Sitting of 25 October 1989

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRAYERS
  PRIVATE BUSINESS
    MIDLAND METRO BILL
    Lords amendments agreed to.
Oral Answers to Questions
  FOREIGN AND COMMONWEALTH AFFAIRS

    Cyprus
    Mr. Cox: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the present position on the United Nations-sponsored intercommunal talks on Cyprus.
    The Minister of State, Foreign and Commonwealth Office (Mr. Francis Maude): The intercommunal talks are stalled at the moment. The United Nations Secretary-General recently met the leaders of the two communities and will shortly present to them his views on how the talks can resume. We hope that this happens soon. We shall continue to give Mr. Perez de Cuellar our full support.
    Mr. Cox: While I note that reply, is the Minister aware that President Vassiliou's efforts in seeking to unite the island of Cyprus have sadly come to nothing? As this country is one of the guarantor powers, does the Minister consider that the Government should now start to take a far more involved role and seek to bring together the Governments of Greece and Turkey to work out a settlement that will unite the island of Cyprus once again? How long does he really believe that the United Nations can be expected to carry on alone in this crucial issue?
    Mr. Maude: We take our responsibilities in respect of Cyprus extremely seriously, as the hon. Gentleman suggests that we should and as our contribution to the United Nations peacekeeping force indicates. As the hon. Gentleman will recognise, there can be no solution unless the leaders of the two communities reach agreement with each other. To do that, there must be talks. As I have said, we must give full support to the United Nations Secretary-General in his good offices mission to enable that to happen. We very much hope that it will be successful
    Mr. Michael Marshall: My hon. Friend will be aware that the next Inter-Parliamentary Union conference is to take place in Cyprus. Will he take this opportunity to assure the House that he will encourage our diplomatic
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    representatives to facilitate the process of dialogue with all communities in Cyprus, including the freedom of movement which will be necessary in that process?
    Mr. Maude: I say again that we shall do all that we sensibly can to encourage the process of dialogue to renew and to encourage the leaders of both communities to come to those talks in a spirit of good will, determined to reach an agreed settlement.
    Mr. John D. Taylor: As Turkish Cypriots fully support the United Nations objective of a bizonal independent arid sovereign Cyprus, will the Government confirm that they will act even-handedly to both the Turkish Cypriots arid the Greek Cypriots? Does the Minister agree that intercommunal talks would be better facilitated if there were less provocation by the Greek Cypriots? For example, I refer to the pending visit to Bulgaria by the President of Greek Cyprus—a most tactless move—and the recent display of armaments on 1 October, including missiles and armed helicopters in southern Cyprus.
    Mr. Maude: It is no secret that we think that it would be better if the President of Cyprus did not visit Bulgaria. It is important that the talks are renewed and that both sides go to them with good will, determined that the talks succeed. Our approach has been scrupulously evenhanded and will continue to be so.
    Mr. Cyril D. Townsend: Should not the Commonwealth be very strongly congratulated on its always outstanding statements on Cyprus? Will my hon. Friend continue to set his face like flint, as did his predecessors, against any form of recognition of the unilateral declaration of independence in the north of Cyprus?
    Mr. Maude: I am grateful to my hon. Friend for his compliments, which I accept on behalf of my right hon. Friend the Foreign Secretary who conducted the negotiations at the Heads of Government meeting. On recognition of the north of Cyprus, it remains our view that the declaration of independence was an illegal act.
    Mr. Anderson: Does the Minister recall the passage in the Commonwealth communiqué which says that dialogue in the UN-sponsored talks—the intercommunal talks—is the only means by which progress can be made to a peaceful solution? Will he confirm that that at least was one area about which the Prime Minister did not dissent or write a separate document? Will he urge the Turks to use whatever leverage they have with the Turkish Cypriots to end any stalemate, urge them to come to the table on the basis of the United Nations talks and impose no preconditions?
    Mr. Maude: The hon. Gentleman's first point is so silly that it does not merit a reply. With regard to his second point, I repeat that we will do what we can to encourage the leaders of both communities to come to the talks in a spirit of good will.
    Mr. Gale: Can my hon. Friend confirm that the Government are still totally opposed to the presence of the Turkish army of occupation in northern Cyprus? Will he further confirm that there is no question of Turkey joining the European Community while that army is there?
    Mr. Maude: Certainly those are matters which will have to be discussed. It is essential that the Greek Cypriots and the Turkish Cypriots have confidence in any settlement

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    that is eventually agreed. That is a precondition for any settlement and the matters to which my hon. Friend has referred will have to be discussed and decided upon.

    EC Social Charter
    Mr. Wallace: To ask the Secretary of State for Foreign and Commonwealth Affairs what is the policy of Her Majesty's Government towards those clauses of the European Community's draft social charter which would ensure the participation of the work force in decision-making within companies.
    The Secretary of State for Foreign and Commonwealth Affairs (Mr. John Major): We are fully committed to the principle of employee involvement, but we believe that it would be misguided to harmonise practice throughout Europe. It is for businesses to develop the arrangements that best suit their own circumstances and those of their staff.
    Mr. Wallace: May I take this opportunity to congratulate, and possibly sympathise with the right hon. Gentleman, on his first appearance at the Dispatch Box in his new office? Does he agree that there is a public mood that in 1992 with the single market, there will be much more than just a business man's Europe and that employees should be able to participate in some of the objectives including having a better say in the industries in which they work? Can the right hon. Gentleman confirm reports that the French Government are proposing a revised draft of the European social charter in some way to trade off employee rights against closer European monetary integration? What is the Government's response to that? Does he accept that both objectives should be pursued with much greater vigour than the Government have shown hitherto?
    Mr. Major: I am grateful to the hon. Gentleman for his congratulations. That was most kind of him. With regard to the social charter, of course the Government accept that there is a social dimension to the Community. Our concern is that the social charter is the wrong way to achieve the objectives that many people want. With regard to the French attitudes, we all wait to see what President Mitterrand has to say in Strasbourg later today.
    Sir Anthony Meyer: Since many clauses in the social charter are modelled on British practices or, if amended, could be made acceptable to British practice, would it not be better for my right hon. Friend to exercise his talent for reconciliation to achieve some agreement rather than appear to reject the whole concept out of hand?
    Mr. Major: At the moment our concern is that the Commission draft is a confused mixture of general principles and detailed intrusive regulation. We believe that that would have the practical effect of restricting the freedom of workers and employers to negotiate the most suitable arrangements for themselves and their staff. The employers and employees should negotiate those matters and there should be no imposition from above.
    Mr. Benn: Is the Government's position not now clearly established, as it was in Kuala Lumpur, in that they sign an agreement and repudiate it later? The Prime Minister
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    agrees to 1992, but repudiates its implications later. Is that not an example of complete consistency by the Prime Minister and the Foreign Secretary?
    Mr. Major: No such agreement signed in Kuala Lumpur was repudiated. The right hon. Member for Chesterfield (Mr. Benn) will be aware of the many Cabinet decisions to which he subscribed which he apparently subsequently denounced in his memoirs.
    Mr. Arbuthnot: Can my right hon. Friend confirm that our record on social policy is really rather good compared with that of some of our competitors? Does he also agree that in the circumstances the last thing that we need is a social charter imposed by other countries?
    Mr. Major: I can certainly confirm that. The essence of any social policy is to create employment. We have created far more jobs in the United Kingdom over recent years than any of our European partners. That creation of jobs should be the centre of any social dimension.
    Mr. Kaufman: May I congratulate the right hon. Gentleman on his appointment and wish him a happy and constructive spell at the Foreign and Commonwealth Office? I assure him that he can rely on security of job tenure at the Foreign Office, unless, of couse, he hears Mr. Charles—[Interruption.]
    Mr. Speaker: Order. The question is about the EEC.
    Mr. Kaufman: It is indeed, and I was offering my congratulations to the right hon. Gentleman and saying that I hope that his job tenure will be acceptable to him and to Mr. Charles Powell.
    Since the right hon. Gentleman has responded to the hon. Member for Orkney and Shetland (Mr. Wallace) by drawing attention to the question of harmonisation, why is it that the Prime Minister traipses from international conference to international conference seeking to wreck harmonisation? She did so at the EC summit—[Interruption.]
    Mr. Speaker: Order.
    Mr. Kaufman: She did so at the EC summit from a position of total isolation by opposing the social charter, at the NATO summit from a position of total isolation by opposing negotiations on short-range nuclear weapons and at the Commonwealth summit from a position of total isolation by repudiating the agreement that the right hon. Gentleman had negotiated.
    Mr. Speaker: Order. I ask for brief questions.
    Mr. Kaufman: My question follows directly on the subject of harmonisation. The Prime Minister repudiated an agreement that the right hon. Gentleman had negotiated to fulfil her role as the enthusiastic accomplice of apartheid in South Africa.
    Will the right hon. Gentleman—[Interruption.]
    Mr. Speaker: Order. I am reluctant to say this to the right hon. Member for Manchester, Gorton (Mr. Kaufman), but such questions take a long time and that is unfair to the House.
    Mr. Kaufman: Will the right hon. Gentleman stand up against Mr. Powell on such issues in the same way as the

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    Chancellor is standing up against Sir Alan Walters? Is he going to be a Foreign Secretary or is he going to be the man who sweeps up after the Lord Mayor's procession?
    Mr. Major: First, I am grateful to the right hon. Gentleman for his congratulations. I shall make up my own mind about my responsibilities as Foreign Secretary, as I was appointed to do.
    If I might bring the right hon. Gentleman back to the social charter, in terms of bringing harmony he may recall the Madrid agreement of Heads of Government that said that tackling unemployment was the top priority and that there should he a clear respect for subsidiarity. If anyone failed to bring harmony it was the Commission, which wholly ignored the instructions of Heads of Government.
    Several Hon. Members rose——
    Mr. Speaker: Order. We are making extremely slow progress. We have dealt with only two questions in about 20 minutes. I ask for brief questions as we shall then receive brief answers.
    Mr. Andrew MacKay: Unlike the right hon. Member for Manchester, Gorton (Mr. Kaufman), may I ask a question about the social charter? Is my right hon. Friend aware that most of my colleagues believe that the social charter has no relevance to the single market? We believe that this sovereign Parliament should decide such matters, not the EC.
    Mr. Major: I entirely share my hon. Friend's view and that is, of course, what the principle of subsidiarity means.

    Hong Kong
    Mr. Morley: To ask the Secretary of State for Foreign and Commonwealth Affairs when he next plans to visit Hong Kong; and if he will make a statement.
    Mr. Major: I hope to visit Hong Kong early in the new year. Precise dates have not yet been determined.
    Mr. Morley: Is the Foreign Secretary somewhat relieved that after the Commonwealth conference's unanimous agreement to a statement on the position in Hong Kong, no member of the Commonwealth repudiated the statement one hour after making it? As the Foreign Secretary moves more towards the idea of compulsory repatriation, and there is much talk of economic migrants as against refugees, how does the right hon. Gentleman intend to determine between economic migrants and genuine refugees in the case of Hong Kong?
    Mr. Major: First, on a point of information, the hon. Gentleman may care to know that no communiqué was repudiated—[Interruption.]—by the Government. The communiqué was accepted in its entirety and without demur. However, there were four areas in the communiqué on which I expressly declined to agree with my Commonwealth colleagues and the subsequent press statement set out the British position on those areas. In the case of Hong Kong, the international community has accepted for some time that all those screened out as non-refugees should, in due course, be returned to Vietnam. Ultimately, that is the only possible solution.
    Sir Peter Blaker: May I congratulate my right hon. Friend not only on his appointment, but on securing the statement in the communiqué by the Commonwealth
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    Heads of Government to which he has just referred, relating to the return to Vietnam of those boat people who are determined not to be genuine refugees? How far have my right hon. Friend's talks about monitoring such returns proceeded with the Government of Vietnam?
    Mr. Major: Those talks are continuing. I hope that they will be concluded before too long, but, as yet, they are not wholly finished. We are concerned to ensure that when Vietnamese refugees and non-refugees return to Vietnam they are treated properly and fairly and we shall seek to ensure that monitoring arrangements are made to safeguard them.
    Mr. Heffer: On a point of order, Mr. Speaker.
    Mr. Speaker: Does the point of order arise out of the question?
    Mr. Heffer: This is a very important matter, Mr. Speaker. Hon. Members cannot properly hear what is being said. I do not know whether it has anything to do with the new television cameras, but we cannot hear the questions being put to the Minister, or the replies. Hon. Members sitting over here certainly cannot hear. Will you look into this matter, so that we can at least hear what is being said?
    Mr. Speaker: Perhaps I should ask hon. Members to speak up. I had some difficulty in hearing the last question—[Interruption.] Order. I shall have the microphones looked into.
    Mr. Foulkes: I do not think that my hon. Friend's complaint will apply to me. Will the Secretary of State consider giving some assistance to the Government of Vietnam to help with the refugee settlement programme? Will he also do what he can to ensure proper safeguards and monitoring for the return of refugees? Does he understand that although Opposition Members support encouragement and persuasion to return for those not accepted as refugees, we shall strongly oppose forced repatriation? Will he now rule out force as part of his orderly return programme?
    Mr. Major: I shall take the hon. Gentleman's final point first. It is becoming increasingly clear that voluntary repatriation cannot provide the comprehensive solution that is necessary. We are seeking to counsel and persuade the Vietnamese boat people to return to Vietnam. We are receiving the full support of the United Nations High Commissioner for Refugees in doing so. I invite the hon. Gentleman to recognise that the problem in Hong Kong is now acute. It is getting worse and cannot be borne much longer. It will soon be necessary to tackle the thorny question of involuntary repatriation. I shall do that as and when it is necessary. I shall most certainly be seeking safeguards for those people who return, because I regard that as a most important matter.
    Mr. Lester: Will my right hon. Friend agree, before he approves any agreement with the Vietnamese Government, to consider the concerns of many colleagues in the House about the prospect of 33,000 Vietnamese non-refugees being forcibly returned to Vietnam? Will he also undertake to consider our views that any aid should be directed to their resettlement—difficult enough in many communities in Vietnam—and that the United Nations or the European Community should examine much more

