference between truth and lying."
    We are told that the Secretary of State has been exonerated by the courts today. As a barrister, my advice to Greenwich would be that it should appeal. With the greatest respect, I say to m'luds that they have forgotten Robert Louis Stevenson's perceptive aphorism:
    "The cruellest lies are often told in silence."
    It is basically the omissions from that pamphlet to which m'luds have not properly directed themselves today and to which I imagine the Court of Appeal will direct itself shortly if Greenwich has the money to appeal.
    I want to intervene briefly, but let me give one example of what I consider to be expenditure on publicity that has
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    got completely out of hand. It relates to the Government and the water industry. We all know that the same Minister is involved. I was in my car today—a Vauxhall Cavalier—coming in from Hackney, when I saw a little crowd in Kingsland road looking at a poster that was 50 ft high and about 105 ft across about water privatisation. I thought that I would make some inquiries today and find out exactly how that poster got up there and how the Government, or the water industry, or both, or the Conservative party, or all three of them, justify its existence. I shall not say now what is in it; I shall keep that for the moment.
    I do not want to give away confidences, but I understand that the water industry employed an advertising agency which gave the job to two of its crack whizzkids, people with the finest intellects in the land, whom I shall call Jeremy and Nigel because all whizzkids in the advertising industry are Jeremies or Nigels. Jeremy and Nigel met together and they had with them the Cabinet Office guidelines. Jeremy was sitting over the table with his head in his hands looking pig sick. He was trying to think what advertisement he could do for the privatisation of the water industry. My hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) quoted the annexe of those guidelines, but paragraph 2 says that the advertisement must be relevant to Government responsibility, objective and explanatory and should be produced and distributed in an economic and relevant way having regard to the need to justify the cost as expenditure of public funds.
    Then Jeremy turned to paragraph 5 and he thought, "Oh my God, what am I going to do?" That paragraph says that Government publicity should always be objective and should be directed at informing the public even where it also has the objective of influencing the behaviour of individuals and particular groups. Jeremy did not know how he was to inform the public. What was he to inform them of about the Water Bill? He had in front of him a series of tables on the test discount rate and the real discount rate in the water industry; diagrams of sewage works and chemical formulas for purifying water. He had everything, but, as he said to Nigel, "There's no buzz in this, Nigel." A good advertisement needs buzz and it needs information.
    Then—I have not yet said what is in the advertisement —a flicker came into Jeremy's eye, a smile came across his face, and he started to jump up and down excitedly. He said, "I've got it. I've done it. It's brilliant. It's super." He hugged Nigel and there were tears streaming down his face because that is the way that genius works in the advertising world. It was extraordinary. He said, "We'll tell the public that water comes from rain". And so it is that in Kingsland road and in every borough in the land we can look up and see these posters. This is not a joke. Those posters have nothing other than a picture of a cloud. The whole thing is one picture of a cloud and underneath it says, "This is the beginning of our production line." Millions of pounds of taxpayers' money, our money, is being spent on telling the public that water comes from rain—can anyone believe the perceptive abilities, the limits of human intellect?—and that rain comes from clouds. Surely that is the grossest example of waste in the history of the world. I defy the Minister to tell us what that is about when he replies.
    I have one last brief point which refers to the letters that my hon. Friend the Member for Holborn and St. Pancras has written to the Treasury and Civil Service Select

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    Committee about the fact that we were grotesquely misled. Civil servants from the Central Office of Information gave evidence to the Select Committee and referred to the 1985 guidelines. They made no mention of the fact that new and more extensive guidelines were published in 1988 concerned with all kinds of new advertising which opened up a hornet's nest of questions which would have embarrassed the Government. The Government's response also referred to the 1985 guidelines and made no mention of the fact that those guidelines were no longer in force but had been replaced by the 1988 guidelines.
    I want to he fair. I do not think that that was a cock-up or a cover-up; I think that it was a nasty conspiracy on the part of the Executive to deceive Parliament. We shall call those Ministers and civil servants to account, bring them back in Committee, and challenge them in the Lobby tonight.
    5.39 pm
    Mr. Phillip Oppenheim: I know that Conservative Members will stand up one by one during the debate and bitterly criticise the Opposition's attitude and their calling of this debate. They would be wrong to do so. Conservative Members should welcome the Opposition calling this debate. They should certainly welcome their new-found vigilance on behalf of the taxpayer. It is right that Opposition Members should be vigilant on behalf of the taxpayer, although there are few of them here to support their Front Bench spokesmen. However, it is a shame that the Opposition's vigilance slips a bit on local authority spending. I can see the Opposition Front Bench spokesmen twitching at the very thought that the subject of local government's high spending on publicity will be raised.
    I hope that you, Madam Deputy Speaker, will not rule me out of order if I mention the fact that the Department of the Environment decided to issue this leaflet partly to counter the smears and misinformation about the community charge that were being put out by local government. Strictly in that context, I shall point out that, over the past couple of years, Derbyshire county council has spent huge, almost unaccountable sums of money on criticising the Government about the community charge.
    So-called free newspapers contain headlines such as "Your privacy invaded—poll tax threat". That sort of expensive misinformation has not been considered a suitable subject for the Opposition's new-found vigilance over the spending of public money on so-called political publicity. On one occasion, when Derbyshire county council spent more than £1 million on a television publicity campaign, the county council's leader said that that was a "mere pin-prick."
    Mr. Joseph Ashton: Is not the difference that the national Government virtually tell the newspapers what to print and do not need to buy adverts for their policy, whereas Labour councils, which are in an overwhelming minority and face a predominantly Tory press, even in the regional newspapers, not to mention the national newspapers, have no option but to buy advertising?
    Mr. Oppenheim: I am pleased that the hon. Gentleman raised that point. In our county of Derbyshire, much of the local press toes the council's party line. I and many other people in Derbyshire believe that one reason for that is
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    that certain newspapers in Derbyshire receive huge sums in advertising revenue from the county council, which encourages them to toe the line of the council's ruling group.
    May I remind the hon. Gentleman that the rules on publicity which bind local government are far less strenuous, tight and onerous than the Treasury and Civil Service rules which bind the Government. That is why it would have been especially appropriate if Opposition Members had raised the subject, and were as vigilant about local government's spending on publicity as they are about the Government's spending. I would hazard a guess that my right hon. Friend the Minister for Local Government has not received a single representation about local government spending from the Opposition.
    I fully agree with the Opposition's vigilance on the spending of public money on publicity. However, I cannot agree on one point. They have persisted in mixing the spending of public money on the promoting of privatisation issues with more general spending to inform the public about the Government's policies and legislation. The money spent on privatisation issues has been recouped many times over. Opposition Members would have been the first to criticise the Government if they had not spent money on promoting those issues and, as a result, had not gained the best possible price for those issues for the taxpayer.
    The attitudes of Opposition Members have also changed sharply since 1977, when they were forced by the International Monetary Fund to sell part of their stake in British Petroleum. The then Labour Government spent millions of pounds, at today's prices, promoting their forced share sale of part of their stake in British Petroleum. I ask any Opposition Member: was that Labour Government wrong to spend money on promoting the privatisation of their stake in British Petroleum in 1977? If that Labour Government were not wrong to spend the money then, why are this Government wrong to do so now?
    It boils down to the fact that Opposition Members do not mind one little bit if public money is spent, as long as it is spent in propagating their point of view. However, they object vigorously, vehemently and strenuously when the Government spend money promoting information to the public about their policies and legislation. I do not criticise them for that, nor do I think it hypocritical; it is merely the stuff of politics. At the same time, it is not a matter that Conservative Members have to take seriously.
    I welcome the Opposition's new-found vigilance and the calling of this debate today. The Opposition have shot themselves badly in the foot by drawing attention, not only to their double standards, but to the millions of pounds spent by Labour councils in promoting Labour policies.
    5.47 pm
    Mr. James Wallace: I disagree with what the hon. Member for Amber Valley (Mr. Oppenheim) said about the disciplines imposed on local authorities as opposed to the Government. Government Ministers, unlike local authorities, are not surcharged if they overstep the law. One wonders if anyone might have been disciplined for the £500,000 campaign that was mounted at the end of last year to rehabilitate the egg, following some disastrous words uttered by the then Under-Secretary of State for Health. The hon. Lady might

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    have thought twice before opening her mouth if she thought she would be surcharged for the public expenditure consequences of her mutterings.
    When I intervened in the speech of the Chief Secretary to the Treasury he thought that he had scored a bull point in return when he talked about the Labour Government. However, I was not a member of that Government. He talked about two issues: the devolution referendum, which took place six months after the Lib-Lab pact, and the European referendum which took place two years before the Lib-Lab pact. As the hon. Member for Holborn and St. Pancras (Mr. Dobson) has already mentioned, in both those cases, both sides were given the chance to put their argument. There is no suggestion from Conservative Members that public funds will be made available to allow people up and down the country to put forward their arguments about why the poll tax is not good. In the previous cases, there was an element of fairness.
    In the few moments that I have had, I have thought back, and I suspect that the last major publicity campaign mounted by a Liberal Government was that with the poster showing the face of Lord Kitchener, with the message "Your Country Needs You". I suspect that that was good value for money because we still remember Lord Kitchener. Who, in 70 years' time, will remember Sid? Given the straitened circumstances of that time, perhaps the Minister will exonerate the last Liberal Government in the way in which he has exonerated the last Labour Government.
    In the past 10 years there has been a sixfold increase in the amount of money spent on Government advertising, which, by any stretch of the imagination, is a significant development. Four years ago, the Government were in tenth place in terms of general advertising spending. They are now in first place, ahead of Unilever. That has been at a time when the Government have embarked on a crusade against public expenditure.
    I recall the words of Mr. Robert Harris, a journalist, who, of one of the privatisation issues, said:
    "People are being forced to pay for adverts they do not notice in order to buy shares they do not want in an industry they already own."
    He could have added that they had been asked to do so with their own money. As the Government regularly tell us, it is not the Government's money but the money of the people and the taxpayers that is being used.
    At the same time, there has been a whiff of hypocrisy. I shall not stray into the subject of local government, but you, Madam Deputy Speaker, have no doubt heard the comments, which are a good example of the kettle calling the pot black.
    We have heard other examples of hypocrisy. The Secretary of State for Health launched an attack on the British Medical Association for trying to spell out to patients what the Government's proposals mean. It is hypocrisy for him to attack it when the mere launch of the White Paper involved more than £1 million. It involved a relay with his face being flashed up on screens across the country, a specially produced video and a video designed specifically for Scotland that featured the Secretary of State and the Under-Secretary, the hon. Member for Stirling (Mr. Forsyth). I am told that nurses were flown in from various islands to Kirkwall in my constituency to see this. Afterwards, some of them said that they had never
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    seen anything more like a Conservative party political broadcast; it was counter-productive, too, as the nurses also told me that it was the best recruiting advertisement for the opposition parties that they had seen in a long time. It failed to hit its target.
    Increasingly glossy brochures have also been mentioned. I have here a White Paper. Once, they were really white. The Beveridge White Paper sold tens of thousands of copies, printed on ordinary white paper. Now they are all glossy and contain photographs—there is inevitably one of the Secretary of State for Scotland at the front. I remember the day when "Scottish Enterprise" was announced. I was sitting here with my hon. Friend the Member for Caithness and Sutherland (Mr. Maclennan), who noticed a rather nice picture of his brother's flat in the document. He did not know what relevance it had to "Enterprise Scotland", and five months later we are none the wiser. It was just another example of Government money being spent on glossy publicity.
    Then there was the White Paper on the ending of the dock labour scheme. I make no bones about it: our party supports the Government on that, but to introduce a White Paper at great cost on one day and then bring in a Bill the next begs the question of what is being done with public money.
    I turn next to the ministerial presentations on the inner cities initiative and on the Government response to the Settle-Carlisle line. Those glossy presentations were made at press conferences, not in the House, and should have been delivered at the Dispatch Box, from which the Ministers would have had to answer questions from hon. Members on both sides of the House. That is another abuse of publicly funded Government PR work—
    Mr. Ashton: Has the hon. Gentleman forgotten the wining and dining that takes place when Ministers meet the press off the record? That is what the Secretary of State for Transport did over an expensive lunch; he gave the press a story and frantically denied it two days later. It happened again when the Chancellor of the Exchequer gave the press a briefing that was recorded on tape and then denied that the tape had been switched on. That is a mammoth waste of public money to impart a message that does not get across.
    Mr. Wallace: I share the hon. Gentleman's view, but I suggest that the lunch to which he referred was paid for by the journalists, not the Secretary of State for Transport. Whether they got value for their money is another matter.
    Of course, we accept that there is a serious dividing line between genuine advice and information and what might be described as propaganda. Information advertising campaigns to bring to public attention the fact that smoking can damage people's health are, we would all agree, legitimate, as are advertising campaigns to encourage the take-up of social security benefits. I encouraged the Minister of State at the Scottish Office to advertise the availability of and opportunities under the agriculture development programme in my constituency after the storms which greatly damaged agriculture there. The Government said that there was no special scheme, but they were willing to promote the programme that already existed to help farmers. That was legitimate.
    The Chief Secretary mentioned the sums spent on energy conservation, but I notice that the Department of Energy's budget for advertising has shrunk. The

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    Government are cutting back on promoting energy conservation at a time when they claim to be concerned about the greenhouse effect. However, through their agencies, British Nuclear Fuels Ltd. and the Atomic Energy Authority, the Government are promoting day trips to Windscale, or Sellafield. That is another PR trick —when Windscale became unpopular, they changed the name to Sellafield, just as the poll tax has been changed to the community charge. All this is part of the Government's use of slick PR.
    The conventions that have already been referred to state:
    "Public funds may not, however, be used to finance publicity for party political purposes; this rule governs not only decisions about what is and what is not to be published, but also the content, style and distribution of what is published."
    The contents should include not only the truth, but the whole truth. I am not surprised that the judges decided the Greenwich case today as they did, but it cannot be denied that, even if there was no abuse of spending which, in their view, merited an injunction, the whole truth was not told.
    As a Scottish Member of Parliament, I have witnessed in the past year the sending out of the registration forms. One aspect which especially alienated people was the statement on the forms that a person who was designated a responsible person was not liable for anyone else's poll tax. The form omitted the fact that a spouse in the house could be jointly liable for the tax. The leaflet that was the subject of the Greenwich case will misinform people in the same way.
    The original GP's contract was sent out containing helpful diagrams showing what would happen to a GP's pay, especially in rural areas. The contract said that a GP with a list of 1,000 would receve an increase in pay. It was less clear that he would also suffer a drop of £10,000 in basic pay, which he would have to make up with special payments. The contract did not say, either, that the examples of special payments in the diagrams related to doctors with lists of well over 2,000. Such misinformation strays over the dividing line of legitimacy.
    At present, there is a campaign in Scotland by the Scottish Office to encourage parents to stand for school boards. A lady in my constituency wrote to say:
    "I have just watched a government advert for school boards. At one point it says 'Every parent can stand for election and every parent can vote'. I think I can vote but I have been led to believe I do not have the right to stand for my son's school board.
    Whalsay only has the one primary school and I teach in it, therefore I believe I do not have the same rights as my friend up the road whose son will start at the same time as my son."
    She is right—she does not have the same rights, but the Government advertising does not make that clear, and the letter that I sent the Minister asking him to clarify and explain remains unanswered.
    Objections have been raised to advertising the privatisation of water. I am told that there is now more advertising of water than of any other product—more than of Pepsi-Cola or Nescafé. The problem is that Parliament has not yet approved the privatisation plans. They may well be Government policies but they have not been put into operation and the Bill has not completed its passage through both Houses. That is an abuse of public money.
    The guidelines mention not only content but style, which I should like to examine in the context of the Department of Employment's promotion of "Action for
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    Jobs". It is a classic example of what the Government complain about when done by local authorities. It is persuasive about controversial issues and it tends to promote the Department. What is more, it can hardly be said to be a sober presentation of factual information. The title, "Action for Jobs", was used at the same time as the "Action" slogan appeared as the theme at the Conservative party conference.
    I am also advised that the Department of Trade and Industry has taken it upon itself to advertise the enterprise initiative with a soaring arrow, a logo that also appeared in a remarkably similar form in Conservative posters in the recent county elections.
    We are told that the Scottish Office is to be given a face-lift by PR consultants to improve its image. Everyone in Scotland knows that that has much to do with the Government's need to give their party a political lift there. We need independent advice which is seen to he independent and not to come from the Government. There is a dangerous blurring of public information and party propaganda, of the state and the party. Perhaps we should not be surprised, because in 1987 the Prime Minister took about £600,000 more from the Exchequer to run her office than the Queen, and last year the gap widened to almost £1 million.
    5.58 pm
    Mr. David Tredinnick: The hon. Member for Holborn and St. Pancras (Mr. Dobson) closed his remarks by saying, "Publicity at public expense has gone too far and should stop." I suggest that that is humbug. The hon. Member for Orkney and Shetland (Mr. Wallace) talked about the pot calling the kettle black, but the deception practised by the Opposition in this matter is more like a cauldron calling the kettle black.
    The Labour party has abused public funds disgracefully to promote its political causes in the past. Perhaps the most striking example of that, as my right hon. Friend the Chief Secretary mentioned, was the campaign from 1975 to 1977 under the last Labour Government. Hon. Members will recall that their economic policies were in complete disarray. They then decided to try to spend themselves out of trouble, I am not thinking of the attempt to pay the taxpayers' money in the normal sense through the Treasury; this was a new device. This was the device of the so-called counter-inflation publicity campaign. It must be one of the most disastrous publicity campaigns in the history of advertising because, of course, by 1979 inflation was running at more than 27 per cent.
    It is well worth studying what the papers said of the Labour Government's campaign at the time. The Guardian said:
    "The Government's campaign to win support for its anti-inflation policy begins officially tomorrow, when all national newspapers will carry full-page advertisements paid for by the taxpayer, and Mr. Wilson will return briefly from his Scilly Isles holiday."
    In The Times we read that:
    "…the Government's anti-inflation publicity campaign, the largest since the days of Sir Stafford Cripps more than a quarter of a century ago, will enter its third phase."
    This is December 1975. Already £1·5 million has been spent, and the specially created counter-inflation publicity unit has another £1 million at its disposal. If that is not an instance of a Government using publicity to get their way and to get themselves out of trouble, I do not know what

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    is. This shows quite clearly the large degree of hypocrisy among Opposition Members. In this campaign they spent £300,000 on television advertising and £800,000 on press advertising in 1975–76 alone.
    Another campaign supported by the Opposition a Parliament ago was the campaign of the late, unlamented Greater London council to denigrate the police in London. I know that you do not want me to stray into local government politics, Madam Deputy Speaker, but it suited the Labour party to use the GLC to get at the Government during the presentation of the Police and Criminal Evidence Bill 1983 and the subsequent Bill, which they did by spending money on a spurious magazine, of which the name escapes me—it might have been "Policing London". They put out propaganda which was intended to prevent local groups from using the new consultative procedure Lord Scarman had suggested should be set up in his historic report into the Brixton disorders.
    That was a disgraceful misuse of public funds, but perhaps it pales into insignificance when one looks at the attempt by the GLC to save its now unlamented neck by spending £12 million of the taxpayers' money, despite the fact that Londoners had voted at the previous general election to abolish the GLC. The view at county hall went blatantly against the democratically expressed wishes of the voters.
    The hon. Member for Hackney, South and Shoreditch (Mr. Sedgemore) mocked the privatisation of water. He talked about adverts for clouds. Some of us might have said that he had his head in the clouds. The whole point of the advertising campaign is to stress the purity of water. [Laughter.] Opposition Members may laugh, but they have been the first to try to make mischief by suggesting that there are problems with the purity of our water. I know that there is concern in my constituency about the purity of water, but surely it is right for the water boards, which are being privatised, to point out the good things which will happen as a result of my right hon. Friend the Prime Minister's policy. That seems to me perfectly reasonable.
    The Government are introducing reforms in areas of life which the Labour party has never even tackled, such as moving from rates to the community charge. Are we really supposed to do that without any publicity? The pamphlet which has been so criticised says in the first paragraph:
    "This leaflet tells you about the main points of the new community charge system."
    It is hardly propaganda. It is giving people an overview to counter the propaganda of the Labour party, which has frightened in particular elderly people in my constituency. The Labour propaganda makes out that everyone will pay the same, whereas we know, of course, that with the community charge there will be protection for poorer people. [Laughter.] Opposition Members may laugh but it is the truth, and it is quite right that we should make that point.
    There is categorical evidence that the Labour party abused public funds during its last administration and aided and abetted local government organisations. We on the Government Benches have an absolute right and duty to present the very important reforms of our Government and party, and our constituents want to know what they are.
    6.5 pm
    Mr. Tam Dalyell: I begin with what is meant to be a non-party point. When I first arrived in the House of Commons in 1962, if a motion of this sensitivity and potential importance had gone down on the Order Paper, the Prime Minister of the day would probably have been present and Hugh Gaitskell certainly would have been.
    If there are to be motions like this on the Order Paper, they should be regarded, in my opinion—which may be old fashioned—with the utmost gravity, because the charge is extremely serious and this is a weighty matter. If people do not mean them, they should not put them down in the first place. [Interruption.] I said that it was a non-party point, and I was speaking, I hope, as a House of Commons man on this issue. Unless it is a major debate, I do not think that the Chief Secretary—incidentally, I do not entirely blame him for this—should feel that, having spoken, he can go off to some Cabinet Committee meeting or some other doubtless important engagement. If there is a Cabinet Committee meeting, the business of the House of Commons on an issue like this should take precedence.
    On 8 May I tabled a question asking the Prime Minister to publish in the Official Report the text of Mr. Ingham's letter to Mrs. Elizabeth Jenkins on a code of ethics for Government information officers. Mrs. Jenkins is the professional civil servants' representative most concerned, and we are to understand that this was an important policy letter, inside the Civil Service at any rate. The answer was a monosyllabic "no". Letters like that should be made available to Parliament because Parliament has few more important internal matters than to reflect on the ethics of the Civil Service.
    My first question to the Minister is why was this important letter not published in the Official Report, or at least put in the Library of the House? Secondly, is it true, as we read in the press, that a number of senior information officers in Whitehall—I will not name them; their names are in the press—are leaving? There may be personal reasons, it may be coincidence, but we are at least entitled to ask why so many seem to be leaving at this moment. I do not jump to conclusions about the recent appointment of Mr. Ingham in this respect because, frankly, I do not know and I do not make assertions about matters I know nothing about. This is a genuine question about why it is happening.
    Thirdly, at 14 minutes past five this afternoon I interrupted the Chief Secretary. I am sorry that he is not in the Chamber. I asked whether, in the context of propriety, he believed Sir Leon Brittan when he claimed that Mr. Powell and Mr. Ingham had fully approved—I repeat the word "approved"—the improper disclosure of a Law Officer's letter in January 1986. The Chief Secretary's reply was that he had no intention of getting involved. That is often the reply that we get in one form or another from other Ministers. Hon. Members can check the actual wording in Hansard, but I do not think that I am distorting it when I say that his reply was, "I will not get involved in that."
    Three or four minutes later the Chief Secretary said that the principles of propriety were unchanged and fully observed as between Governments. That is simply not so. Never before has a chief press officer or, much worse in a way, a senior private secretary to the Prime Minister authorised and approved, knowing that it was improper,

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    the disclosure of a Law Officer's letter for the specific purpose of damaging another Cabinet Minister—in this case the right hon. Member for Henley (Mr. Heseltine). To my knowledge, or to the knowledge of anyone I have talked to, that has never happened before.
    My hon. Friend the Member for Hackney, South and Shoreditch (Mr. Sedgemore) made his point brilliantly earlier in the debate. He is a former civil servant and a private secretary to a Minister. He nods in agreement when I say that never has a senior private secretary behaved in that way.
    Such behaviour is corrupt and quite improper. I do not yah-boo the word "corrupt" across the Chamber. I stick to what I said in a lead letter to The Times some weeks ago —I never shout, bawl or interrupt from a sedentary position. However, I mean every word that I say. If Mr. Ingham and Mr. Powell behaved in that way, their behaviour was corrupt.
    I gave the Chief Secretary every opportunity to say that Sir Leon Brittan was wrong, but he did not say anything of the kind. No one in a responsible position has ever said that. They might have thought that Sir Leon was a bit of a cad to do it, but they did not say that he was factually wrong. This issue touches the most sensitive and delicate areas of the propriety of the way in which 10 Downing street and the leadership of our country operate.
    This matter should be cleared up, and I shall tell the House how it can be done. The Prime Minister must come to the House to do one of two things. She must explain either that Mr. Ingham and Mr. Powell did this off their own bat or they did not. I am not a man of malice or vengeance, but I say that if they did it off their own bat without telling the Prime Minister, Mr. Ingham has no right to occupy this unique position. After all, there is the issue of example and propriety.
    However, if he acted on authority with the approval of the Minister responsible—and only one Minister is responsible—that Minister must come to the House and say, "Yes, Mr. Ingham and Mr. Powell kept me fully informed about the progress of my quite improper idea to get the Solicitor-General to write a letter and then leak it. Mr. Powell and Mr. Ingham kept me fully informed about the role of Sir Leon Brittan." The Prime Minister must also say to the House, "On 27 January, when I was under pressure, I told a self-preserving lie to the House of Commons." Parliament cannot operate properly if senior Ministers and the most senior Minister can get away with lying to the House on a matter of losing two Cabinet Ministers.
    6.16 pm
    Mr. Patrick McLoughlin: I shall not try to follow the arguments advanced by the hon. Member for Linlithgow (Mr. Dalyell). It was strange to hear him complain about the absence of the Chief Secretary when the lead speaker on the hon. Gentleman's own Front Bench was absent for a good part of the debate. The hon. Gentleman did not level any criticism at his hon. Friend.
    I welcome the debate on the Government's publicity machine. Some of us feel that it is not the most crucial issue that our constituents write to us about. I have received no letters from my constituents complaining about the cost of the Government's publicity machine. However, I have received letters complaining about the cost of publicity. Perhaps that is one of the reasons why the Government
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    have felt in necessary to spend a certain amount on trying to put over a particular case. I have a letter from a constituent, or from somebody whom I think is a constituent. It says:
    "I enclose a copy of Workforce. Surely something can he done about this blatant abuse of ratepayers' money for Labour propaganda. This practice is rife. Note particularly the name on the back of this publication. I dare not reveal my name for fear of victimisation as I work for Derbyshire County Council."—[Interruption.]
    Opposition Members seem to find that quite funny.
    When the Education Reform Bill was passing through the House a leaflet was issued by the county council and shortly after that the Government issued a booklet on the Education Reform Act 1988. The council leaflets were distributed in schools and children were asked to take them home to their parents. The use of pupils in such an outrageous way should be wholly condemned. It is noticeable that the Labour party, deliberately and perhaps understandably, tries to distance itself from some of the things that Labour local authorities have done and the way in which ratepayers' money has been spent.
    My hon. Friend the Member for Amber Valley (Mr. Oppenheim) has adequately listed some of the abuses relating to the community charge. I do not want to go over that ground again because the argument has been ably advanced. I asked the Library for some figures about the amounts spent on Government publicity over the past three years, and I asked about the increase between 1986–87 and 1988–89. I was slightly surprised to find that during that period there was not an increase but a reduction of 10·4 per cent. That did not compare favourably with financial assistance to Opposition parties, commonly known as the Short money. From 1986–87 to 1989–90 that amount has increased by 54 per cent. In other words, the provision for Opposition parties increased from £632,000 in 1986–87 to £1,164,000 in 1989–90. So the idea that the Government have not been assisting Opposition parties, or that those parties do not now have their own vastly increased finances, is a strange idea to put about.
    Mr. Wallace rose—
    Mr. McLoughlin: I will not give way because time is short and a number of hon. Members still wish to take part in the debate.
    It is interesting to consider some of the leaflets that were put out by previous Governments. I, too, have examined the document:
    "Britain's new deal in Europe"
    —and whatever might be said about money having been provided for the opposite view to be put, nothing could have been more blatant than that pamphlet. Lord Wilson, who was then Prime Minister, stated on the front of that document:
    "Her Majesty's Government have decided to recommend to the British people to vote for staying in the Community."
    On the final page appeared this absolutely misleading statement, about which we have heard nothing in the debate:
    "When the Government came to power in February 1974 they promised that you, the British voter, should have the right to decide—for continued membership of the European Community…or against."
    That gave the impression that the referendum was to decide whether or not we stayed in the Community. That was nonsense; at the end of the day no referendum could tell Parliament what it was or was not going to do—[Interruption.] That pamphlet stated at the beginning:

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    "The Labour Party manifesto in the election made it clear that Labour rejected the terms under which Britain's entry into the Common Market had been negotiated, and promised that, if returned to power, they would set out to get better terms."
    That clearly said that the document was part of the Labour party's pledges.
    Mr. Dobson rose—
    Mr. McLoughlin: I will not give way in view of the shortage of time. In any event, the hon. Gentleman spent far too long at the beginning of the debate giving his side of the story. He can now listen to what others have to say.
    I regard that document as a blatant use of Government money. The Chief Secretary was generous in his remarks not to say that he found some of the wording in that document open to question, to put the matter no higher. I regard as wholly right the Government's use of taxpayers' money to put over factual matter concerning legislation, particularly in view of some of the propaganda put out by Labour local authorities which has been blatantly untrue and which has stirred up worries and fears which people need not have.
    I understand that under the rules by which the Government are bound, they can spend money on legislation only once it has become law. While prospective legislation is going through its Committee and other stages in Parliament, literature explaining it to the public cannot be put out. I regret that, and suggest that in future we should pay more attention to putting forward the reasons why we are making some quite radical changes.
    I refer again to the letter which accompanied the leaflet on education that I cited earlier. It said:
    "this Bill will not deliver the improvements needed and I hope this short document will illustrate some of the problems."
    That was clearly party political. It was paid for by the ratepayers of Derbyshire. The document was even printed in the Labour party colours of the time, although Labour seems to change its colours quite regularly these days.
    The Government have nothing for which to apologise. Indeed, we have strong grounds for saying that the money we have spent has gone some way to counter the false claims that have been made by some local authorities. We should be proud of the radical reforms that we are making, and at the same time we should be explaining fully to the public what we are doing.
    6.24 pm
    Mr. Thomas McAvoy: My hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) outlined the Opposition case extremely well. I shall expand only on the Scottish dimension of the issue.
    I wish at the outset to hark back to the atmosphere that previously existed between Government and Opposition in matters such as we are discussing today. At the time of the February 1974 general election, the "Switch Off Something" campaign was allowed to continue under an agreement between the Government and the then Labour Chief Whip. That contrasts starkly with the current situation and illustrates how dramatically it has changed. I fear that that change has been to the detriment to standards of conduct in public life.
    The Chief Secretary referred to civil servants. I feel duty bound to state that when Labour is next in government, I
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    shall press for an inquiry to be conducted into the behaviour of Ministers now in office, and civil servants, to discover how they conducted various negotiations in the sphere of publicity, particularly from the point of view of public propriety. I promise them that it will be no excuse for them to say in the future, as they have said in the past, that they were only carrying out orders. We will get to the bottom of how the Government and their Ministers have brought down standards in public life.
    When we look at the Scottish scene, it is interesting to peruse a document issued by the Scottish Office. It refers to the activities of that Department and states:
    "One of the objectives of the new Government advertising campaign in Scotland is to publicise Ministers by showing how services in Scotland derive from the Scottish Office under the direction of the Secretary of State and his Ministers."
    It goes on:
    "The aim is to show how the work of Scottish Office agencies reflects the policies and decisions of the Secretary of State and his ministerial colleagues in the Scottish Office."
    It adds:
    "It is the wish of Ministers that the benefits of Government action in Scotland should be more clearly attributed."
    I assure the Government that they do not need an advertising campaign to put that point across. We know the details only too well.
    Scottish Ministers are now clearly crossing the dividing line between publicising Scotland and advertising themselves. They are no longer just imparting facts but are pushing out propaganda about themselves. The new campaign clearly breaches the rules set out in central Government conventions, which tell us that the achievement of Government policy issues should not be personalised and that the presentation of publicity, as well as the concept and tone of it, should not be party political.
    The present purely party political use of Government money in Scotland—this has a bearing on the inquiries that we will institute when Labour is in government—is confirmed by the fact that a Government Minister, the hon. Member for Stirling (Mr. Forsyth), led the briefings of an advertising agency on a publicity job that he wanted done. It was not left to civil servants to tell the advertising agents what was required. A Minister chaired the meeting and made sure that the agency was well aware of what he —a politician and a Minister—wanted to achieve.
    The figures were made clear on 15 March 1989 when we were informed—the details appear at column 226 of the Official Report for that date—that the budget for the Scottish Office for information campaigns had been £2·1 million in 1988–89 and was £2·9 million for 1989–90, an increase of £800,000. I suppose that one must bear in mind the information about the poll tax that the Government have been putting out. I assure them that it has all been to no avail. We in Scotland know who to blame for the poll tax. We do not want it. As soon as Labour takes office, we will get rid of it.
    The Scottish Office asked a consultancy to carry out the survey of parents' views on skill education. According to a written answer, the consultancy is due to report in June 1989. Therefore, it will be reporting after the Self-Governing Schools etc. Bill has been initiated by the Government. The Opposition therefore believe that the survey has been commissioned for political reasons. Comments and submissions to the survey will be selectively quoted and misinterpreted to give retrospective justification for the schools legislation. This is quite clearly political use on the Government's part.

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    It seems to be common knowledge that senior Scottish Office civil servants are becoming increasingly concerned that the boundary between Government and party propaganda is being eroded rapidly, especially since the appointment of the hon. Member for Stirling as a Scottish Office Minister. According to the central Government conventions, publicity and advertising should not be personalised, but the hon. Member for Stirling is constantly to the fore in these surveys I should have thought that the Secretary of State for Scotland would be extremely wary of allowing his hon. Friend any scope for personal publicity, because it is clear that the hon. Member for Stirling is determined to replace the Secretary of State irrespective of whether the Secretary of State finds another post.
    In the Glasgow Herald of 14 March 1989 there was an article which I have not seen denied by any Government source, although I am ready to be corrected on this point. The article quotes a senior civil servant in the Scottish Office as saying:
    "My impression is that there has been more use of public funds for things like publicity and polls than was the case in the recent past. The consciences of some senior civil servants are being tested more than has ever been the case previously."
    To my knowledge, that has never been refuted by any Minister. It is a serious situation when senior civil servants go to the press and make statements such as that.
    I heard the Chief Secretary to the Treasury being magnanimous and exonerating the past Labour Government from any misspending or abuse. If that attitude has been genuine, bearing in mind the delicate nature of this subject, there would have been consultation between those on the Front Benches, taking in the minority parties, too. That did not happen. They tried to keep it quiet and it was only through the persistent pursuing by my hon. Friend the Member for Holborn and St. Pancras that this was exposed publicly.
    The Government are treading a dangerous path. They are abusing their power in a classic illustration of elective dictatorship. It seems to us that there are no voices of fairness and sanity on the Government side to call a halt to this business of politics on the taxes. One would have thought that, merely in the interests of self-preservation, the Conservatives would call a halt, because there is no doubt that they have initiated a course of action that contains the seeds of their own doom. The Government have demeaned the standards of public life and have added to the list of their squalid actions, cutting corners and sailing close to the wind. All these actions combine to expose this Government as one of the seediest in the western world. It is that aura of shadiness and shiftiness that will ultimately lead to a Conservative defeat in the next general election.
    6.32 pm
    Mr. Irvine Patnick: It is a fact that some of the Government publicity is born out of the activities of Labour councillors. I had expected the hon. Member for Holborn and St. Pancras (Mr. Dobson) to draw attention to, dissociate himself from and condemn the councillors responsible for this misinformation and propaganda that is being pushed out.
    Mr. Tony Banks rose—
    Mr. Patnick: I have five minutes. With the greatest—
    Mr. Banks: I know something about liberty—
    Mr. Patnick: The only liberty the hon. Member knows is the statue of liberty.
    I had expected the hon. Member for Holborn and St. Pancras to notice the real scandal of the gross abuse of ratepayers' money being perpetrated by members of his own party.
    I welcome the fact that the Government give a balanced view to counter some of the activities of Sheffield city council, which seems to think that the community charge will vary from some gross figure to another gross figure based on what it would have been if it had been levied in 1987. We all know that that is nonsense.
    Surely the Government have a clear responsibility to provide advice and information to the public about their rights, entitlements and duties. That responsibility has led to campaigns on such things as crime prevention, health education, the prevention of car tax evasion, rabies prevention, job clubs, income support and teaching as a career. None of those was mentioned by the hon. Member for Holborn and St. Pancras.
    The Widdicombe conventions governing the form and content of Government publicity were published in 1985. I accept that the Government have a duty to ensure that citizens of places such as Sheffield have the facts presented to them in a way that is non-party-political, as opposed to some of the rubbish disseminated by some councils. The council of the hon. Member for Newham, North-West (Mr. Banks) and my friend Councillor Jones is one of the greatest exponents of this. The Government have to communicate effectively—
    Mr. Banks: Give way.
    Mr. Patnick: Government-funded publicity has to compete harder for public attention.
    Some Government publicity which clearly passes the test of propriety inevitably relates to subjects that have been politically contentious. This is neither new nor surprising. The truth is that Labour is running a campaign of misinformation and misrepresentation about legitimate publicity campaigns that wholly meet the test of propriety and value for money simply because it is opposed to these policies, but the public have a right to know about policies that affect them. The Government must continue to ensure that those policies are explained to the public.
    6.35 pm
    Mr. Ian McCartney: I know that my hon. Friend the Member for Newham, North-West (Mr. Banks) wants to put the final nail in the coffin of the Government on this subject but I want briefly to remind the Chief Secretary that in his reply to my hon. Friend the Member for Linlithgow (Mr. Dalyell) he denied any involvement by the Government in expenditure on water privatisation or the Water Authorities Association. Yet I have in my possession, as have other hon. Members who served on the Standing Committees on the Electricity Bill and the Water Bill, confidential minutes of meetings including officers of the Treasury and the Department of the Environment in negotiations with the Water Authorities Association on the level of expenditure, the types of expenditure and the dates on which that expenditure would be made.
    For example, on 18 May 1988 a Mr. Hood, a latter-day Robin Hood who robbed the poor to promote the rich, indicated in minute WAA/C/88/20 that a recent meeting

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    between the Treasury and the water authorities had come to an agreement about the nature of the publicity and the possible split of costs on a 50:50 basis with the Department of the Environment and the water authorities prior to the bill going through the parliamentary process and getting the approval of the House.
    The consequence of that has been an unprecedented use of public resources this year on the privatisation of the water authorities. Something like £8 million has been spent in the last six weeks alone by the water authorities, and presumably under the secret agreement the taxpayer is picking up at least 50 per cent. of the cost of the television advertisements. Over 3,300 spots across the 15 ITV regions in Britain have been purchased by the Water Authorities Association with the explicit agreement of the Treasury and the Department of the Environment. That agreement was reached as far back as 18 May 1988.
    The Minister has deliberately misled the House on this matter. It is not the first time that Ministers have misled the House about expenditure on the promotion of privatisation. The whole issue stinks. The Government are prepared to spend millions on the flotation of public assets at knock-down prices to people who wish to speculate on assets owned by the public.
    If this debate has shown anything, it has shown the extent to which Ministers will go to hide the activities that are taking place involving so-called independent civil servants being embroiled in party political activities, and consultants, some of whom are now employed at Conservative Central Office, who are prepared to organise and promote party political propaganda so long as the cost is met through the public purse. The scandal of paying for that publicity out of the public purse should be ended.
    I hope that the debate will mark the beginning of the end of the Government's attempts to utilise public resources and millions of pounds to promote the Conservative party in the run-up to the next general election.
    6.39 pm
    Mr. Bruce Grocott: It is remarkable that throughout the debate no Conservative Member has attempted to refute the Opposition's central proposition that the cost of Government public relations and advertising is soaring. Although it is extremely difficult to obtain accurate figures, we estimate that spending on publicity is six times greater than when the Government came to office. However, as the Government would be reluctant to accept my figures, it is worth establishing what the advertising industry itself thinks of the Government's various advertising accounts. Recommended reading on that subject is the advertising industry's house magazine, "Campaign," which listed advertising's big spenders in one of its April issues.
    The reference to Government advertising in "Campaign" is particularly interesting, when it comments that
    "the Government was still the third biggest advertiser last year. Criticisms of waste and politicking hid a maturing relationship with its agencies. And there is more—much more —to come."
    One can imagine the industry licking its lips at the prospect of the advertising that is yet to come. In that article, the
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    Government are listed as a holding company, appropriately enough, together with Unilever and Proctor and Gamble. The "Campaign" article continues:
    "Many senior figures in the industry believe that the Government's rush to embrace advertising has happened so fast that it was in serious danger of spinning out of control."
    The feature goes on to make predictions about the level of Government advertising expenditure in the years ahead, saying that
    "there is no evidence to suggest that the Government's love affair with advertising is showing any signs of becoming less ardent or that 1989 will see any let-up in its activity…The poll tax and proposals to reform the NHS will also give Whitehall a lot of explaining to do. `One thing is certain,' says one COI agency man, 'this year's spend is going to be astonishingly high'."
    That is how the advertising industry views Government expenditure.
    Mr. Martin M. Brandon-Bravo: Will the hon. Gentleman confirm that the advertising expenditure he mentions will include campaigns on road safety, crime prevention, benefit take-up, and protection against AIDS—all of which are perfectly legitimate subjects of publicity as part of that advertising budget?
    Mr. Grocott: If the hon. Gentleman has been present for the entire debate, clearly he has not listened. Why is six times the amount of money required to undertake essential factual campaigns, about which nobody argues and which any Government must undertake? Our argument is that under the present Government the content and style of that advertising has changed, and it is that which I find particularly sinister. I find most worrying of all the comment in "Campaign" that
    "it is equally true that the style and content of that advertising will change as the Government matures into a more sophisticated client…'It really works on its agency relationships. Also, government departments themselves are more experienced and ad literate'."
    I do not know what is meant by "ad literate" but I can guess, and it sounds pretty unpleasant to me.
    The Government are moving from conveying factual information into that murky area of changing the public mood. They are massively increasing their expenditure on television advertising. We all know well enough that television advertising is not good at communicating factual information, but it is very good at conveying a mood—perhaps a false one, such as the impression that industry is prospering or that one can find a job if one only looks hard enough.
    It is surely a legitimate exercise for any hon. or right hon. Member to obtain information about the way in which various Government Departments use their budgets for commercial television advertising. I put down a fairly simple question asking each Government Department to say how much it spends with the independent television companies. The replies come back, one after another, "This information is commercially confidential." I am sure that it is also politically embarrassing, and that is why the Government will not spell out those figures.
    Being a persistent soul, I tried again. Knowing that the Departments would not reveal their expenditure, I thought that they might at least divulge how much air time they purchased, so that I could then do the sums for myself in calculating how much they spent with Tyne Tees, TVS, Yorkshire Television and the other commercial

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    companies. This time, the reply was even more sophisticated. The Minister of State, Department of Employment, replied:
    "Information on TV advertising expenditure in the form requested is not held by my Department, nor is it available centrally through the Central office of Information and can only be supplied at disproportionate cost. It is also commercially confidential."—[0fficial Report, 15 May 1989; Vol. 153, c. 51.]
    The Department hit me with both barrels with that one. I am surprised that the Department did not say also that it is a matter of national security.
    It is an abuse of ministerial power not to answer a simple question with an answer that can be obtained by anyone owning a video recorder. However, one answer did slip through the net. It came, surprisingly enough, from the Department of Trade and Industry, which responded in rather more detail. It could not have been part of the conspiracy. Although the DTI would not spell out the names of the independent TV companies with which it places advertising, it did reveal that its total expenditure on television advertising in 1984–85 was £32,000; 1985–86 and 1987–87, amazingly, nil; 1987–88, £4·;6 million; and 1988–89, the absolutely staggering figure of £13£2 million.
    As right hon. and hon. Members know from their own appearances on television, people often say, "I thought that you were good"—or bad, as the case may be—"but I cannot remember a word that you said." Television is simply to do with changing the public's mood, which is what has been attempted in the Government's constant advertising recently. If the Government's sixfold increase in television advertising was part of an overall mission to inform, I would have greater respect for it.
    The truth is that in just the same way as the Government increased the slick packaging of their policies, they run away from examination of those policies in any forum in which their worth can be challenged. The Prime Minister has a perfect opportunity to spell out Government policy in this House any time that she wants, and receive massive publicity when she does so. However, she shows a marked reluctance to come anywhere near the place. Between 1979 and 1983, she spoke in the House 20 times, or an average of once every two and a half months. Between 1983 and 1987 she spoke 10 times, or once every five months. Since the 1987 general election she has spoken twice, or just once a year. That was once a year too often for my sensitivity, but such an attendance record is a barely acceptable minimum. We know that the last thing that the Prime Minister wants is television coverage of her performance reading her notes at the Dispatch Box.
    A measure of the increase in the Government's spending on advertising illustrates that they are trying to sell an increasingly shoddy package in an increasingly glossy envelope. Even the advertising industry admits that. The copy of "Campaign" to which I referred earlier quotes the industry's view of the Government:
    "Too often the products being advertised have been found wanting."
    That is a commentary on the Government's products. The Government find it impossible to distinguish between the national interest and party interests, and, more disgracefully, find it almost impossible to distinguish between the national interest and the survival of one individual in Downing street, and that is even more dangerous. Our central proposition has been unchallenged by the Government and I urge my hon. Friends to vote for it.
    6.50 pm
    The Minister of State, Privy Council Office (Mr. Richard Luce): The Opposition's motion focuses on two main points—first, that the cost of Government publicity has increased and, secondly, that some of that publicity is becoming increasingly party political. On both counts I strongly recommend that the House should reject the motion.
    The hon. Member for Linlithgow (Mr. Dalyell) said that the Opposition and the Government should treat such a motion extremely seriously. I noticed that throughout the debate only a smattering of Opposition Members have been present. If they really treated the motion seriously, they would have taken the trouble to attend the debate. That almost answers their case. As for the rest, my right hon. Friend the Chief Secretary to the Treasury has given clearly the reasons why we reject the motion.
    First, on the matter of costs, my right hon. Friend made it clear that in the past 10 years or so publicity costs have increased within tightly drawn up rules and regulations which are available to the public. But I must emphasise strongly that the Government have a duty to inform the public, and people want to be better informed. The public are entitled to be better informed. My hon. Friend the Member for Sheffield, Hallam (Mr. Patnick) made that point extremely strongly. I suggest that an informed democracy is a stronger democracy, and that the Opposition, who hope and aspire one day to be in government, should hold the same opinion.
    The Opposition's second point was that much of the advertising is party political. The conventions are properly and fully laid down in detail, and that was never the case when a Labour Government were last in office. They are in the Library for the House to see. It is forbidden that any publicity of that nature should be party political. Throughout the debate, the Opposition have failed to produce any evidence of any abuse whatsoever. That is in marked contrast to the tendentious propaganda that Labour councils have distributed around the country in the past year.
    Mr. Robert Hughes: Will the Minister give way?
    Mr. Luce: No. I am here to answer the debate.
    My hon. Friends the Members for Hallam, for Derbyshire, West (Mr. McLoughlin) and for Amber Valley (Mr. Oppenheim) made those points extremely effectively.
    I stress that one of the reasons for the Widdicombe inquiry which led to the 1986 Local Government Act was the abuse by a large number of Labour authorities using party political propaganda. That led to the Widdicombe proposals and the 1986 Act which tightened the rules. If I did not think that you might rule me out of order, Mr. Speaker, I should have drawn attention to some of the unbelievable examples of the propaganda put out by Labour councils. I had such an experience concerning libraries in Derbyshire, where the Labour leader, who has the unusual name of Mr. Bookbinder, put out some propaganda on behalf of the council which was totally and utterly tendentious and misleading.
    Mr. Speaker: Order. I hope that the Minister will not pursue that line. The debate must focus on the motion on the Order Paper.
    Mr. Luce: I accept your ruling, Mr. Speaker.
    I shall move on to answer one or two of the specific points raised in the debate. The hon. Member for Linlithgow raised a number of issues. He asked whether there were a large number of resignations among information officers. There is no clear evidence of a large number of resignations. Indeed, the resignation rate today is lower than it was in the period 1976–82. Three senior information officers have recently left the service, but the rate of turnover and the rate of resignation is not high. I hope that reassures the hon. Gentleman.
    Without being drawn into issues that are well beyond the terms of the motion, I shall respond once again to the implication that some civil servants—the hon. Member for Linlithgow mentioned Mr. Powell and Mr. Ingham—are corrupt officials. That must be utterly rejected. Let us take Mr. Ingham as an example. Mr. Ingham served for many years as press officer to the right hon. Member for Chesterfield (Mr. Benn). He also worked in the press office of Barbara Castle. If he can do that and then serve my right hon. Friend the Prime Minister, he must be a man of the utmost impartiality and the highest calibre.
    Mr. Dalyell: On a point of order, Mr. Speaker. I did not refer to any officials being corrupt. I asked a very much more precise question as to whether it was proper—
    Mr. Speaker: Order. That should not be raised with the Chair under the guise of a point of order.
    Mr. Luce: Reference has been made to the conventions. The House knows that the various conventions that are set out and have been revised and supplemented are extremely thorough. They are available to the House and they set out quite clearly the parameters and the guidelines for Government publicity. There is no evidence that there has been any abuse.
    The Opposition cannot have it both ways. They continually say that they want more information from the Government. They always want the Government to reveal more. When we have more publicity to reveal more information, they turn round and criticise us.
    Mr. A. J. Balfour once said that democracy is Government by explanation. The Government have a positive duty to inform the nation, and to do so within very clear rules. We have clear rules on costs. We must have proper value for money and the expenditure on publicity must be within departmental budgets. We have clear rules on propriety. It is stated quite clearly that there must be no publicity which is party political.
    If we examine the publicity that the Government put out and that we have been discussing today, are the Opposition really saying that it is not right to inform the public about the benefits to be derived from the single market in 1992? Are they seriously saying that it is not right that people should be informed about employment and training opportunities? Are they seriously saying that it is not right that we should put out information about crime prevention, about AIDS and about health? Are they really saying that it is not right that we should put out information about benefits, pensions and other public information about road safety or about expenditure on recruitment to the services, or, taking education as an example, the new rules for school governors? The hon. Member for Blackburn (Mr. Straw) recently pointed out
    220
    that he thought that the Government should spend more money, not less, on such publicity. The charge that we are wrongly spending money is absolutely refuted.
    It has been pointed out that in the 1970s the Labour Government, supported by the Liberal party, spent money on advertising about issues that were politically controversial—counter-inflation policies, selective price controls, devolution and the European referendum. Those were politically controversial matters but this Government in no way disputes their right to publicise them.
    The tactic of the Opposition is hypocritical. They should get their own house in order first. Of course, the abuse by Labour councils led to the Widdicombe inquiry and to the 1986 Act.
    On propriety, the conventions are clear, thorough and detailed. More than ever before on any aspect of the guidelines for Government publicity, there are clearly laid out parameters; for example, the activity should not be party political. Ministers are accountable to the House, to Select Committees and to the Public Accounts Committee for their own publicity. The Government set the highest possible standards.
    The real problem for Her Majesty's Opposition is not one of cost or of propriety; it is the message itself. They do not like Government policies but they know that the public broadly support the Government. They know that the message is succeeding. That is what the debate is really about. They do not like it. That is why they initiated such a spurious debate. I therefore ask the House to reject the Opposition motion.
    Question put, That the original words stand part of the Question:–
    The House divided: Ayes 204, Noes 287.

    Division No. 201]

    [7.01 pm

    AYES

    Abbott, Ms Diane

    Clay, Bob

    Allen, Graham

    Clelland, David

    Anderson, Donald

    Clwyd, Mrs Ann

    Archer, Rt Hon Peter

    Cohen, Harry

    Armstrong, Hilary

    Coleman, Donald

    Ashley, Rt Hon Jack

    Cook, Frank (Stockton N)

    Ashton, Joe

    Cook, Robin (Livingston)

    Banks, Tony (Newham NW)

    Corbett, Robin

    Barnes, Harry (Derbyshire NE)

    Corbyn, Jeremy

    Barnes, Mrs Rosie (Greenwich)

    Cousins, Jim

    Barron, Kevin

    Cryer, Bob

    Battle, John

    Cummings, John

    Beckett, Margaret

    Cunliffe, Lawrence

    Benn, Rt Hon Tony

    Dalyell, Tam

    Bennett, A. F. (D'nt'n &R'dish)

    Davies, Rt Hon Denzil (Llanelli)

    Bermingham, Gerald

    Davies, Ron (Caerphilly)

    Bidwell, Sydney

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

    Blair, Tony

    Dewar, Donald

    Blunkett, David

    Dixon, Don

    Boateng, Paul

    Dobson, Frank

    Boyes, Roland

    Doran, Frank

    Bradley, Keith

    Douglas, Dick

    Bray, Dr Jeremy

    Duffy, A. E. P.

    Brown, Gordon (D'mline E)

    Dunnachie, Jimmy

    Brown, Nicholas (Newcastle E)

    Dunwoody, Hon Mrs Gwyneth

    Buckley, George J.

    Eadie, Alexander

    Caborn, Richard

    Eastham, Ken

    Callaghan, Jim

    Ewing, Harry (Falkirk E)

    Campbell, Menzies (Fife NE)

    Ewing, Mrs Margaret (Moray)

    Campbell, Ron (Blyth Valley)

    Fatchett, Derek

    Campbell-Savours, D. N.

    Faulds, Andrew

    Canavan, Dennis

    Fearn, Ronald

    Carlile, Alex (Mont'g)

    Fisher, Mark

    Cartwright, John

    Flannery, Martin

    Clark, Dr David (S Shields)

    Flynn, Paul

    Clarke, Tom (Monklands W)

    Foot, Rt Hon Michael

    221

    Foster, Derek

    Mitchell, Austin (G't Grimsby)

    Foulkes, George

    Morgan, Rhodri

    Fraser, John

    Morris, Rt Hon A. (W'shawe)

    Fyfe, Maria

    Mullin, Chris

    Galbraith, Sam

    Murphy, Paul

    Garrett, John (Norwich South)

    Nellist, Dave

    George, Bruce

    Oakes, Rt Hon Gordon

    Golding, Mrs Llin

    O'Brien, William

    Gordon, Mildred

    O'Neill, Martin

    Gould, Bryan

    Orme, Rt Hon Stanley

    Graham, Thomas

    Parry, Robert

    Grant, Bernie (Tottenham)

    Pendry, Tom

    Grocott, Bruce

    Pike, Peter L.

    Hardy, Peter

    Powell, Ray (Ogmore)

    Haynes, Frank

    Primarolo, Dawn

    Heffer, Eric S.

    Radice, Giles

    Hinchliffe, David

    Randall, Stuart

    Hogg, N. (C'nauld &Kilsyth)

    Redmond, Martin

    Home Robertson, John

    Rees, Rt Hon Merlyn

    Hood, Jimmy

    Reid, Dr John

    Howarth, George (Knowsley N)

    Richardson, Jo

    Howell, Rt Hon D. (S'heath)

    Roberts, Allan (Bootle)

    Howells, Geraint

    Robertson, George

    Howells, Dr. Kim (Pontypridd)

    Robinson, Geoffrey

    Hughes, John (Coventry NE)

    Rogers, Allan

    Hughes, Robert (Aberdeen N)

    Rooker, Jeff

    Hughes, Roy (Newport E)

    Ross, Ernie (Dundee W)

    Hughes, Simon (Southwark)

    Rowlands, Ted

    Illsley, Eric

    Ruddock, Joan

    Ingram, Adam

    Salmond, Alex

    Janner, Greville

    Sedgemore, Brian

    Johnston, Sir Russell

    Sheerman, Barry

    Jones, Barry (Alyn &Deeside)

    Sheldon, Rt Hon Robert

    Jones, leuan (Ynys Mén)

    Shore, Rt Hon Peter

    Kaufman, Rt Hon Gerald

    Short, Clare

    Kennedy, Charles

    Skinner, Dennis

    Kinnock, Rt Hon Neil

    Smith, Andrew (Oxford E)

    Kirkwood, Archy

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

    Lamond, James

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

    Leadbitter, Ted

    Smith, J. P. (Vale of Glam)

    Leighton, Ron

    Snape, Peter

    Lewis, Terry

    Soley, Clive

    Litherland, Robert

    Spearing, Nigel

    Livsey, Richard

    Steinberg, Gerry

    Lloyd, Tony (Stratford)

    Stott, Roger

    Lofthouse, Geoffrey

    Strang, Gavin

    Loyden, Eddie

    Straw, Jack

    McAllion, John

    Taylor, Mrs Ann (Dewsbury)

    McAvoy, Thomas

    Taylor, Matthew (Truro)

    McCartney, Ian

    Turner, Dennis

    McFall, John

    Vaz, Keith

    McKay, Allen (Barnsley West)

    Wall, Pat

    McKelvey, William

    Wallace, James

    McLeish, Henry

    Wai ley, Joan

    Maclennan, Robert

    Wardell, Gareth (Gower)

    McNamara, Kevin

    Wareing, Robert N.

    McWilliam, John

    Welsh, Andrew (Angus E)

    Madden, Max

    Welsh, Michael (Doncaster N)

    Mahon, Mrs Alice

    Wigley, Dafydd

    Marek, Dr John

    Williams, Rt Hon Alan

    Marshall, David (Shettleston)

    Williams, Alan W. (Carm'then)

    Marshall, Jim (Leicester S)

    Wise, Mrs Audrey

    Martin, Michael J. (Springburn)

    Worthington, Tony

    Maxton, John

    Wray, Jimmy

    Meacher, Michael

    Meale, Alan

    Tellers for the Ayes:

    Michael, Alun

    Mr. Allen Adams and

    Michie, Bill (Sheffield Heeley)

    Mr. Martyn Jones.

    NOES

    Adley, Robert

    Baldry, Tony

    Allason, Rupert

    Beaumont-Dark, Anthony

    Amery, Rt Hon Julian

    Bennett, Nicholas (Pembroke)

    Amess, David

    Blaker, Rt Hon Sir Peter

    Amos, Alan

    Body, Sir Richard

    Arbuthnot, James

    Boswell, Tim

    Arnold, Jacques (Gravesham)

    Bottomley, Mrs Virginia

    Arnold, Tom (Hazel Grove)

    Bowden, Gerald (Dulwlch)

    Atkins, Robert

    Bowis, John

    Baker, Nicholas (Dorset N)

    Braine, Rt Hon Sir Bernard

    222

    Brandon-Bravo, Martin

    Hamilton, Hon Archie (Epsom)

    Brazier, Julian

    Hamilton, Neil (Tatton)

    Brooke, Rt Hon Peter

    Hanley, Jeremy

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

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

    Bruce, Ian (Dorset South)

    Hargreaves, Ken (Hyndburn)

    Buchanan-Smith, Rt Hon Alick

    Harris, David

    Buck, Sir Antony

    Haselhurst, Alan

    Budgen, Nicholas

    Hawkins, Christopher

    Burns, Simon

    Hayhoe, Rt Hon Sir Barney

    Burt, Alistair

    Heddle, John

    Butcher, John

    Heseltine, Rt Hon Michael

    Butler, Chris

    Hicks, Mrs Maureen (Wolv' NE)

    Butterfill, John

    Hicks, Robert (Cornwall SE)

    Carlisle, John, (Luton N)

    Higgins, Rt Hon Terence L.

    Carlisle, Kenneth (Lincoln)

    Hill, James

    Carrington, Matthew

    Hind, Kenneth

    Carttiss, Michael

    Hogg, Hon Douglas (Gr'th'm)

    Cash, William

    Holt, Richard

    Channon, Rt Hon Paul

    Hordern, Sir Peter

    Chapman, Sydney

    Howard, Michael

    Chope, Christopher

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

    Churchill, Mr

    Howarth, G. (Cannock &B'wd)

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

    Hughes, Robert G. (Harrow W)

    Clark, Sir W. (Croydon S)

    Hunt, David (Wirral W)

    Colvin, Michael

    Hunt, John (Ravensbourne)

    Conway, Derek

    Hunter, Andrew

    Coombs, Anthony (Wyre F'rest)

    Irvine, Michael

    Coombs, Simon (Swindon)

    Irving, Charles

    Cope, Rt Hon John

    Jack, Michael

    Cormack, Patrick

    Jackson, Robert

    Couchman, James

    Janman, Tim

    Cran, James

    Jessel, Toby

    Critchley, Julian

    Johnson Smith, Sir Geoffrey

    Currie, Mrs Edwina

    Jones, Gwilym (Cardiff N)

    Curry, David

    Jones, Robert B (Herts W)

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

    Jopling, Rt Hon Michael

    Davis, David (Boothferry)

    Kellett-Bowman, Dame Elaine

    Day, Stephen

    Key, Robert

    Devlin, Tim

    King, Roger (B'ham N'thfield)

    Dorrell, Stephen

    Kirkhope, Timothy

    Douglas-Hamilton, Lord James

    Knight, Greg (Derby North)

    Dover, Den

    Knight, Dame Jill (Edgbaston)

    Dunn, Bob

    Knowles, Michael

    Durant, Tony

    Knox, David

    Dykes, Hugh

    Latham, Michael

    Emery, Sir Peter

    Lawrence, Ivan

    Evans, David (Welwyn Hatf'd)

    Lawson, Rt Hon Nigel

    Evennett, David

    Leigh, Edward (Gainsbor'gh)

    Fairbairn, Sir Nicholas

    Lennox-Boyd, Hon Mark

    Fallon, Michael

    Lightbown, David

    Favell, Tony

    Lilley, Peter

    Fenner, Dame Peggy

    Lloyd, Sir Ian (Havant)

    Field, Barry (Isle of Wight)

    Lloyd, Peter (Fareham)

    Finsberg, Sir Geoffrey

    Lord, Michael

    Fishburn, John Dudley

    Luce, Rt Hon Richard

    Fookes, Dame Janet

    McCrindle, Robert

    Forman, Nigel

    Macfarlane, Sir Neil

    Forsyth, Michael (Stirling)

    MacKay, Andrew (E Berkshire)

    Forth, Eric

    Maclean, David

    Fowler, Rt Hon Norman

    McLoughlin, Patrick

    Fox, Sir Marcus

    McNair-Wilson, Sir Michael

    Franks, Cecil

    McNair-Wilson, P. (New Forest)

    Freeman, Roger

    Madel, David

    Gale, Roger

    Major, Rt Hon John

    Gardiner, George

    Malins, Humfrey

    Garel-Jones, Tristan

    Mans, Keith

    Gill, Christopher

    Maples, John

    Glyn, Dr Alan

    Marlow, Tony

    Goodhart, Sir Philip

    Marshall, John (Hendon S)

    Goodlad, Alastair

    Marshall, Michael (Arundel)

    Goodson-Wlckes, Dr Charles

    Martin, David (Portsmouth S)

    Gorman, Mrs Teresa

    Mates, Michael

    Gow, Ian

    Maude, Hon Francis

    Greenway, Harry (Ealing N)

    Mawhinney, Dr Brian

    Greenway, John (Ryedale)

    Mayhew, Rt Hon Sir Patrick

    Gregory, Conal

    Meyer, Sir Anthony

    Griffiths, Peter (Portsmouth N)

    Miller, Sir Hal

    Grist, Ian

    Mills, Iain

    Gummer, Rt Hon John Selwyn

    Miscampbell, Norman

    Hague, William

    Mitchell, Andrew (Gedling)

    223

    Mitchell, Sir David

    Smith, Tim (Beaconsfield)

    Moate, Roger

    Speller, Tony

    Monro, Sir Hector

    Spicer, Michael (S Worcs)

    Montgomery, Sir Fergus

    Squire, Robin

    Moore, Rt Hon John

    Stanbrook, Ivor

    Morris, M (N'hampton S)

    Stanley, Rt Hon Sir John

    Morrison, Sir Charles

    Steen, Anthony

    Morrison, Rt Hon P (Chester)

    Stern, Michael

    Moynihan, Hon Colin

    Stevens, Lewis

    Mudd, David

    Stewart, Allan (Eastwood)

    Neale, Gerrard

    Stewart, Andy (Sherwood)

    Nelson, Anthony

    Stewart, Rt Hon Ian (Herts N)

    Newton, Rt Hon Tony

    Stradling Thomas, Sir John

    Nicholls, Patrick

    Sumberg, David

    Nicholson, David (Taunton)

    Summerson, Hugo

    Nicholson, Emma (Devon West)

    Taylor, Ian (Esher)

    Norris, Steve

    Taylor, Teddy (S'end E)

    Onslow, Rt Hon Cranley

    Tebbit, Rt Hon Norman

    Oppenheim, Phillip

    Temple-Morris, Peter

    Page, Richard

    Thompson, D. (Calder Valley)

    Paice, James

    Thompson, Patrick (Norwich N)

    Parkinson, Rt Hon Cecil

    Thorne, Neil

    Patnick, Irvine

    Thornton, Malcolm

    Patten, John (Oxford W)

    Thurnham, Peter

    Pawsey, James

    Townsend, Cyril D. (B'heath)

    Peacock, Mrs Elizabeth

    Tracey, Richard

    Porter, David (Waveney)

    Tredinnick, David

    Powell, William (Corby)

    Trippier, David

    Price, Sir David

    Trotter, Neville

    Rattan, Keith

    Twinn, Dr Ian

    Raison, Rt Hon Timothy

    Vaughan, Sir Gerard

    Rathbone, Tim

    Waddington, Rt Hon David

    Redwood, John

    Wakeham, Rt Hon John

    Renton, Tim

    Walden, George

    Rhodes James, Robert

    Walker, Bill (T'side North)

    Riddick, Graham

    Waller, Gary

    Ridley, Rt Hon Nicholas

    Walters, Sir Dennis

    Ridsdale, Sir Julian

    Ward, John

    Rifkind, Rt Hon Malcolm

    Wardle, Charles (Bexhill)

    Roberts, Wyn (Conwy)

    Watts, John

    Roe, Mrs Marion

    Wells, Bowen

    Rossi, Sir Hugh

    Wheeler, John

    Rost, Peter

    Whitney, Ray

    Rowe, Andrew

    Widdecombe, Ann

    Sackville, Hon Tom

    Wilshire, David

    Sainsbury, Hon Tim

    Winterton, Nicholas

    Sayeed, Jonathan

    Wolfson, Mark

    Scott, Nicholas

    Wood, Timothy

    Shaw, David (Dover)

    Yeo, Tim

    Shaw, Sir Giles (Pudsey)

    Young, Sir George (Acton)

    Shaw, Sir Michael (Scarb')

    Younger, Rt Hon George

    Shelton, Sir William

    Shephard, Mrs G. (Norfolk SW)

    Tellers for the Noes:

    Shepherd, Colin (Hereford)

    Mr. John M. Taylor and

    Sims, Roger

    Mr. David Heathcoat-Amory.

    Skeet, Sir Trevor

    Question accordingly negatived.
    Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 30 (Questions on amendments), and agreed to.
    MR. SPEAKER forthwith declared the main Question, as amended, to be agreed to.
    Resolved,
    That this House recognises the responsibility of Government to provide advice and information to the public; and commends the Government's firm adherence to the long standing conventions governing propriety and value for money.

Manufacturing Industry
Mr. Speaker: I have selected the amendment in the name of the Prime Minister.
Many right hon. and hon. Members wish to participate. If it had been possible, I would have applied the 10-minute limit on speeches, but unhappily that would have caught the Front-Bench speakers as well, so I have not been able to do so. I hope, however, that Front-Bench Members will bear that limit in mind, and that Back Benchers will limit their speeches to 10 minutes or less.
7.15 pm
Mr. Bryan Gould: I beg to move,
That this House, alarmed at the huge deficit in trade in manufactures and at continued closures and job losses in industries as varied as textiles, electronics, shipbuilding and aircraft, reaffirms the vital importance of manufacturing to the country's economic future; and calls on Her Majesty's Government to abandon the policies which have done, and are doing, so much damage to manufacturing output, investment, employment and trade.
The significance of manufacturing industry may be a matter for debate and the future of manufacturing industry may be open to question, but I hope that the facts about manufacturing industry and its present circumstances will not be disputed.
Let us first consider manufacturing output. Most people, I think, would accept that manufacturing industry was thrown over a precipice in the first couple of years of this Tory Government. As a consequence of quite avoidable mistakes in economic policy—which I believe in their more honest moments even Ministers would acknowledge—fully one fifth of British manufacturing industry was simply wiped out. No other industrial country has ever suffered such a sharp fall in output.
Since then, inch by inch, we have clawed our way painfully back up the cliff face over which we were thrown; and, as we reached the top—the point that we left in 1979 —the bands played, the drums were beaten and the flags were waved. It was proclaimed an economic miracle. Throughout the period of the present Government, however, manufacturing output has been no less than 6 per cent. lower than under the previous Labour Government. I think that it must be a record for any 20th-century Government to establish a level of manufacturing output lower than that established by their predecessor.
Mr. Phillip Oppenheim rose—
Mr. Gould: I will not give way. I have already accepted from Mr. Speaker an injunction to be brief.
The pity of it is that the mistakes that led to that slump in output are now in danger of being repeated. At 1985 prices, manufacturing investment in 1988—the last full year—was £11·035 billion, still short of the level established in 1979 when the Government began their term of office. That has applied in every one of the 10 years of Tory government, despite—even in recent times—constant investment intention surveys showing an intention on the part of industry to increase investment. Throughout the period of the Thatcher Government, manufacturing investment has been 16 per cent. lower than it was under the preceding Government.
As for manufacturing employment, I hope that I need hardly remind the House that nearly 2 million jobs have been lost in industry since 1979. Every advanced industrial country has found that manufacturing has shown a

225
declining proportion of employment because other sectors —services and so on—have tended to take up the slack. What has not happened in other countries is the huge and quite unnecessary slump that we have suffered, and from which we have still not fully recovered.
Perhaps the saddest story resides in the figures that tell us what has happened to our manufactured trade. We all know that this country once prided itself on being the great workshop of the world and the leader of the industrial revolution. For 200 or 300 years, we paid our way and built our living standards on the strength of what we could make and sell from our factories. That remained true until 1979, when the Government took office. In 1979, we enjoyed a surplus of almost £5 billion in today's prices. I hope that I need not remind the House that last year that surplus had not only already turned into a deficit—I believe that it turned into a deficit in 1984 for the first time in our history—but that deficit had grown to the staggering proportions of £14·5 billion. A turnround of £19 billion in our manufactured trade is so immense that it is difficult for the ordinary person to grasp what that represents. Perhaps I can help the House by saying that by my calculation—which would be the general calculation —if we were to set about producing £19 billion of manufactured goods, which we now import, in British factories, we would have to take on no fewer than 1·5 million extra full-time workers. That is the significance of the turnround in our trade in manufactures.
Not surprisingly, although the Government try to obfuscate our true position, our share of world trade in manufactures has also declined. The world trade in manufactures over the period has risen by 48·5 per cent., but our exports of manufactures have risen by only 36·6 per cent. I hope that I do not need to convince Ministers or Conservative Members that the market place is the test, as the Government constantly tell us, of how well our economy is doing. The answer that the market place gives is that Britain is no longer paying its way and that British industry cannot meet the competition.
At first sight, the trade figures may cause some puzzlement. The immensity of the trade deficit took even Ministers by surprise. They were, after all, forecasting only a year ago a deficit of £4 billion for 1988. There is an explanation, although it is not a full rationalisation. Unfortunately, it runs directly contrary to much of the propaganda that Ministers constantly put out. The House and the British public are always told by Ministers in every interview that whatever the pain, whatever the difficulties we have been through and however many problems British industry has faced over the past 10 years, at least British industry is now leaner, fitter and more competitive. Day after day I hear that phrase on the lips of Ministers.
Neither I nor the Labour party bother to keep the statistical series that measure the competitiveness of British industry but the Government and the Department of Trade and Industry do. There are at least five that are often used and two are especially widely used. It is astonishing that on each one of the five indices, British manufacturing industry today is not more but less competitive than it was in 1979, and that is true not only of today, but of every year throughout the period of Tory government. The indices that show the greatest loss of competitiveness are those which are the most widely used. Relative export prices for manufactures show that we are now 15 per cent. less competitive than we were in 1979.
226
The International Monetary Fund index of normalised relative unit labour costs shows that we are 24 per cent. less competitive than we were in 1979.
The mystery about why, despite the wonderful success story, we are running such a huge balance of payments deficit that we cannot hold on to our own markets or retain our export markets is now unravelled. The Government's own statistics show that British industry is less competitive than it was when they came to power. I could go on about that subject, in which I take a particular interest, but even those indices understate the loss of competitiveness of an economy whose competitiveness has declined over a period. First, the index on relative export prices for manufactures, for example, measures only what we try to charge at—id- the prices we actually obtain in the market place. It does not tell us about all the products that have become so uncompetitive in price terms that we have simply ceased to make them and offer them in the international market.
Secondly, the labour cost indices measure cost right across the economy. They take no account of the fact that in the really successful exporting economies, such as Japan and Germany, costs in export-oriented industries are razor sharp and the cost structure is more favourable than in the economy as a whole. Any index that measures costs across the economy simply understates the competition we face from the successful exporting nations.
I now offer the Government a little ray of light or a twig to hold on to. They will raise, rightly and understandably, the question of productivity and they will say that, despite this gloomy picture, productivity in manufacturing has risen extremely sharply. I am the first to concede that it is a good story to tell on that, but productivity is not as good as the Government would have us believe and it is not as good as in the much maligned 1960s, when manufacturing productivity was higher than it has been in recent years. One also has to take account of some of the statistical peculiarities of the figures and the fact that today much that used to be counted as manufacturing is now contracted out, including peripheral services such as cleaning and canteen facilities, which were low productivity areas so they do not affect manufacturing productivity figures. I would also point out that if one constantly eliminates one's weaker capacity, without anything else changing, there will be an improvement in productivity —or at least an apparent improvement in productivity—for what remains. It is rather like a cricket captain claiming that because he has shot his tail-end batsman he can congratulate himself on the fact that the batting average has risen, although he is ignoring the fact that the team is scoring fewer runs and has lost the match. That is what our productivity record largely shows.
Mr. Peter Thurnham: Will the hon. Gentleman give way?
Mr. Gould: No. I would like to, but I am under a time constraint.
There is a more important point to explain another paradox. If the productivity figures are to be believed—and I am prepared to give them some credence—it is hard to see why the economy in the other respects I have mentioned has performed so badly. The reason is—and I admit that this is no more than a supposition, but it answers the paradox and is increasingly attracting the attention and support of many expert commentators—

227
that in Britain a great deal of investment in manufacturing industry is designed to replace labour, rather than to improve and increase output. That is why in the bits of the economy that remain as a result of some new capital application, but have fewer jobs than previously, productivity has risen, whereas in those bits of the economy where that effort has not been made the capacity has simply disappeared. That means that we have the appearance of high productivity in the bits of the economy that survive, but the economy as a whole is producing less well, its output is sluggish, it is able to compete less effectively and we are having to import so many more manufactured goods.
I ask Conservative Members to agree with me in one respect. Surely there cannot be a single Member who has not had the experience of visiting factories in his or her constituency or further afield and noticing, if he or she has eyes to see, that all the modern machine tools are made abroad. If one asks the factory managers why a particular machine is made in Germany, Italy, Canada or the United States, they say sadly, with a shake of the head, "We would like to buy British, but there simply isn't a British manufacturer who can supply us". That gives some support to my contention that large parts of British industry have simply passed out of existence as a consequence of what has happened to manufacturing industry in recent years.
Productivity may have been a miracle in those parts of industry that have survived, but it has failed to produce a manufacturing economy which does what is essential—to compete, to increase output and to provide good, well-paid jobs for an increasing number of people. We cannot congratulate ourselves on a productivity achievement if the only end result is that we now produce about the same quantity of goods with far fewer people and that we are therefore able to compete much less comprehensively across the board.
As we face not only our present but our future, we are faced with an economy that is ill-equipped, badly trained and under invested. We face our future in that condition with the cushion of North sea oil much less comfortable and reliable than it was—I accept that North sea oil is not yet running out and that it will be with us for some time —with 1992 and the single European market, meaning much more intense competition in what will be our home market, with newly industrialised countries around the Pacific basin and south-east Asia coming on stream. We face our future in all those circumstances and, although the race will go to the technologically proficient, we have not made the effort. We have wasted the oil. We are under-invested and are woefully ill-prepared for that competitive future.
As is probably wearyingly familiar by now, we spend less on research and development than the West Germans, the Japanese, the Americans, the Swedes and the French. In terms of civil research and development, we spend less than the Italians. Uniquely, half of what we spend goes on defence. I was at a seminar this morning where I saw a breakdown of the way in which the West Germans spend their much greater total and the way in which we spend ours. The Germans said, apologetically, "Our R and D defence expenditure has been rising recently and we are worried about it. It is now as high as 20 per cent. of our
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total R and D expenditure." However, we spend 50 per cent. of our pitiful R and D expenditure on relatively unproductive defence spending.
The Germans have a much clearer answer—[Interruption.] I am talking about the spin-off for the rest of industry. The Germans have a much clearer idea of the correct priorities. While they spend on R and D, on industry, in the higher research institutions and the universities and on major issues such as the environment, we make mistakes by concentrating our puny efforts on unproductive defence. We spend less on basic science and pitifully less on training. We do not invest in our manufacturing industry. As I have pointed out, such expenditure has been 16 per cent. lower during the past 10 years than it was even when the Tories came into office. We do not spend on the infrastructure that we shall need if we are to compete technologically in the coming decade.
The pity of it all is that, having brought us to this position, where the North sea oil bonus has come and has largely gone, having left us with a legacy of ill-preparedness, we are now trying to re-establish the Chancellor's control of an economy of which he has lost control. We are in danger of repeating the same old mistakes which destroyed one fifth of British manufacturing between 1979 and 1981. They are again on the agenda, wreaking their damage, exercising their malign influence and doing damage by way of the closures, job losses and lost output with which we were so bitterly familiar in the early 1980s.
The evidence is there. Surveys by the Confederation of British Industry which for so long were held up as great proclamations of confidence now show a sharp fall in expectations for export orders and a sharp decline in the confidence felt by business men about the future course of the economy. Specialist manufacturing employers' organisations, such as the British Textile Confederation, express again, as they did in the early 1980s, their lively fears about what will happen to their industry as a consequence of the appreciation of the exchange rate against their major competitors.
That is why a programme of closures is already beginning in the constituencies of some of my hon. Friends, and it is not limited just to textiles; it applies across the board. I fear that unless we can persuade the Government to change their policy and to avoid those mistakes, we will again face a programme of closures and a lengthening total in the number of people unemployed. Indeed the mistakes are already there. High interest rates are a disincentive to investment. The CBI has complained but the Government take no notice because they do not believe that the voice of manufacturing industry really counts or should be heard. As a consequence of the high interest rates, not only is investment damaged, but the exchange rate is held at an uncompetitive level and is crippling competitiveness.
Only a few months ago and earlier last year, the Chancellor was telling us—at least by implication—that his preferred rate of exchange against the deutschmark was 3 deutschmarks to the pound. He then said specifically that, in his view, a rate of 3 deutschmarks 10 pfennigs would be unsustainable. However, for many months now, we have had a rate that is above 3 deutschmarks 18 pfennigs. Little wonder then that we are finding it increasingly difficult to meet the competition in Europe. Little wonder that we find it difficult in the wider markets around the world when our exchange rate has appreciated against the American dollar by 40 per cent. in the past four

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years. One cannot put up prices against major international competitors by 40 per cent.—or even by 10 per cent. as in the case of the West Germans—and expect the customer not to notice. Such rises have an immediate, direct and calamitous effect on investment, output, employment and manufacturing industry. Indeed, they show the Government's contempt for manufacturing industry that they believe that they can introduce such policies without causing the sort of damage that is now being so painfully felt across the country.
An over-valued exchange rate does many damaging things. It not only destroys our competitiveness; it does something perverse in respect of the Chancellor's stated objectives. It damages the competiveness of the corporate sector and it stimulates consumption because it means that every pound in the consumer's pocket will buy more imported goods than it should. That is why over-valuation not only stops us exporting, but sucks in the imports that are doing so much damage. [Interruption.] Of course, that does not cause concern to Ministers who can laugh if they wish, but such over-valuation sucks in the imports that put British workers in the dole queue and close British factories.
Does any of it matter? We have already had part of our answer from the guffaws of Ministers who clearly find it difficult to take the subject seriously. Indeed, that has betrayed their attitude to this matter throughout the 10 years of their period of office. They have treated the decline and difficulties of manufacturing industry with cavalier insouciance. They have simply maintained that it does not matter. When I taxed the Chancellor of the Exchequer some months ago about the turnround in our trade in manufactures, he remarked from a sedentary position that it was "neither here nor there." Let him try telling that to business men who are trying to keep their enterprises afloat. Let him try telling it to workers whose jobs are now threatened or being lost as a consequence of those foolish policies—
Mr. Frank Haynes: What about small businesses?
Mr. Gould: My hon. Friend mentions small businesses, which in particular are suffering. The regions, which are so dependent on manufacturing, are where the burden will be felt most keenly. That is where the branch-plant economy that the Tories have allowed to develop during their period of office will come home with a vengeance because those branch plants will be closed first when the bite is felt. That is the problem with the Chancellor's current policies.—[Interruption.] Yes, of course manufacturing matters to us because we can no longer rely on North sea oil to keep us afloat.
Our wealth creation for the future depends on the strength of our manufacturing industry and it depends on that manufacturing industry being in the right condition, in the right areas, with the right equipment and the right skills. To use another of the Chancellor's notorious phrases, we cannot afford a "low-tech economy". If we are to compete, we must compete with new skills and with new technology. We must be clear that the new technology has a role to play, not just in new industries, but in old industries, too. It is in textiles, shipbuilding and car manufacture that the new technology has its most direct and important application. That new technology must be
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applied and we must invest in it. That is the important element of our future and of our capacity to earn our living in the future decade.
We were told that we need not rely on the old pejoratively described sunset industries, because it would be the sunrise industries that would take us forward. I wish that that were true. I wish that we could say that other industries may have suffered some difficulties, but, at least, the electronics and information communication industries have done well. However, again the facts are against such an argument. I believe that any attempt to scrutinise the trade figures would demonstrate clearly how fatuous has been the Government's claim. Last year our trade deficit in electronics was £3·9 billion. It has risen by 40 per cent. over the past four years. So much for preparing us for that technological future and so much for an economic miracle. We know the immense importance of manufacturing to wealth creation and to our national prosperity. It will need a Labour Government to put that right.
7.30 pm
The Chancellor of the Duchy of Lancaster and Minister of Trade and Industry (Mr. Anthony Newton): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
"welcomes the renewed strength of manufacturing industry, reflected in major increases in productivity, record levels of output, increased exports, greatly improved profitability and a sustained high level of investment; and notes that the flow of inward investment testifies to the substantial improvement which the policies of Her Majesty's Government have brought about in the climate for doing business in the United Kingdom.".
I suppose that I should not have been surprised—though I must confess that I was—that the Opposition should choose to debate a proposition so totally divorced from reality as one entitled the "Decline of Manufacturing Industry". So it was with some corresponding interest that I waited to see how the hon. Member for Dagenham (Mr. Gould) proposed to delineate this so-called decline. It was clear, despite his contorted efforts, that it could riot conceivably be by reference to production. Output in the manufacturing industries has risen in every single year since 1980, and in the past two years alone by more than 12 per cent. It is not only higher than in 1979, when the Government first took office; it is higher than in 1974, when the preceding Labour Government took office. That is, of course, another way of saying that, whereas that Labour Government departed unlamented with manufacturing output lower than when it arrived, under this Government it has reached a record level. I am certainly not surprised that we have heard little about that.
Equally clearly—and the hon. Member for Dagenham fairly acknowledged this—that alleged decline could riot be by reference to productivity. Productivity in manufacturing industry has so far improved in this decade by no less than 50 per cent. and, by comparison with our major competitors, that represents a quite astonishing improvement in our relative performance.
Mr. Gould: Where do we rank?
Mr. Newton: The hon. Gentleman asked me where we rank and I shall tell him.
In the 1960s our productivity growth was lower than any other of the seven major industrial countries, and only about two thirds of their average. In the 1970s, it was again lower than in any of them, and less than half of their