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    carefully the rehabilitation of the whole of Vietnam's infrastructure and development, now that it has changed its policy to one of development and a market economy? Unless we do that, many of us will be deeply worried about reluctant or compulsory repatriation, given that people will be returned to the abject poverty from which they have come.
    Mr. Major: Vietnam stands a better chance of getting what it wants from the international community if and when it fulfils its international obligations—that point must be understood. The key element is an unequivocal and public commitment by Vietnam to taking back all non-refugees in safety and dignity, and we shall seek that.
    I understand my hon. Friend's concerns; I wish there were an easy alternative, but neither he nor anyone else has yet found one. The whole international community made it perfectly clear at Geneva and elsewhere that it was not prepared to take non-refugees. It is therefore not reasonable to accept that they will have to stay in Hong Kong for ever and I cannot, will not and do not accept that—[Interruption.]
    Mr. Speaker: Order. May I say to those who are asking questions from a sedentary position that that does not help us to hear?

    Afghanistan
    Mr. Wareing: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on Her Majesty's Government's policy towards Afghanistan.
    Mr. Major: We have consistently supported efforts to replace the present regime in Kabul with a truly representative Government acceptable to the majority of Afghans. That is the necessary preliminary to any lasting settlement and to the voluntary return of Afghan refugees.
    Mr. Wareing: It is now nearly six months since the Soviet Union did the right thing and withdrew its troops from Afghanistan. It is perfectly clear that the Government in Kabul is far from being doomed as we were told that it would be, but we do know that the feudal terrorists are pouring rockets into Kabul onto hospitals and buses, and innocent people are being killed. Will the Foreign Secretary assure us that he will use all his energies to ensure that neither the United States nor Pakistan gives succour or arms to these terrorists?
    Mr. Major: In view of what the hon. Gentleman has just said, he may be both surprised and shocked to know that in the six months since Russian troops left, 4,000 supply flights from Russia have gone to Najibullah.
    Mr. Ron Brown: Does the Minister accept and understand why the regime has not been defeated? It is because the workers, peasants and above all the revolutionary women who support the Government have made it clear that they back enlightened change and reforms. It is about time that this Government understood those things and that one cannot defeat a revolution with popular backing. Despite all the dirty tricks, the regime in Afghanistan will prevail.
    Mr. Major: I fear that I cannot agree with the hon. Gentleman. So enlightened is the regime to which he refers that 5 million people have fled from it.

    Consular Officials (Spain)
    Mr. Baldry: To ask the Secretary of State for Foreign and Commonwealth Affairs how many British nationals consular officials in Spain helped this summer.
    The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Tim Sainsbury): Between 1 June and 30 September 1989, British consular posts in Spain received 41,818 visitors and 49,538 telephone inquiries.
    Mr. Baldry: I warmly welcome my hon. Friend to his new position. Does he recognise that the whole House wants to thank consuls, and particularly our honorary consuls in Spain, for the work that they undertake on behalf of British nationals? Given that at least 500,000 British nationals are now permanently resident in Spain, is my hon. Friend confident that the present consular set-up is adequate to deal with their legitimate needs—for example, to deal with their pension and other benefit inquiries?
    Mr. Sainsbury: I thank my hon. Friend, both for his welcome to me and for what he said about the excellent work done by our consular network in Spain. We have a particularly extensive network of consuls—12 consulates and six honorary consuls—and we keep both the size and the location of that network under review in the light of demands on its services and the resources available to us.
    Mr. Dalyell: Is the Minister aware that the all-party heritage committee received great kindness and efficiency from our consul in Seville? Will the Minister give a mind to the problems likely to arise in July when it is a sweltering 110 deg and there is a huge influx of people for Expo? Has that been considered?
    Mr. Sainsbury: I am glad to hear from the hon. Member that the all-party committee was well received by our consul in Seville. I note what he said about the problems that could arise during Expo—we are considering them—in the light of the temperature and the demands on resources in that area.

    Bulgaria
    Mr. Stern: To ask the Secretary of State for Foreign and Commonwealth Affairs what representations have been made to the Bulgarian Government in connection with their policy of Bulgarianisation of the Turkish minority.
    The Minister of State, Foreign and Commonwealth Office (Mr. William Waldegrave): We have always used every opportunity to urge the Bulgarian Government to improve their treatment of their Turkish minority. Most recently, I raised this with the Bulgarian ambassador on 20 September.
    Mr. Stern: Will my hon. Friend use the influence of the Government and the regard with which our right hon. Friend the Prime Minister is held in both countries to take forward the process of diplomacy between Bulgaria and Turkey so that they start to talk and stop bouncing people backwards and forwards across the frontier?
    Mr. Waldegrave: We shall certainly do that and, with our European Community partners, we hope that there

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    will be a meeting in Kuwait between the Foreign Ministers of the two countries to discuss this issue. I believe that that would be sensible.
    Mr. Litherland: Before any representation is made, will the Minister refer to the resolution emanating from the report of, and the in-depth debate that took place in, the Council of Europe in Strasbourg in September, when blame was laid on both countries for the human tragedy and make every effort to bring about a dialogue between the two countries?
    Mr. Waldegrave: I am well aware of that report, and I think that the hon. Member's advice is wise.
    Mr. Nicholas Winterton: The Bulgarians are treating their Turkish minority population with great brutality. Can my hon. Friend tell the House what replies he got during his recent visit and discussions with the Bulgarian ambassador?
    Mr. Waldegrave: The result was not satisfactory. There has long been a policy of Bulgarianisation—making use of the language impossible, and so on. There are some signs that aspects of that are being abandoned. If so, that is welcome, but the huge scale of the movements across the border when it was open show how much pressure those Turkish people have been under.

    Mr. Douglas Forsyth
    Sir Geoffrey Johnson Smith: To ask the Secretary of State for Foreign and Commonwealth Affairs if his Department will make further representations to the Egyptian Government regarding the failure of the Egyptian authorities to return to Mr. Douglas Forsyth control and possession of his villa in Egypt.
    Mr. Sainsbury: No. Mr. Forsyth's father accepted compensation from funds provided by Egypt under the 1959 agreement for the presence of a sitting tenant when the villa was handed back.
    Sir Geoffrey Johnson Smith: My hon. Friend will understand that that is a very disappointing reply. Is he aware that the compensation paid to the Forsyth family was in respect of capital depreciation and that there is not a scrap of evidence to support the Foreign Office's contention that that was in any way compensation for loss of the control and possession of their villa, to which they are entitled under the Anglo-Egyptian agreement of 1959? As this family has been virtually defrauded by the attitude of the Foreign Office, will the Minister agree to meet me and the family so that we may see justice done and discuss this very legal point?
    Mr. Sainsbury: I congratulate my hon. Friend on the energy and diligence with which he has pursued this case over a long period. He knows that the facts go back a long way. I am unhappy to have to say that our interpretations of the legal position do not agree. The advice I have received does not confirm his view that Mr. Forsyth's father did not receive compensation for the loss of vacant possession of his villa. I shall be happy to see my hon. Friend to discuss the matter further.
    Mr. Skinner: Has the Anglo-Egyptian house compensation system been drawn to the attention of the Chancellor of the Exchequer, who got kicked out of his house by the
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    Prime Minister, acting like Lady Porter? What sort of a points system is the Government running when they kick out a man with a family and kids and put in a bloke who has no family?
    Mr. Speaker: Order. I do not think that it is in Egypt, is it?
    Mr. Sainsbury: The hon. Gentleman raises his point of view with his usual ingenuity and delicacy. However, I fear that I cannot find any particular connection with the villa in Egypt and Mr. Forsyth.

    Lebanon
    Mr. Bowis: To ask the Secretary of State for Foreign and Commonwealth Affairs what steps he is taking to promote a cessation of the conflict in the Lebanon.
    Mr. Waldegrave: With our European partners we continue to support fully the Arab League committee of three Heads of State in their efforts to bring peace to Lebanon. We welcome the agreement reached at Ta'if by the Lebanese parliamentary deputies.
    Mr. Bowis: Does my hon. Friend agree that there will never be peace in the Lebanon while the Syrian occupation troops are there? Does he further agree that there is considerable disquiet that the Arab League agreement, welcome as the efforts have been to reach it, appears to legitimise the position of Syrian troops in the Lebanon? Does he also agree that the Government and people of Britain will never compromise with a regime that has been shown by Amnesty International to be guilty of atrocities and which has been shown by other investigations to be guilty of air terrorism?
    Mr. Waldegrave: Our views about some of the activities of the Syrian Government are well known to the House. We believe that it is right and necessary for the sovereignty of Lebanon for all foreign troops, including the troops of the state of Israel, to leave that country. We also strongly believe that in the tragic situation of that country the agreement gives the best hope of restoring proper sovereignty.
    Mr. Galloway: The Minister could acknowledge rather more than he has in his answer the extent to which the fly in the ointment, or rather the dangerous angry hornet in the ointment in the Lebanon, is Syria. The Minister welcomes the Ta'if agreement, but surely an agreement that gives the Syrians two years to withdraw from Beirut and an unlimited time to withdraw from the Lebanon as a whole is rather less than perfect.
    Mr. Waldegrave: I do not think that it is my job to say whether, ideally, a better agreement could have been written. We think that we have here the beginning of a process that could lead to peace in the Lebanon. We see nothing better on offer. There is certainly no hope of the Syrians being driven by force out of the Lebanon. I agree with the hon. Gentleman that if we are right and the agreement could lead to peace, it will only be if the Syrians withdraw—and the sooner the better.
    Mr. Brazier: Does my hon. Friend agree that the record of the Syrians in Lebanon as shown by Amnesty International is one of almost unparalleled brutality? Their record in air terrorism extends from Hindawi to

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    Lockerbie, yet we are endorsing an agreement reached at Ta'if that would leave the Syrian Army controlling almost every polling station in three quarters of Lebanon to elect a Government who are then supposed to discuss with the Syrians the possibility of their withdrawal.
    Mr. Waldegrave: My hon. Friend seems to be endorsing some other solution. We do not see any hope for the Lebanon other than that brought about by the work of the Algerians, the Saudis, the Moroccans and the Arab world as a whole. That is the only hope at present and it is incumbent on all those such as my hon. Friend who wish Lebanon well to do their best to support the agreement.
    Ms. Short: While I am sure that all reasonable people agree with the Government that we must back the Arab League's efforts, does the Minister agree that there will not be proper long-term peace in Lebanon without a settlement between the Israelis and the Palestinians? Is it not over time for the British and American Governments to put more pressure on Israel to have proper negotiations with the Palestinians for a settlement there that will assist the achievement of peace in Lebanon?
    Mr. Waldegrave: I agree with the hon. Lady that the poison in the whole region is the lack of a settlement of the fundamental problem between the Palestinians and the Israelis. None the less, the restoration of peace and a sovereign Lebanon would do a great deal to help bring about peace in that region as well. My right hon. Friend the Foreign Secretary recently met the Foreign Minister of Israel and once again made our views clear.