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average. So far in the 1980s—and my figures are for 1980–88—it has been far and away the highest of those self-same seven: substantially higher than in France and Japan and more than twice as much as in Germany.
Nor could the hon. Member for Dagenham justify his talk of decline by reference to the profitability in manufacturing industry. I do not think that he even sought to do so, because, of course, the profitability in manufacturing industry is at its highest level for 20 years. That in turn is reflected in the powerful revival in manufacturing investment, which has grown by not far short of half since 1983, by more than 9 per cent. last year alone, and is expected to show a further healthy increase in the present year. Moreover, that revival in manufacturing investment is an important contributor to one of the most important and significant changes for the better which has taken place in the British economy in recent years. That is the shift from a pattern in which we persistently tended year in year out to increase consumption faster than investment to one in which, over the past seven years, total investment—I want to make it clear that I am talking about total investment and not just in manufacturing—has grown at more than twice the rate at which consumption has grown, and more rapidly than in any other country in the European Community. In other words, after decades in which we persistently tended to let our consumption run ahead of our willingness to put money into developing industry in the future, that picture has changed and the growth in investment in manufacturing industry is a part of that change in the picture.
One thing that I did expect in this debate—I have not been disappointed—was that the hon. Member for Dagenham would make the most that he could of the fact that investment is still fractionally lower than in 1979. I will make two points about that. First, I think that events will take even that fig-leaf of argument away from the hon. Gentleman before too much more time has passed. Secondly, I hope that he will direct his attention not only to the total, but to the pattern within the total.
The pattern of the late 1970s in particular was one in which we put great quantities of investment into industries which manifestly were among those that the hon. Member for Dagenham described—it is not a phrase that I would have chosen—as sunset industries, usually in the form of massive taxpayer-financed subsidies of one kind or another and which in consequence made it difficult for the industries that were manifestly the growth industries of the future to find the resources that they needed to invest.
What is of more practical importance than just looking at the quantity of investment is the quality of manufacturing investment and the efficiency with which it is used. Undoubtedly, in that area there has been a large improvement. A good deal of industrial capacity was scrapped at the beginning of the decade. Much of it was technically and economically obsolete and, frankly, had been for some time. Most manufacturing investment since then has been for replacement purposes, but the standard of the new capacity for such things as operating costs, quality standards, its impact on the environment and energy use is far higher than that of the old equipment. That improvement in the quality of investment has made
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a major contribution to the improved productivity to which I have referred and to the greater competitiveness of British manufacturers.
The hon. Member for Dagenham made some play of competitiveness figures. I have in front of me those figures that the IMF produces, which are based on relative unit labour costs. I am not sure whether those were the ones to which the hon. Gentleman referred. Certainly, on the figures that I have, there was little change on that single statistical measure between 1979 and 1988. There are some fluctuations in between. However, the point that the hon. Gentleman misses, and, indeed, all his colleagues persistently miss, is that competitiveness in the real world is not something that can be measured in such statistics. It is a matter of people's confidence in whether British goods will be delivered, because of the bad industrial relations record during the late 1970s. It has to do with quality and reliability and all the things that have manifestly improved in British manufacturing industry in the past few years. Improvements in working practices, in maintenance standards and in the timely availability of material components cannot be so readily measured, but I have no doubt—nor do I believe does any serious observer of the scene—that improvements in those factors over the past decade have greatly increased both effective manufacturing capacity and British competitiveness on the world markets.
So we come then to the line of argument on which the hon. Member for Dagenham sought to build so much, which is the deficit on the balance of payments current account, and within it the deficit on manufactures.
Whatever else may be said about those figures, I do not believe that any serious analysis of them—alongside the figures that I have already given—could sustain the case that they show a decline of manufacturing industry in this country. If they could be shown to result from a failure of exports, perhaps that could be so, but they cannot. On the contrary, exports of manufactures have been rising strongly—by nearly 18 per cent. in value in the past three years and by over 5 per cent. last year alone. If the figures could be shown to be associated with a fall in our share of world trade in manufactures, perhaps that could be said. But that cannot be shown either. On the contrary, the signs are that that decline has been halted or even reversed.
Mr. Thurnham: Will my right hon. Friend give way?
Mr. Newton: If my hon. Friend will forgive me, in the light of what Mr. Speaker said at the beginning of the debate, it is right that I should press on.
The most important single factor in the deficit, far from being the weakness or decline of our manufacturing, arises from the growing output and the increasing investment to which I referred earlier. Some three quarters of it is the corresponding rise in imports of raw materials, of components and semi-manufactures and of capital equipment. In other words, it is associated with the recovery of our industries and the strengthening of their capacity to expand production and exports still further in the future.
Inevitably, it takes time for that to feed back on the other side of the account, but I see no reason to doubt that it will. Indeed, there are already some signs of that. If we take the first three months of this year against the last three months of 1988, the volume of manufactured exports rose faster than that of imports, and that is against the

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background of official and independent forecasts which suggest a greater improvement in the volume of manufactured exports in 1989 than in 1988, alongside a much smaller increase in the volume of manufactured imports than we experienced last year.
The other point on which the hon. Gentleman based a good part of his argument was the numbers employed in manufacturing industry. It is indisputable that there has been a substantial decline since 1979, but that is in part the consequence of tackling the overmanning and the under-productivity which nobody could seriously question the existence of up to that time. That improvement in productivity and removal of overmanning was essential if our industry was to restore its competitive position.
No less important, as the hon. Gentleman fairly acknowledged, is the fact that it is a feature of virtually all modern industrial economies that the balance of employment shifts away from the production of goods towards the supply of services. I think that the hon. Gentleman referred to an expectation that it should be possible to employ more people in manufacturing, but he put no particular period on that. However, I know of no major industrial country which has not seen employment in manufacturing decline as a proportion of total employment since the early 1970s. Since 1979, to take the period that is at issue in the debate, in most such countries the absolute number employed in manufacturing has fallen, as it has here.
Those facts are also reflected in the fact that in virtually all advanced industrial countries the percentage of GDP accounted for by manufacturing has fallen and that of services has risen. We are no exception to that, nor should we seek to be. The figure fell from just over 25 per cent. in 1979 to just under 22 per cent. in 1986, the most recent year for which comparative figures are available. The comparable figures in the United States were a fall from 23 per cent. to just under 20 per cent. and in Italy from just over 30 per cent. to just over 23 per cent. Only Japan is an exception to that general trend.
The hon. Gentleman referred to the Government being in some sense contemptuous of the CBI, or the CBI making remarks completely different from the picture that I have sought to set before the House this evening. As it happens, I was on the same platform as the Director General of the CBI in Sheffield barely two weeks ago and I have with me the text of the speech that he delivered on that occasion. He said:
"The last five years have seen a major turnaround in the UK manufacturing sector, and this has of course spun off into demand for services and jobs. Output, export volumes, productivity and business investment—in skill-training, plant and equipment and innovation—are all at record levels. So are profits, which makes investment possible and worthwhile."
That is what the CBI was saying a fortnight ago. Mr. Banham went on to make the point that we export some 20 per cent. more per person than Japan. Opposition Members may like to reflect upon that.
Let me make one other point which will lead me to the conclusion of my speech in a moment or two. The most conspicuous omission from the hon. Gentleman's speech was any reference to inward investment. Whatever his view of manufacturing and the strength of the British economy may be, some of the best companies in the world are voting with their feet by coming to do business in Britain. In one week alone we heard recently of major cases of inward investment totalling well over £1 billion in various parts of
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the country. It is not just the Japanese who are coming, even though they have tended to make the biggest headlines. A third of all American investment in the Community comes to the United Kingdom. Over the past year investment from other European countries, particularly Germany, has also been particularly strong. I wonder how many German firms would have invested in Britain 10 years ago.
I want to make it clear tonight, as I have on other occasions, that we welcome that inward investment and will continue to do so, both for the balance of payments boost that it brings to the United Kingdom and for the added competitive spur that it provides to industry already here. Wherever such firms locate in the Community, and many of them will come anyway, the impact of the extra competition will be felt in Britain. But when they locate in Britain as so many of them are now doing, we have riot only the jobs and the economic activity but the stimulus of new manufacturing methods, quality standards and management techniques in our economy. We shall continue to try to attract as much of that mobile investment as we can.
Those firms are at times almost queueing up to come here as a direct result of the Government's policies which have given priority to curbing inflation, to restraining the weight of public expenditure and public borrowing, which have reduced the rates of taxation on companies and individuals, improved industrial relations and made Britain a country in which people, whether British or from abroad, want to invest and are investing.
The Opposition's motion invites us to abandon those policies in favour, as is increasingly clear, of returning to precisely the policies which made their time in office a period of overmanning and inefficiency, of misdirected investment, of roaring inflation and dismal industrial relations, when the only reason for business men from overseas to come here was not to take part in our economy but to try to learn how not to run an economy. Neither the House nor the country will want to go back down that path.
7.58 pm
Mr. Stanley Orme: Listening to the Minister, I do not recognise the area that I represent in Greater Manchester which has lost tens of thousands of jobs in manufacturing. My city of Salford, which had a large engineering base, has virtually no engineering industry left. Just across the canal, Trafford Park has become a storehouse. Before the war it was a rival to the Ruhr as a major world industrial centre. That is the difference that the Minister fails to recognise.
I declare an interest in the debate as a Member sponsored by the Amalgamated Engineering Union. That union has 750,000 members in manufacturing industry and 2 million workers in the engineering industry, and it wants a share in Britain's prosperity and in manufacturing industry.
We cannot just dismiss the disappearance of 2 million jobs and say that the same thing is happening in Japan or West Germany. The same thing is not happening in those countries. I accept that there has been a reduction and an inevitable change in some of the older industries because of the decline in those industries. The Government have made the notion of small is beautiful one of the key factors in their approach, but it should be remembered—
Mr. Thurnham rose—
Mr. Orme: I shall not give way to the hon. Gentleman.
It should be made known that 60 per cent. of Britain's gross national product is contributed by 150 of the large firms. Nobody denies that small firms are important, and we welcome them into our areas and constituencies. However, they do not replace the tens of thousands of jobs that have been removed from the basic industries.
The Minister said that Britain is booming, and investment and output are up. He made great play of productivity. Assuming that what he said was correct, the important factor is that we are starting from a much smaller base. The problem facing Britain is that its manufacturing base has shrunk. In terms of productivity we are, perhaps, equal to the Germans, Americans and even the Japanese, but our base is small. Therefore, we are faced with the problem of importing many goods. With that small base we cannot produce the products that our economy wishes to consume and, therefore, we have to import them.
The Minister made great play of inward investment. We must be careful when we consider that investment. At the moment, as everyone acknowledges, the balance of trade deficit is horrendous. The manufacturing industry is at the centre of that trade deficit. Last year, the deficit on manufactured goods was £14·4 billion compared with a £2·7 billion surplus in 1979. Imports jumped 127 per cent. between 1979 and 1988, and by 13 per cent. last year. During that period, exports increased by only 2 per cent.
Despite what the Minister says, part of the problem is the underinvestment in the manufacturing industry which is still below the 1979 levels and now forms only 2·7 per cent. of GDP, compared with 3·6 per cent. in 1979. That compares badly with our main competitors in Germany, Japan and the United States.
The opportunity to use oil revenues for such investment has been lost and, instead, they were used, as we know, to fund the increasing unemployment that was created by this Government. That is one of the crimes that the Government have committed. They have left us with a weak economy. The rundown in manufacturing industry is visible for all to see. We were a great manufacturing centre in which the industrial revolution started. However, the rundown that has taken place within that manufacturing centre is now evident for all to see. The new industries that have been introduced have not proved sufficient to prevent that rundown.
The motor car industry is one of the prime causes of our inflated imports. It is worth noting that the cost of our imports of road vehicles in 1987 was greater than the cost of our total imports of food and live animals. The Minister did not refer to that comparison. Japanese firms such as Nissan and Toyota have moved into Britain. Why are they doing so? They want to move inside the ring fence of the Europe of 1992. On the surface—[Interruption.] If hon. Members will allow me, I shall continue. On the surface, that looks a welcome development because it creates manufacturing jobs, which we all want. However, we should insist that those firms do not become screwdriver firms, mere assembly plants. The engines should be made in the United Kingdom. There should be a foundry content, and, above all, research and development should not rest solely in Japan. If we allow that to happen, we shall be at the mercy of foreign and inward investment.
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Car imports form a major part of our trade deficit. In 1982, there was a deficit in the car industry of £1 billion, which rose to £6·1 billion in 1988. That forms a substantial part—about 40 per cent.—of our overall deficit.
The Engineering Employers Federation has estimated that mechanical engineering, which is one of the United Kingdom's consistent exporters, will move into deficit in 1989. That is another tragedy. One effect of Britain becoming an assembly plant is that we shall lose a skill which is so essential for modern industrial development. We are losing ground in new technology and computers.
As somebody who served an apprenticeship in industry and who is a skilled engineer, I think that it is an absolute tragedy that we have thrown away existing skill. Who closed the skillcentres and cut back training boards? If ever there was a short-sighted policy, it was that. At the moment, in the south-east, where there is a demand for labour, there is also a shortage of skilled workers. If we are to get the economy moving again and get people back to work, where are the skilled workers to come from? Training to obtain skills and apprenticeships are essential. While there may be high flyers in the City, in an area in which we need to expand in order to live, we are cutting our own throats, and the Government should take note of that.
People who work in the manufacturing industry are often seen as the poor relations in our society. That is not true in West Germany, the United States or Japan. In those countries, people who work in the manufacturing industry, both factory workers and management, are at the top of the tree. Here, they are hidden away and people seem to be ashamed of those who work in industry. That is one of this country's problems. How can that happen in the country in which the industrial revolution began?
The Minister referred to certain industries. I shall quote what Sir John Harvey-Jones, the previous chairman of ICI, said on 16 April:
"the huge areas of activities on which our industrial foundation was founded are being destroyed … where are the British Engineering firms to rival the Germans or the Japanese, where is our machine tool industry, our car industry, our electrical engineering and our electronic industries?"
The report by the House of Lords Select Committee, on which people such as Lord Weinstock served, asked the same question, and the Minister did not answer it tonight.
Manufacturing industry is a major priority and the Minister should have a policy for it which would include planning, investment, research and development and skills—they should all be brought together. The policy being pursued now of high interest rates and a balance of payments deficit should be recognised as wrong and destructive of our seed corn. The Government have got it wrong, and the only alternative is a Labour Government.
8.10 pm
Mrs. Maureen Hicks: I welcome a debate on manufacturing, but I must confess to a certain disappointment at the negative response from the Opposition on this important subject. Where have they been all these years? Industrialists who read the Opposition motion tomorrow in Hansard will despair because Labour has learned nothing. They would panic at the thought of a Labour Government continuing blindly to advocate failed policies that so largely contributed to the weakening of British manufacturing industry in the

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1970s. Secondary picketing and the thought of Labour threatening to undo all the good that has been done would distress them immensely.
I did not hear a single constructive policy on how to move forward and build for the future from the hon. Member for Dagenham (Mr. Gould). Everything he said was destructive. I suggest that we bring the Opposition back to the real world of the 1980s, in which manufacturing output is at its highest ever and manufacturing productivity has risen by more than 50 per cent. since 1980—faster than any other major industrial nation, including Japan. Those statistics floor the Opposition's motion. If we are the failure that Labour continues to suggest, why are foreign companies flocking to invest here? We are their favourite country in which to invest now, but under the Labour Government we were the laughing stock of Europe. Imagine trying to compete in 1992 under a Labour Government!
I do not ask the Opposition to believe me or the industrialists; I do not even ask them to believe the foreign investors. I ask them to join me on a tour of the west midlands and see for themselves what is commonly described as a manufacturing miracle. More than 20 per cent. of all foreign firms setting up here have chosen the west midlands, compared with only 6 per cent. in 1983. Manufacturing industry in the west midlands has made greater progress in the past 10 years than it did between the end of the second world war and 1979. Unlike Labour Members, I am proud to shout that success from the rooftops to future investors.
Business is booming and there is a renewed faith in the region and its huge investment, new jobs, new factories, full order books, record productivity, record profitability, investment in training and investment in research and development. Acres of derelict land have been turned around under this Government and put to good use. I welcome the Government's support for the heartland of the industrial United Kingdom in the shape of a black country urban development corporation which will produce 1 million sq ft of industrial premises, create 20,000 new jobs and attract £1 billion of new investment. One has only to go around the west midlands to hear the buzz of thriving industry in small and large companies and to feel the excitement. I feel it regularly as I mingle with workers who are now associated with success. It is wonderful to hear from one-time shop stewards—in private—that they are thankful for the trade union reforms that the Government had the guts to instigate.
I speak as a Member representing a black country constituency which, admittedly, was devastated during the recession. Not a week went by in those days without bankruptcies and redundancies and it was hard to imagine how a recovery could ever take place. But families who suffered first hand have had the honesty to recognise that good has come out of bad and that the Government have created the conditions in which industry can flourish. Many of them were longstanding Labour supporters, but they recognise that the country was crying out for strong leadership to deal with the decline of our traditional manufacturing industry and to create an atmosphere in which workers would care about the success of their companies and produce British goods that could compete successfully throughout the world.
In the black country, we used not to be able to give land away. Industrial land values in 1988 doubled because of the demand for sites. A few years ago jobs could not be
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found for love or money. Now, with the biggest reduction in unemployment in the west midlands, the vacancies cannot be filled. What is more, firms cannot keep up with the demand for skills to meet the demand for their goods. We continually hear of companies training their workers only to have them poached by other companies down the road. Industry and Government together must continue to tackle that problem and ensure that we provide the skills necessary to fill those vacancies.
Given the reduction in the number of school leavers, we must devote even greater efforts to forging links between schools and industry. I take the point made by the right hon. Member for Salford, East (Mr. Orme) about the anti-industrial culture that has grown up; we must ensure that industry gets its fair share of the declining market of school leavers.
I am happy to report that in the manufacturing industries we still employ 33—2 per cent. of the working population of the west midlands, which is more than any other region. It will be a great tragedy for our region if excessive wage demands and days lost through industrial action are allowed to hamper our remarkable progress. Against a background of success and falling unemployment it is often too easy to forget the way things used to be. It is worth quoting an industrial analyst of the early 1970s in this connection. He said that 90 per cent. of a manufacturing manager's time here was spent in industrial relations, as opposed to his Japanese counterpart, who used to spend 10 per cent. The Government have redressed the balance, and that can nowhere be seen more clearly than in the major industries in my constituency.
I shall not quote the sort of hollow statistics that we heard from the Opposition tonight: I shall cite living, breathing industry. Goodyear, a flagship industry producing tyres in my constituency, struggled for survival in the 1970s, when the local Labour council did not want industry and was pushing Goodyear out of the region by setting high rates. Then, in the 1970s, Goodyear's labour force was more than half as big again as it is now and its manufacturing costs were well above those of its competitors and sister Goodyear companies. In the 1980s, the company has embarked on a major modernisation, in the form of a multi-million pound investment and rationalisation programme which has led to reduced manufacturing costs and a realistic attitude to success among the work force.
I can report in 1989 that that company is now so successful that it has switched from a five to a seven-day a week operation, 24 hours a day, which has resulted in an extra 1,000 jobs, taking the work force to well over 4,000. Similarly, another company, employing 750, Marston Palmer in the aerospace industry, whose markets in the 1960s and early 1970s centred in the United Kingdom, is today a leading company. It is well known and respected both in Europe and the United States for its technical excellence and is well prepared to compete favourably with the opportunities to be provided in 1992.
These are just two success stories from hundreds I could quote. They are examples of the manufacturing progress we are now witnessing under this Government, and long may it last. I say to the gloom and doom merchants on the Opposition Benches, "Open your eyes and see the success story once considered impossible." In the words of John Banham, the Director General of the Confederation of British Industry:

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"We have made a quantum leap from our dismal performance in the 1970s."
8.20 pm
Mr. Stan Crowther: I do not claim to know very much about economics. I used to think I knew a little about it until I learnt from experts such as the Chancellor of the Exchequer and the Chancellor of the Duchy of Lancaster that a record trade deficit, massive unemployment, rising inflation and very high interest rates are actually indicators of a strong economy. I always thought it was the other way around; now I realise that I got it all wrong.
However, no one needs to be an economist in an area like mine to see the appalling social cost of the decline of our manufacturing industries, because the ghastly physical evidence is there for all to see. The hon. Member for Wolverhampton, North-East (Mrs. Hicks) is inviting us to go and see for ourselves. Perhaps she would like to come and see for herself what I am talking about, because between Rotherham and Sheffield there are great areas of dereliction and desolation where once stood wonderful steel-making and engineering plants, which were in the old days the very backbone of the British economy. They have largely gone, and up to now at least they have not been replaced.
Of course, we are still making steel in Rotherham, but nothing like as much as we did. About 3,000 people are still working in the steel industry at a very high rate of productivity, but in steel alone my area has lost 10,000 jobs in the last 10 years, plus many thousands of other jobs in the coal industry and other industries—some manufacturing industries, but all directly related to manufacturing, whether in the manufacturing sector itself or in the energy-creating sector on which manufacturing depends. This collapse of manufacturing has led to a massive loss of jobs in my part of the world.
Some new jobs have been created, of course, many of them in a very unsightly, out-of-town retail development in the enterprise zone, where people are employed largely part time on very low wages in monstrous blue boxes pretending to be buildings, and they contribute precious little to the local economy. I am very pleased to say that there are a number of new small businesses in manufacturing and, like my right hon. Friend the Member for Salford, East (Mr. Orme), I strongly support small business. I am very much in favour of helping small companies to get established. However, it would take literally 300 new small firms, each employing 40 to 50 people, to create the jobs we need in the Rotherham area not in five years, not next year, but now; that is the measure of the problem. Quite clearly, with the best will in the world, these new small firms, which I strongly support, will not be able to solve that.
Everyone knew a long time ago, and we do not need to be told, that the traditional manufacturing industries would not be able to continue employing the number of people they once did. We all knew technology would take care of that because, of course, the whole purpose of technology is to reduce the need for labour. No one disputes that. Even if manufacturing were booming in Britain today, which it certainly is not, we would still be shedding jobs. However, the tragedy is that the benefits of technology and the potential wealth that technology can
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create have been dissipated, just like the wealth from North sea oil. That wealth ought to have been harnessed and used to develop new industries and create new jobs, but that has not happened. That is the great tragedy of the last 10 years. Where are the sunrise industries that we ought to be developing with the benefit of the wealth we have produced? They are not here, or not many of them are.
Mr. Richard Holt: They are in Cleveland.
Mr. Crowther: The hon. Gentleman says they are in Cleveland. He is extremely fortunate if they are in Cleveland, but there are not very many or we would not be running this massive trade deficit in information technology, electronics and telecommunications, the very industries on which any advanced country has to depend in the future to be able to revive the manufacturing base. It is an appalling tragedy that the country which led the first industrial revolution is now trailing so far behind many other countries in the world in the second industrial revolution.
Much of the problem stems from the fact that successive Secretaries of State for Trade and Industry—and, my goodness, we have had an awful lot in the last 10 years—have all failed to take the slightest interest in manufacturing. The Minister shakes his head, but it is a fact. We have met them all in the Select Committee on Trade and Industry. We have never managed to persuade any of them that manufacturing really matters. We have drawn attention to this problem time after time.
Lack of time will not allow me to quote very much, and I draw the attention of the House to only one of our reports, produced in May 1984, when we were very concerned about the great imbalance in trade in manufactures between this country and the rest of the EEC. It was already running at £8 billion a year, and our Select Committee, in its unanimous report, found it necessary to describe the attitude of the then Secretary of State, the right hon. Member for Chingford (Mr. Tebbit), as short-sighted and complacent, which indeed it was.
The essence of what we were saying in that report five years ago was that if we did not do something urgently to revive our manufacturing industries, we would be in very serious trouble in a few years' time. The question we were putting to the House and to the Government was: what do we live on when the North sea oil starts to run out? Of course, the chickens have come home to roost in this record and still rising trade deficit.
I had always understood that this country was a trading nation—Nye were all told that at school—and I cannot, for the life of me, understand how it can be argued that a trading nation which spends enormously more buying goods than it receives for the goods it sells can be regarded as successful. I may be taking a very simplistic view, but that is certainly a simple concept, which I should have thought would be easily understood by the grocer's daughter who leads the Conservative party and has the benefit of being Prime Minister for another couple of years or so. I do not think that Alderman Roberts of Grantham would have stayed in business very long if he had operated on the basis of developing a huge and increasing deficit year by year. Traders do not stay in business that way, and I do not think that the Government can pretend that we are doing nicely on that basis.

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I greatly admire the companies that are exporting manufactured goods and struggling against the enormous difficulties created by high interest rates, for example, and the quite unrealistic exchange rate, to increase those exports, but they cannot compensate for the fact that we have an absolute flood of imports coming into the country, largely because our manufacturing industries in many important sectors have been completely wiped out; they are just not there any more. In other fields they are being run down to the point at which they can no longer even meet the demands of the home market. When we relate all that to the profligacy of the Chancellor of the Exchequer's taxation policy, no one should be surprised at this huge inrush of imports.
Ministers frequently proclaim the virtues of private enterprise. If the Government had been managing any ordinary private sector company in the way that they manage the country, they would have been sacked years ago.
8.30 pm
Mr. Lewis Stevens: The hon. Members for Dagenham (Mr. Gould) and for Rotherham (Mr. Crowther) may have given to our competitors in Europe and elsewhere a picture of the British economy which they will be delighted to see. All the gloom that they portrayed was such that no one could believe that we now have a manufacturing industry that is likely to be able to compete with any worthwhile economy in the world. As my hon. Friend the Member for Wolverhampton, North-East (Mrs. Hicks) said, the picture of doom and gloom is completely false.
The pessimism of the Opposition about manufacturing industry is that it has not over the past 10 years come out of the shadows of the trade union domination in which it suffered for 20 years. In the last 10 years, improved technology, productivity and industrial relations have brought British industry to the position where it is able to engage in genuine competition better than at any time since the last war.
The impression that we do not want to invest in industry, that people do not want to know about engineering and that manufacturing is always the poor relation has perhaps an element of truth in it. Many things said by the Opposition often have. However, it is the emphasis on that which is so wrong. Companies such as Rolls-Royce have not only developing technology but are able to compete in world markets much more successfully than one would have envisaged even 10 years ago. The orders won by Rolls-Royce in the last few months are some of the most substantial that the company has ever had. We must congratulate the company, the workers on the shop floor and those in design and development and in other departments on their success.
I have a Rolls-Royce company in my constituency. It manufactures marine engines, but in the near future it will move to other products. The Opposition tried to talk down the privatisation of Rolls-Royce. They said that it would not be able to do its job in the private sector, but it has proved that it can do a very good job indeed. The Opposition talk about the loss of manufacturing jobs, and the right hon. Member for Salford, East (Mr. Orme) mentioned textiles. Certainly the textile industry went through a rough time during the major recession. It is
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interesting to note that in my constituency some of the developing industries are textile companies that are competing and exporting.
The second largest employer in my constituency is a textile company. It has built a new factory, is bringing in new techniques and is able to employ more staff than i t did a few years ago. Not only are existing companies developing because of the better climate, but new companis are coming into an industry that was always in decline. Many companies, including those in textiles, have developed in the last 10 years because the Government have provided a framework that has encouraged large and small companies to develop and take part in the necessary development of our total economy.
Manufacturing has many more problems than most other types of industry, and it is necessary for Government to be conscious of the importance of an industrial base to the total economy. The wealth-creating aspect of manufacturing is fundamental to a country's development in terms of jobs and the balance of payments and in the general wealth of people. We can ensure that wealth creation only by continuing the attitude to development that we have adopted in recent years.
Some years ago we had a machine tool industry, in which, among others, I worked, but it largely disappeared. However, there should not be too much gloom about that, because anyone who attended the machine tool exhibition at the National Exhibition Centre will have seen that independent British manufacturers and British manufacturers in collaboration with other companies have developed British machine tools. Those tools have started to appear again on the market and to compete. From the ashes of the former machine tool industry there is now a growing industry. It is not as big as it was before, but it is growing.
We must also recognise that in order to develop as fast as we should like manufacturing industry may sometimes need special Government measures. The Government have provided such measures to help manufacturers, especially small companies to which they have given various grants, particularly to those involved in high technology projects. However, we may have to look at other measures to encourage some of the smaller companies. Measures that will assist cash flow and perhaps tax delays or even VAT delays may be necessary to allow some of those companies to develop rather faster.
At one time, old-style apprenticeships were the best that we had, but that is no longer true. Some of the apprenticeships were superb, but others were weak, and that also applied to many of Britain's other training schemes. The Government have now developed a range of training that is wider than we have ever had, and it is available for people from the age of 16. That should greatly help manufacturers, because it brings together industry and education within the orbit of Government training. Such co-operation did not exist before, and that was why we had weak training systems in the 1950s, 1960s and 1970s.
We have also encouraged the higher education available at polytechnics and universities where courses are geared more to the needs of individuals and industry than they were in the past. They are not purely academic courses. That is the kind of development that we want. Local polytechnics are now running courses which 10 years ago could not have been envisaged, but yet they are necessary because they provide engineering courses that

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are directly relevant to local companies. The picture is not gloomy. We can look forward to making all our industries competitive in Europe and in wider markets. If we adopt an attitude of, "Oh dear, we have problems, perhaps we had better stop", we will get nowhere. That often happened in the 1960s and when a company came up against a problem about introducing new technology or faced difficulty in finding workers projects were sometimes put off. I do not say that that was due to trade unions being awkward. It was a mixture of difficulties created by unions and management.
Today there is an acceptance by unions of flexibility within companies and an acceptance by management of the need to generate a movement that keeps going forward. The Opposition skipped over productivity, but it is one of the most fundamental aspects of competition. Productivity is not a static concept. One does not improve productivity, sit back and say, "We have done it. We are better now." It is an ongoing process, and manufacturing and all industries must recognise the need for continual productivity improvements as part of their businesses. That must be a major priority if business of all sorts is genuinely to compete in the markets.
We have a future in manufacturing. That is not to overlook the need for help and a drive on training and education. Much remains to be done, but a good start has been made under Conservative rule. The whole issue was ignored by the last Labour Government and the fact that a problem existed was not even realised by some Governments before that.
The Conservatives in recent years have appreciated the need for manufacturing to develop, and help has been provided in many ways and in various areas. By recognising the needs of manufacturers, we have already come a long way. There is still a long way to go before we are truly competitive, but the path which the Government have set will prove to be the path to a more successful and reliable manufacturing base.
8.41 pm
Mr. Charles Kennedy: Despite some of the optimistic tones that predictably have been emanating from Conservative Members, I cannot but feel that an initial comment on those tones is to ask why, if things are so good, things are so bad, certainly in the part of the country from where I come.
I cannot claim to speak with knowledge of the part of the country represented by the hon. Member for Wolverhampton, North-East (Mrs. Hicks), but it sounds as though the manna from the Government is falling weakly from heaven there. The extremely encouraging picture she painted of her constituency is not mirrored in many other constituencies, particularly the further north one goes in Britain. Apart from being extremely supportive of Government policy, her remarks represented an eloquent underlining of the extent to which Britain has become a deeply divided nation, socially and politically, under Conservative rule.
The nation and its industrial base has been hit twice by the Government. It was hit first between 1979 and 1981 when they pursued massive deflationary Budget strategies which resulted in the wholesale rundown and closure of large sections of manufacturing industry. That was bad
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enough. But as a result, any figures that are now cited in support of the apparent manufacturing recovery begin at such a low base, as a result of the 1979–81 collapse, that it is easier to make any recovery look better than it is.
The economy has been, and is being, hit for a second time—and all the harder from the point of view of our economic base—by the tax-cutting strategies of the last two Budgets and by the consumer boom sucking in consumer imports. The Government have always displayed a tendency to change the basis of calculation when the figures show an unhealthy story. That has happened with unemployment; there have been a series of changes in the method of calculating the totals. The Chancellor now wants mortgage interest costs to be removed from the inflation index because it puts up the index too high for his liking.
Casting one's mind back to the previous debate today and the willingness of the Government to indulge in propaganda at the taxpayers' expense, one wonders whether, if the balance of trade continues to decline, they will try to withdraw imports from the equation, so making our balance of trade position look not nearly so bad.
Mr. Crowther: The hon. Gentleman may be giving the Government ideas.
Mr. Kennedy: If I get a 10 per cent. return for feeding in that idea to the propaganda machine that Saatchi and Saatchi has developed in recent years, I shall be able to retire happy almost immediately.
What can we do to improve our industrial performance and manufacturing base? There are three key problems to which I wish to refer—low productivity, high unemployment and high inflation, which is linked to poor competitiveness.
In 1960 we were the equals of France and Germany in productivity. We have now slipped way behind. Our productivity has a real impact on our people's standard of living, so we have by far the lowest pensions, we spend less on health and we have the smallest proportion of young people in full-time education. Our closest competitors in Europe are leaving us standing in all those respects.
Four main factors cause low productivity: shortages of skills and basic education, poor industrial relations at times, inadequate research and development and inadequate competition. Given our skill shortages and low levels of basic education, we should be moving towards a right to numeracy in our education system. In other words, it should become increasingly unacceptable for the teaching of maths in schools and colleges without ultimately a certificate of competency.
There should be training incentives. Employers who train less than the average for their industry—the Government should start thinking in these terms—should pay a tax equivalent to the extent of the under-training. Employers who train more than the average should be reimbursed to the extent of that extra training. The amount of training should be measured in terms of expenditure as certified by a company's auditors.
The Companies Bill began its Committee stage this morning. The Government displayed their open-mindedness in the first two and half hours of the Committee's deliberations by removing an amendment on political donations which was inserted in another place. I hope that

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the Government use some of the remaining time that the Bill has for its passage through Parliament by pursuing some of the ideas that I am putting forward.
Next, there should be a right to training. Anybody employing a person under 18 years of age should be encouraged to release that youngster for at least one day a week for education and training at the employer's expense. In the past, the Government have hesitated to introduce such a concept for fear of causing youth unemployment. Under the training incentive proposal that I have outlined, using the tax system based on a company's audited accounts, employers would no longer have an incentive to avoid employing young people with whom they had to enter into training commitments.
Those are some proposals by which the Government could begin to shake up the industrial base and contribute towards industrial, and particularly manufacturing, recovery. They should also look to civil research and development. Our education structures, compared with those of our main industrial competitors, are such that we are failing woefully to provide anything like the tertiary and skill education that, for example, Japan and north America manage to provide in competition with us.
It is attitudinal, and I agree with what hon. Members on both sides have said about education. About a year ago I spoke before a high school audience in Edinburgh, most of whom were going on to some form of tertiary education. One thinks of the proud and distinguished engineering traditions of Scotland. When I asked that audience how many would be going into law, medicine, the arts and so on, it was clear that the number going into engineering was a minute fraction of the total. In Japan, "engineer" is a social handle. It is a position in society in the way "doctor of medicine" is in this country. Our attitude must change.
High unemployment, high rates of inflation and poor competitiveness have dogged this country throughout the period of Conservative rule. We should be looking to full United Kingdom membership of the European monetary system.
There is a very interesting debate developing within the Conservative party, although I do not think that I can dignify it with the description "debate". There is a full stand-up, drag-'em-out fight going on in the Conservative party. There is no doubt that the SLD had the good sense to get our little skirmish behind us in the first half of this Parliament and we will spend the second half being constructive. The Government look as if they are going to spend the second half of this Parliament involved in their own internal punch-up and I welcome that because it will help the Opposition parties generally.
We should be working towards full EMS entry because that would help our industrial base, help our exporters and create far better conditions for them to operate. Conservatives advocating that approach will, I suspect, by the time of the next election or not long after it be proved to be on the correct side in that argument. That, on an international basis in terms of the ability of this country to compete better internationally, would be a major attainment. It is well within the grasp of the Government.
It now seems to be fashionable to assume that a move back towards something much closer to full employment is not attainable whatever economic system one adopts or whatever political goals one sets. But we should look at countries such as Sweden, where unemployment is close to being under 1·5 per cent., which is effectively zero unemployment given the flexibility of the labour market.
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I hope that, despite all the fiddling and fixing of the figures and the misplaced economic optimism of the Government about the economy, they will not lose sight of their tremendous, overriding social obligations to the millions who have lost gainful productive employment during their decade in office and of how important a priority it must remain to bring down unemployment by the production and creation of real jobs in the future.
I have one constituency appeal to make to the Minister. The greatest single manufacturing setback in my constituency was the closure of the Invergordon aluminium smelter. I will not rehearse the history now, but it closed because of a world slump in the price of aluminium and the inability to achieve—[Interruption.] That plant went there with Conservative support in the 1960s. If the hon. Member for Langbaurgh (Mr. Holt) was not so woefully ignorant of recent political history he might know that.
It also failed because of the inadequacy, or ineffectiveness, of the power supply contract that had been negotiated. World aluminium prices have now substantially increased and British Alcan has commented publicly that electricity privatisation may create flexibility for a more favourable power contract to be negotiated. That being the case, I should be glad if the Minister would at least promise to keep his eye on that developing situation, because he will appreciate that any move towards reopening that plant in my constituency would be a major psychological and financial shot in the arm.
8.53 pm
Mr. Charles Wardle: It seems to have become inevitable that whenever the House debates the state of British manufacturing industry an internecine clash follows about the correct interpretation of what has happened to manufacturing in the recent past. Today has been no exception. Opposition Members have made some strident claims about what they describe as the disintegration of our industrial base, the dramatic fall-off in manufacturing employment and the trade deficit in manufactured goods. My right hon. and hon. Friends point with much justification to a freer labour market, vigorous growth in output, greater productivity, higher profits and increased capital investment.
On both sides of the House, to my way of thinking, a rather too euphoric gloss is sometimes placed on industry's short-term prospects in Europe without what I would regard as sufficient concern for the devastating speed with which changes in technology will shortly be consigning even some of our more enterprising companies to iron-age-style obsolescence, and without enough awareness of what it will take to acquire a greater market share in the single European market ahead.
The trouble with a debate about what has already taken place is that it distracts attention from the important issues for industry's future and particularly the opportunities and challenges over the next decade. Nevertheless, any realistic assessment of where manufacturing industry's best strategy lies in the 1990s has to spring from an analysis of the key factors in our past performance. I shall try to keep my comments about that analysis as brief as possible.
There can be no doubt on either side of the House that captive markets in post-war Europe and the Commonwealth left British manufacturers complacent

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about order books in the 1950s and 1960s. That meant that they were later into new technology than our German and Japanese competitors. That had disastrous consequences for this country in the microchip revolution. But the real killer was inflation from 1972 or 1973 onwards because too many companies simply made for stock and watched paper profits accumulating on the shelf. Products remained unsold and simply rose in value, and that in turn encouraged poor cash-flow management, soft wage settlements and overmanning—a situation that was exploited with mindless shortsightedness and selfishness by many trade unions.
Ironically, one of the first people to signal the impending crisis was a trade union leader, Clive Jenkins of ASTMS—the Association of Scientific, Technical and Managerial Staffs. In a book that he published in 1979, before the winter of discontent—I think its title was "The Collapse of Work"—he predicted unemployment of 5 million or 6 million in the 1980s because he recognised the problems of overmanning. So, when the world recession began in 1980, British companies with too much stock, tight liquidity and bloated payrolls fell like ninepins and only the better managed companies managed to come through and survive.
No matter what Opposition Members may claim, from that time on the future of many traditional, steel-based, smoke-stack industries suddenly lay in the far east and the Third world, because even with automated production plant and efficient materials handling Europe could no longer compete with the direct and indirect labour costs of the developing world. So manufacturing in the west midlands and elsewhere was reduced to a rump eight or nine years ago. But, since then, with trade union legislation that has liberated individual workers, deregulation, lower inflation and more individual incentives, growth has accelerated, particularly in the defence field and in the hitherto sluggish state-run companies now in private hands.
The Government have skilfully created a more positive business climate, with record output now being achieved from a much truncated manufacturing base. We have a leaner and fitter industry, better equipped and tightly controlled, but is it geared to win a greater market share in Europe, to ease the balance-of-payments gap and to make up the leeway on product innovation and manufacturing technology?
With continued realism and determination, it is certainly possible, but it will not happen if inflation is allowed to rise and recent hard-won progress is squandered. Nor shall we succeed unless industry and Government come to a clear understanding about several vital areas in which both have a part to play. I am talking not about collectivist nostrums or central planning but about the harsh realities of a highly competitive market place and the ability to create wealth.
First—with no disrespect to our excellent civil servants—Government have to take into account the importance of including in their official ranks people who understand markets, money-making and line management to add to Government's understanding of the realities of the task of running industry. Not that Government should run industry, but they need to understand how it is done and all too often there is a gap in that understanding.
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Secondly, industry must grasp the significance of research and development if our future is to be anything but that of a neo-colonialist subcontractor and national assembly plant in the medium-term future. Companies are making profits and they have to put a large share of those profits into research and development if we are to have businesses in the future. It is the companies' responsibility.
Thirdly, Government have to shed their dirigiste inhibitions in at least one respect. They simply have to understand that the creation of new standards for the European single market must be achieved in a way that helps British competitiveness. That cannot be ignored.
Fourthly, excellent recent advances in training must be accelerated by employers, not by the Government. Employers must go to schools and colleges and participate in training programmes to woo the industrial workers of tomorrow. Fifthly, vast investment is required in our hopelessly inadequate transport infrastructure. We must emulate the efforts of our EC partners, and the swiftest and cheapest means of doing that is to give the job to the private sector and to private finance wherever it is practicable.
Finally, the City—and banks and institutional investors in particular—must grasp the fact that, while takeovers can be strategically important and worthwhile, the companies meriting the highest esteem are those which successfully invest in in-house product development and marketing strategies of their own. Too many companies in our highly sophisticated stock market look for next year's growth in earnings per share from the issue of additional equity for acquisitions, whereas the real glamour should attach to the businesses that ruthlessly seek internal growth and expansion. That is the way to create market winners and perhaps even to win back our European market share of consumer goods.
If those challenges—which are management challenges for private industry and Government alike—are met, we have a realistic chance of taking the lead in Europe by means of our own competitiveness before the turn of the century. If we do not do so, this country, which led the way to the first industrial revolution, will be relegated to the second division of manufacturing in the second industrial revolution in the next century. We have the opportunity to succeed. It is up to us.
9.1 pm
Mrs. Alice Mahon: Try as I might, I cannot find an economic miracle in manufacturing, but some extraordinary claims have been made tonight and, with a first name like mine, I am reluctant to talk about wonderland, white rabbits and mad hatters. However, listening to the contributions of some Conservative Members, I feel that I am in that kind of world.
I will not tolerate the Minister or anyone else saying that the fine industries that were lost to my constituency in the earlier years of the Government's reign were lost simply because they were overmanned or obsolete. We made the finest machine tools in the world and could be doing so still had there been a decent economic policy and a Government committed to industry. Nevertheless, tonight I will settle for a reassurance that the Government will at least take manufacturing's next period of crisis seriously. Sadly, I do not think that they will. Everyone else seems to be doing so. A report from the British Textile Confederation published this week states:

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"It is staggering to realise just how much of trade in textiles is distorted, often by interventionist policies by governments world-wide rather than being carried out on the basis of normal commercial principles."
There is a message for the Government that has nothing to do with competitiveness but has everything to do with British business saying to the Government, "Will you help and stop unfair practices?
Mr. Peter Booth of the Transport and General Workers Union textile group reports that 15,000 jobs were lost in the textile industry last year and predicts that another 20,000 will he lost this year. In a very good debate on manufacturing in another place recently, Lord Ezra commented that:
"unless we have a very strong manufacturing industrial base we shall not be able to balance our trade and our payments with the rest of the world. In order to achieve that, we have to build up that base."—[Official Report, House of Lords, 26 April 1989; Vol. 506, c. 1313.]
Those who took part in that debate, almost without exception, expressed the same sentiments. Concern was also expressed about Britain's £15 billion trade deficit. I add my voice to their warnings. I am pleased that we are having this debate. I asked my party to arrange it.
In the travel-to-work area of the district council that covers both my constituency and Calder Valley, 1,000 jobs have been lost since Christmas across various manufacturing industries, including engineering, machine tools, a new brush company that opened with high hopes, bedding, furniture, and textiles.
One of the saddest cases is that of Crosrol, specialists in textile machinery, which lost hundreds of jobs in the early 1980s but fought back. As my hon. Friend the Member for Dagenham (Mr. Gould) might say, it became leaner, fitter and more competitive. Last year it won the Queen's award for industry, but is now again announcing job losses. All those firms attribute their situation to some of the Government's economic policies.
In 1987–88, we were already feeling the chill wind of the need to be more profitable in the run-up to 1992. In my constituency, there was a major closure with the loss of 1,000 jobs at KP Foods. Even though that company was profitable, it was not profitable enough to cope with the competition it anticipates that 1992 will bring. A further 500 jobs are still to go at that company. The Government know full well that their one-club economic policy of high interest rates seriously damages industry, particularly small companies.
A town such as Halifax relies on the success of small companies. A large carpet mill, Dean Clough, closed, but was reopened, housing a number of small businesses. However, the Government's policy of high interest rates and high energy and water charges is harming those small businesses, which are finding it very difficult to compete. Towns such as Halifax suffer because the Government have no regional policy. The Government view local unemployment statistics as reliable indicators of the local economy but conveniently ignore the army of invisible unemployed, whose identity in the labour market disappeared down a departmental black hole of statistics as the need to get people off the unemployment register became paramount.
The Government do not allow councils such as Halifax capital budgets sufficiently large to help industry through infrastructure. No money is available except to inner cities or urban development areas. We have pleaded with the Minister for objective 2 status as a town surrounded by
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others having assisted areas status, and we suffer greatly from that situation. The economy is overheating in the south-east, with companies looking to relocate, but the Government's response is yet another local government Bill that will curtail the power of local authorities even further. They will not be allowed to help with infrastructure or assist industry to relocate.
As to manufacturing, the market has failed people miserably—[Interruption.] I am glad that the hon. Member for Wolverhampton, North-East (Mrs. Hicks) has such a happy story to tell. Sadly, I have not. I am sorry that Conservative Members see fit to laugh. If they had seen 1,000 jobs lost in three months in their constituencies they would not find it very funny. Another 500 jobs are still to be lost, and the economic indicators are against further employment.
We face a skills shortage in the run-up to 1992 in many of the industries that are doing well, which must raise questions about the Government's much-publicised training schemes, especially YTS and ET. We have not invested in research and development. Two years ago, the Prime Minister boasted that £210 million would be spent on the Link scheme, but only £60 million has been spent. I suspect that it is because the Government are not really interested in research and development or training for the manufacturing industry. The Government have to face up to the seriousness of the situation. Perhaps the very short debate this evening will enable them to do that but quite frankly, given the attitude of some Conservative Members, I seriously doubt it.
9.9 pm
Mr. Alistair Burt: This evening we have had a good debate, sharpening up attitudes on both sides of the House, but with a good deal of moderation and acceptance of the basic ills in the manufacturing sector over the years.
As the House will know, my constituency is in a traditional manufacturing area, south-east Lancashire, the cotton workshop of the world, but no longer are Bury, Ramsbottom and Tottington exclusively manufacturing towns. We have not talked very much about the development of a more mixed pattern of employment in traditional manufacturing areas. In my constituency the index of manufacturing and service industries reveals that there are more than 1,000 firms in my constituency and the area immediately surrounding it. That represents a large number of companies of a wide variety of natures. The fact that manufacturing is becoming less important is balanced by developments in other sectors.
In a traditional manufacturing area there are bound to be mixed views about the changing nature of the towns. Tradition dies hard and industrial closures have hurt the area. When I first became a Member of Parliament unemployment in my constituency was something like 13 per cent. and rising. Now it is down to something like 6 per cent., but recently there has been one closure and some jobs have been lost in another firm. Unemployment hurts and is still hurting. In the past few years unemployment has fallen, but the Government must maintain their goal of reducing unemployment as much as possible.
There has been nothing sudden about the changing nature of my constituency. It has not happened post-1979. That is why I feel that the central thrust of the Opposition motion is misguided. The true damage to manufacturing

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industry occurred in the years of decline this century when the golden age of British manufacturing came to an end, either through no fault—as the closed markets of empire were opened up to other nations or as developing nations improved their economies—or through fault—learning late the post-war lessons about proper management, and failing to get industrial relations right on both sides of the industry. If the Opposition are genuinely looking for a Government to make a scapegoat, they should look nearer home, at the Labour Government between 1974 and 1979. The hon. Member for Dagenham (Mr. Gould) was talking about competitiveness and productivity. How did the appalling trade union legislation of 1974–79 improve our productivity? How much did secondary picketing do to improve British competitiveness and what part did double-digit inflation play in industrial regeneration? All those factors did enormous damage to manufacturing industry but have been neatly passed over by Opposition Members.
Since then areas such as mine have changed and have moved away from manufacturing. We should remember that some 200 years ago manufacturing businesses and companies were new. When John Kay's flying shuttle was invented in Bury, Bury had something like 2,089 inhabitants. There have been many changes. We look back nostalgically to that great industry. But at that time it was new. Therefore, we should welcome the new industries and the new employment into our areas. It may not be as romantic to look back at the creation of an Asda superstore or the construction of a Warner Brothers' multi-cinema complex, but they represent jobs and investment and will exist for a long time to come.
There has been nothing short of a reconstruction of the manufacturing industry in the north-west in the past 10 years. Of course the bulk orders to easy markets have gone, but in the wake of the protection that existed in the past we now have new technology, innovation, and improved attitudes towards design and customer relations. There have been improvements in quality and an increase in the manufacture of value added products.
Some firms in my constituency illustrate that change. In the textile industry, Bury is no longer involved in bulk textile manufacture, but it produces high value-added goods and companies such as Elton-Cop, part of the Coates-Viyella group, have followed the practice of good long-term investments that are now paying dividends. In the paper industry, Bury no longer manufactures paper in bulk, but specialises. A company called Cromptons specialises in teabags and sausage skins. The sausage skins are exported to Germany. If my right hon. Friend the Prime Minister ever does anything as indelicate as eating a sausage with Chancellor Kohl in Germany, I would bet a pound to a penny that the sausage skin was made in my constituency. In the paper-making industry, companies such as Holder-Pamac have developed their own market over the past 10 years because the quality of design and innovation are better than many of their competitors. In the ventilation and ducting industry, Henry Hargreaves has a world wide reputation because it is the best in its field.
In areas such as my constituency and other parts of the north-west, the manufacturing industry has survived because it has learned the basic lessons of good
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management, good labour relations, and a better attitude to success from the shop floor to the boardroom and an understanding that they are all in it together. I do not believe that there are two sides of industry any longer. Those that believe in two sides believe in conflict and division which bring industry to a halt. But more often people feel that they are all in it together. Politicians may talk, but those in the industry do not want to see division and know how important it is to fight the world markets together. Lastly, companies in the north-west have learnt the value of good decent investment over a long period of time.
I should like to flag up some vital issues to make sure that the Government get it absolutely right in future. There is no doubt that the reconstruction of the north-west has been helped immeasurably by Government policies. But in the short term the Government must address some vital issues. First, there is no doubt that the high value of the pound causes difficulty to our exporters. Secondly, our manufacturers need stability in the exchange rates. Thirdly, interest rates should be lower, but we already know that. Fourthly, the Government should take a more aggressive attitude to unfair foreign competition. The textile industry has been through a miserable time recently, particularly with Turkey. It has taken time to order an EC investigation, which is now taking place. But the Government must be more tough when they are confronted with unfair opposition from abroad.
Finally, I should like to refer to something that has been mentioned by other hon. Members—education and training. Last year, the Bow Group commissioned a survey among 160 major industrialists. We asked a range of questions about a variety of issues, but we were surprised at the emphasis that employers placed on education. We are surprised that the emphasis given to the role of education outstripped the more obvious targets for attention. We felt that it showed
"an acute grasp of a depressingly old problem—how to stimulate and prepare the young for an interest in industry in a nation whose culture has too often been seen as anti-industry".
We were impressed that of all the policies discussed, education was considered most important for the future.
The lesson is very clear. We have to prepare our children better for the manufacturing industry of the future. It is a disgrace that the British manufacturing industry is held in such poor esteem. The hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) referred to that. It is true that for some reason, in a world which has been built by industry and in a region such as the north-west which has been built on the back of manufacturing industry, engineers are still despised as men in blue cotton overalls with oily hands wiping away the cotton waste. That is not the reality, nor will it be the reality in future. We must all get our attitude right towards education and towards industry.
In that same summary by the Bow Group 160 industrialists who were questioned said that the Government's performance was
"highly rated and was considered to have been better in the second term of Government than in the first."
There is no doubt that the policies on which manufacturing industry is based are sound and will provide a good base for the future. If the Government take note of short-term concerns, manufacturing industry will have a strong and secure base, providing, solid employment in the future.
9.19 pm
Mr. James Lamond: Government Back-Bench Members have tried to support their Minister's speech by painting a rosy picture of what is happening in their constituencies. It is not difficult to pick out one or two firms where productivity, efficiency and profitability have improved and investment has increased. But one or two such firms do not mean that the whole of manufacturing industry is doing well.
The unfortunate and important fact that spoils the rosy picture is what is known as the bottom line—the manufacturing industry deficit of over £14 billion a year. That cannot be ignored by any hon. Member. I remember great play being made in the 1970s by the Tory party and the press of a monthly deficit of £35 million that was to bring the country to its knees. No doubt the publicity given to that fact cost us many votes. It was important then and it is much more important now when £14 billion worth of manufactured goods are coming into the country each year. If all those firms are expanding so well, why must people go abroad to buy the things that they want?
I am glad that the hon. Member for Bury, North (Mr. Burt) came at last in his speech to criticism of the Government. I had begun to think that he had forgotten that he represents an area where textiles are still important. Employment in textiles represents 9 per cent. of manufacturing employment. Hon. Members do not need to believe me when I tell them that things are bad in the textile industry; they have only to read the annual statement of the British Textile Confederation that was issued this week. The president, Mr. Spencer, put his finger fairly and squarely on two matters that are causing problems—high interest rates and the over-valued pound. Both those are the direct responsibility of the Government. If they want manufacturing industry, and in particular textiles, to expand and provide employment, they have to revise their economic policy. It is the policy of the Chancellor to maintain high interest rates and to threaten us with even higher interest rates unless inflation comes down.
Tory Back Benchers have attempted to demonstrate that the trade union movement was responsible for all the difficulties in the past. Let me draw attention to the record of the trade unions in textiles. I admit immediately that there has been a small labour problem in the textile industry recently. Very unusually, the textile industry had its first strike for decades. What did the workers achieve? What were they determined to obtain that would bring the industry to its knees? At the end of their struggle and all the trouble they caused, they had to accept an increase in minimum earnings from £85 to £95 for a 39-hour week. I want anyone who says that the industry is being bled by the workers employed in it to tell me what his salary is and whether he could live on £95 a week.
The hon. Member for Bury, North mentioned other matters that concern the textile industry. The hon. Member for Macclesfield (Mr. Winterton), the employers in the industry and I are to see the Minister responsible for textiles at the end of the week to draw his attention to the inaction of the Government in protecting the industry against Turkish imports. In the opinion of Mr. Spencer and myself, Turkey's behaviour has been outrageous. The increased imports that we can expect in the EEC from China will kill the textile trade in this country and will end the manufacturing industry which employs 9 per cent. of
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our people. I hope that the Minister, in whom I still have some faith, will get some action. Now and again he shows a little independence and determination to stand up for the country. I look to him to do something when we come to see him on Thursday.
9.25 pm
Mr. Richard Holt: It is my privilege to be the only Member from the north-east of England to speak in the debate. I suppose that that in itself is significant. The Labour party in the north-east has abandoned debates on this subject because it does not wish to cross swords. We have not had a debate but rather a series of well-read, or in some cases not so well-read, speeches. That disappoints me when we are supposed to be a debating Chamber, with the cut and thrust of debate. The tone of the debate was set by the hon. Member for Dagenham (Mr. Gould) who opened for the Opposition. He did not wish to be interrupted because he did not want to have to answer any of the questions that would have been put to him by Government Back Benchers.
Last week there was a television programme on Tyne Tees produced by the Northern development corporation. It was a debate in the north-east about the north-east, dealing with why we are not projected nationally as well as we should be. It must have been an important debate because Brian Redhead was imported to compere the programme. The cat was let out of the bag during the debate when the regional organiser of the Transport and General Workers Union, Joe Mills, said:
"Of course things are better in the north-east now. It hurts me to have to say so but begrudgingly I have to say that Margaret Thatcher has been responsible for this."—(Points of order, col. 958, 24 May 1989.)
Up to 1980, a total of 47,000 people worked in British Steel and ICI on Teesside. After 1980 the numbers went down. Now only 12,000 work in those two industries. I was interested to hear John Harvey-Jones' virtue being extolled by the Opposition. He did a magnificent job for ICI. He saved the company and made it into the great world leader that it is today, but he did it at the expense of putting 18,000 to 20,000 people on the dole in two years. If we consider the history of British Steel, we see that overmanning continued in that industry until we grasped the nettle in 1979 and 1980. The result is that the figures for British Steel today show that it is producing 110, 115 and 120 per cent. of what was being produced when the labour force was four times greater. That is a measure of the improvement in productivity that we have seen over the past 10 years.
I hear Opposition Members say, "They are speaking for their own little patch." I can speak for the entire area of Cleveland, and I am not quoting from the Conservative piece of literature. The headline reads: "Teesside economy still booming". It is booming, as hon. Members will see if they go up there and have a look. The trouble is that very few Opposition Members bother to go and see for themselves.
Only last week it was announced that a new American company, Millecom, was coming to Darlington and bringing with it 1,000 jobs. That is on top of all the other investment that has come into the north-east over the past six years. The area still has high unemployment—judged, perhaps, according to different yardsticks from one day to

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another—but, if I may speak parochially, unemployment in my constituency has fallen by 41·66 per cent. in the past five years, and that is quite a reduction.
Opposition Members may say that we are talking only about small areas. The pharmaceutical industry in the north-east now receives 50 per cent. of all the fixed investment in the region. More than 200 new electronics firms have been established, along with more than 300 companies associated with offshore technology. We have 60 companies working on advanced materials. Investment is coming in all the time: £300 million of investment and 4,000 jobs. Fujitsu is said to be the latest, but it has been superseded by Millecom, and I believe that British Telecom itself will be making a similar announcement in the not too distant future.
What is new and remarkable about what has happened in the north-east is that self-employment has become an option that people take up. Historically, people in the north-east have left school, gone to work, taken their apprenticeships and worked for one company all their lives until they retired. Those days, however, are no longer with us; that type of industry is gone. [Interruption.]
Mr. Patrick McLoughlin: Opposition Members are not interested.
Mr. Holt: I know that. I was more interested in the fact that Mr. Speaker was looking at me, because I was told that I could speak until 9.35 pm. As I am now receiving different indications, I apologise. I accept your stricture, Mr. Speaker, and I will stop speaking if another hon. Member wishes to speak.
Let me say merely that the message from the north-east is not gloom and doom; it shows a future built on new industries. Our old, overmanned heavy industries have gone. The future is ours, and that is why the Conservative party will sweep the north-east of England from now on.
9.31 pm
Mr. Michael J. Martin: I am interested in the rosy employment pictures painted by Conservative Members when they talk about their areas. I do not think that anyone would deny that Glaswegians are triers: they have tried immensely hard to improve their city, and have succeeded in many respects. But hon. Member should not kid themselves by painting such rosy pictures. Unemployment in my constituency is more than 24 per cent., which is a national disgrace.
My hon. Friend the Member for Oldham, Central and Royton (Mr. Lamond) spoke of the decline of industry. I served my apprenticeship as a young sheet metal worker in my constituency. It was a small company employing 70 people, surrounded by others employing 300 or 400—foundries and heavy engineering firms. The only company left now is the one in which I served my apprenticeship. All the others have gone, partly because of the decline caused by the present Government.
An interesting fact of which I have been told by the secretary of the sheet metal workers branch of my union is that there is a shortage of skilled sheet metal workers in the Glasgow area. As my hon. Friend said, we have not invested in training, and as a result firms are desperate for skilled workers. When I arrived here 10 years ago as a new
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Member, I said that if the economy improved we would need skilled people, and that we should already be investing.
It is nonsense to say that the training schemes that we have are the best that the Government can offer. We cannot obtain good apprenticeships unless people are working with the materials and tools of the trade, and rubbing shoulders with skilled workers. This Chamber would not have been built if it had not been for the traditions passed on by craftsmen, and the same is true of industry. We would be failing in our duty if we did not think more carefully about adult apprenticeships. Australia, New Zealand, Canada and America are interested in adult apprenticeships, yet we have people who have been without a proper job for five or six years and who are not getting the opportunity to serve an apprenticeship, which would be the least we could do for them.
It is nonsense to say that industrial relations improved only when we had a Tory Government. The Government should tell that to the people who work in the shipyards, to the women and the contract cleaners who have been exploited. Tory legislation has done away with the rights of the low paid, who had few rights to start with. Let no one fool anyone that Tory legislation brought about good industrial relations. In my constituency, factories have closed despite excellent industrial relations and increases in productivity. The companies wanted to centralise and so closed down their Glasgow offices. It is nonsense that factories that were profitable and had increased productivity were closed.
I hope that the Minister will take on board the views that we have expressed in this debate.
9.36 pm
Mr. John Garrett: This has been a brief but important debate. I do not think that anyone could deny that there has been a decline in manufacturing industry. One fifth of it disappeared between 1980 and 1982 and the growth thereafter has not replaced that loss. We have had examples from my right hon. and hon. Friends of the continuing loss in manufacturing. My right Friend the Member for Salford, East (Mr. Orme) talked about engineering and car manufacturing, my hon. Friend the Member for Rotherham (Mr. Crowther) spoke about the steel industry, my hon. Friend the Member for Halifax (Mrs. Mahon) spoke about the textile and other industries, my hon. Friend the Member for Oldham, Central and Royton (Mr. Lamond) spoke about textiles and my hon. Friend the Member for Glasgow, Springburn (Mr. Martin) spoke about engineering.
The decline in manufacturing industry derives from major structural changes in our industrial base for which the Government appear to have no remedy. In addition to adverse structural changes, we have wholly inadequate management and vocational training systems, which are required to support a modern manufacturing country. Clearly, that is the Government's responsibility. The immediate problem is the remarkable deterioration in the United Kingdom trade balance last year, which was caused primarily by a massive increase in the import of consumer goods such as cars, clothing, textiles and household electronic goods. The Government's claim that rising imports are largely capital goods to re-equip British industry simply is not true. Even if it were, it would simply

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illustrate the collapse in our capital goods and equipment industries and our inability to supply. I have never understood why the Government feel that that is something to boast about.
This country now has to import machinery to equip our industries and we pay for those imports of equipment in oil exports. In other words, we import equipment and export commodities—a trade pattern far more common in an underdeveloped country than a modern manufacturing country. The late Austen Albu, who some may remember as a Labour Member of Parliament, said some years ago that we export bulk and import refinement. The problem he identified then is much worse today when we import equipment and export oil.
The three large sectors of manufacturing in which we are weakest are cars and parts, where the deficit was £5 billion last year, clothing and textiles, in which the deficit was nearly £2 billion, and consumer electronics, in which the deficit was £1·5 billion. Twenty years ago those were staple industries in Britain and a decade ago we still had a substantial international presence in all of them. We no longer have a major international volume car manufacturer. The French have two and produce twice as many cars, trucks and other vehicles as we do. The penetration of imported cars into the domestic market reached 56 per cent. last year and commercial vehicle imports reached 40 per cent. As a percentage of the domestic market, imports of buses and coaches rose in the past decade from 3 per cent. to 38 per cent. When I worked in the motor industry, we used to be the suppliers of trucks and buses to the world. The standard truck throughout the world was the Bedford truck, made by Vauxhall. Today we import most of our vehicles. It is remarkable that our vehicle manufacturing industry has declined so much that we now have only a minor share of our home market.
Domestic market penetration of imported textiles and of footwear has reached 50 per cent. Footwear used to be the basic manufacturing industry in my constituency but it is now reduced to one tenth of its former size. We are still losing jobs because of the exchange value of the pound and because of interest rates. That is what my local footwear manufacturers tell me.
All that could have been judged as a necessary or natural adjustment as we got out of industries for which we were no longer suited and moved into new industries. One could understand that, but our performance is no better in the new technically advanced industries. Let us take as an example information technology, in which we were pioneers. We now have an adverse balance of payments in information technology equipment and services of £2 billion per year. That is now the basic industry of a modern manufacturing country. That growing deficit occurs in a number of other high-tech R and D sectors, such as medical equipment in which, again, we used to be pioneers but where 60 per cent. of the home market is now accounted for by imports. Import penetration in chemicals, in which we have one of the world's leading companies, is now 41 per cent., up from 28 per cent. 10 years ago.
The Government make other claims about the health of our manufacturing industry. The recent increase in manufacturing investment, which appears now to have petered out, and about which we hear so much, has taken investment to barely the 1979 level. Manufacturing investment today is still well below its 1979 level as a percentage of GDP. The Government boast of the rapid
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growth in manufacturing productivity, but the fact is that at absolute levels our manufacturing productivity is still the lowest of any of the Group of Seven countries.
The Government clearly consider that our manufacturing trade balance, our manufacturing investment, our productivity, and our R and D should be left to the free play of market forces and that they have no duty to produce an industrial strategy, objectives or programmes of action. They may feel that they have no responsibility in those areas, but surely they have a responsibility in providing the education and training infrastructure for manufacturing. Indeed, from time to time, the Government appear to recognise their responsibilities for creating the skills that we need. I am deluged by press releases from the DTI and only the other day I noticed that the Government are giving their full backing to management training and to what is called the "management charter initiative". It is in that area that our weaknesses are most obvious.
The Confederation of British Industry recently carried out a comparative study of British and West German industrial performance. The reasons for our markedly inferior productivity compared with the Germans were not the traditional ones of older machinery, higher overheads, bad industrial relations, higher tax burden, less spending on R and D. The main reason was that West Germany's work force is better educated and better trained and is led by a management boasting a higher percentage of university-trained managers and using more advanced information technology. Germany has three times our percentage of workers with post-school qualifications, double our percentage of supervisors with post-school qualifications and double our percentage of managers with degrees. In Britain, only one in three managers has ever had any training and 70 per cent. of that was for less than five days a year.
A British Institute of Management survey in 1987 showed that half our managers started work at the age of 17 or younger and received no subsequent education. Professor Handy's report for the National Economic Development Office on management education said:
"much of executive education is the teaching of sixth form subjects to middle aged executives; it is remedial education instead of executive education."
At all levels British managers and workers have inferior education and training than our competitors. We no longer have the education and training to meet the needs of a manufacturing nation.
In autumn 1988, the Oxford Review of Economic Policy summed it up when it stated that Britain is
"trapped in a low-skills equilibrium in which the majority of enterprises, staffed by poorly trained managers and workers, produce low quality goods and services".
With 1992 on the horizon, those weaknesses will become more apparent. I am sure that hon. Members of all parties will have received complaints that West Germany's industrial interests are dominating the engineering product standard-setting processes. Apparently representatives of the French chambers of commerce and of the West German trade associations turn up to the committees that set standards where, more often than not, we are not represented. We shall find our engineering industry dominated by German product quality standards.
Another worry about 1992 is the susceptibility of British firms to takeover, because of the relatively strong reliance of British companies on equity finance. There is a strong possibility of takeovers of British companies in

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areas of strong comparative advantage by predators from Europe, the United States and Japan, who want to establish themselves within the boundaries of the EEC in order to launch their attack on western Europe. That will be of no great advantages to our manufacturers, especially if the research and development and design is done back in the home countries of those predators.
Once the barriers are removed in 1992, price will become more important. The Government's cost burdens on industry—water, gas, the unified business rate and interest rates—will continue to be a massive handicap. Without any strategy for our manufacturing industry, and with a complete disregard of the need for industrial training and management education, the Government are leaving British manufacturing industry grossly under-prepared for 1992.
If we lurch along as we are at present, underinvested, under-researched and under-trained, British manufacturing industry's future is clear. We shall be an EEC bridgehead for the Japanese. We shall be assembling cars and electronics imported as kits from Japan. In addition, what is most valuable in British manufacturing industry will be under German or American control in joint ventures or in merged corporations in which Britain has a nominal share. Control—what the Germans call mind and management, of which they rarely let go—will be in foreign hands. It is our contention that the Government are presiding over the end of Britain as a manufacturing nation.
9.46 pm
The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Robert Atkins): We have had a fascinating debate, albeit that one would not have guessed from the number of Opposition Members present that there was a three-line Whip for Opposition Members. None the less, many interesting points have come out of the debate, not least those contained in the speeches of my hon. Friends the Members for Wolverhampton, North-East (Mrs. Hicks), for Nuneaton (Mr. Stevens), for Bexhill and Battle (Mr. Wardle), for Bury, North (Mr. Burt) and for Langbaurgh (Mr. Holt). They all spoke with a considerable knowledge of the real world as they see it and of the industrial achievements in their constituencies.
One point that I suspect would be agreed across the party divide is the need to get across to young people the importance and the attraction of manufacturing industry. Perhaps if we were to get them a little younger—for example, in the primary schools—to realise that manufacturing industry and things that are made by hand are important to the future of our country—
Mr. Dobson: The hon. Gentleman should teach the Chancellor of the Exchequer first.
Mr. Atkins: The hon. Member for Holborn and St. Pancras (Mr. Dobson), who has just walked in, missed the part of the debate in which his hon. Friends also made that point. The hon. Gentleman would be wise to consider the position before making interventions from a sedentary position.
Unlike my hon. Friends, the Opposition have sought to paint a picture of unrelieved gloom. As one who is in daily
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contact with industry and who travels the country every week talking to those involved in manufacturing industry, that is a picture that I do not recognise.
I want to turn my attention to one or two touchstones of economic success which highlight the achievements of the Government and which perhaps have not had the attention that they deserve. Hon. Members may not be surprised to learn that my first example is that of the aerospace industry. The Opposition's motion suggests that there is something wrong with the aerospace industry. The British aerospace industry is by any standards among the world leaders. The picture here is anything but gloomy.
The output of our aerospace companies has been growing at about 10 per cent. a year since 1983. In the 1960s our share of world trade in aerospace products was about 10 per cent. It is now 17 per cent. More than 60 per cent. of the industry's output is exported. In 1987 the industry had a balance of trade surplus of £2 billion.
This year, as with last year, will see record orders for civil aircraft. British industry will receive a large share of that business. [Interruption.] Opposition Members should listen to the facts about some of the successes instead of muttering and ignoring what is in front of their faces. British Aerospace will share in the success of the A320, the A330 and the A340.
Mr. Rhodri Morgan: Will the hon. Gentleman give way?
Mr. Atkins: I do not have time. At least I have provoked the hon. Gentleman into listening.
Rolls-Royce is now supplying engines to all three major airframe manufacturers and a wide range of equipment companies are consolidating—
Mr. Morgan: What about launch aid?
Mr. Atkins: The hon. Gentleman is wrong. He should do his investigations.
The industry is also investing in the future—[Interruption.] Opposition Members should listen. It is no good ignoring the facts. I am telling them about a success story and they do not want to hear it.
Let us compare the aerospace industry in 1979 with 1988. In 1979 it had a turnover of £3·1 billion and exports of only £1·2 billion. Now it has a turnover of £10·3 billion and exports of £6 billion, the highest of all time. We did not hear much mention of that from Opposition Members. There has been no decline in the aerospace industry and the House—at least, Conservative Members—will want to join me in congratulating the aerospace industry on its excellent record and to spur it on to even greater efforts in the future.
The steel industry illustrates more clearly than almost any other the transformation of Britain's industrial climate and its prospects. There were no great days here in the late 1970s and early 1980s. Steel production has grown by almost 30 per cent. over the past two years. In 1980 British Steel achieved notoriety with an entry in "The Guinness Book of Records" for the largest ever company deficit—£1·8 billion over the year. No one could have seriously believed that that position could be reversed, but the company is now making a profit and 500,000 private investors have bought a stake in it. It has gone from being Europe's least successful company to being one which others envy—another success story to which Opposition Members do not want to listen.

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There has been much mention of vehicles. The vehicles industry is another barometer of change for the better. Since 1980, productivity has risen by 70 per cent. and all the United Kingdom's industries in that sector have been in profit since 1986. The production of cars has been rising strongly in recent years and the performance of the commercial vehicles sector has been particularly encouraging. [Interruption.] I suggest that Opposition Members consider one company that I know well and which featured large in their considerations in years gone by. Leyland is the name of the company, with its headquarters in my constituency. Following the merger between Leyland Trucks and DAF in 1987 the output of trucks has increased from 8,000 in 1986 to 15,500 in 1988—an 83 per cent. increase in productivity. That is another success story that Opposition Members will not accept.
Not all our manufacturing successes have been stories of recovery. The chemical industry has been successful throughout, with an annual trade surplus of over £2 billion since 1985.
In 1979 production in the telecommunications industry was about £800 million, with exports of about £81 million. Last year production was £1·839 billion and exports £266 million—another success story. There is success story after success story, and the Opposition do not like it.
But the proof of the pudding is in inward investment. In 1979, inward investment in the United Kingdom was running at about 183 companies a year. It is now up to 330 companies a year. More than 2,500 companies from abroad have invested in the United Kingdom, and in so doing they have protected or created about 300,000 jobs.
I have recently returned from the United States where I conducted an inward investment tour on behalf of this country. Some of the companies that I saw—[Interruption.] Why is it that when Ministers tell the truth as they see it and give the success stories the Opposition do not want to listen? I would remind the House that this is an Opposition Supply day debate, on which they have a three-line Whip, but they cannot even be bothered to turn up and if they do they do not listen. I am telling the House about inward investment.
The companies that I saw in the United States wanted to provide about 10,000 or more jobs in the course of the year. I heard comments from the chairmen of the Ford Motor Company, Chrysler and General Motors. They told me that attitudes amongst the work force had been transformed in the past 10 years. The hon. Member for Glasgow, Springburn (Mr. Martin) referred to our concerns about industrial relations. In 1979, 29·4 million working days were lost in strikes. In 1988, the figure was only 3·7 million. That demonstrates what Americans think of this country.
The chairmen of those major companies also said that Britain was the best location in Europe for siting manufacturing plants in terms of cost and good labour. Ford has invested £1·1 billion in Bridgend. Nissan, Toyota, Bosch, Fujitsu and Millecom are just a few of the companies which, in recent months, have recognised that Britain is the place to come to because of what the Government have achieved in manufacturing industry over the past 10 years.
There has been a depressing familiarity about the Opposition's contributions to this debate. We might have hoped for some constructive comments about areas in which manufacturing industry still has scope for improvement, as it always must have. Instead, we have
262
been treated to selective statistics and misinformation—[Interruption.] Oh, yes. We have been given misinformation about aspects of manufacturing industry which my hon. Friends have demonstrated to be facile and to have avoided the point.
Opposition Members' comments belittle the achievements of British industry rather than help it. They should recognise that they will not serve their country or industry well by continuing with that approach. My hon. Friends from the north, west, east and south of the country have all spoken with authority about what has been achieved by industry throughout the country.
The Opposition's interventions have spoken volumes about their ignorance of what is happening in manufacturing industry. They have not been prepared to listen to the facts that they know demonstrate all too clearly the sterility of their arguments. When it comes to industry, the Labour party is still living in the late sixties and seventies.
The hon. Member for Dagenham (Mr. Gould) represents a south-east constituency. Those of us who represent the north-west and Lancashire wear the red rose of Lancashire with the pride that it deserves. If the hon. Member for Dagenham and his hon. Friends have anything to say to the electorate, they should open their eyes and realise the transformation in performance and morale that has taken place in manufacturing in recent years and understand the reasons for it. Until they realise what has been achieved, and until they speak with the authority that is needed on the subject, they will not: be taken seriously and will not, in any circumstances—[Interruption.] Opposition Members may intervene, but the fact is that they are ignoring what I have said and ignoring the success stories throughout the country of the past 10 years. The Opposition's motion is such that we can vote against it with every confidence that our story will demonstrate the success achieved by this Government over the past 10 years.
Question put, That the original words stand part of the Question:—
The House divided: Ayes 201, Noes 274.

Division No. 202]

[9.59 pm

AYES

Abbott, Ms Diane

Campbell, Ron (Blyth Valley)

Allen, Graham

Campbell-Savours, D. N.

Archer, Rt Hon Peter

Canavan, Dennis

Armstrong, Hilary

Carlile, Alex (Mont'g)

Ashley, Rt Hon Jack

Clark, Dr David (S Shields)

Ashton, Joe

Clarke, Tom (Monklands W)

Barnes, Harry (Derbyshire NE)

Clay, Bob

Barnes, Mrs Rosie (Greenwich)

Clelland, David

Barron, Kevin

Clwyd, Mrs Ann

Battle, John

Cohen, Harry

Beckett, Margaret

Coleman, Donald

Benn, Rt Hon Tony

Cook, Frank (Stockton N)

Bennett, A. F. (D'nt'n & R'dish)

Cook, Robin (Livingston)

Bermingham, Gerald

Corbett, Robin

Bidwell, Sydney

Cousins, Jim

Blair, Tony

Cryer, Bob

Blunkett, David

Cummings, John

Boateng, Paul

Cunliffe, Lawrence

Boyes, Roland

Dalyell, Tam

Bradley, Keith

Davies, Rt Hon Denzil (Llanelli)

Bray, Dr Jeremy

Davies, Ron (Caerphilly)

Brown, Gordon (D'mline E)

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

Brown, Nicholas (Newcastle E)

Dewar, Donald

Buckley, George J.

Dixon, Don

Caborn, Richard

Dobson, Frank

Callaghan, Jim

Doran, Frank

Campbell, Menzies (Fife NE)

Douglas, Dick

263

Duffy, A. E. P.q

Marek, Dr John

Dunnachie, Jimmy

Marshall, David (Shettleston)

Dunwoody, Hon Mrs Gwyneth

Marshall, Jim (Leicester S)

Eadie, Alexander

Martin, Michael J. (Springburn)

Eastham, Ken

Maxton, John

Evans, John (St Helens N)

Meacher, Michael

Ewing, Harry (Falkirk E)

Meale, Alan

Ewing, Mrs Margaret (Moray)

Michael, Alun

Fatchett, Derek

Michie, Bill (Sheffield Heeley)

Faulds, Andrew

Mitchell, Austin (G't Grimsby)

Fearn, Ronald

Morgan, Rhodri

Field, Frank (Birkenhead)

Morris, Rt Hon A. (W'shawe)

Fisher, Mark

Mullin, Chris

Flannery, Martin

Murphy, Paul

Flynn, Paul

Oakes, Rt Hon Gordon

Foot, Rt Hon Michael

O'Brien, William

Foster, Derek

O'Neill, Martin

Foulkes, George

Orme, Rt Hon Stanley

Fraser, John

Parry, Robert

Fyfe, Maria

Pendry, Tom

Galbraith, Sam

Pike, Peter L.

Garrett, John (Norwich South)

Powell, Ray (Ogmore)

Garrett, Ted (Wallsend)

Primarolo, Dawn

George, Bruce

Radice, Giles

Golding, Mrs Llin

Randall, Stuart

Gordon, Mildred

Redmond, Martin

Gould, Bryan

Rees, Rt Hon Merlyn

Graham, Thomas

Reid, Dr John

Grant, Bernie (Tottenham)

Richardson, Jo

Grocott, Bruce

Roberts, Allan (Bootle)

Hardy, Peter

Robinson, Geoffrey

Harman, Ms Harriet

Rogers, Allan

Hattersley, Rt Hon Roy

Rooker, Jeff

Healey, Rt Hon Denis

Ross, Ernie (Dundee W)

Hinchliffe, David

Rowlands, Ted

Hogg, N. (C'nauld & Kilsyth)

Ruddock, Joan

Home Robertson, John

Salmond, Alex

Hood, Jimmy

Sedgemore, Brian

Howarth, George (Knowsley N)

Sheerman, Barry

Howell, Rt Hon D. (S'heath)

Sheldon, Rt Hon Robert

Howells, Geraint

Shore, Rt Hon Peter

Howells, Dr. Kim (Pontypridd)

Short, Clare

Hughes, John (Coventry NE)

Skinner, Dennis

Hughes, Robert (Aberdeen N)

Smith, Andrew (Oxford E)

Hughes, Roy (Newport E)

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

Ilisley, Eric

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

Ingram, Adam

Smith, J. P. (Vale of Glam)

Janner, Greville

Snape, Peter

Johnston, Sir Russell

Soley, Clive

Jones, Barry (Alyn & Deeside)

Spearing, Nigel

Kaufman, Rt Hon Gerald

Steinberg, Gerry

Kennedy, Charles

Stott, Roger

Kinnock, Rt Hon Neil

Strang, Gavin

Kirkwood, Archy

Straw, Jack

Lamond, James

Taylor, Matthew (Truro)

Leadbitter, Ted

Turner, Dennis

Leighton, Ron

Vaz, Keith

Lestor, Joan (Eccles)

Wall, Pat

Lewis, Terry

Wallace, James

Litherland, Robert

Walley, Joan

Livingstone, Ken

Wardell, Gareth (Gower)

Livsey, Richard

Wareing, Robert N.

Lloyd, Tony (Stretford)

Welsh, Andrew (Angus E)

Lofthouse, Geoffrey

Welsh, Michael (Doncaster N)

Loyden, Eddie

Wigley, Dafydd

McAllion, John

Williams, Rt Hon Alan

McAvoy, Thomas

Williams, Alan W. (Carm'then)

McCartney, Ian

Wilson, Brian

McFall, John

Wise, Mrs Audrey

McKay, Allen (Barnsley West)

Worthington, Tony

McKelvey, William

Wray, Jimmy

McLeish, Henry

McNamara, Kevin

Tellers for the Ayes:

McWilliam, John

Mr. Frank Haynes and

Madden, Max

Mr. Allen Adams.

Mahon, Mrs Alice

NOES

Aitken, Jonathan

Amery, Rt Hon Julian

Allason, Rupert

Arbuthnot, James

264

Arnold, Tom (Hazel Grove)

Gorman, Mrs Teresa

Atkins, Robert

Gow, Ian

Baker, Nicholas (Dorset N)

Greenway, Harry (Ealing N)

Baldry, Tony

Greenway, John (Ryedale)

Beaumont-Dark, Anthony

Gregory, Conal

Bennett, Nicholas (Pembroke)

Griffiths, Peter (Portsmouth N)

Blaker, Rt Hon Sir Peter

Grist, Ian

Body, Sir Richard

Gummer, Rt Hon John Selwyn

Bottomley, Mrs Virginia

Hague, William

Bowden, Gerald (Dulwich)

Hamilton, Hon Archie (Epsom)

Bowis, John

Hamilton, Neil (Tatton)

Braine, Rt Hon Sir Bernard

Hanley, Jeremy

Brandon-Bravo, Martin

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

Brazier, Julian

Hargreaves, Ken (Hyndburn)

Brooke, Rt Hon Peter

Harris, David

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

Haselhurst, Alan

Bruce, Ian (Dorset South)

Hawkins, Christopher

Buchanan-Smith, Rt Hon Alick

Hayes, Jerry

Buck, Sir Antony

Heathcoat-Amory, David

Budgen, Nicholas

Heddle, John

Burns, Simon

Heseltine, Rt Hon Michael

Burt, Alistair

Hicks, Mrs Maureen (Wolv' NE)

Butcher, John

Hicks, Robert (Cornwall SE)

Butler, Chris

Higgins, Rt Hon Terence L.

Butterfill, John

Hill, James

Carlisle, John, (Luton N)

Hind, Kenneth

Carlisle, Kenneth (Lincoln)

Hogg, Hon Douglas (Gr'th'm)

Carrington, Matthew

Holt, Richard

Carttiss, Michael

Hordern, Sir Peter

Cash, William

Howard, Michael

Channon, Rt Hon Paul

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

Chapman, Sydney

Howarth, G. (Cannock & B'wd)

Chope, Christopher

Howell, Rt Hon David (G'dford)

Churchill, Mr

Hughes, Robert G. (Harrow W)

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

Hunt, David (Wirral W)

Clark, Sir W. (Croydon S)

Hunt, John (Ravensbourne)

Colvin, Michael

Hunter, Andrew

Conway, Derek

Irvine, Michael

Coombs, Anthony (Wyre F'rest)

Irving, Charles

Coombs, Simon (Swindon)

Jack, Michael

Cope, Rt Hon John

Jackson, Robert

Cormack, Patrick

Janman, Tim

Couchman, James

Jessel, Toby

Cran, James

Johnson Smith, Sir Geoffrey

Currie, Mrs Edwina

Jones, Gwilym (Cardiff N)

Curry, David

Jones, Robert B (Herts W)

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

Jopling, Rt Hon Michael

Davis, David (Boothferry)

Kellett-Bowman, Dame Elaine

Day, Stephen

Key, Robert

Devlin, Tim

King, Roger (B'ham N'thfield)

Dorrell, Stephen

Kirkhope, Timothy

Douglas-Hamilton, Lord James

Knight, Greg (Derby North)

Dover, Den

Knight, Dame Jill (Edgbaston)

Dunn, Bob

Knowles, Michael

Durant, Tony

Knox, David

Eggar, Tim

Lamont, Rt Hon Norman

Emery, Sir Peter

Latham, Michael

Evans, David (Welwyn Hatf'd)

Lawson, Rt Hon Nigel

Evennett, David

Leigh, Edward (Gainsbor'gh)

Fairbairn, Sir Nicholas

Lennox-Boyd, Hon Mark

Fallon, Michael

Lester, Jim (Broxtowe)

Favell, Tony

Lilley, Peter

Fenner, Dame Peggy

Lloyd, Sir Ian (Havant)

Field, Barry (Isle of Wight)

Lloyd, Peter (Fareham)

Finsberg, Sir Geoffrey

Lord, Michael

Fishburn, John Dudley

Luce, Rt Hon Richard

Fookes, Dame Janet

McCrindle, Robert

Forman, Nigel

Macfarlane, Sir Neil

Forsyth, Michael (Stirling)

MacKay, Andrew (E Berkshire)

Forth, Eric

McLoughlin, Patrick

Franks, Cecil

McNair-Wilson, Sir Michael

Freeman, Roger

McNair-Wilson, P. (New Forest)

Gale, Roger

Madel, David

Gardiner, George

Major, Rt Hon John

Garel-Jones, Tristan

Malins, Humfrey

Gill, Christopher

Mans, Keith

Glyn, Dr Alan

Maples, John

Goodhart, Sir Philip

Marlow, Tony

Goodlad, Alastair

Marshall, John (Hendon S)

Goodson-Wickes, Dr Charles

Marshall, Michael (Arundel)

265

Martin, David (Portsmouth S)

Raison, Rt Hon Timothy

Mates, Michael

Rathbone, Tim

Maude, Hon Francis

Redwood, John

Mawhinney, Dr Brian

Rhodes James, Robert

Meyer, Sir Anthony

Riddick, Graham

Miller, Sir Hal

Ridley, Rt Hon Nicholas

Mills, Iain

Ridsdale, Sir Julian

Miscampbell, Norman

Rifkind, Rt Hon Malcolm

Mitchell, Andrew (Gedling)

Roberts, Wyn (Conwy)

Mitchell, Sir David

Roe, Mrs Marion

Moate, Roger

Rossi, Sir Hugh

Monro, Sir Hector

Rost, Peter

Moore, Rt Hon John

Sackville, Hon Tom

Morrison, Sir Charles

Sainsbury, Hon Tim

Morrison, Rt Hon P (Chester)

Sayeed, Jonathan

Moynihan, Hon Colin

Scott, Nicholas

Mudd, David

Shaw, David (Dover)

Neale, Gerrard

Shaw, Sir Giles (Pudsey)

Nelson, Anthony

Shaw, Sir Michael (Scarb')

Newton, Rt Hon Tony

Shelton, Sir William

Nicholls, Patrick

Shephard, Mrs G. (Norfolk SW)

Nicholson, David (Taunton)

Shepherd, Colin (Hereford)

Nicholson, Emma (Devon West)

Sims, Roger

Norris, Steve

Skeet, Sir Trevor

Onslow, Rt Hon Cranley

Smith, Tim (Beaconsfield)

Oppenheim, Phillip

Speller, Tony

Page, Richard

Spicer, Michael (S Worcs)

Paice, James

Squire, Robin

Parkinson, Rt Hon Cecil

Stanbrook, Ivor

Patnick, Irvine

Stanley, Rt Hon Sir John

Patten, John (Oxford W)

Steen, Anthony

Pawsey, James

Stern, Michael

Peacock, Mrs Elizabeth

Stevens, Lewis

Porter, David (Waveney)

Stewart, Allan (Eastwood)

Powell, William (Corby)

Stewart, Andy (Sherwood)

Price, Sir David

Stewart, Rt Hon Ian (Herts N)

Raffan, Keith

Stradling Thomas, Sir John

266

Sumberg, David

Walden, George

Summerson, Hugo

Walker, Bill (T'side North)

Taylor, Ian (Esher)

Waller, Gary

Taylor, John M (Solihull)

Ward, John

Taylor, Teddy (S'end E)

Wardle, Charles (Bexhill)

Temple-Morris, Peter

Watts, John

Thatcher, Rt Hon Margaret

Wheeler, John

Thompson, D. (Calder Valley)

Whitney, Ray

Thompson, Patrick (Norwich N)

Widdecombe, Ann

Thorne, Neil

Winterton, Nicholas

Thornton, Malcolm

Wolfson, Mark

Thurnham, Peter

Wood, Timothy

Townsend, Cyril D. (B'heath)

Woodcock, Dr. Mike

Tracey, Richard

Yeo, Tim

Tredinnick, David

Young, Sir George (Acton)

Trippier, David

Younger, Rt Hon George

Trotter, Neville

Twinn, Dr Ian

Tellers for the Noes:

Vaughan, Sir Gerard

Mr. David Lightbown, and

Waddington, Rt Hon David

Mr. David Maclean.

Question accordingly negatived.
Question, That the proposed words be there added. put forthwith pursuant to Standing Order No. 30 (Questions on amendments), and agreed to.
Mr. SPEAKER forthwith declared the main Question, as amended, to be agreed to.
Resolved,
That this House welcomes the renewed strength of manufacturing industry, reflected in major increases in productivity, record levels of output, increased exports, greatly improved profitability and a sustained high level of investment; and notes that the flow of inward investment testifies to the substantial improvement which the policies of Her Majesty's Government have brought about in the climate for doing business in the United Kingdom.

Procurement Procedures
10.15 pm
The Paymaster General (Mr. Peter Brooke): I beg to move,
That this House takes note of European Community Documents Nos. 8803/88 and the Supplementary Explanatory Memorandum submitted by Her Majesty's Treasury on 10th May 1989, 8804/88 and 8805/88 relating to procurement procedures in the water, energy, transport and telecommunications sectors; and endorses the Government's view that the broad approach of the Commission should be supported but that changes are desirable in the proposed directives to prevent the imposition of unnecessary burdens and constraints.
Mr. Speaker: I must tell the House that I have not been able to select the amendment standing in the name of the hon. Member for Thanet, South (Mr. Aitken) and his hon. Friends. However, those points may be raised if the hon. Members are called during the course of the debate.
Mr. Brooke: We debated proposals for directives on public procurement only recently. Those before us tonight come in the same series, and like the earlier ones form part of the Commission's programme to complete the single market by 1992. The earlier proposals mainly affected Government Departments and local authorities. Those in the motion before the House strike out much more widely, and cover nationalised industries and a number of companies in the private sector. Important issues are at stake, and I am glad that the House is able to consider the proposals at this still relatively early stage in their progress through the Community institutions.
I begin by noting the reasons which have led the Commission to make these proposals, one of which relates to the water, energy and transport sectors and the other to telecommunications. The Commission believes that major savings can be achieved by removing the influence of Governments on procurement in these sectors. It quotes the results of studies which it has undertaken and which show the costs to be as much as £15 billion a year. This is a large amount, even allowing for a considerable margin of error. So because we want to create a single market which is strong and efficient, we should welcome the fact that the Commission has made proposals in these areas.
I note, too, the boldness of what is proposed. In 1971, when the works directive was adopted, it was agreed that the different ways in which the sectors were organised in the various member states made it best not to attempt at that stage to apply Community directives to them. In 1977, when the supplies directive was adopted, the same conclusion was reached. Now we have proposals which together cover purchasing worth several hundreds of billions of pounds a year, and which provide a framework of rules which it is hoped will ensure that undertakings buy competitively and that suppliers have confidence that they will do so.
Because of what is at stake—in terms not only of the savings but of the sheer amount of purchasing and the advanced technology which much of it involves—it is vital that the Community gets the directives right. I am sure that the Commission recognises this. In the last couple of years, it has put a lot of work into developing its proposals. It has spent a considerable amount of time talking to those who might be affected by them. If member states believe
268
that there is further to go before we get it right, that is not to belittle the contribution which the Commission has made.
At the core of the Commission's proposals is what is said about the procedures that undertakings should adopt in their purchasing. A considerable effort has been made to ensure that undertakings which need to act commercially have a degree of flexibility. Except in particular circumstances, which are listed, there has to be what is described as a call for competition. But this need not involve an advertisement before each contract is awarded. It is permitted to select participants in a competition from among those who ask for information relating to particular contracts which are mentioned in a so-called periodic indicative notice.
Participants can also be selected from lists of qualified buyers provided that those lists are established following advertisements and on the basis of objective criteria. Unlike Government Departments and local authorities, the undertakings covered by the present proposals would be allowed to choose which of particular types of procedures to use for a particular contract. This means that, besides being able to accept tenders from anyone who responds to an advertisement or inviting firms to tender from those which apply to participate, an undertaking can negotiate the terms of a contract with one or more firms chosen on the basis of a call for competition.
There are problems, none the less, despite the Commission's efforts and I wish to say a few words about the difficulties which the Government see in the Commission's proposals. Then I want to describe ways in which I hope the proposals can be developed.
I will begin with what they cover. The Commission's intention is to cover those areas of activity where there are barriers to competition, and Governments may have a capacity to influence procurement. Since, in the Commission's view, it is impossible to measure these factors, it had to find criteria for determining which undertakings or classes of undertakings should be covered. It has chosen for private sector undertakings the possession of special or exclusive rights granted by the Government. It has chosen as relevant activities the management of a network or the exploitation of a given geographical area. The latter brings in exploration for natural resources and the exploitation of them. In the United Kingdom many of the undertakings that would be covered will be in the private sector and will be responsible to their shareholders for getting value for money in their procurement. In itself that will not let us justify their exclusion from proposals which will be adopted only if other member states believe they are getting broadly equivalent procurement covered in each country. But where there is strong competition the need for applying detailed rules is far from clear, particularly in the case of upstream oil and gas, and the United Kingdom has therefore opposed its coverage by the Commission's proposals.
Whichever sectors we may be thinking of, the present proposals contain elements of bureaucracy which the Community would do well to avoid. This is partly a matter of the timetables laid down for the various contract procedures. These are based on those in the new supplies directive which came into force this year. In the industries now involved they could easily lead to costly delays. Then there is the need for undertakings to notify the Commission of activities not covered by the proposals in

269
order to obtain exemption. This applies also to purchases intended for selling on to third parties. Purchasers baulk at the information systems they would need to set up and at the possible need to qualify large numbers of potential suppliers. Clearly there has to be a balance with the interests of suppliers, who need to have information in order to compete and time in which to do so. But there are parts of these proposals which cannot be justified on that basis.
The proposals require purchasers to base their specifications on European standards where they exist. These standards, once they have been adopted, have to be implemented by national standards bodies as national standards. The Government fully support the development of European standards, which we believe have an important part to play in the development of the single market. We have accepted the principle of making standards mandatory in the supplies and works directives for purchases by Governments and by local authorities, but we cannot so easily do so for purchasers which are commercial undertakings. Many of them have important responsibilities for the safety of their operations, which in the case of the energy industries are among the most hazardous in the world. They need to be able to give due weight to professional judgments.
It is possible that some of the difficulties in this area have arisen from a lack of understanding as to what the proposals mean. We do not know for certain how far defining by reference to a standard prevents a purchaser from going further to describe his own particular requirements. Instead of making standards mandatory, we should encourage the willing acceptance of European standards on a voluntary basis. It is significant that when the Council of Ministers adopted the new approach on standardisation in 1985 its guidelines said quite specifically that standards should retain their voluntary status; any exceptions should be quite specific and decided on the basis of proven need.
The proposals also include particular constraints with regard to offers originating in major part from countries outside the Community. Purchasers will be required, whenever offers are equivalent, to choose an offer which has at least half its value added within the Community. The proposal goes further and treats offers as equivalent even if the Community offer costs 3 per cent. more. These provisions will not apply to offers of third country origin where the Council so decides on the basis of an agreement between the Community and the Third country concerned. We understand and share the Commission's goal of achieving a wider understanding on procurement in the sectors covered by the proposal. We support the work being done in the GATT to broaden the existing agreement on Government procurement. We want to avoid unnecessary intervention in the operation of commercial undertakings.
Mr. Teddy Taylor: Will my right hon. Friend say clearly whether the Government support the proposal in article 24 that empowers any purchasing agent throughout the Community to reject contracts from America, Japan, the Middle East or anywhere else, simply on the basis that half the information of goods to be provided comes from outside the Community? Does my right hon. Friend agree that that is simply another example of blind protectionism and of fortress Europe that I
270
understood the Conservative party and the Conservative Government to be against? Will he endeavour to get rid of that wretched article and ensure real free trade?
Mr. Brooke: I hoped that my hon. Friend would infer from the tone of my remarks that the Government share his views in seeking to prevent Europe developing as a fortress Europe in the way he suggests. In that respect, we are at one with my hon. Friend.
Mr. Taylor: Will my right hon. Friend endeavour to remove article 24 or will he not? Does the Conservative party believe, or does it not, that article 24 is contrary to everything for which Conservatives stand, and that it should be removed? It is all very well talking about the Government's general intentions, but what are the views of my right hon. Friend and of the Government on article 24?
Mr. Brooke: In my earlier answer, I sought to convey to my hon. Friend that we are at one with him in seeking to prevent protectionism being developed in respect of the puchasing arrangements. Earlier, I alluded to the fact that the Government are opposed to such a proposition.
Mr. Dennis Skinner: As the right hon. Gentleman will not answer his hon. Friend's specific question, and as he is not just a Minister but Chairman of the Tory party, will he confirm that the Government's anti-Common Market tirades of the past few weeks are nothing short of electioneering until 15 June, that when that date is passed the right hon. Gentleman will not be at one with his hon. Friend the Member for Southend, East (Mr. Taylor), and that the Government are just playing games for about a month?
Mr. Brooke: I am conscious that the hon. Member for Bolsover (Mr. Skinner) is also the chairman of a political party. My understanding is that the hon. Gentleman's party also has difficulty in determining its position on Europe. I understand the hon. Gentleman's views, but I understand also that attack is the best form of defence. The fact remains that, as we all know, there are problems on the Opposition Benches—
Mr. Bob Cryer: Not on this Bench.
Mr. Brooke: I am glad that the hon. Member for Bolsover has a powerful ally seated close to him.
Mr. Frank Haynes rose—
Mr. Brooke: I always welcome the hon. Gentleman's contribution to European debates, but perhaps he will permit me to get my initial speech out of the way.
Mr. Haynes: On that point, if we force a Division arid vote against the proposals, will the right hon. Gentleman join my right hon. and hon. Friends and me in the Noes Lobby? I want an answer.
Mr. Brooke: The answer is perfectly straightforward. The Government have put down a motion, and the Government will support it in the Lobby.
Mr. Haynes: Double standards again.
Mr. Brooke: Industry has shown considerable interest, which I believe is because the stakes are so high. The extent to which member states will open up public procurement will be a litmus test of commitment to the single European market. The stakes are high for purchasers, in that they

271
face administrative costs that they do not believe to be necessary. Suppliers share that concern but insist that any measures introduced must be enforced effectively. They want a prominent role for the Commission and a complaints system that they can invoke without drawing attention to themselves. Purchasers want any measures that are adopted to sit well with good purchasing practice and not involve unnecessary constraints or introduce new uncertainties. Suppliers need confidence that it is worth their while to try to break into new markets. Both purchasers and suppliers point to the need to be able to build up relations with each other. This can be handled in ways which do not involve discrimination but which the Commission's proposals would obstruct.
Suggestions for improving the proposals have been many and various. We are grateful to all who have provided them. Many of those who have commented have wanted the values above which contracts would be covered to be raised. They have said that thresholds could be found which would make a significant reduction in the number of contracts which are covered—and hence the administrative burden—while still catching a high proportion of the value. On the other hand, some of those who have commented have wanted to keep the thresholds low so that small firms can benefit. Many have said that the system most likely to be effective is one which is in line with business methods. They want the system to call for changes in commercial practices only to the extent that is necessary to show that purchasing is conducted without discrimination.
The CBI, which has played an important role in bringing purchasers and suppliers together to discuss the opening up of procurement, has come out in favour of a system of audit. Others have reached similar conclusions. Such systems offer a means of achieving the Commission's goals by way of adapting firms' own procedures and not imposing new ones on them; of avoiding unnecessary regulation; and of providing assurance to suppliers that the objectives of equal opportunity and fair consideration are being achieved.
Other member states, as well as ourselves, have difficulties with the current proposals. We believe that the difficulties are such, and the importance of taking action so great, that it is necessary to develop the line of thinking I have just described to complement that in the proposals put forward by the Commission. The basis of that thinking is that methods can be found of ensuring non-discriminatory purchasing by laying down principles which can be followed instead of detailed rules. The principles would form the basis of independent tests of purchasing procedures which, if satisfactory, would be accepted as enabling an undertaking not to follow the detailed rules. The independence of the tests would be important.
The most basic requirement would be that suppliers throughout the Community should have the same opportunity to be considered for contracts. That means that they must have proper access to qualification procedures. There must be objective criteria for the selection of candidates to tender and for the award of the contract. Single tendering should be avoided wherever possible, and purchasers should try to ensure there are enough participants in a competition to make it genuine.
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Reasonable time limits must be set for potential suppliers or contractors to apply to participate in competitions and to submit actual tenders.
That should not be all. The principles should also cover such points as whether contracts are advertised in large blocks or whether newcomers are given a chance to compete for manageable portions. They should cover the extent to which information is provided to candidates whose applications to bid are not accepted or whose tenders are rejected. They should also include the handling of negotiations in such a way as not to distort competition.
Mr. Anthony Beaumont-Dark: Night after night, week after week, just after the 10 o'clock vote we have to discuss Common Market recommendations. Does my right hon. Friend agree that if we are to have sensible debates on these awful matters, it would be better if each week we set aside an entire day for discussing the various EC recommendations? Although the way in which my right hon. Friend read his speech did him great credit, he did not seem to agree with what he was saying any more than the rest of us did. If we are to discuss this rubbish week after week, would it not be a good thing if we had one day in which to discuss what is happening to the country, instead of these measures being shoved in surreptitiously late at night, when we all know that, like death by a thousands cuts, the country is being cut down by one measure after another?
Mr. Brooke: My hon. Friend's question should be addressed to the business managers rather than to me. But as I see the Chairman of the Scrutiny Committee the hon. Member for Newham, South (Mr. Spearing) sitting opposite me, I should stress that a quite separate dialogue takes place between the Chairman of the Scrutiny Committee and me to ensure that appropriate debates are conducted at an opportune moment in the process. I hope that the hon. Gentleman will agree that we are fulfilling that obligation on this occasion.
The principles could also include the extent to which information was made available for the benefit of subcontractors and small firms.
In short, we are talking about a professional code for purchasers. It is likely to need to be supported by guidelines. These would help both those engaged in purchasing and those whose task is to test their observance of the code. Purchasers would be saved from having to observe detailed rules which may or may not fit their particular circumstances. But they would have an interest in demonstrating that the way they conducted their business was in accordance with the kind of principles I have outlined. If they failed to do so, they would have to follow the detailed rules.
There are a number of questions which need to be resolved before the system that I have described could be set going. They include the way in which the principles are formulated and whether they are included in a directive or perhaps in a European standard to which a directive might refer. They concern the method and frequency of testing, and include the possibility that the Commission might institute special checks on the basis of complaints. They include the identity of those who conduct the tests, who in the last case I have mentioned might be engaged by the Commission. There must clearly be a rigorous form of accreditation so that high common standards are applied.

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As well as all this, it will need to be decided how information should be provided to suppliers. One possibility would be for the Official Journal of the European Communities to give publicity to the issue of certificates attesting to satisfactory procedures. This could be done alongside notices informing suppliers of the types of purchases being made. Information could also be given through the Official Journal whenever a qualified audit report or the loss of a certificate triggered a requirement to follow the detailed rules.
We see work of this kind as benefiting all who have an interest in procurement. Purchasers should be able to avoid the disruption to their normal purchasing procedures which the current proposals may involve. Suppliers would gain, since they would know that purchasers needed to act responsibly in order to maintain their freedom from regulation. The less the degree of regulation, the greater the economic potential which the single market will release.
I have dealt at some length with these ideas because I believe that they point to how the Community can achieve the objective of open procurement. We are putting them to the Commission with the suggestion that it takes them forward as part of the next stage in developing the present proposals. Other work that must go forward includes that on the detailed provisions of the rules now before us, which we see as being available as an alternative to audit and as applying in cases where audit proves unsatisfactory. Then there is the question of ensuring that there is satisfactory compliance with the rules. The Commission is producing a further proposal on this, with suggestions which we understand will be different from those in the proposal relating to the supplies and works directives which we debated a fortnight ago.
The Internal Market Council has not so far had a detailed discussion of the proposals. Working group discussions took place in December, January and February. The real preparation for the common position has to await the European Parliament's opinion. If this is delivered at the plenary next week, it is expected that the Commission will submit modified proposals in June-July. This will enable the incoming French presidency to work for a common position in, say, November. If this target is achieved, it will be possible to get the directive adopted by June 1990. This was the objective set for works in the excluded sectors when the Internal Market Council agreed a common position on changes to the works directive last autumn. This timetable could be upset if the European Parliament decides next week to send the proposals back into Committee. This could happen as a result of the very large number of amendments understood to be tabled.
The proposals are subject to qualified majority voting, with unanimity required for the Council to amend the proposals against the wish of the Commission. In practice, the Commission may itself amend the proposals if it sees difficulty in getting a qualified majority for them.
We believe that, against this background, our contribution to the debate in the wider Community is timely. We are still at a relatively early stage in the legislative process in the Community so far as the present proposals are concerned. Nevertheless, much has to be done in a relatively short time to ensure that the directives which are adopted are those which produce the fullest benefits.
10.39 pm
Dr. John Marek: As this is a short debate, I shall try not to delay the House too much.
The Opposition feel that—give or take a few points that I shall make later—the motion would have been improved by the addition of the amendment: it would then have commanded our support. The Paymaster General has explained admirably the details of the rules and regulations in the European Community documents and the supplementary explanatory memorandum submitted by Her Majesty's Treasury. I hope that he will forgive me if I do not take up his explanation and argue with him about whether individual details should or should not have been included, and how his Department should proceed in negotiations with the Commission later this year.
The motion asks the House to endorse
"the Government's view that the broad approach of the Commission should be supported".
That surprised me. Judging by what the papers have said over the past two or three days, I thought that nothing was less likely than a Government motion asking the House to support the broad thrust of the Commission's proposals.
An article in today's Guardian having caught my eye, wondered where the motion could have come from. It certainly could not have come from the hon. Members for Southend, East (Mr. Taylor) and for Thanet, South (Mr. Aitken), both of whom are present. The Guardian describes them as "night watchmen", and indeed they are: every time I have attended a debate on European Community documents late at night, they have been in their places. Could the motion have been tabled by members of the No Turning Back group—identified by the article as the hon. Member for Southampton, Itchen (Mr. Chope), the Parliamentary Under-Secretary of State for the Environment, the hon. Member for Mitcham and Morden (Mrs. Rumbold), the Minister of State, Department of Education and Science, and the Economic Secretary to the Treasury. Perhaps the Paymaster General can enlighten US.
I did not really think that Ministers would put down such a motion, but the article went on to mention vet another group in the Conservative party—the Bruges group—and I wondered whether members of that group could have persuaded the Government's business managers to put it down. But the only member mentioned was the hon. Member for Stafford (Mr. Cash), and having thought about it I decided that that was not the answer.
Certainly members of the Tory Reform group would not have been allowed to table such a motion. Perhaps it was the Prime Minister, I thought; but, if history is to be believed, the Prime Minister does not look at such motions very carefully. There is usually a fuss at some stage when she realises that something has been done, says, "I must put a stop to this" and tries to make changes too late.
I suspect that the motion has been put down because no one in the Government has paid much attention to it, and it has been tabled by some civil servant who has been allowed to draft it because the matter does not fall neatly into any one Department. The Treasury led and still leads negotiations on amendments to the existing supplies and works directive, and this proposal is basically an extension of that directive, but it is also concerned very much with matters relating to the Department of Trade and Industry. It does not surprise me, therefore, that the Government do

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not seem particularly interested in what the motion contains. Certainly, if some of the Conservative Members who have been quoted in the newspapers had their way, I doubt very much if such a motion would have been tabled at all. Conservative Ministers, ex-Ministers and ex-Prime Ministers are more interested in squabbling among themselves about which way the Common Market is going than in looking after the nitty-gritty of ensuring that, as we are now in the Common Market, the Government look after our interests and ensure that we do not lose by default.
The Prime Minister has declared that battle has been joined over the pace of political and economic change in the European Community. But the right hon. Member for Old Bexley and Sidcup (Mr. Heath) has told her that she is talking absolute rubbish about the advance of a Socialist super-state. That allows other hon. Members to join in. They were in their places a little while ago, but as soon as the Paymaster General stood up, they left. The hon. Member for Luton, North (Mr. Carlisle) said that the right hon. Member for Old Bexley and Sidcup should be put out to grass. The hon. Member for Macclesfield (Mr. Winterton) said that what the right hon. Gentleman had said was beneath contempt. [HON. MEMBERS: "Hear, hear."] I hear Conservative Members saying "Hear, hear". Clearly, there is no moderation or sensible argument. I do not know whether my hon. Friend the Member for Bolsover (Mr. Skinner) is right in this matter, but I suspect that there are the seeds of real discontent in the Conservative party at present. I foresee that as soon as the European elections come near, the Government will put a stop to the squabbles in the newspapers. The country is no better for these disagreements, because the Government are squabbling among themselves about the way forward within the European Community.
Mr. Jonathan Aitken: May a veteran night watchman, as The Guardian and the hon. Gentleman kindly called me, help with this long, rambling whodunnit? One would think that the hon. Gentleman came from a party that had never known internal argument or squabbling. I remind the hon. Gentleman of the words of Milton:
"who ever knew Truth put to the worse, in a free and open encounter?"
In our party, we are studying the phrases in this bran tub of a motion, which says:
"the broad approach of the Commission should be supported but…changes are desirable … to prevent the imposition of unnecessary burdens".
There is plenty to argue about, so everyone can eventually unite in supporting the motion.
Dr. Marek: I agree with the hon. Gentleman that there is plenty to argue about, but some of us are surprised by the personal nature of some of the comments. The Opposition are no strangers to such arguments, but even we have been surprised by the personal comments. That is the difference between us. I do not believe that the country is being well served as a result of the argument among Conservative Members. While the argument is going on in this country, important decisions are being made in Europe in which we should be involved. We should be negotiating for the benefit of this country. There is no moderation here.
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Like the Prime Minister, when I stand on Westminster bridge, I see the skyline of Parliament. But when I turn round I see the empty shell of county hall, the building that housed the regional strategic local government authority, which was abolished by this Government. One sees the architecture of liberty from Westminster bridge, but with a turn of the head one sees the architecture of a Government who will brook no dissent, suffer no argument and listen to no different points of view. We have to remember that attitude when considering the proposals before us.
Can we really believe that the motion means
"that the broad approach of the Commission should be supported"?
I suspect the same will happen to these proposals as has happened to the proposal to introduce tougher health warnings on cigarette packets. The Government allowed the proposal through because one Department did not know what another Department was doing. Lo and behold, the Secretary of State for Health disrupts the efficient working of the Commission—and there is no harm in any bureaucracy or administration that we set up and for which we pay taxes working efficiently—[Interruption.] This is relevant to our debate on procurement. It is precisely the attitude of the Conservative party to issues in Europe that suggests what it may do on this issue in due course.
The Secretary of State for Health disrupted the efficient working of the Commission by an 11th hour change of mind, no doubt after an argument in some Cabinet committee. The same situation has arisen over the EEC scheme to encourage foreign language teaching in British schools. Proposals were almost ready and had almost been agreed to by the United Kingdom when a sudden turnaround undid a great deal of effort and threw everything into chaos. One should not think that it will end there and that that turmoil will not be repeated with the present proposals for a Communitywide pass for pensioners which would give them an automatic right to concessions that would be offered to retired people throughout the Community—[Interruption.] It has not gone through in the United Kingdom. The problem that we face is one of inattention and hostility by the Government to many of the attractive measures that are proposed by Brussels—
Mr. Beaumont-Dark: Does the hon. Gentleman agree that last week the hon. Member for Peckham (Ms. Harman), the Opposition spokesman on health, tried to pick things like currants out of a bun, some things that she liked and some that she did not like? Tonight the hon. Gentleman has said that the Opposition like some directives, such as that on smoking, but that they do not like others. Should not the Opposition make up their minds about whether they stand with us, who think that some things are for this Government to decide and are not to be interfered with by the Common Market in Brussels? You cannot have it both ways; you either stand alongside us in believing in Great Britain or you stand alongside those weary people in Brussels who stand only for Brussels. The Opposition must make up their minds about whether they stand with Britain or with Brussels. I am tired of these debates where too often you stand one day on one leg, one day on another, and on the other day you seem to be suspended in mid-air. Where the hell do you stand?
Mr. Haynes: On a point of order, Mr. Deputy Speaker. If I had made such a contribution, you would have shot me down, but you let him carry on.
Mr. Deputy Speaker (Mr. Harold Walker): I am not involved in these matters.
Dr. Marek: I suspect that every Opposition Member, except perhaps the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) from the Social and Liberal Democratic party, voted against entry into the Common Market 20 years ago, but we now have the good sense—
Mr. Beaumont-Dark: Is it good sense?
Dr. Marek: We have the good sense to see that, although we should keep our options open about what may happen in the future, while we are in the Common Market we should do the best that we can to get the best for this country out of the Common Market, which seems something that the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) will not recognise.
The European proposal for language teaching throughout Europe—
Mr. Deputy Speaker: Order. The motion before the House relates to procurement procedures for the water, energy, transport and telecommunications sectors. I do not see how language teaching comes into it.
Dr. Marek: I accept your stricture, Mr. Deputy Speaker. The hon. Member for Selly Oak asked me a question that perhaps I cannot answer about why the Opposition can accept some proposals but not others and he asked about where we stood. In view of your comments, Mr. Deputy Speaker, I shall not seek to go along that road but it is important to note that the Conservative Government have said that a number—I shall not mention them—of attractive proposals—attractive to most people in the country—will not be applied in the United Kingdom. That is where the Opposition part company with Conservative Members who inhabit the Government Benches late at night for such debates.
Mr. Edward Leigh: I appreciate that the new-model Labour party is unwilling to take a stand on any issue for fear of irritating any group of voters, but perhaps the hon. Gentleman could tell us whether the official Labour party supports or opposes the motion. The hon. Gentleman still has not told us.
Dr. Marek: I should like to know whether the hon. Gentleman was in at the beginning of the debate. I think that he has just come in.
Mr. Leigh: I have been here all the time.
Dr. Marek: In that case I shall go back. I said at the beginning of my remarks—[Interruption.] I will not start again, but I shall just quote one sentence. The hon. Gentleman must have been asleep. I said that, with the amendment, the motion was a reasonable one and it would have been accepted by the Opposition.
I do not believe that there is any point in ritualistic denunciation of the Common Market, when proposals have been put forward, which may or may not become directives and which we have a chance of improving. However, the Government do not do their job. They leave the proposals alone, so that they end up being unsuitable
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for this country, and then they complain at the 11th hour that we have been robbed. Frankly, the people of this country are fed up with such an attitude. They wish that the Government would enter into negotiations and get something right for once for this country.
The problem that we face is one of inattention or hostility by our Government to many of the attractive measures proposed by Brussels. We also face the same inattention or hostility by our Governmemt to many of the not-so-attractive measures. The problem is that this measure could be made attractive, but it needs detailed examination by the Government, which must be followed by persistent and careful negotiation to ensure that the finished product is right for us in the United Kingdom.
Why, for example, are the standards used in our offshore oil industry not the basis of the relevant part of the proposals? Why are the present discussions in the European Community dominated by the French and the Germans, with very little British input? That criticism can be levied in other areas, too, because it is a general one. Why is so little said about safety? The dangers are clear, but standards will be set that will put our industry at a disadvantage and will involve it in considerable expenditure in order to comply with any eventual directive. Safety standards may be allowed to fall in those of our industries that take a pride in their safety record.
We urge the Government to accept that we are members of the European Community and to take a vital and necessary part in framing the legislation, so that it is good for the European Community and good for the United Kingdom. It is no good creating chaos at the 11th hour. That gets us a bad name, it impedes the work of the Commission and it stops our people receiving benefits from the European Community that could be available.
The proposals clearly need to be adjusted to lessen the bureaucracy and paperwork. We must also be satisfied that covert subsidy by national undertakings and vertically integrated industries will be kept to a minimum. That is especially important where a company or undertaking has exclusive or monopoly rights and, therefore, considerable freedom to choose a tariff for the customer.
Mr. Hugh Dykes: Give us an example.
Dr. Marek: I shall not give an example, because hon. Members must be able to think of examples themselves from the history of monopoly utilities within the United Kingdom.
Mr. Leigh: Let the hon. Member for Newham, South (Mr. Spearing) intervene.
Dr. Marek: My hon. Friend the Member for Newham, South (Mr. Spearing) will no doubt make his contribution in due course, and it would not be right for me to invite him to intervene.
Lower standards should not be accepted and more attention needs to be paid to safety. There is a need to get the balance right, because it is not just a question of insisting that the suppliers hold all the aces and not the nationalised undertakings and private companies supplying services to the consumers. The nationalised undertakings and some private companies have a duty to provide a service to the public. They should be able to do so after the proposals are enshrined in the form of a directive.
11.4 pm
Mr. Quentin Davies: We have just been treated to a model of the discursiveness and obfuscation in which the hon. Member for Wrexham (Dr. Marek) specialises. I rise to speak because the subject before the House is far too important for us to permit the essentials to be lost in a fog of muddle or theology.
Let me start by trying to situate the importance of the subject in terms of figures. I apologise for not having a copy of the Cecchini report which quotes the figures. The Table Office does not have a copy, so I must quote the figures from memory. They will be fairly exact, but the figures that I committed to memory were in dollars and I shall not risk turning them back into ecus.
Out of a total domestic product in the EC of around $4 trillion at the present time, public procurement of goods and services amounts to more than $600 billion—about 15 per cent. of the Community's total income. Rather more than half that sum— $350 billion or $400 billion—would be suitable for international procurement. At present, only about 5 per cent. of that figure—about $30 billion—is procured by public sector organisations in the European Community outside the frontiers of the nation state in which that public sector institution or purchaser is located.
One sees immediately from those broad figures, which I believe to be approximately correct, what enormous scope there is for increasing competition. We have a competitive vacuum in public procurement in the EC. That is undesirable, dangerous and expensive for us all.
The Cecchini report has attempted to estimate exactly what the savings would be if we introduced competition into this currently closed sector. It estimated that the consequences would be a saving of about a half of 1 per cent. of total domestic product in the Community, or approximately $20 billion, or £12 billion or £13 billion at the present rate of exchange—a substantial amount of money.
It might be useful briefly to touch on some of the key sectors, many of which are important for Britain and which have suffered from nationalistic public procurement up to the present time.
I shall take a few examples which will immediately illustrate their great importance for our industry. One is telecommunications. I think that I am right in saying that in neither Britain, nor France nor Germany has a public switching system yet been purchased from a supplier outside those countries. British Telecom has always bought from Plessey or GEC. The Bundespost has always bought from Siemens or SEL or another German supplier, the French from Alcatel, and so forth. They have never gone across their frontiers to procure public switching equipment from a non-national supplier.
There has not been a single case of substantial turbines or generators, or other major equipment for a power station, whether nuclear or conventional, being procured in Britain, France, Germany or Italy outside their own countries. No traction locomotive for a railway system in any of those countries has ever been procured from outside.
Although the nationalistic procurement may not be absolute in other sectors, it has been high. One has only to think of the procurement of hospital equipment or computers and other information technology within the public sector in the different EC countries. This all represents areas of industry which are crucial for
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employment and for the future of technological progress and which have not been exposed to the sort of competition to which they should have been.
As a result, three great costs to our economy have arisen. First, there is the financial cost of having to pay higher prices than we would if there were genuine competition in the procurement of this type of equipment or the associated services. [HON. MEMBERS: "How much?"] I am asked how much. I would refer the hon. Members who asked this pertinent question, for which I am grateful, to the estimates in the Cecchini report. They might find it enlightening and enlivening bed-time reading when they leave the House this evening.
Secondly, we incur costs through the loss of impetus to technological progress which result from the absence of competition. Conservative Members certainly recognise that one of the great spurs to technological progress is competition—the supplier's need continuously to seek to improve his product to gain a competitive edge.
Thirdly, we lose because of the absence of the supply side shock, from which industries would otherwise benefit. That is the simple need for both management and the work force to get up a little earlier in the morning, go to bed a little later at night, to take things a little less for granted, to cut their costs, and to improve their products and marketing skills. If we can open important British industries to this new blast of competition, we shall provide them with the sort of supply side shock which has been so effective in other sectors of the economy which have performed so well under the Government that we are pleased and proud to have.
Mr. Skinner: I am interested to hear what the hon. Gentleman has to say about the shock to the system and the therapy that he advises will be good for us. How much coal shall we sell when we have had this shock?
Mr. Davies: If we really believe in markets, the answer to the hon. Gentleman's question must be determined not by me or the House, but by the market. Human history shows that those who did not believe in markets ended up paying a high price in economic terms, and, ultimately, in political terms as well. I see that I carry my hon. Friends with me.
I emphasise once again the importance of the principle which is at stake. Therefore, I support both sides of the Government's motion. First, I warmly welcome the first serious moves to try to introduce real competition into these key areas of our economy. Secondly—it follows on naturally—we should be particularly careful, cautious and vigilant about the mechanisms that we put into place to secure such an important aim. The question of how we can achieve our objectives is complex.
I congratulate both the Government and the European Commission on all the work they have put into these documents, which obviously reflect many thousands of hours of competent human consideration. That consideration was not in vain because when we succeed in abolishing nationalistic public procurement in the European Community we shall—
Mr. Cryer rose—
Mr. Davies: I am about to conclude my remarks, but I am sure that the hon. Gentleman will catch your eye later, Mr. Deputy Speaker, if he wishes to do so.

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That labour was not in vain because, when we have got rid of nationalistic public procurement in the European Community, we shall have completed an excellent day's work for employment, for prosperity and for the competitiveness of these important British industries in the future.
11.9 pm
Mr. Frank Doran: This is the first time I have ventured into one of these European debates, and it is obvious that they have their own complexities and intricacies. I shall try to keep my remarks simple so as not to incur the opprobrium that other speakers seem to have provoked.
I have a particular interest in the offshore oil industry which is based and centred in my constituency. There is extreme concern in all parts of the industry, on the part of the operators, the oil producers and the contractors who provide services.
I stress the importance of the offshore industry to us. The Government have received £68 billion in tax and royalties from the North sea in the past 10 years. The oil industry spends about £3 billion a year on goods and services in Britain, so it is crucial that nothing be done to interfere with the smooth running of its operations or to undermine the valuable contribution that British industry has made to this area.
We are developing a technology and expertise in this country which is making us world leaders in the offshore industry. It is important to realise that that industry could be undermined by these proposals. That is certainly the view expressed to me by the people involved in the industry at all levels—the producers, the major companies from around the world which have operations in the North sea, and those who provide the technology.
The opposition that the Paymaster General expressed to the proposals was welcome, but the manner in which he expressed it, and the possibilities of defeating the proposals, did not satisfy me. It does not appear that the Government are doing much to fight the corner of my industry in Aberdeen—
Mr. Charles Kennedy: As the hon. Gentleman is speaking on a subject and to a theme that I very much endorse, may I take this opportunity to say, on behalf of Highlands Fabricators Ltd. in my constituency, of which the corporate planning manager is John Wood—also the chairman of the United Kingdom Module Constructors Association—that the company supports the thrust of the hon. Gentleman's comments? I hope that the Minister will seriously consider them.
Mr. Doran: I thank the hon. Gentleman. I know that he shares my worries—
Mr. Nigel Spearing: The motion says that the Commission's broad approach should be supported, but the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) and my hon. Friend the Member for Aberdeen, South (Mr. Doran), who know about the offshore oil business, say that something is at stake here. Could the broad approach be modified in the way that the Paymaster General described, or does it imperil the prosperity of the industry?
Mr. Doran: The latter. I criticised the Paymaster General's remarks precisely because the industry feels it is being undermined—
Mr. Spearing: The Government are not defending it.
Mr. Doran: No more they are.
Most of the larger fields have now been developed, and we are embarking on a phase in which exploration and development costs will increase, possibly dramatically. The finds that the industry will make will be much smaller, and there will have to be intensive research and development into ways of increasing the recovery rates from the fields. High capital and operating costs will be involved in building, developing and operating safely on ever smaller and more marginal fields. All this may be undermined.
The hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) mentioned what Mr. Ian Wood had said to him. He is a constituent of mine and he has presented me and the Department of Energy with a detailed report on how he views the position. He is the managing director of one of the largest contracting firms in the North sea—an Aberdeen-based, Aberdeen-developed and now international company operating here and in the United States, where it has made some significant acquisitions. It is a tremendous success story for a north-east of Scotland company.
He points out the effects of increased bureaucracy. There is a potential for a hugely increased bureaucracy. The offshore construction industry is entirely dependent for survival on the operating companies letting contracts for their projects. He has given me a step-by-step appraisal of the number of stages involved in contracts, and it is fairly considerable. Most of these contracts are well over £125,000, the limit referred to in the EEC order. As all these stages in the draft directive come into force, at every stage a delay would occur to allow for placing of advertisements and of intent to let a contract. There would be a lengthy tendering period, and after the award of the contract a period to allow for appeals. These are all bureaucratic steps which are unnecessary in what is already a highly competitive industry.
Mr. Wood then talks about the implication for standards. There are two standards in the offshore industry: the American standard and the United Kingdom standard. Over the past 15 to 20 years, through the constant effort of all those concerned in the United Kingdom offshore industry, a great deal of time has been spent in raising standards and quality assurance. This has resulted in a number of British standards being introduced which are considered to be of great value. Where these do not exist, American standards are enforced in the industry throughout the world.
This directive will undermine that process, which has been taking place over the last 15 to 20 years. We shall find that the British standards become less relevant, which would make it much more difficult for our own industry, which has developed its own standards to a very high level, where they are accepted internationally, to compete outside the EEC. That is obviously of considerable concern, particularly to my constituents, looking at when the oil finally runs out.

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We want to encourage the development of a manufacturing and technological industry which can export its expertise to the rest of the world. We do not want to be confined to the European market.
Finally, I come to safety. There are real concerns within the industry that the present close attention to safety which has been forced upon the industry, mainly because of the Piper Alpha disaster, is likely to be undermined because of the possibility of lower standards being required because of the extra cost of these particular measures and the implications of taking them through the industry. This represents a serious threat to the wellbeing of one of our most important industries.
I said earlier that I would try to keep my remarks simple. It is a fairly simple issue. Will this industry, which is vital to the future of our country, be supported or not? It strikes me, having listened carefully to what the Paymaster General said, that it will certainly not be supported by this Government.
11.17 pm
Mr. Teddy Taylor: I should like to ask the Minister two questions. In agreeing 100 per cent. with the wise words of my hon. Friend the Member for Stamford and Spalding (Mr. Davies), I should say that the one thing worrying everyone in the House is what indication we have that there is the slightest possibility of this freedom happening. Our experience of the EEC is that we have the most splendid pledges, the most wonderful promises, the greatest visions, but they do not actually happen.
For example, we had a lot of discussion not too long ago about spending controls. We gave money in exchange for them, and we saw a reference in the Court of Auditors' report, but we might as well not have had them, because, despite having an official limit of 3 per cent. on extra spending, the Commission spent 18 per cent. more. However, it did not matter because an accountancy device was found. We find the same on agricultural reform. We are constantly told that things will change. We were told there would be a price freeze which would mean everyone would get a green pound adjustment and surpluses would disappear. I am afraid we are always being told that next year things will get better, and they never do.
If we had genuine free international competition in public purchasing it would be good for us, good for Europe and good for all the countries of the world. What worries me about the EEC is that, instead of getting free trade, we will simply surround our purchasing agencies with a pile of extra bureaucracy.
The Minister is well aware that two institutes have already expressed fears about the many forms to be filled in and the information to be provided, and have said that genuine free trade simply will not happen. That is not simply a silly point. The Minister must be well aware from the sad occasions on which he has had to admit that his hopes have not been realised, that this is probably what will happen.
As I said to the Minister last week on a similar issue, is there any way in which he can adjust these proposals to allow any kind of easy arbitration so that if someone feels that he is being blocked out or is not getting a fair deal he can get redress? My hon. Friends who love the Common
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Market and hope that it will be a great thing must be well aware in their hearts that there will be no free trade but much bureaucracy, many more forms, and that Britain will give some contracts to companies in Europe but that the same will not happen in reverse.
The Minister may well think that that will happen, but if he has any doubts about it he should consider what happened today on the question of tobacco. We were told by the Common Market that we would have to put different advertisements on tobacco packets to discourage smoking. The same Common Market sent our Government an official letter saying that we had to cut the tax on cigarettes. The Treasury and the Department of Health had to say that that would mean more cigarette smoking. The Common Market spends £500 million every year to subsidise the tobacco industry and pay for research into how European tobacco can be made more palatable to smokers.
Mr. Aitken: Before my hon. Friend gets carried away by the theme that everything is the same, may I draw to his attention one important change? On 14 November the Government refused to accept an amendment suggesting that the basis on which we were asked to endorse the tobacco products labelling directive was contrary to the single market legal requirements, despite Mr. Speaker's Counsel's recommendation. Despite the refusal by the Under-Secretary of State for Health on that date, today the Secretary of State for Health was in Brussels vigorously opposing the very grounds that his hon. Friend had endorsed. There has been—
Mr. Deputy Speaker: Order. We are not debating tobacco advertising.
Mr. Taylor: Most of us are happy that at last the Government appear to be waking up to the realities of the European situation. We do not know what change in policy might come, but at least we know that there is discussion. That is good, even though it is taking place at half-past 11.
Is there anything that the Minister can do to see that something happens apart from extra costs and extra form filling? We should be worried about this. I urge hon. Members to look at the White Paper on developments in the EEC that we are debating on Thursday to see what has happened to our trade. In 1970 our export-import ratio with Europe was 143—
Mr. Deputy Speaker: Order. We are debating procurement procedures in the water, energy, transport and telecommunications sectors. The debate should be confined to those matters.
Mr. Taylor: I am simply trying to say that over that period of 20 years our export-import ratio has gone down from 143 to 72, and that is rather significant for Britain. I hope that we shall not make the same mistake again in these proposals on public purchasing. If we do, we will once again be caught out and will lose. We shall find that our costs will increase because of more form filling and that we will not have the free trade that we want.
What exactly does the Minister mean in relation to article 24? He must be well aware from his visits to America and from the views expressed by American businesses and those in other parts of the world that many people rightly or wrongly suspect that all the 1992 rules are concerned not with free trade and competition but with a

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bit more protectionism. Article 24 is abundantly clear. It says that we can keep out competition if half of it is foreign. I am not quite sure what "foreign" means. Does it mean that we can include EFTA and eastern Europe, the United States and Japan? The Minister must be aware that this is purely a matter of blind protectionism. It is a matter of saying that we may be willing to consider free trade and competition—
Mr. Dykes: I thought that my hon. Friend was in favour of protectionism.
Mr. Taylor: I can assure my hon. Friends that as a Conservative I am totally opposed to blind protectionism. I am in favour of free trade, as I hope my hon. Friends are, although I have doubts about my hon. Friend the Member for Harrow, East (Mr. Dykes), who seems to have some strange ideas which are becoming out of date in the party, with all the changes that are taking place. He may have been in the mainstream at one time. He is certainly not now.
May we be told what the Minister proposes to do about all this? With almost everything we do in the EEC we are damaging the Third world, damaging freedom of trade and undermining GATT. Does the Minister intend to propose to the Council that article 24 be deleted, or is he simply saying in his courteous and gentlemanly way that he agrees with my general sentiments? How do the Government intend to ensure that this provision works, and what will they do to prevent its being used as a means not of providing free competition but of discriminating against the rest of the world?
11.25 pm
Mr. Nigel Spearing: The hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) asked the Paymaster General in an intervention some procedural questions, to which the right hon. Gentleman appealed to the Chairman of the Scrutiny Committee, asking if it was not a discharge of the responsibilities laid on Government by the resolution of the House of 30 October 1980.
I am glad to say that the letter of that resolution is being carried out by this debate, and therefore—as the Chairman of that Committee—I can give the Paymaster General an affirmative answer to his question. There my function as Chairman of the Committee ceases and henceforward I speak as the hon. Member for Newham, South. While I agree that the letter of the law is being carried out, I am far from satisfied with the way in which the spirit of the law is being carried out.
This and similar debates are limited to an hour and a half, which is not sufficient, given the importance of the topic. Tomorrow night we shall be invited to debate mergers and unless there is a motion down to suspend the rule, we shall have to debate that important issue, about which the Select Committee took evidence from Lord Young for an hour and a half, in one and a half hours.
The Paymaster General will remember from years ago that the hour and a half rule was introduced only in 1951 for this country's secondary legislation, or statutory instruments. We are not tonight debating a piece of secondary legislation deriving from a Government statute. It is a piece of super-primary legislation contained in some 300 pages. This is equivalent, therefore, to a Second
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Reading debate of a Bill of that length. So we are having to compress a debate on important matters of principle into an extremely short time.
The hon. Member for Selly Oak wonders whether we can get rid of all this late-night business and have some daytime debates. That may be possible, but we would have to face up to the fact that we would be taking on double or treble the amount of legislation in a normal parliamentary year.
Mr. Beaumont-Dark: Better if we knew.
Mr. Spearing: If the hon. Gentleman thinks it would be better if we knew, would he like two or three days a week to be taken up with EEC business?
Mr. Beaumont-Dark: Yes.
Mr. Spearing: Very well. That would be about the ratio of importance to time that EEC matters would have to be given, and I think I see the hon. Member for Harrow, East (Mr. Dykes) nodding in agreement.
Mr. Beaumont-Dark: If it meant giving up two or three days a week to debate those issues, the country would be alerted to the fact that we were becoming a glorified parish council in relation to what is happening in Brussels. Better for us to do that than for us to do it by surreptitious means.
Mr. Spearing: I refer the hon. Gentleman to the investigation now taking place by the Select Committee on Procedure. If he thinks that that ratio and time scale is right, whatever the result, he—and other hon. Members who feel the same way—should give evidence to that Committee to that effect. He may be right in that it would have the secondary effect of alerting people to something of which they may not at present be aware.
The matter that we are debating is the subject of two explanatory memoranda from the Government. Earlier this year it came before the Scrutiny Committee and we said that we wanted more information. I have to thank the Paymaster General for producing his second explanatory memorandum, which was signed only on 10 May and sent to the Committee and on which we based a report which is in the Vote Office.
But I have to tell him that are getting into very deep water. Here we have the theory of an open market, flat-table theology, well expressed by the hon. Member for Stamford and Spalding (Mr. Davies), and in order to obtain something that we have had on a national basis throughout Europe before we have 300 pages of legislation, all of which has to be administered and checked and for which new machinery has to be installed. In other words, freedom of competition does not necessarily mean freedom from bureaucracy. That is something that free marketeers and enthusiasts for capital competition on the Government Benches ought to bear in mind, because it is not necessarily possible to have one without the other in every respect and there is a classic case of it in this measure.
Market magic when applied to this area may not produce the expected results because this set of regulations is clearly supplier-oriented. We have already heard from the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) how it will affect the offshore oil industry. How

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do we know that it will not affect many other industries similarly by hog-tying the rights and demands of the purchaser?
The Paymaster General mentioned the CBI evidence. He did not mention, although I think the hon. Member for Southend, East (Mr. Taylor) did, the Institute of Purchasing and Supply. He may have received a memorandum from the institute, but he did not mention it in his speech. It is a very important body because, as I understand it, it represents the corporate interests of the purchasing organisations of public authorities, local government, national Government and publicly funded organisations, as well as private organisations. It represents a huge purchasing power in the nation, and it tells me that this whole organisation is not in favour of the consumer or the corporate interests of the consumer in terms of safety, standardisation and value for money. It should appeal to hon. Members, particularly Government Members, because it is weighted, as I have said, in favour of supplier opportunity and not the convenience of the consumer.
Indeed, if we listened very carefully to the Paymaster General's speech we detected that in the Whitehallese which he trotted out. I would not criticise him personally for that. Why should he, from the Treasury, have to go into the details of the vast range of industries affected by these proposals? Why it has come to the Treasury rather than the DTI I do not know. I would suggest that as a function it would perhaps go more suitably to the DTI because surely the DTI should be more aware of the difficulties that will occur for the purchasing organisation. So I detect from the speech of the Paymaster General that the Government do not really want this at all, for some very good reasons.
I come now to some quotations from the memorandum which the Paymaster General sent not just to the Committee but to the public. I think the newspapers have got it wrong when they say that Government memoranda are not available until the Scrutiny Committee reports; they are available in the Vote Office. Paragraph 4 says:
"Consultation is continuing and will be supplemented over the next few months by a series of briefing meetings with representatives of interested trade associations."
It goes on:
"Many of the principal concerns about the present proposals, however, are shared by both purchasers and suppliers."
So there does not seem to be much enthusiasm in that area.
Paragraph 8, "Main implications for purchasers"—the customers, with whom we are all directly or indirectly involved—says:
"They are concerned, however, that the proposals should be amended to reduce very significantly the constraints on good purchasing practice and to limit the administrative burdens that they believe would result".
That needs quite substantial amendment and, as we said in the report of the Scrutiny Committee—and I quote direct from paragraph 25 of the Minister's own memorandum on a matter which has not yet been raised but is of great current significance:
"A particular concern of UK suppliers and contractors has been the provision allowing concessionnaires in this sector to award contracts to associates and affiliates without going to competition. This is believed to give special treatment to a large part of the French water supply industry."
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Does that mean that it would affect those parts of this country's water supply industry owned by French interests? It is clear that it might.
We must conclude on any objective criteria that the proposals will not be much good for this country or for the collective interests of purchasers, and that they will probably be a burden on suppliers. In short, it is something we could well do without. But unfortunately, as the memorandum states, the measure is subject to qualified majority voting in the Council of Ministers. I hope that a sufficient number of other nations share our doubts.
I am informed that other nations are not so well developed in their public purchasing arrangements. If the interests of purchasers in other countries are not so well organised as they are here, their Governments will not have the same doubts that we have.
Although the right hon. Gentleman did not say as much, he pointed to the possibility of the proposals going the way of tobacco—of which we had a dramatic example this very day. In other words, despite the right hon. Gentleman's words, it is possible that we could be outvoted. We return to the merits of the whole matter, on which my views are well known. I will detain the House no longer, except to say that those right hon. and hon. Members who participated in certain debates 10 years ago are entitled to say to the Government, "We told you then. You haven't seen anything yet. Wait until the next lot. It will get worse and worse."
11.37 pm
Mr. Anthony Beaumont-Dark: The Government's motion states that
"changes are desirable in the proposed directives to prevent the imposition of unnecessary burdens and constraints."
I am happy that my right hon. Friend the Prime Minister has asked all Ministers to be more alert to such proposals. I am worried, as are all right hon. and hon. Members, and not because we are anti-Common Market. It is not true to say that, because one does not speak up for something to do with the Community, one is somehow violently anti-Europe. I recognise that we must play our part in a Europe of which our country is a part. Nevertheless, more and more right hon. and hon. Members genuinely feel that the bureaucrats in Brussels or in Strasbourg, or wherever they hang out from time to time, are concerned with dragging more and more power into the vacuum of their lives—and with sucking out the life of this country, this Parliament, and our people.
All we ask of the Government and of Ministers is that we should not be presented with anodyne motions. We make that request whether the Minister concerned is my right hon. Friend the Paymaster General or—a latter-day convert—my right hon. and learned Friend the Secretary of State for Health, who went to Europe and fought for this country at long last, even though he lost 11 to one, because my right hon. Friend the Prime Minister told him, "For God's sake, go and do something for Britain" If we vote against such motions, as in this case, and such directives are still adopted, it will serve to alert the public that the powers of this Parliament are ebbing away.
We are ultimately elected by British people to represent British interests. There is nothing shameful about standing up for one's country. But if the House is presented with such motions day after day—or should I say, night after late night—we shall in the end become what my right hon. Friend the Member for Old Bexley and Sidcup,

289
shamefully, wishes us to be, and have no more power than the governor of a united European state similar to Arkansas or Iowa. I did not come here to be a governor of Arkansas; I came here to speak for Britain, and what is shameful about that?
11.39 pm
Mr. Brooke: With the leave of the House, I shall respond briefly to the debate.
I welcome the hon. Member for Wrexham (Dr. Marek) to these debates in apparent succession to the hon. Member for Vauxhall (Mr. Holland). There were occasions when I had doubts as to whether he had arrived at the right ground, in the context of his speech tonight. I am sure that he was playing himself in, but I am sorry that his innings did not last long enough for him to score any runs. He and others raised the question about the Government's support for the motion. The Government's support for the motion rests firmly on the connection between the motion and the single European market, and the Government's determination to achieve the single European market. That is completely separate from some of the other ideas from Brussels which are questioned by the United Kingdom Government.
The hon. Gentleman said that we should try to get something right for once. If he re-heads my speech, he will find that the Government's intentions are directed at that purpose. The hon. Gentleman and his hon. Friend the Member for Aberdeen, South (Mr. Doran) mentioned the safety record. He will note that my speech contained specific references to that.
My hon. Friend the Member for Stamford and Spalding (Mr. Davies) concluded by warmly welcoming competition, but said that we should be careful about the mechanisms. I hope that the Government are seeking to do that. The Government have taken the view that the Commission's proposal on upstream oil and gas is not appropriate because of the degree of competition in that industry which the hon. Member for Aberdeen, South mentioned.
Mr. Kennedy: That is fine so far as it goes. What chance is there that the Government will succeed on that exclusion?
Mr. Brooke: It would be mistaken to assume that the Government have not made their position absolutely clear on upstream oil and gas. The argument has been put in Brussels and in discussion with individual member states. I would not want to claim that the Government can take sole credit, but it is significant that the main committee which is involved in the European Parliament has already voted to exclude upstream oil and gas from the directives.
My hon. Friend the Member for Southend, East (Mr. Taylor) asked me whether it would work and said that it was surrounded by bureaucracy. He said that I was constantly having to eat words that I had uttered in previous debates. I know that he will be generous enough in future, when some of the Government's predictions come to pass, to acknowledge them.
The amendment to which he spoke, although it was not possible to select it for debate, implied that it was within the Government's power not to approve a proposed directive, but with qualified majority voting the most that we could do would be to vote against the adoption of a common position. The amendment also urges the
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Government to seek clarification on the enforcement of compliance. We would certainly seek more than clarification in that regard.
My hon. Friend intervened in my speech and returned to the subject of article 24. The Government policy is to ensure that purchasers are not required to give preference to Community offers. In other words, the situation should remain permissive, but it is necessary to recognise that that means taking on strong forces within the Community which seek to make the Commission's proposal more protectionist. We have taken the view that it is right to allow purchasers to reject offers of third country origin, if they wish. Our objective is to obtain a wider agreement in the GATT that will ensure that suppliers from the Community get a fair chance in the third countries concerned.
The hon. Member for Newham, South (Mr. Spearing) referred to the Institute of Purchasing and Supply. I hope that the institute will acknowledge that the purpose which the Government seek to achieve by our proposals for making the directives more effective is in line with its objectives.
I think that my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) was speaking to the general spirit of European debates rather than to the motion. He would almost certainly be supportive of the Government's view that a single European market should be achieved.
I know the difficulties of conducting debates of this sort in one and a half hours after 10 o'clock at night. I express appreciation to the House for the amount of ground that we have been able to cover in a relatively short time.
Question put:—
The House divided: Ayes 97, Noes 17.

Division No. 203]

[11.45 pm

AYES

Arbuthnot, James

Gummer, Rt Hon John Selwyn

Bennett, Nicholas (Pembroke)

Hague, William

Brooke, Rt Hon Peter

Hargreaves, Ken (Hyndburn)

Burns, Simon

Harris, David

Burt, Alistair

Haselhurst, Alan

Butcher, John

Hawkins, Christopher

Campbell, Menzies (Fife NE)

Heathcoat-Amory, David

Carlisle, Kenneth (Lincoln)

Hicks, Robert (Cornwall SE)

Carrington, Matthew

Howarth, G. (Cannock & B'wd)

Cash, William

Howell, Rt Hon David (G'dford)

Chapman, Sydney

Howells, Geraint

Chope, Christopher

Hunt, David (Wirral W)

Coombs, Anthony (Wyre F'rest)

Irvine, Michael

Coombs, Simon (Swindon)

Jack, Michael

Cope, Rt Hon John

Johnston, Sir Russell

Couchman, James

Jones, Gwilym (Cardiff N)

Cran, James

Jopling, Rt Hon Michael

Currie, Mrs Edwina

Kennedy, Charles

Curry, David

King, Roger (B'ham N'thfield)

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

Knight, Greg (Derby North)

Davis, David (Boothferry)

Knowles, Michael

Day, Stephen

Lawrence, Ivan

Dorrell, Stephen

Lightbown, David

Dover, Den

Lilley, Peter

Durant, Tony

Lord, Michael

Dykes, Hugh

Mans, Keith

Eggar, Tim

Maude, Hon Francis

Fallon, Michael

Mayhew, Rt Hon Sir Patrick

Fishburn, John Dudley

Meyer, Sir Anthony

Forth, Eric

Miller, Sir Hal

Freeman, Roger

Mills, Iain

Garel-Jones, Tristan

Mitchell, Andrew (Gedling)

Gill, Christopher

Nicholls, Patrick

Gregory, Conal

Nicholson, David (Taunton)

Griffiths, Peter (Portsmouth N)

Norris, Steve

291

Paice, James

Thurnham, Peter

Porter, David (Waveney)

Tredinnick, David

Raffan, Keith

Twinn, Dr Ian

Rathbone, Tim

Waddington, Rt Hon David

Redwood, John

Wallace, James

Sackville, Hon Tom

Waller, Gary

Shaw, David (Dover)

Wardle, Charles (Bexhill)

Shaw, Sir Michael (Scarf)

Wheeler, John

Stern, Michael

Widdecombe, Ann

Stevens, Lewis

Wood, Timothy

Stewart, Allan (Eastwood)

Yeo, Tim

Stradling Thomas, Sir John

Taylor, Ian (Esher)

Tellers for the Ayes:

Taylor, John M (Solihull)

Mr. Alan Howarth and

Thompson, Patrick (Norwich N)

Mr. David Maclean.

Thorne, Neil

NOES

Barnes, Harry (Derbyshire NE)

McKay, Allen (Barnsley West)

Bermingham, Gerald

Mahon, Mrs Alice

Cunliffe, Lawrence

Meale, Alan

Dixon, Don

Parry, Robert

Dunnachie, Jimmy

Spearing, Nigel

Haynes, Frank

Wilson, Brian

Hughes, John (Coventry NE)

Lewis, Terry

Tellers for the Noes:

Lloyd, Tony (Stretford)

Mr. Bob Cryer and

Loyden, Eddie

Mr. Dennis Skinner.

McAvoy, Thomas

Question accordingly agreed to.
Resolved,
That this House takes note of European Community Documents Nos. 8803/88 and the Supplementary Explanatory Memorandum submitted by Her Majesty's Treasury on 10th May 1989, 8804/88 and 8805/88 relating to procurement procedures in the water, energy, transport and telecommunications sectors; and endorses the Government's view that the broad approach of the Commission should be supported but that changes are desirable in the proposed directives to prevent the imposition of unnecessary burdens and constraints.

Lebanon
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Fallon.]
11.56 pm
Mr. Cyril D. Townsend: I am delighted to have this opportunity to draw the attention of the House to British policy towards the Lebanon. Shocked by the plight of the people of the Lebanon, I asked my hon. Friend the Under-Secretary of State for Foreign and Commonwealth Affairs, who will kindly reply to this brief debate, what more the Government could do to assist them. It is foolish and remiss of the House that we do not have more debates on international issues. It is our job to turn the spotlight of public attention on the world's trouble spots and to seek solutions.
Britain is involved directly and indirectly in the Lebanese tragedy, in many and various ways. As I discovered in my visits to that country, the last being in 1982 when I was a British parliamentary observer at the presidential elections, the British are highly regarded—curiously, more so than the French, in some ways. Many Lebanese look to this country in their long drawn-out hour of need.
We should be clear at the outset that the problems of the Lebanon will never be tackled successfully until the Palestinian-Israeli dispute has been settled. The many parties to that grave and historic dispute are using the Lebanon to help to achieve their long-term aims. It is essential, too, that the Lebanese people learn that loyalty to their country must be paramount. Too many people for too many years have given their loyalty either to internal factions at the expense of their country or to other countries. While the international community can and must deal vigorously with the international dimension, the Lebanese must set aside their present and deep divisions—be they religious, political or a combination of both—and unite. If they cannot, they and their children will be condemned to years of further bitterness, despair and degradation.
The political scene in the Levant is like a tangled web. I have time to highlight six major aspects and to put some questions to my hon. Friend the Under-Secretary. First, what further action will our Government take, in concert with other European Community Governments, and through the United Nations, to end the destruction of the once beautiful and highly civilised city of Beirut? The capital was once the Geneva of the middle east. There has been wholesale slaughter of its citizens. Our Government are right to support the initiative of the ministerial committee of the League of Arab States led by Kuwait's Minister of Foreign Affairs and to arrange a ceasefire and a negotiated solution. It is the best bet in the current circumstances, but it is realistic to doubt whether it can succeed when it is weakened by the Iraqi-Syrian dispute.
Are we taking advantage of our transformed relations with the Soviet Union? Did the Prime Minister discuss the Levant with the Soviet Prime Minister when they met in Luxembourg a few weeks ago? United Nations resolution 520 called for
"strict respect for Lebanon's sovereignty, territorial integrity, unity and political independence".
Why do our Government not press for this matter to be raised as a matter of urgency in the Security Council? Is it true that no European Community country, save France,

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is willing to take this crisis to the United Nations? If so, why such prudence when a United Nations resolution is being ignored and hundreds of people are dying each week? Is an international conference a possibility?
Lord Glenarthur has described the crisis as being an "internal dispute", but clearly it is more than that. Ask the Syrians. I trust that we shall set our faces like flint against partition. That would be no solution; it could never be stable.
As Middle East International put it recently in an excellent editorial:
"A tiny Christian enclave in the north, a Syrian protectorate in the centre and an Israeli protectorate in the south would be a prescription for permanent conflict."
Secondly, what more can be done to bring humanitarian aid to the victims of the conflict? Britain has contributed more than £1 million to UNICEF and the International Committee of the Red Cross for projects on health care, water supply, education and other relief operations. Britain also supports UNRWA which does wonderful work in assisting Palestinian refugees in the Lebanon.
There is an urgent need to get medical aid and food supplies into Beirut following a new peak of savagery and destruction. Mr. Perez de Cuellar has spoken of some $87 million being needed to provide assistance to 800,000 people in chronic need of general relief and urgent rehabilitation. There is also an immediate need for $5 million to ensure electrical supplies in Beirut on which the provision of water and hospital services depends. I should like to see the Royal Navy landing supplies by helicopter and other means to both sides as soon as the shelling stops.
Thirdly, turning to southern Lebanon, when did we last draw the attention of the Security Council to Israel's continuing and illegal occupation of a substantial part of the Lebanon following its second and highly destructive invasion? Its activities in that part of the country are outrageous and provocative and UNIFIL must be allowed to operate right up to the internationally recognised border in accordance with Security Council resolution 425. It is not sufficiently known that Britain does a first-class job in supporting UNIFIL from our sovereign bases in Cyprus.
I should like to see UNIFIL's mandate strengthened. I have been appalled by the role being played by the south Lebanese army, Israel's surrogate force. The UN soldiers, more than 170 of whom have been killed since 1978, have been trying to protect the hapless, mainly Shia inhabitants of the border area from brutal attacks by the SLA. In recent months the Israeli army, and the mainly Maronite SLA, have expanded their operations in the south, outside the so-called security zone. In March, Israel's northern front commander stated that he was considering enlarging the security zone to include five villages in the central Bekaa valley. There have also been well-reported recent Israeli incursions close to Beirut.
Who gave Israel a dispensation to invade and maraud in the land of its neighbours? That behaviour must be brought to a halt. That is a matter that the Bush Administration could address, even if it wishes to duck the wider issues. Such violence offers no solution. If the Israelis cannot be moved out, there is no chance that the Syrians will leave.
Fourthly, I am mindful of the breakdown in relations between Britain and Iran over the Salman Rushdie affair, which was made worse by the deplorable and completely
294
irresponsible comments by the Speaker of the Iranian Parliament, Hashemi Rafsanjani, and its impact in the Lebanon. Britain has been forced to close consular and visa offices following a security alert that warned that Iranian-backed fundamentalists in Beirut might be preparing attacks.
I hope that my hon. Friend will tell the House what is the latest position and what more can be done to protect our admirable and courageous ambassador, Alan Ramsay, who is a personal friend, and his dedicated staff. There is also the presence of armed Iranian units to consider.
Fifthly, in all our minds is the continuing plight of the British hostages, who are thought to be held in or near Beirut by the pro-Iranian Hezbollah. We appreciate that there may be little that the Minister can say and that there is always the danger that ministerial comments may lead to dangerous speculation, but has the Minister any news of Mr. Jackie Mann, a former fighter pilot, who was reported missing at the weekend? The sympathy of the whole House goes out to his wife, family and friends.
Finally, and touching all those issues, is the extraordinary role of Syria. Alack, we have foolishly failed to restore diplomatic relations—which in my view had been broken off correctly—so we have minimal influence or ability even to communicate. Its forces were initially invited in and at first were welcomed by the hard-pressed inhabitants of Beirut, who hoped that they might at least keep the armed fanatics off the streets. However, now the Syrian army is the main element on one side of an increasingly bloody and futile war, which is mainly conducted through the random shelling of civilian targets—a completely abhorrent form of military conduct that must be universally condemned. What is the Government's official position on Syria's presence and activities in the Lebanon?
The canvas is a vast one, but I hope that I have made clear the deep concern that I suspect all right hon. and hon. Members have for the people of the Lebanon and also the extent of Britain's responsibility, especially as a permanent member of the UN Security Council. The multinational force, in which the United Kingdom participated, was a failure, and I do not envisage another. However, there may be an enlarged role for UN peace keepers and, indeed, the UN in its many forms.
This is not a quarrel in a far away country between people of whom we know nothing. Television brings its sorrow and savagery nightly before us, and this evening's news of a successful and outrageous brutal bomb attack was no exception. Without a shadow of a doubt, the vast majority of the Lebanese seek peace and the reunification of their country after 14 years of conflict.
Difficult though the problems are, they must not be regarded by us as insoluble. The objective is an independent, sovereign and united Lebanon, at peace with itself and its neighbours. It would be wonderful if the United Kingdom could be seen to have played a leading part in helping the international community to achieve that objective.
I wish my hon. Friend and his fellow Ministers well in that endeavour.
12.10 am
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Timothy Eggar): As my hon. Friend the Member for Bexleyheath (Mr. Townsend) has said, Lebanon's plight is tragic. The fighting there, which has been going on over recent weeks and months, has caused many casualties and deaths and the physical destruction of much of the once beautiful city of Beirut and its surrounding countryside.
The Government's aim, in common with other countries who wish Lebanon well, is to restore peace and stability to that tragically divided country. I am most grateful, yet again, to my hon. Friend for his initiative in calling this Adjournment debate.
I am also grateful for the presence of my hon. Friend the Member for Lewes (Mr. Rathbone). I know that he will join with me and the House in paying tribute to the tremendous work done by the late Lord Chelwood on behalf of the Lebanon and its people. If he were with us, he would share our anguish at the latest developments there.
For reasons of which the House and my hon. Friends are well aware, the situation in the Lebanon is complex. Our powers to help resolve the present crisis are severely limited. The conflicts between the people of Lebanon are deeply rooted. Unhappily, too, their country has also become a battleground for foreign forces.
In the last analysis, it must be our aim to enable the Lebanese people themselves to find ways of restoring peace to their country without foreign interference.
As a sign of support for those working towards a settlement in Lebanon, we have kept our embassy in Beirut open under difficult and extremely dangerous conditions. I know that the House will wish to join me and my hon. Friend the Member for Bexleyheath in paying tribute to the courage and tenacity of our ambassador, Mr. Alan Ramsay, and his small team in Beirut. They are doing an excellent job of work.
The embassy has for a long time had to operate in particularly trying and hazardous conditions. In recent weeks its working conditions have deteriorated even further. The Rabieh district of east Beirut, in which the embassy is located, has experienced its share of the recent heavy shelling. The movement of embassy staff is necessarily extremely restricted and it has become increasingly difficult for the ambassador and his staff to perform all the functions normally expected of it.
The staff are constantly working against a background of specific threats against British targets, and the risk of being taken hostage remains high. The recent death of the Spanish ambassador in Beirut was an all too tragic reminder of the personal risks run by all foreign diplomats working in the uniquely difficult circumstances of present day Lebanon.
A major reason for our embassy remaining is the plight of British hostages in Beirut. The House is already well aware that Alec Collett, John McCarthy, Terry Waite and Brian Keenan have all been the unfortunate victims of kidnapping in Lebanon. We now await with considerable concern news of another British national, Mr. Jack Mann, who disappeared in west Beirut last Friday and whose subsequent whereabouts remain unknown. As my hon. Friend has said, we understand the anguish of his family and sympathise with them.
296
We are aware of the anxieties of all the families and friends of those who have been detained and kidnapped against their will. However, we remain firmly convinced that our policy of not making substantive concessions to terrorists is the right one. Within that policy, we have consistently done the maximum possible to ensure the hostages release.
In an environment where basic human rights and civilised standards of behaviour are flagrantly disregarded, our embassy has done, and will continue to do, everything possible to get firm information about the plight and position of the British hostages in the Lebanon. We raised the position of the hostages regularly with the Iranians before the breach in relations with them. It is high on the agenda for all our contacts in the region and elsewhere. We shall continue with those efforts, although we must also acknowledge that recent events have moved against us.
The intensified fighting in Lebanon has, as I have already said, made the task of our embassy even more difficult and dangerous, and the situation within Iran makes it very difficult for us to deal with that Government. This situation is not of our choosing. Nevertheless, we have done, and will do, the maximum possible in the circumstances, and will continue to strive to secure the release of British hostages.
The recent disappearance of Mr. Mann further underlines the vital importance of consular advice that we have given to British subjects in Lebanon. For years, we have strongly urged all those who have no pressing reason to remain in Lebanon to leave while commercial means are available. We have also regularly issued warnings advising British subjects not to travel to Lebanon unless it is absolutely necessary.
Let me return to the political situation in Lebanon which provides the background to the plight of the hostages. The bitter nature of the fighting has been shown in a further tragic twist today, with the news of the murder of Shaikh Hassan Khalid, the Grand Mufti of Lebanon and a Sunni leader of stature and distinction. We deplore this new act of violence, and the loss of a man who has been consistently a force for moderation.
Since 23 September 1988, Lebanon has had two rival administrations, and deepening partition in Government institutions. Since 14 March, this division has led to an outbreak of hostilities unmatched during 14 turbulent years of fighting between rival factions. Our policy, in common with that of most other countries, is to use our good offices with all the parties in order to help bring an end to the carnage without, however, taking sides between the two administrations. We recognise states, not Governments. But to end the 14 years of war and suffering, it is vital that a political solution should be found.
The first thing that is needed is a durable, negotiated ceasefire. Along with our European partners, we repeated our call in a statement on 17 April for all parties, including Syria, to stop fighting and agree to an immediate ceasefire. We were naturally associated with the statement issued by the President of the United Nations Security Council on 31 March, and his further statement on 24 April.
We have fully supported the ministerial committee of the Arab League, chaired by Sheikh Sabah, in its efforts to obtain a ceasefire. The Arab League has come very close to success. It gained an agreement to a ceasefire to begin on 28 April and offered to deploy an Arab League force to police it. Although we were greatly disappointed that the ceasefire broke down after three days, the Arab League

297
negotiators helped to nurse a new one into being on 11 May. There has been some sporadic firing, but the ceasefire generally has been holding and we hope and pray that it will prove more durable than the last.
We believe that, for as long as the Arab League is pursuing its initiatives, it should be allowed a free hand before the international community considers alternative approaches. This is in keeping with article 52 of the United Nations charter, which says that every effort should be made to achieve pacific settlement of local disputes through regional organisations before referring them to the Security Council. In any case, it is clear we should have to think very carefully before involving the Security Council actively in what is essentially an internal Lebanese issue.
Once a ceasefire has been established, Lebanon can work towards a period of national reconciliation. We hope that, as a first step, all parties will facilitate an election, in complete freedom and without external pressure, of a president capable of starting this vital national work. We look forward to seeing an independent, united and sovereign Lebanon, able to pursue its destiny without the presence of foreign forces on its soil.
We regret very much the involvement of other forces in the conflict in the Lebanon. All those involved, including the Syrians, should move rapidly towards an immediate ceasefire. One objective of political progress and reconciliation should be the withdrawal of Syrian troops from Lebanon. The Israelis should also withdraw fully from Lebanon and allow UNIFIL to deploy to the international border in accordance with Security Council resolution 425.
The presence of UNIFIL demonstrates that the international community still regards Lebanon as a sovereign state. We remain fully committed to UNIFIL and contribute more than £4 million to maintain the force.
298
A withdrawal by UNIFIL would increase the risk of outright confrontation in the area between Israeli, Syrian, Lebanese and Palestinian forces. We do not think anything is to be gained at present by seeking to amend or strengthen UNIFIL's mandate. The important thing is for UNIFIL to be allowed to fulfil its existing mandate, which will be possible only when Israeli troops complete their withdrawal from Lebanon in compliance with Security Council resolution 425.
My hon. Friend has asked what more the British Government can do in a practical way to relieve the terrible suffering of the Lebanese people. We give, as my hon. Friend knows, essential aid through multilateral channels. We continue to support United Nations arid European Community organisations in their efforts. We give nearly £1 million a year through United Nations organisations and the International Committee of the Red Cross. We have also, this year, given more than £750,000 in emergency aid through the European Community budget.
Circumstances on the ground make provision of direct aid difficult. This is why we call on all parties first to agree to a negotiated ceasefire. Then, once this happens, we will know exactly what work needs to be done, how it can be done, and then work out a practical way with our partners to relieve suffering that undoubtedly exists.
I know that the House has welcomed this opportunity to debate the tragic situation in Lebanon. I have taken careful note of the points which have been raised, and I should like to assure my hon. Friends that the Government will take careful account of their views in assessing the contribution we can make towards the resolution of this particularly bitter and fruitless conflict.
Question put and agreed to.
Adjourned accordingly at twenty-three minutes past Twelve o'clock.

TRANSPORT

  European Market (Freight Links)
  Mr. Gerald Bowden
  To ask the Secretary of State for Transport what steps he has taken to ensure that Britain will be able to compete fully in the European market when the freight links between the Channel tunnel and the manufacturing and exporting base in the north pass through already overcrowded rail routes in London.

  Mr. Portillo
  British Rail's routes in the London area have considerable spare capacity outside the commuter peaks. The board considers it will have ample capacity to handle Channel tunnel freight traffic in the short and medium term and in the longer term if its proposed new passenger rail link is built.

  Orange Badge Scheme
  Mr. Andrew Bowden
  To ask the Secretary of State for Transport what consideration he has given to the implications for elderly people with(a) arthritis, (b) Parkinson's disease and (c) heart complaints of his Department's proposals to reform the orange badge scheme.

  Mr. Peter Bottomley
  We propose to tighten the eligibility criteria so that, in accordance with the original aims of the scheme, orange badges are issued to people with severe mobility problems, irrespective of the medical cause.

  We shall be consulting interested parties, including organisations representing disabled and elderly people, on detailed proposals for bringing the criteria into line with this objective.

  River Thames (Traffic)
  Mr. Barry Field
  To ask the Secretary of State for Transport what steps he is taking to increase the use of the River Thames to reduce vehicular traffic in and around London.

  Mr. Portillo
  The Government recognise that transport of passengers and freight by river can contribute to the relief of road congestion in London. This was reflected in an agreement concluded on 22 March under which the Government are making a grant of up to £500,000 to promote and improve the regular passenger services provided by the Riverbus partnership. The Port of London authority is particularly promoting the river carriage of bulk materials including materials for major construction projects in docklands, and refuse.

  A1 Northumberland
  Mr. Beith
  To ask the Secretary of State for Transport when he expects improvements to be carried out to the A1 between Bellshill and Mousen, Northumberland.
  114
  Mr. Peter Bottomley
  At present it seems unlikely that work on any improvement of this section of the A1 will start before 1992–93. The flow is low and the cost is high.

  Ticket Barriers (London Underground)
  Mr. Cohen
  To ask the Secretary of State for Transport, further to his answer of 28 February,Official Report, column 115, what was the basis of his calculation that the total cost of installing automatic ticket barriers at London Underground stations will be £22·2 million; whether it included electronics, computers and other associated costs of their installation; and if he will make a statement.

  Mr. Portillo
  The estimated final cost at current prices was provided by LRT. I understand it covered the cost of gate equipment, cabling, data circuits and installation. The cost of computers was not included as they serve all the new ticketing system, not just the gates.

  Shipping
  Mr. Cousins
  To ask the Secretary of State for Transport what has been the credit, debit and balance of payments on shipping services in each year since 1974–75.

  Mr. Portillo
  I refer the hon. Member to table 3.3 in "United Kingdom Balance of Payments, 1988 Edition—CSO Pink Book" published by Her Majesty's Stationery Office for the Government statistical service, a copy of which is in the Library.

  Figures for the years 1974 to 1976, which are not included in the 1988 edition, are as follows:

  £ million

  Credits

  Debits

  Balance

  1974

  2,665

  2,776

  -111

  1975

  2,651

  2,562

  89

  1976

  3,233

  3,155

  78

  Channel Tunnel Rail Link
  Dr. Cunningham
  To ask the Secretary of State for Transport what representations he has received from Sellindge parish council, Kent, to move the proposed high speed Channel rail route south of their village.

  Mr. Portillo
  The Department can trace no record of having received any representations from Sellindge parish council since British Rail announced its preferred route for the proposed rail link to the Channel tunnel.

  Trunk Roads (Emergency Telephones)
  Mr. Mans
  To ask the Secretary of State for Transport what plans he has for further provision of emergency telephones on all-purpose trunk roads.

  Mr. Peter Bottomley
  Over 5,000 calls have been made from emergency telephones on the A180 trunk road between Brigg and Grimsby since they were installed in March 1988. The heavy use demonstrates their value.

  The Department is now to embark on an initial programme of further provision of over 140 emergency telephones at priority sites on selected lengths of the A1, A2, A45, A46, A303 and A604 trunk roads.

  This programme will help all motorists, particularly vulnerable drivers, including those travelling alone or at

  115
  night. The Department also works closely with disability and motoring organisations to promote better emergency and breakdown provision for those unable to leave their cars to use the telephone.

  Further schemes will be added to the programme as the opportunity arises.

  East London River Crossing
  Mr. Spearing
  To ask the Secretary of State for Transport what consideration he has given and what policy decisions he has made concerning charging tolls for road vehicles crossing the proposed east London river crossing bridge between Newham and Thamesmead.

  Mr. Channon
  I have no proposals to levy tolls on the east London river crossing scheme.

  British Rail (Costs)
  Mrs. Margaret Ewing
  To ask the Secretary of State for Transport what costs were identified by British Rail in the last financial year in respect of(a) funding local planning inquiries, (b) meeting specific planning requirements made by local authorities, (c) maintenance of listed buildings and other structures, (d) measures to lessen the impact of noise, (e) measures to lessen the impact of visual intrusion and (f) total expenditure on infrastructure (i) investment and (ii) maintenance.

  Mr. Portillo
  The Department does not collect detailed management information on items(a) to (e), from British Rail. British Rail will provide information on infrastructure expenditure in its annual report and accounts for 1988–89, due to be published in July.

AGRICULTURE, FISHERIES AND FOOD

  Co-responsibility Levies
  Mr. Colvin
  To ask the Minister of Agriculture, Fisheries and Food by how much co-responsibility levies will increase when the Green pound is devalued as a result of the 1989 price negotiation.

  Mr. MacGregor
  At the 1989 price fixing, agreement was reached on significant reductions in the levels of milk co-responsibility levy, including its removal in less-favoured areas. It was agreed that this was the first step towards total elimination of the levy, for which the United Kingdom has consistently argued. These changes, together with the 3·2 point green pound devaluation, mean that the rates of levy paid by producers in 1988–89 and that to be paid in 1989–90 compare as follows:

  1988–89 £ per tonne

  1989–90 £ per tonne

  (i) Producers in LFAs:

  First 60,000 kg

  2·861

  Nil

  Remainder

  3·814

  Nil

  (ii) Producers elsewhere:

  Producers of up to 60,000 kg

  3·814

  1·968

  Producers of more than 60,000 kg

  3·814

  2·951

  The cereals co-responsibility levy has two elements. First, there is a fixed basic levy of 3 per cent. of the
  116
  intervention price. Secondly, there is an additional levy which, at the beginning of the marketing year, is set at 3 per cent. of the intervention price and is subsequently adjusted under the stabiliser arrangements if the EC cereals harvest exceeds the maximum guaranteed quantity of 160 million tonnes by less than 3 per cent. The total levy—basic plus additonal—deducted from first sales of cereals at the beginning of the 1988 marketing year was £7·;06 per tonne. This was subsequently adjusted to £5·57, which was the rate applicable at the time of this year's price fixing. Following the 3·9 point green pound devaluation agreed at this year's price fixing, and taking account of the operation of the cereals stabiliser mechanism on the intervention price, the rate of levy to be deducted from the start of the 1989–90 marketing year, 1 July 1989, will be £7·32 per tonne. Any adjustment which may need to be made will depend upon the size of the 1989 EC cereals harvest.

  British Summer Time
  Mr. Cousins
  To ask the Minister of Agriculture, Fisheries and Food whether he has received any representations from the National Farmers Union concerning British summer time.

  Mr. Donald Thompson
  The National Farmers Union responded to my Department's request for comments on a consultation document on the arrangements for summer time to apply from 1990 which was issued on 29 April 1988. Details of the outcome of the consultations will be issued shortly.

TRADE AND INDUSTRY

  EC (Manufacturing Trade)
  Mr. Teddy Taylor
  To ask the Chancellor of the Duchy of Lancaster if he will publish a table in the Official Report setting out the surplus or deficit in the manufacturing trade between the United Kingdom and the EEC in each of the past 20 years; and if he will publish a separate table showing the balances with the rest of the world, all on an OTC basis.