    Council of Ministers
    Mr. Yeo: To ask the Secretary of State for Foreign and Commonwealth Affairs when he last attended the European Council of Ministers; and what subjects were discussed.
    Mr. Maude: My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs attended the meeting of the Foreign Affairs Council on 3 October. Issues discussed included the television broadcasting directive, assistance to Poland and Hungary, trade relations with the United States and Japan and renegotiation of the Lomé convention.
    Mr. Yeo: Does my hon. Friend agree that enthusiastic British support for rapid progress towards a free market for goods and services inside the Community should be accompanied by robust resistance in the Council of Ministers to some of the bureaucratic lunacies emerging from the Commission?
    Mr. Maude: We shall resist bureaucratic lunacies from whatever source they emanate. We look extremely carefully at every Commission proposal to ensure that it is properly framed within the competence of the Communities and under the proper legal base. My hon. Friend is right to draw attention to our enthusiastic support for the completion of the single market, and to our pleasure that this is now broadly following a liberal approach of the sort that we can strongly support.
    Sir Russell Johnston: Following the Government's enlightened decision not to sell the Hawk trainer aircraft to Iraq, have they taken the opportunity to follow this
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    issue up in the European Council, with a view to trying to ensure that the Iraqis do not get the Alpha jet as a substitute?
    Mr. Maude: I cannot tell the hon. Gentleman that that matter has been pursued in the Foreign Affairs Council, but certainly my right hon. Friend and I will want to reflect on what he said to see whether that is appropriate.
    Mr. Gow: How much satisfaction is given to my hon. Friend by the prospect of one of Her Majesty's Ministers being summoned before the Court of the European Community to answer allegations about the condition of our drinking water?
    Mr. Maude: We have every confidence that the quality and standard of our drinking water are exceptionally good. We strongly regret the action that the European Commission has taken. The Commission accepts that we are doing everything that we can to bring water up to the required standard. No one has suggested, not even the Commission, that any time scale more rapid than that which we propose is possible, and its action in taking infraction proceedings against us, as it has done against many other member states, is irrelevant and harmful.
    Mr. Robertson: I welcome the Minister to the Dispatch Box on his first appearance as the Minister with responsibility for Europe. His predecessor, the right hon. Member for Wallasey (Mrs. Chalker), was ditched because she showed a slight glimmer of independence of mind. It seems clear from his career that he is in no such danger. Let me bring him back to the subject of the social charter. Why is it, according to today's newspapers, that when even all the other Right-wing champions of the social charter seem willing to accommodate the foot-dragging views of the British Government, we will still not agree to the charter? What sort of Community does the Minister envisage when we stand alone so consistently and regularly against proposals that all our partners believe are essential for the correct working of the single European market?
    Mr. Maude: The hon. Member must not be too fulsome in his compliments. I can tell him what sort of social charter we would find acceptable. It would be a charter that accepted the principle that the Heads of Government enunciated at the Madrid Council with respect to the principle of subsidiarity, which leaves as much as possible to the national practices and voluntary traditions in other countries. The present draft of the social charter does not do that. That is a matter of considerable regret, and we hope that there can be further changes that will make it acceptable.
    Mr. Aitken: Can my hon. Friend explain why he did not resist signing the television directive, which surely has nothing whatever to do with the creation of a single market? It was condemned by the United States Government representative, Carla Hills, as being one of the worst examples of protectionism and anti-Americanism and fortress Europeanism, and it makes it mandatory for television companies throughout Europe to carry 50 per cent. of European content. This has nothing to do with the single market.
    Mr. Maude: I can remember discussing this matter with my hon. Friend on another occasion when I was in my previous role. This is an important measure which does have something to do with the single market, because it

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    prevents national Governments from erecting barriers to transfrontier broadcasting. It is quite an important single market measure. My hon. Friend may not have read it as carefully as others have. The formulation in the directive makes it clear that it is not possible for countries, the European Commission or national Governments to insist in all circumstances that over 50 per cent. of the programming is of European content. The United States Government made representations at a late stage in the discussions and the formulation that was arrived at was much more liberal than that which was proposed originally, to the extent that considerable embarrassment was caused to the French Government.

    Spanish Prime Minister
    Mr. Norman Hogg: To ask the Secretary of State for Foreign and Commonwealth Affairs when he last met the Spanish Prime Minister, Felipe Gonzalez, and if the social charter was discussed on that occasion.
    Mr. Maude: My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs has not yet met the Spanish Prime Minister.
    Mr. Hogg: Is the Minister aware of the briefing given by Commissioner Papandreou in London last week, when she emphasised the flexibility of the social charter and spoke of the plurality of cultures that it contains? Will the Minister give an undertaking that the Government will learn something about consensus and will seek by 1992 to produce a commitment to Europe that at least will provide equality for all the people rather than just for some?
    Mr. Maude: I am aware of the briefing that Commissioner Papandreou gave in London last week. The problem is that it is difficult to recognise the social charter, as it is drafted, from the words that the commissioner used.
    Mr. Teddy Taylor: Does my hon. Friend agree that he and the Spanish Foreign Secretary should publish explanatory notes for British and Spanish trade unionists and others so that they can be aware that when the directives go through workers who believe that they are not getting union recognition rights, such as those at GCHQ and elsewhere, will be able to go to the European Court instead of this Parliament or their employers, and those who believe that they are not being paid satisfactory wages can go to the European Court instead of this Parliament or their employers? Why do not the Government publish a paper that explains what it is all about so that the British people can know before the directives go through?
    Mr. Maude: We have been at some pains to set out our concerns about the draft social charter as it is now framed. Our concerns include those to which my hon. Friend has referred. The more widely these issues are understood, the better it will be.
    Mr. Robert Hughes: Will the Minister take the earliest opportunity to express to Mr. Felipe Gonzalez the great outrage in Britain at Spain's refusal to return 30 children in defiance of court orders awarding custody, and despite the fact that Spain is a signatory to both the international convention and the Hague convention on custody? Will
    840
    the hon. Gentleman ask the Spanish Government immediately to enact domestic legislation that will give effect to the treaties that they have signed?
    Mr. Maude: The hon. Gentleman has raised an important and serious matter which I would wish to examine closely.
    Mr. Cash: When my hon. Friend met the Spanish Prime Minister, did the issue of minimum wages within the European Community arise? Did he address the issue in terms of the effect that it would have on jobs and investment in the United Kingdom and elsewhere in the European Community? Did he make it clear that the consequence of having a national minimum wage would be to create havoc for employment prospects here and elsewhere in the Community?
    Mr. Maude: The burden of my original answer was that my right hon. Friend had not yet met the Spanish Prime Minister. The points that my hon. Friend makes are very much those with which we seek to argue the case against a prescriptive social charter. I was interested to read in today's newspapers that the UNICE, the Europeanwide body of employers, reflects many of the same concerns, especially the disadvantageous effect that a minimum wage provision would have on the poorer parts of the Community.

    International Court of Justice
    Mr. Sillars: To ask the Secretary of State for Foreign and Commonwealth Affairs whether there are any proposals aimed at extending the jurisdiction of the International Court of Justice.
    Mr. Sainsbury: The non-aligned movement and the Soviet Union have both recently come forward with formal proposals in the United Nations General Assembly for fuller use of the International Court of Justice. The United Kingdom which is one of the minority of United Nations members that accept the compulsory jurisdiction of the court, is carefully considering those ideas.
    Mr. Sillars: Would the British Government support a proposition to extend the jurisdiction of the court so that Fourth world nations such as the Kurds, who have been subject to the most appalling tragedies, could take their state to that court?
    Mr. Sainsbury: The hon. Gentleman raises an interesting idea, but one which appears clearly to be outside the terms of reference of the International Court of Justice, which is concerned with disputes between member states. I suspect that there would be no little difficulty in defining which or what organisations or bodies should come under the hon. Gentleman's "Fourth world" definition, and who would be responsible for deciding which should qualify.
    Sir John Stokes: Is my hon. Friend aware that the International Court of Justice is entirely unlike the English courts of justice, which have given this country justice for many centuries? Is he further aware that judges at the International Court of Justice are political appointees, who are not always especially distinguished? Would we not do far better to stay with the English courts?
    Mr. Sainsbury: I am sure that there is no stronger defender of our courts than my hon. Friend. However, the point and purpose of the International Court of Justice is to resolve disputes between states. I suspect that even those who are the greatest admirers of the British system of justice would be reluctant to refer such disputes to our domestic courts.
    Mrs. Clwyd: Do the ideas put forward by the United Kingdom include the bringing to justice of war criminals such as Pol Pot, who is responsible for the genocide of up to 1 million people?
    Mr. Sainsbury: I must repeat that the International Court of Justice is concerned with disputes between states, not matters involving individuals.
    Mr. Kilfedder: Will the Government favourably consider an extension of the jurisdiction of the International Court of Justice as part of, perhaps, a constitutional settlement in Northern Ireland?
    Mr. Sainsbury: As I said earlier, as the court is responsible for considering disputes between states, I cannot perceive an immediate application of its power or role in the position suggested by the hon. Gentleman.

    Central America
    Mr. McKelvey: To ask the Secretary of State for Foreign and Commonwealth Affairs when he last visited central America; and if he will make a statement.
    Mr. Sainsbury: My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs has not yet had an opportunity to visit central America. I visited Belize on 5 to 7 October. I hope to visit other countries in the region in due course.
    Mr. McKelvey: I hope that the Minister has an opportunity to visit Nicaragua. However, in the event that he might not get there, can he say how much financial assistance the Government are prepared to give to the Nicaraguan Government to ensure free and fair elections next year? Will he consider giving some financial assistance for the training of the officers who have to run the elections? Were not those two of the areas that the British observer noted as having a distinct lack of resources?
    Mr. Sainsbury: I am glad to note the hon. Gentleman's concern that there should be free and fair elections in Nicaragua. I hope that that view is shared throughout the House. I hope that the elections will allow equal rights to both the Government and Opposition and a fair opportunity for both of access to the media. These matters are primarily for the Nicaraguan Government, but we have made clear to them our concern that there should be free and fair elections.
    Mr. Jacques Arnold: When considering the forthcoming elections in Nicaragua, will my hon. Friend exercise extreme caution in the light of the limitations on free speech in that country, its record on giving fair broadcasting time to the various contenders in elections and its disgraceful record on political prisoners?
    Mr. Sainsbury: My hon. Friend voices some of the widely held concerns about the election outlook for Nicaragua. We are sending an official observer—the
    842
    highly respected Dr. David Browning—and we shall await with considerable interest his views on the conduct of the elections.
    Mr. Watson: Will the Minister report on the outcome of the Prime Minister's meeting with President Cristiani of E1 Salvador in London last month? Will he tell us whether the Prime Minister condemned the increasing violation of human rights in that country where it is estimated that 296 people have either disappeared or been assassinated in the first three months of the ARENA Government? If, as I suspect, the Prime Minister did not voice that condemnation then, will the Minister now do so on behalf of the Prime Minister and her Government?
    Mr. Sainsbury: I have made clear to their Foreign Secretary our anxiety about human rights. We condemn abuses of human rights wherever they occur. I hope that the whole House will join me in deploring the particularly reprehensible recent example when the 23-year-old daughter of the commander of the armed forces' centre of studies was shot in her car going to university. That is a breach of human rights which deserves universal condemnation.

    Middle East
    Mr. Cyril D. Townsend: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the search for peace in the Palestinian/Israeli dispute.
    Mr. Archer: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the middle east peace process.
    Mr. Waldegrave: We fully support Egyptian efforts to seek clarification of Mr. Shamir's useful elections proposal and to promote talks in Cairo between the Israeli Government and Palestinians from inside and outside the occupied territories. We look to Israel to respond positively.
    Mr. Townsend: Is it my hon. Friend's view that if the Palestinian people were granted the right of self-determination, which they certainly should be under the United Nations charter, they would inevitably voice support for an independent Palestinian state? Has not the time come for the British Government to commit themselves to working towards the creation of such a state in the middle east?
    Mr. Waldegrave: We are working towards self-determination. It will then be entirely up to the Palestinians what they choose. The chairman of the PLO has said that they would then seek some form of federation—confederation is probably a better word—with Jordan. Self-determination is the first issue.
    Mr. Archer: Is there not a disturbing credibility gap between the protestations of Mr. Arafat that he has renounced terrorism and seeks peace, and the pronouncements of some of his close associates, including Abu Iyad, that the Palestinian strife must escalate in intensity? How are we to reassure the Israelis, at least until Mr. Arafat has publicly repudiated those sentiments?
    Mr. Waldegrave: I do not know what more the PNC can do to put on record that it now wishes to negotiate a

    843
    way to peace. It is worth noticing that Mr. Arafat is threatened with death by Mr. George Habash and others who oppose that policy. We have said many times in the House that if Israel does not respond within a reasonable time, there are bound to be people in the broad movement of the Palestinians who return to violence.
    Sir Dennis Walters: Bearing in mind that the Israeli Government have contemptuously dismissed every peace plan proposal put forward and that the United States Administration seem to be moving very slowly in the direction of putting some pressure on the Israeli Government, will my hon. Friend consider the possibility of a limited European initiative aimed at least at protecting the inhabitants of the West Bank and Gaza who continue to be terrorised by the Israeli occupying forces?
    Mr. Waldegrave: Britain and the European Community have increased help for the Palestinians in the occupied territories, and it is right that we should do so. I deplore the increasing economic pressure on Palestinians. It seems wholly self-defeating in terms of finding moderate leaders with whom to negotiate.
    Mr. Kaufman: I welcome what the Minister said about the Egyptian 10-point plan. Is the Minister aware that the day before yesterday I had the opportunity in Cairo of discussing it with President Mubarak who made it clear that he framed the plan with the maximum effort to make it palatable to the Israelis? Indeed, General Rabin has made it clear that the Israeli Labour party agrees with the
    844
    plan, and Israeli Labour Ministers tabled it in the Israeli Cabinet, where it was rejected. Is the Minister further aware that on Monday I had an opportunity to speak to Mr. Arafat, who made it clear that he was ready to go along with the Egyptian plan and take part with a mind delegation in discussions with the Israelis?
    Will the Minister use the particular pressure that the Government can exert on the United States Administration—who are themselves playing a constructive part—so that when Mr. Shamir visits Washington next month it can be made clear to him that he and his party are the sole remaining obstacles to a sensible dialogue to settle the Israeli-Palestinian and middle eastern disputes?
    Mr. Waldegrave: I welcome what the right hon. Gentleman has said. I share his understanding and belief that the American and Egyptian Governments—I pay tribute to the skilful diplomacy of the latter in recent months—are trying to build effective and practical bridges over which both sides can advance. If that is to lead anywhere, however, a response from Israel is essential. I do not think that it can possibly be fair for Israel to demand, as its objective, that it be allowed to pick the delegation of Palestinians that would then negotiate in the face-to-face talks that we all hope will begin soon.
    Mr. Devlin: On a point of order, Mr. Speaker.
    Mr. Speaker: Order. I will take it after the statement.