  Mr. Alan Clark
  The information is in the following table. Figures prior to 1970 on an OTS basis are not readily available.

  United Kingdom Trade Balance in Manufactures (SITC 5–8)

  £ million

  Year

  EC

  Rest of the world

  1970

  567

  1,687

  1971

  416

  2,383

  1972

  118

  2,016

  1973

  -329

  1,704

  1974

  -596

  2,216

  1975

  -542

  4,009

  1976

  -509

  4,637

  1977

  -685

  5,802

  1978

  -1,988

  5,639

  1979

  -3,154

  4,327

  1980

  -1,751

  5,385

  1981

  -3,183

  5,820

  1982

  -5,029

  5,226

  1983

  -8,076

  3,222

  1984

  -8,847

  2,533

  1985

  -9,522

  3,710

  1986

  -10,848

  2,602

  1987

  -11,085

  1,139

  1988

  -13,417

  -3,912

  117
  Source: United Kingdom Overseas Trade Statistics.

  Airbus Industrie
  Mr. Colvin
  To ask the Chancellor of the Duchy of Lancaster if the four member states of Airbus Industrie have yet completed their studies on a new organisational structure; and if he will make a statement.

  Mr. Atkins
  A new management structure for Airbus Industrie, broadly based on the recommendations contained in the 1988 report of the Airbus "Wise Men", was introduced with effect from 1 April 1989. The new structure is intended to strengthen the strategic control of Airbus projects by the four partners in the consortium while, at the same time, placing the senior managers of Airbus Industrie at the centre of all day-to-day operations of particular Airbus programmes. The supervisory board has been streamlined and now consists of five members, the four chairmen of the partner companies and Dr. Friderichs, the chairman of Airbus Industrie. A new seven-man executive board has been constituted for the

  Inward Investment into Great Britain 1979–88

  1979

  1980

  1981

  1982

  1983

  1984

  1985

  1986

  1987

  1988

  Total

  Scotland

  28

  31

  28

  28

  49

  74

  57

  36

  31

  58

  420

  Wales

  18

  16

  20

  17

  31

  42

  45

  49

  58

  55

  351

  Northern Ireland

  18

  20

  15

  6

  11

  27

  22

  18

  17

  22

  176

  North East

  21

  19

  14

  15

  20

  29

  26

  30

  31

  22

  227

  North West

  9

  15

  12

  14

  22

  40

  28

  34

  27

  24

  225

  Yorkshire and Humberside

  27

  17

  6

  7

  10

  7

  16

  11

  23

  14

  138

  West Midlands

  11

  3

  7

  1

  13

  14

  63

  74

  59

  66

  311

  East Midlands

  15

  5

  8

  13

  12

  11

  19

  15

  11

  16

  125

  South East

  23

  23

  15

  25

  59

  70

  84

  60

  55

  45

  459

  South West

  13

  6

  8

  7

  9

  14

  15

  12

  11

  5

  100

  United Kingdom1

  —

  —

  —

  —

  —

  —

  —

  —

  1

  3

  4

  Total

  183

  155

  133

  133

  236

  328

  375

  339

  324

  330

  —

  1 Investment into more than one region.

  Weights and Measures Legislation
  Mr. Allen McKay
  To ask the Chancellor of the Duchy of Lancaster whether, in view of recent survey evidence of overcharging of customers using stamped brim glasses, he will bring into force section 43 of the Weights and Measures Act 1985.

  Mr. Forth
  Last year the Department introduced revised regulations for the construction of beer measures; and coincidently the Brewers Society published guidelines on the proper use of these measures by bar staff when dispensing beer.

  These initiatives, which seek to accommodate local preferences for the way in which beer is served, are designed to encourage licensees to use the glass most appropriate for the type of beer they are serving.

  I therefore have no plans at present to implement section 43 of the Weights and Measures Act 1985.

  Mr. Allen McKay
  To ask the Chancellor of the Duchy of Lancaster if, in the light of recent evidence of disregard by many establishments of the agreed code of practice on selling wine by the glass, he will now introduce legislation to enforce the code.

  Mr. Forth
  Surveys carried out by individual local authorities generally continue to indicate an increasing level of compliance with the voluntary code of practice for sales of still table wines by the glass, particularly in the quantities in which wine is sold.
  118
  day-to-day management of Airbus operations. It includes among its members the newly-appointed finance director of AI, Mr. Robert Smith, formerly of British Aerospace's Royal Ordnance operation.

  Overseas Companies
  Mr. Andrew Welsh
  To ask the Chancellor of the Duchy of Lancaster how many overseas companies have set up operations in the United Kingdom since 1979, giving a breakdown by standard region.

  Mr. Atkins
  The following are the Invest in Britain Bureau figures for inward investments announced in each year since 1979 for the United Kingdom broken down by DTI regions. (These figures are not readily available on a United Kingdom standard region basis). The figures are based on information provided by the companies themselves at the time of the investment and include the establishment of a new business, expansion or acquisition of an existing business and involvement in joint venture.

  I have no present plans to introduce legislation.

  Bradbury-Wilkinson Premises, Saltash
  Mr. Robert Hicks
  To ask the Chancellor of the Duchy of Lancaster how many inquiries have been received by his Department from companies interested in taking over the former Bradbury-Wilkinson premises at Saltash; and if he will make a statement about the present position and his Department's intentions.

  Mr. Atkins
  My Department has received no inquiries regarding this site, the future of which is a matter for its private sector owners.

  Financial Services Act
  Mr. Brazier
  To ask the Chancellor of the Duchy of Lancaster if he will make a statement on the application of section 47(2) of the Financial Services Act to transactions during the course of takeovers and other dealings and practices on the financial markets.

  Mr. Maude
  Section 47(2) of the Financial Services Act is directed against deliberate manipulation of the market. Some concerns have been expressed that the provision may go wider than was intended. In the light of these concerns it may be helpful to set out my Department's views on some of the points which have been raised.

  It has been suggested, for example, that section 47(2) would prevent or inhibit certain actions which are at

  119
  present common and which are consistent with the takeover code. My Department's view is that the balance of dealings between offeror and offeree company is unaffected by the new provision, and it is difficult to see how actions taken in compliance with the code and not otherwise unlawful could constitute the offence of market manipulation.

  In relation to takeover offers, it has been suggested that the act of buying shares of an offeree company might influence the price and lead in some way to a breach of section 47(2). If shares are bought by associates of the offeror or the offeree company, or by persons already holding 1 per cent. or more of the shares, these purchases must under the code be disclosed. My Department believes that in such circumstances it would not be possible to maintain that the purchase had created a false and misleading impression as to the value of or the market in the shares, since the market would be aware not only of the price and quantity of the purchase but also of the connection (if any) between the purchaser and the relevant parties to the take-over. Although the code does not provide for instantaneous disclosure, the requirements are well-established and recognised by the market as the means by which a false market is avoided.

  Of course, not all purchasers are required under the code to disclose their purchases. Some people in this class may wish the offer to fail because they believe it is in the long-term interests of the offeree company that it should fail. They may, in genuine support of this belief, buy shares at above the offer price. Such a purchase would be based on a commercial assessment of the prospects of the company concerned, and even if others in the market had different views as to the value of the shares in question the Department does not believe that such purchases would amount to market manipulation. Thus we do not take the view that the section outlaws activity of this kind by those who hope that an offer will not succeed.

  In such cases, there is of course a risk that anything said by or on behalf of the offeree company, for example about future prospects, may be inside information, or that any arrangements, however informal, would constitute a Companies Act concert party. Similarly, any financial arrangements raise questions as to whether unlawful assistance is being given. While actions in contravention of section 47(2) may themselves also contravene these provisions my Department does not believe that section 47(2) affects the application of such provisions. The scope for supportive action may therefore be extremely limited.

  In a different context, it has been suggested that a person—say, a fund manager—who needs to buy or sell a large number of shares, and who does so in small quantities so as not to move the price against himself, might be guilty of market manipulation. This view appears to depend on it being accepted that a misleading

  £ million

  1985 Population Thousands

  ERDF

  European social fund2

  1986

  1987

  1988

  1987

  1988

  West Midlands Region

  5,183

  40

  67

  25

  9

  17

  Strathclyde Region

  2,359

  50

  51

  48

  9

  10

  Greater Manchester

  2,583

  14

  22

  24

  7

  7

  Merseyside County

  1,481

  33

  6

  8

  8

  7

  120
  impression as to the value of the shares is being created. The Department does not consider that in such a case the impression created is misleading. The fund manager has done nothing to indicate that he is not going to be a seller of further shares in the future. It would be a different matter if in some way he misrepresented a particular small purchase as his only purchase or dishonestly concealed his intentions in such a way as to induce a sale. Such actions, however, would be more likely to fall under section 47(1), which is a continuation (for these purposes) of what has been statute law for some time.

  It has been suggested that there is some overlap between sections 47(1) and 47(2), in that a statement is capable of constituting conduct of the kind prohibited by section 47(2) even though it may not itself be prohibited by section 47(1). These two subsections define distinct offences and in committing an offence under section 47(2) a person may make statements which are not in themselves an offence under section 47(1). But in such a case it is not the statement itself which is an offence but the conduct which involves making that statement. As a prosecuting authority, the Department cannot envisage a case in which the making of a statement which was not a contravention of section 47(1) would, by and of itself, be held to be an act or course of conduct contrary to section 47(2), given the defence which section 47(3) provides.

  Company Statistics
  Mr. Tim Smith
  To ask the Chancellor of the Duchy of Lancaster how many companies were registerd at the latest available date; and how many qualified as(a) small and (b) medium-sized for the purposes of section 248 of the Companies Act 1985.

  Mr. Maude
  [holding answer 15 May 1989]: There were 1,141,000 companies registered in Great Britain at 8 May 1989. Not all of these are active, but at least 90 per cent. are estimated to be eligible to deliver modified accounts according to the criteria set out in section 248 of the Companies Act 1985. Of these 2 to 3 per cent. are estimated to qualify as medium-sized companies.

  Social Fund
  Mr. Alton
  To ask the Chancellor of the Duchy of Lancaster what funds have been received from the EEC through social fund and European development fund by(a) the west midlands, (b) Strathclyde, (c) Greater Manchester and (d) Merseyside county.

  Mr. Atkins
  [holding answer 15 May 1989]: European regional development fund and European social fund commitments in recent years are shown in the table. Allocations to individual regions fluctuate considerably from year to year, according to decisions by the European Commission.
  121

  Notes:

  1 Parts of west midlands region and of Greater Manchester have not been eligible for the ERDF.

  2 Figures for the European social fund exclude funding provided by the ESF for central Government programmes, for which a regional breakdown is not available.

  Advertising
  Mr. Grocott
  To ask the Chancellor of the Duchy of Lancaster how much advertising air time the Department of Trade and Industry purchased with each commercial television company in each of the last five years.

  Mr. Forth
  [holding answer 15 May 1989]: I am advised by the Central Office of Information, through which the Department buys such advertising, that the information is commercially confidential.

PRIME MINISTER

  Maidstone
  Miss Widdecombe
  To ask the Prime Minister if she has any plans to visit Maidstone.

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

  Disciplinary Powers
  Mr. Dalyell
  To ask the Prime Minister, pursuant to her answer to the hon. Member for Walsall, North (Mr. Winnick) of 24 April,Official Report, column 392, what steps are taken to monitor centrally the exercise of disciplinary powers by individual Government Departments; and where ministerial responsibility lies for ensuring consistency in the application of such powers.

  The Prime Minister
  The principles which govern the conduct of the Home Civil Service are my responsibility as Minister for the Civil Service, which includes laying down the general procedures to be followed to ensure fairness and consistency of practice. The Cabinet Office (Office of the Minister for the Civil Service) is available to provide advice and guidance on their application to particular cases. Disciplinary action against an individual is the responsibility of the Department concerned and is not monitored centrally.

  Wild Birds
  Dr. Godman
  To ask the Prime Minister what proposals Her Majesty's Government have to protect the feeding grounds of breeding seabirds in the United Kingdom's waters under EEC directive 79/409 on the conservation of wild birds; and if she will make a statement.

  The Prime Minister
  The Government's scientific adviser, the Nature Conservancy Council, is in the process of identifying the most important seabird feeding and gathering grounds in United Kingdom waters. It will advise the Department of the Environment when the results have been obtained. The Department will then consider the most appropriate measures to safeguard these areas.

  Crown Prosecution Service
  Mr. John Morris
  To ask the Prime Minister if she will co-ordinate the activities of the Chancellor of the 122
  Exchequer, the Secretary of State for the Home Department and the Attorney-General to ensure that the pay scales of both the Crown Prosecution Service and the magistrates' clerks are such that there is no shortage of staffs in either.

  The Prime Minister
  As my right hon. and learned Friend the Attorney-General explained to the House on 8 May, there is an overall shortage of lawyers nationwide. This is of course taken into account in determining the pay of qualified lawyers employed by the Crown Prosecution Service and the magistrates courts.

  EC Legislation
  Mr. Teddy Taylor
  To ask the Prime Minister if she will raise at the next meeting of the European Council the volume of legislation stemming from the European Economic Community and the democratic procedures for considering it; and if she will make a statement.

  The Prime Minister
  No. I recognise the concern at the number of proposals for EC legislation now corning forward and the need for effective scrutiny of them. My right hon. Friend the Lord President keeps our arrangements under close review and currently is holding discussions with the Procedure and European Legislation Committees to establish what improvements may be made.

  Voluntary Bodies (Government Grants)
  Sir Geoffrey Finsberg
  To ask the Prime Minister if she will list the total amounts paid in grants by Government Departments to voluntary bodies during the financial year 1987–88; and if she will make a statement.

  The Prime Minister
  The figures are shown in the table. The total amount provided in 1987 represents a cash increase of 4·6 per cent. on the level of provision in 1986–87. In the period between 1979–80 and 1987–88 the level of Government support to voluntary bodies has risen by 237 per cent. (or in real terms 91·6 per cent.).

  Grants by Government Departments in 1987–88

  £

  Agriculture, Fisheries and Food

  187,765

  Defence

  5,297,319

  Education and Science1

  7,207,000

  Employment

  40,289,647

  Energy

  1,067,187

  Environment:

  direct grants

  6,160,502

  urban programme

  66,644,000

  Foreign and Commonwealth Office

  1,202,750

  Overseas Development Administration

  42,475,571

  Health and Social Security

  36,571,661

  Home Office

  21,945,889

  Lord Chancellor's Department

  712,000

  Northern Ireland Department

  14,263,793

  Scottish Office:

  direct grants

  9,790,137

  urban programme

  20,400,000

  Trade and Industry

  9,069,000

  Transport

  671,000

  Welsh Office:

  direct grants

  5,530,466

  urban programme

  3,430,000

  Total

  292,915,687

  123

  1 The 1979–80 figure for DES included £3,736,000 paid to certain adult education bodies. These have been excluded in later years as not being strictly speaking, grants to voluntary organisations. In addition the sum listed for DES grants is lower than in previous years because (i) responsibility for grants to village halls and community centres has now been transferred to local government; and (ii) a number of other bodies included hitherto are no longer classified as voluntary bodies.

  Employment In addition, payments were made directly to voluntary bodies under various employment programmes

  £

  Training Agency (formerly Manpower Services Commission):

  Community Programme

  564,400,000

  Voluntary Projects Programme

  8,700,000

  Youth Training Scheme

  118,305,000

  Total

  691,405,000

  The MSC and the Department of Employment made payments to voluntary bodies under other programmes but these cannot be given in detail except at disproportionate cost.

  Northern Ireland, Department of Economic Development

  £

  Action for Community Employment

  27,674,880

  Community Workshops

  16,180,266

  Community Volunteering Scheme

  645,000

  Youth Community Project

  757,000

  Youth Help

  750,295

  Total

  46,007,441

  Departments also made grants and payments to housing associations and societies, these are as follows

  £

  Department of Environment

  923,040,000

  Northern Ireland Office (Department of the Environment)

  43,000,000

  Scottish Office

  115,319,000

  Welsh Office

  56,600,000

  Total

  1,137,959,000

  Grants made to voluntary bodies in 1987–88 by non-departmental public bodies include the following

  £

  Equal Opportunities Commission

  69,044

  Commission for Racial Equality

  1,884,358

  Countryside Commission

  2,900,000

  Countryside Commission for Scotland

  502,310

  Health Education Council

  729,000

  Highlands and Islands Development Board

  797,920

  Nature Conservancy Council

  2,140,501

  Sports Council

  16,203,000

  Sports Council for Northern Ireland

  431,232

  Sports Council for Scotland

  2,319,285

  Sports Council for Wales

  1,486,347

  Total

  29,462,997

  Grand Total

  2,197,750,125

  Engagements
  Mr. Harry Greenway
  To ask the Prime Minister if she will list her official engagements for Tuesday 16 May.

  Mr. Barry Field
  To ask the Prime Minister if she will list her official engagements for Tuesday 16 May.
  124
  Mr. Pike
  To ask the Prime Minister if she will list her official engagements for Tuesday 16 May.

  The Prime Minister
  This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House I shall be having further meetings later today. This evening I hope to have an audience of Her Majesty The Queen.

EDUCATION AND SCIENCE

  Staff Statistics
  Mr. Butler
  To ask the Secretary of State for Education and Science if he will publish in the Official Report a table showing for each local education authority (a) the number of teachers in post, (b) the number of administrative and support staff and (c) the proportion that (b) is of (a) and (b).

  Mr. Butcher
  The total full-time equivalent teaching staff in maintained schools and colleges in each local education authority area in January 1988 is shown in the table.

  The Department does not hold centrally information on administrative and support staff employed by local education authorities. However, figures from the Joint Manpower Watch indicate that for England as a whole non-teaching staff amount to 76 per cent. of teaching staff.

  The Chartered Institute of Public Finance and Accountancy publication "Education Statistics 1988–89 Estimates", a copy of which is in the Library, shows breakdowns of teaching and non-teaching staff for each authority responding to its survey.

  Full-time equivalent teaching staff in maintained schools and colleges. January 1988

  LEA

  Number

  Barking

  2,264·1

  Barnet

  3,046·9

  Bexley

  2,103·1

  Brent

  3,394·0

  Bromley

  2,418·7

  Croydon

  3,207·1

  Ealing

  3,187·8

  Enneld

  3,330·9

  Haringey

  2,423·1

  Harrow

  2,094·5

  Havering

  2,508·7

  Hillingdon

  2,083·3

  Hounslow

  2,556·3

  Kingston

  1,923·4

  Merton

  1,601·2

  Newham

  2,784·9

  Redbridge

  1,979·8

  Richmond

  1,393·0

  Sutton

  1,534·6

  Waltham Forest

  2,772·7

  ILEA

  32,000·8

  Birmingham

  12,282·9

  Coventry

  4,344·2

  Dudley

  3,420·5

  Sandwell

  3,630·7

  Solihull

  2,285·1

  Walsall

  3,611·4

  Wolverhampton

  3,879·9

  Knowsley

  1,972·6

  Liverpool

  6,784·7

  St. Helens

  2,285·2

  Sefton

  2,901·2

  Wirral

  3,681·2

  Bolton

  3,293·3

  Bury

  1,920·0

  125

  LEA

  Number

  Manchester

  7,183·9

  Oldham

  2,676·5

  Rochdale

  2,580·3

  Salford

  2,861·7

  Stockport

  3,129·9

  Tameside

  2,187·2

  Trafford

  2,143·4

  Wigan

  4,063·5

  Barnsley

  2,356·4

  Doncaster

  3,375·7

  Rotherham

  3,039·2

  Sheffield

  6,704·0

  Bradford

  6,343·4

  Calderdale

  2,186·4

  Kirklees

  5,196·2

  Leeds

  8,819·4

  Wakefield

  3,627·4

  Gateshead

  2,132·5

  Newcastle upon Tyne

  3,956·3

  North Tyneside

  2,398·5

  South Tyneside

  1,917·5

  Sunderland

  3,752·0

  Avon

  9,808·2

  Bedfordshire

  6,020·3

  Berkshire

  7,690·7

  Buckinghamshire

  6,213·1

  Cambridgeshire

  6,556·5

  Cheshire

  10,352·5

  Cleveland

  7,340·3

  Cornwall

  4,428·4

  Cumbria

  5·393·1

  Derbyshire

  10,4671

  Devon

  9·530·3

  Dorset

  5,804·5

  Durham

  6,253·3

  East Sussex

  6,073·3

  Essex

  14,590·1

  Gloucestershire

  5,140·8

  Hampshire

  15,789·0

  Hereford and Worcester

  6,689·0

  Hertfordshire

  11,284·5

  Humberside

  9,915·0

  Isle of Wight

  1,197·7

  Kent

  14,390·5

  Lancashire

  15,780·2

  Leicestershire

  10,088·1

  Lincolnshire

  5,597·6

  Norfolk

  6,882·8

  North Yorkshire

  6,801·6

  Northamptonshire

  6,475·5

  Northumberland

  3,088·5

  Nottinghamshire

  11,565·2

  Oxfordshire

  5,628·9

  Shropshire

  4,245·3

  Somerset

  4,379·9

  Staffordshire

  11,292·7

  Suffolk

  5,960·1

  Surrey

  8,702·4

  Warwickshire

  5,283·9

  West Sussex

  5,858·7

  Wiltshire

  5,488·2

  England

  523,580·9

  Irradiated Rodent Carcases
  Mr. Flynn
  To ask the Secretary of State for Education and Science if he will set out all the methods that have been adopted by the Medical Research Council for the disposal of irradiated rodent carcases following experiments.

  Mr. Jackson
  The disposal of irradiated rodent carcases used in radiation experimental work is subject to authorisation under the Radioactive Substances Act 1960. The disposal routes for such carcases used by the Medical Research Council are:126

  1. Maceration followed by disposal to the sewer; or

  2. Incineration and landfill.

  Academics (Earnings)
  Mr. Dalyell
  To ask the Secretary of State for Education and Science (1) if he will undertake a sample survey of universities to ascertain information about the levels of non-pay earnings among academics;

  (2) if he will commission research into the levels of outside earnings of academics.

  Mr. Jackson
  My right hon. Friend has no intention at present to undertake a survey himself, or commission research about, the non-pay earnings of academic staff.

  Mr. Dalyell
  To ask the Secretary of State for Education and Science, pursuant to his reply of 2 May,Official Report, Column 2, if he will list those recent departmental decisions which are based on anecdotal evidence.

  Mr. Jackson
  Decisions reached by the Department are based on full consideration of those facts which are available and relevant.

  Mr. Dalyell
  To ask the Secretary of State for Education and Science what information he has on the practice of universities in the treatment of academic staff's outside earnings.

  Mr. Jackson
  This is not a matter on which the Department collects information.

  Mr. Dalyell
  To ask the Secretary of State for Education and Science what information he has as to the average working week of university academic staff on research and teaching duties.

  Mr. Jackson
  This information is not collected.

  Mr. Dalyell
  To ask the Secretary of State for Education and Science what proposals he has to encourage universities to make contractual provision for time to make outside earnings for university academic staff.

  Mr. Jackson
  That is a matter for university managements.

  Open University
  Mr. Flynn
  To ask the Secretary of State for Education and Science if he will make a statement on the contribution made to environmental education and research by the Open university.

  Mr. Jackson
  Courses about or related to the environment are available in the university's undergraduate and continuing education programmes. The university also supports research undertaken by the energy and environment research group.

  Cancer Research
  Mr. Fearn
  To ask the Secretary of State for Education and Science what financial support Her Majesty's Government have given to research trials of cytokines, particularly interferon, in treatment of common cancers.

  Mr. Jackson
  The Medical Research Council, which receives its grant-in-aid from this Department, is the main
  127
  agency through which the Government support medical research. The council has mounted three trials involving the use of cytokines in the treatment of cancer, all of which are currently recruiting patients. Details of the trials are as follows:

  A phase II evaluation of human lymphoblastoid interferon (Wellferon) in malignant glioma.
  This trial was launched in October 1988; the approximate annual support provided by the council is £7,000.

  A trial of alpha-interferon in chronic myeloid leukaemia
  This trial was launched in September 1986 and is one arm of a larger trial of chronic myeloid leukaemia, for which the approximate annual support provided by the council is £23,000.

  A trial of the use of alpha-2b INF in the plateau phase of myelomatosis.
  This trial was launched in December 1988 and is one arm of a larger trial of myelomatosis, for which the trial co-ordinator receives grant support of approximately £32,000 per annum. In addition, the council provides approximately £13,000 per annum for this trial.

  Teachers (Pay)
  Mr. Simon Hughes
  To ask the Secretary of State for Education and Science if he will estimate the 1989–90 cost of the recommended changes to school teachers pay, above the original £385 million limit proposed; what amount and proportion of this excess above the original limit will be offset by the net 0·4 per cent. reduction in employers contributions for superannuation identified in his reply to the hon. Member for Southwark and Bermondsey, of 4 May,Official Report, column 177, as being free from other assumed offset purposes; what amount and proportion will not be so offset; and if he will make a statement.

  Mr. Butcher
  The salary bill for school teachers in England will rise by some £440 million in the financial year 1989–90. This is £80 million above the England element of the original limit proposed. The effect of the extra 0·4 per cent. reduction in the cost of employers' contributions to teachers superannuation will be to reduce the school teachers salary bill by about £25 million. The remaining £55 million to be borne by local education authorities represents less than 0·4 per cent. of local authority education provision.

  LINK
  Mr. Andrew Mitchell
  To ask the Secretary of State for Education and Science if he will make a statement about progress on LINK.

  Mr. Jackson
  The Government attach great importance to LINK, which aims to increase the benefits to the United Kingdom economy from Government-funded research by encouraging collaboration between industry and the science base.

  I am pleased to announce today a major new LINK programme in structural composites. Collaborative research in this area is vital to ensure that United Kingdom industry is well placed to adopt these new materials in a cost effective way.

  This programme will develop both new and existing expertise, and will widen the use of such materials within United Kingdom industry. The use of advanced composites as structural components is likely to have a major impact in the future.
  128
  A key aim of the programme is to co-ordinate, and stimulate existing and new United Kingdom R & D in composite materials with particular emphasis on structural applications. It will support research which will meet industry's future demands for composites with improved properties, more efficient processability and lower cost.

  More than 40 companies and over 20 science base organisations have already indicated that they wish to be involved in individual collaborative research projects. Special efforts will be made to encourage the involvement of small and medium sized firms.

  The structural composites programme will raise the level of United Kingdom activity at a time when national programmes are being undertaken within Europe, Japan and the USA and will complement R & D work being undertaken through the European Community's BRITE/EURAM initiative.

  This programme, the 14th to be announced under LINK, will be jointly funded by the Department of Trade and Industry (£14 million) and the Science and Engineering Research Council (£6 million); matching support from industry will be needed for this £40 million, five-year programme.

  Training Grants
  Mr. Arbuthnot
  To ask the Secretary of State for Education and Science if he will announce his proposals for the local education authorities training grants scheme in 1990–91.

  Mrs. Rumbold
  Subject to consultation with local education authorities the main thrust of the scheme will continue to be the successful implementation of the Education Reform Act, in particular the national curriculum and associated assessment arrangements. My right hon. Friend also intends to include support for the introduction of teacher appraisal, eligible training for licensed teachers and pilot schemes for articled teachers, training in managing pupils' behaviour in response to the committee of inquiry into discipline in schools and training to develop teaching and assessment of competence-based qualifications in further education.

  £120·5 million is planned to be allocated for training on national priority areas—an increase of £36·3 million on 1989–90—which will qualify for 65 per cent. grant and £94·7 million on local priorities which will qualify for 50 per cent. grant.

  Copies of the consultation letter have been placed in the Libraries of both Houses.

WALES

  Hospital Closures
  Mr. Robin Cook
  To ask the Secretary of State for Wales if he will list, for each year since 1979(a) each hospital closed completely and (b) each hospital closed partially; and if he will break that list down by each health authority, and regional health authority.

  Mr. Grist
  A list of hospitals which closed, and remain closed, between 1 January 1979 and 31 December 1988 is given in the following table. These closures are the result of reorganisations and improvements of health care services in Wales since 1979, notably the provision of seven
  129
  new hospitals, including five district general hospitals, at a cost of some 162·4 million at 1989–90 prices. Information on changes in bed complements for individual hospitals is published annually in "Bed Use Statistics", copies of which are in the Library of the House.

  District health authority hospital

  Year of closure

  Clwyd

  Prince Edward's War Memorial

  1980

  Llangwyfan

  1981

  Chatsworth House

  1985

  Colwyn Bay Maternity

  1985

  Wrexham War Memorial

  1986

  Chirk

  1987

  East Dyfed

  Cilymaenllwyd

  1984

  Allt-y-Mynydd

  1986

  Gwent

  Snatchwood

  1980

  Cefn Mably

  1983

  Gwynedd

  Gors Maternity

  1980

  Caernarvonshire and Anglesey General

  1984

  Galltysil

  1985

  Mid Glamorgan

  Glyncornel

  1979

  Blackmill

  1985

  Bridgend and District

  1985

  Cefn Hirgoed

  1985

  Powys

  Adelina Patti

  1986

  West Glamorgan

  Llwynderw

  1979

  Drymma Hall

  1986

  Cwmdonkin

  1987

  Neath Annexe

  1988

  Road Accidents
  Mr. Denzil Davies
  To ask the Secretary of State for Wales (1) how many deaths occurred on Welsh roads in each of the last three years;

  (2) how many people were injured on the roads of Wales in each of the last three years.

  Mr. Wyn Roberts
  The information requested is shown in the following table.

  Casualties

  1986

  1987

  11988

  Fatal2

  235

  220

  226

  Serious3

  3,243

  3,173

  2,900

  Slight4

  10,967

  10,890

  12,024

  1 Provisional.

  2 When death occurs in less than 30 days as a result of the accident.

  3 When a person sustains an injury for which he/she is detained in hospital as an "in-patient" or any of the following injuries whether or not he/she is detained in hospital; fractures, concussion, internal injuries, crushings, severe cuts and lacerations, severe general shock requiring medical treatment, injuries causing death 30 or more days after the accident.

  4 When a person sustains an injury of a minor character such as a sprain, bruise or cut not judged to be severe, or slight shock requiring roadside attention.

  Mr. Denzil Davies
  To ask the Secretary of State for Wales how many people were taken to hospital with serious injuries after road accidents in Wales in each of the last three years.
  130
  Mr. Grist
  Information is not available in the precise form requested. However, the number of patients and day cases who died in hospitals in Wales or were discharged from them after road traffic accidents in the last three years for which data are available is as follows:

  Number

  1985

  3,332

  1986

  3,263

  1987

  2,978

  This may understate the true position as not all hospitals provide full clinical details relating to discharges and deaths. The numbers with "serious" injuries cannot be separately identified.

  Council House Sales
  Mr. Murphy
  To ask the Secretary of State for Wales if he intends to introduce a scheme to convert council house rents into mortgages, along the lines of that announced by the Scottish Office.

  Mr. Peter Walker
  I am examining a scheme similar to that recently announced in Scotland.

  Nursery Education
  Mr. Win Griffiths
  To ask the Secretary of State for Wales if he has any plans to examine the provision of education for the under-fives along the same lines as those recently announced by the Department of Education and Science in England; and if he will make a statement.

  Mr. Wyn Roberts
  The Minister of State, Department of Education and Science has established and will be chairing a committee of inquiry to consider the quality and content of the educational experience offered to under-five-year-olds, as one of the responses to the Education, Science and Arts Committee's report on educational provision for the under-fives in England. I shall be keeping in close touch with the work of this group, on which the Welsh Office has observer status.

  I shall be keeping under review the need for any action in Wales in the light of the deliberations and findings of the new committee.

SCOTLAND

  Pay
  Dr. Reid
  To ask the Secretary of State for Scotland if he will make a statement on Her Majesty's Government's action to improve pay levels in Scotland.

  Mr. Lang
  The Government have sought to create the conditions in which sustained growth in output and real incomes can take place. Pay levels, in Scotland as elsewhere, are essentially for employers and employees to determine, but the Government have removed a number of statutory obstacles to sensible pay determination and have encouraged employers to link pay to the performance of their firm. In their dealings with its own employees the Government have introduced more flexibility by means of performance-related pay, and new, flexible, long-term pay agreements.

  Roads
  Mrs. Margaret Ewing
  To ask the Secretary of State for Scotland if he will list in the Official Report the total budget for 1988–89 which was allocated to the Scottish Development Department for road building and maintenance: and if he will show the projects completed and projects commenced during that financial year.

  Lord James Douglas-Hamilton
  Gross provision for trunk road building and maintenance in Scotland in 1988–89 was £130 million. Schemes costing over £1 million completed and commenced during that financial year are shown in the following table:

  1988–89

  Schemes Costing Over £1 million

  Completed

  A75

  Castle Douglas Bypass

  A75

  Ringford Bypass

  M8

  Starlaw Junction

  A82

  Auchendennan-Arden

  A830

  Mallaig-Kinsadel I

  A830

  Polnish-Lochailort

  A9

  Dornoch Bridge Northern Approach Roads

  A9

  Dornoch Bridge Southern Approach Roads

  A9

  Mound Bridges

  A92

  Murcar-Balmedie

  A929

  Kinsway-Powrie

  A96

  Bucksburn-Tyrebagger I

  A96

  Forres Bypass

  Commenced

  A7

  North Middleton Bypass

  A75

  Dumfries Bypass

  A77

  Balsalloch-Balcreuchan

  A835

  Garve Railway Bridge

  A9

  Dunblane Bypass

  A9

  Dornoch Firth Bridge

  A94

  Parkford-Balnabreich1

  A94

  Upper Northwaterbridge-Oatyhill

  A96

  Inverurie Bypass1

  1 Schemes commenced in that a contract was let during the year but actual construction did not start until a few weeks later.

  Mrs. Margaret Ewing
  To ask the Secretary of State for Scotland if he will list in the Official Report the proposed roads budget allocated to the Scottish Development Department for the financial year 1989–90.

  Lord James Douglas-Hamilton
  £162 million, net of receipts, has been allocated for motorway and trunk road expenditure in Scotland in 1989–90.

  Health Education
  Mr. Allan Stewart
  To ask the Secretary of State for Scotland what plans he has to improve the effectiveness of health education in Scotland.

  Mr. Michael Forsyth
  I have announced today the setting up of a major and wide-ranging review of health education in Scotland. This is one of the four central priority areas recommended in the SHARPEN report and which were accepted by the Government. It is a key aspect of health policy.

  The review will consider the purpose of health education programmes, identify the principal objectives of such programmes and the means by which the effectiveness of those objectives can be assessed.

  It will also consider and examine the way in which health education is undertaken at both national and local levels and the role of those involved, including the Scottish
  132
  Health Education Group, health boards and voluntary bodies as well as the Scottish Home and Health Department and the Scottish Education Department.

  We hope to appoint management consultants to conduct the review. I expect them to talk to a large number of organisations and individuals in the course of the review and to complete their work towards the end of 1989.

  Community Charge
  Mr. Blunkett
  To ask the Secretary of State for Scotland if he will publish a table showing for each local authority in Scotland(a) the community charge level for 1989–90, (b) the Government's previous estimate of the level of community charge and (c) the percentage difference between (a) and (b).

  Mr. Lang
  The information requested is set out in the table. The Government's estimates were of what each authority's community charge would be if the authority maintained the level of services provided in 1988–89 and therefore did not increase the volume of its spending. The figures for regional and islands councils include water charges.

  Actual Community Charge £

  Government Estimate £

  Percentage Difference per cent.

  Borders

  205

  151

  35·8

  Central

  213

  167

  27·8

  Dumfries and Galloway

  206·5

  157

  31·4

  Fife

  238

  206

  15·8

  Grampian

  219

  150

  46·2

  Highland

  200

  165

  21·2

  Lothian

  305

  247

  23·6

  Strathclyde

  219

  221

  -0·8

  Tayside

  241

  193

  24·7

  Islands Councils

  Orkney

  148

  84

  77·1

  Shetland

  114·16

  202

  -43·5

  Western Isles

  171

  126

  36·2

  District Council

  Berwickshire

  31

  26

  19·2

  Ettrick and Lauderdale

  42

  29

  44·8

  Roxburgh

  42

  39

  8·8

  Tweeddale

  43

  23

  84·5

  Clackmannan

  87

  58

  49·6

  Falkirk

  46

  44

  3·9

  Stirling

  97

  83

  17·6

  Annandale and Eskdale

  47

  39

  19·2

  Nithsdale

  39

  35

  10·6

  Stewartry

  37

  39

  -40

  Wigtown

  40

  21

  89·0

  Dunfermline

  55

  43

  26·6

  Kirkcaldy

  60

  51

  18·0

  North East Fife

  82

  46

  79·7

  Aberdeen City

  85

  51

  65·4

  Banff and Buchan

  56·7

  35

  60·2

  Gordon

  44

  33

  31·7

  Kincardine and Deeside

  32

  18

  76·4

  Moray

  42

  26

  59·6

  Badenoch and Strathspey

  35

  21

  69·1

  Caithness

  25

  31

  -18·5

  Inverness

  26

  24

  9·8

  Lochaber

  37

  37

  0·7

  Nairn

  28

  16

  76·9

  Ross and Cromarty

  39

  25

  56·4

  133

  Actual Community Charge

  Government Estimate

  Percentage Difference

  £

  £

  per cent.

  Skye and Lochalsh

  25

  22

  12·8

  Sutherland

  6

  3

  139·0

  East Lothian

  69

  60

  15·0

  Edinburgh City

  87

  66

  31·3

  Midlothian

  59

  59

  -0·7

  West Lothian

  54

  49

  10·1

  Argyll and Bute

  58

  72

  -19·7

  Bearsden and Milngavie

  79

  58

  35·5

  Clydebank

  78

  72

  8·0

  Clydesdale

  82

  72

  13·5

  Cumbernauld and Kilsyth

  56

  72

  -22·5

  Cumnock and Doon Valley

  57

  72

  -21·1

  Cunninghame

  59

  72

  -18·3

  Dumbarton

  79

  72

  9·4

  East Kilbride

  99

  72

  37·1

  Eastwood

  63

  43

  47·6

  Glasgow City

  87

  72

  20·5

  Hamilton

  72

  72

  -0·3

  Inverclyde

  72

  62

  16·5

  Kilmarnock and Loudoun

  50

  72

  -30·8

  Kyle and Carrick

  89

  69

  28·6

  Monklands

  74

  72

  2·5

  Motherwell

  86

  67

  28·7

  Renfrew

  76

  72

  5·2

  Strathkelvin

  80

  72

  10·8

  Angus

  52

  45

  15·9

  Dundee City

  83

  81

  3·1

  Perth and Kinross

  58

  43

  34·1

  Regional Selective Assistance
  Mr. McLeish
  To ask the Secretary of State for Scotland what was(a) the number of aplications for regional selective assistance received between 1 April 1988 and 31 March 1989, (b) the number of applications that have been processed and (c) the total amount of money paid out in that period.

  Mr. Lang
  [holding answer 8 May 1989]: In the period 1 April 1988 to 31 March 1989, 255 applications for regional selective assistance were received in Scotland. Of these, 237 have been fully processed. The remaining 18 are being processed. Total payments of regional selective assistance in Scotland in the same period have amounted to £37·6 million.

  Investment Grants
  Mr. McLeish
  To ask the Secretary of State for Scotland (1) what was(a) the total number of applications for the investment grants from 1 April 1988 to 31 March 1989, (b) the total number of applications approved, (c) the total amount of expenditure involved and (d) the total estimated expenditure planned for that period and the estimated expenditure for 1989–90, 1990–91 and 1991–92;

  (2) what was (a) the total number of applications for the innovation grants from 1 April 1988 to 31 March 1989, (b) the total number of applications approved, (c) the total amount of expenditure involved and (d) the total estimated expenditure planned for that period and the estimated expenditure for 1989–90, 1990–91 and 1991–92.
  134
  Mr. Lang
  [holding answer 8 May 1989]: The information requested is as follows for the period 1 April 1988 to 31 March 1989.

  Regional enterprise grants

  Innovation grants

  Investment grants

  Number of applications received

  100

  374

  Number of applications approved

  37

  189

  Value of applications approved

  £851,000

  £1,097,000

  Total expenditure on regional enterprise grants for the period covered is £282,000 out of a provision for 1988–89 of £1·6 million. Planned provision for 1989–90 is published in the Supply Estimates. Planned net provision for regional selective assistance and related schemes (including regional enterprise grants), consistent with the figures published in "Public Expenditure to 1991–92, A Commentary on the Scotland Programme", for each of the years 1990–91 and 1991–92 is £80 million.

  Regional Development Grants
  Mr. McLeish
  To ask the Secretary of State for Scotland what was(a) the number of applications for regional development grants outstanding on 31 March 1988, (b) the number of those outstanding applications that have subsequently been processed, (c) the number of applications that are still outstanding and (d) the total amount of money paid out on regional development grants since 31 March.

  Mr. Lang
  [holding answer 8 May 1989]: The figures requested for applications in Scotland under the revised regional development grant scheme are as follows:

  Number

  Number of applications outstanding at 31 March 1988

  5,117

  Number of these fully processed by 3 May 1989:

  4,932

  Number under consideration but awaiting response from applicants:

  185

  Number of applications awaiting attention:

  nil

  Total payments made between 31 March 1988 and 31 March 1989:

  £50·8 million

  Mr. McLeish
  To ask the Secretary of State for Scotland what was the total amount of European regional development fund money allocated to each of the regions in 1988.

  Mr. Lang
  [holding answer 8 May 1989]: The information requested is as follows:

  £ million (rounded)

  Project awards1

  Central

  2

  Dumfries and Galloway

  1

  Fife

  2

  Highland

  9

  Strathclyde

  12

  Shetland

  2

  Western Isles

  11

  Programme awards2

  Strathclyde Integrated Development Operation3

  34

  Highlands and Islands4

  11

  Tayside5

  4

  135

  £ million (rounded)

  West Lothian

  7

  Total

  95

  136
  1 Grampian and Lothian each received project awards of less than £0·5 million.

  2 Programme awards show only 1988 entries. Substantial forward commitment under programmes has been secured.

  3 Covers development areas in Strathclyde, plus Sanquhar in Dumfries and Galloway and Dumgoyne ward in Central.

  4 Covers Highlands and Islands Development Board area.

  5 Tayside figure differs from that in the programme due to a rescheduling of expenditure.

FOREIGN AND COMMONWEALTH AFFAIRS

  Torture
  Mr. Vaz
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will publish a table showing the number of representations he has made in the last five years about the denial of human rights and use of torture in each of the nations in membership of the United Nations.

  Mr. Eggar
  In the last five years we have made many representations to the Governments of many countries, both bilaterally and with our European Community partners.

  The precise information requested is not readily available and could be provided only at disproportionate cost.

  Immigration
  Mr. Madden
  To ask the Secretary of State for Foreign and Commonwealth Affairs when Mr. Nasim Ahmed who was born on 2 July 1965, and whose reference is IMM/84536 and A.421238, first applied to the British post in Islamabad to enter the United Kingdom; when Mr. Ahmed successfully appealed against refusal to grant him entry, and when the British port in Islamabad was instructed to issue Mr. Ahmed with a visa to enter the United Kingdom.

  Mr. Eggar
  The information requested is not immediately available. A further reply will be sent to the hon. Member in due course.

  Mr. Madden
  To ask the Secretary of State for Foreign and Commonwealth Affairs (1) when Mrs. Musrat Begum, whose date of birth is 1 January 1958, applied to the post in Islamabad, to join her husband in the United Kingdom; and when a decision will be taken on her application;

  (2) when Mr. Mohd Arif, who was born on 1 September 1963, will he issued with a visa by the post in Islamabad following his successful appeal against refusal to grant him permission to enter the United Kingdom;

  (3) when Shamin Akhter, who was born on 12 November 1964, applied to the post in Islamabad to enter the United Kingdom; when her application was refused; when the post despatched an explanatory statement setting out the reasons her application was refused; and if he will make a statement;

  (4) when Mr. Sodigar Hussain applied to the post in Islamabad to join his wife, Mrs. Zaidah Begum whose date of birth is 27 January 1967; and when a decision on his application will be taken.

  Mr. Eggar
  [pursuant to his reply, 9 May 1989, c. 362]: In accordance with the recent guidelines on the handling of representations by Members of Parliament in immigration cases, issued to Members on 14 December 1988, I have referred the questions to the correspondence unit of migration and visa department of the Foreign and Commonwealth Office. The hon. Member will receive a reply from the unit in due course.

HOME DEPARTMENT

  Married Prisoners (Visits)
  Mr. John Greenway
  To ask the Secretary of State for the Home Department, whether he will review the current arrangements for visits between married prisoners where both spouses are in custody serving prison sentences; and if he will make a statement.

  Mr. Douglas Hogg
  The current arrangements for visits between imprisoned spouses and other close relatives are set out in "Prison Standing Order 5A 20", which is available in the Library. I see no need for a review.

  Postal Voting
  Mr. Allen
  To ask the Secretary of State for the Home Department if he will examine the procedures and forms associated with postal voting in order to make them less complex.

  Mr. Douglas Hogg
  I refer the hon. Member to the reply given to a question from my hon. Friend the Member for Battersea (Mr. Bowis) on 2 March 1989, at column 274.

  Driving Offences (Ministerial Immunity)
  Mr. Cohen
  To ask the Secretary of State for the Home Department if he will describe the system which grants Ministers immunity from prosecution for driving offences while on official business.

  Mr. Douglas Hogg
  In general, road traffic law applies to vehicles and persons in the public service of the Crown as it applies to other motorists. Ministers have no immunity from prosecution for driving offences.

  Football (Arrests)
  Mr. Pendry
  To ask the Secretary of State for the Home Department (1) how many of those arrested for football-related incidents during the 1987–88 and 1988–89 seasons were season ticket holders;

  (2) how many of those arrested for football-related incidents during the 1987–88 and 1988–89 seasons were of pensioner age;

  (3) how many of those arrested for football-related incidents during the 1987–88 and 1988–89 seasons were women.

  Mr. Douglas Hogg
  This information is not recorded centrally.

  Tamil Asylum Seekers
  Mr. Darling
  To ask the Secretary of State for the Home Department how many Tamil asylum seekers have been returned to Sri Lanka after being refused asylum in the United Kingdom since February 1988; and what efforts he has made to monitor the situation of those returned from the United Kingdom.

  Mr. Renton
  No distinction is made in statistical records between Tamils and other Sri Lankans. Removals and deportations of failed asylum seekers are not normally recorded separately. However, it is known that 47 Sri Lankans who sought asylum at ports have been removed to Sri Lanka since 1 February 1988. Additionally, in the
  139
  same period 28 Sri Lankans have been removed as illegal entrants and seven have been deported. Most of these applied for asylum and were refused after consideration of their application. Information on passengers refused entry and removed, as illegal entrants or as deportees, is published annually in "Control of Immigration: Statistics, United Kingdom". The 1988 volume will be published in the summer.

  On monitoring, I refer the hon. Member to a reply I gave to the hon. Member for Islington, North (Mr. Corbyn) on 15 March, at column 232.

  Trevi Group
  Mr. Darling
  To ask the Secretary of State for the Home Department if a co-ordinator representing the interests of the United Kingdom has been appointed for the Trevi group.

  Mr. Renton
  A senior officer of the Home Office is co-ordinating issues concerning the free movement of persons, pursuant to the decision of the Rhodes council last December, and is attending regular meetings with his Community counterparts.

  Police (Allowances)
  Mr. Soley
  To ask the Secretary of State for the Home Department whether police officers who presently receive a rent and rates allowance are to be given a poll tax allowance following the abolition of rates.

  Mr. Douglas Hogg
  No. The recent arbitration award on police rent allowance stated specifically that payments of the community charge levied on police officers should not be reimbursed by police authorities.

  Parole Board
  Mr. Paice
  To ask the Secretary of State for the Home Department what steps he is taking to improve the operation of the parole board; and if he will make a statement.

  Mr. Douglas Hogg
  The parole board is an independent advisory body responsible for its own organisation. We are, however, aware that, to cope with the increased caseload, the board has increased its sittings and the number of cases considered at each one. My right hon. Friend will also be appointing extra members to the board. In addition, we are taking steps to improve the service provided to the board by the parole unit.

  Mr. Paice
  To ask the Secretary of State for the Home Department what is the average time taken by the parole board to decide upon the recommendaton of the local panel.

  Mr. Douglas Hogg
  For parole applications referred to the parole board, the average time between receiving the local review committee recommendation and notifying the inmate of the result is about five months.

  Electronic Tagging
  Mr. Cran
  To ask the Secretary of State for the Home Department whether electronic surveillance devices are used by his Department or by any organisation or agency acting on its behalf; and if he will make a statement.
  140
  Mr. Hurd
  My hon. Friend may wish to refer to the Home Office's guidelines on the use of surveillance in police operations issued on 19 December 1984, a copy of which was placed in the Library.

  Hillsborough Disaster
  Mr. Allen McKay
  To ask the Secretary of State for the Home Department if he will make it his policy that the additional cost of the Hillsborough disaster inquiry to any individual police force be borne by central funds.

  Mr. Douglas Hogg
  I refer the hon. Member to the answer I gave to the hon. Member for Sheffield, Brightside (Mr. Blunkett) on 12 May, at column 569.

  Hull Prison
  Mr. Michael Welsh
  To ask the Secretary of State for the Home Department what action he is taking to implement that part of Judge Stephen Tumin's report which stated that B wing of Hull prison was no place for 15 and 16-year-old boys, or for any unconvicted prisoner under 21 years of age.

  Mr. Douglas Hogg
  There is no feasible alternative at present to the continued use of B Wing of Hull prison to accommodate unsentenced prisoners under 21 years of age. The plan is for a new remand centre to be built at Everthorpe in 1991–92 which will relieve the situation. Meanwhile strenuous efforts are being made to improve the regime and conditions in Hull's B wing.

  Mr. Michael Welsh
  To ask the Secretary of State for the Home Department if any young people from Doncaster area are currently held in Hull prison while waiting for their cases to be dealt with by the courts.

  Mr. Douglas Hogg
  On 12 May there were in Hull prison 14 unsentenced prisoners aged between 17 and 20 whose home addresses were recorded as in Doncaster.

  Hunt Saboteurs
  Sir John Farr
  To ask the Secretary of State for the Home department (1) if he will call for a report from the Chief Constable of Buckinghamshire as to why hunt saboteurs were permitted to disrupt the activities of the Northamptonshire mink hounds at Snelson, near Olney, Buckinghamshire, on 6 May; and what action has been taken in relation to the alleged recording of the car numbers of supporters by some hunt saboteurs present for intimidatory purposes;

  (2) if he will call for a report from the Chief Constable of Buckinghamshire on the policing arrangements at the meet of the Northamptonshire mink hounds at Snelson, near Olney, Buckinghamshire, on 6 May; and if he will make a statement.

  Mr. Douglas Hogg
  I understand from the chief constable of the Thames Valley police that, following attempts to disrupt the start of the hunt, 15 demonstrators and one huntsman were arrested in order to prevent a breach of the peace. All were subsequently released without charge. The event itself took place without serious disruption. A number of huntsmen and demonstrators recorded each other's vehicle registration numbers before dispersing without further incident. In the circumstances, further police action was not considered appropriate.

  Vagrancy
  Mr. Nellist
  To ask the Secretary of State for the Home Department, further to his answer to the hon. Member for Coventry, South-East of 11 May, what statistics his Department collects on arrests of young people for vagrancy; and if he will make a statement.

  Mr. Douglas Hogg
  Information about the total number of arrests by each police force is collected centrally but it is not broken down into specific offence categories. Information on the number of persons dealt with by the courts in respect of offences under sections 3 and 4 of the Vagrancy Act 1824 is published annually in "Criminal Statistics". The available information for 1987 appears in tables 1.1c and 1.1d of the supplementary tables volume 1.

  Voluntary Sector (Funding)
  Mr. Boswell
  To ask the Secretary of State for the Home Department what plans he has for a review of Government funding of the voluntary sector.

  Mr. Hurd
  Government funding of the voluntary sector has risen steadily over the last decade and now amounts to some £2 billion. It serves a wide variety of valuable purposes in areas ranging from health care to employment and training and to the environment. The Government acknowledge the voluntary sector's important position as a third force alongside the public and private sectors of the economy and the valuable contribution which it makes.

  The Government have concluded that it would be timely to examine their funding of the voluntary sector with a view to ensuring that the purposes for which grants are made are properly defined and have a beneficial purpose; and that funds are being effectively and efficiently deployed in a way which is of practical help and achieves the benefits intended.

  The Government have decided, therefore, to set in hand an efficiency scrutiny of Government funding of the voluntary sector. Its terms of reference will be to examine:

  (i) the full range of programmes for Government funding of the voluntary sector;

  (ii) the purposes for which financial provision is made under these programmes;

  (iii) the different types of funding employed;

  (iv) arrangements for the identification and selection of suitable voluntary organisations for particular tasks, for the setting of objectives and the monitoring and review of performance and results;

  (v) arrangements for the administration of the programmes;

  and to make recommendations for achieving cost effective improvements where necessary.

  The matters to which the scrutiny will have regard include:

  (i) the need for improvements in the procedures for agreeing payment of grants and in the conditions under which grants are awarded, to ensure that Government funds are applied properly and without waste;

  (ii) the need for standard conditions in respect of political activities, campaigning, equal opportunities and so on;

  (iii) whether there is scope for standard criteria to be followed in agreeing grant applications and setting priorities;

  (iv) ways of improving the setting of objectives both for particular projects and for continuing funding;

  (v) the scope for improving the arrangements for evaluation and monitoring of the work carried out with Government funds by (a) periodic review and (b) regular monitoring;

  142

  (vi) the levels at which financial authority is exercised under various programmes;

  (vii) methods of devising measures of performance both for continuing and short-term grants;

  (viii) the information about the purposes of a particular programme made available (prior to application) to those seeking funding;

  (ix) the benefits or otherwise of standard grant application procedures, taking account of the different circumstances where there is open application and where a single organisation is supported.

  Such a wide-ranging scrutiny is unprecedented. It has therefore been agreed that it will be carried out by a team of officials from a number of Government Departments led by Mrs. Juliet Reisz (Home Office) under the ministerial supervision of a group of Ministers chaired by my hon. Friend the Member for Oxford, West and Abingdon (Mr. Patten). I expect to receive the scrutiny report in September.

  Domestic Violence
  Mr. Ashley
  To ask the Secretary of State for the Home Department in each of the last 10 years, what funding his Department has provided for refuges for victims of domestic violence.

  Mr. John Patten
  [holding answer 12 May 1989]: None, but I understand that some public funds have been provided from other sources. We understand that some funds are available from local authorities and through the Department of Environment's urban aid programme. The Department of Health provides £100,000 per year to the Women's Aid Federation, which provides information and advice to local refuges.

DEFENCE

  Jet Aircraft (Anniversary)
  Mr. Atkinson
  To ask the Secretary of State for Defence if he has any plans to commemorate the 50th anniversary on 12 July 1994 of the introduction of jet aircraft into RAF service.

  Mr. Archie Hamilton
  I am sure that the Royal Air Force will play an appropriate part in commemorating this important event. Detailed planning will be set in hand nearer the time.

  Nuclear Tests (Radiation)
  Mr. Ashley
  To ask the Secretary of State for Defence if he has any information as to whether there were any significant differences regarding exposure to radiation as between the British and United States nuclear tests.

  Mr. Sainsbury
  An assessment on the basis of the evidence available to us shows that there were considerable differences in the situations pertaining to British and United States nuclear tests.

  Royal Navy
  Mr. Allen McKay
  To ask the Secretary of Stale for Defence how many ships of the present surface fleet are having their lives extended.

  Mr. Sainsbury
  A number of surface ships are currently undergoing routine maintenance and refit, but none is
  143
  having work done on it designed to extend its service life. Consideration is being given to the feasibility of extending the lives of the assault ships HMS Fearless and HMS Intrepid in parallel with other options for replacing the capability they represent.

NORTHERN IRELAND

  Fair Employment Agency
  Mr. Alex Carlile
  To ask the Secretary of State for Northern Ireland how many complaints of unlawful discrimination were investigated by the Fair Employment Agency; how many such complaints were found proved; and how many employers were ordered to pay compensation as a result of those findings, for each year since 1981.

  Mr. Viggers
  The information requested is given in the following table:

  Complaints investigated

  Findings of unlawful discrimination

  Number of payments1

  1981

  42

  5

  —

  1982

  41

  2

  7

  1983

  28

  5

  4

  1984

  34

  10

  3

  1985

  46

  7

  2

  1986

  60

  11

  5

  1987

  56

  4

  8

  1988

  41

  6

  6

  21989

  7

  1

  1

  TOTAL

  355

  51

  36

  1 Based on the date of payment, which does not necessarily fall in the year in which the finding is made.

  2 To 30 April.

  Harland and Wolff
  Mr. Teddy Taylor
  To ask the Secretary of State for Northern Ireland if he will make a statement setting out the progress made in securing the sale of Messrs Harland and Wolff since his statement to the House on 22 March,Official Report, columns 1089–1100; and if, in particular, he will outline the financial contributions and loans being made available to the new owners by Her Majesty's Government.

  Mr. Viggers
  [holding answer 2 May 1989]: Following the signing of the heads of agreement on 22 March, preparation for the formal completion of the sale is under way. Discussions between officials and the MEBO/Olsen team are continuing, and officials are also involved in discussions with the European Commission in seeking its approval to the terms of the sale.

  As my right hon. Friend the Secretary of State made clear to the House on 22 March, under the heads of agreement the privatised company will receive repayable loan stock and grant towards rationalisation of £98·75 million and intervention aid on new merchant orders.

  Police Discipline
  Mr. Mallon
  To ask the Secretary of State for Northern Ireland (1) in how many cases to date of complaints made under the Police (N.I.) Order 1987 the Independent 144
  Commission for Police Complaints for Northern Ireland has directed that disciplinary tribunals be set up under article 14 of the order;

  (2) in how many cases to date of complaints made under the Police (N.I.) Order 1987 the Independent Commission for Police Complaints for Northern Ireland directed the Chief Constable of the Royal Ulster Constabulary to prefer disciplinary charges against members of the police service;

  (3) in how many cases of complaints brought to date under the Police (N.I.) Order 1987 the Independent Commission for Police Complaints for Northern Ireland directed the Chief Constable to send reports to the Director of Public Prosecutions as empowered under articles of the order;

  (4) in how many cases to date of complaints made under the Police (N.I.) Order 1987 the Independent Commission for Police Complaints for Northern Ireland has expressed dissatisfaction with the way in which the investigation was conducted;

  (5) how many cases to date have in the public interest been referred to the Independent Commission for Police Complaints for Northern Ireland by (a) the Secretary of State for Northern Ireland and (b) the Northern Ireland police authority, under section 8 of the Police (N.I.) Order 1987;

  (6) how many cases to date, which have not been the subject of formal complaint, have been referred to the Independent Commission for Police Complaints for Northern Ireland under section 8 of the Police (N.I.) Order 1987;

  (7) in how many instances to date the Independent Commission for Police Complaints for Northern Ireland has been asked by the Secretary of State for Northern Ireland for reports relating to its functions, other than the report supplied at the end of each calendar year.

  Mr. Ian Stewart
  [holding answer 5 May 1989]: The answer to each of these questions is none.

  Mr. Mallon
  To ask the Secretary of State for Northern Ireland in how many cases to date of complaints made under the Police (N.I.) Order 1987 the Independent Commission for Police Complaints for Northern Ireland recommended to the Chief Constable of the Royal Ulster Constabulary that disciplinary charges should be preferred against members of the police service.

  Mr. Ian Stewart
  [holding answer 5 May 1989]: Twenty.

  Mr. Mallon
  To ask the Secretary of State for Northern Ireland in how many cases of complaints made to date under the Police (N.I.) Order 1987 against junior officers the Chief Constable of the Royal Ulster Constabulary has determined that a criminal offence was committed; and in how many of these the Chief Constable determined that charges ought to be brought.

  Mr. Ian Stewart
  [holding answer 5 May 1989]: It is not the function of the Chief Constable either to determine that offences have been committed or that charges should be brought. He is, however, able to determine that a criminal offence may have been committed by police officers and that the officers ought to be charged. It is then his duty to send the appropriate papers to the Director of Public Prosecutions.

  The available information does not indicate in how many cases he has referred papers to the director since the 1987 order came into force.
  145
  Mr. Mallon
  To ask the Secretary of State for Northern Ireland in how many cases to date of complaints made under the Police (N.I.) Order 1987 the Independent Commission for Police Complaints for Northern Ireland has disapproved of the person appointed to carry out the investigation.

  Mr. Ian Stewart
  [holding answer 5 May 1989]: Two.

  Mr. Mallon
  To ask the Secretary of State for Northern Ireland in how many cases to date of complaints made under the Police (N.I.) Order 1987 the Independent Commission for Police Complaints for Northern Ireland has decided, in the public interest, to supervise the investigation where not required to do so under articles 9(I) and 8(I) of the order.

  Mr. Ian Stewart
  [holding answer 5 May 1989]: Ninety-nine.

  Mr. Mallon
  To ask the Secretary of State for Northern Ireland in how many cases of complaints involving serious injury made to date, under the Police (N.I.) Order 1987, the Independent Commission for Police Complaints for Northern Ireland has supervised the investigation.

  Mr. Ian Stewart
  [holding answer 5 May 1989]: Seventy-four.

  Mr. Mallon
  To ask the Secretary of State for Northern Ireland how many complaints made to date under the Police (N.I.) Order 1987 have been investigated by the Independent Commission for Police Complaints for Northern Ireland under section 9 of the order.

  Mr. Ian Stewart
  [holding answer 5 May 1989]: Article 9 of the Police (Northern Ireland) Order 1987 deals with the supervisory powers of the Independent Commission for Police Complaints. To date 173 cases have been supervised under the provisions of article 9.

  Mr. Mallon
  To ask the Secretary of State for Northern Ireland (1) how many complaints have been made to date under the Police (N.I.) Order 1987 against officers below the rank of superintendent; and how many of these have been investigated(a) informally and (b) formally;

  (2) how many complaints have been made to date under the Police (N.I.) Order 1987 against officers of the rank of superintendent and above; and how many of these have been investigated (a) informally and (b) formally.

  Mr. Ian Stewart
  [holding answer 5 May 1989]: Information is not available in the form requested. However, since the commencement of the Police (NI) Order 1987 on 29 February 1988 there were 2,809 complaints against police officers below the rank of assistant chief constable. Of these, 752 have been withdrawn; 128 informally resolved and 1,929 have been or are at present being formally investigated.

  Mr. Mallon
  To ask the Secretary of State for Northern Ireland how many complaints made to date under the Police (N.I.) Order 1987 have been investigated formally by(a) members of the Royal Ulster Constabulary appointed to do so and (b) members of our United Kingdom police forces.

  Mr. Ian Stewart
  [holding answer 5 May 1989]: I understand that 1,929 complaints have been or are at
  146
  present being formally investigated by members of the RUC. No complaints have been investigated by members of other United Kingdom police forces.

  Mr. Mallon
  To ask the Secretary of State for Northern Ireland how many cases of complaints made to date under the Police (N.I.) Order 1987 have been deemed suitable for informal resolution by the Chief Constable of the Royal Ulster Constabulary.

  Mr. Ian Stewart
  [holding answer 5 May 1989]: I understand that 128 complaints have been found suitable for informal resolution since February 1988.

  Mr. Mallon
  To ask the Secretary of State for Northern Ireland how many complaints made to date under the Police (N.I.) Order 1987 have been referred by the Chief Constable of the Royal Ulster Constabulary to the Independent Commission for Police Complaints for Northern Ireland for investigation.

  Mr. Ian Stewart
  [holding answer 5 May 1989]: The investigation of complaints is a police responsibility. The Independent Commission for Police Complaints has wide supervisory powers in relation to complaints. To date 2,446 complaints have been referred by the Chief Constable to the commission.

  Mr. Mallon
  To ask the Secretary of State for Northern Ireland how many complaints made to date under the Police (NJ.) Order 1987, have been adjudicated upon by the Chief Constable of the Royal Ulster Constabulary.

  Mr. Ian Stewart
  [holding answer 5 May 1989]: The Chief Constable has not himself chaired any disciplinary hearings arising from complaints made under the order.

  Elections
  Mr. William Ross
  To ask the Secretary of State for Northern Ireland what steps have been or will be taken to ascertain the number of persons refused a ballot paper at(a) the local government elections in Northern Ireland on 17 May and (b) EEC election in June, on the grounds that they were not able to produce one of the documents set out as necessary for the proof of identity.

  Mr. Ian Stewart
  [holding answer 15 May 1989]: None. I have no evidence to suggest that such steps are necessary. All electors should possess or can readily obtain free of charge at least one of the range of specified documents which are listed on the back of the poll card, and I am satisfied that the system is now well understood.

ENERGY

  Energy Sources
  Mr. Greg Knight
  To ask the Secretary of State for Energy what steps he is taking to encourage the greater use of environment-friendly sources of energy.

  Mr. Michael Spicer
  All sources of energy have enrivonmental consequences, but the non-fossil obligation in the Electricity Bill will guarantee a level of diversity for electricity generation. In addition, my Department is giving specific encouragement through its support for research and development on renewable forms of energy and clean, more efficient, coal technologies.
  147
  In recognition of the potential of renewables, my right hon. Friend the Secretary of State recently announced that the Government had decided to add a number of extra tranches to the non-fossil fuel obligation. These will be reserved exclusively for renewable projects. This will help realise the environmental benefits which renewables offer.

  Campaign for Nuclear Disarmament
  Mr. Flynn
  To ask the Secretary of State for Energy, pursuant to his reply to the hon. Member for Meirionnydd Nant Conwy (Dr. Thomas),Official Report, 3 May, column 151, what reply, and on what date, he made to the letter from the Campaign for Nuclear Disarmament.

  Mr. Michael Spicer
  The letter is currently receiving attention and a reply will be sent as soon as possible.

  Renewable Energy
  Mr. Harry Barnes
  To ask the Secretary of State for Energy if he will list the current research projects into renewable sources of energy which are sponsored by his Department, with their estimated costs.

  Mr. Michael Spicer
  I refer the hon. Member to my reply to the hon. Member for Meirionnydd Nant Conwy (Dr. Thomas) on 19 December 1988, at columns 30–35. An update of this list, together with the estimated costs of the projects, will today be placed in the Libraries of both Houses.

HEALTH

  Acute Beds
  Mr. Robin Cook
  To ask the Secretary of State for Health if he will list for each year since 1979(a) the number of acute beds available and (b) the number of non-acute beds available in each district health authority, SHA and regional health authority; and if he will give the national total for each year.

  Mr. Freeman
  The information requested has been placed in the Library and I have written to the hon. Member with a copy of such information. These figures amend those for 1987–88 provided to the hon. Member for Holborn and St. Pancras (Mr. Dobson) on 22 December, in the light of changes since reported by health authorities.

  Abortions
  Mr. Ken Hargreaves
  To ask the Secretary of State for Health how many prostoglandin abortions were performed in England and Wales in 1987(a) with and (b) without the use of other agents.

  Mr. Freeman
  The data are as follows.

  Number of Prostoglandin Abortions performed in England and Wales in 1987.

  a. Prostoglandins with other agents, 5,431.

  b. Prostoglandins (only), 3,701.

  John Leeman
  Mr. Devlin
  To ask the Secretary of State for Health why John Leeman was discharged from Broadmoor in(a) 1974 and (b) 1981; what previous offences had been committed by John Leeman prior to being imprisoned in 1975; and what recommendations were made prior to the discharge of John Leeman from Broadmoor in 1981.
  148
  Mr. Freeman
  Mr. Leeman was conditionally discharged from Broadmoor hospital in 1974 on the recommendation of his responsible medical officer and a mental health review tribunal. Discharge was authorised by the Home Secretary.

  Mr. Leeman was not discharged from Broadmoor in 1981. A Home Office direction terminating the restrictions on his discharge under the Mental Health Act 1959 took effect when he was in Parkhurst prison.

  The record of an individual's criminal convictions is considered to be confidential, and is not disclosed except where there are overriding reasons for departure from the normal rules of confidentiality.

  Health Care (Expenditure)
  Mr. Austin Mitchell
  To ask the Secretary of State for Health whether the review of the Health Service considered the reasons for the cost of health care in the United Kingdom compared with other industrial countries; and if he will publish in the Official Report a table showing the percentage of gross domestic product to one place of decimals spent on (a) public and (b) private health care in other industrial countries together with an estimate of the extent to which the relative cost in the United Kingdom is due to (i) the standard of health (ii) the number of elderly persons, (iii) the level of remuneration of employees and (iv) the level of public provisions.

  Mr. Mellor
  The Government's review of the NHS took into account a wide range of information about the costs of health care provision in this country and overseas.

  The OECD's latest estimates of public and private expenditure on health as percentages of GDP in 12 leading industrial countries are shown in the table.

  Differences in health expenditures between countries both in absolute and in relative terms are influenced by a wide range of economic, social and cultural factors the individual components and impacts of which are the subject of continuing research both here and abroad.

  However, the raw percentages reported by the OECD will reflect the effects of factors such as the type of health funding systems adopted by individual countries; the mix of items comprising expenditure on health care and differences in relative prices.

  It is not possible without disproportionate cost to summarise here the results of relevant international research into this subject.

  Public and private expenditure on health as a percentage of GDP, 1986

  Public

  Private

  Australia

  5·3

  2·1

  Belgium

  5·5

  1·6

  Canada

  6·5

  1·9

  Denmark

  5·2

  1·0

  France

  6·7

  1·8

  Germany

  6·3

  1·8

  Italy

  5·2

  1·5

  Netherlands

  6·6

  1·8

  Spain

  4·3

  1·7

  Switzerland

  5·4

  2·6

  United Kingdom

  5·3

  0·9

  United States

  4·5

  6·6

  Hospitals (Running Costs)
  Mr. Austin Mitchell
  To ask the Secretary of State for Health whether the Government will take into account the
  149
  higher cost of running hospitals in buildings such as hutted camps and Victorian workhouses when the new arrangements for the hospital services are introduced.

  Mr. Freeman
  The introduction of a system for charging for capital announced in the White Paper "Working for Patients" will enable health authorities to appraise capital investment options more effectively. Comparison of the running costs of hospitals of different ages, types and functional conditions is complicated by a number of factors including the tendency for new hospitals to be used more intensively than those they replace. The Department is sponsoring research in this area to see to what extent overall running costs are related to the physical characteristics of the hospital stock. If successful this research would add further to the quality of investment appraisal in the National Health Service.

  Pensioners
  Mr. Robin Cook
  To ask the Secretary of State for Health if he will list by region the population of females over 60 years and males over 65 years.

  Mr. Freeman
  The information requested is as follows.

  Name

  Number of constituencies

  Average number of electors per constituency on 1989 register

  Amount by which average constituency size differs from 1989 electoral quota1

  ENGLAND

  523

  169,533

  Shire counties

  Isle of Wight

  1

  101,859

  46·5

  Wiltshire

  5

  85,552

  23·0

  Gloucestershire

  5

  82,135

  18·1

  Cambridgeshire

  6

  81,326

  17·0

  West Sussex

  7

  80,014

  15·1

  Suffolk

  6

  79,811

  14·8

  Hampshire

  15

  79,399

  14·2

  Berkshire

  7

  79,170

  13·9

  North Yorkshire

  7

  79,146

  13·8

  Buckinghamshire

  6

  78,642

  13·1

  Bedfordshire

  5

  77,815

  11·9

  Shropshire

  4

  77,545

  11·5

  Warwickshire

  5

  75,741

  8·9

  Lincolnshire

  6

  75,678

  8·8

  Hertfordshire

  10

  75,368

  8·4

  Leicestershire

  9

  74,831

  7·6

  Hereford and Worcester

  7

  74,548

  7·2

  Humberside

  9

  73,905

  6·3

  Cheshire

  10

  73,848

  6·2

  Essex

  16

  73,792

  6·1

  Dorset

  8

  73,743

  6·1

  Cornwall and Isles of Scilly

  5

  73,296

  5·4

  Staffordshire

  11

  73,037

  5·0

  Norfolk

  8

  73,005

  5·0

  Northamptonshire

  6

  72,639

  4·5

  Avon

  10

  72,637

  4·5

  Somerset

  5

  72,530

  4·3

  Derbyshire

  10

  72,426

  4·2

  Surrey

  11

  72,400

  4·1

  Kent

  16

  71,976

  3·5

  Devon

  11

  71,243

  2·5

  Nottinghamshire

  11

  71,115

  2·3

  Oxfordshire

  6

  70,290

  1·1

  Cleveland

  6

  69,881

  0·5

  East Sussex

  8

  69,787

  0·4

  Durham

  6

  66,858

  -3·8

  150

  Mid 1987 estimates of resident population (thousands)

  Males aged 65 and over

  Females aged 60 and over

  Total persons over retirement age

  England

  2,949·0

  5,750·8

  8,699·8

  North

  186·7

  374·0

  560·7

  Yorkshire and Humberside

  302·1

  596·2

  898·4

  East Midlands

  243·9

  454·4

  698·3

  East Anglia

  138·2

  247·8

  385·9

  South East

  1,063·1

  2,075·6

  3,138·7

  South West

  333·3

  632·7

  966·0

  West Midlands

  306·5

  591·1

  897·6

  North West

  375·2

  778·9

  1,154·1

  Wales

  183·8

  365·2

  548·9

  Scotland

  286·7

  606·9

  893·6

  Northern Ireland

  74·9

  152·7

  227·6

  Population estimates relating to mid-1988 are currently being prepared and will become available shortly.

  Electorates
  Mr. Simon Coombs
  To ask the Secretary of State for Health if he will list the shire counties, London boroughs and metropolitan boroughs in England in ranking order according to the degree by which their electorates vary from the nationally averaged electorate appropriate to the numbers of parliamentary constituencies within them.

  Mr. Freeman
  The information requested is as follows:
  151

  Name

  Number of constituencies

  Average number of electors per constituency on 1989 register

  Amount by which average constituency size differs from 1989 electoral quota1

  Lancashire

  16

  66,748

  -4·0

  Cumbria

  6

  63,944

  -8·0

  Northumberland

  4

  59,039

  -15·1

  London boroughs

  Haringey

  2

  76,780

  10·4

  Hounslow

  2

  75,631

  8·8

  Harrow

  2

  74,720

  7·5

  Hackney

  2

  69,024

  -0·7

  Ealing

  3

  68,938

  -0·9

  Enfield

  3

  67,349

  -3·1

  Wandsworth

  3

  65,101

  -6·4

  Camden

  2

  65,028

  -6·5

  Merton

  2

  63,981

  -8·0

  Sutton

  2

  63,080

  -9·3

  Havering

  3

  61,277

  -11·9

  Brent

  3

  60,648

  -12·8

  Croydon

  4

  60,205

  -13·4

  Lambeth

  3

  59,995

  -13·7

  Hillingdon

  3

  59,824

  -14·0

  Lewisham

  3

  59,716

  -14·1

  Redbridge

  3

  59,654

  -14·2

  Bromley

  4

  58,511

  -15·9

  Richmond upon Thames

  2

  57,182

  -17·8

  Southwark

  3

  57,155

  -17·8

  Tower Hamlets

  2

  56,872

  -18·2

  Bexley

  3

  56,746

  -18·4

  Barking and Dagenham

  2

  56,303

  -19·0

  Barnet

  4

  55,450

  -20·3

  Cities of London and Westminster

  2

  55,434

  -20·3

  Islington

  2

  55,430

  -20·3

  Waltham Forest

  3

  53,972

  -22·4

  Greenwich

  3

  53,290

  -23·4

  Newham

  3

  53,258

  -23·4

  Hammersmith and Fulham

  2

  49,653

  -28·6

  Kingston upon Thames

  2

  48,696

  -30·0

  Kensington and Chelsea

  2

  44,387

  -36·2

  Metropolitan counties

  Tyne and Wear

  13

  68,385

  -1·7

  South Yorkshire

  15

  67,234

  -3·3

  West Yorkshire

  23

  67,194

  -3·3

  Greater Manchester

  30

  64,425

  -7·3

  West Midlands

  31

  64,070

  -7·9

  Merseyside

  17

  59,361

  -14·6

  1 A number of parliamentary constituencies straddle metropolitan borough boundaries, and information is therefore provided in respect of metropolitan counties.

  Radiation
  Mr. Ashley
  To ask the Secretary of State for Health what advice he has received regarding the genetic effects of radiation exposure.

  Mr. Freeman
  The National Radiological Protection Board is under a statutory obligation to provide advice to Government and others on the effects of radiation. The board's advice on genetic effects of radiation exposure is contained in NRPB publication R226, "Health Effects Models Developed from the 1988 UNSCEAR Report", a copy of which will be placed in the Library shortly. I am advised that there is some evidence that radiation causes genetic defects in animals; however, epidemiological studies of groups of people exposed to large doses of radiation have produced no conclusive evidence of any genetic damage that has been passed on to their children.

  Gynaecologists
  Mrs. Ann Winterton
  To ask the Secretary of State for Health what guidance has been issued by his Department 152
  to candidates for consultancy posts in gynaecology concerning their rights under the conscience clause of the Abortion Act 1967.

  Mr. Mellor
  The Department has not issued any guidance to candidates for consultant posts in gynaecology, not all of which involve duties relating to the termination of pregnancy. Under a long-standing agreement with the medical profession no reference to termination duties should be included in the advertisement of hospital posts, but it should be included in the job description made available to all applicants.

  Hospital Trusts
  Mr. Fatchett
  To ask the Secretary of State for Health whether there are any plans for hospitals in the Yorkshire regional health authority to consult(a) medical staff, (b) non-medical staff and (c) members of the general public in the hospital catchment area before putting themselves forward as possible self-governing hospitals.
  153
  Mr. Mellor
  Only expressions of interest in self-governing status are being requested at this stage. When applications are invited, RHAs will seek the views of those with an interest in an application, particularly the health authorities concerned, staff, general practitioners, CBCs and the local community.

  Mr. Corbett
  To ask the Secretary of State for Health whether he will require hospitals which seek to become self-governing to undertake ballots of all medical and non-medical staff to determine the level of support for such proposals; and whether he will meet the cost of any such ballots.

  Mr. Mellor
  No.

  Mr. Corbett
  To ask the Secretary of State for Health (1) what evidence of consultation with medical and non-medical staff he will require in support of applications by hospitals to become self-governing;

  (2) what evidence of consultation with patients he will require in support of applications by hospitals to become self-governing.

  Mr. Mellor
  RHAs will give publicity to applications and will seek the views of those with an interest which will be submitted to me to consider alongside the application.

  NHS Review
  Mrs. Mahon
  To ask the Secretary of State for Health what he estimates will be the annual capital charge for a body scanner with an initial purchase price of £500,000 under the proposals in his White Paper, "Working for Patients."

  Category of elderly complaints

  Total elderly complaints

  Clinical

  Nursing

  Support services

  Other

  Letters of Appreciation

  19891

  12

  —

  7

  2

  3

  2162

  1988

  6

  1

  4

  1

  —

  557

  1987

  8

  2

  5

  3

  —

  519

  1986

  6

  4

  1

  4

  —

  159

  1985

  10

  2

  6

  5

  —

  3—

  1 January to March.

  2 First quarter.

  3 Not collected.

  Remanded Juveniles
  Mr. Michael Welsh
  To ask the Secretary of State for Health if he is giving any consideration to funding secure accommodation for remanded juveniles from Doncaster and neighbouring areas awaiting a court appearance who, because of their behaviour, are unsuitable for living in normal open local authority children's homes.

  Mr. Mellor
  I have approved a grant in principle, to enable Humberside county council to provide a new 10 place secure unit. This will provide accommodation for remands, and other children, who need this specialised form of care from local authorities in the Yorkshire and Humberside region generally, including Doncaster. I understand tenders have already been sought for the project.

  Westminster and Chelsea Teaching Hospital
  Mr. Frank Field
  To ask the Secretary of State for Health (1) why no provision is made in table 4 of the
  154
  Mr. Mellor
  We are still considering the detailed basis of valuation of assets for capital charging purposes so no estimate is yet possible. The NHS review working paper Number 5 on capital charges describes in further detail how the proposals will be implemented.

  Pontefract Hospital
  Mr. O'Brien
  To ask the Secretary of State for Health if he will investigate the complaints made by families of patients who have attended the hospital alleging a fall in standards of the elderly care unit in the Pontefract hospital; and if he will make a statement;

  (2) how many written complaints have been made to authorities about changes in standards at the elderly care unit in Pontefract hospital; and if he will make a statement;

  (3) if he has received any representation about changes in the standards of the support services in the elderly care unit of Pontefract hospital; and if he will make a statement.

  Mr. Freeman
  The DHA follows up all complaints (figures in the table show complaints and letters of appreciation). An unusually high figure for January to March this year led to individual discussions with complainants and the CHC secretary. As a result of this local managers have taken action to remedy immediate problems (for example over linen supply) and to improve staff training and counselling. I am sure the DHA will ensure that the appreciation of the services in this unit is matched by high quality care.

  Supply Estimates for class XIV, vote 1, for the costs of constructing the new Westminster and Chelsea teaching hospital;

  (2) what resources have been allocated in the next three financial years for construction of the new Westminster and Chelsea teaching hospital.

  Mr. Freeman
  [holding answer 25 April 1989]: Provision for estimated expenditure on the Westminster and Chelsea hospital is contained within the total sum analysed in table 4. As a result of an administrative error the scheme is not, however, separately identified. I apologise for the omission. The information requested, set out in the form in which it would otherwise have appeared in the Supply Estimate, is given in the table.

  Westminster and Chelsea hospital

  Timetable

  Year of start

  1989–90

  Estimated year of completion:

  Original

  1992–93

  155

  Timetable

  Current

  1992–93

  Estimated total cost:

  Original

  £116,070

  Current

  £116,070

  Probable spend to 31 March 1989

  £9,832

  Estimates provision 1989–90

  £22,246

  Estimated spend after 31 March 1989

  £83,992

  Spectacles and Dental Treatment
  Mr. Terry Davis
  To ask the Secretary of State for Health whether he will now make a statement on the arrangements which have been made to reimburse those people who may have been required to pay too much for spectacles or dental treatment as a result of incorrect instructions having been issued to the staff in the agency benefits unit.

  Mr. Freeman
  [holding answer 2 May 1989]: Starting in the week beginning 15 May, the agency benefits unit of the Department of Social Security will reassess claims from those who, between 11 April and 4 November 1988, were assessed as having to make a contribution towards relevant costs and had non-dependents living with them.

  Where the reassessment shows entitlement to more help, the unit will send claimants a special claim form which will ask for details of charges paid and other relevant costs incurred. Where people paid too much it will be refunded.

  A special arrangement for optical vouchers is necessary to avoid disproportionate administrative costs. Those who obtained glasses will be paid the difference between the mistakenly assessed contribution and the correct one. This will mean that everyone will get at least their proper entitlement or—generally in the case of the cheaper lens prescriptions—more than that.

  Child Minders
  Mrs. Maureen Hicks
  To ask the Secretary of State for Health what steps he is taking to ensure compliance with the requirements of the Nurseries and Childminders Act 1948 for all child minders to be officially registered.

  Mr. Mellor
  [holding answer 12 May 1989]: Local authority social services departments are responsible for enforcing the registration requirements in the Nurseries and Childminders Regulation Act 1948 (as amended) and they have power to prosecute offenders.

  The Government have undertaken to update the 1948 Act by introducing amendments to the Children Bill at present being considered by a Standing Committee of the House.

  Publicity
  Mr. Dobson
  To ask the Secretary of State for Health if he will place in the Library details of each major publicity campaign mounted by his Department in 1985–86 and each successive year, including in each case the objectives of the campaign, the intended audience and the outcome of the monitoring of the achievement of the intended 156
  objectives, and national research conducted for him by the Central Office of Information together with a note of the intended objectives in the campaigns in 1989–90.

  Mr. Mellor
  [holding answer 2 May 1989]: The following is a list of major publicity campaigns mounted by my Department where expenditure has exceeded £0·5 million in any financial year over the period 1985–86 to 1988–89:

  Campaign

  Objectives

  Audience

  Aids

  To provide information on the means of transmission of and prevent the spread of HIV infection

  The general public

  Drug misuse

  To provide information on the risks of and reduce the incidence of drug misuse

  The general public

  Nurse recruitment

  To improve recruitment and retention of trainee and qualified nurses to meet the future needs of the NHS

  Potential recruits and former NHS employees

  Information on the outcome of monitoring and the achievement of objectives is not available in the form requested and could be provided only at disproportionate cost.

  Research conducted by the Central Office of Information on major campaigns over the financial years 1985–86 to 1988–89 is as follows:

  Subject and Title

  Date

  Cost

  AIDS

  Creative pre testing

  August 1985

  49,525

  Survey RS 85/86

  October 1985

  543

  Campaign evaluation

  January 1986

  126,351

  Communication ball test

  March 1986

  26,657

  Moralists/trialists

  March 1986

  2,990

  Omnibus check

  March 1986

  7,059

  Youth campaign development

  August 1986

  21,390

  Leaflet research

  August 1986

  23,920

  Youth tracking study 86

  August 1986

  57,328

  Leaflet post evaluation

  September 1986

  64,055

  Adults qualitative

  November 1986

  18,504

  New campaign-dipstick

  November 1986

  69,089

  Attitudes to condoms quality research

  February 1987

  31,050

  Ethnic attitudes

  February 1987

  8,740

  Antibody test leaflet

  February 1987

  13,513

  Media coverage

  March 1987

  33,976

  AIDS/anti drugs research

  March 1987

  37,088

  Sexual behaviour/holiday abroad

  March 1987

  14,433

  Attitudes of West Indians

  April 1987

  80,500

  AIDS/Drugs D/Head creative concepts summary

  May 1987

  27,370

  AIDS/Drugs 87/88 quality evaluation

  September 1987

  55,050

  Drugs

  Anti-heroin finished ads.

  April 1985

  14,331

  Qualitative heroin dipstick

  November 1985

  32,318

  Heroin 86–87 creative development

  February 1986

  19,435

  Heroin evaluation STG III

  February 1986

  30,544

  Anti heroin double head communication CH

  April 1986

  20,183

  Heroin evaluation STG IV

  June 1986

  37,548

  87 campaign target met research

  November 1986

  31,223

  Heroin evaluation STG V

  January 1987

  35,420

  Campaign evaluation

  August 1987

  37,914

  Anti injection 88

  May 1988

  40,940

  Creative development STG 88/89

  September 1988

  28,520

  Creative development STG III

  November 1988

  17,342

  157

  Subject and Title

  Date

  Cost

  Camp evaluation; stage VII

  December 1988

  44,647

  Camp 88/89 qualitative

  December 1988

  42,182

  Nursing

  Recruitment qualitative camp

  June 1985

  25,588

  Recruitment check

  June 1986

  16,129

  Recruitment strategic research

  June 1987

  26,847

  Recruitment communication check 88

  May 1988

  24,895

  Recruitment campaign evaluation 88

  July 1988

  28,750

  Recruitment tracking 88

  August 1988

  36,855

  Recruitment phone response

  September 1988

  7,388

  Recruitment addline analysis

  October 1988

  5,353

  Back to nursing research

  February 1989

  27,198

  Youth concept research

  March 1989

  14,634

  Male nurse recruitment

  March 1989

  22,954

  £ millions

  Year

  Net contribution before refunds and VAT abatements

  Negotiated refunds

  VAT abatements

  Net contribution after refunds and abatements

  1973

  102

  —

  —

  102

  1974

  29

  —

  —

  29

  1975

  -56

  —

  —

  -56

  1976

  167

  —

  —

  167

  1977

  369

  —

  —

  369

  1978

  822

  —

  —

  822

  1979

  947

  —

  —

  947

  1980

  804

  98

  —

  706

  1981

  1,090

  693

  —

  397

  1982

  1,625

  1,019

  —

  606

  1983

  1,454

  807

  —

  647

  1984

  1,184

  528

  —

  656

  1985

  2,035

  61

  166

  1,808

  1986

  2,273

  —

  1,701

  572

  1987

  2,866

  —

  1,153

  1,713

  1988

  2,956

  —

  1,594

  1,362

EMPLOYMENT

  Wages Councils
  Mr. Parry
  To ask the Secretary of State for Employment how many representations he has received in favour of the retention of wages councils.

  Mr. Nicholls
  We have received about 360 representations in favour of retaining wages councils, including those referred to by my right hon. Friend the Minister of State in his reply to my hon. Friend the Member for Mid-Kent (Mr. Rowe) on 21 March, at columns 555–56.

  Mr. McAllion
  To ask the Secretary of State for Employment what representations he has received on the Government's proposed abolition of the wages councils; and if he will make a statement.

  Mr. Nicholls
  I refer the hon. Member to the replies given by my right hon. Friend the Minister of State to my hon. Friend the Member for Mid-Kent on 21 March,Official Report, columns 555–56, and to the hon. Member for Oldham, West on 23 March, Official Report, columns 798–802. Since those replies about 50 further representations have been received.

  Mr. Simon Hughes
  To ask the Secretary of State for Employment what representations he has received from British managers in respect of his plans to abolish wages councils.

  Mr. Nicholls
  It is not this Department's practice to reveal the content of representations made by either
  158
  The campaigns for 1989–90 have still to be finalised but are likely to include drug misuse and nurse recruitment.

NATIONAL FINANCE

  EC (Contributions)
  Mr. Teddy Taylor
  To ask the Chancellor of the Exchequer if he will publish a table showing the net contribution made by the United Kingdom to the EEC in each year of membership, adjusted to take into account rebates and refund.

  Mr. Brooke
  The information requested is set out in the table:

  individuals or organisations. I would refer the hon. Member to the replies given by my right hon. Friend the Minister of State to my hon. Friend the Member for Mid Kent (Mr. Rowe) on 21 March, Official Report, columns 555–56 and to the hon. Member for Oldham, West (Mr. Meacher) on 23 March, Official Report, columns 798–802.

  Mr. Ron Davies
  To ask the Secretary of State for Employment what protection will be offered to the low-paid after the abolition of the wages councils.

  Mr. Nicholls
  The future of the wages councils has yet to be decided. However, the best protection for any worker is the removal of mechanisms and practices which may threaten his continued employment or prevent his initial recruitment.

  Enterprise Allowance Scheme
  Miss Widdecombe
  To ask the Secretary of State for Employment if he will make a statement on the progress of the enterprise allowance scheme.

  Mr. Cope
  430,000 people have started their own business under the enterprise allowance scheme since it began in 1982. Some 87,000 people are currently in receipt of the allowance.

  Self-employment
  Mr. Ashby
  To ask the Secretary of State for Employment if he will make a statement on the number of people currently self-employed in the east midlands.
  159
  Mr. Cope
  In December 1988 there were 205,000 self-employed people in the east midlands, an increase of 27,000 over the previous two years.

  Mr. Harris
  To ask the Secretary of State for Employment if he will make a statement on the number of people currently self-employed in the south-west.

  Mr. Lee
  In December 1988, the latest date for which figures are available, there were an estimated 302,000 self-employed in the south-west region. This represents an increase of 35,000 or 13 per cent. since December 1986.

  Dr. Goodson-Wickes
  To ask the Secretary of State for Employment how many people were self-employed in(a) March 1983 and (b) March 1989; and if he will make a statement.

  Mr. Lee
  Estimates for March 1989 are not yet available. In March 1983 there were 2,147,000 self-employed in Great Britain. In December 1988, the latest 160
  date for which figures are available, the number was 2,988,000. This represents an increase of 841,000 or 39 per cent. since March 1983.

  Company Law
  Mr. Wallace
  To ask the Secretary of State for Employment what is his Department's policy towards implementation of the European Economic Community fifth directive on company law; and if he will make a statement.

  Mr. Cope
  We shall continue to oppose vigorously the proposals for compulsory worker participation in this draft directive. They are unnecessary and would seriously damage the excellent voluntary arrangements which exist in many United Kingdom companies.

  Labour Statistics
  Mr. Burns
  To ask the Secretary of State for Employment what is the current rate of fall in unemployment in East Anglia: and if he will make a statement.

  Mr. Lee
  In the standard region of East Anglia, defined as Norfolk, Suffolk and Cambridgeshire, unemployment fell by 19,100, or 34·3 per cent., over the 12 months to March 1989 on the consistent seasonally adjusted basis. It is now at its lowest level for well over eight years; and the unemployment rate at 3·5 per cent. is less than half of what it was three years ago.

  Mr. Andrew Mitchell
  To ask the Secretary of State for Employment what is the recent rate of fall in unemployment in the east midlands; and if he will make a statement.

  Mr. Lee
  In the 12 months to March 1989 unemployment in the east midlands fell by 35,500 on the consistent seasonally adjusted basis. At 118,200 unemployment in the region is now at its lowest level for eight years.

  Mr. Pawsey
  To ask the Secretary of State for Employment what is the current rate of fall in unemployment in the west midlands; and if he will make a statement.

  Mr. Lee
  In the 12 months to March 1989, unemployment in the west midlands fell by 67,800, or 27·2 per cent., on the consistent seasonally adjusted basis and is now at its lowest level for well over eight years. The unemployment rate in the west midlands is now down to 6·7 per cent. and has been falling faster than in any other region of the country.

  Mr. Teddy Taylor
  To ask the Secretary of State for Employment what is the current level of employment in the European Economic Community nations and in European Free Trade Association nations; and what were the comparable figures five and 10 years ago.

  Mr. Cope
  The latest published information available for all countries is for 1987. The figures are as follows:

  Total civilian employment

  (Thousands)

  1977

  1982

  1987

  EC countries

  United Kingdom

  24,538

  23,584

  25,060

  Belgium

  3,665

  3,578

  3,621

  Denmark

  2,414

  2,476

  2,663

  Germany

  25,014

  25,177

  25,440

  Greece

  3,262

  3,501

  3,597

  Spain

  12,253

  11,043

  11,383

  Table B. ILO/OECD unemployed by claimant status: Averages for four years: spring 1985 to spring 19881

  Thousand

  ILO/OECD unemployed

  of which: Claimants

  Non-claimants

  Male

  Female

  Total

  Male

  Female

  Total

  Male

  Female

  Total

  South East

  380

  283

  663

  296

  126

  422

  83

  157

  241

  (Greater London)

  193

  123

  315

  153

  57

  210

  40

  66

  105

  Rest of South East

  187

  160

  347

  143

  69

  212

  44

  91

  135

  East Anglia

  40

  38

  78

  34

  19

  52

  7

  19

  26

  South West

  95

  81

  176

  77

  38

  115

  18

  43

  61

  West Midlands

  188

  120

  309

  168

  59

  227

  20

  61

  81

  East Midlands

  109

  80

  188

  95

  38

  132

  14

  42

  56

  162

  1977

  1982

  1987

  France

  21,188

  21,240

  20,976

  Ireland

  1,068

  1,131

  1,067

  Italy

  19,791

  20,297

  20,584

  Luxembourg

  157

  158

  169

  Netherlands

  4,701

  5,009

  5,251

  Portugal

  3,784

  3,959

  4,169

  EFTA countries

  Norway

  1,824

  1,943

  2,090

  Sweden

  4,099

  4,219

  4,337

  Finland

  2,221

  2,367

  2,414

  Iceland

  98

  112

  1117

  Austria

  3,222

  3,229

  3,297

  Switzerland

  3,036

  3,190

  3,273

  1 Figure is for 1986.

  Sources:

  United Kingdom—Department of Employment.

  Other EC countries—EC Statistical Office.

  EFTA countries—OECD.

  Ms. Short
  To ask the Secretary of State for Employment if he will publish a table from the 1988 labour force survey, for each Great Britain region and Greater London, by male-female, and claimant status, showing the numbers of people without work who had looked for a job in the four week reference period, and were available to start work within two weeks.

  Mr. Lee
  The available information for 1988 is given in table A. A reliable analysis of the regional figures by claimant status cannot be provided for individual years, but averages for the four years 1985 to 1988 are given in table B.

  Table A

  People looking for a job in the four week reference period1 who were available to start work within two weeks (ILO/OECD unemployed). Great Britain, Spring 1988 (preliminary results)

  Thousand

  Male

  Female

  Total

  South East

  293

  240

  533

  Greater London

  160

  112

  272

  Rest of South East

  133

  128

  261

  East Anglia

  28

  30

  58

  South West

  74

  67

  141

  West Midlands

  133

  97

  230

  East Midlands

  89

  64

  153

  Yorkshire and Humberside

  160

  99

  259

  North West

  222

  138

  360

  North

  126

  72

  198

  Wales

  91

  54

  145

  Scotland

  183

  114

  297

  Great Britain of which:

  1,398

  976

  2,374

  claimants

  1,160

  460

  1,620

  non-claimants

  238

  516

  754

  1 Including some waiting to start a new job already obtained, as in the ILO/OECD measure of unemployment.

  163

  ILO/OECD unemployed

  of which: Claimants

  Non-claimants

  Male

  Female

  Total

  Male

  Female

  Total

  Male

  Female

  Total

  Yorkshire and Humberside

  174

  108

  282

  155

  55

  210

  19

  53

  71

  North West

  246

  155

  401

  215

  82

  297

  31

  73

  105

  North

  133

  73

  206

  121

  39

  159

  13

  34

  47

  Wales

  102

  63

  165

  91

  31

  122

  11

  31

  42

  Scotland

  206

  124

  330

  184

  67

  251

  22

  57

  79

  Great Britain

  1,672

  1,125

  2,797

  1,436

  533

  1,989

  237

  572

  809

  1 Including preliminary results for 1988.

  Note:

  The figures from the labour force survey are subject to sampling errors. In some cases figures may not appear to add because of rounding.

  Mr. Duffy
  To ask the Secretary of State for Employment how many people are now employed in service industries in South Yorkshire, expressed as a percentage of the workforce; and what is the comparable figure for the south-east.

  Mr. Lee
  The available information about employment in the county, taken from the census of employment, is for employees in employment and the latest available figures are for September 1984. At that time, 58 per cent. of all employees in employment in South Yorkshire were employed in service industries; the comparable September 1984 figure for the South East region was 73 per cent.

  More up-to-date employee estimates for counties, from the September 1987 census of employment, will become available later this year.

  Mr. Devlin
  To ask the Secretary of State for Employment if he will make a further statement on the level of employment in the northern region.

  Mr. Lee
  I refer my hon. Friend to the reply that I gave on 18 April 1989.Official Report. column 153.

  Mr. Dover
  To ask the Secretary of State for Employment if he will make a further statement on the level of employment in the north-west.

  Mr. Lee
  I refer my hon. Friend to the reply that I gave to my hon. Friend the Member for Wyre (Mr. Mans) on 18 April 1989,Official Report, column 154.

  Mr. Roger King
  To ask the Secretary of State for Employment if he will make a further statement on the level of employment in the west midlands.

  Mr. Lee
  I refer my hon. Friend to the reply that I gave to my hon. Friend the Member for Rugby and Kenilworth (Mr. Pawsey) on 18 April 1989.Official Report, column 152.

  Mr. Sims
  To ask the Secretary of State for Employment if he will make a statement on the number of people currently in employment.

  Mr. Lee
  In December 1988 the work force in employment in Great Britain stood at 25,961,000, the highest level on record. This represents an increase of 2,964,000 or 13 per cent. since March 1983. This rising trend has now continued for more than five years. The figures have been adjusted for the effects of seasonal variations. The work force in employment is the sum of employees in employment, the self-employed, Her Majesty's forces and participants in work-related Government training programmes.

  Mr. Aitken
  To ask the Secretary of State for Employment if he will make a statement on the changes in levels of unemployment on the last 12 months.
  164
  Mr. Lee
  In the 12 months to March 1989 the level of unemployment, seasonally adjusted, in the United Kingdom fell by 535,800, on a consistent basis. Unemployment has now fallen over 32 consecutive months by 1,215,100 since July 1986.

  Mr. Irvine
  To ask the Secretary of State for Employment if he will make a statement on the number of people currently self-employed in East Anglia.

  Mr. Lee
  In December 1988, the latest date for which figures are available, there were an estimated 138,000 self-employed in East Anglia. This represents an increase of 22,000 or 19 per cent. since December 1986.

  Mrs. Gorman
  To ask the Secretary of State for Employment what is the recent rate of fall in unemployment in the south-east; and if he will make a statement.

  Mr. Lee
  In the 12 months to March 1989, the level of unemployment, seasonally adjusted, in the south-east fell by 159,500, on a consistent basis. At 387,500, unemployment in the south-east is now at its lowest level for more than eight years.

  Mr. Lord
  To ask the Secretary of State for Employment if he will make a further statement on the level of employment in East Anglia.

  Mr. Lee
  I refer my hon. Friend to the reply that I gave to my hon. Friends the Members for Suffolk, South (Mr. Yeo) and for Norwich, North (Mr. Thompson) on 18 April 1989,Official Report, column 153.

  Mr. Stewart
  To ask the Secretary of State for Employment if he will make a further statement on the level of employment in the east midlands.

  Mr. Lee
  I refer my hon. Friend to the reply that I gave to my hon. Friend the Member for Stamford and Spalding (Mr. Davies) on 18 April 1989,Official Report, column 152.

  Mr. Hague
  To ask the Secretary of State for Employment if he will make a further statement on the level of employment in Yorkshire and Humberside.

  Mr. Lee
  I refer my hon. Friend to the reply that I gave to my right hon. Friend the Member for Selby (Mr. Alison) on 18 April 1989,Official Report, column 151.

  Mr. Malins
  To ask the Secretary of State for Employment if he will make a statement on current levels of unemployment.

  Mr. Lee
  In March 1989 the level of unemployment, seasonally adjusted, in the United Kingdom was 1,918,100, the lowest for more than eight years on a consistent basis.

  Enterprise Training
  Mr. Hunter
  To ask the Secretary of State for Employment how many people are currently obtaining skills on enterprise training; and if he will make a statement.

  Mr. Cope
  Over the last financial year about 53,000 people have taken up this type of training. This represents an increase of 9,000 on the previous year's total.

  North Derbyshire (Coalfield Communities)
  Mr. Harry Barnes
  To ask the Secretary of State for Employment whether he has plans to increase the numbers in employment in the coalfield communities of north Derbyshire; and if he will make a statement.

  Mr. Lee
  My Department operates a wide range of employment, enterprise and training measures, which are all available in north Derbyshire as elsewhere, and which are helping to increase the numbers in employment.

  During the 12 months to March 1989 unemployment in Derbyshire fell by 10,183, 24·2 per cent. of the March 1988 figure.

  Remedial Education
  Mrs. Maureen Hicks
  To ask the Secretary of State for Employment if the Government training initiatives aimed at the long-term unemployed includes provision for remedial education where required.

  Mr. Nicholls
  An important aspect of employment training is to improve trainees' awareness of the work environment and enhance their motivation and confidence. Provision for vocational literacy and numeracy training is included in employment training where unemployed people need such help to benefit fully from occupational training. Where appropriate, training is also offered in English as a second language. The aim is to integrate training in these skills with occupational training wherever possible.

  Construction Industry Training Board
  Mr. Latham
  To ask the Secretary of State for Employment whether he will make a statement on the future of the construction industry training board.

  Mr. Nicholls
  I refer the hon. Member to the answer given to him on 14 February 1989. Consultations with the board and organisations representing employers in the construction industry are continuing.

  Low Pay
  Mr. Tony Lloyd
  To ask the Secretary of State for Employment if he will make a statement on Her Majesty's Government's policy on the eradication of low pay.

  Mr. Nicholls
  Low pay is a relative concept. No matter how much living standards rise, some workers will always be paid less than others. The best way to help the lower paid is through the development of a prosperous and growing economy, which the Government's policies are helping to achieve.

  Mr. Allen McKay
  To ask the Secretary of State for Employment if he will make a statement about the incidence of low pay in Yorkshire and Humberside.
  166
  Mr. Nicholls
  Pay in Yorkshire and Humberside, as elsewhere, is a matter for employers and employees or their representatives to determine.

  Secondary Picketing
  Mr. Bowis
  To ask the Secretary of State for Employment if he has any plans to seek to alter the present legislation on secondary picketing; and if he will make a statement.

  Mr. Nicholls
  As indicated in the Green Paper, "Removing Barriers to Employment", which was published on 20 March 1989, the Government propose no change to the law on picketing.

  Training and Enterprise Councils
  Mr. Coombs
  To ask the Secretary of State for Employment what plans he has to meet representatives of the chambers of commerce to discuss the establishment of training and enterprise councils; and if he will make a statement.

  Mr. Cope
  Over the past few months, my right hon. Friend the Secretary of State and I have had frequent contacts with individual chambers and with the Association of British Chambers of Commerce to discuss the establishment of TECs.

  Chambers of commerce have been very active in improving employer commitment to training and are playing a key role in the establishment of TECs. We look to their continued support and involvement.

  Mr. Patrick Thompson
  To ask the Secretary of State for Employment when he last met employers to discuss training and enterprise councils in East Anglia; and if he will make a statement.

  Mr. Cope
  We have been encouraged by the excellent response from employers throughout the country and in East Anglia to our invitation to form training and enterprise councils. A number of employers from the area attended a dinner on training and enterprise councils in late February given by my right hon. Friend the Secretary of State.

  We understand that a number of groups of employers are interested in establishing training and enterprise councils in East Anglia and we look forward to receiving their proposals.

  Tourism and Catering
  Mr. Amos
  To ask the Secretary of State for Employment if he will make a statement on the development of tourism in Northumbria.

  Mr. Lee
  Northumbria already attracts more than 4 million visitors each year. With its combination of beautiful countryside, historic towns, and a wealth of natural and heritage attractions, the region offers considerable potential for further expansion of its tourism industry. The Gateshead garden festival in 1990 will help provide an additional stimulus to the development of the region.

  Mr. Sumberg
  To ask the Secretary of State for Employment when he last met with local tourist authorities to discuss promoting and developing tourism in the north-west of England.
  167
  Mr. Lee
  I am in virtually weekly contact with north-west tourist authorities to discuss promoting and developing tourism in that region.

  Mr. Bevan
  To ask the Secretary of State for Employment how many people are employed in the tourism and catering industry; and if he will make a statement.

  Mr. Lee
  It is estimated that, in December 1988, there were 1·4 million employees in employment in tourism-related industries in Great Britain. This figure includes only those catering activities related to tourism. There are no directly comparable estimates for the number of self-employed, but according to the preliminary results of the 1988 labour force survey, it is estimated that there were 0·2 million self-employed workers in the hotel and catering industry in the spring of 1988.

  European Community Social Fund
  Mr. Kirkwood
  To ask the Secretary of State for Employment if he will take steps to secure European social fund grants for projects in the Borders.

  Mr. Cope
  Applications for finance from the European social fund for the Borders were forwarded to the European Commission in the normal way and with full support from my Department. The decision on which projects are funded rests with the Commission.

  Mr. Matthew Taylor
  To ask the Secretary of State for Employment what efforts are being made to secure European social fund grants for projects in Cornwall.

  Mr. Cope
  Applications for finance from the European social fund for Cornwall were forwarded to the European Commission in the normal way and with full support from my Department. The decision on which projects are funded rests with the Commission.

  Employment Training
  Mr. Hardy
  To ask the Secretary of State for Employment what assessment he has made of the operations of the employment training scheme in south Yorkshire.

  Mr. Nicholls
  Employment training in south Yorkshire continues to make excellent progress providing unemployed people with a wide range of training opportunities to help them acquire the skills and experience needed to get jobs.

  Ms. Short
  To ask the Secretary of State for Employment whether all new recruits to employment training during 1989–90 will continue to receive training premiums of £11·95, £11·25 and £10, depending on their circumstances; whether he has any plans to increase each of these training premiums in line with inflation; and if he will make a statement.

  Mr. Nicholls
  As was announced on 12 April 1989, from 22 May all new entrants to employment training will be paid a training premium of £10 per week. All trainees receiving a premium of £11·25 or £11·95 at 22 May will continue to do so until they leave the programme.

  Ms. Short
  To ask the Secretary of State for Employment what were the profiles of the number of 168
  expected starts with training managers, excluding conversion from other programmes, on employment training for each month since September 1988, for each training agency area.

  Mr. Nicholls
  Profiles of the number of expected starts with training managers are for internal management purposes only.

  Ms. Short
  To ask the Secretary of State for Employment what level of European social fund funding he is seeking for employment training; and if he will make a statement.

  Mr. Cope
  The United Kingdom has submitted a number of applications for European social fund aid in respect of anticipated expenditure under the employment training programme which are being considered by the European Commission in the light of the total demands being made by the United Kingdom and other member states. The Commission has indicated that European social fund aid is to be allocated for the employment training programme but the amounts are not yet known. A decision will be given shortly.

  Wages Inspectors
  Mrs. Mahon
  To ask the Secretary of State for Employment how many wages inspectors there are in the north-west region; and how many there were in 1979 and 1987.

  Mr. Nicholls
  There are currently 12 inspectors in post in the north west division of the wages inspectorate. There were 21 inspectors in the division in 1979 and 11 in 1987.

  Ms. Mowlam
  To ask the Secretary of State for Employment how many wages inspectors there are nationally; and how many there were in 1979.

  Mr. Nicholls
  Currently there are 66 wages inspectors in post nationally. Arrangements are in hand to bring the number of inspectors up to the full complement of 71. In 1979, there were 158 inspectors.

  Employees (Contracts)
  Mr. Cousins
  To ask the Secretary of State for Employment, how many employees have contracts which exclude rights to redundancy or unfair dismissal.

  Mr. Nicholls
  The information requested is not available.

  Wages
  Ms. Short
  To ask the Secretary of State for Employment what is his best available estimate of the proportion of the work force earning less than £3·80 per hour.

  Mr. Lee
  It is estimated from the New Earnings Survey that about 40 per cent. of the adult work force in Great Britain, including both full-time and part-time employees, earned less than £3·80 per hour in April 1988.

  Unit Labour Costs
  Mr. Beith
  To ask the Secretary of State for Employment how much unit labour costs in the United
  169
  Kingdom have increased over the last 12 months; and what information he has as to by how much labour costs have increased over the same period in France, West Germany, Japan and the United States of America.

  Mr. Lee
  International comparisons of unit labour costs for the whole economy are not available. However, the latest available information for manufacturing industries is provided in the table:

  Unit labour costs in manufacturing Percentage changes in the year to the fourth quarter of 1988

  per cent.

  United Kingdom

  0·4

  France

  -15

  West Germany

  0·7

  Japan

  -2·0

  United States

  1·1

  Notes:

  1. The percentages are calculated from index series produced by the International Monetary Fund; the latest available figures for the five countries on a consistent basis are for the fourth quarter of 1988.

  2. The source index series are in local currency and are not adjusted for exchange rate changes.

  Skill Centres
  Mr. Dunnachie
  To ask the Secretary of State for Employment whether a prospectus will be sent to all those bidding for the skill centres.

  Mr. Cope
  The skills training agency will be offered for sale through a private tender process, and the sale will be open to all interested parties.

  Ms. Ruddock
  To ask the Secretary of State for Employment who owns the freehold of Deptford skill centre; and if he will make a statement.

  Mr. Cope
  The freehold is Crown property, at present held in the name of the Secretary of State for the Environment. Management and financial responsibility is a matter for the Training Commission.

  Mr. Nigel Griffiths
  To ask the Secretary of State for Employment if he will report to the House what progress has been made on the management buy-out of the national network of skill centres.

  Mr. Cope
  In his statement to the House on 13 March,Official Report, column 35, my right hon. Friend the Secretary of State referred to the existence of a management buy-out team, and said that he had agreed to give them financial assistance to make a bid when the skills training agency is offered for sale. It is for the team to decide whether to bid when the formal offer for sale occurs.

  Dock Labour Scheme
  Mr. Janman
  To ask the Secretary of State for Employment if he will make a statement on the past operation of the dock labour scheme in the port of London.

  Mr. Nicholls
  The restrictions of the dock labour scheme have contributed to the decline in business and jobs in the port of London and in other ports covered by the scheme.

  Non-oil cargo passing through the port of London area declined by 9 per cent. between 1970–1987, from 30·4
  170
  million tonnes to 27·7 million tonnes. The number of registered dock workers declined from 16,573 in 1970 to 1,739 in May 1989.

  Mr. David Davis
  To ask the Secretary of State for Employment if he will make a statement on the past operation of the dock labour scheme in Hull, Goole and Grimsby.

  Mr. Nicholls
  The restrictions of the dock labour scheme have contributed to the declining share of business and jobs in the ports of Hull, Goole and Grimsby.

  The growth in trade handled by ports on the south and east coasts outside the dock labour scheme has been Far greater than in the scheme ports, including Hull, Goole and Grimsby.

  The number of registered dock workers in Hull, Goole and Grimsby fell from 4,470 in 1970 to 1,563 on 2 May 1989.

  Mr. Evennett
  To ask the Secretary of State for Employment how many dockers employed in dock labour scheme ports are aged 25–35 years, 35–45 years and over 45 years; and if he will make a statement.

  Mr. Nicholls
  The 1987 National Dock Labour Board annual report, the most recent available, provides the following information on the numbers of registered dock workers in each age group.

  Age group

  Number of workers

  25–35

  693

  35–45

  3,200

  Over 45

  6,408

  Dr. Woodcock
  To ask the Secretary of State for Employment if he will make a statement on the past operation of the dock labour scheme in Liverpool.

  Mr. Nicholls
  The restrictions of the dock labour scheme have contributed to the decline of business and jobs in the port of Liverpool and in other ports covered by the scheme.

  Non-oil cargo passing through the port of Liverpool (including Garston) decreased from 16,464 tonnes in 1970 to 8,886 in 1987: a fall of 46 per cent. In the same period Heysham, a non-scheme, west coast port increased its traffic by over 300 per cent. The numbers of registered dock workers employed in Liverpool and Birkenhead has fallen from 10,449 in 1970 to 1,244 in April 1989.

  Mr. McLoughlin
  To ask the Secretary of State for Employment how many dockers were employed in dock labour scheme ports and in non-dock labour scheme ports in(a) 1959 and (b) 1989; and if he will make a statement.

  Mr. Bellingham
  To ask the Secretary of State for Employment how many dockers were employed in dock labour scheme ports and non-dock labour scheme ports in 1959 and 1989; and if he will make a statement.

  Mr. Nicholls
  According to national dock labour board returns employment of registered dock workers in dock labour scheme ports declined from 71,846 in 1959 to 9,319 in May 1989. Figures for non-scheme ports over the same period are not available, but between 1983 and 1987 employment of dock workers in those ports rose by 10 per cent. to 3,900. A quarter of all dock workers are therefore now employed in non-scheme ports.
  171
  Mr. Hill
  To ask the Secretary of State for Employment if he will make a statement on the past operation of the dock labour scheme in Southampton.

  Mr. Nicholls
  The restrictions of the dock labour scheme have contributed to the declining share of business and jobs in the port of Southampton.

  The growth in trade handled by ports on the south and east coasts outside the dock labour scheme has been far greater than for scheme ports such as Southampton.

  The number of registered dock workers in Southampton has dropped by 66 per cent., from 1,944 in 1970 to 681 in April 1989.

  Mr. Robert B. Jones
  To ask the Secretary of State for Employment if he will make a statement on the past operation of the dock labour scheme.

  Mr. Nicholls
  Since 1970, the number of registered dock workers has declined from 45,542 to 9,310—a drop of 79 per cent. Between 1967 and 1987, the share of the United Kingdom market held by non-scheme ports increased from 10 per cent. to nearly 30 per cent. of a smaller total tonnage.

  The dock labour scheme has contributed to the declining share of business and jobs in the ports in which it operates.

  Mr. Brazier
  To ask the Secretary of State for Employment if he has any plans to discuss the reintroduction of casual labour into dock labour scheme ports with the National Association of Port Employers; and if he will make a statement.

  Mr. Nicholls
  Arrangements following the abolition of the Dock Labour Scheme are a matter for employers and dock workers in the ports concerned, as is already the case for other workers in those ports and dock workers in ports outside the scheme. My right hon. Friend has no plans to enter into discussions with those concerned.

  Employers of 93 per cent. of dock workers in scheme ports have given assurances not to return to a system of casual work. I understand that they have indicated a willingness to examine this and other issues on a port by port basis.

  Mr. Jacques Arnold
  To ask the Secretary of State for Employment how many representations has he received on his White Paper, "Employment in the Ports, the Dock Labour Scheme"; and if he will make a statement.

  Mr. Colvin
  To ask the Secretary of State for Employment what representations he has received on his plans to abolish the dock labour scheme; and if he will make a statement.

  Mr. Nicholls
  I have received a number of such representations. The abolition of the dock labour scheme will lead to increased investment and employment opportunities in British ports and ports areas, and has been welcomed by all sectors of industry.

  Mr. Michael Brown
  To ask the Secretary of State for Employment if he will make a statement on the past operation of the dock labour scheme in Immingham and Grimsby.

  Mr. Nicholls
  The restrictions of the dock labour scheme have contributed to the declining share of business and jobs in the port of Grimsby and Immingham.
  172
  The growth in trade handled by ports on the south and east coasts outside the dock labour scheme has been far greater than for scheme ports such as Grimsby and Immingham. The number of registered dock workers in Grimsby and Immingham fell from 1,344 in 1970 to 684 in May 1989.

  "Removing Barriers to Employment"
  Mr. David Evans
  To ask the Secretary of State for Employment what representations he has received in response to his Green Paper, "Removing Barriers to Employment".

  Mr. Nicholls
  Our Green Paper "Removing Barriers to Employment" was published on 20 March and the closing date for comments is 20 June. We are, therefore, in the early stages of the consultation period. To date, six representations have been received.

  Minimum Wage
  Mr. Boyes
  To ask the Secretary of State for Employment if the Government will implement the Council of Europe's decency threshold of an hourly rate of £3·80 as a minimum wage.

  Mr. Nicholls
  No, there is no such thing as a Council of Europe decency threshold for a minimum acceptable level of earnings.

  Mr. Jack Thompson
  To ask the Secretary of State for Employment if he intends to introduce a statutory minimum wage: and if he will make a statement.

  Mr. Nicholls
  No. A national minimum wage would raise employers' costs and destroy jobs, including the jobs of those whom it was designed to help.

  Work Force
  Mr. Baldry
  To ask the Secretary of State for Employment if he will make a statement on the anticipated changes in the make-up of the work force by age and sex over the next 10 years.

  Mr. Lee
  My Department's latest projections of the civilian labour force show a number of significant changes between now and the end of the century. In particular, it is expected that the share of young people in the labour force will decline markedly and the share of women will rise. These projections were published in the April 1989 edition of Employment Gazette, a copy of which is in the Library.

  TUC
  Mr. Paice
  To ask the Secretary of State for Employment, if he has any plans to meet the General Secretary of the Trades Union Congress to discuss industrial relations; and if he will make a statement.

  Mr. Nicholls
  My right hon. Friend meets the general secretary of the Trades Union Congress from time to time to discuss matters of mutual interest.

  Training Schemes
  Mr. Flannery
  To ask the Secretary of State for Employment how many people who would otherwise have been on the unemployment register have been on Government training schemes since 1979.
  173
  Mr. Lee
  No such estimates are available.

  Picketing
  Mr. Boswell
  To ask the Secretary of State for Employment if he has any plans to convert the current law on picketing to a voluntary code as recommended by the Trades Union Congress; and if he will make a statement.

  Mr. Nicholls
  The Green Paper "Removing Barriers to Employment". published on 20 March, states that the Government propose no change to the law on picketing.

  Dr. Michael Clark
  To ask the Secretary of State for Employment if he has any plans to meet the general secretary of the Trades Union Congress to discuss picketing; and if he will make a statement.

  Mr. Nicholls
  My right hon. Friend has no current plans for such a meeting.

  West Midlands (Engineering Apprentices)
  Mr. Grocott
  To ask the Secretary of State for Employment what is his latest estimate of the number of engineering apprenticeships in the west midlands, expressed as a percentage of the numbers available in 1979.

  Mr. Cope
  Currently in the midlands there are 54 per cent. of the number of apprentices registered with the engineering industry training board in 1979. It is not known how many engineering apprentices there are outside the board's registration system.

  Wages Act 1986
  Ms. Armstrong
  To ask the Secretary of State for Employment, what assessment he has made of the effects of the Wages Act 1986 on young workers' pay(a) by region and (b) nationally.

  Mr. Nicholls
  The removal of wages council minima has enabled employers to offer, and young people to accept, jobs at rates which would previously have been unlawful, and there is evidence that this has resulted in increased job opportunities for those under 21. It is not possible to measure the effect of this greater flexibility on pay levels, but there has been no general reduction in the earnings of young people in wages council trades. These have continued to increase in real terms.

  Skill Training
  Mr. Lofthouse
  To ask the Secretary of State for Employment if he will make a statement on skills training in Yorkshire and Humberside.

  Mr. Cope
  A skilled work force is essential to the growing economy in Yorkshire and Humberside. The Government recognise this and are playing their part. We are establishing local training and enterprise councils which will put employers in the lead in determining local skills training needs. Business growth training launched last month will help companies in Yorkshire and Humberside to improve the effectiveness of their training. In addition young people and unemployed adults are given the opportunity to train through YTS and employment training.

  Mr. Corbett
  To ask the Secretary of State for Employment if he will make a statement on skills training in the west midlands.
  174
  Mr. Cope
  A skilled work force is essential to the growing economy in the west midlands. The Government recognise this and are playing their part. We are establishing local training and enterprise councils which will put employers in the lead in determining local skills training needs. Business growth training launched last month will help companies in the west midlands to improve the effectiveness of their training. In addition young people and unemployed adults are given the opportunity to train through YTS and employment training.

  Mr. Eastham
  To ask the Secretary of State for Employment if he will make a statement on skills training in the north-west.

  Mr. Cope
  A skilled work force is essential to the growing economy in the north-west. The Government recognise this and are playing their part. We are establishing local training and enterprise councils which will put employers in the lead in determining local skills training needs. Business growth training launched last month will help companies in the north-west to improve the effectiveness of their training. In addition young people and unemployed adults are given the opportunity to train through YTS and employment training.

  Training Commission
  Mr. Robert G. Hughes
  To ask the Secretary of State for Employment if he will make a statement on the development of the Training Commission.

  Mr. Cope
  The Employment Bill seeks to complete the abolition of the Training Commission.

  New Businesses
  Mr. Oppenheim
  To ask the Secretary of State for Employment how many new businesses have registered for value added tax during the latest year for which figures are available.

  Mr. Cope
  The net increase in the number of VAT-registered businesses in 1987 was 45,000, or nearly 900 a week on average.

  National Port Employers
  Mr. Andrew MacKay
  To ask the Secretary of State for Employment if he has any plans to meet representatives of the national port employers; and if he will make a statement.

  Mr. Nicholls
  My right hon. Friend has no such plans.

  YTS
  Mr. David Nicholson
  To ask the Secretary of State for Employment if he will make a further statement on the progress of two-year YTS.

  Mr. Cope
  Over 80 per cent. of those who complete their two-year YTS programme go into employment; over 60 per cent. of those who complete gain a qualification. YTS is providing the skills and qualification that young people and the country needs as we move into the 1990s.

  Ms. Short
  To ask the Secretary of State for Employment how many YTS trainees were in receipt of a
  175
  training agency lodging allowance to undertake training away from their home by training agency area, at the end of March 1988, and the end of January, February and March 1989; and how many were in receipt of the allowance by region at March of each year since YTS started.

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

  Ms. Short
  To ask the Secretary of State for Employment how many people of YTS eligible age, registered with jobcentres or the careers service were awaiting an offer of a YTS place at the end of January, February and March 1989; and of those how many were receiving bridging allowance or extended child benefit or income support.

  Mr. Cope
  I am satisfied that the Training Agency has more than sufficient YTS places available in all areas of the country for all those who apply for one.

  Information on numbers receiving bridging allowance and for those whose parents were receiving extended child benefit is provided in the table. Information on the number of young people receiving income support is not available.

  Numbers receiving bridging allowance

  Date

  Number

  12 January 1989

  11,994

  9 February 1989

  14,163

  9 March 1989

  13,955

  Numbers whose parents are receiving extended child benefit

  Date

  Number

  30 January 1989

  1,451

  27 February 1989

  1,960

  27 March 1989

  2,000

  Local Enterprise Agencies
  Mr. Patnick
  To ask the Secretary of State for Employment what amount of Government funding was made available in 1988–89 to local enterprise agencies.

  Mr. Cope
  Government support to local enterprise agencies in the United Kingdom in 1988–89 exceeded £8·3 million.

  Job Creation
  Mr. Roy Hughes
  To ask the Secretary of State for Employment what new initiatives he has to reduce unemployment.

  Mr. Lee
  Unemployment has fallen by over 1·2 million and for 32 months in succession, the longest and largest sustained fall on record, as a direct result of the sustained growth brought about by the Government's sound economic policies. Since 1983 the workforce in employment has increased by nearly 3 million and there are now more people in work in this country than ever before in our history. We will continue to provide the right conditions for this jobs growth to continue. In addition we already have in place a comprehensive range of measures to help unemployed people back into the jobs that are becoming available—in particular the restart programme, job clubs and employment training.

  Unions (Secondary Action)
  Mr. Curry
  To ask the Secretary of State for Employment if he has any plans to review the legislation on secondary action in an industrial action; and if he will make a statement.

  Mr. Nicholls
  Proposals for the reform of the law on secondary action are contained in the Green Paper "Removing Barriers to Employment" which was published on 20 March 1989.

  Smoking
  Mr. Foulkes
  To ask the Secretary of State for Employment what is his departmental policy towards smoking in the work place.

  Mr. Nicholls
  My right hon. Friend welcomes the publication by the Health and Safety Executive in November 1988 of a free booklet "Passive Smoking at Work" which recommends that employers, in consultation with employees or their representatives, develop and implement policies to control smoking in their work place. The booklet advises employers to limit the exposure at work of non-smokers to tobacco smoke.

  Mr. Sims
  To ask the Secretary of State for Employment if, in the light of criticisms of the Health and Safety Executive's booklet "Passive Smoking at Work" he will take steps to withdraw this booklet from circulation and replace it with one which has the approval of the medical profession, and which takes account of the advice of the fourth report of the Independent Scientific Committee on Smoking and Health; and if he will make a statement.

  Mr. Nicholls
  My right hon. Friend supports the advice given by the Health and Safety Executive in the booklet "Passive Smoking at Work" and has no intention of asking the executive to withdraw or replace it. The booklet takes account of the fourth report of the independent scientific committee on smoking and health and also refers readers to other sources of more detailed advice such as that published by the Health Education Authority. It outlines practical ways in which smoking policies can be introduced at work and was agreed with representatives of employers, trade unions and the medical profession.

  Job Clubs
  Dr. Godman
  To ask the Secretary of State for Employment how many job clubs have been closed down, and are to be closed down in(a) Strathclyde, (b) Scotland and (c) England and Wales.

  Mr. Lee
  Changes to the job club network were announced in my right hon. Friend the Secretary of State's reply to my hon. Friend the Member for Bury, North (Mr. Burt) on 27 January 1989,Official Report column 810. As part of those changes the number of job clubs which have been closed down or are to be closed down shortly is:

  Number

  (a) Strathclyde

  5

  (b) Scotland

  7

  (c) England and Wales

  207

  Alternative provision is available where job clubs have been closed.

  Business Growth Training
  Mr. Bright
  To ask the Secretary of State for Employment if he will make a statement on business growth training.

  Mr. Cope
  I refer the hon. Member to the answer that I gave to my hon. Friend the Member for Cambridgeshire, South-East (Mr. Paice) on 19 April 1989,Official Report, column 211.

  Small Businesses
  Mr. Bill Walker
  To ask the Secretary of State for Employment if he has any plans to meet the general secretary of the Confederation of British Industry to discuss the expansion of small businesses; and if he will make a statement.

  Mr. Cope
  My right hon. Friend and I are in regular contact with the CBI to discuss issues affecting small firms and other matters.

  Mr. Tracey
  To ask the Secretary of State for Employment if he has any plans to meet the chairman of the British Venture Capital Association to discuss the development of small businesses.

  Mr. Cope
  I have regular contact with the BVCA but have no immediate plan to meet the chairman of the association.

  Low Pay Unit
  Mr. Tom Clarke
  To ask the Secretary of State for Employment if he has received the most recent report of the low pay unit; and if he will make a statement.

  Mr. Nicholls
  My right hon. Friend is aware of this report and of similar publications prepared by the low pay unit, which do not call for any comment from him.

  Mr. McFall
  To ask the Secretary of State for Employment whether he has received the low pay Unit report, "Ten Years On: The Poor Decade"; and if he will make a statement.

  Mr. Nicholls
  My right hon. Friend has seen this report and similar publications prepared by the low pay unit, which purport to show large increases in the numbers of low-paid people, based on the unit's own definition and quoting the so-called Council of Europe "decency threshold". The Government do not accept the validity of those calculations. Earnings and take-home pay have increased in real terms at all levels of income since 1979, and among both women and men.

  Companies (Worker Representation)
  Mr. Dykes
  To ask the Secretary of State for Employment when he next intends to discuss worker representation on company boards with his European Economic Community counterparts in the Council of Employment Ministers.

  Mr. Cope
  My hon. Friend the Parliamentary Under-Secretary of State for Corporate Affairs will be attending a meeting of internal market Ministers on 12 June when this subject may be discussed.

  Asbestos
  Mr. Nigel Griffiths
  To ask the Secretary of State for Employment what investigation the Health and Safety 178
  Executive has conducted into the burning of asbestos at the protein fractionation centre in Edinburgh adjacent to the Liberton and Southfield hospitals; and what conclusions they have reached.

  Mr. Nicholls
  Inspectors from the Health and Safety Executive are currently investigating the incineration of filters at the protein fractionation centre in Edinburgh. I will write to the hon. Member when the investigation is complete.

  Cobalt Dust
  Mr. Bill Michie
  To ask the Secretary of State for Employment what are the results of the Health and Safety Executive's recent hard metal special national project.

  Mr. Nicholls
  Results so far available show that measurements of cobalt dust in air were below the current recommended occupational exposure limit at 16 factories visited by the Health and Safety Executive in the hard metal special national project. At 17 factories visited the level of cobalt dust was not controlled below the recommended limit.

  Mr. Bill Michie
  To ask the Secretary of State for Employment what action the Health and Safety Executive will be taking to ensure that compliance by the hard metal industry with the occupational exposure limit for cobalt is improved.

  Mr Nicholls
  Inspectors from the Health and Safety Executive have enforcement powers under section 2 of the Health and Safety at Work etc Act 1974 to require an employer to comply with his duties to ensure so far as is reasonably practicable the health, safety and welfare of his employees. These duties extend to the risks associated with the exposure of workers to cobalt dust.

  At visits inspectors check that employers comply with the recommended occupational exposure limit for cobalt and its compounds and will take enforcement action necessary where companies do not meet the required standards.

  Mr. Bill Michie
  To ask the Secretary of State for Employment under what instructions Health and Safety Executive inspectors have been working in taking enforcement action in relation to employers' failures to comply with the cobalt occupational exposure limit and to provide adequate medical surveillance.

  Mr. Nicholls
  At visits, inspectors consider whether employers have complied with their duties under section 2 of the Health and Safety at Work etc Act 1974 to ensure, so far as is reasonably practicable, the health, safety and welfare of their employees. Inspectors check that employers comply with the recommended occupational exposure limit for cobalt and its compounds and will take any enforcement action necessary where companies do not meet the required standards.

  Restart
  Ms. Short
  To ask the Secretary of State for Employment how many claimants called for restart interview have failed to attend their interview; how many of those failing to attend are believed to have found work; how many of those failing to attend have not found work; how many failing to attend have their benefit stopped and
  179
  how many of these have successfully appealed against the benefit decision; and how many failing to attend have subsequently re-registered as unemployed in the most recent 12-month period.

  Mr Lee
  Between April 1988 and March 1989, 3,066,000 were called for restart interview of which 326,000 were referred to unemployment benefit offices for failing to attend that interview. 25,387 (7·8 per cent.) of these had their benefit or credits disallowed.

  The other information requested is not available.

  Unemployment Benefit
  Ms. Short
  To ask the Secretary of State for Employment how many claimants each month have been referred to the unemployment benefit service due to doubts over non-availability or doubts about their restricted availability since December 1988 for each employment service region.

  Mr. Lee
  Up to December 1988 statistics on decisions by adjudication officers on availability cases were produced by the Department of social security on a six-monthly basis. From January 1989 the figures will be produced every quarter. The figures for the period ending 31 March 1989 are not yet available, but I will write to the hon. Member when statistics are to hand on decisions on availability cases for the period requested.

  Child Minders
  Ms. Short
  To ask the Secretary of State for Employment how many child minder allowances have been granted to lone parent ET participants since September 1988; and how many were granted during the most recently available monthly period, for each training agency area.

  Mr. Nicholls
  Information about the number of lone parents on employment training receiving child care payments before April 1989 is not available. The number of lone parents receiving child care payments during April is given in table 1.

  Table 1

  Employment Training

  Number of lone parents receiving child care payments during April 1989

  Training Agency area

  Lone parents

  South East region

  Berkshire and Oxfordshire

  49

  Buckinghamshire and Hertfordshire

  47

  Essex

  47

  Hampshire and Isle of Wight

  43

  Kent

  35

  Surrey

  22

  Sussex

  87

  London region

  Inner London North

  131

  Inner London South

  109

  London East

  92

  London North

  107

  London South

  74

  London West

  27

  South West region

  Avon

  123

  Devon and Cornwall

  121

  Dorset and Somerset

  35

  180

  Training Agency area

  Lone parents

  Gloucester and Wiltshire

  46

  West Midlands region

  Birmingham and Solihull

  229

  Coventry and Warwickshire

  55

  Dudley and Sandwell

  45

  Staffordshire

  48

  The Marches, Hereford/Worcester

  55

  Wolverhampton and Walsall

  16

  East Midlands and Eastern region

  Bedfordshire and Cambridgeshire

  40

  Derbyshire

  17

  Leicester and Northamptonshire

  84

  Lincolnshire

  19

  Norfolk and Suffolk

  47

  Nottinghamshire

  87

  Yorkshire and Humberside region

  Bradford, Calderdale and Kirklees

  111

  Humberside

  71

  North Yorkshire and Leeds

  91

  Sheffield and Rotherham

  53

  Wakefield, Doncaster and Barnsley

  38

  North West region

  Cheshire

  45

  Cumbria

  23

  Lancashire

  42

  Central Manchester

  80

  Greater Manchester North

  46

  Greater Manchester East

  96

  Merseyside

  190

  Northern region

  Cleveland

  119

  County Durham

  56

  Northumberland, North Tyneside and Newcastle

  37

  Sunderland, South Tyneside and Gateshead

  41

  Wales

  Dyfed and West Glamorgan

  58

  Gwent

  21

  Gwynedd, Clwyd and Powys

  56

  Mid Glamorgan and South Glamorgan

  54

  Scotland

  Ayrshire, Dumfries and Galloway

  44

  Central and Fife

  44

  Glasgow City

  73

  Grampian and Tayside

  69

  Highlands and Islands

  16

  Lanarkshire

  37

  Lothian and Borders

  45

  Renfrew, Dumbarton and Argyll

  21

  Claimants (Surveys)
  Ms. Short
  To ask the Secretary of State for Employment what are the terms of reference and other details of the surveys being carried out or commissioned by his Department amongst claimants at either unemployment benefit offices or jobcentres in the west midlands; and if he will make a statement.

  Mr. Lee
  My Department commissioned the Harris Research Centre Ltd. to undertake a survey of claimants at unemployment benefit offices in the west midlands conurbation. Interviewing took place during March and April. All those interviewed were selected at random by interviewers. All interviews were anonymous and voluntary. The aim was to collect information about a representative sample of claimants, not about individuals.
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  This survey is part of a wider study of the labour market in the west midlands conurbation, which also includes a survey of employers' vacancies and recruitment practices. The aim of the study is to establish what the barriers are to the efficient operation of the labour market and, in particular to see what are the factors which prevent longer-term unemployed people from being able to take advantage of the available jobs and to help determine how best my Department's programmes can meet their needs.

  Availability for Work
  Ms. Short
  To ask the Secretary of State for Employment if he will list from the 1988 labour force survey by region, including Greater London and by male and female, the number of people not counted as unemployed by the definition using broad ILO guidelines on the grounds that they had not looked for a job in the four weeks prior to interview, but who stated that they would like a job if one was available, and(a) were available to start work within two weeks or (b) were not available to start work within two weeks.

  Mr. Lee
  Preliminary results from the 1988 labour force survey as requested are shown in the following table:

  Persons not in employment and not unemployed on ILO-OECD definition who had not looked jar work in four weeks prior to interview1 but would like a job, by availability to start work

  Spring 1988, thousands

  Available to start within two weeks

  2Not available to start within two weeks

  Males

  Females

  Males

  Females

  Great Britain

  367

  763

  294

  554

  Northern

  20

  52

  33

  39

  Yorkshire and Humberside

  34

  84

  30

  51

  East Midlands

  30

  62

  19

  40

  East Anglia

  11

  23

  3

  11

  South East of which Greater

  93

  201

  63

  175

  London

  45

  90

  32

  91

  South West

  18

  57

  16

  40

  West Midlands

  44

  70

  30

  53

  North West

  56

  99

  52

  67

  Wales

  22

  42

  20

  28

  Scotland

  39

  74

  26

  51

  1 Includes those who did not state whether they had looked for work.

  2 Includes those who did not state whether they were available to start work.

  3 Sample size too small for a reliable estimate.

  Fair Employment Act (Compensation Payments)
  Mr. Redmond
  To ask the Secretary of State for Employment if he will list those employers who have made a compensatory payment to a complainant under the Fair Employment Act; and what were the sums involved in each case, the original date of each settlement and the actual date of payment since the Act became law to the present time.

  Mr. Viggers
  I have been asked to reply.

  I refer the hon. Member to the reply that I gave on 21 April 1989 to the question from the hon. Member for Kingston-upon-Hull, North (Mr. McNamara) at column 316.

ENVIRONMENT

  Job Creation
  Mr. Holt
  To ask the Secretary of State for the Environment how many part-time jobs have been created by Cleveland county council since 1979.

  Mr. Gummer
  Cleveland county council employed 10,616 part-time staff in December 1979. By December 1988 it employed 12,927, a net increase of 2,311, or 21·8 per cent.

  National Business Rate
  Mr. Fraser
  To ask the Secretary of State for the Environment how much he estimates Lambeth will receive from the proceeds of the national business rate, in relation to the current yield from rates of non-domestic properties.

  Mr. Gummer
  The proceeds of the national business rate will be distributed as an equal amount per adult. The level of receipts in any area will depend on the distributable amount per adult and the number of adults in that area. This information will not be available before the autumn. It is of no significance to community chargepayers if the income from non-domestic ratepayers retained in Lambeth changes when the new system is introduced. Grant will be paid according to need. So if Lambeth retained more non-domestic rate income, the need for grant would be lower and chargepayers would not benefit.

  Gipsy Sites
  Mr. Robert Banks
  To ask the Secretary of State for the Environment if he will set out the number of local authorities with designated gipsy sites and those without.

  Mr. Trippier
  The number of local authorities which are designated areas under the Caravan Sites Act 1968 is as follows:

  Designated

  Not designated

  Shire districts

  94

  203

  Metropolitan districts

  10

  26

  London Boroughs

  22

  10

  Brodsworth Parish Council (Letter)
  Mr. Redmond
  To ask the Secretary of State for the Environment when he replied to the letter sent to him by Brodsworth parish council in the county of South Yorkshire, dated 14 March, in respect of sewage and river pollution; and if he will publish his reply in the Official Report.

  Mr. Moynihan
  The Department replied to the council on 9 May and I have sent a copy to the hon. Member. I have no plans to publish the reply.

  Puffins
  Mr. Barry Field
  To ask the Secretary of State for the Environment if he will commission a study into the disappearance of puffins along the south coast.

  Mrs. Virginia Bottomley
  No. The Nature Conservancy Council advised that there has been no fall in the overall
  183
  numbers of puffins on the south coast. The latest available figures show a maximum of some 260 birds in the area between 1985 and 1987, compared with 205 in 1969–70. While some small colonies may have declined or moved elsewhere, any localised changes are not considered so significant, in relation to the total British puffin population of over 500,000 breeding pairs, to justify commissioning a study.

  Sulphur Dioxide
  Mr. McCrindle
  To ask the Secretary of State for the Environment if he will make a statement on progress being made to remove sulphur dioxide from power station and factory emissions.

  Mrs. Virginia Bottomley
  I refer my hon. Friend to the reply I gave to the hon. Member for St. Helen's, South (Mr. Bermingham) on 2 May, at column 53.

  Community Charge
  Mr. Battle
  To ask the Secretary of State for the Environment if he will publish a table outlining how many people his Department estimates will gain and how many will lose as a result of the introduction of the community charge in(a) Leeds, West and (b) Kirkstall ward.

  Mr. Gummer
  I refer the hon. Member to my reply of 16 March at column 318, to the hon. Member for Nottingham, North (Mr. Allen).

  Mr. Battle
  To ask the Secretary of State for the Environment if he will set out(a) all the exempt categories of those who will not have to pay the poll tax and (b) the exact nature and amount of the exemptions including housing benefit payment arrangements; and if he will make a statement.

  Mr. Gummer
  The Government have no plans to introduce a poll tax. The categories of people who are exempt from liability to pay the personal community charge are listed in schedule 1 to the Local Government Finance Act 1988. We estimate that the number of individuals in these categories will be about half a million.

  Mr. Blunkett
  To ask the Secretary of State for the Environment if, pursuant to his reply to the hon. Member for Sheffield, Brightside of 8 May,Official Report, column 350, he will publish the letter in the Official Report.

  Mr. Gummer
  I refer the hon. Member to my right hon. Friend's reply of 11 May at column 521 to the hon. Member for Copeland (Dr. Cunningham).

  Mr. Allen
  To ask the Secretary of State for the Environment who(a) collected the local information for and (b) distributed the newspaper articles on the poll tax in the name of the Minister for Local Government which appeared last week.

  Mr. Gummer
  The Government have no plans to introduce a poll tax. My articles were distributed by the Department's press office and the regional offices of the COI. The information they contained was collected from a range of sources.

  Mr. Randall
  To ask the Secretary of State for the Environment how many of the leaflets entitled "The Community Charge (the So-called Poll Tax); How It Will Work for You" have been printed.
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  Mr. Gummer
  [holding answer 12 May 1989]: A total of 23 million.

  Mr. Grocott
  To ask the Secretary of State for the Environment what was the cost of printing the leaflets entitled "The Community Charge (the So-called Poll Tax); How it Will Work for You."

  Mr. Gummer
  [holding answer 12 May 1989]: The total cost of production was £367,887.

  Mr. Allen
  To ask the Secretary of State for the Environment if he will list the newspapers which received articles on the poll tax in the name of the Minister for Local Government last week.

  Mr. Gummer
  I shall write to the hon. Gentleman shortly with this information.

  Mr. Kaufman
  To ask the Secretary of State for the Environment when regulations relating to the processing of information gathered for the purpose of compiling the poll tax register will come into effect; what guidelines his Department will issue to councils on this matter; what representations he has received concerning the sending out by Westminster city council of registration forms with a 21-day deadline for reply; and if he will make a statement.

  Mr. Gummer
  [holding answer 10 May 1989]: The Government have no plans to introduce a poll tax.

  Regulations prescribing the powers of community charges registration officers to require information from the public were laid before Parliament on 17 March and come into force on 22 May. Where information is required under this provision, the person concerned has 21 days within which to respond. It is open to CCRO's to seek information before that date on a voluntary basis but they have been advised that such requests would not have any statutory character. I expect however that most recipients of requests before 22 May will co-operate by providing the information to compile the register in a smooth and economical manner.

  Mr. Allen
  To ask the Secretary of State for the Environment if he will make it his policy to meet the costs which have so far been incurred in setting up the community charge system in Nottingham beyond the £307,000 specific grant for 1989–90 already made available.

  Mr. Gummer
  No. To agree to meet any costs incurred by authorities in preparing for the community charge would give no incentive to efficiency. Nottingham has been allocated £306,864 specific grant and a similar amount of expenditure has been supported through RSG. It is now for it to use its available resources to ensure that the new arrangements are effectively implemented.

  Mr. Cohen
  To ask the Secretary of State for the Environment (1) what a managing director would pay(a) in community charge and (b) in a system of capital value rates plus local income tax paid in proportions of 80–20, respectively, if he or she lived in a typical five-bedroom house in Hornsey;

  (2) what a home-help would pay (a) in community charge and (b) in a system of capital value rates plus local income tax paid in proportions of 80–20, respectively, if he or she lived in a typical council high-rise flat in Hornsey.

  Mr. Gummer
  I refer the hon. Member to the reply I gave on 2 May, at column 46.

  Sea Dredged Aggregates
  Mr. Barry Field
  To ask the Secretary of State for the Environment what is the total United Kingdom demand for sea dredged aggregates for the last five years; what is the percentage growth over the last ten years; and what are the predicted levels of demand during the next five years.

  Mr. Chope
  The total United Kingdom demand for sea dredged aggregates over the last five years for which figures are available (1983–87) was 70·03 million tonnes (mt).

  The percentage growth over the last 10 years (1977–87) is 46 per cent. Specific predictions for the estimated level of demand over the next five years (1989–93) are not available. But an estimate is made in MPG5, "Guidelines for Aggregates Provision in England and Wales" that the total level of demand over this period is likely to be 81·1mt.

  Nuclear Waste
  Mr. Flynn
  To ask the Secretary of State for the Environment if, pursuant to the reply to the hon. Member for Meirionnydd Nant Conwy, (Dr. Thomas)Official Report, 2 May, column 53, he will list the 12 sites earmarked by UK Nirex Ltd for further appraisal.

  Mr. Ieuan Wyn Jones
  To ask the Secretary of State for the Environment, pursuant to his reply to the hon. Member for Meirionnydd Nant Conwy (Dr. Thomas) on 2 May Official Report, column 53, if he will list the 12 sites chosen for further appraisal by Nirex.

  Mrs. Virginia Bottomley
  My right hon. Friend the Secretary of State has not received a list of the 12 reserve sites identified by Nirex.

  Rent Arrears
  Mr. Heddle
  To ask the Secretary of State for the Environment if he will publish in the Official Report the gross amount owed to each local authority in England in rent arrears; what proportion such sums represent as a percentage of rental income; and how much has been owed in each case for (a) three months, (b) six months, (c) one year and (d) two years.

  Mr. Trippier
  A table was placed in the Library on 1 March this year showing rent arrears reported at 1 April 1988 and the arrears as a percentage of rent roll. Corresponding information for the position at 1 April 1989 will be available towards the end of this year.

  Information about total tenants' arrears (including rates and service charges and so on) together with estimates of the length of arrears is contained in the Chartered Institute of Public Finance and Accountancy publication "Housing Rents Statistics at April 1988", a copy of which is also in the Library.

  BISF Homes
  Mr. Allen
  To ask the Secretary of State for the Environment whether he was invited to the national meeting of the BISF home owners held on 6 May; and if he will make a statement.

  Mr. Trippier
  I was not invited to this meeting. I refer the hon. Member to the reply I gave on 8 May at column 353, to my hon. Friend the Member for Sherwood (Mr. Stewart).

  Waste Reduction
  Ms. Walley
  To ask the Secretary of State for the Environment if he will take steps to ensure that integrated pollution control will require industry to take account of waste minimisation and waste reduction.

  Mrs. Virginia Bottomley
  Under the Government's proposals industrial processes scheduled for integrated pollution control will need a consent from Her Majesty's inspectorate of pollution to operate. That consent will require the generation and emission of specified polluting wastes to be minimised through the application of best available technology not entailing excessive cost. The consent will also require the minimisation of the impact on the environment as a whole of all waste outputs from scheduled processes.

  Energy Conservation
  Ms. Walley
  To ask the Secretary of State for the Environment if he will take steps to ensure that integrated pollution control will require industry to take account of energy conservation.

  Mrs. Virginia Bottomley
  Integrated pollution control will not directly regulate the energy efficiency of prescribed processes.

  Crown Suppliers
  Mr. Dalyell
  To ask the Secretary of State for the Environment, pursuant to his answer to the hon. Member for Linlithgow of 24 April,Official Report, column 413, if he will make a statement as to the parameters within which Her Majesty's Government will define pensions for Crown Suppliers employees as broadly comparable to present arrangements.

  Mr. Chope
  The pension terms on offer would be assessed by the Government Actuary.

  Plumstead Baths and Library
  Mr. Cartwright
  To ask the Secretary of State for the Environment what recommendations he has received from English Heritage about the possible listing of Plumstead baths and library; and what has been his response.

  Mrs. Virginia Bottomley
  English Heritage has recommended that the baths and library are not buildings of special architectural or historic interest, and I have decided to accept its advice. Accordingly, these buildings will not be included in the statutory list.

  Cryptosporidia
  Mr. Fearn
  To ask the Secretary of State for the Environment what research is being undertaken to establish whether cryptosporidia is contained in water filter beds.

  Mr. Howard
  Research into cryptosporidia in water supplies is one of the questions being examined by the group of experts established by the Government under the chairmanship of Sir John Badenoch.

  Bathing Waters
  Mr. Gareth Wardell
  To ask the Secretary of State for the Environment if he will publish in the Official Report the

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  estimated cost for each of (a) Morecombe South; (b) Morecombe North, and (c) Bardsea of (i) a long sea outfall, (ii) full sewage treatment works with a short sea outfall, and (iii) full sewage 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 cost of commencement and completion.

  Mr. Howard
  I refer the hon. Member to the answer I gave on 8 May, at column 352, to his question about the bathing waters at Formby, Ainsdale and Southport.

  Domestic Waste
  Dr. Glyn
  To ask the Secretary of State for the Environment what steps he is taking to encourage the reprocessing of domestic waste by local authorities; and if he will make a statement.

  Mrs. Virginia Bottomley
  It is for waste disposal authorities to choose the most appropriate method of disposal for their own locality, taking account of the economic and environmental implications in so doing. We are currently considering changes to the legislation which will ensure that the true costs of waste disposal are met by those disposing of the waste. It may well be that recycling or other methods of treating waste will then be seen as more attractive options.

  Local Government Boundaries
  Mr. Rooker
  To ask the Secretary of State for the Environment when he expects to receive the results of the review of local government district council boundaries in the west midlands.

  Mr. Gummer
  [holding answer 11 May 1989]: Before 31 March 1992—the date by which the Local Government Boundary Commission must complete its reviews.

  Paper Recycling
  Mr. Ron Davies
  To ask the Secretary of State for the Environment how many paper recycling plants there are operating in the United Kingdom currently; what are their respective capacities; and how much recycled paper they produce.

  Mrs. Virginia Bottomley
  [holding answer 12 May 1989]: I understand that there are 54 mills in the United Kingdom (approximately half of all the paper and board mills in the country) that use waste paper. In 1988 they consumed a total of 2·4 million tonnes of waste paper and
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  produced an estimated 2·1 million tonnes of paper made wholly or partly from waste paper. Details of their respective capacities or production are not available.

  Mr. Ron Davies
  To ask the Secretary of State for the Environment whether he has any plans to encourage the recycling of paper and the use of recycled paper.

  Mrs. Virginia Bottomley
  [holding answer 12 May 1989]: The Department has shown the way by phasing in the use of recycled paper for correspondence since 1984; other Departments are doing the same.

  We are also co-operating in the current series of seminars organised by the Department of Trade and Industry aimed at raising awareness of the growing demand for waste paper as a raw material for newsprint production.

  My hon. Friend the Under-Secretary for Trade and Industry has responsibility for co-ordinating Government policy on recycling. I and other colleagues work closely with him to promote recycling whenever it is an economically viable method of waste disposal.

  Local Authority Expenditure
  Mr. McCrindle
  To ask the Secretary of State for the Environment if he will make a statement on the consequences for local authorities of financing new capital expenditure direct from revenue after the introduction of the community charge; and if he will make a statement.

  Mr. Gummer
  [holding answer 15 May 1989]: Under the proposed new capital finance system contained in the Local Government and Housing Bill, local authorities will be free to finance additional capital expenditure direct from a revenue account. This freedom will extend the accountability of the community charge to capital as well as revenue expenditure. I am discussing with the local authority associations how allowance for the direct financing of capital expenditure should be included in the total revenue needs assessment used to determine local authorities' needs grant.

  Tree Preservation
  Mr. Ron Davies
  To ask the Secretary of State for the Environment when he expects to be in a position to announce the results of his review of legislation relating to tree preservation orders.

  Mrs. Virginia Bottomley
  [holding answer 15 May 1989]: The review of tree preservation policy and legislation is still in progress.

  It is too soon to say when a further announcement may be made.

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

Legal Profession: Green Papers
Lord Benson Lord Benson asked Her Majesty's Government:
Whether they will publish the responses received on the three Green Papers on the legal profession.
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, I shall be publishing a synopsis of the responses and, of course, those who respond are welcome to publish their contributions, as many have done already. However, I doubt whether it would be practical for the Government to publish all the responses, bearing in mind that there are more than 2,000, and that each individual or organisation would have to be asked for permission.
Lord Benson: My Lords, I am grateful to the noble and learned Lord for that information. I wonder whether he would be willing to allow the responses to be examined at some place so that anybody who is interested in seeing them can study them and make an appropriate synopsis.
The Lord Chancellor: My Lords, I shall certainly bear that suggestion in mind. I note that the Royal Commission over which the noble Lord presided followed that course, but after seeking permission from the various people who had responded to its request for information and restricting the responses which were open for inspection to those not of a personal kind but of a general organisational kind suggesting various changes.
Lord Rawlinson of Ewell: My Lords, has my noble and learned friend read all those responses?
The Lord Chancellor: My Lords, I have read a good number but I have not read all of them yet. However, I certainly intend to do so.
Lord Mishcon: My Lords, is the noble and learned Lord aware that much reliance has been placed by all those concerned on his assurance that he will be keeping an open mind on the proposals contained in the Green Papers and that he will be very ready to consider any counterproposals that coincide with the main aims which he seeks to perfect in those Green Papers?
The Lord Chancellor: My Lords, I am not sure whether I am aware of that, but certainly the position is that I have already studied a good number of the responses which contain various suggestions to which I shall be giving very careful attention.

Legal Profession: Costs
2.39 p.m.
Lord Alexander of Weedon Lord Alexander of Weedon asked Her Majesty's Government:
Whether they made studies of the impact on the cost of legal services arising out the proposals in the three Green Papers on the legal profession, and, if so, whether they will publish their studies.
The Lord Chancellor: My Lords, the Green Papers set out proposals for the elimination of rules in the legal profession which are not necessary in order to ensure standards of competence and conduct. The question therefore in relation to any particular rule is whether it is necessary for this purpose. If a rule is not necessary for this purpose its elimination is not likely to increase cost.
Lord Alexander of Weedon: My Lords, I thank my noble and learned friend for that Answer. As a result, am I right in understanding that the Government have carried out no studies of the actual costs of the proposals either to the public purse or to private litigants; and, if not, bearing in mind that this issue is of critical importance to the administration of justice, is it not right that wide-ranging studies should be carried out before any proposals are implemented?
The Lord Chancellor: My Lords, like my noble friend, I have attended a great number of inquiries of one kind or another. I do not think that I have ever attended one in which there has not been a suggestion of some further study that should be undertaken before a decision is reached. I acknowledge most heartily the importance of these proposals. I regard them as extremely important, and I think I can assure my noble friend that decisions about what we should recommend arising from the consultation will be taken only after very careful consideration.
Lord Irvine of Lairg: My Lords, what specific cost benefits to the consumer does the noble and learned Lord anticipate if the Green Paper proposals are implemented by statute?
The Lord Chancellor: My Lords, as I have said, the primary aim of the Green Paper proposals is to consider whether there are any unnecessary rules in the profession. If on examination a rule turns out to be unnecessary, its elimination is not likely to increase costs. We have made a number of proposals for seeking to reduce costs. These have arisen primarily from the civil justice review which my noble and learned friend Lord Hailsham initiated some time ago. I was glad to be able to announce some little time ago that we were hoping to implement the main thrust of that review's proposals. The object of the three Green Papers is not primarily to reduce costs. If as a result of the elimination of unnecessary rules costs are reduced, that will be welcome to all those who are clients of the legal profession.
Lord Beloff: My Lords, has my noble and learned friend studied the paper by that most distinguished free market economist, Professor Basil Yamey, of the London School of Economics, who points out that the probable result of the removal of these so-called restrictions would be to increase the costs of litigation to the ordinary person?
The Lord Chancellor: Yes, my Lords, I have in fact studied that paper with some care. If I have understood it properly, I think it may proceed on assumptions about the Green Paper proposals which are not fully justified by a close study of the Green Papers themselves.
Lord Hacking: My Lords, without bringing your Lordships to a high state of emotion so early in this afternoon's proceedings, may I ask the noble and learned Lord whether he accepts that members of both sides of the legal profession have concern over the present cost of legal proceedings, particularly in the field of litigation, and wish to co-operate in containing their escalation? Secondly, will the noble and learned Lord confirm that, in suggesting a reduction in advocates appearing in court proceedings, including the use of solicitors' right of audience, his proposals should have a significant effect in reducing those costs, whether or not they are quantified?
The Lord Chancellor: My Lords, I have always regarded it as a wise precaution in advocacy not to overstate one's case. Therefore, at the moment I am simply claiming that these proposals, if implemented, would not increase costs. As I said, I believe that they may reduce costs; but I am not actually making that claim at present.
So far as concerns the first supplementary question of the noble Lord, I believe that the legal profession as a whole, in both its branches—indeed, it is truly to be regarded as one profession in two branches—is anxious to do what it can to reduce costs. Therefore I hope that as a result of all this consultation and consideration benefits to the clients of the legal profession will ensue.
Lord Morris: My Lords, is it not important continually to remind oneself that by their very nature these Green Papers are discussion documents and not proposals? If that is the case, and if it was discussion which Her Majesty's Government wished to pursue, then the papers have certainly had the most monumental success.
The Lord Chancellor: My Lords, the Green Papers contain proposals which are the provisional views of the Government on many matters. They are, however, provisional views and therefore may not ultimately be the Government's views after there has been consideration of the consultations. As a means of provoking lively and informed discussion I think that the Green Papers have been quite successful.
Lord Hailsham of Saint Marylebone: My Lords, I welcome my noble and learned friend's desire to
1040
implement the proposals contained in the six papers of the civil justice review, but can he say whether he has been able to work out how many clauses would be required in a Bill if they, and only they, were to be enacted in the next Session?
Lord Mason of Barnsley: My Lords, fewer than the Water Bill!
The Lord Chancellor: My Lords, important as the civil justice review proposals are, I doubt very much whether Her Majesty's Government would propose that they, and only they, be enacted in the next Session. The number of clauses required for that purpose has not yet been determined.
Lord Glenamara: My Lords, will the noble and learned Lord stick to his guns in this matter and not allow himself to be browbeaten both inside this House and outside by the two bi-partisan trade unions?
The Lord Chancellor: My Lords, these are papers for consultation and I have promised—I hope that your Lordships will believe that I should like to fulfil that promise—to consider representations about them from whatever quarter they may arise.
Baroness Carnegy of Lour: My Lords, to follow on from that, I speak rather unusually, in the interests of customers. Can the noble and learned Lord tell the House whether the Government have any idea as to the amount which the two sides of the legal profession may be spending on their campaign against the proposals contained in the Green Papers? That cost must presumably ultimately be passed on to their customers.
The Lord Chancellor: My Lords, I am not really able to say a great deal about the matter. I have read reports in newspapers which indicate that a fairly substantial sum was aimed at by the Bar. I think that that amount has been collected. However, whether it has all been spent I cannot tell. So far as concerns the Law Society, I have no information in that respect.
I believe that the proposals are most important and therefore it is not perhaps surprising that some advice was sought, even if it turned out to be a little costly, about how the matter might be handled by the profession.
Lord Irvine of Lairg: My Lords, has the noble and learned Lord addressed the question of whether legal costs could be increased as a result of the implementation of the Green Paper proposals? If he has done so, can he tell the House how that will arise?
The Lord Chancellor: My Lords, yes, I have addressed that question. I have already said that the nature of the proposals are such that they should lead to the elimination of unnecessary costs and unnecessary rules. I do not believe that that will increase the cost of litigation.
Lord Molloy: My Lords, is the noble and learned Lord aware that the mass of ordinary people in this country to whom these Green Papers ought to be directed—they are not only directed to the legal profession—are almost frightened to enter into some form of litigation, despite the fact that they can get justice, or what can be called justice, because they fear that the costs will be worse than anything they have experienced? Is he further aware that many people hope that considerations of ordinary folk will be taken fully into account in these consultations and dealt with accordingly?
The Lord Chancellor: My Lords, the aim of the Green Papers as well as the aim of the civil justice review, and every other initiative that I and my noble and learned friends who have preceded me in this office have taken in recent years, has been to try to improve the service to the people whom the noble Lord referred to as "ordinary folk". Indeed I made that fact clear in the Green Papers. We tried to write the papers in such a way that ordinary people without any particular legal training or experience could understand them.
Lord Hailsham of Saint Marylebone: My Lords, will my noble and learned friend confirm that, contrary to what was suggested by the noble Lord, Lord Glenamara, neither of the two honourable and learned professions of the law practises in England as a trade union, and that both are deeply concerned with the honour and integrity of the craft which they practise and are very proud indeed to belong to it?
The Lord Chancellor: My Lords, I answered the noble Lord in the way that I did so as not to make any comment that could be construed as in any way adverse to the honour and public spiritedness of the two branches of the legal profession in this country.
I believe, without any reservation, that the representations made to me by the Inns of Court, the General Council of the Bar, the Law Society, various local law societies, many other professional bodies and individual practitioners have been put forward in a constructive spirit. I hope that your Lordships will feel that the project upon which we are all engaged is important, and that your desire is that out of it will come a profession that is even better than the one we have at present.

Cyprus: British Troops Sports Centre
2.51 p.m.
Baroness Strange Baroness Strange asked Her Majesty's Government:
Whether they will give a grant to the British troops serving with UNFICYP at Jubilee Camp towards renovating the old hangar at Nicosia Airport as a sports centre.
The Minister of State, Foreign and Commonwealth Office (Lord Glenarthur): My Lords, I am glad to say that we have agreed with UNFICYP to fund the conversion of the hangar to a gymnasium and
1042
recreation centre. We hope that the necessary work can be completed in the current financial year.
Baroness Strange: My Lords, I thank my noble friend for that deliciously and unexpectedly encouraging reply. Does he agree that we are all proud of our British forces and the way they maintain peace throughout the world, and that we are delighted to have any opportunity to express that pride?
Lord Glenarthur: My Lords, I am grateful to my noble friend. We of course share that view. In Cyprus the British contingent has worked extremely hard and brings special balances to bear in a difficult situation.
Lord Cledwyn of Penrhos: My Lords, I welcome the information that the Minister gave to his noble friend. Nevertheless, is it not the case that Britain and the other countries which contribute to the United Nations force in Cyprus are owed large sums of money by other United Nations countries which do not contribute? Will he be good enough to tell the House what is the current accumulated deficit which is owing at present?
Lord Glenarthur: My Lords, the noble Lord is right. All the other major troop contributors absorb some or all of their own costs. The main UNFICYP account is funded by voluntary contributions by United Nations member states. The account is in deficit by 167 million dollars. We call upon others to support a change to the assessed contributions to put UNFICYP on a sounder financial basis.
Viscount Mersey: My Lords, while it is obviously good news about the hangar, surely my noble friend agrees that the news would be even better if the green line in Cyprus disappeared altogether? It is nearly as nasty a thing as the inter-German border. Will my noble friend update the House on the state of play between Mr. Denktas and President Vassiliou and whether the reunification of Cyprus is on the horizon?
Lord Glenarthur: My Lords, President Vassiliou and Mr. Denktas agreed at a meeting with the United Nations Secretary-General on 6th April to prepare a draft outline settlement by the end of May. We continue to hope that substantial progress can be made.
Viscount Hanworth: My Lords, does the Minister agree that were one to withdraw the United Nations from the border, a serious border incident might occur; and that might have have far-reaching effects? For the moment at least it is vital to keep that force there.
Lord Glenarthur: My Lords, yes. I agree with the noble Viscount.

"Phones on the Move": Responses
2.55 p.m.
Lord Morris Lord Morris asked Her Majesty's Government:
How many proposals they have received in response to the Department of Trade and Industry paper Phones on the Move and what their timetable is for issuing licences.
The Secretary of State for Trade and Industry (Lord Young of Graffham): My Lords, by 12th May we had received 52 responses to this discussion document. They raise a wide range of technical and other issues which are being considered by my department and the Office of Telecommunications.
I am concerned, however, that we should move ahead quickly in this area and identify prospective operators as soon as possible. I am not yet in a position to say precisely when this will be, but, as I undertook to the House in my Statement on 26th January, I shall make a further announcement once we have completed our consideration of the responses.
Lord Morris: My Lords, I thank my noble friend for that Answer and in particular for his statement that there will be an early resolution in the allocation of licences. Is he aware—I am sure that he is—that the early allocation of those licences will bring the benefits of mobile telephony to a far wider market than at present?
Lord Young of Graffham: My Lords, we are still awaiting the launch of the Telepoint service which will be starting within a matter of weeks. The service is one which will follow Cellnet and Telepoint and it will involve new technologies and a considerable amount of innovation. The initial responses that we have received are based on innovation and new technologies. Out of them I hope to select a few applicants and we shall ask them to develop submissions on the viability of running services.
Viscount Montgomery of Alamein: My Lords, will the 52 proposals that my noble friend has received be treated as licence applications. That might have the effect of ensuring a British lead in the next generation of mobile telephony.
Lord Young of Graffham: My Lords, no. I shall select a limited number and we shall return to them and ask them to make licence applications.
Lord Williams of Elvel: My Lords, by what criteria does the Minister propose to select the licensees?
Lord Young of Graffham: My Lords, that is a point which should be developed. We asked for responses by 28th April, essentially on the viability of a new personal communciation network between 1·7 gigahertz and 2·3 gigahertz; the United Kingdom markets' ability to support more mobile radio operators; the role of the pocket radio telephone; the timing of any new network; the most appropriate technology that should be used; the amount of radio spectrum that we need to run these telephones; the
1044
features that technology should offer; and the international dimension—the ability the new services would have to be accepted round the world by adopting European and other international standards.
Those 52 applications cover a wide spectrum of approaches. We are looking to see which ones we believe would be most capable of being developed in the future, and we shall then go out to a number of individuals and ask them to submit formal applications for licences. We are talking about the technology of the mid-1990s. It is a big step forward. I know from the applications that we have received that we have excited the imagination and response of companies all round the world.

Business
2.58 p.m.
Lord Denham: My Lords, it may be for the convenience of the House if I announce that the Committee stage of the Electricity Bill will be adjourned at approximately 7.30 p.m. for approximately one hour and that during this adjournment the Committee stage of the Parking Bill will be taken.

Prisons (Scotland) Bill [H.L.]
The Lord Advocate (Lord Fraser of Carmyllie): My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of recommitment be discharged.
Moved, That the order of recommitment be discharged.—(Lord Fraser of Carmyllie.)
On Question, Motion agreed to.

Electricity Bill
3.p.m.
The Parliamentary Under-Secretary of State, Department of Energy (Baroness Hooper): My Lords, I beg to move that the House to do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Baroness Hooper).
On Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES, in the Chair.]
[Amendment No. 61 not moved.]
Lord Shepherd Lord Shepherd moved Amendment No. 62:
Before Clause 3, insert the following new clause:

("Efficient use of electricity

The Secretary of State, shall, after consultation with the Director, require each of the public electricity suppliers to make and produce evidence to the Director showing that he has made such arrangements as will promote the efficient use of electricity

1045
and may direct any public electricity supplier to take specific action in this area and, if appropriate, may refuse or amend any application for tariff increases or major capital projects.").
The noble Lord said: I seek to move Amendment No. 62 with some degree of confidence that it should command support from all quarters of the Committee. I regret that I was not present on Thursday when there was a considerable debate on energy conservation. That was due to a long-term prior engagement.
The case for conservation and efficient use of energy is too well known to require any explanation from me this afternoon. But there is no doubt that end-use electricity efficiency can play a significant role in the conservation of energy. The amendment is very specific. It deals with the use of electricity; it is not involved with generation or transmission.
Sub-committee B of the European Communities Committee, of which I am chairman, has carried out a full inquiry into Community proposals in regard to energy efficiency and the part that it can play in reducing dependence upon imported oils. I move the amendment not as chairman of the committee, because that is the convention and I think that that would apply equally to other noble Lords who have put their names to the amendment. We do so in our personal capacity.
We took evidence from the Department of Energy, from the Commission, from manufacturers and trade associations and from many other witnesses. Based on the evidence, we produced a unanimous report that was published on 18th April. In paragraph 103 the committee records that clearer statutory guidance should be given to the electricity supply industry to ensure efficient electricity use; that the Bill as drafted is inadequate to ensure that; and that there is a need for a clearer statutory duty to promote energy efficiency.
The underlying reason behind the amendment is to be found in paragraph 83 of the Select Committee's report, which says that:
"The Committee agree with the [European] Commission that the more efficient use of electricity can reduce significantly both future investment in electrical power generation and the demand for primary energy … Substantial savings can be made".
This possibility has not been widely appreciated in the electrical power system planning. That is the crux of the matter. More efficient use of electricity reduces energy demands, with all the consequential benefits that it has. Much evidence to support this claim was printed in the Select Committee's report.
The European Commission's figure is that a 10 per cent. improvement in efficiency between now and the year 2000 would eliminate the need for 40,000 megawatts of new power station capacity within the Community. Compelling evidence was produced showing that the widespread application of state of the art technologies by all classes of electricity consumers could significantly reduce the United Kingdom electricity demand. For example, the Association for the Conservation of Energy reported that in commercial lighting, industrial motors and domestic fridge-freezer areas alone a 90 per cent. take-up of best available technology would result in savings of up to 11 per cent. of the present Central Electricity Generating Board's demand. This
1046
improved efficiency would be equivalent to acquiring some six years of increased capacity according to the CEGB's growth forecast. In other words, the need for four or five new power stations, costing in total perhaps some £10 billion, could be postponed, with associated savings in the national fuel and import bills, plus environmental benefits.
Whatever the figure actually is, no one can doubt the real importance of greater efficiency of electricity use. The real question is, how can it be achieved? Two bodies have been mainly responsible for this in the past: the Electricity Council, representing the area boards, and the Energy Efficiency Office of the Department of Energy. Both have mounted successful promotional campaigns. But the Electricity Council will be abolished with privatisation and the budget of the EEO has recently been cut substantially. There is little to reassure us that the work of these two bodies can be continued. Who in fact will encourage research and development?
More important, however, is the question of whether promotion of electricity efficiency is enough in itself to ensure a greater take up. I firmly believe that it is not. That is because of the pattern of consumer choice. People just do not buy more efficient domestic appliances, for example, if they have to pay more initially in capital costs. In other words, the pay-back is too long.
In her speech on Thursday, the noble Baroness spoke of the need for information and advice. Yes, that is important and can develop public awareness. But I am sure that she is aware that the present information available to a customer in any of our big stores is either vague or unreliable and is often irrelevant. How is it possible to compare like with like if one is to make a choice? What we need, and what the committee felt was necessary, is for proper standards for these appliances to be agreed, and also the form of presentation. We suggested that the Government should look at the United States Appliance Energy Conservation Act of 1987. In paragraph 101 of the report we say that,
"Satisfactory standards and testing methods … should be worked out and … imposed on Community manufacturers".
Again, according to the evidence to the committee, the same is true of industry. Some 61 per cent. of industrial electricity consumption is by electrical motors. Despite all the promotional efforts of the motor manufacturers and the EEO, purchases by the United Kingdom industry of energy efficient motors has achieved only 3 per cent. of electrical motor sales. In the United States the corresponding figure is 10 per cent. higher. We are still unfortunately an energy-illiterate nation.
While I recognise what the noble Baroness said on this subject last Thursday, I cannot accept her argument that:
"We [the Government] believe that decisions on the efficient use of electricity are for individual consumers to take".[Official Report, 11.5.89; col. 782.]
The evidence indicates that there are reasons why consumers will not take such initiatives. I am not calling on the Government for subsidy. All I suggest is that the suppliers of electricity shall be required to promote efficient use by those whom they supply.