Social Security Benefits (Uprating)
3.30 pm
The Secretary of State for Social Security (Mr. Tony Newton): With permission, Mr. Speaker, I wish to make a statement about the uprating of social security benefits. The statutory instrument necessary to bring my proposals into effect will be laid before both Houses and debated. Uprating will take place for most benefits in the week beginning 9 April next year, the first full week in the tax year. The provisions will apply to both Great Britain and Northern Ireland.
Let me turn first to the main national insurance benefits. As the House knows, the increase in the retail prices index for the year to September 1989—which is the most up-to-date indicator available at the time when the uprating process has to start—is 7·6 per cent.
Our commitment to raise the basic pension in line with that figure will again be fully carried out. It will therefore rise by £3·30 a week for a single person—from £43·60 to £46·90—and by £5·30 a week for a couple—from £69·80 to £75·10. The same percentage increase will be applied to other national insurance benefits—including widows' pensions—to public service pensions, to industrial injuries benefits and to the war pensions scheme—although, in the last case, with some exceptions, in which I propose larger increases to which I will come later in my statement. Unemployment benefit will go up from £34·70 to £37·35 for a single person and from £56·10 to £60·40 for a couple, and sickness benefit from £33·20 to £35·70 for a single person and from £53·75 to £57·80 for a couple.
As for statutory sick pay paid through employers, the welcome growth in occupational sick pay schemes, which now cover more than nine people at work out of every 10, means that the rates that we set often bear little relation to what individuals actually receive in total sick pay. I intend a limited restructuring of the scheme to make it somewhat simpler to run—while concentrating additional resources more on the lowest-paid employees, who are generally less likely to be covered by occupational schemes—and at the same time make a saving of between £70 million and £80 million for the national insurance fund. The dividing line between the higher and lower rates, at present £84, will be set at the point where employers' contributions rise from 7 to 9 per cent., currently £115. The lower rate of SSP will be increased by rather more than the rate of inflation, by £3 to £39·25, and the higher rate by 40p to £52·50. As the standard rate of statutory maternity pay is the same as the lower statutory sick pay rate, that also has the advantage of bringing about a modest real increased entitlement for about 230,000 women.
Next, let me deal with the main long-term sickness and disability benefits. Invalidity benefit will, as usual, go up in line with retirement pension. The associated invalidity allowances will rise by 7·6 per cent., except for a marginally greater increase in the highest rate to take it to £10. Severe disablement allowance and invalid care allowance will both rise from £26·20 to £28·20; mobility allowance, now helping more than half a million people compared with only 100,000 10 years ago, from £24·40 to £26·25; and attendance allowance, now helping more than three quarters of a million compared with only about a quarter of million 10 years ago, from £23·30 to £25·05 at the lower rate and £34·90 to £37·55 at the higher rate.
846
I turn now to the income-related benefits—income support, housing benefit, community charge benefit and family credit. The index applied here is the retail prices index less housing costs: the use of that index simply reflects the fact that, for those in receipt of such benefits, housing costs are taken into account in their housing benefit itself, or through help with mortgage interest. The increase in that index in the year to September 1989 is 5·2 per cent. The main rates of income-related benefits will be uprated accordingly. The rate for a single person over 25 will go to £36·70, the rate for a single person aged 18 to 24 to £28·80, and the rate for a couple, where one or both are over 18, to twice that, at £57·60. That figure will also be the threshold for calculating family credit. Again, with some exceptions where I propose somewhat larger increases, the premiums will be increased, for example taking the extra payment for pensioners to £11·80 for over-60s, £14·40 for the over-75s, and £17·05 for the over-80s.
The general uprating I have so far described will add more than £2·5 billion to the Department's programme. Separately, we have already implemented two measures this month, to abolish the pensioners' earnings rule and to increase benefits for disabled and older pensioners on income support and housing benefit, which together will cost nearly £600 million next year. In the remainder of this statement, I will detail proposals which will increase expenditure on residential care and nursing homes costing about £100 million and additional measures amounting to around another £200 million in a full year. Those measures will help three groups whose priority is, I believe, recognised in all parts of the House—the less well-off pensioners; low-income families with children, including many lone parents; and the long-term sick and disabled, together with those who care so devotedly for them.
Before describing those measures—and there are some 20 of them—I should make it clear that, against the background of additional expenditure on that scale for the three priority groups, I am not able to propose an increase in child benefit as well. In coming to that conclusion, I have taken account of the fact that an increase in child benefit of itself does nothing for the least well-off—indeed it helps only those who do not receive income support and family credit. I have also taken account of the fact that the take-home pay for those on average male earnings has already increased in the past year by some £16 a week, and will have been further increased by up to £3 a week for the great majority of families as a result of this month's reduction in national insurance contributions—indeed, more where both partners are working. The introduction of independent taxation next April will bring further improvements for many. In these cirumstances, I think it right to concentrate extra help from social security on others.
In that context, I take first the less well-off families receiving family credit or income support. They will of course receive, through the uprating of income-related benefits, the same amount as they would have gained from any general child benefit increase, at a cost of around £100 million. In addition to that, and to some increases for disabled children and their families to which I shall come shortly, I am making five other improvements.
The family premium in income support will be increased from £6·50 to £7·35, which is 50p a week more than a straightforward uprating would have entailed. This will of course carry through into extra entitlement to housing benefit and community charge benefit also.

847
The adult credit in family credit will be increased from £33·60 to £36·35, which is £1 a week more than would otherwise have occurred, and the child credits will be increased so as to compensate fully for the decision not to uprate child benefit.
The lone parent premium in housing benefit and community charge benefit will be increased by 12·8 per cent. from £8·60 to £9·70. The amount that lone parents can earn without affecting their housing benefit entitlement will be increased from £15 a week to £25 a week. Those two changes will help 95,000 lone parents.
The maternity payment, which is given to those on income support or family credit who have a baby, will be increased by £15 to £100. The total cost of additional measures for the least well-off families is about £70 million in a full year. over and above the £100 million which gives them the full equivalent of a child benefit increase. They will help 1·5 million families, and will in particular give greater encouragement to lone parents who wish to work. They should also reinforce our efforts to increase the number of people who take advantage of family credit. In that regard, I am glad to be able to tell the House that family credit coverage rose by more than 40,000 to over 320,000 between March and July this year, which means that it is providing nearly twice as much help to over 50 per cent. more families than the old family income supplement. We plan a further campaign in the next few months to make it still more effective.
Next, I come to the less well-off pensioners, for whom I propose five beneficial changes. The most important relates to income support for those in residential care or nursing homes, about which much concern was expressed in the House during last week's debate on community care. I intend to increase payments for this purpose, at a cost of more than £100 million, to give increases in the income support limits of £10 a week for virtually every category of home, providing more help for 200,000 elderly and disabled people.
I shall also deal with an anomaly in the amount allowed for the personal expenses of those who are in hospital for a long time, which has the effect of leaving uncovered certain expenses that they continue to incur at home. To help them, the relevant allowance will be increased from 20 to 25 per cent. of the retirement pension—from £8·70 to £11·75 a week.
For elderly couples on income support, the capital rule that governs access to the social fund will be doubled from £500 to £1,000 to help to overcome the anxiety that many of them feel about money set aside for a funeral. For war widows, I shall increase the age allowances from £6·10 to £7 for those aged 65 to 69, from £12·20 to £13·50 for those aged 70 to 79 and from £15·30 to £20 for those who are 80 or over. In each case, that is substantially more than a straightforward uprating, and for the over-80s it is over £3·50 a week more. I shall also, as was indicated earlier this year, raise from £5 to £10 the amount of war pension or war widows pension that is disregarded in calculating entitlement to income-related benefits.
The full-year cost of those measures, of which the bulk is on residential and nursing care, is £115 million, and they will help 400,000 people. That is over and above the extra £200 million which this month's premium increases will next year be giving to 2·5 million elderly people.
Last, but not least, I come to the needs of long-term sick and disabled people and of those many relatives and others who do so much to help with their care. As a result of the
848
series of important surveys which we commissioned four years ago from the Office of Population Censuses and Surveys, we now know much more about disabled people and their circumstances. In the light of that, I intend to bring forward, within the next few months, and I hope before the turn of the year, proposals to improve the balance and structure of social security provision for them.
Such changes will necessarily take some time to develop and carry through. Meanwhile, however, there are pressing needs which should not wait, and I intend to make, at the next uprating, or as soon as practicable if the House agrees the necessary legislation, 10 immediate improvements which, for the convenience of the House, I will simply list.
First, the disability premium for adults in income-related benefits will be increased by £1·70 for a single person and £2·60 for a couple. That is £1 and £1·60 more respectively than a straightforward uprating, giving extra help to about 400,000 people.
Secondly, the disability premium for families on income-related benefits with disabled children will be aligned with the adult rate. That will more than double it from £6·50 to £15·40, giving extra help to 20,000 families.
Thirdly, a carers' premium will be introduced into income support for those receiving invalid care allowance, initially at a rate of £10 a week. That will help 30,000 carers.
Fourthly, as has already been announced, attendance allowance will be made available to the terminally ill without the normal six months waiting period. That is expected to help more than 50,000 people by up to £37·55 a week.
Fifthly, we shall now also scrap the rule that prevents payment of attendance allowance for children under two. That will give up to £37·55 a week extra to 3,000 families with severely disabled babies.
Sixthly, in consequence of these extensions of attendance allowance, invalid care allowance at £28·20 a week will also become available to many carers who would not otherwise qualify.
Seventhly, mobility allowance will be extended to the deaf-blind. That will give £26·25 a week more to about 3,000 people.
Eighthly, the amount that those receiving invalid care allowance can earn without affecting their ICA will be increased by 66 per cent., from £12 to £20 a week.
Ninthly, the amount that people on invalidity benefit or severe disablement allowance can earn without affecting those benefits, provided the work is medically certified as beneficial, will go up by 23 per cent. from £28·50 a week to £35 a week and they will be able to keep their benefit when they go on an employment rehabilitation course instead of the existing rehabilitation allowance which may be lower by £20 or more.
Tenthly, the independent living fund, which has proved so successful in assisting many exceptionally severely disabled people with their very special needs, for which the original provision for this year was £5 million, is being doubled immediately to over £10 million, and will be more than doubled again next year to more than £20 million.
The total full-year cost of these measures, over and above the normal uprating of disability benefits generally, will be about £100 million a year. They will improve the incomes of more than 500,000 seriously ill or disabled people and carers, in some cases by very substantial amounts. To give the House just one example, a family

849
with a very severely disabled baby, where one of the parents is staying at home as carer, will get more than £65 a week extra. A full schedule of the new benefit rates is in the Vote Office.
Next year, for the first time, social security spending will be over £1 billion each and every week. The new measures that I have described confirm the capacity of our reformed benefit system to focus more quickly and effectively on those with a special claim to our help. They will reinforce our policies for care in the community, and they underline our commitment to ensure that our country's greater prosperity is widely shared.
Following are the details:

Schedule of main proposed Social Security benefit rates from April 1990

Weekly rates unless otherwise shown

Old rates 1989

New rates 1990

Attendance allowance

higher rate

34·90

37·55

lower rate

23·30

25·05

Child benefit—each child

7·25

7·25

Child's special allowance

8·95

9·65

Community charge benefit

Personal allowances

single

18 to 24

27·40

28·80

20 or over

34·90

36·70

lone parent—18 or over

34·90

36·70

couple—one or both over 18

54·80

57·60

dependent children

under 11

11·75

12·35

11 to 15

17·35

18·25

16 to 17

20·80

21·90

18

27·40

28·80

Premiums

family

6·50

7·35

lone parent

8·60

9·70

pensioner

single

11·20

11·80

couple

17·05

17·95

pensioner (enhanced)

single

13·70

14·40

couple

20·55

21·60

pensioner (higher)

single

16·20

17·05

couple

23·00

24·25

disability

single

13·70

15·40

couple

19·50

22·10

severe disability

single

26·20

28·20

couple (one qualifies)

26·20

28·20

couple (both qualify)

52·40

56·40

disabled child

6·50

15·40

carers (from October 1990)

10·00

Allowance for personal expenses for claimants in hospital

8·70

11·75

Capital

upper limit

8,000·00

8,000·00

amount disregarded

3,000·00

3,000·00

Weekly rates unless otherwise shown

Old rates 1989

New rates 1990

child's limit

3,000·00

3,000·00

Tariff income

£1 for every complete £250 or part thereof between amount of capital disregarded and capital upper limit

Earnings disregards

where disability premium awarded

15·00

15·00

various specified employments

15·00

15·00

lone parent—in receipt of IS

15·00

15·00

lone parent—not in receipt of IS (from October 1990)

15·00

25·00

where the claimant has a partner

10·00

10·00

single claimant

5·00

5·00

Other income disregards

war disablement pension and war widows pension

5·00

10·00

voluntary and charitable payments

5·00

5·00

student's covenanted income

5·00

5·00

Expenses for subtenants

furnished or unfurnished

4·00

4·00

where heating is included, additional

7·00

7·35

Dependency increases

Adult Dependency increases For spouse or person looking after children, with:—

retirement pension on own insurance invalidity pension, unemployability supplement and, if beneficiary over pension age, unemployment benefit

26·20

28·20

non-contributory retirement pension, invalid care allowance and severe disablement allowance

15·65

16·65

sickness benefit if beneficiary over pension age

25·10

27·00

unemployment benefit

21·40

23·05

maternity allowance/sickness benefit

20·55

22·10

Child Dependency increases For each child with:—

retirement pension, widows benefit, invalidity benefit, invalid care allowance, severe disablement allowance, higher rate industrial death benefit, unemployability supplement and sickness/unemployment benefit if beneficiary over pension age

8·95

9·65

Earnings rules

Invalid care allowance

12·00

20·00

Unemployment benefit (daily rate)

2·00

2·00

Therapeutic earnings limit

28·50

35·00

Industrial injuries unemployability supplement permitted earnings level (annual amount)

1,482·00

1,820·00

War pensioners' unemployability supplement permitted earnings level (annual amount)

1,482·00

1,820·00

Adult dependency increases with sickness benefit where claimant is

(a) under pension age

20·55

22·10

(b) over pension age

25·10

27·00

maternity allowance

20·55

22·10

unemployment benefit where claimant is

(a) under pension age

21·40

23·05

Weekly rates unless otherwise shown

Old rates 1989

New rates 1990

(b) over pension age

26·20

28·20

retirement pension, invalidity pension, severe disablement allowance, unemployability supplement where dependant

(a) is living with claimant

34·70

37·35

(b) still qualifies for the tapered earnings rule

45·09

45·09

retirement pension, invalidity pension and unemployability supplement where dependant not living with claimant

26·20

28·20

severe disablement allowance where dependant not living with claimant

15·65

16·85

invalid care allowance

15·65

16·85

Child dependency increases level at which CDIs payable with long·term benefits are affected by earnings of claimant's spouse or partner

for first child

95·00

100·00

for each subsequent child

12·00

13·00

Family credit

Adult credit

33·60

36·5

Child credit

under 11

7·30

8·25

11 to 15

12·90

14·15

16 to 17

16·35

17·80

18

23·30

25·10

Applicable amount (ie taper threshold)

54·80

57·60

Capital

upper limit

6,000·00

6,000·00

amount disregarded

3,000·00

3,000·00

child's limit

3,000·00

3,000·00

Tariff income

£1 for every complete £250 or part thereof between amount of capital disregarded and capital upper limit

Disregards

war disablement pension and war widows pension

5·00

10·00

voluntary and charitable payments

5·00

5·00

student's covenanted income

5·00

5·00

Expenses for subtenants

furnished or unfurnished

4·00

4·00

where heating is included, additional

7·00

7·35

Guardian's allowance—each child

8·95

9·65

Hospital downrating

20 per cent, rate

8·70

9·40

40 per cent, rate

17·40

18·80

Housing benefit

Personal allowances

single

16 to 24

27·40

28·80

25 or over

34·90

36·70

lone parent

under 18

27·40

28·80

18 or over

34·90

36·70

couple

both under 18

41·60

43·80

one or both over 18

54·80

57·60

dependent children

under 11

11·75

12·35

11 to 15

17·35

18·25

Weekly rates unless otherwise shown

Old rates 1989

New rates 1990

16 to 17

20·80

21·90

18

27·40

28·80

Premiums

family

6·50

7·35

lone parent

6·60

9·70

pensioner

single

11·20

11·80

couple

17·05

17·95

pensioner (enhanced)

single

13·70

14·40

couple

20·55

21·60

pensioner (higher)

single

16·20

17·05

couple

23·00

24·25

disability

single

13·70

15·40

couple

19·50

22·10

severe disability

single

26·20

28·20

couple (one qualifies)

26·20

28·20

couple (both qualify)

52·40

56·40

disabled child

6·50

15·40

carers (from October 1990)

10·00

Allowance for personal expenses for claimants in hospital

8·70

11·75

Non-dependant deductions

rent rebates and allowances aged 18 or over and in remunerative work

9·15

10·85

others, aged 18 or over, or on Income Support and over 25

3·85

4·55

low earnings threshold

52·10

56·05

Service charges for fuel

heating

7·00

7·35

hot water

0·85

0·90

lighting

0·55

0·60

cooking

0·85

0·90

all fuel

9·25

9·75

Amount ineligible for meals

three or more meals a day single claimant

12·50

13·15

each person in family aged 16 or over

12·50

13·15

each child under 16

6·25

6·60

less than three meals a day

single claimant

8·30

8·75

each person in family aged 16 or over

8·30

8·75

each child under 16

4·15

4·35

breakfast only—claimant and each member of family

1·50

1·60

Capital

upper limit

8,000·00

8,000·00

amount disregarded

3,000·00

3,000·00

child's limit

3,000·00

3,000·00

Tariff income

£1 for every complete £250 or part thereof between amount of capital disregarded and capital upper limit

Earnings disregards

where disability premium awarded

15·00

15·00

various specified employments

15·00

15·00

lone parent—in receipt of IS

15·00

15·00

lone parent—not in receipt of IS (from October 1990)

15·00

25·00

where the claimant has a partner

10·00

10·00

Weekly rates unless otherwise shown

Old rates 1989

New rates 1990

single claimant

5·00

5·00

Other income disregards

war disablement pension and war widows pension

5·00

10·00

voluntary and charitable payments

5·00

5·00

student's covenanted income

5·00

5·00

Expenses for subtenants

furnished or unfurnished

4·00

4·00

where heating is included, additional

7·00

7·35

Income Support

Personal allowances

single

under 18—usual rate

20·80

21·90

under 18—higher rate payable in specific circumstances

27·40

28·80

18 to 24

27·40

28·80

25 or over

34·90

36·70

lone parent

under 18—usual rate

20·80

21·90

under 18—higher rate payable in specific circumstances

27·40

28·80

18 or over

34·90

36·70

couple

both under 18

41·60

43·80

one or both over 18

54·80

57·60

dependent children

under 11

11·75

12·35

11 to 15

17·35

18·25

16 to 17

20·80

21·90

18

27·40

28·80

Premiums

family

6·50

7·35

lone parent

3·90

4·10

pensioner

single

11·20

11·80

couple

17·05

17·95

pensioner (enhanced)

single

13·70

14·40

couple

20·55

21·60

pensioner (higher)

single

16·20

17·05

couple

23·00

24·25

disability

single

13·70

15·40

couple

19·50

22·10

severe disability

single

26·20

28·20

couple (one qualifies)

26·20

28·20

couple (both qualify)

52·40

56·40

disabled child

6·50

15·40

carers (from October 1990)

10·00

Maximum amounts for accommodation and meals in residential care homes

old age

140·00

150·00

very dependent elderly

155·00

165·00

mental disorder (not handicap)

140·00

150·00

drug/alcohol dependence

140·00

150·00

mental handicap

165·00

175·00

physical disablement

(a) (under pension age)

200·00

210·00

Weekly rates unless otherwise shown

Old rates 1989

New rates 1990

(b) (over pension age)

140·00

150·00

others

140·00

150·00

maximum Greater London increase

23·00

23·00

nursing homes

mental disorder (not handicap)

195·00

200·00

drug/alcohol dependence

190·00

200·00

mental handicap

205·00

215·00

terminal illness

235·00

245·00

physical disablement

(a) (under pension age)

235·00

245·00

(b) (over pension age)

190·00

200·00

others (including elderly)

190·00

200·00

maximum Greater London increase

23·00

23·00

Amounts for meals where these cannot be purchased within the accommodation (daily rate)

breakfast

1·10

1·10

midday meal

1·55

1·55

evening meal

1·55

1·55

Allowances for personal expenses for claimants in private and voluntary residential care and nursing homes personal allowance

10·05

10·55

dependent children

(a) Under 11

5·10

4·30

(b) 11 to 15

6·05

6·35

(c) 16 to 17

7·00

7·35

(d) age 18

10·05

10·55

hospital

8·70

11·75

local authority (Pt III) accommodation

8·70

9·40

the Polish home Ilford Park

maximum amount for accommodation and meals

140·00

150·00

personal expenses for claimant

13·25

13·95

personal expenses for partner

13·25

13·95

personal expenses for dependent children

(a) Under 11

4·10

4·30

(b) 11 to 15

6·05

6·35

(c) 16 to 17

7·00

7·35

(d) age 18

11·95

12·55

Housing costs

deduction for non-dependants

aged 18 or over and in remunerative work

9·15

10·85

others, aged 18 or over, or on Income Support and over 25

3·85

4·55

low earnings threshold

52·10

56·05

Deduction for direct payments

fuel debt 5 per cent, rate

1·75

1·85

fuel debt 10 per cent, rate

3·50

3·70

arrears of housing costs

1·75

1·85

arrears of water rates

1·75

1·85

Deductions for arrears of Community Charge

single debtor

1·75

1·85

couple debtors both with IS

2·75

2·90

Reduction in benefit for strikers

18·50

19·50

Capital

upper limit

6,000·00

6,000·00

amount disregarded

3,000·00

3,000·00

child's limit

3,000·00

3.000·00

Tariff income

£1 for every complete £250 or part thereof between amount of capital disregarded and capital upper limit

Weekly rates unless otherwise shown

Old rates 1989

New rates 1990

Disregards

standard earnings

5·00

5·00

higher earnings

15·00

15·00

war disablement pension and war widows pension

5·00

10·00

voluntary and charitable payments

5·00

5·00

student's convenanted income

5·00

5·00

Expenses for subtenants

furnished or unfurnished

4·00

4·00

where heating is included, additional

7·00

7·35

Industrial death benefit

Widow's pension

higher rate

43·60

46·90

lower rate

13·08

14·07

Industrial disablement pension

18 and over, or under 18 with dependants

100 per cent.

71·20

76·60

90 per cent.

64·08

68·94

80 per cent.

56·96

61·28

70 per cent.

49·84

53·62

60 per cent.

42·72

45·96

50 per cent.

35·60

38·30

40 per cent.

28·48

30·64

30 per cent.

21·36

22·98

20 per cent.

14·24

15·32

Under 18

100 per cent.

43·60

46·90

90 per cent.

39·24

42·21

80 per cent.

34·88

37·52

70 per cent.

30·52

32·83

60 per cent.

26·16

28·14

50 per cent.

21·80

23·45

40 per cent.

17·44

18·76

30 per cent.

13·08

14·07

20 per cent.