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The amendment will require the suppliers to show the director that they have taken steps to do so. It will also give the director powers to refuse or amend any application for tariff increases for major capital projects should he feel it necessary to do so. That may appear to be strong, but I cannot accept what the noble Baroness said, again on Thursday, that this is already covered in the Bill. The control to be exerted by the Government on electricity prices to promote the efficiency of the electricity supply industry will not necessarily extend to the promotion of efficiency of use of electricity by consumers. If every anticipated increase in electricity demand can be matched by an increase in new utility prime capacity, the more inefficient the use of electricity by the consumer the greater is the revenue of the suppliers, although they themselves may be highly efficient generating and distributing companies. I hope that the Committee will accept that, while the amendment may lay some duties upon the electricity industry, there is equally clear evidence that the industry and the utilities themselves can enhance their profitability through promoting the right measures in energy efficiency. The general duties that we have in the Bill may mean something or they may mean nothing. In my view, the situation calls for firm but fair powers. I suggest that those are provided in the amendment. I beg to move.
The Earl of Lauderdale: I too must apologise as I was not able to be present on Thursday. When I announced to the Chief Whip that it was impossible for me to be here on that day, he said, "Hurrah, you would cause trouble anyway". It will not come as a surprise to the Committee to hear me repeat what I have said many times before which is that I do not think that this is a good Bill. I think it is a bad Bill for the simple reason that I do not think that it will get us the extra generating capacity that we know we shall need by the end of the century.
I repeat that my main objection to the Bill is that the Department of Energy has consistently got it wrong as regards predictions of future energy requirements. The department will not admit that; it always blames someone else. The point now is that if, as the all-party committee concluded from an exhaustive study of a lot of elaborate and technical evidence, efficiency in use could be seriously promoted, the need for new generating capacity would be reduced substantially over the years. I am interested in this idea. I was of course a member of the committee—not that I did it any good. However, I was a member of the committee and I gladly added my name to this amendment following our considerations in the committee.
I hope that when my noble friend replies she will confirm whether what I am about to say is the case. It has been said to me that the matter is covered by the provisions of the various licences which are to be issued to enable public suppliers to supply. If that is the case, perhaps my noble friend can tell the Chamber where this requirement appears in the licences. I have gone through them and I cannot find it. However, I am slow on the uptake and my eyes are not very good. No doubt the requirement is there
1048
somewhere. However, even if the requirement is in the licences, it does not really meet the point. We need a statutory requirement. Licences can be changed very easily and the system of licences can be modified. I wish, with respect, to refer to the report of the all-party committee. The noble Lord, Lord Shepherd, also referred to it. Paragraph 91 states that the committee:
"regard it as essential that the electricity supply utilities continue to contribute to improvements in the efficiency of electricity use after privatisation".
The committee further stated that it did not consider that the Bill as drafted met that requirement at all adequately. It states in paragraph 93:
"The Electricity Bill as currently drafted is inadequate to ensure that the privatised electricity industry will actively promote energy conservation as part of minimum cost planning. The Committee recommend that clearer statutory guidance should be given to the Electricity Supply Industry as to how it should ensure efficient use of electrical energy. The Director General of Electricity Supply should ensure that the industry abide by such obligations. The licensees too should have a statutory duty to promote efficiency".
I stress that it is recommended that statutory guidance should be given to the electricity supply industry as regards efficient use of energy. The quotation shows that the committee also considered the subject of licencees. We are not likely to be appeased by being told that this matter is covered in the licences. We do not think that that is adequate. We are asking for proper statutory control. I hope that if my noble friend cannot give a positive answer today, she will at least be willing to take the matter back and look at it seriously. The proposition was put forward originally by an all-party committee. None of us in the committee differed on this matter. There was no argument over it. I hope that my noble friend will consider this amendment sympathetically. I know that she will consider it in a kindly way, but I hope that she will also consider it sympathetically.
Viscount Hanworth: I wish to speak briefly and very strongly in support of this amendment. We had a wide-ranging discussion on Amendment No. 9 which concerned the need to stress in the Bill the importance of efficiency of supply of electricity and energy conservation. All the Minister seemed to say in direct reply to the amendment was that the Government did not wish to stress those matters at the expense of other possibly equally important considerations; for example, consumer and environmental interests. I wish I had had time to count how many times these other considerations are mentioned in the Bill. I refer the Committee to Clause 3(1) as an example of that. Quite insufficient emphasis is laid on the efficiency of supply and energy conservation. I should have thought that although there is a distinction between the two—the Minister stressed that—for most purposes the latter covered both. Amendment No. 9 received a great deal of support from all sides of the Chamber. If the Government are sincere about energy conservation, as they seem to be in theory, they must realise that even if this amendment is pressed to a Division and lost, we shall come back with some other solution on the same lines. In my opinion, we are morally bound to do so.
3.15 p.m.
Baroness Gardner of Parkes: I think that there is a degree of confusion in some of the statements which have been made. On Second Reading I announced that I was a member of the London Electricity Board. I do not therefore feel obliged to declare that interest again, except just to put it on the record.
Statements have been made to the effect that teaching people to use their electricity economically will result in a reduction in the demand for energy. The speakers mean electrical energy presumably. The experience of the London Electricity Board is that that is not so. We as a board are very conscious of the need to teach people to conserve energy. We have carried out a major programme to just that end; we believe that the programme has been very successful. However, it has not resulted in an overall reduction in the demand for energy because the world is changing very fast.
Everyone now wants to work in an air-conditioned office. The supply of energy used to be a seasonal phenomenon which showed a great difference in demand between summer and winter. Now the summer fall-off in demand does not occur because people all wish to work in air-conditioned offices. That air-conditioning is operated by electricity. I believe that all boards presently are very conscious of the need to conserve energy resources and to encourage consumers to get value for money and to use their appliances wisely and well. I can certainly speak for the London Electricity Board in that regard.
Other speakers have said we should encourage people to buy new appliances which use less power than older ones. That is splendid. Everyone would love to sell more electrical appliances, but purchasers have to think of their pockets and what they can afford. Many people do not change over to a more efficient form of heating simply because of the capital outlay involved. That has already been referred to. However, to put in a statutory demand that the privatised boards follow this provision is not necessary because the industry is conscious of the need to conserve world resources of energy. I am confident that that will continue after privatisation.
Lord Kearton: I wish to support the amendment moved by the noble Lord, Lord Shepherd. I had the honour of serving under him on Sub-committee B. As he said, the report had the unanimous support of the committee.
I shall not repeat the cogent and powerful arguments made by the noble Lord, Lord Shepherd. I shall merely give some personal reasons why I so strongly support the amendment. I was connected with the power industry for approximately 40 years. For nearly 20 of those years I was chairman of the Electricity Supply Research Council. During almost all of that time we were concerned with matters of efficient energy production. It is true that during my time in the industry we set up the laboratory at Capenhurst, which was concerned with applications of electricity and more efficient use of electric energy. Nevertheless, overwhelmingly throughout
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the 40 years I was connected with the industry the interest was in more efficient generation.
It is obvious that the world has moved on and it is very much more important now that there should be efficient use of electricity. That would contribute to reducing atmospheric pollution, environmental hazards and the greenhouse effect. Everything is in favour of more efficient use of electricity. I believe that we should make it a statutory requirement, as proposed by the amendment, because only in that way shall we have the positive, committed action that the situation demands. I have great pleasure in supporting the amendment.
Lord Williams of Elvel: I spoke to this subject in relation to Amendment No. 9 and I do not wish to weary the Committee by repeating the arguments since we spent a long time on the subject. I fully support the recommendations of the all-party Select Committee.
Lord Peyton of Yeovil: The Government accept, in Clause 3(3)(b), the need to promote efficiency and economy in the industry. I cannot see immediately any reason why they should resist elevating that purpose to its proper place, as proposed in the amendment. I very much hope that my noble friend will agree to do so without hesitation.
I do not want to make a long speech on the subject, but I emphatically echo the words of the noble Lord, Lord Shepherd, in moving the amendment. I dissent from the idea which was expressed by my noble friend earlier in the Committee stage that this is an area in which decisions should be left to individual customers and that they should receive guidance from electricity distributors. Such guidance is poured out in unceasing quantities today through the post. I imagine that it is proposed that guidance would be received in the ordinary way accompanying bills. I venture the opinion to my noble friend that advice received with a bill is not particularly well timed, and therefore is more likely than on other occasions to meet with almost immediate rejection.
There are two questions which I should like to ask my noble friend. First, what in the Government's view could be achieved if energy was used more efficiently? Secondly, am I wrong in having the impression that the Government believe that energy demand is the mirror of economic growth? I do not believe that it is or should be. I hope that my noble friend will realise, both from the debate which we had the other day and the debate today, that this is a proposal which commands a wide measure of support from all sides of the Chamber.
Baroness Gardner of Parkes: As a number of questions have been asked of my noble friend, perhaps I may ask another. Is it true that if such a statutory imposition were placed on the electricity industry it would be unique as there are no similar constraints on the gas industry or any other energy producer? Would it be just to impose such a constraint on one industry only?
Lord Hughes: Following on from that question, perhaps I may ask the Minister whether she considers

1051
that the experience resulting from not having imposed such a constraint on British Gas or British Telecom is the best possible argument for making good the error in this case.
3.30 p.m.
Baroness Hooper: As the noble Lord, Lord Shepherd, said in introducing the amendment, we discussed the subject fairly fully in connection with a previous amendment. However, it is an important topic and there is still plenty to say. It was useful to hear the views of the Select Commmittee as the noble Lord explained them. In responding, perhaps I may therefore begin with a few general remarks and, for emphasis, reiterate some of the points which I made last week.
It is precisely because we believe the efficient use of electricity to be important that for the first time a statutory provision is introduced to promote efficiency in the electricity supply industry. Clause 3(3)(b) places a duty on the Secretary of State and the director, when exercising their functions under Part I of the Bill, to promote efficiency and economy on the part of persons licensed to supply electricity. It also places a similar duty on the Secretary of State and on the director to promote the efficient use of the electricity supplied.
Secondly, public electricity suppliers will be required by their licence to provide guidance to their customers on the efficient use of electricity. I can tell my noble friend Lord Lauderdale that the relevant condition is condition 18 of the draft public electricity supply licence, which requires each licensee to provide, within three months of his licence coming into force, information on the efficient use of electricity. This means that public electricity suppliers will be required to give advice to their customers about, for instance, insulation and efficient ways of using electricity. This licence condition requires public electricity suppliers to revise this information as necessary, and also to send to each customer a copy of any information on energy efficiency published by the director under Clause 46 if he asks them to do so.
I must emphasise that there is not a risk that it will be easy to alter the licence, a point whch I expect we shall discuss in relation to later clauses. This provision is included in licences because it is a detailed matter, not because it is not important. The licence condition follows from the general principle stated in Clause 3(3)(b). We maintain therefore that the provision is both in the Bill and in the licence.
It is for those reasons that we believe the provision to be appropriate and adequate to encourage energy efficiency. Since my noble friend Lady Gardner referred to British Gas, I should like to quote that example because British Gas is subject to similar statutory provision in accordance with condition 14 of its authorisation. British Gas undertakes significant expenditure, currently running at £3.4 million a year, on encouraging greater awareness of energy efficiency in the community through the provision of information and advice, particularly among low income groups; for example, the
1052
development of energy efficiency advisers in housing estates.
British Gas also works closely with appliance manufacturers in developing efficient new products and its current R&D budget for improving end use energy efficiency is about £5.3 million. In addition, British Gas's gas energy management awards are held annually in the regions with winners competing for national awards. The awards recognise the particular contribution of natural gas to the efficient use of energy as well as reflecting the wide range of applications for gas and the work of the technical consultancy service teams operating in British Gas regions. I therefore cannot agree that the statutory provision on British Gas has been inadequate.
I should add that the electricity supply industry already does a great deal to encourage energy efficiency. For example, it runs similar award schemes to the British Gas schemes and provides technical advice promoting the efficient use of electricity. That will continue after privatisation.
Attention has again been drawn to the Energy Efficiency Office. Although I responded on that front last week, I should like to add some more details about the future of the Energy Efficiency Office. For example, we have an energy efficiency marketing strategy which comprises a number of tightly targeted objectives. The objectives of the domestic programme are to promote energy efficiency measures to home owners who are moving or refurbishing and to increase awareness among small builders and heating engineers, encouraging them to motivate home owners.
The education programme is designed to encourage energy consciousness among school pupils and teachers by providing education materials. That will be done through an independent body, known as CREATE (the Centre for Research, Education and Training in Energy), which will encourage the promotion and co-ordination of energy studies in the curriculum.
The building programme's objective is to encourage the use of energy efficiency measures in the building or refurbishing of commercial, industrial and public sector buildings.
The industrial programme carries forward "The Heat is On Campaign". Its continuing objective is to ensure that penetration of the energy efficiency message and best practices in management and technological terms continues. The targeted sectors are: food, drink and tobacco production; paper and board; textile finishing; and fabric care.
In addition, the energy efficiency programme will continue to support the magazine, Energy Management, published by the department to convey news information to industrial and commercial energy users. The department's regional energy efficiency officers will also continue to deploy professional marketing support. So any suggestion that the Energy Efficiency Office is about to fold up is misleading.
Perhaps I may now return from those examples to the effect of our proposals. So far as concerns the generating side of the industry, the efficiency with which it uses fuel—its major cost after all—will

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significantly affect its operations and its ability to compete successfully. So increases in the efficiency of electricity generation can lead to huge energy savings. The increased competition which is central to the Government's proposals will provide a major incentive to the efficient use of fuel and that will also exert a downward pressure on prices.
These are, I believe, major steps forward in the promotion of efficiency of electricity use. I might just mention here that, when we come to consider Clause 3, we shall ask the House to approve a government amendment to extend the duties imposed on the Secretary of State and the director to promote efficiency and economy on the part of licensed transmitters of electricity.
The proposed new clause tabled by the noble Lords, Lord Shepherd and Lord Ezra, and my noble friend Lord Lauderdale is, as they have explained, a result of some of the findings of the Select Committee. However, perhaps I may clear up what appears to be a misunderstanding about the Bill implicit in the proposed new clause. The Secretary of State will not have the power under the Bill to approve tariff increases. Supply companies will have to comply with the price formulae in their licences and demonstrate that to the director.
Secondly, I question whether it is justifiable to give the Secretary of State such overriding and even Draconian powers over private companies. It is in the consumer's own interest to use electricity efficiently. Not only will our proposals ensure that consumers are fully informed by public electricity suppliers of the benefits of energy efficiency measures, but the new private companies will be using energy efficiency as a marketing tool in their competition with other forms of energy, as is already the case. I remind the Committee again that British Gas is spending some £8 million a year on promoting energy efficiency awareness and on R&D in that area.
Thirdly, the new clause specifically mentions approval of capital projects as some possible weapon with which the Secretary of State might encourage the industry to take specific action as regards the efficient use of electricity. The most substantial capital projects that the industry faces are on the generating side and generation will form only a subsidiary part of the public electricity supply companies business.
The noble Lord, Lord Shepherd, referred particularly to energy labelling of appliances and quoted some of the United States' examples. We believe that energy labelling of appliances is essentially a voluntary matter for manufacturers and retailers, but all electrical appliances without exception are marked with their rated electricity consumption; that is, their maximum rate of electricity use. That already happens. Energy consumption data for appliances must be treated with caution to avoid misleading impressions because differences in basic design of appliances are now small. Consequently, differences in energy consumption largely reflect size and facilities available rather than differences in energy efficiency.
1054
I realise that I made some of these remarks the other day. I shall repeat another point because I believe that it bears repeating. In this important area, there is no single solution that will guarantee the security of supply, which concerns my noble friend Lord Lauderdale and, at the same time, ameliorate the environmental consequences of our energy needs. We believe that we need a package of measures which would include energy efficiency as an important part of that package. I believe that that is what the Bill provides. I therefore regret that I cannot accept the noble Lord's amendment. I hope that he will find what I have said reassuring and will feel able to withdraw his amendment.
The Earl of Lauderdale: Perhaps my noble friend will just clear up one point. Did I understand her to say that condition 18 of the licence was the one that covers this matter?
Baroness Hooper: Yes.
The Earl of Lauderdale: I do not know whether I have the right documents here, but I have a copy of the electricity generation licence that was placed—
Baroness Hooper: Perhaps I may interrupt my noble friend. This is the condition relating to the public electricity supply companies' licences. In this amendment we are not talking about generating licences.
Lord Peyton of Yeovil: I do not want to irritate my noble friend more than I can avoid, but perhaps she will briefly answer the two questions that I asked her. First, have the Government formed any estimate of the potential that could be achieved if energy were used more efficiently? Secondly, as regards energy demand, do the Government believe that energy demands always and relentlessly follows economic growth?
Baroness Hooper: I believe that those points were covered in some of my remarks and in our discussions last week. Certainly, we believe that energy consumption increases as a result of economic growth, but we can point—I do not have the figures at my fingertips—to the fact that, as a result of energy efficiency measures that have already been incorporated, consumption has not increased at the same rate as our economic growth. So there is clearly an area where we can take action, where we believe we are taking action and where we shall be capable of taking action. As to the potential that could be achieved, I think that that follows from my reply on that last point.
The Earl of Lauderdale: I am sorry to trouble my noble friend, but perhaps she will clarify the point about the licences. I obtained a copy of the electricity generating licence with explanatory notes, issued by the Department of Energy in January 1989. That has 13 conditions not 18. There is another licence draft—the second tier electricity supply licence. That has 10 conditions, not 18. The electricity transmission licence has 12 conditions. So I have

1055
difficulty in following what my noble friend said about condition 18. Perhaps I may make one other point with regard to my noble friend Lady Gardner of Parkes. Because the London Electricity Board has tried, but not yet been 100 per cent. successful in securing efficient electricity use, surely that is an argument for trying harder. The argument for trying harder is an argument for statutory provision.
I do not wish to weary my noble friend unduly nor indeed try the patience of the Committee. However, I ask my noble friend whether she cannot take another look at this matter. Perhaps some discussion may take place between now and the Report stage when we may consider it again. To turn it down holus-bolus is not in my view good enough.
Lord Renton: With great respect to my noble friend Lord Lauderdale, it seems to me that it is the mover and supporters of the amendment who need to take another look at this because it is perfectly clear that they and the Government have the same objectives. I shall come to that in the Bill in a moment. But it is just a question of whether those objectives are to be achieved by means of the provisions of the Bill or as stated in this amendment.
The Government's case is perfectly clear. It is in the Bill and confirmed by the very full speech made by my noble friend on the Front Bench. But reference has already been made to the starting point of this, which is in subsection (3) of Clause 3 which states that:
"the Secretary of State and the Director shall each have a duty to exercise the functions assigned or transferred to him by this Part in the manner which he considers is best calculated".
Then there are set out the objects which are there immediately to be achieved. One of them is:
"to promote efficiency and economy on the part of such persons",
that is, the people to whom the electricity is supplied:
"and the efficient use of electricity supplied by them".
I should note in passing that the amendment refers only to supply and suppliers and users. It does not refer, as Clause 4(1) refers, to a person who generates electricity or transmits electricity, and both of those are technically different from the supply of electricity. So we are concerned mainly with supply. When we come to that and look at the very detailed and full provisions of those clauses of the Bill which refer to the licensing of supply—and they are mainly covered in Clauses 4 to 15 although there are other references which assist (I do not want to weary the Committee by going into those clauses in detail)—quite frankly one finds, as my noble friend Lady Hooper has said, that they meet the desires of those who have tabled this amendment. I very much hope that we will accept the view of the matter that my noble friend has expressed. Perhaps I may say that I do not always agree with the Government on this or any other Bill.
Lord Shepherd: The noble Baroness was quite right in her reply to the noble Lord, Lord Peyton, that demand does not necessarily flow immediately from growth. Energy savings have an effect. What she did not say was that the United Kingdom is low down in
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the league compared with other industrial countries such as Japan.
I do not despair of the noble Baroness; I despair of her department. The brief that she has been given is the brief that those officials who appeared before my committee produced when we had our inquiry. As a consequence of that and other evidence we reached the view that the Bill in itself was inadequate. We did not say that there were not provisions in the Bill that fulfilled our aims but we said that they were inadequate. I still take the view that they remain inadequate.
The noble Baroness spoke in glowing terms about the work of the EEO in the next few months. I have the highest regard for that office. Throughout our inquiry there was nothing but praise for it. The truth too is that none of the evidence that we received indicated nor any of the witnesses we heard could understand that, just because an office is successful and while there is still a long-term need in that direction, its capacity and ability to perform its task should be reduced. That is what the Government are doing.
The noble Lord, Lord Renton, said that there was nothing much between us and the Government in the Bill. I accept that. My only difficulty is that what is in the Bill is so vague and general that it can give very little assurance at least to those who have listened to the evidence as we have done. We must also recognise that the licences upon which the noble Baroness relies have never appeared on the Floor of this Chamber. Noble Lords have only to go to the Library to read them, but they have no relevance to any decision which this Committee would wish to make on the matter.
I do not say that any amendment moved from anywhere on the Back Benches is necessarily correctly and fully drafted. However, I believe that the intention of this amendment is clear. I should like to test the opinion of the Committee on this matter to see whether the amendment is agreed to. Then, if it is imperfect and requires readjustment within the Bill as a whole, I should be most willing to co-operate with the noble Baroness in that direction.
3.46 p.m.
On Question, Whether the said amendment (No. 62) shall be agreed to?
Their Lordships divided: Contents, 126; Not-Contents 114

DIVISION NO. 1

CONTENTS

Addington, L.

Bruce of Donington, L.

Airedale, L.

Buckmaster, V.

Allenby of Megiddo, V.

Butterfield, L.

Amherst, E.

Callaghan of Cardiff, L.

Attlee, E.

Campbell of Eskan, L.

Aylestone, L.

Carmichael of Kelvingrove, L.

Barnett, L.

Birk, B.

Carter, L.

Blackstone, B.

Cledwyn of Penrhos, L.

Blyth, L.

Cocks of Hartcliffe, L.

Bonham-Carter, L.

Craigavon, V.

Boston of Faversham, L.

Dacre of Glanton, L.

Bottomley, L.

Dainton, L.

Briginshaw, L.

David, B.

1057

Davies of Penrhys, L.

Mackie of Benshie, L.

Dean of Beswick, L.

McNair, L.

Denington, B.

Mason of Barnsley, L.

Donaldson of Kingsbridge, L.

Merrivale, L.

Donoughue, L.

Milner of Leeds, L.

Dormand of Easington, L.

Mishcon, L.

Elwyn-Jones, L.

Molloy, L.

Ennals, L.

Mulley, L.

Ewart-Biggs, B.

Nicol, B.

Falkender, B.

Northfield, L.

Falkland, V.

Ogmore, L.

Flowers, L.

Peston, L.

Foot, L.

Peyton of Yeovil, L.

Galpern, L.

Pitt of Hampstead, L.

Gladwyn, L.

Ponsonby of Shulbrede, L. [Teller.]

Glenamara, L.

Graham of Edmonton, L.

Porritt, L.

Greenhill of Harrow, L.

Prys-Davies, L.

Grey, E.

Rathcreedan, L.

Halsbury, E.

Reilly, L.

Hampton, L.

Ritchie of Dundee, L.

Hanworth, V.

Robson of Kiddington, B.

Hatch of Lusby, L.

Rochester, L.

Hayter, L.

Rugby, L.

Hirshfield, L.

Sainsbury, L.

Hood, V.

St. Davids, V.

Houghton of Sowerby, L.

Scanlon, L.

Howie of Troon, L.

Seear, B.

Hughes, L.

Sefton of Garston, L.

Hunt, L.

Serota, B.

Hunter of Newington, L.

Shepherd, L.

Hylton, L.

Sherfield, L.

Hylton-Foster, B.

Somers, L.

Jenkins of Hillhead, L.

Soper, L.

Jenkins of Putney, L.

Stallard, L.

John-Mackie, L.

Stedman, B.

Kearton, L.

Stewart of Fulham, L.

Kilbracken, L.

Stoddart of Swindon, L.

Kinloss, Ly.

Taylor of Blackburn, L.

Kirkhill, L.

Taylor of Gryfe, L.

Lauderdale, E.

Taylor of Mansfield,. L.

Leatherland, L.

Thurlow, L.

Listowel, E.

Tordoff, L. [Teller.]

Llewelyn-Davies of Hastoe, B.

Turner of Camden, B.

Underhill, L.

Lloyd of Kilgerran, L.

Wallace of Coslany, L.

Lockwood, B.

Walston, L.

Longford, E.

White, B.

Lovell-Davis, L.

Williams of Elvel, L.

Macaulay of Bragar, L.

Winstanley, L.

Mcintosh of Haringey, L.

NOT-CONTENTS

Ailesbury, M.

Denham, L. [Teller.]

Airey of Abingdon, B.

Dundee, E.

Alexander of Tunis, E.

Effingham, E.

Allerton, L.

Elibank, L.

Arran, E.

Ellenborough, L.

Balfour, E.

Elles, B.

Belhaven and Stenton, L.

Elliot of Harwood, B.

Beloff, L.

Elliott of Morpeth, L.

Belstead, L.

Erroll of Hale, L.

Bessborough, E.

Faithfull, B.

Blatch, B.

Foley, L.

Boyd-Carpenter, L.

Fraser of Carmyllie, L.

Brabazon of Tara, L.

Fraser of Kilmorack, L.

Braye, B.

Gainford, L.

Brougham and Vaux, L.

Gardner of Parkes, B.

Butterworth, L.

Gisborough, L.

Campbell of Alloway, L.

Glenarthur, L.

Campbell of Croy, L.

Gray of Contin, L.

Carnegy of Lour, B.

Gridley, L.

Carnock, L.

Grimston of Westbury, L.

Cathcart, E.

Hailsham of Saint Marylebone, L

Colnbrook, L.

Constantine of Stanmore, L.

Harmar-Nicholls, L.

Cottesloe, L.

Harvington, L.

Crathorne, L.

Henley, L.

Crickhowell, L.

Hesketh, L.

Cullen of Ashbourne, L.

Hives, L.

Davidson, V. [Teller.]

Hooper, B.

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Johnston of Rockport, L.

Platt of Writtle, B.

Knutsford, V.

Pym, L.

Limerick, E.

Rankeillour, L.

Long, V.

Reigate, L.

Lurgan, L.

Renton, L.

McApline of Moffat, L.

Rippon of Hexham, L.

Mackay of Clashfern, L.

Rochdale, V.

Macleod of Borve, B.

Rodney, L.

Margadale, L.

St. Germans, E.

Marley, L.

Saltoun of Abernethy, Ly.

Maude of Stratford-upon-Avon, L.

Sanderson of Bowden, L.

Shannon, E.

Mersey, V.

Sharples, B.

Middleton, L.

Skelmersdale, L.

Monk Bretton, L.

Slim, V.

Montagu of Beaulieu, L.

Stodart of Leaston, L.

Montgomery of Alamein, V.

Strange, B.

Morris, L.

Strathclyde, L.

Mottistone, L.

Strathspey, L.

Munster, E.

Sudeley, L.

Murton of Lindisfarne, L.

Swansea, L.

Nelson, E.

Terrington, L.

Nelson of Stafford, L.

Teviot, L.

Norrie, L.

Thomas of Gwydir, L.

Northesk, E.

Thomas of Swynnerton, L.

Nugent of Guildford, L.

Trafford, L.

Oppenheim-Barnes, B.

Trumpington, B.

Orkney, E.

Vaux of Harrowden, L.

Oxfuird, V.

Weir, V.

Pender, L.

Wolfson, L.

Resolved in the affirmative, and amendment agreed to accordingly.
3.55 p.m.
Clause 3 [General duties of Secretary of State and Director]:
Lord Peyton of Yeovil Lord Peyton of Yeovil moved Amendment No. 63:
Page 2, line 36, leave out ("The Secretary of State and").
The noble Lord said: This series of amendments is designed to be helpful. As we continue our way through the Bill, my sympathy for whoever takes on the mantle of Director General of Electricity Supply becomes greater by the day. When he is appointed, he will have exceedingly heavy duties to perform. They are set out reasonably clearly in the Bill and indeed in the clause that we are now discussing. The director general will be appointed by the Secretary of State. He will be answerable to the Secretary of State for the efficient performance of his duties.
I wonder whether he will be assisted in the efficient performance of those duties by the fact that they are shared with the Secretary of State instead of his merely being answerable to the Secretary of State for their efficient performance. I cannot help feeling that shared duties of this kind will help no one and could very easily lead to conflict.
I very much hope that the Government will not brush this amendment aside, as they sometimes give the impression of doing, indicating that the arguments are quite light and of little consequence, that they have done a great deal of preparatory work, and that they are wholly convinced that they are right. I believe that the Government would lose nothing in accepting this very simple, clear and helpful amendment. I beg to move.
Baroness Hooper: I hope I am correct in thinking that in moving Amendment No. 63 the noble Lord was speaking also to the grouping which includes Amendments Nos. 64 and 65.
Lord Peyton of Yeovil: Indeed, I mentioned the series of amendments.
Baroness Hooper: I appreciate that in moving these amendments my noble friend Lord Peyton of Yeovil wishes to alter the division of regulatory work between the director and the Secretary of State, by placing a greater proportion on the director. At the same time he aims to reduce the director's independence from the Secretary of State.
The issue of how the various regulatory tasks should be divided between the Secretary of State and the director is complicated. The problem is one of striking the correct balance. My right honourable friend the Secretary of State is answerable to Parliament for his actions, and there may be arguments that he should therefore be directly involved in all or most regulatory decisions. Equally, one could argue that the Secretary of State cannot reasonably be expected to develop the detailed expertise and knowledge of the industry which the director will be expected to acquire. I believe that this is the position being put forward by my noble friend in attempting to place more of the burden on the director.
I believe that we have succeeded in achieving the right balance in Clause 3 of the Bill. Much of the initial regulatory structure reflects the policies put forward by the Government in the White Paper, and it is sensible that these should be carried out by the Secretary of State. Most of the detailed day-to-day regulation will not have any political imperative behind it, and it is proper that the director should carry out this work. Other areas require a combination of the Secretary of State's accountability and the director's expertise, and the Bill already provides that one of them should act after explicitly consulting the other.
On the duties imposed by this Bill, it could cause major complications if the Secretary of State and the director did not have the same duties. It makes better sense for them both to be required to take the same range of matters into account when exercising their functions, which are essentially complementary.
We have already debated Clause 1, dealing with the appointment and possible removal of the director by the Secretary of State. It is important that the director should have sufficient scope to act independently in carrying out his functions under this Bill, guided in particular by his duties under this clause. He should not have to look over his shoulder towards the Secretary of State all the time, but at the same time it is right that he should report his actions to the Secretary of State as the Bill requires, particularly under Clause 48. This indicates the necessary relationships between the two without prejudicing the director's independence. We are therefore building on the experience of gas and telecommunications in making these provisions. Therefore for these reasons I ask my noble friend to reconsider his amendment.
The Earl of Lauderdale: My instinct is to support my noble friend Lord Peyton in this amendment because the regulation of the electricity supply
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industry is much more complicated than that of telecommunications and gas. Gas has remained a unitary system, whereas this will be broken into a thousand pieces. The regulator is the public's safeguard, on the one hand, and the Government's safeguard, on the other, to ensure that the system runs properly. I believe that the absolute independence of the regulator is critical to ensure public respect for his functions. For that reason, it is most important that his functions should be operated separately from those of the Secretary of State, to whom he will still be responsible and through him to Parliament. The functions should be his own; otherwise the public will not respect him. If he is to be treated as a government stooge, that surely is not what anybody wants. I hope that my noble friend the Minister may be willing to take a further look at this amendment on the basis of establishing public respect for the independence of the regulator.
4 p.m.
Lord Williams of Elvel: I hope very much that the noble Baroness will consider what the noble Lord, Lord Peyton, and the noble Earl, Lord Lauderdale, have said. As the noble Earl pointed out and we and many noble Lords in all parts of the Chamber pointed out on the first day of the Committee, the complexity of running this organisation as it is about to develop is absolutely enormous. There is a major question to which we shall come in the next amendment concerning who at the end of the day bears the responsibility. We believe that it should be quite clearly the Secretary of State who bears the responsibility and the director should be answerable to him. We support the remarks made by the noble Baroness's noble friends and we hope that she will listen to them carefully.
Lord Peyton of Yeovil: My noble friend seems to have missed at least part of the point that I was seeking to make; I am sure that it is my fault. I have no strong views as to which duties should be placed on the Secretary of State and which on the director general. I am merely suggesting that the director general has a herculean task confronting him. I do not believe that it will be made easier for him by the fact that a large number of the duties, particularly those laid down in this clause, are to be shared with the Secretary of State. I believe it is quite sufficient for the director general to be answerable to the Secretary of State who appoints him.
For the life of me I cannot see the objection to the simple proposition, and nor has my noble friend removed from my mind the real danger that if both are setting out to perform the same duties one of two things could happen: both could ignore it or there could be a conflict between them. I hope that my noble friend will agree to look at this point again and not just to say that there is nothing in any of the views which have come from behind her.
Baroness Hooper: I have listened very carefully to the views expressed by my noble friends. I recognise that my noble friend Lord Peyton feels that the task of the director is extremely complex and that he seeks to restructure the relationship between the

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Secretary of State and the director. But I should like to emphasise that, although the duties are joint, the functions will be separately exercised. I should not like my noble friend Lord Lauderdale to think that they will both be doing the same thing. The independence of the director emerged as an extremely important point in the debate that we had last week on his role concerning consumers. I do not believe it was properly appreciated that the director would need to remain independent in order to carry out that role adequately, and that goes for the other functions as well.
I ask my noble friend to reconsider his amendment and to consider withdrawing it, because we believe that the delicate balance which is necessary in this relationship is adequately finely tuned in the Bill.
Lord Taylor of Gryfe: Like the noble Lord, Lord Peyton, I feel that the Minister should perhaps look at this. This is not a party matter or a matter of principle. It is a matter concerning the structure of a very large industrial organisation in which responsibilities must be clearly defined. In the circumstances I should have thought that the noble Lord is trying to be helpful to the Government in seeking to have a clear definition of these responsibilities such as we should demand in any public company of this kind. I hope that the Minister will respond.
Lord Peyton of Yeovil: I am grateful to the noble Lord, Lord Taylor, for his accurate paraphrasing of my position. I am most disappointed by this attitude which always persists. It costs nothing for the Government to say that they will have another look at something to see whether they have it wrong or whether there is something in the views which have been expressed. In the circumstances I should like to take the opinion of the Committee.
Baroness Hooper: In view of the pleas expressed from all sides of the Chamber—although I see no real possibility of changing our views, because in our view my noble friend's amendment drives a coach and horses through the Government's proposals—I am prepared to take it back, to look at it again and to read the comments that have been made. However, that must be an agreement without commitment.
Lord Peyton of Yeovil: If I may make this rejoinder, if this modest amendment is really such as to drive a coach and horses through the whole fabric of the Government's proposals, they must be even more flimsy than I suspected. It is not my intention to be churlish. My noble friend has gone a very small step of the way, but I hope that if I withdraw the amendment she will understand that there are considerable anxieties about the Bill and they are not laid to rest by the reiterated statement from the Front Bench: "We are right and you are wrong". I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 64 and 65 not moved.]
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 66:
Page 2, line 38, leave out ("he considers").
The noble Lord said: For the convenience of the Committee, I shall also speak to Amendments Nos. 67 and 80. These amendments are designed to solve the problem of who at the end of the day is responsible for the security of supply of electricity.
Members of the Committee may remember that when we debated the disposal of radioactive waste the noble Lord, Lord Nelson of Stafford, said quite clearly—and many Members agreed with him—that if the lights went out it would not be the public electricity suppliers (alias the area boards) which would be responsible but the Secretary of State whose head would be on the block. I believe that to be absolutely true. If it is true, it is sensible that the legislation should reflect that position.
At the moment—that is, before privatisation and while the Bill is before this Chamber—the responsibility for the security of supply of electricity in England and Wales rests with the Central Electricity Generating Board. It is clear that there can be no security of supply without security of generation. I follow the point made by the noble Lord, Lord Renton, on the first day of Committee in drawing a distinction between supply and generation. There can be no security of supply without security of generation. Clearly any supplier who does not have the electricity to supply cannot assure security. Therefore at the moment the CEGB in England and Wales has that responsibility and it has fulfilled it adequately for long periods
Assuming that the Bill is enacted in its present form we shall see the CEGB broken up and other generators—perhaps private generators, industrial companies and area boards—coming into the business of generating electricity. Therefore there will be no single authority for England and Wales which will be responsible for generation. Therefore there can be no onus on anybody to supply electricity on a continuing basis; in other words, to ensure the security of generation.
The Government seek to lay the responsibility on what are known at present as the area boards and will become public electricity suppliers. We believe that there are two reasons why that arrangement will not work. The first is that area boards—and I persist in calling them that for ease of reference rather than using the clumsy expression "public electricity suppliers"—have no expertise at present in calculating the demand for electricity in their area. They have never done so and at the moment there is no evidence to show that they are capable of doing so.
If Members of the Committee care to visit various installations of the Central Electricity Generating Board, including the national control centre, they will find a great deal of scepticism about whether the area boards are capable of estimating electricity demand in their area, let alone estimating what may be happening in two or three years, or the effect of private generation or industrial customer opting out of the area boards' service. Therefore there: is a doubt about whether there is a capacity in the area boards'

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system, leaving outside that doubt the question of whether it will be an integrated system in the sense that we now have it.
The second reason we believe that area boards should not be left with the responsibility arises because of the responsibility of the national grid. The national grid is quite aware of the system which it must operate post-privatisation. If Members of the Committee care to visit the national control centre at Bankside they will be told in no uncertain terms that the grid will believe it to be its responsibility to make sure that it can satisfy the demand for electricity and can supply electricity to area boards, whatever area boards may do or say in the future. So it will be second guessing the area boards; and, in my view, quite rightly.
If in practice it is to be the grid which will assure the security of supply and the grid is owned by the area boards, them, to use an American expression, "Where does the buck stop?". It appears to us to be important that the buck should stop with the Secretary of State.
At a later stage of the Bill we shall be advancing amendments concerning the ownership of the grid and other pieces of the complex puzzle which the Government have put before us. I shall not anticipate those amendments. I simply wish to put forward the argument that the real responsibility for security of supply is with the Secretary of State. That is the case in England and Wales and also in Scotland. I do not believe that it is right for legislation to be framed which will remove that responsibility from the Government.
I recognise that my amendments as drafted are not necessarily perfect. I am not a draftsman, as I have said, and there may be imperfections. However, I hope that the thrust of the amendments is absolutely clear. It is that at the end of the day the Government must bear the responsibility for supplying demands for electricity. I beg to move.
4.15 p.m.
The Earl of Lauderdale: Is the noble Lord moving the two amendments and can we discuss them both?
Lord Williams of Elvel: I thought I had made it clear that I was speaking to Amendments Nos. 66, 67 and 80.
Baroness Hooper: The grouping list which I have also includes Amendment No. 78.
Lord Williams of Elvel: Yes; the noble Baroness is right. It was the object of certain negotiations which took place this morning. Amendment No. 78 relates to a somewhat different point. Nevertheless, it eliminates the judgment from the Secretary of State by leaving out the words "he considers".
Viscount Hanworth: I cannot see how the area boards can possibly be completely responsible for the continuity of supply. They must rely on the grid. The only other alternative would be for them to have their own power stations. If they did so there would
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be bound to be a duplication and an unnecessary number of power stations. Furthermore, in doing so they would have to raise capital from the City which they may or may not require.
The Government must come to terms with the issue. Are they going to say that the area boards will have a contract with the grid to supply them up to a certain amount and therefore shift the responsibility contractually on to the grid? That is the only way in which I can see it occurring. Please may we know the answer?
Lord Renton: The four amendments deal with separate points. I do not complain about their being grouped together because it may save a little time and effort. However, it means that one must deal with them separately when addressing Members about them.
Amendment No. 66 leaves out the words "he considers". I agree that as an old lawyer I am becoming a little rusty. However, subject to correction, I believe that that provision could have the effect of opening up judicial review whenever there was a complaint—however small, great, difficult or technical—about the matters referred to in Clause 3(1).
Some Members of the Committee may believe that the time of the courts and the expense of litigation should be incurred in examining all such issues and that we should pass the buck to the judiciary. I do not happen to feel that way. I think it is right that the Secretary of State should have the responsibility and be answerable to Parliament for exercising it in respect of these matters.
The next amendment seeks to delete the word "reasonable" from the subsection (1 )(a) which would make it read:
"to secure that all demands for electricity are satisfied";
that would mean however unreasonable those demands were. I really do not believe that on reflection the noble Lord, Lord Williams, would wish to press that to a Division. I hope that he will hear me out before he interrupts. One could multiply the examples when a demand might be unreasonable, especially if it were expected to be met at very short notice.
Let us take, for example, somebody living on a remote island who, for his own domestic purposes, has a low-voltage cable running under the sea to connect him to the supply on the mainland. Let us suppose that he suddenly says, "I am going to convert my small island into a major leisure resort. I demand. that, forthwith", whatever that may mean, "I am given a high voltage supply to this island". That may cost a vast amount of money; it may not be feasible because of wind and tide and may simply be unreasonable.
Lord Williams of Elvel: Perhaps I may save the time of the Committee and the noble Lord. He is arguing like the distinguished lawyer that he is. I am not a draftsman. As I said in my introduction, I do not wish to press these amendments as amendments to the Bill. If he likes to take Amendment No. 80, he will see that the principle is firmly stated. I am

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arguing the principle and not necessarily that the words of the amendment are, in their true form, ones which I would wish to press.
Lord Renton: I am relieved to hear that that is so but in that case I wonder why we are having this sort of debate.
Lord Williams of Elvel: With great respect, we are having this debate in order to establish why the Government believe that the responsibility for security of supply should not rest with the Secretary of State.
Lord Renton: One could discuss that on clause stand part, and that is a very compendious way of doing it.
Perhaps I may just quickly refer to Amendment No. 68 on safeguarding the interests of consumers. There are all sorts of provisions in the Bill which do that. I do not believe that the Government will have any difficulty in satisfying the noble Lord on that point. On making supply the sole responsibility of the Secretary of State, the noble Viscount, Lord Hanworth, has already dealt with that and has pointed out that we should be rather careful about how we regard the responsibility for supply.
The Earl of Lauderdale: Security of supply is an absolutely key issue. When we read in the Bill that that is to be limited by the word "reasonable", goodness knows how that word could be interpreted. There may be a case where thanks to the follies of this Bill, we are short of generating capacity, it is expensive to import from France and in a hot summer a paternal government invites people to turn off their air conditioning because it is unreasonable, despite the heat of the summer, to overload the system. That is what we should avoid.
The system must be absolutely reponsible for the security of supply. The Government have qualified it in this extraordinary way. I do not know what "reasonable" means. I doubt whether the lawyers do, although my noble friend is a very reasonable man himself. I find great sympathy with this group of amendments, particularly as regards the terrifying word "reasonable" because that cuts into the absolute security of the supply, which we must have.
The Earl of Dundee: With the leave of the Committee, I shall also speak to Amendments Nos. 67, 78 and 80. The wording at the beginning of subsections (1) and (3) of Clause 3 places on the Secretary of State and the director a duty to exercise his functions under Part I of the Bill in the manner which he considers best calculated to secure the general duties which follow. The noble Lord wishes to remove the words "he considers" from these subsections.
I hesitate to say to the noble Lord, Lord Williams, that the wording at the beginning of subsections (1) and (3) of Clause 3 is well precedented. We had discussions on whether it was a good thing that matters should be well precedented on the last Committee day but I believe that the noble Lord would agree, if there is good reason for the precedent,
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that there is no point in removing it. It is identical to the wording in Section 4 of the Gas Act 1986, to the wording in Section 3 of the Telecommunications Act 1986 and is similar to the wording in Section 2 of the Fair Trading Act 1973. As far as I am aware, this language has not given rise to problems of interpretation, nor has it brought into question the way in which Secretaries of State and directors have carried out their duties.
I am also hesitant about embarking on a debate on semantics. However, it seems to me that the present wording accurately conveys what will happen in practice; namely, that the Secretary of State and the director, in exercising their functions under Part I of the Bill, will each have to consider how these functions can be exercised to fulfil their general duties set out in subsections (1) and (2).
It may be that the noble Lord is concerned lest the present wording allows the Secretary of State and the director too much latitude in interpreting their duties. If this is the anxiety, perhaps I can set these fears to rest by pointing out that persistent or significant failure by the director to act i n accordance with his duties might constitute misbehaviour, which is one of the grounds in subsection (3) of Clause 1 which would enable the Secretary of State to remove a director from office. Indeed, failure by the Secretary of State and the director to act in accordance with a reasonable interpretation of the opening passages to subsections (1) and (3) could lead to their acts being challenged by way of an application for judicial review.
I hope that in the light of my remarks in regard to the first amendment, the noble Lord will feel reassured.
The second amendment, Amendment No. 67, seeks to leave out the word "reasonable" in Clause 3 at line 39. Subsection (l)(a) of Clause 3 requires the Secretary of State and the director to exercise their functions in the manner each considers best calculated to secure that all reasonable demands for a supply of electricity are satisfied.
Under Clause 16 of this Bill, all owners or occupiers will, for the first time, benefit from the same right to require the public electricity supplier for their area to give them a supply of electricity. At present only those within 50 yards of a main can require an area board to provide a supply.
This will mean that the public electricity supply companies will be obliged to meet all requests on reasonable terms, if it is technically practical. Any dispute over the terms offered can be referred to the Director General of Electricity Supply for a determination which will be final and binding. If the director decides that a breach of the obligation to supply has occurred, he will be able to make an order requiring the company to comply with the obligation, and to take proceedings to enforce that order if necessary. All these provisions are important and the new measures will benefit consumers greatly.
The noble Lord's amendment wishes to delete the word "reasonable" in subsection (1)(a) of Clause 3. I believe it is more "reasonable" to retain it. I am sure the noble Lord would be the first to acknowledge that it would be impossible to require a public

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electricity supplier to supply electricity when external circumstances prevented him from doing so. For instance, when we had the hurricane in October 1987 which devastated so much of the South East, considerable damage was done to the boards' transmission and supply lines. Many consumers were cut off, in many cases for several days, and in some cases for several weeks. But we know of the tremendous efforts made by the boards to get consumers' supply back on as quickly as possible. If this amendment were to be passed the Secretary of State and the director might be held to have failed to secure that all demands for electricity are satisfied even though to do so would be beyond the powers of man. Therefore, I ask the noble Lord to look again at his amendment.
I come now to the amendment which the noble Lord, Lord Williams addressed first. While I certainly agree with the noble Lord that the Secretary of State should play an important role vis-à-vis the continuity of electricity supply, I do not think it is right that he should discharge this role to the complete exclusion of the Director General of Electricity Supply.
The Director General of Electricity Supply, who will head the Office of Electricity Regulation, will have a statutory duty under this clause and this subsection of the Bill to protect consumers' interests. In carrying out this role he will monitor the whole spectrum of activities associated with electricity generation, transmission and supply. This will include not only prices and other terms of supply but also the promotion of the efficient use of electricity and the quality of electricity supply services provided. I believe it is wholly right that the director in exercising his duty to protect consumers' interests should also monitor the continuity of supply. Consumers can only benefit from such a measure and I am sure the noble Lord does not wish to erode in any way the benefits which consumers will gain as a result of the provisions of our Bill.
This amendment would undermine the specific roles rightly accorded to the director in relation to the continuity of supply. Under the licences the director is responsible for, among other things, ensuring that public electricity suppliers have proper forward plans for contracting adequate capacity. He is also responsible under the Bill for implementing standards of performance to be achieved by public electricity suppliers and—perhaps most fundamentally—for ensuring that public electricity suppliers meet their basic obligation to supply. The director has powers under Clause 25 of the Bill to ensure that these licence conditions and statutory requirements are fully met by licence holders.
As I have already said, I agree with the noble Lord that the Secretary of State should play a role—indeed, a pivotal role—in ensuring that security of supply should be maintained. However, as I have mentioned, I cannot agree that the director should play no part in this, given his general duty to protect consumer interests. Moreover, the Bill as presently drafted places a duty on the Secretary of State and the director to protect the consumers' interests in respect of the continuity of supply. I am
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sure the noble Lord will appreciate that there is a noticeable difference in nuance between the word "duty" in the Bill and the phrase "sole responsibility for" in the amendment. I venture to say that I believe the Bill has got the balance right in the drafting of this clause and I should not be happy to see this balance eroded as a consequence of this amendment.
4.30 p.m.
Viscount Hood: My noble friend Lord Lauderdale has already said that supply is basic to the requirements of the Bill. I entirely agree that the Secretary of State cannot be made solely responsible for the continuity of supply. That initially must rest with the area companies, which will contract with generating companies to supply power. However, I ask the Minister what will happen if, for reasons of finance or otherwise, the area companies are unable to secure from privately owned generating companies the power that they require.
Lord Howie of Troon: The Minister used the word "nuance" towards the end of his reply. That is perfectly correct. It is clearly difficult to impose an absolute duty to supply, important though that might be, on all occasions. The noble Lord, Lord Renton, referred to people in distant places and the difficulty of supply them, but something could be done marginally using windmills, diesel generators, and so on. Surely it is not impossible to deal with those situations. In any case, they ought to be considered.
The thought struck me that perhaps the Minister could nudge himself a little towards my noble friend. The word "reasonable" is, we know, difficult to define and in a sense provides a field day for lawyers. Would it not improve matters a little if we replaced the notion of something being reasonable with the notion of something being not unreasonable? I do not want to sound as though I am pin-pricking, but there is a nuance, a difference, because the onus of proving that something is reasonable is very difficult but it is different, in essence—and perhaps better from my noble friend's point of view—from proving that something is not unreasonable.
A movement by the Government in that direction would be welcome. It is not my business, speaking off the cuff, to try to rewrite my noble friend's amendment or the Government's response to it, but there is some merit in what I say. The difference between reasonable and not unreasonable may be minute to a lawyer but it is distinct to a layman.
The Earl of Dundee: In response to the noble Lord, Lord Howie of Troon, I should be loath to find that the Government were in the position that if they did not budge on the question of reasonable they were to be considered unreasonable.
I remember the interesting debates on the Copyright, Designs and Patents Bill, in which the noble Lord, Lord Howie, played a useful part, when we had this kind of debate. However, everybody—I shall not say reasonable men—is more or less agreed on what reasonable means. As I said in my earlier remarks, if we deleted the word "reasonable" in this case we would get into the likely difficulty in the case of a catastrophe where there would be objections

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if electricity is not supplied and the Secretary of State and the director would be said to be failing in their duties.
Lord Howie of Troon: Before the Minister leaves that point, I remind him that on the copyright Bill, to which he alluded a moment ago, the great difference between the debates then and the debates now, and on other Bills in the more recent past, is that throughout the debates on the copyright Bill the Government Front Bench, including the noble Earl, was extremely reasonable. The Front Bench then listened to reason and came back with reasoned amendments based on the arguments put forward. The Front Bench seems to have slipped back from that happy condition of 12 or 18 months ago.
The noble Earl enjoyed the debates on the copyright Bill as much as we did on this side of the Committee. If he were to approach this Bill in the same reasonable manner in which he approached the copyright Bill we would arrive at some sort of consensus which would be of advantage to the Committee and, no doubt, to the nation in the long run.
The Earl of Lauderdale: Perhaps I may ask my reasonable noble friend to be not unreasonable.
The Earl of Dundee: I thank my noble friend Lord Lauderdale. I am grateful also to the noble Lord, Lord Howie, for being so kind about our procedures on the copyright Bill. I hope that by the time we reach the end of this Committee stage he will feel, if not from his point of view at all times, that in the majority of cases the Government have been as reasonable as they can.
In response to my noble friend Lord Hood, who asked about insufficiency of supply, I can say that the area boards can generate for themselves in the unlikely event that there might not be enough willing generators.
Baroness Seear: The noble Earl said that it would be impossible to accept the amendment because there could be some ghastly catastrophe so that it would not be possible to supply electricity. Is it not possible to insert a saving clause about acts of God intervening or a matter which could not be foretold? That would be a let-out and would provide an excuse if the whole system blew up and it was not possible to provide electricity. We are not referring to such eventualities but to these maddening interruptions of supply which are not an act of God but just the result of, as was said on another occasion, the inactivity of the Government.
Lord Harmar-Nicholls: Before my noble friend answers that point, the example given by my noble friend Lord Renton is certainly not an act of God. He referred to the man on a lonely island who does not want the great power, who decides to turn the place into a leisure centre and who could demand, irrespective of the effect it would have on costs for the area, to get it. There is no act of God there. It is the act of an individual who wants to improve his financial position in the world. I think that in
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answering the noble Baroness the Minister should take into account what my noble friend has said.
Lord Trafford: Before my noble friend rises to make another comment, is not the Committee itself being a little unreasonable? The term "reasonable" is frequently used in legislation. It was used in the housing legislation, in the Legal Aid Bill and in the Gas Bill. It has been used constantly, and everybody knows what it means even if it is difficult to define. The noble Lord, Lord Howie, asked why we should not use a phrase with a different nuance, that is "not unreasonable". Unfortunately, that is not logical. If something is not reasonable, it is unreasonable. If it is not unreasonable, it is reasonable. There is no way round that sort of semantic proposition. It is not the same as saying, "not less than" because "not less than" could mean two things: more than or the same. That is not so with "reasonable".
We have heard examples of how the suggestion that a connection and a supply must be reasonable could be abused. We do not really expect that it should be abused, but we know that there are people who would use every loophole of legislation, one of the reasons being, perhaps, to make a profit. I can well foresee how the leisure island off the west coast of the Hebrides that my noble friend Lord Renton envisaged could be a very profitable undertaking if the electricity had to be supplied, reasonably or unreasonably; but there are other situations in which one could get into quite a turmoil.
The word "reasonable" has been used constantly with regard to housing, rent and legal aid. Incidentally, if the noble Lord, Lord Howie, or the noble and learned Lord, Lord Williams, wants to study this matter, the phrase "fair and reasonable" resulted in a considerable number of judicial and legal interventions as to what that meant when we were discussing lawyers' fees. Of course, there were different views as to what was reasonable, as might be expected; but let us say that the discussion was not unreasonable. So if the noble Lord wishes to study the meaning of the phrase in terms of legislation, it could be found there.
However, it seems to me that we are not going to get very much beyond leaving it as it is without inviting a great deal of confusion for the courts, for the utility companies, and indeed for the Government.
Viscount Hanworth: I raised a question as to how the area boards could be responsible for supply. I suggested that they would have a contract with the grid or one of the national power generators. But that may break down. If they are to cover themselves completely they would have to have their own stations, and possibly considerable duplication. Could the Minister say what is the intention of the Bill concerning that situation?
Lord Hughes: I have just been warning my noble friend that he may not regard this intervention as helpful, but I was once a member of the North of Scotland Hydro-Electric Board. We had a request, sponsored by the late Sir David Robertson, for the supply to somebody who was in such a remote

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district that it would be ruinously expensive to the board. The finance director of the board offered a solution which he thought would be reasonable: he said "Let us buy him a bungalow in Inverness which already has electricity".
Lord Williams of Elvel: I do not know whether the noble Earl wishes to say any more, but we have had quite a long debate on the subject. I would argue that there are two points which are outstanding. I am not concerned about whether the Secretary of State and the director should be open to judicial review or not. I am quite happy that if we leave out "he considers" that should lay them open to judicial review. I think that is perfectly reasonable, but I leave that aside.
The two major points in the debate seem to me to revolve first around the word "reasonable" in terms of reasonable demands for electricity; and secondly to revolve around the role of the Secretary of State. The difference between ourselves and the Government on the word "reasonable" is that we do not quite understand what it means in spite of the explanation of the noble Lord, Lord Trafford, that it is used in legislation frequently. I should have thought that some better formulation would be more appropriate; but I simply leave that on the table because I join with the noble Earl, Lord Lauderdale, in thinking that "reasonable demands" gives a let-out, which is unsatisfactory.
Secondly, on the role of the Secretary of State, the difference between the noble Earl and myself is that he regards the Secretary of State has having a pivotal role, and that he should monitor and do other things of that nature. I regard the Secretary of State as being ultimately responsible. He should be ultimately responsible for the security and continuity of supply.
However, we have had a long discussion on the subject. Many noble Lords have contributed, and I am most grateful. We shall obviously read carefully what the noble Earl has said, think about it and decide whether we shall come back at a later stage. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 67 not moved.]
4.45 p.m.
Viscount Hanworth Viscount Hanworth moved Amendment No. 68:
Page 2, line 39, at end insert—("( ) to safeguard the interests of consumers;").
The noble Viscount said: I think it might be convenient if I speak to Amendments Nos. 68 and 69, which I can do fairly briefly.
Baroness Hooper: I am sorry to interrupt the noble Viscount, the grouping which I understood was agreed on this is Amendments Nos. 68, 80A and 81A.
Viscount Hanworth: I realise that, and perhaps that prevents my speaking on the other one, but the point is much the same.
Clause 3(1) states:
"The Secretary of State and the Director shall each have a duty…(a) to secure that all reasonable demands for electricity
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are satisfied; (b) to secure that licence holders are able to finance the carrying on of the activities which they are authorised by their licences to carry on; and (c) subject to subsection (2) below to promote competition in the generation and supply of electricity".
My amendment adds to those safeguards the interests of consumers.
I shall just add (although I cannot speak to both but nevertheless I will do so to this extent) that Amendment No. 69 promotes environmental protection and enhancement in the same paragraph. I beg to move.
Lord Williams of Elvel: I too shall speak to Amendments Nos. 68, 80A and 81 A. Perhaps I may concentrate on Amendments Nos. 80A and 81A which are amendments in my name.
We must understand that electricity suppliers do not simply offer electricity; it is not just a question of supplying electricity. There are services which are very closely associated with electricity supply such as meter reading and billing. In fact, those services could quite easily be contracted out. There is no reason at all why future area boards should not contract out such services. For instance, gas and electric meters could be read by the same organisation, as they are in France. That is a perfectly reasonable and sensible way to go about things.
The third type of service is incidental to the main business of supplying electricity, that is repairing appliances or selling appliances. Those services are not statutory monopolies and in such cases the area boards or public electricity suppliers will be in competition with other organisations. They will have to compete in the market in the normal way. However, Clause 3(3) restricts the director general to considering matters to do with the quality of the electricity services provided. We appreciate the logical case for this in the context of the Bill, but we want to know what control there will be on future public electricity suppliers in those services which are not directly related to or are not precisely electricity services. When the noble Baroness comes to respond to the amendment perhaps she will define for me exactly what an electricity service is. That is part of the problem.
Amendment No. 81A is similar to Amendment No. 80A. I do not wish to dwell on it. This is all part of the business of trying to ensure that the director general is responsible for services which are rendered to the consumer. That is why it is grouped with Amendment No. 68, standing in the names of the noble Lord, Lord Ezra, and the noble Viscount, Lord Hanworth. They come together as a package. It is in that spirit that I wish to support both the noble Viscount and the need for our amendments along the same lines.
Baroness Hooper: These three amendments concern consumer interests and these are important duties. Perhaps I may deal first with Amendment No. 68, which was moved by the noble Viscount, Lord Hanworth. Clause 3( 1 )(a) requires the Secretary of State and the director to exercise their functions in the manner which each considers to be best calculated to protect the interests of consumers of electricity supplied by persons authorised by licences

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to supply electricity. They do this in three respects: first, in respect of the prices charged for electricity consumed by them and the terms on which the electricity is supplied; secondly, in respect of the continuity of the supply; and thirdly, in respect of the quality of the electricity supply services provided to them.
These are important duties. They will enable the Secretary of State and the director to include in supply licences provisions about the prices charged by suppliers to their consumers and about the terms and conditions under which they supply their consumers. As concerns continuity of supply, under Clause 16 for the first time all owners or occupiers will benefit from the same right to require the public supplier for their area to give them a supply of electricity. At present, as noble Lords will know, only those within 50 yards of the main can require their area board to provide a supply. This will mean that the public electricity suppliers will be obliged to meet all requests on reasonable terms if it is technically practicable.
If the director decided that a breach of the obligation to supply had occurred, he would be able to make an order requiring the company to comply with the obligation and to take proceedings to enforce that order if necessary. As regards the quality of the supply services provided, this means matters such as easy-to-read meters. The Committee will notice that Clause 3(4) provides a new safeguard for the elderly and the disabled by placing a specific duty on the director to consider particularly their needs in respect of the quality of electricity supply services provided. This is further reinforced by condition 16 in the draft public electricity supply licence which requires the licensee to produce a new code of practice specifically aimed at the elderly and disabled.
The code of practice will cover special services available to these groups, including such matters as the use of special controls for electrical appliances and meters. In preparing this code of practice the public electricity supplier will have to consult the appropriate consumers' committee and must then submit it to the director for approval. The director will be able to call for review of the code and its operation by the licensee. I hope that this shows that the Government are determined to protect consumers' interests after privatisation. In many respects the Bill marks a new beginning for consumer protection in the electricity industry.
Perhaps I may turn to the amendments proposed by the noble Lord, Lord Williams. I should like to explain a little further his point about the quality of electricity services. As he said, this relates to matters such as responses to customer complaints, metering, meter reading services, the placement of equipment, efficient maintenance of the system and the provision of adequate supplies of token dispensers. As such it probably covers a considerable number of the services about which the noble Lord is concerned.
As the Committee will be aware, the imposition of this duty under Clause 3 is not all that the Government are doing to protect the interests of consumers. Under Clause 38 the director will put
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into effect the Government's radical new proposals to provide domestic customers with compensation if the public electricity suppliers do not meet certain standards of performance in the provision of electricity supply services. This will be supplemented by standards of overall performance which the suppliers will be expected to meet in areas of supply service where the payment of compensation is perhaps not appropriate. I am sure that we shall be debating these clauses in more detail when we come to them. However, I can assure the Committee that they add up to an important new package of rights to protect the position of the consumer in the privatised industry.
Even in relation to Amendment No. 81 A, I cannot go further than that except to say that in discharging their functions under Clause 3 and elsewhere in the Bill the Secretary of State and the director will be fully aware of their responsibility to promote efficiency and economy in all areas of the industry's activities. On this basis I trust that the Committee will feel that we have aired this matter adequately and that the noble Viscount will feel able to withdraw the amendment.
Viscount Hanworth: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Viscount Hanworth Viscount Hanworth moved Amendment No. 69:
Page 2, line 39, at end insert—
( " ( ) to promote environmental protection and enhancement;").
The noble Viscount said: I have already mentioned this amendment. It seeks to make one more addition to the duties of the Secretary of State and the director which I read out in moving the previous amendment. It adds a requirement to promote environmental protection and enhancement. I beg to move.
Lord Williams of Elvel: I believe that we shall have a more substantial debate on Amendment No. 75, which stands in the name of the noble Lord, Lord Renton, and so I shall reserve my comments on the environment for that amendment.
Lord Renton: That is very courteous of the noble Lord. I am perfectly happy that we should have our main debate on Amendment No. 75.
Viscount Hanworth: In that case, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Viscount Hanworth Viscount Hanworth moved Amendment No. 70:
Page 2, line 40, leave out from ("are") to ("and") in line 42 and insert ("technically and financially competent to comply with the terms of the operating licences").
The noble Viscount said: The rewording of the Bill would add to the requirement that a licence holder should be financially viable, that he should have technical competence, which seems a reasonable thing to require. I beg to move.
Lord Williams of Elvel: I should like to support the noble Viscount in his Amendment No. 70. For

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the convenience of the Committee perhaps I may also speak to Amendment No. 71, which stands in my name. I think that these amendments are self-explanatory. It is of vital importance that public electricity suppliers are not only technically and financially competent, but also that they do not involve themselves in financial techniques which are dubious in order to keep themselves alive.
On Second Reading I mentioned the possibility that there would be a number of area boards—as I persist in calling them—which would get into financial trouble, should their industrial customers opt out on a large scale. I think that I cited the instance of the South Wales Electricity Board which relies in large measure for its profits on the industrial customers of South Wales.
If a public electricity supplier, now privatised, suffers the penalties associated with contracting out by industrial customers, then one can see it struggling to keep alive. It is that struggle to keep alive which we are interested in in these amendments. We very much hope that such suppliers would not be allowed to engage in some of the rather dubious practices in which other companies have been engaged; for example, sale and lease-back, leverage buy-outs, over-indebtedness and other such practices which we have seen over the past few years.
Therefore the point of the two amendments is broadly the same. My amendment is exploratory and I should like to receive some comfort from the noble Baroness that the director will be keeping an eye on the financial competence and indeed the financial propriety of the companies under his supervision.
5 p.m.
Baroness Hooper: Clause 3(1 )(b) is well precedented. There are in fact similar provisions in the Gas Act and in the Telecommunications Act. As regards Amendment No. 70, the noble Viscount, Lord Hanworth, was concerned lest cowboys should receive licences. I should also be concerned if I thought that that was a real danger. However, I do not really think that it is.
The duties of the Secretary of State and of the director under Clause 3(3)(a),
"to protect the interests of consumers",
in respect of "the continuity of supply" and,
"the quality of the electricity supply services",
will also mean that only technically competent people will be licensed in the first place. The present wording of the clause will allow the director to check the financial credentials of a potential new entrant and to bear in mind that entrant's future viability.
I believe that the present wording meets the need to ensure competence. Therefore in that case I believe that the amendment is really not necessary. Moreover, I think in part that responds to the point raised by the noble Lord, Lord Williams of Elvel, especially as regards Amendment No. 71.I say that because the duty under Clause 3(1 )(b) means that in exercising their functions the Secretary of State and the director must take ino account the ability of the licence-holders to finance the activities that they are
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licensed to carry on. Obviously reliance on unsound money or on dubious financial techniques would not be evidence of such ability, but very much the reverse. Therefore the licence would not be issued in the first place.
Lord Williams of Elvel: I understand that that may be the case in the issuance of the licence. However, what happens if during the currency of the licence a public electricity supplier engages in one of the little tricks which I have described? Does the licence then fall, or is it revoked? What happens under such circumstances?
Baroness Hooper: For the reasons which I have given, I believe that the actual or potential insolvency of a licensed successor company is of the remotest possibility. However, in the case that the contingency should arise, then of course normal insolvency law would apply as it would to previously privatised industries such as British Telecom and British Gas.
Lord Williams of Elvel: With all due respect to the noble Baroness, I am not talking about insolvency—although we could get to that subject. I am talking about the position between total financial health and insolvency. There is a large grey area there whereby companies may wish to finance themselves, or attempt to try to get themselves out of a financial hole, by the use of dubious financial techniques which are fairly well known by people who operate in this business.
I wonder whether the director—perhaps the noble Baroness will guide me on this point—has any power to vary the licence, or revoke the licence, should he discover that a public electricity supplier has got itself not into an insolvency situation but into a situation where it is of dubious financial status.
Lord Taylor of Gryfe: I wonder whether we are perhaps moving into an entirely different area here. I should have thought that some of the anxieties expressed by the noble Lord, Lord Williams of Elvel, are covered by existing oversight under the Financial Services Act 1986, under the provisions of the Office of Fair Trading and other organisations which take a lively interest in dubious financial transactions.
I wonder just how one might incorporate the phrase "dubious financial transactions" in this Bill. It is a very difficult phrase. I should have thought that the existing provisions protecting shareholders, for example, might be applied in respect of any company where there is a dubious financial transaction and that the board of the new organisation would be held responsible.
Baroness Hooper: 1 am most grateful to the noble Lord, Lord Taylor of Gryfe, because there are of course general external safeguards which would apply equally to the public electricity supply companies. However, in addition the director will monitor the company's behaviour; indeed, that is one of his duties. If necessary he could take the company, for example, to the Monopolies and Mergers Commisson or to some other external body as may be appropriate.
Lord Peston: Perhaps I may intervene here for just a moment. I should remind the noble Baroness that the amendment is actually about financing techniques; it is not about some of the other matters which she has just mentioned. Further, I wonder whether she would like to take this opportunity to clarify more generally the issue of licences. I thought earlier, when the noble Earl, Lord Lauderdale, said that the licences could be easily changed, that I heard the noble Baroness say that that was not the case and that they would be very hard to change. Perhaps she will confirm what I think I heard her say.
An interesting question on licences, which relates to my noble friend's amendment, is that, as I understand it, any of the privatised companies will eventually become ordinary companies in the market and may be bought by other interested people. However, what is not clear is whether by buying the company one also buys the licence; in other words, whether the licence in some sense belongs to the company.
I had intended to raise that question at a later stage; but I think that this might be a convenient heading under which to raise the issue. What does one get when one receives a licence? This is not unrelated to the dubious financing techniques question because, without being as critical as some of us are of some aspects of private enterprise, one occasionally comes across companies the behaviour of which is dubious. It is not inconceivable that a company, the behaviour of which is dubious, might care to bid for one of the electricity companies. It would be interesting to know if such a company were to bid successfully for one of the electricity companies whether it would receive a licence and whether in such circumstances there is no control left.
The amendment is by no means as minor as it might seem. Moreover, I do not think that the issue is necessarily covered by existing legislation. I should certainly like to know the Government's answer to that question. I have joined the debate now, although I intended to raise the matter later in connection with one or two other amendments, because I believe that the answer would be worth knowing at this stage.
Baroness Hooper: I recognise the point of the suggestion made by the noble Lord, Lord Peston, that we should start dealing now with matters which we would naturally be dealing with at a later stage of our discussions on the Bill. However, if it is agreeable to Members of the Committee, I should prefer to leave such detailed discussion until that time.
Perhaps I should say that it will certainly not be easy to change the licences, as I said earlier to my noble friend Lord Lauderdale in relation to a different point. The point of submitting the matter to the Monopolies and Mergers Commission, for example, would be to obtain a new licence condition preventing the company from adopting unsound financial techniques. That is the safeguard that is built in. These are to be plcs with all the duties and obligations that that means. In view of the director's ability to monitor the way that a company is
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operating, there will be plenty of scope for remedial action to be taken without disadvantage to the consumers and the customers.
Viscount Hanworth: I am not completely satisfied with the answer that has been given. Nevertheless, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 71 not moved.]
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 72:
Page 2, line 43, after ("promote") insert ("reasonable").
The noble Lord said: It may be for the convenience of the Committee if I speak also to Amendments Nos. 76 and 77. Amendment No. 72 seeks to introduce a measure of qualification into the general duty to encourage competition or to "promote competition" in the words of the Bill. Amendments Nos. 76 and 77 have a different formulation but seek in one way or another to ensure that the duties spelt out in Clause 3(3) to protect the interests of consumers rank pari passu with the duties in subsection (1).
We accept that the Government have set out to promote competition as an objective. Whether we believe that the Government will succeed is another matter. We accept however that that is the objective. But it seems to us that it is unnecessary and undesirable to give competition, and the objective of promoting competition, an overriding place above the interests of the consumer.
The Bill places duties on the Secretary of State and the director general to protect public safety, to protect the consumers' interests and to ensure the continuation of health and safety advisory machinery which has played an important role. Those duties are welcome. Nevertheless, as the Bill stands, they can conflict with the duty to promote competition. It is the duty to promote competition which will override the secondary duties under subsection (3). That is different from Section 4(2) of the Gas Act which gives competition and public safety equal emphasis.
Amendments Nos. 76 and 77, whichever formulation is used, achieve exactly that and put the Bill on the same footing as the Gas Act. We believe that that is the right way to proceed. I hope that the Government will feel sympathetic towards the proposal. As the Bill stands, there is an anomaly which we should like to see corrected. I beg to move.
5.15 p.m.
Baroness Hooper: In relation to Amendment No. 72, I should explain how our proposals will encourage competition in generation and supply. By competition in generation, I am not talking merely about the competition between National Power and Power Gen, the two companies which will inherit the generating capacity of the CEGB. Our proposals will open up exciting new opportunities for independent private generators and will give all types of generator new rights to put them on an equal footing with the successors to the CEGB and the area boards.