8·72

9·38

Maximum life gratuity (lump sum)

4,730·00

5,090·00

Unemployability Supplement

43·60

46·90

plus where appropriate an increase for early incapacity

higher rate

9·20

10·00

middle rate

5·80

6·20

lower rate

2·90

3·10

Maximum special hardship allowance/ reduced earnings allowance

28·48

30·64

Maximum retirement allowance

7·12

7·66

Constant attendance allowance

exceptional rate

57·00

61·40

intermediate rate

42·75

46·05

normal maximum rate

28·50

30·70

part·time rate

14·25

15·35

Exceptionally severe disablement allowance

28·50

30·70

Invalid care allowance

26·20

28·20

Invalidity benefit

Invalidity pension

43·60

46·90

Invalidity allowance

higher rate

9·20

10·00

middle rate

5·80

6·20

lower rate

2·90

31·0

Maternity allowance

33·20

35·70

Maternity payment

85·00

100·00

Weekly rates unless otherwise shown

Old rates 1989

New rates 1990

Mobility allowance

24·40

26·25

One·parent benefit

5·20

5·60

Pneumoconiosis, byssinosis, workmen's compensation (supplementation) and other schemes

Total disablement allowance and major incapacity allowance (maximum)

71·20

76·60

Partial disablement allowance

26·20

28·20

Unemployment supplement plus where appropriate increases for early incapacity

43·60

46·90

higher rate

9·20

10·00

middle rate

5·80

6·20

lower rate

2·90

3·10

Constant attendance allowance

exceptional rate

57·00

61·40

intermediate rate

42·75

46·05

normal maximum rate

28·50

30·70

part-time rate

14·25

15·35

Exceptionally severe disablement allowance

28·50

30·70

Lesser incapacity allowance

maximum rate of allowance

26·20

28·20

based on loss of earnings over

34·90

37·55

Retirement pension

Category A or B

43·60

46·90

Category B (lower)—husband's insurance

26·20

28·20

Category C or D—non·contributory

26·20

28·20

Category C (lower)—non·contributory

15·65

16·85

Additional pension

(increased by 7·6%)

Increments to basic and additional pension, contracted out deductions (from pre April 1988 earnings) and graduated retirement benefit

(increased by 7·6%)

Contrated out deductions and increments to contracted out decuctions (from post April 1988 earnings1)

(increased by 4·6%)

Graduated retirement benefit (unit)(pence)

5·71

6·14

Addition at age 80

·25

·25

Severe disablement allowance

26·20

28·20

Sickness benefit

Over pension age

41·80

45·00

Under pension age

33·20

35·70

Social fund

Capital limit—aged 60 and over

500·00

1,000·00

Statutory maternity pay

Earnings threshold

43·00

46·00

Lower rate

36·25

39·25

Statutory sick pay

Earnings threshold

43·00

46·00

Standard rate threshold

84·00

125·00

Lower rate

36·25

39·25

Standard rate

52·10

52·50

Unemployment benefit

Over pension age

43·60

46·90

Weekly rates unless otherwise shown

Old rates 1989

New rates 1990

Under pension age

34·70

37·35

Occupational pension abatement

35·00

35·00

War pensions

Disablement pension (100 per cent, rates)

private or equivalent

71·20

76·60

officer (£ per annum)

3,712·00

3,994·00

Age allowances

40 per cent.-50 per cent.

5·00

5·40

over 50 per cent, but not over 70 per cent.

7·75

8·35

over 70 per cent, but not over 90 per cent.

11·10

11·95

over 90 per cent.

15·50

16·70

Disablement gratuity (base figures for calculation purposes only)

specified minor injury

4,730·00

5,090·00

unspecified minor injury

2,601·50

2,799·50

Unemployability allowance

personal

46·30

49·80

adult dependency increase

26·20

28·20

increase for each child

8·95

9·65

Invalidity allowance

higher rate

9·20

10·00

middle rate

5·80

6·20

lower rate

2·90

3·10

Constant attendance allowance

exceptional rate

57·00

61·40

intermediate rate

42·75

46·05

normal maximum rate

28·50

30·70

part-time rate

14·25

15·35

Comforts allowance

higher rate

12·30

13·20

lower rate

6·15

6·60

Mobility supplement

27·10

29·15

Allowance for lowered standard of occupation (maximum)

28·48

30·64

Exceptionally severe disablement allowance

28·50

30·70

Severe disablement occupational allowance

14·25

15·35

Clothing allowance (£ per annum)

higher rate

97·00

104·00

lower rate

61·00

66·00

Education allowance (£ per annum) (maximum)

120·00

120·00

War widow's pension (private)

widow

56·65

60·95

childless widow under 40 age allowance

13·08

14·07

(a) age 65 to 69

6·10

7·00

(b) age 70 to 79

12·20

13·50

(c) age 80 and over

15·30

20·00

children's allowance

12·60

13·40

Orphan's pension

13·80

14·70

Unmarried dependant living as spouse (maximum)

54·60

58·90

Rent allowance (maximum)

21·55

23·20

Weekly rates unless otherwise shown

Old rates 1989

New rates 1990

Adult orphan's pension (maximum)

43·60

46·90

Widower's pension (maximum)

56·65

60·95

Widow's benefit

Widow's payment (lump sum)

1,000·00

1,000·00

Widowed mother's allowance

43·60

46·90

Widow's pension

standard rate

43·60

46·90

age related

age 54 (49)

40·55

43·62

53 (48)

37·50

40·33

52 (47)

34·44

37·05

51 (46)

31·39

33·77

50 (45)

28·34

30·49

49 (44)

25·29

27·20

48 (43)

22·24

23·92

47 (42)

19·18

20·64

46 (41)

16·13

17·35

45 (40)

13·08

14·07

1 Contracted out deductions and increments (post April 1988). Scheme is responsible for 3 per cent. Balance of 4·6 per cent, paid by State.

Note:
For deaths occuring before 11 April 1988 refer to age-points shown in brackets.
Mr. Robin Cook: May I begin with those parts of the statement to which the Opposition can give an unqualified welcome? First, we warmly welcome the introduction of a carers' premium on income support. As the Secretary of State will be aware, it remedies one of the worst injustices of the cuts of last April, when carers found themselves the sole group on long-term supplementary benefit who were denied any premium on the transfer to income support. We welcome the introduction of such a premium. We regret that, for the past two years, carers have been left without it.
We also welcome the changes to attendance allowance, particularly the extension of attendance allowance to the terminally ill and to children under two. The Secretary of State will have had it pointed out to him, I am sure, that during the course of the Social Security Act 1988 my hon. Friends the Members for Preston (Mrs. Wise) and for Coventry, South-East (Mr. Nellist) were particularly vigorous in pressing that point on the Government and, at the time, the Government were particularly vigorous in resisting both changes.
But the Secretary of State cannot pretend that the comparatively minor changes that he has just announced to disability benefits are the comprehensive review of disability benefits that we were promised after the study conducted by the Office of Population Censuses and Surveys. As the Secretary of State is aware, that survey identified 6·5 million disabled people in Britain——
The Minister for Social Security (Mr. Nicholas Scott): It was 6·25 million.
Mr. Cook:—my figure includes the under 16-year-olds—whose needs cannot possibly be met by an additional £100 million. Neither can an extra £1 on the disability premium possibly meet the depths of poverty revealed by

859
the OPCS study. May I, therefore, press the Secretary of State to make it clear that he remains committed to that comprehensive review of disability benefits?
I also congratulate the Secretary of State on having recruited another 40,000 claimants to family credit. I congratulate him on the fact that that brings the numbers up to two thirds of the number that the Secretary of State originally predicted would be on family credit. In case any hon. Members consider that family credit is now an efficient benefit, will the Secretary of State confirm that the additional numbers that he has announced today have been purchased by advertising expenditure which works out at £120 for every additional claimant? The extraordinary advertising costs necessary to recruit that modest increase makes it all the more incomprehensible that the Secretary of State has chosen to freeze child benefit, which, without advertising, reaches 98 per cent. of mothers.
May I at least congratulate the Secretary of State on Monday's Lobby briefing, in that he attempted to persuade the Treasury to let him uprate child benefit. Upon which arguments did he place the greatest stress in his negotiations with the Treasury? Did he place greatest stress on the dishonour brought on the Conservative party by a freeze in child benefit for the third year running since the general election during which every Conservative Member stood on a manifesto that pledged them to continue child benefit? Or did the Secretary of State stress the dishonesty of pretending that he had carried out his annual duty to review the level of child benefit? Is he aware that over the past three years of the freeze, the level of child benefit has sunk by a fifth?
Which mother did the Secretary of State meet in the course of his review who told him that the cost of bringing up a child has gone down by a fifth over the same period? Or did the Secretary of State point out to the Treasury the sheer hypocrisy of a party that boasts of being the party of the family, which cannot find an extra 50p for the family budget? Does not the Secretary of State understand that so many young mothers with small children live in first-time buyers' homes where budgets have been wrecked by Conservative mortgage rates? Will the Secretary of State now at least find the courage to do the House the courtesy of informing the House and the nation that he is a member of a Cabinet which wants to be rid of child benefit and that Britain, as it limps towards 1992, is the only country with a Government who are not prepared to recognise anywhere in the benefit or tax system the extra cost of families with children?
The Secretary of State has again increased income support by the retail prices index less housing costs. Will he confirm that this year that reduces the increase by one third? In view of the large difference between the increase in income support and the increase in national insurance benefits, how many pensioners are likely to find themselves floated off entitlement to means-tested benefit?
I want to press the Secretary of State about two particularly desperate groups on income support. The Secretary of State referred to the thousands of old people who have been encouraged to go into private nursing homes on the assurance that the Department of Social Security will meet their costs. They now find that the benefit does not cover their bills. Is the Secretary of State aware that many of my hon. Friends have cases in their constituencies where the gap between the old person's benefit and the private home fee is £30, £40 or £50 a week?
860
An increase of £10 a week in the benefit will go nowhere towards plugging that gap. Will the Secretary of State admit that the £10 he has just announced is no more than the 5·2 per cent. increase to which they are entitled on a weekly payment of £190?
The fees of those homes will go up by more than £10 this year and that will leave old people with a further gap to meet if they are to keep a roof over their heads.
May I press the Secretary of State on a group whom he omitted from his statement and who are on income support? I refer to the stark desperation of the 200,000 claimants who are entitled to no increase because they are still on transitional protection and to whom today's statement is wholly irrelevant. Next April will be the third year running in which they have had no increase. They still need the extra heating and the special diet for which they used to get allowances, but which they now cannot afford. I plead with the Secretary of State for an amnesty for those cases on transitional protection so that they may get the full uprating.
The Secretary of State has again announced an increase in the basic state pension, but it is not a penny over the minimum necessary to match price increases. Will he confirm that if the link with earnings had been preserved under his Government, the figures he has announced today for the state pension would have meant an increase in the single person's pension of £12·65 over the present level and, on the married person's pension, of £20 a week over the present level? Is he aware that, last April, the cumulative total in the national insurance fund was a record surplus of £9,900 million? Why will the Treasury not let him spend some of that surplus on the pensions for which working people have paid their contributions to that fund?
Is he aware that, this year, the cost to the national insurance fund of the 2 per cent. bribe in personal persons schemes is already £1·5 billion over budget? Will he confirm that that sum alone would have doubled the sum he announced today relating to the increase in the state pension? If he really believes in targeting, surely it would be better to target that expenditure to help pensioners in poverty than to subsidise the private pensions industry.
The Secretary of State will be aware that during the 11 years of this Government the basic pension has gone up by a beggarly 2 per cent. in real terms. In the five years of the previous Labour Government it went up by 20 per cent. in real terms. Those figures show up the different priorities we attach to the state pension.
Since the Secretary of State has said that his announcement is intended to ensure that the greater prosperity of the nation gets through to those on benefit, why does he not go back to the Treasury and remind the Chancellor of his many speeches on Britain's economic miracle? He should ask his right hon. Friend when that greater prosperity will get through to the millions of pensioners dependent on the basic state pension, who should not be abandoned in their old age to the stress and distress of a life in poverty.
Mr. Newton: I would have found the latter part of the hon. Gentleman's remarks somewhat more credible but for the fact that the previous Labour Government were unable even to sustain their own undertakings about the way in which they would uprate retirement pensions; and but for the fact that pensioners' average total net incomes have been rising far faster under this Government than

861
under the previous Labour Government. The latest figures show that, between 1979 and 1986, those incomes rose by 23 per cent. against only 0·6 per cent. a year, or 3 per cent. over the whole period when the hon. Gentleman and his friends were in office. The principal reason for that was, of course, the roaring inflation over which the Labour Government presided.
The second principal reason for the substantial increase in pensioners' average net incomes going far beyond what occurred under the previous Labour Government is the very growth of occupational and other pension schemes, which we have been sucessfully encouraging still further by the development of personal pensions.
The hon. Gentleman made several observations about family credit, child benefit and the review of benefits for disabled people. I shall refer to each of them. First, as I emphasised in my statement, the key point about family credit is that that benefit is now far more effective than the old family income supplement in taking substantial help to the less well-off families in work. The effectiveness of that benefit will be further increased by the steps that I have taken today. I make no apology for the scale and importance of the advertising campaign that we have mounted to ensure that that benefit is effective. We shall continue with the campaign.
As for disability benefits, I note with some pleasure the hon. Gentleman's welcome—albeit grudgingly—at least for the range of new improvements that I announced at the conclusion of my statement. If the hon. Gentleman had been listening to my statement with the care that I would have hoped for, he would have heard me say clearly that it is a package of immediate improvements and that within a few months—by the turn of the year, I hope—the Government will be coming forward with a fuller and more strategic response to the information that we have gained from the OPCS surveys. That is absolutely clear. There is no way in which I am suggesting that what I have announced today—important though it is—is the full and final answer to the greater information that we now have available.
Finally, I refer briefly to the hon. Gentleman's comments on child benefit. I shall tell the hon. Gentleman what I had in mind in considering the balance—it had to be a balance—between increasing child benefit and doing a variety of other things. It was against a background of rising real incomes for those in work and of further improvements in their position through the reduction in national insurance contributions that have already taken place and that are likely to occur in other ways as a result of changes in taxation, to which I also referred, that I came firmly to the conclusion that I would rather spend the sum of money that I outlined in my statement on the less well-off families, the poorer pensioners and on the sick and disabled and their carers. I believe that that sense of priorities will be widely shared.
Several Hon. Members rose——
Mr. Speaker: Order. I draw the attention of the House to the fact that we have a heavy day ahead of us. The Secretary of State mentioned in his opening statement that there will be a statutory instrument and a debate so I ask for brief questions and answers today, please.
Mr. Nicholas Bennett: Will my right hon. Friend confirm that the Labour party, which is so concerned now about child benefit, voted against the reductions in income tax in the last two Budgets which will help the people who will not get an increase in child benefit this year? Does my right hon. Friend agree that the best way to help those on the lowest incomes is to target it, as he has done, on those who do not pay income tax?
Mr. Newton: I agree with my hon. Friend that whatever the rate of child benefit it is right to ensure that we have special measures to help less well-off families both in work and out of work. Again, I make no apology for having concentrated primarily on those groups in part of the proposals that I have outlined.
Mr. Frank Field: As the Secretary of State is a known advocate of child benefit and he has now been defeated on this issue, what advice can he offer to his friends in the House? Does he agree that it would be gesture politics of the worst order now merely to call yet again for an increase in child benefit when it has been frozen for the third year running? Should not an alternative strategy be advanced? Does the Secretary of State accept that the best way forward would be a reintroduction of child tax allowances? Does he agree that such a move would benefit practically every working family with children? At a later stage, could not that money be put back into the child benefit scheme so that in next year's negotiations on this front, the right hon. Gentleman would have many more supporters among his hon. Friends who would be in favour of that move, including the Prime Minister?
Mr. Newton: I have noted with interest not only what the hon. Gentleman has just said, but the various press articles and other comments that he has made on similar lines. Our policy remains, as is required by law, to review the rate of child benefit annually in the light of all the relevant circumstances. That is what I have done and, in the light of all the relevant circumstances, I have come to the conclusions that I have outlined.
Sir Ian Gilmour: While I congratulate my right hon. Friend on his many welcome announcements this afternoon, does he agree that as this is the third year running that the Government have made the mean and wrong-headed decision to freeze child benefit that can only signify that it is the firm and considered—if unaccountable—view of the Government that at all levels of income couples with children have no greater expenses than couples without them or single people?
Mr. Newton: Clearly, the existence of child benefit is at variance with that proposition. As I told the hon. Member for Birkenhead (Mr. Field) just now, we look each year at all the circumstances and in particular at the needs of those who will not be helped by child benefit. This year, as on earlier occasions, we have come to the conclusion that there are better ways of spending the money involved.
Mr. Archy Kirkwood: But surely the Secretary of State recognises that there is no credibility left in the Government adhering to that view. For three years now Secretaries of State have told us that they are considering the circumstances each year individually and on their merits, but that is now a complete

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fiction. Would it not be more honest to say that the Government have decided to let child benefit wither on the vine and to allow people to take appropiate steps accordingly?
Does the right hon. Gentleman agree that he has been guilty of sleight of hand this afternoon? Although many of the new changes involving increased expenditure are welcome, they are merely the recycled savings from the freezing of child benefit.
Mr. Newton: We have decided not to uprate child benefit and to use that money and, taking account of the increase in pensioner premiums and the abolition of the earnings rule, provide significantly greater sums on improving the position of pensioners, especially that of less well-off pensioners and of less well-off families. Above all, in the light of the OPCS surveys, we have used the money to improve the position of the long-term sick and disabled and their carers.
Mr. Nicholas Winterton: I associate myself with the views of the hon. Member for Birkenhead (Mr. Field), but may I also express my disappointment as a member of the Select Committee on Social Services that the Government have not decided to uprate child benefit? It is the most efficient way of getting money directly to families with children.
Nevertheless, I believe that my right hon. Friend has made an exciting announcement about the uprating of benefit, and I think that the whole House should look in detail at what he has said so that we may have a constructive debate when the regulations are laid.
Mr. Newton: I am grateful to my hon. Friend and I am well aware that he and many others—not only the hon. Member for Birkenhead (Mr. Field)—will be disappointed that there is to be no increase in child benefit. I can only tell him and others who may feel the same way that they would also have been extremely disappointed had I not been able to do some of the many things—some 20 in all—for the groups that I have mentioned. In the real world it is sometimes necessary to make choices.
Mr. Jack Ashley: I welcome the premium for carers and the extension of the mobility allowance to deaf-blind people, although I regret the failure to extend it to mentally handicapped people. Is the Minister aware that these increases are miserly and lacking in all generosity? The fact that they are made at the expense of child benefit is disgraceful.
Does the right hon. Gentleman recognise that some disabled people need child benefit as well, so they are paying for the increase in the disability allowances by losing child benefit? Where is the justice in that?
Mr. Newton: In view of the right hon. Gentleman's long track record of pressing the case for disabled people with such vigour and in such a well-informed way, I would have hoped for a slightly less grudging response to a number of changes for which he has pressed for a long time. What I have announced today adds up in a full year to about £100 million extra for many disabled families and their children and carers; to describe that as miserly is less generous than I would have hoped for from the right hon. Gentleman.
Sir George Young: The whole House should welcome unequivocally the additional measures that my right hon. Friend has announced today over and
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above the statutory uprating and bringing extra help to many groups who certainly need it. But was it not clear from my right hon. Friend's statement that these improvements are largely to be funded by freezing child benefit, provision for an increase in which was already in his Department's public expenditure programme? Where is the equity in funding these welcome improvements by placing an extra burden on families who happen to have children rather than funding them though taxpayers generally?
Mr. Newton: I fear that I have to repeat to my hon. Friend what I have said to a number of others already. When considering the overall position this year, I had to decide whether the right way to use a substantial sum of money was to increase child benefit and to give relatively modest amounts to a large number of people, many of whom have substantial incomes which have been rising rapidly, or whether to put it into the hands of groups who have not benefited in the same way and whose needs have been acknowledged by right hon. and hon. Members on both sides of the House. I decided to do the latter, and I shall not apologise to the House for that.
Rev. Martin Smyth: I welcome the general statement, but will the Minister enlighten us about when the immediate grants will be paid? As I heard and read the statement, it seemed that the next uprating is likely to be six months to a year hence. Is it not possible for some of these payments to be made with greater speed? Secondly, in relation to child benefit, the Minister referred to the fact that male earnings have gone up, but will he recognise that citizens advice bureaux and others have said that what really matters are payments direct to the woman, not male earnings. As a male, I know that many men keep their wage packets and payments to their wives separate.
Mr. Newton: Of course, family credit is also normally payable to the mother for precisely those reasons, so I do not think that the hon. Gentleman's point takes us that far. It will be difficult—probably impossible—to bring any of these changes forward from the uprating date next April, except for the increase in the independent living fund, in regard to which I have made it clear that an immediate increase is being made. In one or two cases, changes may have to be later because of the need to pass legislation.
Dame Elaine Kellett-Bowman: I had intended to take my right hon. Friend to task because he is not indexing child benefit, because there is a large number of non-earning women whose husbands do not give them an allowance of any sort, shape or kind. However, in view of the immense generosity of his proposals for people in residential homes, for carers, on whom so many elderly people rely, and for disabled people in general, I shall refrain from criticising him at this time.
Mr. Newton: I suppose that I should be grateful to my hon. Friend, and I am.
Dr. David Owen: Is it not a shabby way to help the disabled, who greatly need help, to take away allowances from children and from families with children? Is universal child benefit not a badge of citizenship in a country which professes to proclaim the

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doctrine of one nation? Why does the Minister not tax the second earner in a family on child benefit and get some selectivity in that way?
Mr. Newton: I seem to be getting a number of suggestions which I shall obviously note. Choices have to be made when deciding how to use public money, and I think that we have made the right choice on this occasion.
Mr. David Nicholson: My right hon. Friend and the Minister with responsibility for the disabled are to be congratulated on their skill in targeting this package at a time of financial stringency. Did my right hon. Friend hear the various murmurs of appreciation, not only from Conservative Members but from Opposition Members, as various long-standing injustices were remedied? Is he aware that the proposal on carers and on the independent living fund, both of which featured in the debate last week, are particularly welcome? Will he do everything that he can to increase uptake of family credit, which is an excellent benefit and can he say how much spending on family credit has increased in comparison to family income supplement?
Mr. Newton: Very roughly, the amount being spent on family credit is about twice as much as that on family income supplement. As I have said, as that goes to about 50 per cent. more families, it means that the average amounts being paid are substantially greater than under family income supplement. I noted and was grateful for the murmurs of approval from all parts of the House for what I announced, especially in relation to the disabled. We certainly hope in due course to build further on that.
Ms. Marjorie Mowlam: The Secretary of State has returned to the position of two years ago for single parents of allowing them to earn up to £25 before it affects their benefit. Will he clarify whether he intends to return to the other piece of legislation of two years ago when the £25 was net of child care costs? Unless that is the case, his moves today will have no meaningful effect for single parents.
Mr. Newton: I have no plans for going back down the path of introducing specific arrangements in relation to specific costs. The increase in this earnings disregard in housing benefit for lone parents from £15 to £25 will help significantly with the problems of lone parents generally and especially those who wish to work.
Miss Emma Nicholson: Is not my right hon. Friend aware that withering on the vine produces the most concentrated and sweetest wine? He has offered the House a most carefully constructed libation that will do more to help the really poor than the thin gruel spread so forcibly throughout the population by the Opposition. I also welcome the allowance to be paid to parents of severely disabled children under two where medical advances now mean that such children can be cared for at home. That is an example of sensitive thinking which I warmly welcome. Will he continue to look most carefully at the delivery system for family credit?
I welcome the fact that the advertising campaign has resulted in a greater take-up. I look forward to far greater
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efforts being made in advertising and other campaigns aimed at the population so that this excellent benefit will receive the take-up that it deserves.
Mr. Newton: Yes, I will continue to look very hard at ways of improving still further the effectiveness of family credit. This has been a fairly intractable problem under both family credit and family income supplement, but I am encouraged by the progress that we made in the early part of the year and which I outlined in my statement. I hope that we can build on that, especially in relation to lone parents. I obviously agree with the general drift of what my hon. Friend said about child benefit. Because of the medical advances about which she spoke and other matters, we have reviewed and changed the position about attendance allowance for the under-twos.
Mr. John Battle: Although I welcome the overdue extension of mobility allowance to the deaf-blind, may I ask the Secretary of State to amplify his comments on pensions, because his answer on 17 October clearly demonstrates that every year since July 1986 the value of a pension as a proportion and percentage of average net earnings has been declining and is now lower than it was in 1978 and 1979? Further, what is his Department's estimate of the take-up level of family credit? Is it not the case that nearly 250,000 families who are entitled to family credit are not getting it because the take-up is low? What will happen is that some funds will be shifted from child benefit into family credit, but the Minister's Department will not even have budgeted for a full take-up of family credit.
Mr. Newton: What the hon. Gentleman suggests in the latter part of his question is manifestly incompatible with the strenuous efforts that we are making to improve the coverage of family credit. I have not given any figures for the percentage take-up of family credit because it is increasingly obvious from looking at the figures that we are not at all clear about the full size of the eligible population. Therefore take-up figures as such are not very meaningful. I have concentrated on what we have succeeded in doing in increasing the numbers of people in receipt of the benefit by comparison with the earlier period, because that is what seems to matter. As I said in my statement, the number went up by 40,000 to 320,000 in the middle part of this year.
On the earlier part of the hon. Gentleman's question, the apparent discrepancy between my earlier answer and what I said this afternoon is that pensioners' incomes from state social security benefits are only a small part—in some respects an increasingly small part—of pensioners' total incomes. Over the period to which I referred—from 1979 to 1986; the latest data available—income from social security benefits rose by 19 per cent. in real terms but income from occupational pensions rose by 56 per cent. in real terms and income from savings rose by nearly 64 per cent. in real terms. That explains the discrepancy. Whereas income from savings rose by 64 per cent. or 64 p in the pound under this Government in that period, under the previous Labour Government, the figure fell by 16 p in the pound.
Mr. John Maples: Many of us welcome my right hon. Friend's decision not to uprate child benefit as we regard it as wrong to pay universal flat rate benefits regardless of people's means. They are a