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There are already nearly 20 proposed independent power-generation projects which will amount to some seven gigawatts of electricity. Our proposals will enable public electricity suppliers to attract supplies from a wide range of competing generators; for instance, they will be able to contract for supplies from Power Gen, National Power, new private generators, Scotland or France, and they will be able to generate some electricity for themselves. They will have to generate efficiently or be penalised by the licensing regime through the price control mechanism.
Our proposals will oblige public electricity suppliers and the National Grid Company to allow others to use their networks on transparent and non-discriminatory terms, with the director settling any disputes. That again will help newcomers to the generating field. The licensing arrangements will ensure that the domestic customer receives the benefits of greater competition in generation and supply and the downward pressure on costs which that will exert. Heavy users, in particular, will find it useful to be able to contract directly with generators of their own choice.
On Amendments Nos. 76 and 77, I can assure the Committee that the Government have in mind the protection of consumers' interests, the promotion of the efficient use of electricity, the protection of public safety and the health and safety of those working in the industry, which is why the duties contained in subsection (3) are a central feature of the Bill and establish the framework for the operation of the relevant provisions in Part I by the Secretary of State and the director.
I dispute the suggestion made by the noble Lord, Lord Williams, that those matters are in some way subsidiary. As to consumers, Clause 3 gives the director general the statutory duty to protect their interests in carrying out his functions under the Bill; and in enforcing licence conditions the director must have regard to their interests.
On the efficient use of electricity, public electricity suppliers will be required by their licences to provide guidance to their customers on the efficient use of electricity, a matter which has already been discussed. That is supplemented by Condition 18 of the public electricity supply licence. On safety, the Clause 3 duty to protect the public from dangers arising from the generation, transmission and supply of electricity will apply to economic regulation as well as to all the other functions of the Secretary of State and the director under Part I. It will ensure that the director and Secretary of State will bear in mind the need for public safety at all times.
We are also determined that the industry's excellent safety record should be maintained. Licence holders and those operating under exemptions will have to act in accordance with the same regime that has resulted in the current high standards of safety in the industry.
There should therefore be no doubt about our determination in the legislation to protect consumers, the efficient use of electricity, the safety of the public and those working in the industry. I
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cannot therefore see the justification for the amendment moved by the noble Lord.
Lord Williams of Elvel: I am sorry that the Minister cannot see the justification for my amendments. I believe that the layman, although perhaps not the lawyer—the noble Baroness may be right—would say that the duties spelt out in Clause 3(3) are clearly subordinate to the duties spelt out in subsection (1). I shall read carefully what the Minister has said. She seemed to be implying that the duties were not subordinate, but they seem to us to be subordinate. If it is necessary we will return to the point at a later stage in the Bill. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 73 had been withdrawn from the Marshalled List.]
Lord Campbell of Croy Lord Campbell of Croy moved Amendment No.
74:
Page 3, line 6, leave out ("any") and insert ("the area defined as the North of Scotland district in the Electricity (Scotland) Act 1979 as amended by the Variation Order 1981 and in any other").
The noble Lord said: Clause 3(2) enables the Government by order—subordinate legislation—to ensure that common tariffs are applied throughout a designated area. The Government have made it clear that the present North of Scotland Hydro-Electric Board is intended for that treatment. In particular, in their White Paper the Government said that they considered that the successor company to the North Board should be required to maintain the policy. My amendment would carry that intention into the Bill rather than relying on a subsequent order. It is being asked in Northern Scotland why that is not stated categorically in the Bill. For more than 30 years I have had my home in Northern Scotland and I have business interests there, but I should make clear that my interests would not benefit because they are not in a remote part of the North Board's area.
The policy which has been operated by the North Board, and which I hope will continue in future, has evened out the price of electricity over the whole area. It is especially helpful to outlying, sparsely populated areas on the mainland and to the islands in the north. The majority of consumers in the area of the North Board, including myself, have been prepared to make this collective small contribution to our fellow consumers resident in difficult and remote areas.
I can see straightaway one reason why the Government may not favour putting this in the Bill, although they have stated quite clearly that it is their intention. I shall explain that, but my amendment is merely probing because I hope to hear an absolute assurance from the Government today. I also wish to test whether the objection which I have in mind is the one that weighs with the Government.
The difficulty, as I see it, is that the question might be raised as to whether the Bill becomes hybrid if the amendment were passed. The boundary of the North Board's area could be described as somewhat arbitrary. It runs across the middle of Scotland. A

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consumer resident either a short distance north of that border, or south of it, might claim that he was being discriminated against in a public Bill. Even if this developed into no more than an argument about hybridity, it could cause considerable delay. The Bill might be referred to the examiners. If they pronounced it hybrid, there would be very little chance of a Bill of this size passing through Parliament in one Session. The procedure of private legislation would be applied to the relevant parts of the Bill and that would be bound to consume much time.
There is nothing wrong with hybrid Bills, but governments do not expect Bills which they have introduced as public Bills to be transformed into hybrid Bills during the course of their passage through Parliament, because that causes major delay. When a Bill must clearly combine public Bill procedure and private Bill procedure, it is introduced as a hybrid Bill, such as, for example, the Channel Tunnel Bill. Permission is normally granted, where necessary, for the proceedings to extend beyond one single Session of Parliament. Therefore I understand the reluctance of the Government to put these words into the Bill. I ask my noble friend whether that is a reason—perhaps the principal reason—for not including the North Board area in the Bill. I understand that the Government are already persuaded of the need for the common tariff system to be continued in the North Board's area. As I mentioned, the White Paper confirmed this and they have made public statements to that effect since then. I hope to hear my noble friend repeat those statements today.
However, I must remind the Government that in 1980 the North Board proposed that there should be an 11 per cent. surcharge in areas where there was diesel generation. That proposal was dropped after a considerable outcry. Of course, diesel generation was more expensive than being on the grid and that was the reason for the proposals in 1980.
Since then, some of those areas have been linked to the grid and diesel has only been kept in reserve. The Western Isles are expected to be on the grid by 1991. That still leaves one important area served only by diesel; that is, the Shetland Isles. That area is more at risk and more concerned than any other about future tariffs. I therefore look for an assurance by the Government that the order will be laid before Parliament and that a surcharge of the kind which was proposed in 1980 should not be proposed while the order is in operation.
This brings me to the question: for how long will the system last? Will the first order be for only a period of five years? That is what is rumoured.
Another point which I heard of only today is this. I must quickly say that I have been in some confusion after a delay in my arrival. When my plane from Inverness was over Manchester we were informed that there was a fire in the control tower at Heathrow; aircraft were landing at the rate of only one in ten minutes. Fortunately, we were one of those which came in fairly quickly. As a result, I have only just been opening a letter from the CBI as I have been sitting here. It raises a point applying to my
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amendment, which is this. Will the proposed order apply only to tariff customers or will it also cover big industrial concerns which consume large quantities of electricity? If the latter is the case, they might not be able to reach special agreements with generators or public electricity suppliers.
I assume that subsection (2) does not apply to tariff customers because I note that the term "tariff customers" appears in line 4 on page 3 of the Bill. I do not know for certain and I should like my noble friend to pronounce on the matter and, I hope, be able to reassure the CBI if I am right. I beg to move the amendment.
Lord Carmichael of Kelvingrove: I think that we should be grateful to the noble Lord, Lord Campbell of Croy, for introducing the amendment. The Minister will be aware of the special place that the Hydro-Electric Board has in the minds of the people of Scotland because it has directly and indirectly brought a great deal of benefit to the Highlands. I looked up the order referred to by the noble Lord, Lord Campbell of Croy, which defined the North of Scotland Hydro-Electric Board. It made me slightly uneasy as to why it had been omitted from the original definition. Although it is not written in tablets of stone, the very fact that there was a variation order in 1980–81 shows that a variation order can still be put through both Houses at any time.
I agree with the noble Lord that it would be reassuring if we could be given an explanation by the Minister as to why the point had been omitted and specifically why the words,
"premises in any area in Scotland",
were put in, or whether there will be a variation in the definition of the Hydro Board. Certainly at this point I am inclined to support the noble Lord, Lord Campbell of Croy.
Lord Taylor of Gryfe: I share the apprehensions of the noble Lord, Lord Campbell of Croy, in respect of the discharging of the public service obligation of the Hydro Board in a new set-up in which there is a plc to which shareholders subscribe and from which they expect the maximum return on their investment. It would help those of us who have a deep concern for Scotland and its welfare if the Minister were able to give us some assurance that the Government recognise public sector obligations and that these would be taken on board in the new legislation.
5.30 p.m.
Lord Hughes: At this stage I also wish to support the amendment proposed by the noble Lord, Lord Campbell of Croy. I only add the words "at this stage" because the noble Lord, Lord Campbell of Croy, said the provision would be dealt with by order. I looked at the words at the top of page 3 of the Bill, but I could not find a reference to an order. I presume that there is a reference in some other part of the Bill. Clause 25, for instance, mentions order-making powers. I do not know whether that is the reference I have missed. Either that or I have—
Lord Campbell of Croy: I am grateful to the noble Lord for giving way. Line 6 of page 3 states:
"specified in an order made by the Secretary of State".
Lord Hughes: Is that stated on page 3?
Lord Campbell of Croy: Yes, it is.
Lord Hughes: I am sorry. That takes care of my first point. The only other thing I wish to mention is that the noble Lord said he would be willing to accept an order rather than have his provision inserted in the Bill. He said that if it were inserted in the Bill there would be a danger that the Bill would be made hybrid, and that would result in delay. I have a feeling that I am not the only Member of the Committee who would regard such a consequence as being totally desirable.
Lady Saltoun of Abernethy: If the Bill is not at risk of a crippling attack of hybridity in consequence of the acceptance of the amendment of the noble Lord, Lord Campbell of Croy, I believe that the reassurance it would give to consumers in the present hydro board area would be very helpful in view of the present political climate in Scotland.
Baroness Carnegy of Lour: I wish to endorse what my noble friend Lord Campbell of Croy and many other Members of the Committee have said. Those of us who live in the area of the North of Scotland Hydro-Electric Board accept that, although we live in an area where the generation of electricity is advantageous to consumers, we do pay a little more in the more advantaged areas of the north of Scotland than those who live in the outlying areas, in order that they should be able to pay the same. Obviously, they would pay more, if we paid less.
We all want to know why the area is not specified in the Bill. We want to know about the five-year period that has been mentioned. Does that mean that a longstanding commitment or a five-year commitment is involved? I remind my noble friend that the hydro-electric board area is not an even area at all. It is very uneven as regards the advantages given there. Some places are very remote while others are not particularly remote. However, we shall all be customers of the one all-purpose company, so this is a particularly crucial matter for people who live in our particular area.
Lord Kirkhill: I intervene to remind some Members of the Committee that I was chairman of the Hydro Board between 1978 and 1982. Therefore, I stand arraigned and fully culpable for an attempt, on behalf of the board, to impose in 1980 a diesel island area surcharge. On Second Reading I made it clear that I was opposed to the basic ethos which lies behind this Bill. I do not support the proposition that we should turn what is at present a public monopoly into what will virtually become a private monopoly. I regard that kind of public policy-making as entirely politically mischievous. I am quite opposed to the Government on that major point.
Having said that, and having at the time been chairman of the Hydro Board when the previous Government were in power—that government had,
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relatively speaking, the same basic philosophy here—I must tell the Chamber that the reasoning behind the board's attempted imposition of the then diesel island area surcharge was an attempt to keep within very narrowly defined cash limits imposed upon it centrally. At the same time the board sought to develop underground cabling to the more remote islands, as it did then, has done and is doing. It was hoped eventually to do away with the need to burn diesel at the more remote locations. That was the reasoning behind all that was attempted about 1980, but which of course did not take place.
Although I certainly wish to hear what the noble Lord, Lord Sanderson of Bowden, will say, my view is that it would be unlikely that the successor company to the board would face quite the same problem. As regards that point, I am rather optimistic that it would fulfil its obligation.
The Minister of State, Scottish Office (Lord Sanderson of Bowden): This has been a most useful debate. I shall perhaps take a little longer to reply to it than the Committee may expect. I wish to cover this matter rather fully because it is a crucial part of the privatisation of the Scottish electricity industry.
It may be helpful, in replying to my noble friend Lord Campbell of Croy, if I explain some of the background to subsection (2)(a) to Clause 3 of the Bill and the proposed amendment. My right honourable friend the Secretary of State for Scotland made it clear in his White Paper Privatisation of the Scottish Electricity Industry the Government's view that the successor company to the hydro board should be required to maintain the policy of applying common tariffs throughout the north of Scotland area. If I may refer the Committee to page 146 of the Bill, it will see that the whole of the Electricity (Scotland) Act 1979, to which this amendment refers, will be repealed, and with it the North of Scotland Hydro-Electric Board (Variation of District) Order 1981, by the enactment of the Bill now before us. I think this answers the point made by the noble Lord, Lord Carmichael of Kelvingrove. Our intention is that the statutory framework governing the operations of the privatised companies should be by reference to this Bill and not to miscellaneous parts of earlier legislation.
We intend to promote an order under the terms of subsection (2)(a) of Clause 3 which will set out the area of the north of Scotland. Our view is that the definition of the north of Scotland area is best dealt with in subordinate legislation under this Bill. I shall now explain why. The wording of Clause 3(2)(a) refers to Scotland, rather than to the north of Scotland. That is for three reasons. First, my right honourable friend's area of jurisdiction is Scotland. Secondly, although it is the Government's policy that the common tariffs policy should operate in the area currently served by the hydro board, we have to preserve some degree of flexibility for any future changes in the boundary between the two Scottish companies. For instance, it might be deemed sensible by the two companies, if a future housing or commercial development straddled their boundary, to seek to have the boundary altered. Clearly, subordinate legislation would be the best vehicle for

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achieving such a change and we believe that such legislation would be best promoted under the terms of the Bill now before us.
Thirdly, the licence issued to the hydro board's successor will contain a licence condition specifying further how the licensee's power to fix tariffs under Clause 18 of the Bill should be exercised to implement the requirement and the factors to be taken into account. The authority for such a condition is contained in Clause 7(1 )(a) of the Bill. I hope that the Committee will understand why we have deemed it appropriate that the starting point for all the legislative provisions which will require the maintenance of common tariffs in the north of Scotland should be this legislation now before us.
I am sure there is no disagreement between us over the Government's policy for the north of Scotland. Any differences seem to me to relate simply to the method of achieving the implementation of that policy. I have explained to the Committee the reasons why the Bill is drafted as it is and why we wish to adhere to the provisions as they now stand. Whether or not this or any other piece of legislation would be hybrid if it were drafted in a different way is not a matter on which I can advise the Committee.
I have explained to the Committee why this part of the Bill should be drafted in this way. I know that my noble friend Lord Campbell of Croy has put forward the amendment with the very best of intentions. Perhaps I may explain to other Members who may be concerned that the special social clause relating to the Hydro Board area is of long standing. It is something which I think all of us who come from Scotland understand. However, I think that I should also place on record that one of the main reasons for it, and why we support it, is the geographical nature of the Highlands and Islands and the very important fact that 48 per cent. of the electric power used in the area comes from hydro-electricity as opposed to a very small amount in the South of Scotland Electricity Board's area.
Various other matters have been mentioned. My noble friend raised the question of tariffs for larger consumers. A company will, like any other company, be able to enter into special arrangements or contracts with any customer if the cost of supply justifies such an agreement. It will therefore always be open to the customer to seek better terms than the tariff if his demand justifies it. Geography, however, will not be a relevant factor in justifying such a special agreement; factors such as load duration and interruptibility will.
The noble Lord, Lord Kirkhill, who I recognise knows a great deal about the Hydro Board's activities in the north of Scotland, pointed to a very important matter concerning surcharges. Common tariffs means exactly that, common tariffs. I should also like to answer the points made by my noble friends Lady Carnegy of Lour and Lord Campbell of Croy: there are no proposals to limit the period of the order.
I hope that, with that explanation and also with an assurance, since I have responsibility for the Highlands and Islands, that there is no question of
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singling out Shetland for expensive electricity and that the social clause, the common tariff, will apply there just as anywhere else, even though diesel power is used my noble friend will consider withdrawing his amendment.
Lord Hughes: When I spoke earlier I indicated a certain reservation. I should like to say now that what the noble Lord, Lord Sanderson of Bowden, has just said is totally satisfactory. It reassures me completely and it will be a delight to have it on the record.
Lord Campbell of Croy: I am very glad that the noble Lord who has just spoken agrees with my assessment of what the Minister has said in reply. I am grateful to all those who have taken part in this short debate for their comments and for their support for the principle of common tariffs in the area of the North Board. As I said at the beginning, my purpose is simply to probe and to receive a statement from the Government, which we have had.
I am grateful particularly to the noble Lord, Lord Kirkhill, for taking part in the debate as a distinguished former chairman of the North Board and for his comments. When I spoke about the remoter areas of the mainland of northern Scotland and the islands, I pointed out that there have been changes since he was chairman of the board and that many of the areas which used diesel generation have been or will soon be connected with the grid. However, that still leaves for some time to come some very important islands which are ai: a distance from the mainland and which will still be dependent on diesel generation.
I am grateful to my noble friend Lord Sanderson. He has confirmed that it is the Government's intention to designate the area of the North Board by order and to continue the common tariff policy without a time limit. I understand his point that the boundary, which I described as a somewhat arbitrary boundary, between the North and South Boards may need adjusting.
I did not expect my noble friend to decide today whether the Bill might or might not be hybrid if these words were added. That is always a technical matter which takes a long time to resolve. However, I conclude that the Government are aware of my point that the mere raising of the question of hybridity causes a great deal of time to be expended. I remember that I was much involved with the Aircraft and Shipbuilding Bill which was eventually found to be hybrid. If I remember rightly the examiners took between six and eight weeks during which the Bill was out of action, being considered by officials and lawyers with no parliamentarians involved at all. It is the time-consuming element which is of concern if the question of hybridity comes up.
I am grateful to my noble friend for his reply. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5.45 p.m.
Lord Renton Lord Renton moved Amendment No. 75:
Page 3, line 12, at end insert—
("( ) The Secretary of State and the Director shall also each have a duty to exercise these functions in a manner best calculated to preserve, protect and enhance the environment and to that effect shall place on all licence holders a duty—
(a) to achieve target improvements, which shall be set annually, in the efficient use of energy; and
(b) to achieve target reductions, which shall be set annually, in pollution.").
The noble Lord said: The proposed new subsection would become subsection (3)(a) of Clause 3. The Committee will see that it places upon the Secretary of State and the director a duty to exercise their functions under that clause in a manner best calculated to preserve, protect and enhance the environment and to that effect to place on all licence holders—that is, all those involved in generation, transmission or supply of electricity—a duty to achieve target improvements, to be set annually, in the efficient use of energy, and to achieve target reductions, also to be set annually, in pollution.
I must make it clear that 1 regard this amendment as a peg on which to hang a further discussion on what I hope are largely agreed matters of great importance in this Bill and to probe the Government's intentions as to the matters mentioned in the amendment. Perhaps I may say that I am deeply grateful to noble Lords opposite who enabled us to have a general debate on this amendment by not moving their own amendments a short while ago. I think that that is very helpful.
I have to confess that my amendment could be technically improved. I have often said that about other people's amendments so I had better say it about my own. I do not intend to divide the Committee on the amendment but I think that we can have a very useful exchange of views, and I am anxious to learn what my noble friend has to say.
First, may I remind the Committee of the various ways in which the activities of the electricity industry can impinge upon the environment, and sometimes damage it. The first is physically. There are high voltage lines, and we have become accustomed to them right across the country. Overhead power lines are vastly expensive and often physically impossible to place underground. There is not much, quite frankly, that we can do about them in my opinion; others may have a different view.
Then there are the low voltage lines which can be put underground without much difficulty or expense in most places. There are towns and villages in this country festooned with low voltage lines even after all these years. I think that the electricity industry and its users could have done more to put them underground. 1 hope that they will do so in future.
That brings me to the third physical impingement on the environment, and that is the building of power stations, large transformers and so on. Of course we have our planning procedures. We have frequently very considerable public controversy about the building of power stations, and it is right that we should have elaborate scrutiny of the effect upon the environment every time that it is intended to build a new power station.
Then we come to those matters in which there can be damage to the environment of a less obviously physical kind. Of course, it is physical damage in the strict sense. I refer to atmospheric pollution which causes acid rain, or can do so. The greenhouse effect contributes and helps to damage the ozone layer. Those are issues of which everyone is at last becoming conscious, especially the Prime Minister. We have the clean air Acts and the Control of Pollution Act. Those are to remain on the statute book and there is no need for this Bill to repeat much of their contents. But I, my noble friend and the noble Lord who tabled the amendment feel that there is scope for having targets of reduced pollution. I shall deal with that matter in more detail later.
Another form of potential damage to the environment is through atomic accidents of the Chernobyl and Three Mile Island kind. Mercifully—touch wood—we have been spared major accidents of that kind in this country, although we did suffer from the effects of Chernobyl. One has only to ask the farmers in north Wales, south-west Scotland and so on. So that is something that we need to bear in mind. Then there is the question of disposal of atomic waste. That is somewhat separate, but these matters taken together surely mean this: that, in passing through Parliament a major Bill on the reorganisation of electricity supply, we should take stock in a serious way of the problems that are involved and that potentially threaten the environment.
I wonder whether I may be marginally reminiscent. In 1957, I had the responsibility, with the late Reginald Maudling, of piloting the 1957 Act which established the area boards—which I am glad to say are being retained—through another place. At the Report stage in the House of Commons—I think as a result of pressure from the CPRE—I moved an amendment which became Section 37 of the 1957 Act. It was simply headed, "Preservation of amenity". It was the first attempt on the part of Parliament to impose on a particular industry a duty to preserve the environment. I am happy to say—and it is a very strange coincidence—that in Clause 37 of the Bill we find these words:
"The provisions of Schedule 9 to this Act (which relate to the preservation of amenity and fisheries) shall have effect".
When we turn to the ninth schedule on page 106, we find that paragraph 1 of the schedule repeats in almost exact words Section 37 of the 1957 Act. So, at any rate, to that extent, the Government are not going backwards. They go on to elaborate what are the "relevant proposals" referred to in the previous paragraph. They refer to,
"the construction or extension of a generating station of a capacity not less than 10 megawatts"—
of course, it would be a fairly small station if less—
"or such other capacity as the Secretary of State may by order specify".
The schedule refers to,
"the installation (whether above or below ground) of an electric line"
and to,
"the execution of any other works for or in connection with the transmission or supply of electricity".
So far so good. But the matter is not given very great prominence in the Bill. Of course, there is a view among lawyers that all clauses are equal wherever they come. However, we do not regard schedules as being equal with clauses. I must say that I should have preferred, had I been responsible for the Bill, to see Schedule 9 as a main clause in the Bill. However, the great thing is that the Government are alive to this matter to the extent—some may think the limited extent—expressed in Schedule 9. But, as I say, we want it probed further. My noble friend Lord Norrie has studied the technical factors, especially in pollution, more closely than I have done. I hope that he will add to what I have had to say and do so quite soon.
Perhaps I may now come to the question of targets. No one really knows how far the Government are going or how far they have the will to go unless they make a decision in advance. I think that in present times amid all the anxiety that exists about atmospheric pollution and when scientifically it is possible to measure the nature and the degree of pollution, it should at least be possible—I do not necessarily say that this should be written into the Bill—for the Government to have an intention and an aim in order to ensure that there is real progress in the matter.
Looking at paragraph (a) of Amendment No. 75, I see that it refers to all licence holders having a duty,
"to achieve target improvements, which shall be set annually, in the efficient use of energy".
At first sight, someone may ask: what on earth has that to do with damage to the environment? It does have something to do with it. I say that for this reason. If the demand for electricity goes on increasing—as we were assured by my noble friend Lord Peyton of Yeovil earlier that it will—it means producing more electricity by one means or another, more power stations and more hydro-electric power, although I do not raise much hope of getting much more of that because our rainfall is so variable. In Scotland we get terrible dry seasons sometimes. But unless, with the ever increasing demand, energy is produced as efficiently as it can be, we shall need more power stations than would otherwise be the case.
There is also the question, which we should not ignore, of alternative forms of energy that are non-pollution producing, as a way—sometimes locally, sometimes on a small scale—of producing electricity. So I say that there might very well be target improvements in the efficient use of energy. Technically I believe that that is possible, but I do not wish to dwell further on the point. I hope that I have said enough in a rather long speech, for which I ask the Committee's forgiveness, to initiate this debate which I hope will be of great interest. I beg to move.
6 p.m.
Lord Norrie: The debate on this amendment could, if I dare risk a small pun, prove to be one of the more illuminating that this Chamber will have during the passage of the Electricity Bill. I hope that the Minister will take the opportunity provided to give
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us a clearer indication of the Government's thinking on the environmental issues raised by the Bill.
At present the Bill only mentions the environment in Clause 37, with the details relegated to Schedule 9 and tucked away in the operational detail, at a stage when all the strategic decisions about the direction and purpose of the industry have been, in effect, already taken. It is in Clause 3 that we find the overall strategic duties of the electricity supply industry, and it is thus in Clause 3 that we should expect to see the environment take its proper place as one of the industry's major priorities.
I hope that the Minister will explain to the Committee why the environment is not mentioned in Clause 3.I entirely accept that we do not want to be put into a regulatory straitjacket—experience in the United States has perhaps gone further than we would like to see here, allowing as it has the unreasonable influence of militant minority groups to disrupt the supply of electricity to the community. Nevertheless, the environment is of vital importance and must be recognised as such in the legislation.
Let us now consider the contrast with the Water Bill. There the environment occupies a much more prominent place in the legislation and we have been labouring in recent days to improve its importance yet further. The Water Bill, we are told, is an environmental Bill, and therefore we should not be surprised that the environment figures prominently and regularly in its clauses. In many respects the Bills are quite different, not least because the water authorities own unusually large amounts of land. But I submit that electricity is or ought to be an environmental Bill too. The issues and problems that it raises may be different but they are no less serious. The electricity supply industry is potentially the biggest polluter of all and has a major impact on our environment. It, too, needs to be run on environmentally sound principles.
The challenges are many and varied. Perhaps the most worrying, because we do not have adequate solutions to them, are the emissions of polluting gases. Each year the electricity supply industry emits 233 million tonnes of carbon dioxide, which add to the greenhouse effect, 2·8 million tonnes of sulphur dioxide and 809,000 tonnes of nitrogen oxides which are the prime constituents of acid rain. The Government must surely recognise public concern about acid rain. Go into any school and children just 10 years old will tell you about it. If we are careless with the necessary legal protection, those same children will have to live with the consequences of our neglect.
Unless this Bill can be seen to address these problems the Government will have a hard public relations job convincing the country that they are treating them as seriously as they deserve. We cannot go on creating environmental problems without helping to provide a framework for solving them. Let us take just one example: global warming from the greenhouse effect. Experts have suggested that we might see temperature rises of between 1·5 degrees C and 4·5 degrees C over the next 50 years. This would drastically change our country, our economy and the kind of food we could grow. It would change our

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lives. We have to act now if we are to avoid creating insoluble problems for ourselves and future generations.
The Water Bill places on every participant in the industry a duty to further conservation. This brings the environment right up front in the water industry's activities. Everything the water companies do must be measured against that duty. The Bill is designed to shape future decision-making and practice in the industry.
Many people argue that, although the principle is right, the obligation does not go far enough. The Water Bill, quite rightly in my mind, builds it in at the beginning. But the Electricity Bill is different. First the decisions will be made and then measures will be taken to make their impact less unacceptable. That is crisis management.
Environmental conflicts in electrical power generation are well known. Indeed there are conflicts each time that the CEGB proposes to build a major power station, whether coal-fired, as at Fawley B, or nuclear, as at Hinkley C. Consider the flue-gas desulphurisation programme, designed to reduce sulphur dioxide emissions from coal-fired stations. Each 1,800 megawatt power station requires 300,000 tonnes of limestone; and produces nearly half a million tonnes of gypsum, which has to be disposed of somehow. An industry which takes its environmental duties seriously would try to minimise those problems from the outset, through energy conservation and by using cleaner and more efficient methods of power generation. Trying to reduce acid rain and the greenhouse effect as an afterthought using "clean-up" technology is not an acceptable option.
The Water Bill provides for a code of practice to guide the industry's operation. No such code of practice is to be found in the Electricity Bill. We must be assured that the privatised companies which emerge as a result of the Bill will adhere to the codes of behaviour and good practice which have been associated with the CEGB.
The absence of references to the environment in the governing clause of this Bill is very worrying. Nonetheless, my profound belief—and I speak as a committed environmentalist—is that safe nuclear power (and it can be safe) is of huge environmental benefit. That is why I deplore, on environmental grounds, the Labour Party's announcement in its New Policy Review that a Labour government would build no nuclear power stations—indeed it would not even complete Sizewell and would decommission most existing nuclear power stations by the end of the century.
In the past we have been guilty, through lack of forethought, of allowing our beautiful countryside to be scarred and spoilt by the uncontrolled headlong advance of technology. As the noble Lord, Lord Renton, said, we are all too familiar with the ugly sight of electricity wires strewn across our landscape, disfiguring our towns and villages. The Bill should deal with measures and funding for undergrounding; I emphasise that we are only talking about low voltage lines—those draped between wooden poles
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and not the pylons of the major distribution network. I do not accept that the undergrounding of those low voltage lines is prohibitively expensive. It is not. At present the cost of undergrounding the high voltage lines of the national grid is expensive, given the current state of technology. That should change. Some areas, like Yorkshire, have already shown signs of positive action and I believe that the Bill should indicate that the resources must be found for undergrounding. After all, the power distribution companies are well aware that the cost of good environmental practice such as undergrounding is tax allowable. That is a very practical incentive.
Over the past 30 years environmental demands in Britain have greatly increased and the fact that an ugly wire-scape was acceptable a generation ago does not mean that it should be tolerated today or in the future. I do not accept the Minister's disappointing and sweeping view at Second Reading that cost rules out all undergrounding.
Finally, in considering the wider aspects of the Bill, it is in my view essential that the Minister should find a way of ensuring that responsible specialist bodies such as the Nature Conservancy Council and the Countryside Commission, as well as all those in the voluntary sector are notified and indeed consulted well in advance about projects and activities affecting the environment. I have to say that I was equally disappointed by the reply given to me at Second Reading on these points.
The amendment proposed by my noble friend Lord Renton would, I believe, help provide a solution, in a way which would help the industry itself to respond to the challenges of tomorrow. I know that the Minister has had meetings with representatives of a number of environmental bodies, including the Government's own advisers on these matters—the Nature Conservancy Council and Countryside Commission—and representatives of the voluntary bodies, the Council for the Protection of Rural England and Friends of the Earth. They have all impressed on the Minister the need for environmental improvements to the Bill.
I hope that this probing amendment will give the opportunity for the Minister to tell us what she has in mind to improve the Bill in this vital area of public concern, thus demonstrating the Government's true commitment to conservation of our countryside. How much better that would be than waiting until the problems become so serious that we have to impose drastic rearguard action on the industry from outside. By that stage, it may well be too late. Instead, let us learn from the past and protect the future.
Lord Hatch of Lusby: I very much welcome this amendment and thank the noble Lord, Lord Renton, for putting it down and for giving us the opportunity yet again to debate the question of the environment. It is also a great and very rare pleasure to be able to agree with almost everything that he said in his opening speech. I shall refer to one reservation later.
I was pleased that the noble Lord mentioned the question of power lines and pylons across the countryside. The Committee may remember that last Thursday night my noble friend Lord Peston

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from the Front Bench declared himself to be a completely urbanised man with very little knowledge of the countryside. He suggested that most of the knowledge of the countryside came from the other side of the House. I dispute that. I put in a plea for Members on this side of the Chamber who have been brought up in and still live in the country. For many years now they have suffered from the eyesores of the pylons and the power lines that ruin the beauty of much of our countryside. In addition to the points raised by the noble Lord, I refer also to the low power lines above ground in villages. I hope to hear some prospects for the future in the noble Baroness's reply.
However, she will not be surprised to know that I am not satisfied with the answers, or non-answers, that she has given to points that I have raised from Second Reading onwards. The noble Lord, Lord Norrie, repeated some of the points when giving the figures regarding the pollution of the atmosphere, the greenhouse effect, and the ozone layer. I should like to ask the noble Baroness whether she can accept this amendment or something in the style of this amendment. If she cannot accept that it is to be laid as a duty on the Secretary of State and the director to be responsible for active policy in protecting and developing the environmental issue, who will have that responsibility? If it is not to be the Secretary of State and the director, and the industry is to be passed into private hands, whose responsibility will it be?
The amendment states that:
"The Secretary of State and the Director shall also each have a duty to exercise these functions in a manner best calculated to preserve, protect and enhance the environment and to that effect shall place on all licence holders",
these two target requirements. I suggest that if the Government disagree with the amendment, they have the responsibility to say who will do so. Who will develop those alternative sources of energy that we know are environmentally non-polluting which will help to preserve the environment? Who will be responsible for developing wave power, wind power and solar energy? If it is not be the Secretary of State and the director, whose responsibility will it be? This aspect has been gravely neglected until now, as I have several times drawn to the attention of the noble Baroness.
I repeat my question; I believe that this is the fourth time. If the Government are seriously concerned about the greenhouse effect, the impact of energy production on the environment and on the atmosphere, what is the answer of the noble Baroness to the fact that I have stated at least four times: that all present research shows that energy conservation is seven times as effective as atomic energy production in preserving the environment. If that is the case—and I do not believe that the noble Baroness can argue this fact because it comes from one of the leading institutes in the world—who will be responsible for energy conservation, energy efficiency, and for cutting down the use of unnecessary energy?
The noble Baroness told me last week, in answer to a similar question, that this should be left to the consumer. It cannot be left to the consumer. Are we
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going to leave the question of the greenhouse effect and the ozone layer to the consumer? Do government have no responsibility? Do they not feel any responsibility" They have been saying that they do. They have been holding seminars and conferences. If they are serious, the Government will take this opportunity that the noble Lord, Lord Renton, has given them to write into the Bill that the responsibility lies with the Secretary of State and the director to develop research into alternative energy supplies. It lies with them to develop research, knowledge and education in energy conservation.
I disagree with one matter that I think was hinted at by the noble Lord, Lord Renton, and was certainly stated by the noble Lord, Lord Nome: that the solution to the toxic emissions that are producing the greenhouse effect by the use of fossil fuels is an increase in the production of nuclear energy. I do not believe that. Nor do I believe that that argument can be sustained by any rational scientific evidence. Whenever I have tackled the noble Baroness on the issue of nuclear energy, her answer has always been, "We believe in a variety of solutions to this problem". However, in this Bill nuclear energy is given 20 per cent. protection. The production of nuclear energy contributes to the greenhouse effect; but it does much more. It greatly increases the pollution of our environment.
When we see, as we have done over the past few days, that apparently now there is a policy of going into the market to import nuclear waste for reprocessing in this country, when we see the international market developing in the international transport of nuclear waste to third world countries such as Morocco, I say to the noble Baroness: this answer is not enough. When she tells us that there is a variety of solutions, we need to know whether the Secretary of State and the director will be told in this Bill that they have certain targets to lay down; that they have targets for annual improvements in the effective, efficient use of energy; and that they have targets for the reduction in pollution. If that can be put into the Bill, whether in those words or others, it will give comfort and assurance to many people in this country who are concerned about the effect of the Bill on the environment as a whole, with regard to the greenhouse effect, on the ozone layer and so on.
Lord Renton: I am grateful to the noble Lord for giving way. I am trying to follow his argument, but he must realise—does he not—that atomic energy does not produce carbon dioxide or sulphur dioxide, which are the two main causes of damage to the ozone layer.
Noble Lords: The greenhouse effect.
Lord Renton: I am sorry. If there is no increase in the greenhouse effect caused directly by atomic energy, is the noble Lord saying that it is simply the heat generated in the atmosphere by atomic power stations which causes the greenhouse effect? Atomic energy stations do not produce acid rain and do not attack the ozone layer because they do not cause carbom dioxide or sulphur dioxide to be emitted. Why is it that he says that atomic power stations have no advantage compared with fossil fuels?
Lord Hatch of Lusby: If I said that, it was a mistake, but I do not think I did. It was certainly a false impression, I an not suggesting for one moment that the production of electricity by atomic energy contributes anything like as much to the greenhouse effect as the burning of fossil fuels, unless they are desulphurised. I do not put forward that case for a moment. But it is wrong to suggest that the production of electricity by atomic energy has no effect. I am not saying that it does not have a much lesser effect than the burning of fossil fuels, again without desulphurisation. But it has some effect, even if only minimal. But added to that must be the great danger to our environment from the pollution caused by nuclear waste and the disposal of nuclear waste.
I suggest that there is a further danger from the building of atomic energy stations which the noble Lord himself mentioned as a danger which fortunately we have not come up against in the same way as the Soviet Union has at Chernobyl. It is a danger, and the noble Lord will remember the fire at Windscale and the accident that preceded it.
He will also remember that there was a dangerous earthquake very near the first Wylfa power station in 1984. He will know no doubt that Wylfa was built on a fault and that the second Wylfa is likely to be built on that fault too. I would not dispute that. It may be a very long chance, but Chernobyl was a long chance. All these things are long chances.
I am making the case that if the Government are concerned with the prevention of pollution and with the danger of atomic accidents but still want to increase the supply of electricity and to reduce the demand for electricity, which can go hand in hand, the most positive and constructive way to do that is through energy conservation, which has been downgraded. It has been lumped into this 20 per cent. without any targets and without any specific instructions to the Secretary of State or the director general. I suggest that the amendment gives the Government the opportunity of assuring those who are concerned about the environment. I hope that they will be able to accept this or something along the same lines.
Lord Trafford: I wish to comment on two points that have been made. The first is that I entirely agree with my noble friend Lord Renton that it is important for this to be included in the Bill. It is a significant fact and an important part of the general way in which we live in this country that this matter should be given due consideration.
The problem is that in talking about the environment I am often concerned that we leave something of reality behind. It is easy to talk about greenhouse effects, ozone layers, acid rain and so forth, but one must remember that the most immediate environment that most people have in terms of electricity is the financial environment: that is to say, paying the bill, the costs, the price. It is not only the capacity of these various types of power stations to control the production of the various pollution agents—we had good examples of them just now; it is that the cost is ultimately transmitted to the consumer. Therefore it is not just the capacity
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that we may have or shall instruct to be delivered; it is also the timescale and the price, because they matter so much to the individual.
The environmental dilemma has been addressed by two noble Lords, and it is simply that most environmentalists until recently have also been against the use of nuclear power and the building of nuclear power stations. On the other hand, we have to recognise, as has been conceded this evening, that nuclar power stations on the whole contribute least to this type of difficulty, though they have their own difficulties. There is the problem that has been mentioned of the final disposition of toxic waste.
My view of safety is that I am much more concerned with the regulations for French nuclear power stations than I am with British ones. The prevailing wind is south-west in this country. Along the north French coast, with great international co-operation, 14 nuclear power stations have been built. Should there be an accident under French auspices, it is not so much the French as the British who would receive the consequent fall-out. I have always thought it strange that people are more concerned with what we are doing about our nuclear power stations, which are less likely to cause trouble, than what happens with French power stations. However, that is by the way to this amendment.
It seems to me that one has to have a balance. I think the Government's balance of 20 per cent. is a bit low. I should have liked to have seen a higher protection level for nuclear power over the next 20 or 30 years. There are two reasons for saying that, as well as the environmental reason. The second is that it is an ultimate preserver of natural resources: one is not consuming an ultimate consumable agent such as oil. It is arguable that our coal reserves are long enough ahead not to have to be a concern, but the problem there is twofold: first, it becomes ultimately equally costly and, secondly, it becomes very expensive to remove the 230 million tonnes of carbon dioxide that is pumped into the air. Therefore in itself nuclear power becomes much more economically viable in those terms than it would if one did not have to be concerned about the pollution.
It is therefore a question of balance—balance between what one might wish to see in the environment. It is a balance of the capacity of our industry to avoid pollution. It is a balance of the problems of disposal of nuclear waste as opposed to atomic energy's least immediately environmental problems, and it is a balance in relation to the price to the consumer. I forecast that most people will be extremely concerned with the price to the consumer because to a great extent that is the factor which affects the personal environment in which people live.
If you are on a finely balanced budget, as is often the case in rural areas—passé the noble Lord, Lord Peston, because it occurs outside the suburbs—you are very dependent upon electrical supplies. In those circumstances price makes a considerable difference to the type and quality of life that you lead.
All those matters are a balance. I do not believe that the Government have necessarily got the balance wrong in any way. But I support in some

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measure and in some way—not necessarily along the lines of exactly these words—the inclusion of the importance of environmental protection in the Bill.
6.30 p.m.
Lord Hatch of Lusby: Will the noble Lord answer one question arising from his speech? When talking about the concern for price does he claim that the production of electricity by nuclear power is cheap and cheaper than other methods? If he does I must point out that the claim has been widely questioned.
Lord Trafford: No, I did not say that. I carefully said that only in circumstances where one must make big changes in coal-fired power stations, where it were difficult to obtain the coal, or where there were transport costs and those costs rise, would they approach that of nuclear power. In other words, nuclear power is at present much more expensive to produce unit for unit. I was making that point and was not trying to suggest that it was cheaper; nor would it be in the immediate future.
Lord Hunt: I should like to say a few words in support of the amendment of the noble Lord, Lord Renton. Such is my concern about the matter that last year, during the White Paper stage which preceded the Bill, I tabled a Starred Question on 7th July. I asked the Government:
"Whether they intend to embody the environmental responsibilities currently held by the CEGB under Section 37 of the 1957 Electricity Act".—[Official Report 7/7/88; col. 391.]
I received a totally positive response from the noble Viscount, Lord Davidson. I have not checked the 1957 Act but the noble Lord, Lord Renton, has assured Members that the wording of Schedule 9 is very similar in terms to that in the Act.
My point is obvious but perhaps it needs stressing again and again. It is that over the past 32 years the pressures on our natural environment have increased tremendously. I now recognise and totally acknowledge the fact that the wording of Section 37 of the 1957 Act, which is now contained in Schedule 9, is no longer adequate to meet the protection which our natural environment deserves and demands. We are not talking only of pollution and the greenhouse effect but about our landscape. We are talking about environmentally sensitive areas of scientific and historical importance. We are talking about the quarrying of high-grade limestone in order to produce the material to cleanse the flues of power stations.
There is no doubt in my mind that the wording of the noble Lord's amendment goes much further than stating merely that the industry has a responsibility to have regard to the desirability of preserving and it shall take into account any effect and so forth. Such words are not good enough. I support the strong and firm duty which the noble Lord, Lord Renton, proposes should be placed on the industry.
Lord Peyton of Yeovil: I should like to register my support for my noble friend's amendment. We have it on the highest authority from within the Government that the environment is regarded as
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being of major importance. It is unchallenged that the electricity supply industry is a major source of pollution. Sometimes the comments of Ministers in another place give the impression that they look for energy conservation simply through the control of emission and by advising people to restrict their use. That gives me the impression that the Government have not reached the root of the matter.
At some time during the debate can my noble friend say whether the Government have asked themselves the question: by now much is it possible to reduce demand and at the same time sustain the service? Some people have suggested that very substantial savings are available in that way. I should like to know the Government's view about that issue.
In contrast with the place enjoyed by the environment in the Bill, that assigned to competition is most prominent indeed. Although in most contexts I regard competition as being an important factor, I believe that in the context of the electricity supply industry not only is it a great deal less important than the environment but it will be very difficult to achieve. Much of the talk about competition in the industry is a "will of the wisp". Even if the Government do not agree with the precise words put forward in my noble friend's amendment, I hope that they will agree to include a provision in the Bill with at least the same prominence as that enjoyed by competition. It is not particularly attractive in this context.
The Lord Bishop of Worcester: I should like to make two comments of a general nature. The environmental issues have been well rehearsed in this Chamber and in the press and figures of great importance have been quoted this afternoon. There is no need to add to that. However, I should like to see the noble Lord's amendment placed on the face of the Bill thereby firmly placing on the government of the day the duty to control these matters and to do all in their power to ensure that the environment is enhanced and protected.
Many Members of the Committee may believe that good government is least government and that to have a government which constantly interferes in the activities of the nation is not to be commended. Nevertheless, surely it is the duty of the Government to articulate and enforce those issues to which we collectively subscribe and collectively wish to have protected.
We do that in the matter of order and law. We do not expect a government to withdraw from the scene when matters of order and law arise; we expect them to be strong and to intervene. Therefore, when faced with a matter so important as environmental pollution, I wish to encourage the Government to see it as part of the duty of any government worldwide.
My second point is that the protection, good stewardship and enhancement of our environment—for an ugly environment brutalises those who live in it—is a moral issue just as much as the protection of the family or the promotion of good sexual ethics in the nation. This is a moral issue. The protection of our environment in such a way that it can be handed on intact and indeed possibly enhanced to those who come after is something

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which we should all want to see. As I say, it is a moral issue on which we want the Government to take a quite definite stance. Therefore, I shall vote for this amendment if the opportunity arises.
Lord Hylton: This is a very important amendment and I welcome it. I should like to mention three points which have not yet been touched on of which we should be aware.
The first is the heating of the air from existing power stations by means of their cooling towers. Every time I come to your Lordships' House by train, I pass Didcot power station which is belching great clouds of steam straight into the air.
The next point is the losses of electricity which take place during transmission from the point at which they are generated to the point at which they are consumed. I know that those are not as great as they used to be but are still very substantial.
The third point concerns the efficiency of consumption of electricity wherever it is used. We already know that something can be done about not heating the air by means of combining the generation of electricity with the use of waste heat, and plants are doing that very effectively. If electricity could be generated closer to the point of use, there would be less transmission loss.
Finally, on the point of efficiency of consumption, we know that every year a large amount of electricity is used simply for space heating. Therefore, insulation is essential. There are also such devices as low energy bulbs and efficient appliances which make the best possible use of the power they consume, not to speak of the proper use of waste heat from such processes as refrigeration and cooking.
All those pointers fall within the terms of the amendment and to my mind they are very much more to be desired than a massive increase in investment in nuclear power. Therefore, I hope that the Government are sensitive to these issues and, even if they cannot accept the exact wording of the amendment, will feel that something can be written into the Bill which is better than that which we have at present.
Lord Williams of Elvel: I intend to speak very briefly because I understand from the weekend press that the noble Baroness may be helpful on this matter. The weekend press may be wrong but I look forward to her response.
I also understand that there is a rumour about that the Central Electricity Generating Board has produced a paper on environmental issues which we may be in a position to see at some future stage. We look forward to the publication of that with eager anticipation.
Furthermore, I should perhaps declare an interest, however disappointing it may be to my noble friend Lord Peston, as president of the Council for the Protection of Rural Wales. There seems to me to be three levels at which one can deal with the environment and I accept much of what many Members of the Committee have said. There are what I call the life and death issues such as
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Chernobyl, the greenhouse effect and the ozone layer. It is clear that there must be a duty on the Secretary of State and the director to cope with those in a sensible manner. That must be right up front.
There are then what I call the serious but not life and death issues; for example, where you put open cast coal, where you put pylons and undergrounding, as referred to by the noble Lord, Lord Norrie. I am less convinced that the Secretary of State and the director should try to achieve targets on those issues although my mind is open.
There are then what I call the bread and butter issues on environment; for example, litter and messing up the coastline which, as the right reverend Prelate the Bishop of Worcester rightly said, makes life extremely difficult and sometimes intolerable for people who live in those conditions.
Therefore, I support the general thrust of the amendment of the noble Lord, Lord Renton. Taking up his invitation, I am bound to say that I do not agree entirely with his wording but I shall not pursue the matter lest I be accused of trying to get my own back for some of the criticisms which he has brought forward on my amendments. However, I believe that it is right to have a duty imposed on the Secretary of State and the director similar in nature, kind and importance to the other duties imposed on the Secretary of State and the director in the Bill as it is now drafted.
6.45 p.m.
Baroness Hooper: This has been an interesting exchange of views and I am grateful to my noble friend Lord Renton for having prompted it by his, as he admitted, probing amendment. There is no disagreement about the objective of seeking to protect the environment to the maximum extent which is reasonably practical when electricity developments are undertaken. The difference, such as it is, is about the approach and method.
The starting point is important. We are not starting from the position that the electricity industry has neglected the environment. On the contrary, anyone who has looked into the matter must be impressed by the action taken by the CEGB to minimise the impact of power stations on the environment and to create offsetting benefits. Area boards have also taken action to lessen the visual impact of electricity lines and equipment in areas where that was particularly important.
In relation to undergrounding, I have some examples of the amount of money which has been spent and the action taken. For example, during the period from 1st April to 31st March 1989 the South Wales board installed 600 kilometres of underground cable and over the same period 329 kilometres of overhead cable was erected, but a total of 394 kilometres was dismantled. The Yorkshire board has replaced much of the overhead line near Kirk Smeaton village with underground cable. The total cost of the work was £39,000 of which approximately one-third was for amenity. I could quote other examples from other area board areas. However, there can be no doubt that in their efforts to avoid spoiling the environment, area boards

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incur quite significant sums within the overall costs of their operational schemes but they believe that that is a valuable contribution to good environmental practice.
Last year the CEGB published, as a contribution to the European Year of the Environment, a document on its environmental achievements. Among other things, that illustrated the action taken at power stations to create nature reserves, nature trails, field centres and facilities for bird-watching, It also described the creative conservation measures which the board intended to take at proposed new power stations. The successor companies to the CEGB including the National Grid Company will inherit that serious and constructive attitude to the effects of the industry on the environment. 01 course, that attitude reflects the importance which is attached nowadays to ways of promoting and conserving the environment.
One manifestation of that importance is the number of environmental statutes which bear on an industry such as electricity, although not exclusively so. There are no fewer than 15 Acts of Parliament ranging from the Clean Air Act 1956 to the Food and Environmental Protection Act 1985 which control and regulate the impact which the activities of the electricity industry and other industries have on the environment.
Added to those are some 14 European Community directives, including the control stemming from the agreement in the European Community on the large combustion plant directive. Under that the United Kingdom will reduce the level of sulphur dioxide emissions from large combustion plants by 60 per cent. on 1980 levels by the year 2003 and will reduce nitrogen oxide emissions by 30 per cent. by 1998. Compliance with the directive will of course be ensured by Her Majesty's Inspectorate of Pollution, but action has already been taken to implement that directive.
Given this array of legislative constraints, it is obvious that the amenity provision referred to in Clause 37 and spelt out in Schedule 9 of the Bill is not the only safeguard for the environment. Nevertheless, that amenity duty is important. It is true that it is couched in the same terms as the duty imposed on the electricity industry by the Electricity Act 1957, with which my noble friend Lord Renton was associated, but that does not and should not in any way belittle its importance and influence. For example, those Members of the Committee who have had an opportunity to study the environmental statement which the CEGB recently produced to accompany its application for a PWR power station at Wylfa may have seen that the Board specifically refers to the amenity duty in the 1957 Act as part of the statutory background to the statement. Therefore, the amenity duty which currently applies only to the nationalised industry will in future apply to all licensees and not just to the successor companies of the present electricity industry.
Comparisons have also been drawn between this Bill's treatment of environmental matters and that of the Water Bill. There are good reasons for the difference. The water industry has the potential for
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environmental effects over far greater areas of the country than electricity and much more potential for positive additions to the environmental scene and for recreational opportunities. The water industry is, in effect, the guardian of areas of great natural beauty, whereas the main impact of the electricity industry on the environment is much more in relation to pollution. As I have enumerated, there are many safeguards and a great deal of legislative prescription in that area.
The Government therefore take the view that, together with the array of legislation which I have mentioned, the main safeguards against electricity developments having an unacceptable effect on the environment are contained in our detailed planning procedures. These ensure wide consultation with those affected or those who have an interest. These procedures are now buttressed by the various regulations made earlier this year to implement the European Community directive on the assessment of the effects of projects on the environment.
The regulations, which will be up-dated as appropriate to reflect the new consent requirements following the passage of this Bill, require an environmental assessment to be prepared in the case of proposed power stations with a capacity of 300 megawatts or more. They give the Secretary of State discretion to require an environmental statement in other cases too, and the Government have explained that they intend to adopt a serious and responsible attitude in deciding when environmental statements are required.
One of the results of the policy of privatising the electricity industry has been an upsurge of interest in smaller types of power stations. These are likely to have a less adverse effect on the environment than large stations. They will certainly be visually less obstrusive, and by the use of gas to a greater extent as a fuel they will be less polluting in their effect.
In the light of the controls and developments I have described, I believe that the Government have no reason to feel at all apologetic about their approach to electricity and the environment, or indeed the industry itself. On the contrary, this is an industry which has become subject to an increasing number of constraints, culminating most recently in the European agreement to reduce emissions of sulphur dioxide and nitrogen oxide and the Government's regulations on environmental assessment to which I have referred.
After privatisation the effects of the industry on the environment will continue to be closely controlled by all the regulation and legislation which apply to industry across the board. However, despite our confidence in this, the Government have given careful consideration to the views which have been expressed to us by various bodies such as the Nature Conservancy Council, the Countryside Commission, the Council for the Protection of Rural England and Friends of the Earth. We intend to introduce some amendments at a later stage which I shall attempt to outline as a small package now.
One of the concerns expressed is the desirability of early notification to or consultation with bodies

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with statutory environmental responsibilities when electricity developments, particularly major ones, are in prospect. The Government therefore propose to introduce an amendment which will allow regulations to be made under Schedule 8 of the Bill to provide that an application for consent under Clauses 35 and 36 shall be notified to the Nature Conservancy Council if it relates to sites of special scientific interest or national nature reserves. Secondly, we shall look at Schedule 8 to see whether an amendment is needed to make clear that the conditions attached to deemed planning permission may include environmental conditions. Thirdly, when the environmental assessment regulations are to be remade after the passage of the Bill, which we hope will be successful, a regulation will be included providing for notice to be given to and consultation with statutory environmental bodies where an environmental assessment is, or is to be, submitted with an application for consent under Clauses 35 and 36. Further, the Government will ensure that licence documents include a reference to the amenity clause in Schedule 9 of the Bill. This will underline to licensees this particular obligation.
There is a further development to which the noble Lord, Lord Williams, referred, which I believe will be of general interest. Concern has been expressed about whether the privatised companies will of their own volition continue to take as responsible an attitude to the environment as that taken by the public sector electricity industry, to which I referred. I do not think there are good grounds for that apprehension. After all, it will be in the interests of the companies in building up their independent identities to demonstrate concern for the environment. Nevertheless, we have had discussions with the CEGB about what reassurance might be provided, and I am pleased to say that the designated chief executives of the three successor companies to the CEGB have today issued a joint statement of environmental policy. This will emphasise the commitment of the successor companies to the maintenance of high standards of environmental care. It will list the specific ways in which National Power, Power Gen and the National Grid Company will ensure responsible and progressive application of the duties of environmental care. These will include consultation and liaison with environmental authorities and the preparation of environmental guidelines. The area boards, for their part, are also preparing statements of environmental policy.
I hope that these proposals and developments will be seen as proof of the Government's wish to be helpful even though we are confident, as I said, that existing arrangements which apply across the board to industry will ensure adequate control over the industry's effect on the environment.
Turning to the precise amendment tabled by my noble friend, this would impose two burdens on the Secretary of State and the director: first, to exercise their functions in a manner best calculated to preserve, protect and enhance the environment and, secondly, to require them to place a duty on all licence holders requiring them to set targets on an annual basis as regards improvements in the efficient
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use of energy and reductions in pollution. This second duty would be a statutory duty unique to the electricity supply industry. It would be a duty which would apply to all licence holders irrespective of the size of their operations. I really do not see how this would be appropriate, and perhaps I can try to explain why.
The Government are already doing a great deal to encourage targeting of energy use on a voluntary basis. This is the monitoring and targeting programme of the Energy Efficiency Office. The purpose of that programme is to promote better energy management by helping sectoral bodies to develop pilot energy management systems in the major sectors of energy use. These monitoring and targeting systems allow companies to find out where expenditure on energy is going, to understand what factors make the energy usage change, and to set targets to achieve savings. It is a way of treating energy as a manageable resource rather than as a fixed overhead.
The Energy Efficiency Office is financing the development of M&T systems in 40 industrial sectors. In 18 of those sectors the system has been developed and promoted. Work is continuing in the other sectors. The overall programme objective is to achieve a take-up of M&T by 1,000 sites by the end of 1990. The implementation of M&T is expected to lead to annual savings of over £300 million for a government expenditure of £9 million. We believe that the M&T programme is an object lesson in securing value for money from public expenditure, and it demonstrates the value of proceeding through voluntary co-operation rather than by statute. This is an approach we shall be following in the Energy Efficiency Office's major new programme Best Practice.
The amendment proposed by my noble friends relates to improvements by all licence holders in the efficient use of energy. As I have said before, under our proposals for the very first time the efficiency with which the electricity industry uses fuel will significantly affect its costs and its ability to compete successfully. The increased competition which is central to the Government's proposals will provide a major incentive to the efficient use of fuel.
Our proposals will also promote the efficient use of electricity by consumers under Clause 3(3)(b) which we have in fact already discussed in some detail.
As I have already dealt with many environmental issues, as regards the targeting on pollution I would simply reiterate that the Government are already committed to reducing emissions from power stations on the basis of the targets agreed in the European Community last summer.
I would also say that in addition to the energy efficiency programme the Government are ensuring, through the non-fossil fuel obligation, that nuclear power will continue to make a contribution to limiting emissions of CO2.In supporting R&D into renewables, as well as in the proposals to provide a special place for renewables within the non-fossil fuel obligation, the Government are certainly doing a considerable amount to encourage that form of

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energy which we believe to have an important contribution to make in relation to environmental concerns.
There is one general point which I should like to repeat before I conclude. The standards of environmental protection which the electricity industry has to meet now will be enforced every bit as vigorously after privatisation as they are now. Those environmental standards need not be reiterated in this Bill. They will be covered in existing legislation already on the statute books which regulates the impact of the electricity industry and that of other industries on the environment.
I hope that in the light of what I have said my noble friends—who indeed indicated that they would not be pressing this amendment—will feel able to withdraw it. I hope that we shall then all have the opportunity to consider further what has been said in the course of this debate.
Baroness Nicol: Before the noble Lord withdraws his amendment, perhaps I may ask the noble Baroness whether we are to understand from her reply that the Energy Efficiency Office is expected to continue? And can we be sure that it is going to continue with realistic funding? We have no grounds for optimism from what has happened to it this year. Can she say whether that has been considered, and can she give us some proper report on what she is expecting to happen?
Lord Hatch of Lusby: In order to avoid the noble Baroness getting up and down, perhaps I may add a question. She said at the end of her speech that the Government are doing many things to assist the development of renewable resources. She did not tell us any of the things that they are doing. Is it not the case that government funding for such activity has been cut?
Who is going to take responsibility for that when the industry is passed over into private hands? Does she really believe that the objective of making profits is going to help in the development of renewable resources? Is it not much more likely that when there is this so-called competition within the electricity industry, there will be corners cut, rather than investment in the longer term non-profit making activities that are helpful to the environment and are non-polluting? Perhaps the noble Baroness will answer this question along with the previous one from my noble friend.
Baroness Hooper: I am delighted to confirm once again that there is absolutely no intention of doing away with the Energy Efficiency Office. It does a very valuable job and we are very concerned in ensuring in every way possible that it does an effective job, not only a cost effective job.
The Energy Efficiency Office's budget for 1989–90 will be £15 million, and at the height of the energy efficiency campaign in 1986–87 the expenditure reached £24.5 million. The reduction will be in two main areas in relation to direct subsidies. It now seems inappropriate to subsidise consumers to do what is clearly in their own interest. For example, because of the widespread appreciation of the
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benefits of energy surveys the survey scheme was closed to new applicants last June.
The other main area will concern general advertising. I believe that general awareness of energy efficiency is now high, as comments in the course of this debate have indicated. It is therefore appropriate to reduce levels of general advertising. But the campaign is certainly continuing in terms of the "best practice" campaign in respect of marketing strategy—which I will not go over again but to which I referred in some detail earlier—and in relation to the work of the regional energy efficiency offices.
So far as concerns the renewables programme, I am happy to tell the noble Lord, Lord Hatch, that government funding for R&D into renewables has in fact increased. This is an on-going programme. We shall be discussing research and development generally later on, and of course we shall be discussing renewables in the context of the non-fossil fuel obligation later in the Bill, but I can assure the noble Lord that renewables are receiving considerable support from the Government not only in R&D but also in the encouragement which the additional tranches to the non-fossil fuel obligation will give to producers and potential producers.
Lord Renton: We have had, as I am sure the whole Committee will agree, a most valuable debate. We have been virtually unanimous about what needs to be done to protect the environment and the other matters that were mentioned. The differences between us as to how these matters are to be achieved do not appear to be very serious. Perhaps I may say how grateful I am to all those noble Lords who have taken part and how especially grateful I am, as I am sure is the whole Committee, to my noble friend Lady Hooper for a very full and, if I may say so, impressive and helpful reply.
My noble friend has assured us that standards will be enforced at least as vigorously as under existing legislation. They have been so far. She has pointed out that the purely visual, strictly physical features of the threats to the environment are already covered by a mass of legislation as well as by what appears in the Bill. She has reminded us, as I attempted to do, that on pollution we are bound, and the electricity industry will be bound, by the Clean Air Acts, the Control of Pollution Act and other measures.
My noble friend has assured us that all licensees will be bound by what is aimed at in the Bill without the need to set specific targets. I must confess that I was convinced by what she said about targets. They can sometimes be misleading. We should not assume that it is right to impose them upon all and sundry whatever the circumstances. Targets have their limitations. We shall of course note with great interest the amendments—it seems as though they will be rather numerous—that she will table for the Report stage. We shall also wish to study her detailed speech carefully.
My noble friend has given convincing reasons for not accepting the amendment. I was rather relieved to hear the noble Lord, Lord Williams of Elvel, agree with me that my amendment was far from perfect. That being so, and with gratitude to all concerned,

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and living in hope that the debate will lead to further preservation of the environment, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 76 not moved.]
Viscount Hanworth Viscount Hanworth moved Amendment No. 77:
Page 3, line 13, leave out ("Subject to subsections (1) and (2) above,").
The noble Viscount said: The object of the amendment is twofold. I wish to ensure that the duty to promote competition in the generation and supply of electricity is given due weight but does not have priority over the duty to protect the interests of the consumers of electricity. Secondly, I wish to ensure that the duties of promoting competition in the generation and supply of electricity and of securing the financial integrity of the companies cannot take priority or be used as an excuse for failing to protect the public from dangers arising from the generation, transmission or supply of electricity through the provisions of Clause 3(3)(c). My aim is also to secure the establishment and maintenance of machinery for promoting the health and safety of persons employed in the generation, transmission or supply of electricity through the provisions of Clause 3(3)(d). I beg to move.
Baroness Hooper: I was under the impression that we had discussed this amendment earlier with Amendments Nos. 72 and 76.1 outlined at that time the Government's view that the provisions of the Bill on the efficient use of electricity and on safety cover the problem which the noble Viscount seeks further to cover. In the light of the remarks made earlier I hope that the noble Viscount will feel able to withdraw the amendment.
Viscount Hanworth: I apologise to the Committee for not noticing that. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 78 not moved.]
7.15 p.m.
Lord Peston Lord Peston moved Amendment No. 79:
Page 3, line 20, after ("charged") insert ("in accordance with Schedule (Pricing formula) to this Act").
The noble Lord said: Considering the hour, I am in some difficulty about this amendment. The fact remains however that the subjects I wish to raise are at the heart of the Bill. I can think of no other matter that I wish to debate during the various days of the Committee stage more important than this. I do not know how long our discussion will take. However, as I regard this matter as the heart of the Bill I must warn noble Lords who are hungry that I have no intention of hurrying it.
The issues raised under the licences, and within the licences, under the price regulation scheme, are fundamental both to the economics of this industry as it will be privatised and to the financial viability of the industry in terms of the companies which end up owning it and running it. One of the problems
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for those of us interested in this matter is quite independent of politics. While some of us regard the privatistion of the industry as ludicrous, if the Government are pressing ahead the least one can do is to examine the matter carefully so that we end up with an Act that gives the eventual privatised owners, the pics, some chance of doing a proper job.
One of the difficulties I have is that the Bill tells us virtually nothing about the most important matters. It refers constantly to licences; but there is nothing of great substance in the Bill on licences. Except for my amendment there is nothing on the price regulation scheme. The logic is to proceed from the licences to the price regulation scheme. But prior to that one has another series of documents. The documents are explanatory notes, a draft licence and so on. They are produced by the Department of Energy. What these documents have in common is a sentence in black type which reads:
"These notes are intended to assist understanding of the draft licence but do not form part of it and have no formal standing".
One must then ask the question: what actually has formal standing?
As someone who has been interested in public affairs for a long time—I have been involved with Whitehall for 25 years—perhaps I may say that these are pretty well the most remarkable documents I have ever seen. When I was a junior economist in the Treasury a long time ago I remember preparing a paper which was to go to Ministers. It contained a formula. The people who looked after me asked me whether the formula had to go in. I was more obstinate then even than I am now. I said, "Yes, my formula must go in". They were horrified at the idea that a document going to Ministers would contain a formula. It was a discounted cash flow formula, as I was one of the first to think that discounted cash flow might apply to government matters. At the time, the predecessors of the Department of Energy, the old Ministry of Power, had not the slightest idea of what discounted cash flow or compound interest were. Indeed those at the ministry would faint at the mere mention of the expression "marginal cost".
So the department has come a long way in producing these documents. However, as I say, they are quite extraordinary. It was a grievous disappointment to me that the most extraordinary one of all relating to the public electicity supply licence was not available earlier to the noble Earl, Lord Lauderdale, who had the other ones but could not find condition 18 to which the noble Baroness referred. I did not join in at that point, although I was willing to confirm that there existed a document with condition 18 in it. As I say, it is quite an astonishing document. Moreover, if the Committee will forgive the subtle reference, it is even more exciting than any account I have seen of the fall of the Indian rupee. However, whether it assists anyone to understand the procedure is something which I do not know but certainly I have a great many questions to ask in this resepct.
Logically, prior to those questions, there is an enormous number of other questions which must be raised about licences. I shall raise only a few of them on this amendment in order to proceed speedily

1109
at this stage and will raise several others almost artificially on other amendments. We are going ahead with the licences and at least for some of us it is difficult to see in the first place what their statutory basis is. What is a licence? Licences are referred to in the Bill but they are always referred to without any detail as to what they are. Indeed, one can only understand what they are with the assistance of the explanatory notes.
The kind of questions which arise about licences are these. I should first like to know what is their statutory basis. For example, are they in the form of a contract? Can there be litigation on them? At the other extreme, does this Chamber have any rights to debate them when they are actually fully constructed for the companies? Further, what is the position of the other place in this respect?
I refer again to the noble Earl, Lord Lauderdale, and to a point which I have already made. He said that he thought that licences could easily be changed and that the system could be modified. However, the noble Baroness said that it would not be easy to alter the licences. Of course I am interested to know all about those aspects, whether easy or hard. I am also interested to know about the system of licences and about the whole issue of modification. For example, could a successor government by amending this legislation change the whole structure of licences? If they could do so, would it not follow that they could very much influence the financial viability of the pics which will one day own this industry? That is the first sort of question which I have to ask.
The second class of question is this. When will the licences be given? I have been trying to get some grip on the process. As I see it, if the Bill is enacted the assets of the industry will pass into the hands of the Secretary of State, who will then in a sense sell them to the private sector—at least, I think that that is what is supposed to happen. Subsequently the industry ends up in the form of various pics in the private sector. But do the people who buy into the industry get the licences beforehand, or are they in some sense guaranteed a licence? If they are guaranteed a licence, and if they can get a licence anyway, I am not quite clear what the whole process which we are going through here is all about. Alternatively, do they obtain the industry, in its different sections, so to speak, with the licensing process taking place afterwards? I can see obvious difficulties in that connection. For example, who would bid for an industry if they did not know for certain that they would receive a licence? Further, who would bid for an industry if they did not know the economic and financial nature of the licence which they would receive?
I return now to the point about the circumstances in which the licences could be revoked. This relates to my point about whether the licences are contracts and therefore could only be revoked if the conditions of the contract were not met or whether they could be revoked by a government passing such legislation. If a government could do so, surely that is some source of worry to those who would wish to acquire the industry.
There are different kinds of licences. We are discussing generating licences, transmission licences and supply licences. I shall return to the meaning of certain of those words in relation to a later amendment. I think that the Bill is somewhat ambiguous in its language. Indeed, the noble Baroness has at least one or two amendments which deal equally with clarifying the language. However, in considering those licences, I have a particular question relating to what I think could correctly be called "supply licences". Is it necessarily the case that the supply licences will correspond precisely to the area boards? There is obviously a one-to-one relationship between the existing area boards and the supply companies. I assume that they will correspond to a licence for each area board.
I am sorry to have to go over some of this ground again at great length, but this issue relates to the further question as to whether once you have a licence it in some sense belongs to you. Therefore if you were to sell the company to someone, presumably that person would get the licence—or, would the licence itself have to be renegotiated? That does not seem to me to be a minor matter. To put it bluntly, the thing which seems to be worth buying is the licence; that is what you want to have. If you do not own it in the full sense, it does not seem to me that you own very much at all.
I do not speak as an expert in any of these matters; I am genuinely asking questions because I should like to know the answers. I should add that I could easily be persuaded that some of the answers to these questions are not known. Indeed, I could easily be persuaded to wait for some of my answers. However, it does not seem to me to be possible that we could go ahead and pass this legislation without having that kind of explanation.
I turn now from the issue of licences to the price regulation formula. As someone who has certain political views but who has also devoted his life to economics, I think that I have some understanding of free market economics: I taught the subject; I was taught it and I can even claim a modicum of expertise in the matter. Of course I agree that teaching subjects does not necessarily go with having any expertise, but in my case it did for a while.
What is amazing about the price regulation formula is that we are presented with this set of privatisation proposals as an act of free market economics. We are told about competition—although I agree with the noble Lord, Lord Peyton, that competition for the most part in this connection is a will-o'-the-wisp—but what we are given here is the most extraordinary price regulation regime. The idea that that corresponds in any way to free market economics is simply absurd.
It is a tough regulatory regime which in the hands of the right person—we still do not know who that person will be, but there will be sucessors to that person just as one day there will be successors to this Government—could be used to do anything with the industry that that person wished. Indeed, there are those on this side of the Chamber who say that one would never have to renationalise the industry

1111
because we have here all that is needed to control it, and I must say that it seems to me that there is a great deal in that.
Therefore let us examine this formula, or rather let me ask some questions about it. I put this formula forward because there is no formula in the Bill. There is a formula in the explanatory notes, but the notes have no statutory basis. Therefore the only way one can ever arrive at discussing the formula is to put an amendment down which would at least put it in the Bill for the moment. There are many formulae. I did not want to bore Members of the Committee even more by putting all of them in. However, there is quite a good case for including all the notes of guidance and all the formulae.
I have put forward this formula which comes from the public electricity supply licence explanatory notes because it gives me the basis for asking a number of questions. However, let me say, before I go into detail, that in my view the price regulation part of this Bill is quite central.
I listened with enormous interest to the debate on the environment. I was struck by the fact that, with the possible exception of the noble Lord, Lord Trafford, that debate did not become involved in the price question, and yet the two are inseparable. Anything that one does in the environment must have consequences for the regulation, the pricing formula, and, for that matter, the profits of the industry and all that type of thing. Although in a way the environment seems exciting and the price formula and its control mechanism is boring economics, people who are interested in the environment are obliged to give some thought to such matters.
My first point on the pricing formula is directed to the officials. Their word processor must have superscripts on it as well as subscripts. Mine does. They have not shown a great deal of talent in their use of symbols and their arrangement of the variables. In particular, the variable Pst-1 in any serious piece of work should be Ps t-1.The t-1 relates to the time and the s defines the variables. I hope that when the officials go back to their machinery they will achieve that, because on all the programmes that I know it is just as easy to do superscript as it is to do subscript. As their objective is to make the matter comprehensible that is the least that they can do.
I should apologise. I do not know who does our printing, and I do not blame them, but the little ones and two are too large and they can be misleading. My main questions are on the economics of the matter, but they are not unrelated to finance. First, in a formula of this kind, if we take the variable Mst, we are discussing something called the maximum average charge per unit supplied in the relevant year. I take it that maximum means maximum. Obviously there is a sense in which one would hope that the industry would consider charging less than the maximum.
My next question concerns the variable Xs. In the documents of guidance that variable means a number to be decided. It is of course the essential efficiency factor. When will the essential efficiency
1112
factor become public knowledge? For example, a large essential efficiency factor—that number to be decided—could be set at such a level that it would bankrupt the companies concerned. On the other hand, if it is set at zero, it is not an efficiency factor. I am keen to know when it will be set; how will it be set; will it be set before the system starts up; will it be set by the director general or, in the first place, will it be set by the Secretary of State and then set by the director general in subsequent years? Since I am naive and uninstructed on all these matters I ask whether it will be a matter of negotiation. Will it be a matter of the director general saying, "We want this efficiency factor", and the industry coming back and saying, "You may want it, but there is no way that we can deliver it and survive, so we will offer the following". How will we get the efficiency factor into the system? It cannot be left at this stage as a number to be decided. At least, it can be left today but in due course it must be a number that we know about.
The next matter to which I come, which is an even greater confession of ignorance and lack of understanding, relates to the variables Pst-1 and Pst-2 I shall put the matter as bluntly as I can, and I hope that the Committee will forgive my ignorance. I do not see where the Pst-2 gets into the thing. I have some difficulty with that variable. I know that the system must have a start up which I should have thought would be Pst-1 and so I should like an explanation ofthat point. Again, what I have written in my notes is: where do the Ps come from? I assume that they die out of the system once it gets going, but again I could be entirely wrong.
Now we have another variable—Kst—which intrigues me. It is an important variable. It will be important to consumers who are looking for reassurance in this field. Essentially, as I understand it, K—again I should like an explanation—is a variable which deals with the possibility of over-charging. It seems to suggest that if the industry, having agreed a maximum price, somehow manages to generate more revenue than would correspond to that maximum price—which divided by the output would give the actual price—and ends up with too much money, it is clawed back via the K factor.
I am glad to see that the tradition of discounting cashflow survives in Whitehall because the Department of Energy does not claw back the over-charging; it says that implicitly the industry will have invested that revenue during the year and will have gained some interest on the over-charging and therefore the department will claw back the interest as well. I approve of that. It shows that the lessons of DCF have not been missed by the department. There are of course some obvious questions.
First, will the Government tell us what interest rate they are proposing to regard as the relevant rate of interest? Will it, for example, be the average rate of return on capital in the private sector, or will it be one of the many weighted average rates of return which in my younger days we used to invent in the Treasury? What will it be? How much will it be? What will the number be? Will it be set merely to get back what those people have earned or will there be a kind of penalty factor included as a way of

1113
teaching them, "Please do not over-charge because we will charge you a slightly higher rate of interest to warn you". Another question, the answer to which is presumably buried somewhere in the document is: who will get the money? Will it come back to the Treasury? The answer to that is surely that it should not because the over-charging of course belongs to the consumers. There should be a way of getting it back to the consumers.
Lord Lloyd of Kilgerran: I am grateful to the noble Lord for giving way. Perhaps I may join him for a moment in a confession of ignorance. I have been looking at Amendment No. 127 where the Kst comes in. I have tried to follow the formula. Is the Kst in the proposed amendment substantially the same as the Kst, in the papers or is it totally different? In other words, do we have to consider two Ksts later this evening?
Lord Peston: I hope that there is only one. Those questions must be answerable. I am aware that I am going on at great length. I intend to go on at great length because it was not I who delayed the earlier proceedings.
I come now to the Y formula which is the other adjustable formula. If I understand it correctly, the regulator is not anxious that costs should merely be passed through the system without any kind of thought. The regulator and the department rightly wish to put some pressure on the industry to be efficient and wish to have some "pressure" device to prevent costs being passed through. Essentially it produces a kind of rat race. It is one that I have seen in other aspects of public expenditure control. One is telling people that they can pass on some of their costs, but to the extent that their costs differ from the average, they will be somewhat penalised if their costs are above the average. There will therefore be some pressure to bring down the costs. If the average consists of everyone's costs, averaged, such pressure, good though it is when viewed from the consumer's point of view, generates a kind of rat race for the producers. I do not mind that so long as the producers are well aware that that is what they have bought. The essence of the matter is the weighted average. The department rightly says that R is a number between one and zero. One does not have to be a genius to know that R has to be a number between one and zero. The only thing we really want to know is, what number? Again, we need to know whether it is negotiable, and so on.
That brings me to the end of the questions I wish to raise at this moment. They are not all the matters that I wish to raise on the subject but I do not raise them in order to annoy Members of the Committee nor to keep them from dinner. I raise them because I believe that without the answers to these questions and without all this being made transparent, the Government cannot privatise the industry or expect it to run. I go back to my opening remark that these matters are at the heart of the whole Bill as far as I am concerned. I look forward with great interest to the answers to my questions. I beg to move.
Baroness Hooper: I regret that no other Members of the Committee are prepared to take part in this interesting duologue which is about to develop. I start my responses by thanking the noble Lord, Lord Peston, for his kind suggestion that, where matters of detail and complexity are so great, in order to respond adequately to them it would require a study of Hansard to see exactly what his questions are. That is the method by which we shall respond.
The noble Lord began his intervention by raising a number of general questions on the licences and I shall attempt to respond to them. He wished to know about the statutory basis of the licences. They are secondary legislation issued under Clause 6 of the Bill. He asked when they will be issued. The licences will come into force on the transfer date, which is provisionally 1st January 1990, when the companies become public limited companies but before they are privatised.
Lord Peston: Perhaps I may interrupt the noble Baroness so that I may understand that reply. Someone seeking to buy an area board will simultaneously negotiate the price plus the licence. Is that correct? If I wish to buy an area board, or whatever the boards will be called from now on, I shall simultaneously negotiate with the Government on the whole package, including the licence at that point, so that I get the licence when I get the company.
Baroness Hooper: The flotation arrangements for the company, which will come into force after the company has been formed and after the licence has been agreed, will take into account the fact that the company is in possession of the licence. That may help the noble Lord. It will be the transfer day. The noble Lord asked whether the licences were subject to litigation. Enforcement of licence conditions is described in Clauses 25 to 28 of the Bill. Basically the director issues enforcement orders.
Will these licences correspond to area boards on a one-to-one basis? That was another question that was asked. The answer is yes, the successor companies to the area boards will inherit the area boards' assets. They will be licensed on the same day as they receive the assets. That is what I partly covered previously.
Can the licences be revoked? Yes, they can, either after giving the notice described in Part 1 or for one of the reasons in Schedule 2 which the noble Lord may wish to study as it is quite a lengthy schedule. I hope that that covers most or all of the points which the noble Lord raised regarding licences.
Lord Peston: Perhaps then I may ask another question since it relates to an answer which may be coming. My point was that once the industry has been privatised it will be possible for someone else to take over a particular plc, as it is a plc and plcs can be taken over. I asked specifically whether they would then be taking over the licence with no problem whatever. Does the licence automatically go with the plc?
7.45 p.m.
Baroness Hooper: The licences cannot be transferred from one company to another. However, as the noble Lord said, a licensee might be the subject of a takeover bid. Such a proposed merger would be subject to normal takeover law and practices and could be referred to the Monopolies and Mergers Commission. So there is a control over the situation. The noble Lord shakes his head, just as I was shaking mine when he raised the questions on the formulae. Again, I reiterate that I shall take up his offer to write to him in some instances regarding matters which I may not be able to cover now since this is a complicated subject to someone like myself who does not speak the language of mathematics. I believe that to those who speak and understand the language of mathematics all is much clearer.
It may be helpful if I quickly summarise the formulae we are considering. The control applies to the maximum average price which a public electricity supplier may charge its regulated customers; that is to say, those under 10 megawatts. In an abbreviated form, it can be and has been described as an RPI-X+Y price control.
The RP1-X element covers the suppliers' own costs related to supply. This element will fall in real terms each year. The Y element covers other costs, including generation, J and W, with which I shall deal in a moment; the fossil levy is F which will be determined pursuant to regulations under Clause 33. Transmission, the T element, and distribution, U, will each be controlled by separate RPI-X controls.
Generation costs charged to customers will be a combination of the actual costs paid by the supplier, W, and the yardstick, J—in a sense the average—costs paid by all public electricity suppliers. The yardstick will encourage each supplier to purchase cheaply in an attempt to beat the yardstick and maximise profits. This will encourage all suppliers to take advantage of competition in generation. As they do so, this will in turn reduce average costs. Customers of efficient suppliers will also get a direct benefit from the reduction in actual costs.
The price control formula also includes an automatic correction factor, K, to deal with over or under-charging. This will be dealt with by changes to the following year's prices. The important point to note is that if a supplier over-charges, it will have to repay this in the following year with interest, including a penalty.
I accept that the formula in the licence condition may, at first sight, seem long, although not as long as the formula tabled by the noble Lord. This reflects the combination of regulation and competition and the fact that many costs will be outside a supplier's immediate control. The formula will promote competition and efficiency, putting downward pressure on prices, and will prevent abuse of any remaining effective monopolies.
Some elements of the price formula have still to be determined—that is one of the queries which the noble Lord, Lord Peston, raised—including the figures for X and r, the efficiency factors and the
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weight given to the yardstick generation costs. These will be fixed shortly before the transfer date, using the latest information available at the time. The precedents established in previous privatisations, in particular for British Telecom and British Gas, are that detailed regulation such as the price control formulae are contained within the licences rather than in the primary legislation. I recognise that the amendment of the noble Lord was a device to enable a discussion to take place.
These amendments have enabled us to discuss the price condition. I hope that, subject to receiving satisfactory answers to any of the detailed questions which the noble Lord raised in great quantity, he will feel able to withdraw his amendment.
Lord McIntosh of Haringey: I hope that the Committee will forgive me for intervening. I was fascinated by the noble Baroness's reference to other privatisation legislation. She will no doubt recall that the Water Bill is proceeding through this Chamber at the present time. There, all of this discussion about the formulae for price regulation has been put into a cupboard in the back corridor under the name of RPI plus X; in other words, none of the formulae to which the noble Baroness and my noble friend Lord Peston referred has been allowed out into the open. Has she discussed this matter with her noble, honourable and right honourable friends in the Department of the Environment? Can she explain why such a different approach is being taken here?
Baroness Hooper: No.
Lord Peston: I thank the noble Baroness for her answer. It was never my intention to press this matter to a Division. The Committee could have passed through the Lobbies, formula by formula. However, I hope that when the noble Baroness reads my contribution in Hansard and sees the large number of other questions that I raised, she will provide answers to them. I am particularly keen to know what will happen to the overcharging money. I was in a state of shock horror when I realised that the Minister had said that if the industry undercharged it could get some of the money back. Being a rather tough person, I hope we can find a way round that.
I am of course aware of other legislation. I believe that in the case of this Bill the formulae are so important to the industry that it will be a pity, to say the least, if the whole thing goes through this Chamber without us knowing about them. As the noble Baroness said, we shall only obtain the formulae when the licences are issued. It is not entirely satisfactory that we should not have an opportunity at some stage to discuss such matters. Having said that, I thank the noble Baroness for her first attempt at an answer for which I am most indebted. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Dundee: The Committee may agree that we have reached the right moment to break in order to return to the subject in an hour's time at 8.55 p.m. I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Parking Bill
7.53 p.m.
Lord Teviot: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Teviot.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD HAYTER in the Chair.]
Clauses 1 and 2 agreed to.
Lord Lucas of Chilworth Lord Lucas of Chilworth moved Amendment No. 1:
After Clause 2, insert the following new clause:
("Surplus revenue from parking places.
The following subsection shall be inserted after section 55(4)—
"(4A) Any surplus revenue accrued by a local authority in respect of parking places designated by designation orders for which they are the local authority shall not be carried forward from one quadrennial period to another without the consent of the Secretary of State; and any such surplus revenue shall be applied for all or any of the purposes listed in paragraphs (a), (b) and (c) of subsection (4) above." ").
The noble Lord said: Perhaps at the outset I should apologise to my noble friend Lord Teviot and to my noble friend the Minister as well as to the Committee for having been absent on 24th April during the Second Reading of this Bill. Had I been present I could have given notice of my intention to raise some matters, two of which are the subject of the two amendments that I have tabled.
Amendment No. 1 is a little wide of the purport of the Bill. It is intended as a probing amendment. I wish to draw the attention of the Committee to some serious errors in the way that on-street parking and parking charges are dealt with by some local authorities. In essence the amendment takes us back to the position in 1956 and the 1956 Act when the net proceeds of car parking meter charges were devoted to providing further parking spaces. It is interesting to note that over the years that parking meters have been in use—they were started in 1958—many millions of pounds have been raised as a surplus.
That provision which required local authorities to spend the money within a four-year period was abandoned during the passage of the 1984 road traffic Act. It is now only necessary for local authorities to provide a separate income and expenditure account. The surpluses are to be used,
1118
in general terms, for traffic related matters. A local authority is not required to spend the surplus, if a surplus occurs, on providing car parking spaces. Under the present legislation a local authority is let off the hook entirely if it decides that there is no need for further parking facilities in its area.
I want to emphasise this situation by referring to the report of the Oxford University transport studies unit of November 1988 entitled Traffic Regulation in Urban Areas—The Public View. This report was commissioned by the Department of Transport. I shall take from the abundant examples in the report Chester, Oxford, Leicester and Southampton. All the motorists in those places have said that an inability to find a parking space causes frustration, congestion and a lot of aggravation not only to the local authority concerned but also to the police and other motorists. I suggest that local authorities have not discharged their obligations in this area.
The Royal Automobile Club conducts an annual survey of parking meters which covers the City of London, Westminster, 20 other London boroughs and 26 provincial towns. Therefore, the survey is representative of about 50,000 meters, 24,000 pay-and-display spaces and some 65,000 residents' parking bays. The period that has been studied does not represent 30 years exactly because some authorities did not enter the scheme until 17 years ago. During that period a surplus of £65 million has occurred. Yet in areas like Southampton, which I know best and to which I drew the attention of the House as regards parking problems when we were discussing another matter about a fortnight or three weeks ago, there is a surplus of £500,000. Nevertheless, the motorists in the survey say that it is difficult to find a parking space there. That is an appalling situation.
I apologise to my honourable friend the Member for North-East Leeds, Mr. Kirkhope, for using his Bill to draw attention to this matter. In the absence of the provision which was contained in the 1956 Act, what can the Government do to apply pressure on local authorities to provide out of the surpluses that occur—namely the differences between the revenue and expenditure on parking meters—an adequate supply of parking spaces for hard-pressed motorists? I beg to move.
8 p.m.
Lord Carmichael of Kelvingrove: I am grateful to the noble Lord for explaining his amendment. My problem is that I believe that it would be difficult to compel local authorities to spend surplus money from parking meters on providing off-street parking. I believe that they should be given flexibility, but to compel them to use the money for that purpose is unrealistic.
My memory may be at fault, but I believe that the ministry was first approached by Westminster City Council which had a large fund but could not find anywhere to build off-street car parks because land was so valuable and space was not available. The second problem was the lack of space on the roads at 5 o'clock at night, and concern that the bigger the car parks the more cars there would be on the road

1119
at 5 o'clock. My memory may again be at fault but I seem to remember that in Birmingham, the city of the motor car, a Conservative council talked about the only solution if they built more car parks being to close them until after the commuters had driven into the city in the morning and before the commuters left at night because the purpose of car parks was to provide parking for people on relatively short visits to the city for two, three or a maximum of four hours.
I can see the point of the noble Lord's amendment, and I can see the need for off-street parking in some areas. Oxford may very well be one such area. Consider North Oxford any night at 5 o'clock; I should not like to see very many more cars on that road where it is already almost impossible to move. Therefore I should be doubtful about supporting the amendment, largely because I do not think that it gives enough flexibility to local authorities to decide how to use any surplus that they may have.
Lord Teviot: I have very little to say on this amendment. My noble friend Lord Lucas and the noble Lord, Lord Carmichael, have introduced a most interesting discussion. I am a public transport buff, but I believe that this Bill is absolutely splendid in providing for off-street car parking and payment by credit cards. However, I am concerned by my friend's remarks about the number of parking spaces: they could grow like Topsy. That remark may incite my noble friend to spend the next 20 minutes saying that that it not so, and the Committee has already had to wait a long time for this Bill to appear this evening. Therefore I shall wait for my noble friend to give us the benefit of his wisdom.
The Parliamentary Under-Secretary of State, Department of Transport (Lord Brabazon of Tara): It is very kind of my noble friend to describe my words as wisdom. We shall see whether all noble Lords agree with that. I am grateful to my noble friend Lord Lucas for explaining the amendment and indicating that this is a probing amendment.
I shall concentrate my remarks on the more general matters he has raised. But I shall first say that the Government cannot support the amendment. It would re-introduce a requirement for ministerial consent which was swept away in 1974 under the Local Government Act. That was in the context of an exercise to remove or relax a range of statutory controls on local authorities which were no longer felt to be necessary or appropriate. We have no wish to reverse that process.
Under Section 55 of the Road Traffic Regulation Act 1984, any surplus revenue from on-street meters must be applied for specified purposes. The broad intention is that profits from parking charges on the street should be ploughed back into financing parking provision, or if not, into expenditure on public transport or highway improvements. It would be unreasonable in the circumstances for authorities not to be able to carry these forward from one year to another. We see no reason to constrain this further in the way that this amendment proposes.
1120
For most local authorities the provision of off-street parking does not tend to be a highly profitable activity, particularly where it involves the acquisition of land or costly construction. The noble Lord, Lord Carmichael, referred to a case in point. Where an authority is able to make a surplus on the revenue account of off-street parking, the 1984 Act does not constrain the use to which the money can be put. It may be transferred to the authority's general rate fund and used to keep down the rate levy or to support other rate funded services.
Local authorities have a duty under Section 122 of the 1984 Act to secure the provision of suitable and adequate parking facilities on and off the highway, but there is significant scope for private sector involvement, for example in joint development schemes with the local authority. Some authorities contract out the management of off-street car parking to the private sector. We welcome such moves. We believe that it is right that users should pay for parking. There is seldom a case for subsidy from the ratepayer.
I am grateful to my noble friend for giving me an opportunity to comment briefly on these issues although, as my noble friend said, they fall rather outside the provisions of this Bill. I hope that he feels that my remarks have been helpful and that he does not need to press the amendment.
Lord Lucas of Chilworth: I am most grateful to the noble Lord, Lord Carmichael of Kelvingrove, for his contribution in this short debate which, if nothing else, has drawn some attention to the fact that there are surpluses in some areas and that there are shortages of car parking spaces, whether on street or off street. That leads in part to the congestion on our roads. I am grateful to my noble friend the Minister for his explanation. I have to accept that responsible local authorities should use the moneys which they raise, lawfully and properly, in a manner which suits their areas best. However, I suggest that car parking falls very low on the list of local authorities' priorities. With thanks to your Lordships' Committee, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Lucas of Chilworth Lord Lucas of Chilworth moved Amendment No. 2:
After Clause 2, insert the following new clause:

("Display of information.

The following section shall be inserted after the section 35A inserted by section 2 above—

"Display of information.

35B.—(1) The Secretary of State may make regulations requiring local authorities to display at off-street parking places provided by them under section 32 above such information about parking there as is specified in the regulations.
(2) Regulations under this section may also—

(a) require the display of any orders under section 35(1) above relating to the parking place;

(b) specify the manner in which the information and orders are to be displayed;

(c) exempt local authorities, in specified circumstances or subject to specified conditions, from the requirement to display information and orders, or to display them in the specified manner; and

1121

(d) provide, in relation to a parking place at which a local authority fails to comply with the regulations or with any specified provision of the regulations, that, except in any specified circumstances, any order under section 35(1) above shall be of no effect in its application to that parking place in so far as it requires the payment of any charge in connection with use of the parking place—

(i) while the failure to comply continues, and
(ii) as respects vehicles parked there when the failure to comply was remedied, during a specified period thereafter.
(3) Regulations under this section may make different provision for different circumstances and for different descriptions of parking place, and may exempt specified descriptions of parking place from any provision of the regulations.
(4) In any proceedings for contravention of, or non-con+pliance with, an order under section 35(1) above relating to an off-street parking place, it shall be assumed, unless the contrary is shown, that any relevant regulations under this section were complied with at all material times."").
The noble Lord said: This new clause looks rather long and complex but it is not quite so frightening as it appears. The amendment represents an attempt to safeguard the interests of consumers. This is a matter which is gaining in popularity in government and in other circles because it is the consumer—the car parker—who has to pay. The purpose of the amendment is to help him by promoting the display of sufficient information at car parks.
Perhaps in parenthesis I may say that while there may be a proliferation of signs, instructions and guidance notes at car parks, whether it is on the surface, underground or above ground, I hope that any further development in this area will be accompanied by adequate lighting. Unhappily a number of crimes have been reported in underground car parks—which could equally occur in surface and above ground car parks—and I believe there should be a requirement on a developer of an off-street car park to provide an adequacy of lighting, purely for safety reasons.
Criticism is often levelled at the lack of information about the rights and obligations of the car park user. He is invariably told how much it will cost, but it does not always make it abundantly clear when the park opens and closes, what kind of vehicles may use the park and a whole multitude of other matters. Practice varies up and down the country. The clause, which has, I am sure, the support of Her Majesty's Government—I have to acknowledge help from the department of my noble friend the Minister in drafting the amendment is an attempt to bring some uniformity and some clarity to the situation that currently obtains.
It is essentially a matter of providing the Secretary of State with regulations. I know that noble Lords are not always over-keen to give regulatory powers to the Secretary of State, but we think that it may not be necessary for any regulations to be made. We believe that voluntary compliance in the interests of good will between the car park operator and the user will perhaps be sufficient to ensure that there is an adequacy of signing.
I should say that, if noble Lords agree the amendment, and regulations were to be made, the provisions in Section 134 of the 1984 Act relating
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to consultations still apply. Under that section, before the Secretary of State could make regulations, he would be required to consult representatives of local authorities, users of parks and so on.
There is only one other matter that I should perhaps draw to the Committee's attention. Subsection (4) provides that, in the unhappy event of there being proceedings—in other words, the car park user being brought to court—it shall be assumed, unless it is shown otherwise, that the local authority has complied with regulations. It would then be up to the motorist, if he parks without payment—because he takes the view that the local authority has failed to meet its obligations to display any prescribed information—to be able to demonstrate that such was the case.
As I said at the outset, this is essentially a measure to safeguard the interests of consumers which I believe may well commend itself to the Committee this evening. I beg to move.
Lord Carmichael of Kelvingrove: Again, I must congratulate the noble Lord on his ingenuity in introducing these amendments; but, in this case, I hope that the Minister has something good to say because the general tenor of the noble Lord's speech was very worthy of consideration.
We have all experienced the problem, particularly in basement and multi-storey car parks where the lighting is bad and the feeling of general security is not very good and can sometimes even be quite scary. Sometimes, when one goes in late at night, one wonders whether the wheels on the car will be there—and occasionally they are not.
Perhaps the Minister will give us an idea as to whether there is any general advice from the department to architects to liaise with the police in the design of new car parks, whether multi-storey or basement car parks. They would then be aware of the need for a safe neighbourhood approach to design to ensure that there are as few dark corners and awkward pillars as possible and that the lighting is good and well maintained. I hope that the Minister will give his noble friend some encouragement for what he has done in these two amendments.
8.15 p.m.
Lord Brabazon of Tara: I am grateful to my noble friend Lord Lucas of Chilworth for his remarks in introducing the amendment. I find the proposition an attractive one.
As my noble friend says, the Bill opens the door for an increasing range of payment options at local authority car parks. It will be important for the motorist to be given clear information when he parks his vehicle, or in some cases in advance, before the point where he is committed.
There is a more general point. Car parks are not always furnished with information as well as they should be. As my noble friend has said, the motorist may not always be sufficiently informed about conditions of use. Such matters will have been covered in the relevant parking place order which governs the charges and use of the car park. There is no requirement at present to display the full text

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of the order, but it is reasonable to suppose that there is a minimum standard of information which ought to be available and clearly displayed for the benefit of users.
Like my noble friend, I would hope that we could avoid having to resort to regulations. Many local authorities may already be fully meeting their moral obligation to users in this area. I understand that there is a prospect of a British standard being developed which would aim to guide car park operators in such matters as information and signing. That would undoubtedly help to promote good practice. The new clause would, however, provide a useful means of reinforcing that if exhortation alone proves insufficient to encourage observance of the standard. I do not believe that the requirements would be onerous. As my noble friend said, there would be consultations.
My noble friend and the noble Lord, Lord Carmichael of Kelvingrove, referred to lighting and the design of car parks. Those points are not covered in this amendment or in the Bill, but I understand that standards are promoted by the British Parking Association and I hope that they will be observed.
To return to the amendment, it appears to be a sensible measure in support of the parking public and the Government would be happy to support it.
Lord Teviot: It only remains for me to say that my noble friend's amendment is an excellent and well drafted amendment. The short debate on the subject has been most interesting. In essence, the measure satisfies the consumer and helps local authorities.
Lord Lucas of Chilworth: I am most grateful to the noble Lord, Lord Carmichael of Kelvingrove, and to my noble friend the Minister. I only hope that my honourable friend Mr. Kirkhope in another place will have as much support when he takes his Bill back to that place.
On Question, amendment agreed to.
Clause 3 agreed to.
Remaining clause and schedule agreed to.
House resumed: Bill reported with an amendment.
Viscount Davidson: My Lords, I beg to move that the House do now adjourn during pleasure until 8.55 p.m.
[The Sitting was suspended from 8.20 to 8.55 p.m.]

Electricity Bill
House again in Committee on Clause 3.
[Amendments Nos. 80 and 80A not moved.]
The Earl of Dundee The Earl of Dundee moved Amendment No. 81:
Page 3, line 23, leave out ("such persons") and insert ("persons authorised by licences to supply or transmit electricity").
The noble Earl said: In moving Amendment No. 81 I shall also speak to Amendment No. 83. Taking these two amendments together, the Government propose that the duty on the Secretary
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of State and the director to ensure that licensed electricity suppliers are efficient and economical in their operations be extended to cover transmission licensees also. The existing duty provides those regulating the industry with the power to include in the public electricity supply licence conditions designed to promote efficiency and economy, such as those governing economic purchasing, price control and prohibition of cross-subsidy. The transmission licence holder, the National Grid Company, will similarly be prevented by its licence from cross-subsidising one business activity from another.
The first amendment, Amendment No. 81, will make it clearer that the transmission licence may include the necessary condition. It also reinforces the power to include conditions relating to the grid code in the transmission licence. The grid code is a technical document covering the operating procedures and principles necessary for the efficient running of an integrated transmission system. As such, it can be seen as part and parcel of ensuring an efficient, co-ordinated and economical system of electricity transmission.
The second amendment, Amendment No. 83, is a consequential drafting amendment to take account of the fact that transmission licensees do not in fact supply electricity direct to consumers. I commend both these amendments to the Committee. I beg to move.
Lord Peston: I thank the noble Earl for the explanation of the amendment. I am bound to say that it turns out to mean a good deal more than I had worked out from looking at it. There are two questions which he might care to answer. Am I right in assuming that under the general rubric of "efficiency and economy" it is now the case that the generators, transmitters and what are called the suppliers are all, as it were, obliged to meet the efficiency and economy criteria under paragraph (b) to which he refers? As I understand it, that is the direction of the amendment. Perhaps the noble Earl will make that absolutely clear.
I believe that it may be convenient at this time to request clarification on another point, not necessarily for immediate answer. The words "supply" and "supplier" seem to be used in the Bill in two ways. I should welcome clarification in that respect; perhaps the noble Earl will write to me. In one sense the word "supply" used by the general public, or by lay people such as myself, would mean everything from the original generation of the electricity until the time that it reaches the customer. One might refer to that as the supply system. Sometimes the Bill refers to supply of electricity meaning the whole process from start to finish. However, supply also seems to have a very definite specific meaning: the last stage of the process—the process in which the area board engages. I have not had time to go through the Bill to ensure that the word "supply" is used consistently. I should like reassurance on that at some point. The Minister is quite right to emphasise the technical use of the word "supply". However, the word is often used in a more general way. It would be worth. while clarifying that point.

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I was a little surprised to be told that the second amendment is simply consequential on the first. I thought that the replacement of "by them" to "to consumers" was not so much consequential as a clarification of what the Bill meant at that point. However, it leads me again to what I suppose is a typical economist's question: what is the precise meaning of the word "consumers" here? The word "consumer" has two meanings. One meaning would be the final consumers, householders, who buy the electricity in household terms; as it were, the consumers of the National Consumer Council. The term "consumer" is also used in economics for whoever demands the electricity. If firms demand electricity in their production process they would be referred to as consumers. I do not require an answer now but I should be interested to know in which sense the word "consumer" is being used here and elsewhere.
We have no objection to the amendment. Quite the contrary, we welcome it.
9 p.m.
The Earl of Dundee: I am grateful to the noble Lord for raising the various points. On the first point—whether the criterion of efficiency should apply to the generating companies as well as to the supply companies—the answer is that it does not apply to the generating companies. It concerns the supply companies. As a result of the amendment that I have moved—
Lord Williams of Elvel: Perhaps I may have clarification from the noble Earl. Does he mean therefore that generating companies are not required to be efficient?
The Earl of Dundee: No. I can assure the noble Lord that if he had a fear that we should do other than encourage the generating companies to be efficient, that is not the case. The position is simply that in this part of the Bill we address the supply companies and not the generating companies.
The noble Lord, Lord Peston, asked whether, when we talked about "supply", we referred to the last stage of supply or the whole range. He kindly said that I could write to him. I should prefer to do so.
On the second amendment to which I spoke, he said that it was a little more than drafting. I take his point. He makes a distinction about the two categories of consumers, whether domestic or the more general consumer. We intend that it should be all types of consumers—industrial and domestic.
Lord Williams of Elvel: I am sorry again to intervene. However, if the noble Earl cannot explain what the government amendment is about and wishes to write to my noble friend, should not the Government withdraw their amendment?
The Earl of Dundee: The answer to that is no.
On Question, amendment agreed to.
[Amendment No. 8 JA not moved.]
Viscount Hanworth Viscount Hanworth moved Amendment No. 82:
Page 3, line 24, after ("electricity") insert ("and heat").
The noble Viscount said: Amendments Nos. 82 and 84 go together. Amendment No. 84 is the key amendment. Combined heat and power once more raises the question of efficient use of energy. If one takes the waste heat from a power station—I am thinking of a coal-fired power station at the moment—one can raise efficiency from 38 per cent, to about 80 per cent, with only a small relative loss of electrical output.
There have been 10 schemes where cities wanted to use the waste heat from adjacent power stations to heat the cities. The Government provided a small grant for them to consider this possibility. Unfortunately to make it worth while with a large power station it means that one needs a large city. It means digging up a lot of roads and involves a long timescale. For that reason so far nothing of this nature has got off the ground. The Government have apparently refused to give any guarantee or any financial help to get at least a prototype scheme of this kind off the ground.
This great opportunity to use waste heat, saving coal, with all the environmental advantages, has not even started, whereas on the Continent—I think I am right in saying in Denmark—50 per cent, of the heating comes from combined heat and power and from the power stations.
We are given a tremendous opportunity with this privatisation. I foresee that there will be many small power stations. That makes it a very great deal easier to try to get a small scheme in operation. If they are run with gas turbines it is very simple because all one has to do is to have a heat exchanger which directly heats the water from the exhaust gases. Even if one has a combined plant which uses some of that heat to produce steam on another electric generator, one still has some left over which can be used for this purpose.
There are a number of cases where the waste heat could be used not for domestic but for industrial purposes. The trouble is matching the electricity generated and the heat output with the industrial requirements. On the other hand, if under the Bill better terms can be obtained from those who can supply electricity to the grid or locally, this kind of thing will become much more viable. It is one great potential contribution towards cutting out or saving power and saving heat and thereby cutting down the need for more and more power stations. I beg to move.
Baroness Hooper: I fully agree with the noble Viscount, Lord Hanworth, that heat generated with electricity is an important potential source of energy. I should like to add that this Government have done more than any other to promote energy efficiency in all its forms. The potential for combined heat and power, which can effectively utilise up to 85 per cent, of the fuel used, compared with 35 to 40 per cent, in conventional power stations, has long been recognised by the Government. This is why the Department of Energy has funded an extensive programme to establish the potential for CHP both on a city-wide and a local basis.

1127
I should also like to dispel any uncertainties that the Committee may have about the impact of the primary duties of the Secretary of State and the Director General of Electricity Supply in Clause 3. They certainly do not disadvantage CHP operators as opposed to any other form of generating plant. The relevant duties imposed by Clause 3 are to promote competition in the generation and supply of electricity, to promote efficiency and economy on the part of licensees and to promote the efficient use of electricity supplied by them. There is therefore no duty to generate electricity efficiently as such, as was clarified by my noble friend in the discussion on previous amendments.
Indeed to have a specific duty on generation could have disadvantages for CHP plant since we are well aware that in operating such plants a balance needs to be struck between the electrical and heat output.
The noble Viscount referred to the fact that the Government are active in identifying the potential of CHP schemes and are helping to bring them to market. For example we made available £750,000 towards further studies in Leicester, Belfast and Edinburgh to examine the economic feasibility of CHP district heating schemes in those cities. But we do not believe it to be the role of government to subsidise uneconomic schemes. If there is a place for CHP—we very much believe that there is—it must pay its own way. The acid test of any successful CHP scheme must be its ability to attract private sector finance. To do this a scheme must be able to compete effectively with other forms of electricity generation, space heating and heating for industrial processes.
I do not share any pessimism about the future of CHP which is perhaps implied in the amendments. I do not believe that we need to subsidise or artificially to support CHP to enable it to realise its potential. Of the capacity planned by the major independent generators wanting to enter the market, over 1GW is accounted for by CHP. This represents a 50 per cent, increase on existing levels.
On Amendment No. 84, I also agree that heat co-generated with electricity is an important potential source of energy which should be utilised as far as possible. Clause 3 places a duty on the Secretary of State and the director to promote energy efficiency. We believe that in the privatised industry each licence holder will naturally control its own use of electricity scrupulously, as this will significantly affect cost and the ability to compete successfully. If a project to utilise the heat produced during the process of generating electricity is economic, it will be in the licence holder's interest to bring the scheme forward.
Our proposals will ensure that all private generators, including CHP, will have fair and equal access to the transmission and distribution systems and that the independent grid company will have every incentive to promote competition in generation. As well as the lead city schemes to which I have referred, on the industrial and commercial front the Energy Efficiency Office has been active in supporting and promoting CHP and novel applications for CHP under its energy efficiency demonstration scheme. To date, 21 projects have
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been supported. In addition to support for its technological aspects, we have also undertaken extensive research into the potential for CHP. Reports on the market potential for CHP in public, commercial and domestic buildings and in industry have been published in the last year.
In this context, I am pleased to point to a number of schemes which are being prepared for development without government subsidies. Included here are schemes at Leicester, Sheffield and Newcastle to which the noble Viscount referred. In addition, there is the widespread use of CHP in industrial processes, with around 2GW of such capacity already in place.
Our privatisation proposals are specifically designed to encourage competition in generation and to ensure that all economic sources of electricity supply will have fair access to the market. Thus, all generators, including CHP operators, will have fair and equal access to the transmission and distribution systems after privatisation. The new transmission company will have every incentive to promote competition in generation. We shall also ensure through licence conditions that terms for the use of the grid will be transparent, thereby allowing first time generators to compete on an equal footing with the two major generators being created from the CEGB.
I do not think it would be right to impose a duty on the Secretary of State and the director to promote a certain type of power plant designed both to generate electricity and utilise effectively any surplus heat produced in the process as suggested by Members of Committee. It would be quite wrong to require any industry to act uncommercially. I believe that our approach—of encouraging competition and leaving the consumers to make their own well informed decisions about whether to invest in energy efficient measures—is likely to produce the best results. It is not sensible to try to enforce energy efficiency by statute and regulation. Against this background, it is not necessary to seek to create a privileged position for CHP operators in the way that this amendment suggests. Given the encouragement that exists, to which I have referred, I trust that the noble Viscount will withdraw the amendment.
9.15 p.m.
Viscount Hanworth: I thank the Minister for that long and useful reply. I was trying to point out that, in respect of large power stations, one needs to obtain a prototype. Once that is off the ground others will follow. That is where some guarantee or help from the Government would be useful because it is difficult to obtain finance on the long-term basis required.
Equally, I believe that some kind of provision could be put in the Bill. However, I do not believe that the wording is right. I should like to modify it and to put in a provision that is a reminder of the possibility. To get something off the ground may require, for example, the help of the director. I am not therefore totally happy that a provision along these lines may not be required. Nevertheless, I gladly withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Dundee The Earl of Dundee moved Amendment No. 83:
Page 3, line 24, leave out ("by them") and insert ("to consumers").
On Question, amendment agreed to.
[Amendments Nos. 84 and 85 not moved.]
[Amendment No. 86 had been withdrawn from the Marshalled List.]
[Amendment No. 87 not moved.]
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 88:
Page 3, line 29, at end insert—
("(3A) In performing his duty under subsection (3)(b) above, the Director shall require that before any Licence Holder applies for planning permission for the construction of new plant over 50Mw electrical capacity in aggregate, it must be demonstrated that the Licence Holder has examined all reasonable energy demand management alternatives on an equal basis with the proposed energy supply option, and that new energy supply is the most efficient and economical option available overall.
If the Director is satisfed that the proposed new supply is more efficient and economical than energy demand management alternatives, then he will issue a Certificate allowing the Licence Holder to seek planning permission. If the Director is not satisfied under the terms of this subsection, then he will withhold the issue of a Certificate thereby preventing the Licence Holder from proceeding.").
The noble Lord said: We embark here on the question of efficiency in generation. As the noble Earl pointed out, government amendments have led us to efficiency in transmission and an amendment accepted by the Committee earlier today pointed to efficiency at the point of use. However, as yet we have not had anything concerned with efficiency in generation.
The amendment seeks to ensure that those who wish to generate electricity above a certain capacity (with which I shall not bother Members) have examined all reasonable energy demand management alternatives on an equal basis with the proposed energy supply option. It also seeks to ensure that the new energy supply is the most efficient and economical option available overall. I shall concentrate in what I have to say on that second proposition which is known in the United States as the least cost option
We believe that there is substantial benefit to be gained from generators, before they can satisfy the director, studying what will be the various costs of the different methods of generating electricity. On the assumption, and if it is proved, that energy conservation and increased energy efficiency do not lead to the proposed generating station being superfluous, they should at least ask themselves whether what they are doing is the least cost option.
There have been many pieces of evidence submitted, not least to the European Communities Committee Sub-committee B, referred to by my noble friend Lord Shepherd earlier this afternoon, and indeed to the House of Commons Select Committee, that the UK seriously lags behind internationally in studying energy efficiency in generation. Indeed, it is argued by a study sponsored by the European Community in the North-West of" England that by implementing readily available energy efficiency measures, increase in energy
1130
demand can be limited to 3 per cent, by the year 2000. I cite that as a figure. A similar study is at present being completed in the North-East of England, and I believe that that will be presented fairly shortly to the European energy conference or, indeed, it may have already been presented.
In the generation of electricity either we move to a high cost system, which is essentially, in spite of what the noble Lord, Lord Trafford, may or may not have said earlier, high cost generation of electricity, or we move to low cost generation of electricity. We wish to know in which direction the Government are moving. Do we wish to go to a system which would enable us to evaluate all the different methods before the director decides whether he can pass it for planning permission, do we wish to go to a system which enables the director to decide that system X is more efficient than system Y in cost terms, or do we wish to go to a protected system where the non-fossil fuel quota is increased from 20 per cent., 30 per cent, or whatever it may be and as consumers we have to pay the price?
Therefore, this amendment attempts to raise the whole question of where we are going in efficiency of generation. It is in putting the question in that form that I beg to move the amendment.
Lord Trafford: I am somewhat unhappy about this amendment for two reasons. First, what company would not look at all the options of how it was to proceed in a major investment, particularly the necessity of such an investment, before making plans to proceed? Secondly, if it were making plans to proceed, it would clearly prefer, other things being equal, a low cost to a high cost production.
Lord Williams of Elvel: Perhaps I may—
Lord Trafford: Perhaps the noble Lord will let me finish. Thirdly, the assumption here is that unless a whole series of probably non-economic reasons—and they may be social or environmental—are put forward, it is assumed that any company would not consider those matters. I am querying the necessity for this amendment at all because it strongly suggests to me that the noble Lord is saying to a large extent that he would expect people operating those companies to be short-sighted and incompetent.
Lord Williams of Elvel: I am glad that the noble Lord puts his question in that form, because I believe that in some respects they may well be so. Which company would not look to low cost? I tried to copy down the question when the noble Lord did not allow me to intervene. The answer is probably National Power and possibly Power Gen, if I may put that in a direct manner, because they are constrained by other provisions in the Bill which stop them from doing that. They may be constrained by the non-fossil fuel quota, for a start; and they may well be constrained by other policies relating to coal imports, and so on. Therefore, there is no pressure because there is no competitive pressure between the two major power generators. Whatever the Government may argue, I simply do not accept that there is competitive pressure. In my view they will not be constrained to the lowest cost option.
Lord Trafford: Assuming that the noble Lord is right in what he said about various constaints, there is no option, anyway. In fact, that is the point that the noble Lord is making. All these constraints will force the companies to choose one way or the other, irrespective of the economic circumstances. Therefore, it is not a question of low-cost or high-cost, but a question of, "If there are no constraints, I must choose X". It is Hobson's choice. My whole argument about the amendment is that if these reasons are true and assuming what the noble Lord said is accurate, it is unnecessary. On the other hand, if what the noble Lord said is not accurate, it is irrelevant.
Lord Williams of Elvel: The noble Lord is quite wrong. Given that there are constraints, and given that there is no competition, it is up to the regulatory authority to ensure the benefits of the competition that would have existed if there had been any competition at all.
Lord Hylton: Regarding the amendment, I draw attention to Schedule 12 of the Bill. This schedule, which we have not yet reached, gives the Secretary of State the power to make outright grants for three listed categories in connection with nuclear fuel, radioactive waste and the decommissioning of nuclear power stations. The schedule empowers the Secretary of State to make loans—again, in connection with nuclear generation—at any rate of interest which he may with the approval of the Treasury direct. The schedule then goes on to allow him to give guarantees.
It is precisely on those aspects, which give carte blanche permission to the Secretary of State to do whatever he likes, that we need this alternative demand management analysis. I hope that the Government will respond to that point.
Perhaps I should say to the noble Lord, Lord Williams of Elvel, that I am not sure that his amendment is quite right. I say that for this reason. Those who will be in the business of generating may not be those who are in a position by one means or another to manipulate or adjust the level of demand. The noble Lord is hitting an important point, but I am not entirely sure whether he has the right vehicle for applying this demand management analysis. I hope that we shall have a full reply from the Minister.
Lord Williams of Elvel: I apologise to the noble Baroness for intervening again but perhaps I may respond to the noble Lord, Lord Hylton. The last part of the first paragraph of my amendment uses the words "available overall", so it is the director who has to take a broad view, not simply on the specific proposals but of the overall situation. I think that covers the point.
9.30 p.m.
Baroness Hooper: The Government are committed to increased and sustained energy efficiency including sensible demand management. Perhaps I should also refer to the fact, as the noble Lord, Lord Williams, is no doubt aware, that electricity demand
1132
is growing and is likely to continue to do so in all major industrialised countries as consumers install new electrical processes and equipment. The major international organisations such as the IEA and the European Commission therefore forecast continuing growth in electricity demand even after taking account of prospective efficiency gains. Therefore, new plant is likely to be a necessary option in the future. If I may say so, I do not believe that the somewhat bureaucratic measure that is being suggested is necessary.
As a result of the new structure which the Bill brings about, the electricity industry will be subject to full commercial pressures. The noble Lord is well aware of what "full commercial pressures" means. In the light of this, generators will not build power stations if there is no market for the electricity. Our proposals will mean that energy efficiency decisions taken by consumers will prevent unnecessary power stations being built.
In the privatised industry each licence holder will very naturally scrupulously control its own use of electricity and fuel. As my noble friend Lord Trafford said, that will significantly affect their costs and their ability to compete sucessfully. I believe that they will automatically ask themselves what is going to be the least cost for themselves without the imposition of a statutory requirement.
The increased competition which is central to the Government's proposals will provide a major incentive to the efficient use of fuel. In addition to that, condition 5 of the public electricity supply licence will oblige public electricity supply licence holders to purchase electricity from the most economical sources available to them. Under our proposals, for the first time public electricity suppliers will be able to choose between contracting for more generating capacity and selling energy efficiency measures. Up to now the area boards—as the noble Lord himself prefers to call them—have had little choice but to accept the capacity provided by the CEGB. In future, public electricity suppliers will be able to choose energy efficiency instead, and they will be able to choose their suppliers not only from the two successor companies to the CEGB, National Power and Power Gen, but from the other competing generators.
In that context perhaps I should say that the non-fossil fuel obligation is an obligation on the supply companies not on the generators, so the supply companies will look not only to Power Gen and National Power for that source to fulfil their obligation but to other generators as well, although it goes without saying that in the initial phase at least they will be looking very largely to National Power and the nuclear component.
Perhaps I may make a final reference to the least cost planning in the United States. I believe that we touched on this in our discussion last week. I should point out that although this is a method which is used in three states in the United States it has actually been attacked there on two grounds, the grounds of uncertainty and fairness. So the fact that it operates in some parts of the United States is not necessarily a recommendation.

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For those reasons, I believe that the amendment is unnecessary and I trust that the noble and learned Lord will feel able to withdraw it.
Lord Williams of Elvel: I am grateful, as always, to the noble Baroness for her courteous reply. We have a major divide here about whether or not there will be effective competition in generation. If there is effective competition in generation, all the noble Baroness has said will probably turn out to be right. I and her noble friend Lord Peyton and others
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believe that there is no, and will be no, effective competition in generation. On any estimates, National Power and Power Gen will have 90 per cent, of the generating market in England and Wales for a long time hence. I do not believe that all this will occur in the way that the noble Baroness insists. However, she insists on her point and I insist on my point. I can see that we shall get no further. We shall come back to this at a later stage. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
9.45 p.m.
Viscount Hanworth Viscount Hanworth moved Amendment No. 89:
Page 3, line 30, after ("subsection") insert ("(3)(a)(i), (3)(a)(ii) and").
The noble Viscount said: The Bill requires that the Secretary of State and the director,
"shall take into account, in particular, the interests of those who are disabled or of pensionable age".
But this applies only to subsection (3)(a)(i) which covers prices charged and the other terms of supply. This amendment extends the obligation to the continuity of supply and the quality of electricity supply services provided. I cannot see why this has not already been done but no doubt the noble Baroness will be able to tell us. I beg to move.
Lord Williams of Elvel: It may be for the convenience of the Committee if I speak also to Amendments Nos. 90, 90A and 91. I support the noble Viscount in his amendment. Our Amendments Nos. 90 and 90A are broadly along the same lines. At present the clause requires the Secretary of State and the director to take into account when carrying out their duties the interests of the disabled and those of pensionable age. This subsection and subsection (2) clearly recognise that utility pricing problems cannot be reduced to the simple measure of maximising efficiency. We have had a good deal of discussion of efficiency but this is not the end of the story. It is particularly important in regard to this Bill that electricity for space and water heating is disproportionately the fuel of the disadvantaged in society. We all know that not only those of pensionable age but also disadvantaged people regard electricity as a major means of existence. It would be inappropriate to omit reference to those who are disadvantaged through ways other than disablement or being of pensionable age. In our view "disadvantaged" can mean people who are ill or people who may be living on their own. It can mean all kinds of things of which the welfare considerations of the Bill should take account.
The heating systems used by low income households are not a product of consumer choice. In many ways they are a product of public policy. For example, much of the UK's rented housing is still provided by public authorities. Therefore tenants are not able of their own volition to switch fuels in response to whatever economic signals may be put out.
I believe that this is a matter to which the Government would do well to pay attention. It is not only elderly and disabled people who are vulnerable to utility prices; indeed, low income families with several children would be similarly vulnerable. Therefore if this clause could be extended to include wording based on the articles of association of the National Consumer Council, we on this side of the Committee would welcome such a move.
Baroness Hooper: Of course the Government are concerned about pensioners and disabled people. Nevertheless, the provisions in the Bill place a duty upon the Secretary of State or the director to take
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into account those interests in promoting the interests of consumers in respect of the quality of the electricity supply services provided. We have already touched upon what that may involve in terms of the types of meter which are offered. But, notwithstanding our concern in that area, and because of the provision which has already been made, it does not seem right to extend the duty to cover continuity of supply. Without vast expenditure on providing extra mains, it would be impossible to offer next-door neighbours different arrangements for continuity of supply.
The duty of the Secretary of State and the director to protect consumers' interests in respect of continuity of supply should extend equally to all electricity consumers who continue to enjoy the current high standards of security. Similarly, the special arrangements for vulnerable premises—for example, hospitals—will continue. We believe that all consumers have a right to expect their supplies to be provided efficiently and continuously so far as is possible.
So far as concerns the need to avoid disconnections, ample provision is made for those having difficulty in meeting bills in the two licence conditions on this subject. The first requires licence holders to provide a code of practice and the second, which we shall be introducing shortly, requires the licence holder to operate an agreed method for dealing with customers in default. Those conditions will protect the interests of the elderly and the disabled, just as they will other customers.
I believe that in saying this I have covered the amendments in the group. I trust therefore that the noble Viscount will consider that sufficient argument and will feel able to withdraw his amendment.
Viscount Hanworth: I have heard the arguments and although I am not wholly convinced, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 90 to 91 not moved.]
Clause 3, as amended, agreed to.
Lord Sherfield Lord Sherfield moved Amendment No. 92:
After Clause 3, insert the following new clause:
("Research and Development.
The Secretary of State shall have a duty to secure the provision of such research and development as may be necessary to guarantee the long-term supply of electricity to the nation.").
The noble Lord said: I rise to move the amendment standing in my name on the Marshalled List. The noble Lords, Lord Nelson of Stafford and Lord Gregson, and the noble Viscount, Lord Caldecote, are also associated with this proposal. I need not detain the Committee for long as the issue of research and development in the electricity industry was raised by many speakers on Second Reading, notably by the noble and gallant Lord, Lord Carver. He spoke on behalf of the sub-committee of the Select Committee on Science

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and Technology of this House which is currently inquiring into certain aspects of what is universally now known as the greenhouse effect.
I put down this amendment after discussion in the Select Committee and I move it in the absence of the noble Lord, Lord Nelson of Stafford. Other speakers, including the noble Earl, Lord Lauderdale, and the noble Lord, Lord Shepherd, also spoke about research and development on Second Reading. They were answered by the noble Lord, Lord Sanderson of Bowden, when he wound up. He concluded by saying that the Government's intention would be to ensure that the long-term research and development that they considered to be necessary in the national interest would be carried out. The purpose of the amendment is to introduce the essence of that assurance into the Bill. I do not doubt the bona fides of the noble Lord's assurances, but this is a long-range measure. Assurances from a Front Bench tend to fade into oblivion, particularly when Ministers change.
There are two aspects to research and development in this industry; that which is needed to sustain the safe operation of existing plant, and the longer term development of future plant, notably, improved PWRs, fast reactors, fusion and other energy-producing systems, non-renewable and renewable.
Secondly, there are the environmental effects of the various means of power generation. There is widespread concern over the question of long-term and strategic research and development in both those areas.
In evidence to your Lordships' Select Committee last year the CEGB made it clear that, with the reorganisation of the industry, resources hitherto devoted to research and development were bound to diminish. The noble Lord, Lord Marshall of Goring, was asked who would be responsible for long-term research and development after privatisation. He replied:
"In my opinion that must be the Government. At the present time the CEGB has the national obligation to supply, and it is our responsibility to plan and implement the supply of electricity in England and Wales, now and in the future. That will not be our responsibility in the future when it must be either with the Government or collectively with the Distribution Boards".
The National Coal Corporation told us only last week:
"The research institutions of the nationalised energy industries have been the natural place for much research into the environmental consequences of energy production and use. Because of this, the government has in the past not needed to consider separate funding for such research in the general national interest. However, with the privatisation of these industries, shorter term commercial pressures will result in a curtailment of this fundamental environmental research. It is therefore essential that separate government funding is made available to these institutions so that their expertise and experience is not dissipated and so that the environment policies and actions of the government are backed-up by thorough and well-directed research".
That message is equally applicable to the electricity supply industry.
The Government's record in supporting long term research and development has up to the present time
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been patchy and far from distinguished. If things continue as they are, on present form any contribution to long-term research and development of the electricity industry is likely not only to be too little but to be too late after the experienced research teams have been dispersed or have moved elsewhere.
Finally, it would be extraordinary if in a Bill of this range, reorganising an industry of this importance, there were no reference to research and development. Even the Water Bill manages to include a clause about research and development in that industry. I and my colleagues on the Select Committee consider that the Bill should include a similar clause. I beg to move.
Viscount Weir: I wish to commend the amendment most strongly. For many years the CEGB in particular has supported an excellent research and development programme. It has done so through its own laboratory facilities, through support for such projects as the fast reactor programme and through direct collaboration with equipment makers. The projects that have been supported have been both worthwhile and well chosen. According to its last accounts the CEGB spent something like £200 million in that area. Work on reducing the emission of oxides and nitrogen through better burner design of boilers is only one example of what it has done. Work in supporting fluidised bed combustion is another.
Overall, the CEGB's programme has been very directly in the national interest in three specific ways. First, it made better equipment available to the generating industry and by improving reliability and efficiency benefited the consumer. Secondly, it has been of great value to British equipment makers, particularly in helping them to compete more effectively abroad. Thirdly, it has kept Britain's place in longer term developments in the power field.
It is perfectly understandable that the CEGB should now take the view that when it is divided into two independent companies after privatisation, it will be unreasonable to expect the board on its own to continue to carry the research and development burden, particularly for longer term projects, as it has done entirely itself in the past. Its reluctance is justified by the fact that the two companies will not only have to compete with each other but also compete with new entrants to the industry which will not bear such costs.
I do not think it justified that nationally we should accept the consequences of such commercial decisions when one such consequence will most certainly be to leave gaping holes in the overall research programme. It is futile to suggest that market forces will automatically produce some sensible and economic response to the situation. At the very best, there would be a considerable lapse of time before the electricity industry settled down into its new structure and, for example, co-operative arrangements for research and development within the industry, such as those that exist today within the United States, could be established.

1139
It is essential therefore that for a considerable period—and I suggest that in practice this could be not less than five years—an obligation should remain on the Secretary of State to fill the gap which would otherwise be left. For many years now the electricity industry has enjoyed the combination of co-operation between the users and the equipment suppliers and competition between those suppliers for the users' business. A very important expression of that co-operation and common interest has been in the fields of research and development. This has not in any way been something collusive and cosy, to the detriment of the public interest—quite the contrary. In fact I think it is the right and natural way for matters to be in the industry.
If we look at France, Germany or Japan, we see excellent examples of such co-operation being reflected in a most efficient electricity supply industry in those countries and in the very successful exports of electrical equipment from them. In all those countries the electricity utilities strongly and directly support research and development by the equipment suppliers. I believe therefore that we must do everything possible to preserve arrangements of this kind in the field of research and development for the future health of both sides of the industry. I find it very difficult to imagine the Committee giving other than the broadest and the most enthusiastic support to this measure.
Finally, the broad scope of this amendment is by its very nature commendable, as it invites the Government to make constructive, sensible and detailed proposals to deal with so obvious a deficiency and omission in the Bill. Therefore, I look forward to hearing just what constructive proposals the noble Baroness, Lady Hooper, may have in mind.
Viscount Hanworth: I strongly support the amendment. Most of the major points have already been made. However, I do not believe for one moment that long-term research will look after itself without promotion. Firms do not, except in a small way, look far enough ahead for that. I also wonder what the relationship as regards research will be between the two major power generation companies. They will obviously agree to a certain degree to share results. But unless someone looks at this matter rather carefully, the best results will not be achieved. Someone needs to co-ordinate this matter.
Perhaps I ought to know, but what on earth is being done about nuclear research? How does that come into the picture? If the Minister feels, as I and many other Members of the Committee here tonight feel, that something should be done, what does she think about my proposal in Amendment No. 93, which is grouped with this amendment?
The Earl of Lauderdale: I do not join in this debate as an expert in research or with any comprehension of science. However, we are faced with a long-term proposition. The first effects of this Bill, if it becomes an Act, as I am afraid it will, will probably not be noticed by the public for five years, or perhaps longer. In the meantime those who are responsible and those whose heads should be on the block will
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have disappeared over the hill. The Department of Energy may well have disappeared altogether and been swallowed up in the DTI. The Secretary of State concerned may well be in another job. Those responsible will disappear and escape the axe which is due to them.
This is a very serious matter. Even now I do not feel that the Government appreciate what they are tampering with. This Bill has come from the House of Commons. It was well debated there and there was no guillotine. It is up to us to do the best we can to salvage what is left of the wreckage. The Government are wrecking the electricity supply industry and we must try to save what we can. That is the context in which I warmly support the amendment of the noble Lord, Lord Sherfield. I hope that if he does not receive a satisfactory reply from the Front Bench he will test the opinion of the Chamber. I say that very firmly.
This matter was raised at some length in a debate on research that took place not many weeks ago. We received no answer whatever. I raised the matter again on the Second Reading debate on this Bill. I was promised an answer, but I received no answer whatever. As a layman, I am concerned that the decision to cut research funding for the fast reactor is disastrous in itself. I think that the decision to pull out of fusion research—some people say it can be done by so-called cold fusion in a test tube but that theory has been exploded—and to cut funding for research because it will take 45 years to produce results is mistaken. That is no reason for doing so; it is a very good reason for investing in research. If we are interested in the future of our country we should not be snipping and snapping at our research like peeling a banana.
I said to my noble friend when she was appointed that I thought that she had an awful row to hoe. I sympathised with her on being landed with this job. I think the department has not given her the support which Parliament expects to be given to a Minister; otherwise we should not have such a muddled Bill. However, I should not be surprised if she tells us that the Government are consulting ACORD—the Advisory Committee on Research and Development—and are awaiting its judgment. We have been told over and over again that this Bill has the support of the industry. Who are the people who have been consulted? Those they nominated themselves, the people appointed to ACORD as government nominees. We know very well how the government of the day can lean on the most honourable people and get the answers they want.
Therefore, if we are told that the Government are awaiting ACORD's judgment I do not believe that that is good enough. I believe that ACORD's judgment will be much influenced by a vote in this Chamber. Unless my noble friend comes forward with a satisfactory reply, I hope that the amendment will be pressed to a Division.
I do not like to speak in these terms but those of us who have listened to today's debate have been very disappointed at the hardness and rigidity of the Government. I am reminded of an occasion many years ago when we debated in this Chamber, day and night, the Bill to take us into the Common

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Market. The Government made it clear then that they would not accept any amendment, even to put the language right, even to put in a comma or the word "that" which was necessary for the Bill to make sense. I remember a former Lord Chancellor rising and saying "Only a sense of public duty brings me to my feet at twenty minutes to midnight on 8th August". I feel rather like that tonight. It is not 8th August yet, but if the Government continue to be as obstinate as they have been today this Committee stage will go on and on. Those of us who feel seriously about the matter will continue to press it, not because we have any animosity towards the Government but because the policy is wrong and the Government are not listening.
I implore my noble friend not to take too harshly the words I have said after dinner. However, this is a serious matter; it is very serious indeed. We are talking about our grandchildren's future and the position of this country in 20, 30 or 40 years' time. It is not a trivial matter. Merely to say, as has been said hitherto, "We are waiting for the advice of ACORD" is not good enough. We want a vote in this Chamber to support the motion and to make it clear to ACORD how this Committee feels. There are noble Lords present who know about research and who are eminent in the subject. I am just a layman. I have said my say. I hope that my noble friend will not take it amiss or personally, but I feel very strongly on the matter, as she knows.
10 p.m.
Lord Trafford: I too feel very strongly about the matter. As I recall 8th August is better known in history as the black day of the German army, as described by Ludendorf. It was the day it began its retreat. I believe this is a very important question. I am deeply concerned that we manage to maintain levels of research and development.
I say again, as I have said in previous debates on research and development, that there are two types of research and two types of development, one good and one bad in each case. Therefore, I am always anxious about blanket endorsements of any particular policy procedure or requirement. Of course it would be very nice, as every director of every research outfit would agree, to have only good research. That is not always possible to foretell; nor is it always capable of achievement. To a certain extent one has to put one's bread upon the waters.
Although I hope that my noble friend on the Front Bench will look at the matter sympathetically and perhaps review the wording or the terms of the proposal, I must put in a caveat. It is like the question of investment, if I may use that analogy. Investment is utterly useless if it merely wastes money, produces nothing and is simply money down the drain; but it is still classified as investment. On the other hand, if a much smaller sum of money produces a much better return, that is a much better investment. That is common sense, but the same is true of research and development.
Opinions are always expressed strongly on research and development. There is a strong research element in the House. However, despite the strong
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opinions expressed, I believe that one must remember that selection is also part of the essence. I hope that my noble friend will look at the matter sympathetically. I am sure that she is aware of the importance of research and development, but I hope that she has that slight hesitation with regard to a blanket endorsement of such a proposal as is contained in the wording.
Lord Williams of Elvel: As has frequently happened with regard to other amendments, the debate on this amendment has taken place on the opposite side of the Chamber. This is the first opportunity that I have had to speak to the amendment.
I believe that the noble Lord, Lord Trafford, is wrong in his criticism of the drafting of the amendment. I believe that the noble Lord, Lord Sherfield, has put it absolutely right and that the Secretary of State should,
"have a duty to secure the provision of such research and development as may be necessary".
Clearly, the Secretary of State must choose so that he is not simply throwing money all over the place. The noble Lord, Lord Trafford, said that he was sympathetic to the thrust of the amendment, while entering a caveat. I believe that noble Lords opposite—indeed, the noble Lord, Lord Sherfield, and everyone who has spoken—are sympathetic to the amendment.
I cannot do better than the noble Viscount, Lord Weir. He made a most powerful speech in support of the amendment. The fact that we were both born in the same year—1933—only goes to show that 1933 was a vintage year for speakers. I cannot do better than the noble Viscount because he said exactly what needed to be said in the Chamber in the most forceful terms possible. If the noble Earl, Lord Lauderdale, wishes to encourage the noble Lord, Lord Sherfield, to divide the Committee, he can be assured that the slender troops that we have at our disposal will be at the disposal of the noble Lord, Lord Sherfield. However, I must point out that it is late at night and that we want to move on with the Bill. I very much hope that we can reserve this battle for another day when we have read what the noble Baroness will say in response.
The Earl of Halsbury: I am currently the prisoner of the Cardiff Bay Barrage Bill and am therefore unable to take part in all the procedures in the Chamber. In rising to speak after the noble Lord, Lord Williams of Elvel, I should say that, if my noble friend, along with the noble Earl, Lord Lauderdale, chooses to divide the Committee, I shall follow them into the Division Lobby.
Baroness Hooper: I do, of course, look sympathetically at this question. The Government share the view of all noble Lords who have contributed to the discussion about the importance of research and development, particularly in the energy sector. However, I cannot agree with my noble friend Lord Lauderdale that he received an inadequate reply from my noble friend Lord Sanderson of Bowden at Second Reading.

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However, research and the introduction of new technology are, we believe, the key to the efficient production of goods that customers want to buy. In the energy sector, where most sources of fuel are not limitless, research is therefore most important in order to ensure that energy can be provided to customers efficiently and at least cost over a long timescale.
Perhaps I may first explain the Government's approach to the question of research and development in the private sector. We do not believe that it is right to take an interventionist approach to research and development, as I have had the opportunity to say many times. Nevertheless it is no accident that successful companies both here and abroad are those which invest a considerable effort in R&D. To take an example from within the energy sector which will be familiar to many Members of the Committee, the oil companies that are active in the North Sea are spending close on £100 million a year on research and development on new offshore technology. The Government wish to encourage that, but we believe that it will not be possible to do so by taking over the reins and deciding what research and development is to be undertaken. If they were to do so companies might well stop investing in R&D and would lose the ability to pick winners themselves for the future.
In this connection I am minded to recall the discussions we had this time last year during the passage of the Education Bill when arguments against overdirection from government on research and development were rife. They seem to be completely at odds with some of the arguments that have been advanced today.
Much concern has been expressed about environmental research and the greenhouse effect in particular. The Committee may have seen the announcement of the noble Lord, Lord Marshall of Goring, which has already been quoted in this debate. Many Members may also have seen the announcement made by the CEGB on the day of the Second Reading of the Bill to the effect that it was launching a £1·5 million research programme into the greenhouse effect. I should like to quote Dr. Chester, the CEGB's Environment Director, who said:
"It is vital that we put research into higher gear to get uncertainties reduced. There will be hard decisions and hard investments to be made and those making them should have the benefit of the best that science can provide".
He also added that National Power and Power Gen would continue most of the board's environmental work in a joint venture. I believe that this demonstrates a responsible commitment to research and development, as we would expect from such major companies.
For its part the Department of Energy is involved in supporting scientific work on the greenhouse effect under the wider international framework of the Intergovernmental Panel on Climate Change. The department's existing R&D programmes in renewables and energy efficiency will of course continue to provide valuable information and support for the introduction of new technologies
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which can help reduce carbon dioxide emissions; while the non-fossil fuel obligation, as well as ensuring a continuing role for nuclear power in the generation system, will also provide a new impetus for renewables.
There has also been the suggestion that the privatised industry will concentrate wholly on short-term research. I believe that it would be extremely short-sighted of it to do so in an industry where the lead times for the construction of plant are long and long-term decisions need to be taken about fuel supply and likely demand changes. A long-term view of the future has to be taken. If the oil companies that I mentioned earlier are prepared to demonstrate their faith in the future through their long-term R&D, I see absolutely no reason why the privatised electricity industry should show any less confidence.
Lord Dean of Beswick: Perhaps the Minister will give way at this point. How would she respond to the point made by the noble Viscount, Lord Weir, regarding the question of exports? He is someone else who has worked in the past in the power plant industry. Are the Government not aware that if they get it wrong they may mortally wound our capacity to export power plant abroad with all the appalling consequences that that will have on the balance of payments in our manufacturing industry which, as the Minister knows, is already very adverse?
Baroness Hooper: I hope to be able to demonstrate that the Government have no intention of getting it wrong.
The Earl of Lauderdale: My noble friend referred to oil companies and I should declare an interest in that I am a director of a French oil company, Elf Aquitaine. We spend a lot of money on research. But this is not long-range research of the kind envisaged by the movers of this amendment. This is research which provides ways of improving what is called enhanced oil recovery, and so on. We have spent a lot of money. It is not research for 20 or 40 years ahead. I believe that we are talking about the very long-term research into such things as fast reactors—which is fairly short term, speaking relatively—and fusion. That is quite different. There is no analogy between what the oil company is doing in the North Sea and what we are talking about.
10.15 p.m.
Baroness Hooper: I shall not quibble with my noble friend about this, although I believe that the oil industry is looking far into the future, and indeed the export market as well, in the research that it is developing. However, since my noble friend also referred earlier in somewhat slighting terms to ACORD, I must fulful his prophecy by saying that he may be interested to hear that last week ACORD considered the electricity supply industry's R&D programme in order to advise the Secretary of State about the implications of the changes that are taking place. ACORD concluded that while it would take some time for the full implications of privatisation for R&D to work through, the industry's proposals

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demonstrated the seriousness of its commitment to undertake R&D and its acknowledgement of the contribution that R&D can make to ensure the future health of the companies concerned.
While noting that there was uncertainty about the future of longer term research, members of ACORD from the private sector pointed to the longer term elements in their own programmes and warned against too ready an assumption that all long-term work would be dropped.
The council advised that the department should monitor the situation carefully over the next few years. Members from the electricity industry made helpful offers of assistance as to how the department might set about this monitoring task, and ACORD will itself be involved in this process.
In the light of this, I believe that I can reassure Members of the Committee that the department will continue to receive well-informed advice about what R&D will be undertaken in the industry and what gaps, if any, would be appropriate for Government funding.
In seeking to put a specific duty on the Secretary of State, the amendment is not entirely necessary, not only because of the practice of successive governments, but also because such a general duty for the Secretary of State already exists in statute. The Ministry of Fuel and Power Act 1945 already charges him with the general duty of,
"securing the effective and co-ordinated development of coal, petroleum and other Minerals and of promoting economy and efficiency in the supply, distribution, use and consumption of fuel and power, whether produced in Great Britain or not".
This duty, taken with the powers to support R&D under the Science and Technology Act 1965, already I believe achieves much of the situation that the noble Lord's amendment is seeking to cover.
In brief therefore I believe that the Secretary of State already has a general duty to ensure adequate co-ordination in this area; that the present administrative arrangements— —
The Earl of Lauderdale: I am sorry to trouble my noble friend. The Secretary of State has a duty to co-ordinate. What about the funding? We have read recently that the funding of the fast reactor research will be slashed; and that of future research even more so. The Secretary of State may have the duty; but how does he exercise it? We are worried about the money and the provision for 10, 20 or 30 years ahead.
Baroness Hooper: My noble friend has made perfectly clear what his major worry is. However, perhaps I may continue. We believe that there is no reason why the present arrangements should not continue to work well in the future after privatisation. In this sense therefore there is nothing between the Government and those who have sponsored this amendment.
We also have certain difficulties with the wording of the proposed amendment. We believe that it could lead to confused lines of responsibility. Under the Bill as drafted, the responsibility for ensuring secure electricity supplies devolves squarely and
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unambiguously on the supply companies. By imposing on the Secretary of State a specific duty in relation to security of electricity supplies, the amendment would confuse this responsibility in an undesirable way. More generally the amendment would give the privatised electricity companies an undesirable signal that they need not concern themselves with long-term research because ultimately the Government would always be there to pick up that tab.
I have dealt fully with this question because it is important. I recognise that it preoccupies many noble Lords on all sides of the Committee. As I have said, the Government consider it to be an important area. In introducing the amendment the noble Lord, Lord Sherfield, made the point that there is no reference to research in the Bill. Perhaps on that basis and as a result of the strength of views that have been expressed on this matter, we could consider the promotion of research and development further to see whether a possible government amendment could be brought forward at the Report stage that would acknowledge the concerns of those who have expressed themselves on the subject this evening, while avoiding the difficulties in drafting to which I have referred.
I trust that on that basis the noble Lord will feel able to withdraw his amendment.
Lord Williams of Elvel: Before the noble Lord, Lord Sherfield, decides what to do with his amendment can I probe what the noble Baroness has just said? Is she giving us some form of undertaking that the Government will come back with an amendment on Report?
Baroness Hooper: What I have said is that the Government will consider the question to see whether a government amendment could be brought forward at the Report stage. I believe that we should be able to do that in consultation with the proposers of the amendment. We hope that we may be able to satisfy their concerns and to overcome the difficulties in drafting that this amendment has suggested to us.
Lord Williams of Elvel: Can we take that as a definite undertaking that that will happen?
Baroness Hooper: In the usual way on these occasions, I make that comment without commitment but in reading what I have said I believe the noble Lord will be able to draw the necessary conclusion.
Lord Sherfield: I should first like to thank all those who have spoken in this debate for the support which they have given to the amendment. The noble Baroness said that there was really nothing between us and the Government, but there is something important between us because she is saying that she does not think an amendment is necessary and we consider that it is essential. I agree very much with what the noble Lord, Lord Williams of Elvel, said about the interpretation of the clause. Of course there is a difference between good research and bad

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research and between good development and bad development, but it is up to the Secretary of State to select what is good and to reject what is bad. That is the whole point of giving him a duty to secure the provision of R&D.
We all know it is quite clear that, whatever the privatised industry can do, there will be serious gaps both in the research on energy supply and research on the environmental issues. All I suggest is that the Secretary of State should have the duty to identify those gaps and fill them. He need not intervene in the industry; he will watch it and fill the gaps. It is essential that there should be a provision in the Bill which places that duty upon him.
Perhaps it is characteristic of the atmosphere which surrounds the question of research and development that we should be debating this highly important subject at 10.30 p.m. It is typical! The noble Baroness has not given an undertaking, but she has given at least an indication that on Report she will bring forward an amendment which will meet the universal, unanimous opinion of Members who have stayed up here in order to discuss the issue. I hope that she will take account of that.
I and my colleagues will study what she has said. I wish to make it quite clear that if on Report she does not bring forward an amendment my colleagues and I will do so. We shall then test the opinion of the House if we are not satisfied. On that understanding I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 93 not moved.]
Clause 4 [Prohibition on unlicensed supply etc.]
Lord Peston Lord Peston moved Amendment No. 9 3A:
Page 3, line 44, after ("electricity") insert ("in the United Kingdom").
The noble Lord said: I should like to speak to Amendments Nos. 93A and 93B. It may well be that if the noble Baroness can clarify the relevant questions, they are not required. I believe that in the first place we must hear the talking about electricity generated in the United Kingdom. In my view the clause is ambiguous because it appears to suggest that imported electricity from, say, France, for which the person does not have a licence in this country could somehow be illegal. I should like a reassurance that that is not the case.
That relates to another matter where we referred to the licence in the second amendment at the top of page 4. Again there is the question of making certain that no illegality will arise in respect of electricity generated outside this country but imported into it. I ask the Minister for reassurance on that matter. Perhaps implicitly the Bill always refers to the United Kingdom without having to clarify that, but it is a minor source of worry.
Can the noble Baroness also say whether this is the appropriate place to raise another question concerning the United Kingdom? Some Members read in the weekend press of an obligation, with which we shall deal later in the Bill, concerning the use of nuclear power and a basic minimum nuclear
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power requirement. It was suggested in the Sunday Times that imported French electricity made by its nuclear power stations would somehow meet our nuclear condition. I find it impossible to believe that the Bill will allow that.
If it is not appropriate to deal with the issue at this stage I shall accept that and give notice that it will be raised at a later stage. However, if it is appropriate, I ask what the 20 per cent, condition means. I mention the matter now because it comes within the general rubric of the United Kingdom. I should like reassurance about whether at this stage we need to clarify the United Kingdom. Also I am giving notice that we may need to raise the United Kingdom question again. I beg to move.
10.30 p.m.
Baroness Hooper: I must confess some puzzlement concerning the purpose of the noble Lord's amendment. If its purpose is to bring the provisions of Clause 4 of the Bill into effect throughout the United Kingdom, this amendment does not achieve that. The amendment would apparently make it an offence to generate electricity in Northern Ireland without a licence or exemption. However, it does not attempt to make it an offence to transmit or supply electricity in Northern Ireland without a licence or exemption.
This Bill is designed to restructure the electricity supply industry in Great Britain, and not that of Northern Ireland. Indeed Clause 108 of the Bill makes it clear that the provisions of Clause 4 do not extend to Northern Ireland.
Lord Peston: My Lords, I apologise to the noble Baroness. I do not have the slightest interest in Northern Ireland. I meant Great Britain rather than the United Kingdom. The point I made in my remarks is the one that I should like to be addressed. I shall try to show an interest in Northern Ireland on another occasion but that is not what I have in mind at this moment.
Baroness Hooper: Perhaps I may turn to Amendment No. 93B. This is not an xenophobic Bill. Foreign companies may, for example, apply for these licences. It is, however, totally contrary to accepted principles of international law for the legislature of one state, or for some authority within that state, to say what conduct is or is not to be a criminal offence in another state, which would be the effect of Amendment No. 93B. That appears to make it possible for persons to generate, transmit or supply electricity if licensed to do so by another member state of the EC.
Once the Bill has been passed into law it will be for my right honourable friend the Secretary of State, or the director, to grant these licences and not anyone else—unless of course Parliament should at some future time enact otherwise.
To answer the question on the non-fossil fuel obligation and the possibility of French or other imports counting towards it, since they are nuclear, Clause 32 explicitly provides for imports in subsection (8). Therefore, it is intended that imports, if they are from nuclear or renewable sources, should count towards the non-fossil fuel obligation.
Lord Peston: I thank the noble Baroness. I am amazed by that last answer and I shall come back to that on Clause 32.
I realise that the two amendments I have before me are so appallingly defective that they have misled the noble Baroness almost as much as they have misled me. I am still somewhat at a loss as to how to obtain an answer to my question but I shall table some amendments on Report to clarify the matter. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 93B not moved.]
Lord Peston Lord Peston moved Amendment No. 93C:
Page 4, line 3, at end insert ("or unless where he makes no use of an electric line owned by a public electric supplier or the transmission company").
The noble Lord said: Perhaps I can deal with this amendment as briefly. The clause as drafted seems somewhat peculiar and I gather that a number of producers or generators of electricity are rather worried about it. Let us take the case of a business with its own power station or generating station which restricts the output of that station to the business itself and its subsidiaries, but those subsidiaries are not on site, so in order to get the generated electricity to a different site transmission lines are required. All that takes place within the business itself and there is no attempt to sell to any other business or to transmit or supply, within the meaning of the Bill, to other operations. Nonetheless, in essence the clause seems to suggest that a business behaving in that way would require a licence. One is puzzled by that because it is hard to believe that the Government want that to happen. It seems somewhat bureaucratic for what in the end is a straightforward procedure, if I have a small power station and use it to generate electricity for my operations in more than one place I cannot see why anyone would want to involve me with licensing because it has nothing to do with the intent of the Bill.
We have therefore tabled the amendment—I gather others have thought along the same lines—with a view to obtaining clarification from the noble Baroness. If the Government have this wrong they might like to consider changing the Bill. There is no urgency but we should like to get the problem on the record and understood. I beg to move.
Baroness Hooper: I trust that I am right in thinking that in proposing Amendment No. 93C the noble Lord was also speaking to Amendments Nos. 97, 98 and 100.
Lord Peston: I should have been but was not; but I was in the technical sense.
Baroness Hooper: Starting with Amendment No. 93C, I should explain that the electricity licences do two things. They enable suitable obligations to be placed on licensees; for example, to ensure that their operations are carried out in accordance with appropriate technical standards. These obligations are vital, regardless of who owns the lines through which the electricity is sent. But licences also confer
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certain rights, as appropriate, which make it possible for the licence holder to carry on his business; for example, the right to break streets to lay lines. These powers are in turn reflected in the licence obligations to allow others to share use of a system built with the benefits of those rights.
It is of course only right that those who intend to play a major role in the generation, transmission or supply of electricity should be subject to the conditions of a licence and should therefore operate under the overall scrutiny of the director. However, the Government recognise that licences are not appropriate for those who will play a minor role in the electricity industry. We intend, for example, that under Clause 5 of the Bill those who generate on site for their own consumption and those who generate less than 50 megawatts will be exempt from the requirement to hold a licence, though if they choose to hold a licence which carries with it certain advantages, one might say, they can opt to do so.
As regards the other amendments in the group, it is our current intention to exempt from licensing persons without at least one generating station with a capacity of 50 megawatts or more; those who supply electricity at a low level (less than 0–5 megawatts); and those involved in the resale of electricity purchased from a licensed supplier, such as landlords supplying tenants. We are at present considering these exemption criteria and will be consulting those likely to be affected. We will refine these criteria as necessary in the light of these consultations.
I cannot see how the proposed wording will materially change the clause as drafted, so with those explanations I hope that the noble Lord will feel able to withdraw his amendment.
Lord Macaulay of Bragar: Before the noble Baroness sits down perhaps I may say a few words on Amendments Nos. 97, 98 and 100, to which she has just replied. The object of these three amendments is to remove the phrase,
"persons of a particular class",
and substitute for it the phrase,
"specified categories or groups of persons".
The reason for tabling the amendments is that it is difficult to understand what is meant in the context of the Bill by the phrase,
"persons of a particular class".
It may be said that it is rather a tinkering amendment and it is a distinction without a difference, but in interpretation of statutes the words ought to be given their normal and ordinary meaning, and it is difficult to see what a particular class of person might be in the context of the Bill. To give it its ordinary meaning, it refers to status in society. Quite clearly, that is not what is intended and what is behind the Bill. A group of Members of the Committee could be of a particular class in that sense. Thre is no definition of the words "particular class" in the general interpretation Clause 106, and that is probably because they are incapable of definition. It is for that reason that the new phraseology is suggested to the Government as being perhaps a tidying up amendment.

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The word "particular" in front of "class" makes it even more difficult. I had a look at the Oxford English Dictionary today to see whether I could make any sense of this. I found that two pages of that dictionary are devoted to the meaning and derivation of the word "class". Initially it says:
"A division or order of society according to status; a rank or grade of society".
Or alternatively:
"The system of such divisions of society; rank (esp. high rank), caste".
Quite clearly, that would never apply to the Electricity Bill whatever else it might apply to.
Then we come to the leading sense according to the dictionary. It is defined in the following terms
"A number of individuals (persons or things) possessing common attributes, and grouped together under a general or 'class' name; a kind, sort, division".
So there we have a sort of circular definition which does not take us anywhere. I suggest that that does not make it any clearer.
I would ask the noble Baroness at least to consider rephrasing that part of the Bill.
Baroness Hooper: I can assure the noble Lord that reference to persons of a particular class does not refer in any way to social status but to the small operators that I referred to in my reply. It could be said that "specified groups of persons" might be rather difficult to interpret, so I trust that he will be able to withdraw the amendment.
Lord Peston: I thank the noble Baroness generally. I shall read carefully her answer to the first amendment because I think that it is an important matter and we may come back to it.
I am more persuaded by our wording on the remaining amendments than the noble Baroness is, but at this stage I do not feel that it would be helpful to press the point. So with your Lordships' permission, I beg leave to withdraw Amendment No. 93C.
Amendment, by leave, withdrawn.
[Amendments Nos. 94 to 94B not moved.]
Clause 4 agreed to.
Clause 5 [Exemptions from section 4.]
[Amendments Nos. 95 to 100 not moved.]
Clause 5 agreed to.
Lord Stanley of Alderley Lord Stanley of Alderley moved Amendment No. 100 A:
After Clause 5, insert the following new clause;
("Small scale and novel techniques of generation.
.—(1) In the exercise of their duties and powers under sections 3 and 5 of this Act, the Secretary of State and the Director shall have regard to the desirability of encouraging

(a) the generation of electricity by small scale generators, and

(b) research into novel techniques of generating electricity

(2) For the purposes of this section the Secretary of State may by scheme provide for the making of grants of amounts determined in such manner as may be provided for by or under the scheme towards expenditure incurred or to be incurred by persons for the purpose of establishing small scale electricity
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generating capacity and associated systems for transmission and supply, and for research into novel techniques of generation.
(3) Any scheme under subsection (2) above may make different provision for different circumstances, and shall be made by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.").
The noble Lord said: This is a probing amendment to discover the Government's view on small-scale generation of power by such methods as bio-mass, hyro-electricity and, indeed, windmills. I realise that such matters have been discussed in passing on previous amendments, but Clause 5 gives the Secretary of State power to exempt small-scale producers of power, if I can call them that, from having to be licensed.
That is certainly welcome, as are the provisions in Clause 3 to provide all reasonable—a word about which we have had some debate—demands for electricity and to promote competition. I believe that encouragement of small scale producers of electricity would further the aims in Clause 3. However, if they are to survive and prosper, particularly against heavily subsidised nuclear power, I suggest that they need to be similarly helped. Hence I have tabled this amendment in which I suggest, first, that the Secretary of State should have a duty to encourage the generation of electricity by these small scale generators and that he should encourage and promote research into such methods; and, secondly, that the Secretary of State should be empowered to make grants towards this research and also towards individual producers of this power. There are substantial government grants to nuclear producers, so to be fair, surely these small scale producers should be helped and similarly encouraged. Thirdly, I believe that, if these small scale producers are to contribute, some guarantee should be given that any surplus power produced will be purchased at the price paid to nuclear producers and that they should be allowed to feed this power into the national grid.
My noble friends Lord Renton and Lord Norrie mentioned the importance of trying to find environmentally acceptable methods of generating electricity. I suggest that these small units, particularly wind power, could be just that. I beg to move.
10.45 p.m.
Lord Peston: From these Benches we think that this is a sensible amendment and that it is also very much in line with the stated policy of the Government. We have seen in the past the Government showing an interest in this kind of development. Therefore the only issue is the usual one, on which we shall no doubt hear from the noble Baroness, as to whether it should be in the Bill. We believe that this is precisely the kind of clause that ought to be in the Bill. It would act as an encouragement. What seems to cause us to differ throughout the discussion on this legislation is that we should like to see certain encouraging things in the Bill whereas the Government seem to keep saying that there is no point in putting them in the Bill as they will encourage them anyway. We look forward to hearing whatever variant of those answers the Government put forward. Broadly, we feel convinced that this is something of which the Government must be in favour.
Lord Renton: Of course we are all in favour of encouraging these things but I do not think that the object of legislation is to encourage. It is to make enforceable laws. I very much doubt whether this clause would be enforceable if it were added to the Bill. As to the Secretary of State having power to help, I very much doubt whether it is necessary. I should have thought that he may have a discretion to help under other legislation. If it is for a business purpose the ordinary allowances against tax would enable the cost of these experiments to be met. Even when they go beyond the scope of experiment, help may possibly be given. However, having said that, I think it is an excellent idea but I doubt seriously whether it should be the subject of legislation.
Baroness Hooper: As I have already agreed to take back a previous amendment on research and development, perhaps I need not deal with the general question of research that arises on this amendment. As to the other limb of the amendment regarding support for the smaller private generators, the prospects for small scale electricity projects are not quite as unpromising as to require grants of the kind the amendment suggests.
There are already a great number of small scale independent generation projects. The Department of Energy is aware of around 300 projects totalling more than 1,000 megawatts. There may well be many others of which we are not aware. Other forms of small scale generation include of course renewable forms of energy such as landfill gas. Here too there is an enormous potential. At present we know of more than 20 projects totalling some 25 megawatts. By 1991 it is estimated that the number of projects will almost double and total capacity could be over 40MW. Upward of 200MW could be generated from such sources by the year 2000. The market is therefore already flourishing, and there is significant potential upon which to build. But the Government are also helping in their own way.
Members of the Committee will also recall, in respect of renewables generally, that the Government announced their intention to create through the 1990s new tranches of capacity (up to 600MW) within the non-fossil fuel obligation which will be reserved exclusively for renewable sources of energy. That is a real commitment to the future development of renewable sources of electricity generation, and is one which I envisage can considerably help small generators.
Moreover, my department is already helping to support R&D into new generating techniques. Prominent among these is the major programme of research and development where we are funding into the more promising renewable energy technologies. Over £190 million at 1989 prices has already been invested; and, over the next three years, a further £50 million is likely to be spent. Most of that expenditure is concentrated on electricity generation.
Looking at the longer term, the Government's strategy for renewables, published last year as Energy Paper 55, identified that at least £360 million worth
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R&D will be necessary during the 1990s, the cost being shared between the Government and industry. This strategy was developed in partnership with industry and the generating boards and emphasises that an effective programme of R&D involving the private sector can be drawn up without recourse to a legislative framework. I am confident therefore that the approach put forward in Energy Paper 55 will meet most of the concerns of the proposers of this amendment.
I trust on that basis that my noble friend will agree with my other noble friend Lord Renton that this amendment is not really necessary.
Lord Stanley of Alderley: I am not sure that I was entirely satisfied with my noble friend's a reply. For instance, she did not reply to the question regarding surplus power. She did not say, if I produce surplus power, whether it will go into the grid.
I should also point out to her that in the past I am sorry to say that the Central Electricity Generating Board has been especially—I was going to say unpleasant, but I do not think that that is the right word—discriminating in dealing with surplus power. Indeed it is a powerful monopoly issue and one which I believe needs addressing.
I agree with the noble Lord, Lord Peston, in that I see no reason for not encouraging these techniques; indeed, why cannot we encourage them? In my view they should be encouraged. This was a probing amendment and I shall read what my noble friend said. As I said, I do not think that I was very happy with her reply and I may well return to the matter on Report. However, in the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 6 [Licences authorising supply etc.]:
[Amendments Nos. 101 to 108 not moved.]
The Earl of Dundee The Earl of Dundee moved Amendment No. 109:
Page 6, line 14, at end insert—
("(11) Any sums received by the Secretary of State or the Director under this section shall be paid into the Consolidated Fund.").
The noble Earl said: Under Clause 6 fees may be charged for applications for licences or extensions of licences. It has always been the Government's view that licence fees generally would be paid into the Consolidated Fund. The Bill already provides for other moneys, such as the essentially annual licence fees specified in licences, and for fees charged for the inspection of the director's register of licences and licence exemptions, to be paid into the Consolidated Fund.
However, as presently drafted, Clause 6 does not contain the necessary provision. I therefore invite the Committee to accept this technical amendment, which corrects this oversight.
On Question, amendment agreed to.
On Question, Whether Clause 6, as amended, shall stand part of the Bill?
Lord Peston: I wish to reiterate the point that I have made several times this evening. It is our view that licences, and all that goes with them, are central to the Bill, and those issues have not been thought through fully. On an earlier amendment we tried to persuade the Government to think again about the licences and all those matters. I am looking forward to hearing the noble Baroness answer a number of questions I asked about the licences and the price regulation scheme.
All that is required at this stage is to underline our unhappiness with this part of the Bill and our slight astonishment that the Government are happy with it because if the clause is as important as we think it is, what it does and why it does it should be transparently clear. That is why I felt the need to intervene on the clause stand part.
Clause 6, as amended, agreed to.
Clause 7 [Conditions of licences: general]:
[Amendments Nos. 110 and 110A not moved.]
The Deputy Chairman of Committees (Lord Murton of Lindisfarne): If Amendment No. 111 is agreed to I cannot call Amendment No. 112.
The Earl of Dundee The Earl of Dundee moved Amendment No. 111:
Page 6, line 16, leave out ("generation, transmission or supply of electricity") and insert ("activities authorised by the licence").
The noble Earl said: With the leave of the Committee I shall speak also to Amendment No. 114. Amendment No. Ill is a drafting amendment to ensure that the style adopted in subsection (l)(a) conforms with that adopted in Clause 3(3)(d). Amendment No. 114 is necessary to take account of particular circumstances arising in regard to the transmission licensee—the National Grid Company.
The CEGB's assets in the Anglo-French interconnector will be transferred to the National Grid Company. Those assets are in part outside the territorial limits of the United Kingdom. We wish to make it clear that for the purpose of this provision they should be seen as part of the transmission system over which it is intended that third parties can seek agreement for use of the system. I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 112 to 113 not moved.]
Baroness Oppenheim-Barnes Baroness Oppenheim-Barnes moved Amendment No. 113A:
Page 6, line 23, at end insert—
("( ) Without prejudice to the generality of paragraph (b) of subsection (1) above, conditions included in a licence by virtue of that paragraph—

(a) may require the licence holder to render payment to a customer where standards set under section 38 fail to be met; or

(b) may require the licence holder to render payment to the grantor where standards set under section 39 fail to be met; or

(c) may require the licence holder to forego part or all of any price increase allowable under another condition of the licence where standards set under section 39 fail to be met.").

The noble Baroness said: The amendment is a minor probing amendment. I hope that my noble friend the Minister will be able to enlarge upon what his right honourable friend the Secretary of State said on Second Reading with regard to compensation for consumers, which is introduced in Clause 38. This is a dress rehearsal for Clause 38. My right honourable friend said that compensation would be available to consumers in the case of broken appointments and things of that nature. I should like to know how much wider that compensation is likely to go and whether it is likely to apply in cases of interruption of supply, for whatever reason.
I am sure that my noble friend the Minister will agree that consumers can suffer a great deal from the interruption of supply other than mere inconvenience. If it is in the interests of the industry to maintain high standards, it should have to pay compensation when the supply is interrupted, whether or not that is due to negligence.
In 1984, a similar amendment was moved during the passage of the Telecommunications Bill in the other place. The Government then said that there should be no necessity for such an amendment and that it was inappropriate. Subsequently, the regulator of British Telecom negotiated successfully and consumers of British Telecom now have this. I hope therefore that my noble friend will give a sympathetic and informative reply. I beg to move.
11 p.m.
Lord Glenarthur: My noble friend's amendment gives me the opportunity to explain the relationship between Clauses 38 and 39 and the licences. I hope that that will help her in a sense with what she described as a dress rehearsal for those two clauses. Clause 38 will put into effect the Government's radical new proposals to provide domestic customers with compensation if the public electricity suppliers do not meet certain standards of performance in the provision of electricity supply services. This will be supplemented by general indicators of overall performance which the suppliers will be expected to meet in areas of supply service where the payment of compensation is not appropriate. These statutory provisions are reflected in condition 17 of the public electricity supply licence which will require the holder to conduct its licensed business in a way best calculated to achieve the standards set by the director pursuant to Clauses 38 and 39.
Clause 7(b), to which my noble friend's amendment refers, concerns the payment by the public electricity suppliers of a licence fee to cover the director's costs. If my noble friend's amendment were to be accepted, that would mean that the payment of compensation to a customer, if the standards set under Clause 38 are not met, would be placed in a second licence condition. I hope that my noble friend will realise that this is not necessary. The public electricity supplier will already be required to pay compensation under the regulations made by Clause 38 which the director will make to that effect. I think this is clear from Clause 38(b) which provides that an order for compensation made by the director is enforceable as if it were a county

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court judgment or the Scottish equivalent. There is therefore no need to repeat this obligation in the licence.
The second part of my noble friend's amendment would involve the payment of a sum to the grantor of the licence—that is, to the Secretary of State or the director, if the standards under Clause 39 are not met. But the standards to be set under Clause 39 are intended to cover only those aspects of a company's performance where it would be inappropriate or impractical to pay compensation to the consumer on an individual basis. Of course it will be for the director to decide on the actual standards to be set, but a standard under Clause 39 could perhaps cover areas of performance such as dealing with, for example, written inquiries within a set number of days which the company might be expected to achieve 100 per cent, of the time. I hope my noble friend will accept that it would be impractical to compensate customers on an individual basis for a failure to meet such a standard. It would be doubly inappropriate, I believe, for such a measure to be included in the clause in this way.
Instead, under Clause 40, the director will publish information annually on the way in which the public electricity suppliers have met both sets of standards. This will have two results: the suppliers will wish to match or beat the performance of the other companies, and for the first time, the consumers will have the information they need to compare their local suppliers directly with all the others in the country, enabling them to put pressure on their supplier to improve its performance.
The third part of my noble friend's amendment would enable a price increase allowed under another licence condition to be reduced in part or whole if the standards under Clause 39 were not met. But the price formula of RPI-X+Y is designed to put pressure on the suppliers to increase their efficiency in the supply of electricity. It would not be acceptable for a public electricity supplier to be constrained by the price control formula in the supply of electricity and then be subject to a penalty for failure to meet standards for quality of service. These are quite separate areas of regulation. One, the prices charged by suppliers, is quite properly to be subject to rigorous control by the director, via the formula. The other, guaranteed standards, is provided for separately in Clauses 38 and 39. Of course the additional costs of paying compensation under Clause 38 will not be allowed to be passed through to the customer; so it will always be in the supplier's interests to meet the standards.
As for guaranteed standards cover for the security of supply, the standards under Clause 38 can cover the security of supply, and it is up to the director whether they will. However, I undertake to convey the views of my noble friend, with which I have considerable sympathy, to the director when he is appointed because there is certainly no reason why what my noble friend wishes should not be the case. In a nutshell, I suggest to my noble friend that where she seeks to amend is probably the wrong place. If she wishes to amend anywhere, Clause 38 or 39 would be better. But it is unnecessary and, to some
1158
extent, marginally misconceived. However, I understand the spirit with which my noble friend has moved the amendment.
Lord Peston: I had not intended to intervene, but I am a trifle unhappy about the reply of the noble Lord as regards paragraph (c). I believe that the anxiety of the noble Baroness is that a firm, subject to the price regulation formula but anxious to maximise profits, will place quality of service in danger. As I understand it, the amendment is saying that if that were to happen and if the quality of service were to decline, the obvious place to penalise the offending body would be in connection with price. That is how the amendment reads at least. It makes perfectly good sense to me. The argument that the penalty, as it were, should be kept separate from the price regulation does not appear to me to hold water. I heard the Minister say that he would convey the views of the noble Baroness to his right honourable friend—
Lord Glenarthur: I will convey them to the director.
Lord Peston: I beg the Committee's pardon. The Minister will convey the views of his noble friend to the director. But perhaps he may care to inform also his right honourable friend, who, I am sure, takes an interest in our proceedings at all times, that the idea particularly behind paragraph (c) of the amendment is one that is certainly worth considering if quality of service is important. I know we all believe it is important.
Baroness Oppenheim-Barnes: I thank my noble friend for his extremely helpful answer. I hope he will answer a final question. Does he agree that when we discuss the standards in Clause 38, we should consider compensation for interruption of supply?
Lord Glenarthur: We may be able to consider that when we come to Clause 38, although I am not anticipating the debate we may have on that clause at this particular juncture.
Baroness Oppenheim-Barnes: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 111B and 113C not moved.]
The Earl of Dundee The Earl of Dundee moved Amendment No. 114:
Page 6, line 26, leave out from ("agreements") to ("for") in line 27 and insert ("with other persons for the use of any electric lines and electrical plant of his (wherever situated and whether or not used for the purpose of carrying on the activities authorised by the licence)").
On Question, amendment agreed to.
[Amendment No. 114A not moved.]
The Earl of Dundee The Earl of Dundee moved Amendments Nos. 115 and 116:
Page 6, leave out lines 31 and 32 and insert ("Conditions included in a licence by virtue of subsection (l)(a) above").

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Page 6, line 42, at end insert—
("(3A) Conditions included in a licence by virtue of subsection (l)(a) above may—

(a) instead of specifying or describing any contracts or agreements to which they apply, refer to contracts or agreements designated (whether before or after the imposition of the conditions) by the Secretary of State or the Director; and

(b) instead of containing any provisions which fall to be made, refer to provisions set out in documents so designated and direct that those provisions shall have such effect as may be specified in the conditions.").

The noble Earl said: I beg to move Amendments Nos. 115 and 116 en bloc.
On Question, amendments agreed to.
[Amendment No. 116A not moved.]
Clause 7, as amended, agreed to.
Clause 8 [Conditions for funding certain companies engaged in nuclear generation in Scotland]:
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 117:
Page 7, line 7, after ("applies") insert (", comes to apply or has at any time applied").
The noble Lord said: In moving Amendment No. 117 I wish to speak also to Amendments Nos. 118, 119, 120 and 121. Following privatisation, the nuclear stations in Scotland will be owned and operated by Scottish Nuclear Limited (SNL), which is to be owned by the two electricity companies in proportion to their relative size. SNL will be the nuclear site licensee and as such will be responsible for decommissioning the stations and disposing of nuclear waste once generation has ceased.
As things stand, SNL, as a subsidiary company of South company or related company to North company, would be unable to obtain funds from its parents without their agreement. While it is expected that the parents would agree, the Government recognise that it is prudent to ensure that there is a direct route to enforce the long-term liabilities against them. Accordingly, Clause 8 as currently worded will enable a licence condition to be included in the licences granted to the two electricity companies as successors to the Scottish boards to ensure that funds are made available to meet those long-term liabilities. I beg to move.
On Question, amendment agreed to.
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendments Nos. 118 to 121 en bloc.
Page 7, line 10, leave out ("which") and insert ("engaging in the operation of a nuclear generating station in Scotland while").
Page 7, line 11, leave out ("is").
Page 7, line 13, leave out ("is").
Page 7, leave out lines 15 and 16.
On Question, amendments agreed to.
Clause 8, as amended, agreed to.
Clause 9 [General duties of licence holders.]
[Amendments Nos. 122 to 125 not moved.]
Lord Peston Lord Peston moved Amendment No. 125A:
Page 7, line 25, after ("co-ordinated") insert ("secure").
The noble Lord said: We are a trifle puzzled by the wording of Clause 9(2)(a) because it seems to us—and this is a point that has been made by many noble Lords on all sides of the Chamber—that while efficiency is important, co-ordination is important and an economical system is important, although I am not always convinced that the words have any meaning in this context, what the ordinary household or firm wants is a secure supply. In common parlance, the one thing they do not want to happen is for the lights to go out.
We are just a little taken aback that the word "secure" has not been included here. We do not want a lengthy debate at this late hour but should like to place on record our view that we should place a secure supply ahead of any other consideration. I should be willing to pay more for a service in which the lights definitely do not go out in preference to a cheaper service in which occasionally the lights do go out. I beg to move.
Lord Renton: In our language the word "secure" has several different meanings. I think a better word here would be "safe". One should always choose the word of Anglo-Saxon rather than of Latin origin, and the short word rather than the long word. "Safe" is therefore better than "secure".
Baroness Hooper: I certainly agree with the noble Lord, Lord Peston, that it is of vital importance that security of supply should be maintained. We believe that our proposals ensure that, because under the licence the director will already be responsible for, among other things, ensuring that electricity suppliers have proper forward plans for contracting adequate capacity. He is also responsible under the Bill for implementing standards of performance to be achieved by public electricity suppliers and, perhaps most fundamentally, for ensuring that public electricity suppliers meet their basic obligation to supply. The director has powers under Clause 25 of the Bill to ensure that those conditions and statutory requirements are fully met by licence holders. I trust that that goes some way to reassuring the noble Lord.
11.15 p.m.
Lord Peston: I thank the noble Baroness. I am somewhat reassured but equally mystified because that answer would take a number of other items out of the Bill because the director has responsibilities for them. The point that I was making—given that one has written a sentence under Clause 9(2)(a)—is why it is not a better sentence. However, we can return to the matter on another occasion. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Viscount Hanworth Viscount Hanworth moved Amendment No. 126:
Page 7, line 28, at end insert ("; and
(c) to consider and promote the utilisation of power plant which both generates electricity and utilises effectively its surplus heat.").
The noble Viscount said: I have spoken about combined heat and power at considerable length, as has the Minister. Here is another opportunity to insert the provision,
"to consider and promote the utilisation of power plant which both generates electricity and utilises effectively its surplus heat".
I hope that the Minister might feel that this is a more suitable place for the provision to be inserted.
Baroness Hooper: As the noble Viscount said, we have been into the arguments on combined heat and power. I believe that the provisions of Clause 3 will ensure that energy efficiency, which will include in some cases CHP schemes, is properly taken into account. I must reiterate that we believe that it is quite wrong to require any industry to act uncommercially. Our approach of encouraging competition and leaving consumers to make their own well informed decisions is likely to produce the best results. I therefore regret that I cannot at this point accept the amendment of the noble Viscount.
Viscount Hanworth: I did not have much hope. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 9 shall stand part of the Bill?
Lord Peston: Clause 9 is the clause under which one would most properly discuss the whole question of the grid, merit order, optimising the generation of electricity and producing the optimum investment decision. It is my view—and, I believe, the view of my noble friends—that, if the industry were privatised in that way, it would simply be unable to optimise in the way that the nationalised industry does by the merit order system and the grid.
There was a small debate on the matter at Second Reading and noble Lords disagreed about that. At some point, I wish to try to demonstrate my view of the matter; namely, that an optimum solution to the power problem is not possible within the privatised system. However, it is clearly not appropriate to do so at this hour because it would take us a certain amount of time. I believe that, on behalf of my noble friend Lord Williams of Elvel and myself, we should place on record our doubts about whether a privatised industry in this particular form could possibly meet the optimisation standards that an integrated, nationalised industry could do. I simply give warning that I hope to be able to demonstrate that my view of the matter is correct and that the Government's view is incorrect; but that is all that I have to say at the moment.
Clause 9 agreed to.
Clause 10 agreed to.
Before Schedule 3: [Amendment No. 127 not moved.]
Schedule 3 [Compulsory acquisition of land etc. by licence holders]:
[Amendments Nos. 127A to 127F not moved.]
Lord Monk Bretton Lord Monk Bretton moved Amendment No. 128:
Page 77, line 28, at beginning insert—
("With the exception of section 5 (3) of the Land Compensation Act 1961 (Special suitability … of the land for any purpose to which it could be applied only in pursuit of statutory powers, etc),").
The noble Lord said: I wish to move this amendment in the name of my noble friend Lord Stanley of Alderley. I shall be brief.
The effect of the amendment on compulsory purchase compensation would be to exclude the application of Section 5 (3) of the Land Compensation Act 1961 which states that compensation shall not take into account,
"The special suitability … of the land for any purpose … to which it could be applied only in pursuance of statutory powers".
On 7th March the Department of the Environment issued a consultation paper very largely in response to the case which was made on the Channel Tunnel Bill in 1987. I welcome this consultation paper but I remain concerned, as does my noble friend, that it starts by affirming that no change will be made to the fundamental principle that compensation should be based on the value of the land disregarding any effect upon it of the proposal giving rise to the compulsory purchase. That is what it is about.
The first question that I should like to ask my noble friend is whether he thinks that this amendment is in the right Bill or whether I am about to be told that it is not. If it is in the right Bill, the next question to which I should like an answer is: is it acceptable in principle? If it is not acceptable in principle, I should not at this late hour wish to occupy the time of the Committee any longer because I think it would be preferable to argue the case on the Water Bill. If the case is successfully argued on the Water Bill, I would wish to leave the option open to introduce it again on this Bill at Report stage. I beg to move.
Lord Sanderson of Bowden: In answer to my noble friend, I think it is up to him to decide whether or not this amendment is suitable for bringing forward on this Bill. So far as the question of whether it is acceptable in principle, I think that when I have finished speaking he will understand that the answer from me is no.
The effect of the amendment would be to disapply Section 5(3) of the Land Compensation Act 1961 from the procedure in paragraph 14 of Schedule 3 of the Bill for assessing compensation on compulsory purchase. Section 5 of the 1961 Act says, in effect, that when assessing compensation account shall not be taken of the special suitability of the land for the purpose for which it is being compulsorily purchased if the land could only be applied for that purpose through the exercise of statutory powers.
I sympathise with my noble friend because this matter has been raised most forcefully by the Country Landowners' Association and the National Farmers' Union. We have looked very closely at it, as no doubt my noble friend has realised. However, I have to say that the Electricity Bill would broadly carry forward the provisions currently in the Electricity Act 1947.

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The existing provisions for compensation on compulsory purchase are intended to give the landowner the value that he would have realised on the open market in the absence of the proposed scheme for which the land is being acquired. Compensation is therefore based on the market value of the land, taking account of any planning permission or "hope value" which attaches to it, except in so far as the actual or prospective development might have taken place apart from the scheme associated with the compulsory purchase.
The Government have carefully reviewed these provisions against the background of the concern expressed by my noble friend this evening about the powers of compulsory purchase that the privatised companies will have. Our view is that the market value of the land as assessed under the existing compensation provisions remains a fair measure of the loss to be compensated where any land is acquired compulsorily. I should point out that this general approach has been supported by the Royal Institution of Chartered Surveyors.
So in answering my noble friend, I am afraid that I give him cold comfort, but at least he understands where the Government stand in relation to the Electricity Bill.
Lord Monk Bretton: I thank my noble friend for that reply, cold comfort or no. I am afraid that it is cold comfort. I have pages of ammunition that I might have fired off at this stage but, as I said, I shall keep it for now. With that said, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 3 agreed to.
Schedule 4 [Other powers etc. of licence holders]:
[Amendments Nos. 128A to 128K not moved.]
Schedule 4 agreed to.
Schedule 5 [Water rights for hydro-electric generating stations in Scotland]:
The Earl of Balfour The Earl of Balfour moved Amendment No. 128L:
Page 91, line 1, at end insert ("and (iv) the river purification authority.").
The noble Earl said: I am sure that those Members of the Committee who live in Scotland or have a connection with Scotland are well aware of the magnificent work that is being done by the river purification boards. It is for that reason that I think they should also be included in the list of people who are to be notified in the draft order.
These boards are connected with the flow of water. I am sure that my noble friend Lord Sanderson is aware of this situation in Scotland. I hope that he will at least seriously consider that river purification authorities should be added to this list. I beg to move.
Lord Macaulay of Bragar: Perhaps I may say that there is a degree of sympathy with the amendment on this side of the Chamber. It has our support.
Lord Sanderson of Bowden: On first looking at this amendment put forward by my noble friend it seems both logical and helpful. However, it is one that we feel to be unnecessary and I shall try to demonstrate why.
Paragraph 8 of Schedule 5 sets out the process of the notification of the various authorities and public undertakers of a draft order authorising a licensed generator to abstract, divert or use water as necessary for the purpose of constructing, extending or operating a hydro-electric generating station in Scotland.
As drafted, paragraph 8(b) of the schedule ensures that such notification is served on any affected river purification authority in the form of a notice which will include those details set out in paragraph 7. The Committee will see that they are already quite comprehensive. If my noble friend's amendment were to be accepted, it would place an obligation on the applicant to serve on the affected river purification authority both the notices above and also a copy of the draft order as specified for water authorities and regional, district and island councils in paragraph 8(a).
It may be argued that river purification authorities should be placed on a par with such authorities. However, our aim is to avoid placing an unnecessarily heavy and bureaucratic burden on applicants while ensuring adequate dissemination and publication of their proposals.
At page 91, paragraph 8(b) states:
"on the river purification authority within whose area the watercourse or loch affected is situated".
I trust that with that information my noble friend will see fit to withdraw his amendment.
The Earl of Balfour: I am most grateful to my noble friend for his reply. I had missed those last few words. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 129:
Page 91, line 7, leave out ("and").
The noble Lord said: This amendment is required to correct a minor drafting error which resulted from an amendment to paragraph 8(b) of Schedule 5 to the Bill during its passage through another place. The word "and" at this place in the paragraph is grammatically superfluous. I therefore commend this amendment to the Committee. I beg to move.
On Question, amendment agreed to.
Schedule 5, as amended, agreed to.
The Earl of Dundee: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Hayle Harbour Bill [H.L.]
Reported from the Unopposed Bill Committee with amendments.
House adjourned at half-past eleven o'clock.

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