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recipe for high taxation and it is no business of the state to have one of its agencies taking money out of the pockets of husbands so that another agency can put it back into the pockets of wives. Will my right hon. Friend use every opportunity to explain something to which he alluded in his statement but which is widely misunderstood, which is that an uprating of child benefit would have been of no benefit to children of the poorest 25 per cent. of families?
Mr. Newton: As I know my hon. Friend understands, as child benefit is taken into account in setting the rates of income support and so on, an increase in child benefit reduces the amount of income support that would otherwise be paid. Conversely, if child benefit does not increase, as it is not increasing in my proposals for this year, the effect of that is fully offset for income support families by the increases that take place in their income support for their children and themselves.
Mrs. Margaret Ewing: Will the Secretary of State accept that, despite his many and loud protestations today, his decision to freeze child benefit yet again will be regarded as a niggardly move by millions of women throughout the country as it is the one benefit that has an uptake rate of 98 per cent. and is paid directly to the mother? If it is his intention to kill the benefit through death by gradualism, has the right hon. Gentleman made an estimate of when family credit will have reached the same level of take-up? When he brings forward his proposals on mobility allowance and attendance allowance, will he also be looking at the procedures for dealing with such claims, because it seems as if the authorities believe that they should pay as few as possible of those allowances? Where an appeal is made people are subjected to long, difficult and sometimes humiliating procedures in order to obtain payment of the benefits.
Mr. Newton: The answer to the hon. Lady's last question is yes. It is something that I am conscious of and if we could find ways of improving the medical adjudication procedures nobody would be more pleased than I. However, I do not want to pretend that that will be a simple or quick task. The hon. Lady may be right to think that some people—indeed there has been some evidence in the House today—will regard my decision not to uprate child benefit as niggardly. However, it will not be seen as niggardly by, among others, those women who are caring for disabled people, severely disabled babies and others, as they will be receiving substantial benefit increases.
Mr. Robin Squire: My right hon. Friend is a humane and intelligent man and that is reflected in the range of welcome initiatives in his statement. However, he knows that as a result of his statement, several hundred thousand families in difficult circumstances, on either side of the level of salary qualifying for family credit, will receive nothing for the third year in a row. Knowing that, and hearing the suggestions from both sides of the House on the necessity for change, will he accept the need to change the system if we cannot uprate benefits?
Mr. Newton: Again, I note what my hon. Friend has said and the comments he is reported to have made in the newspapers this morning. I am grateful that he has acknowledged the scale and importance of what I have been able to do as a result of the decision not to increase child benefit this year.
Mr. Andrew F. Bennett: Does the Secretary of State agree that his early reputation in the House was built on the championing of child benefit as a universal benefit? Does he not now find it humiliating to have to trample over his principles?
Mr. Newton: No, I do not. I have never made any secret of the importance that I attach to helping families with children, but it does not follow that that can be given, at any particular point in time, priority over a whole range of other needs that I have also advanced in the House over the years, including those of disabled people. My main feeling is one of pride at having been able to make so many improvements for that latter group.
Mrs. Elizabeth Peacock: While I welcome greatly what my right hon. Friend has told the House and appreciate all the extra money that he has announced—we all recognise and welcome that the sum is £143 million per day for benefit—I am greatly disappointed that he has not found it possible to uprate child benefit. I appreciate that it is a universal benefit, but it is paid directly to the mother, and that is an important aspect. During the next six months, will my right hon. Friend look carefully at the take-up of family credit, to see whether he can raise that figure to as near as that for child benefit as possible? I shall reserve my judgment about opposing him until I see how he gets on.
Mr. Newton: I take some comfort at least from the last part of what my hon. Friend said. I assure her, as I have assured the House several times, that everything possible will be done to increase the number of people who take up family credit. The improvements that I have announced this afternoon will assist in that process.
Ms. Dawn Primarolo: Why has the Secretary of State ignored the report of the Social Security Advisory Committee, which said that if child benefit was not raised, the Government's efforts to encourage single mothers back into the paid labour market would not succeed, and that the freezing of the benefit at the 1987 level would increase women's dependency on means-tested benefits and continue to trap them within the poverty limit?
Mr. Newton: I have not ignored anything, on this or any other front, that the Social Security Advisory Committee has said. I simply take a different judgment, certainly at the moment, about the right way to achieve the objective to which it also attaches importance.
Mr. Robert G. Hughes: Does my right hon. Friend accept that many Conservative Members find it offensive that people on the salaries of Members of Parliament and other similar salaries are still receiving child benefit, and that we would prefer to see that money used to help people who are less well off? People who are not sharing their income fully with their wives and children should be thoroughly ashamed of themselves. Most people will welcome my right hon. Friend's statement that the people most in need will be helped most.
Mr. Newton: My hon. Friend has at least clearly shown that there is more than one view. I have sought to strike a balance that best suits the needs of those whom we most want to help at his time.
Mr. Harry Ewing: I should declare my position as one of the few hon. Members who gives all his earnings to his wife. What she does not get, my daughter gets.
Does the right hon. Gentleman appreciate that this is the third consecutive year that child benefit has not been increased? If, in 1991, in the run-in to a general election, he thinks that he can use child benefit for an election bribe, he will find that millions of mothers simply will not forgive the Government for the treatment that they have had over child benefit in the past three years.
On a completely different issue, as some of the changes that the Secretary of State has introduced arise from the introduction of the social security changes in April 1988, will he look at another anomaly introduced by those changes? The Government increased the age limit for qualification for a widow's pension from 40 to 45. Many widows who receive widowed mother's allowance will go off that allowance before they are aged 45. Therefore, they will go from the widowed mother's allowance one day to nothing the following day. Will the Secretary of State look at this vexed question?
Mr. Newton: The hon. Gentleman will know that we have acted already to deal with one aspect of the changes in widows' pensions which was widely regarded as anomalous. I shall examine with care what he has said, but I cannot give him any undertaking. As for child benefit, I have no plans to do anything other than what I have faithfully done this year, which is to review the matter in the light of the circumstances and the other things that I wish to do. That is what I shall continue to do.
Several Hon. Members rose——
Mr. Speaker: Order. I must have regard to subsequent business. I shall endeavour to call hon. Members who have been rising in their places, but I ask for brief questions and not repetition of questions which have already been asked and answered.
Mrs. Maureen Hicks: I welcome the generous benefits that have been outlined, but I have to say to my right hon. Friend that I think that there is an inconsistency and a principle at stake in excluding yet again an uprating of child benefit. I remained silent during the previous two occasions on which we discussed the subject, but I have reached the point where I am conscious of those who do not apply for family credit, despite our wonderful efforts to encourage take-up, and of constituents who are not eligible for family credit. I hope that all the comments that my right hon. Friend has heard this afternoon will demonstrate clearly to him that there is a need to say honestly and openly that there is a clear-sighted policy for the future. The Government have always been recognised as being clear sighted, but we are now in danger of having muddle. We have a universal benefit that has not been upgraded and at the same time we have family credit. All that we are saying is that we look to my right hon. Friend in future to offer a clear policy.
Mr. Newton: I respect what hon. Friend has said and the reasons why she said it. I merely say that I think that it would be accepted on both sides of the House that under a Government of any colour it would be virtually inconceivable that child benefit could be set at levels that would give family credit families the same amount that they get from family credit. Wherever the line is drawn,
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there will be a need, in my judgment, for a benefit of that sort. I think that it is right to concentrate on making it as effective as we can.
Mr. Nigel Griffiths: Does the Secretary of State not realise that for the 10th year running the Government have failed to link old-age pensions to rising levels of incomes? Next year the Government will save about £5,000 million from failing to uprate the old-age pension, and that is enough to cover the package that has been announced today, the top tax cuts for the rich and this month's trade deficit, all on the backs of Britain's pensioners.
Mr. Newton: Over the 10 years during which the Government have presided, the range of our policies as a whole have increased pensioners' average net incomes far faster than under the previous Government. In recent months—indeed, during this very month and in parts of the package that I have announced—we have given additional help on a substantial scale to those who have not yet benefited from occupational pension schemes, for example.
Mr. Barry Field: In view of the demographic slump, my right hon. Friend's announcement on helping lone parents back into work will be widely welcomed. Can he tell me when he will be able to announce a decision on a local increment for income support for families, with young children, that have a metered water supply?
Mr. Newton: I cannot give my hon. Friend an off-the-cuff answer on the second part of his question. I am grateful for his introductory comment.
Mr. Max Madden: May I urge the Secretary of State to launch an urgent investigation into the difficulties of elderly people and their relatives who are finding great difficulty in paying the difference between DSS benefit and private home fees? Will he instruct his Department to collect information about elderly people who are being evicted from private homes because they cannot afford to pay the fees? In that context, will he persuade councils, such as Bradford council, not to close council homes, whose places will be needed desperately for elderly people who cannot afford the fees of private homes or are evicted from private homes because they cannot pay the fees?
Mr. Newton: The hon. Gentleman will be aware that payments from social security in that respect have risen from only about £10 million in 1979 to more than £1 billion this year, and I have announced further increases today. The hon. Gentleman would acknowledge that payments have never been set at levels that cover all the costs in all the homes. However, they do cover the majority of homes, and I think that that cover will be improved by what I have announced today. That is certainly the position that I expect next year.
We all know that the system has not proved to be an entirely satisfactory way of providing help, which is why, following the report of Sir Roy Griffiths on community care, the Government have changed to a different way of dealing with those needs. Meanwhile, I repeat that what I announced this afternoon will give significant further help to many tens, indeed hundreds, of thousands of elderly people.
Mr. Peter Thurnham: I congratulate my right hon. Friend on a welcome and thoughtful package. I am glad that he did not delay bringing in the planned £100 million package for the disabled. He has done a fair job in his dealings with the Treasury, but we shall be looking for further benefits for the disabled when he introduces his White Paper.
Will my right hon. Friend remind Opposition Members that universal child benefit accounts for about half of the total family package? Does he feel that he now has the balance right between targeted and universal benefits?
Mr. Newton: In an area where I appreciate so many of the difficulties and the needs, I should always be reluctant to claim that we have everything absolutely right. However, as a result of what I have said this afternoon the balance of the social security system will be improved, and not least in relation to the disabled, in whom my hon. Friend rightly takes such an interest. I hope that we have paved the way for further improvements.
Mr. Jeremy Corbyn: Will the Secretary of State take this opportunity to congratulate my hon. Friends the Members for Preston (Mrs. Wise) and for Coventry, South-East (Mr. Nellist) and all those who campaigned for attendance allowance for the parents of disabled children under the age of two? Is he aware that his statement will be profoundly disagreeable to millions of pensioners and that he must therefore return to the 1980 link between the old-age pension and earnings? That would give pensioners an increase of at least £8 more per week than he has announced today. Does he realise that they bitterly resent the way in which they have been robbed by this Government during the past decade?
Mr. Newton: Obviously, I reject the suggestion in the latter part of the hon. Gentleman's question. I beg leave to doubt whether pensioners generally would feel that way about proposals that steer additional help to so many of them, especially when taken alongside the increases this month in the pensioner premiums for the over-75s and for disabled pensioners.
Mr. Andrew MacKay: Is my right hon. Friend aware that as most people rightly believe that benefits should be targeted towards those most in need, they will widely welcome his statement today? Is he further aware that they will think him right not to increase child benefit further, but instead to use the money on more urgent priorities?
Mr. Newton: I am grateful to my hon. Friend for what he said.
Mr. John McAllion: Last week, the Home Secretary boasted that police pay had increased by 50 per cent. above the rate of inflation since 1979. This afternoon, the Secretary of State has yet again shackled pensioners to increases of no more than the rate of inflation and he has frozen child benefit for the third year running. Is he saying that in the real world, when choices have to be made, the Government choose to boost police pay at the expense of pensioners and mothers with families?
Mr. Newton: The hon. Gentleman might care to reflect on the fact that under this Government, the real value of total expenditure on the long-term sick and disabled has
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risen not by 50 per cent., but has doubled. With the introduction of family credit alone, we have pretty well doubled the amount spent on low-income families in work.
Mr. Kevin Barron: Will the Minister answer the question asked earlier by my right hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) about the widening of the likely recipients of mobility allowance to include those with the disabilities of hearing and sight loss? Will he take that even further and bring in mental handicap, too? I am sure that he is aware that many people feel that the system is grossly unfair and that an extension that does not include mental handicap is only half a job.
Mr. Newton: I am aware of the arguments that took place both in this place and another place during the passage of the social security legislation earlier this year. When I considered the matters I concluded that there was a clear-cut and relatively straightforward way of helping the deaf-blind. The other problem to which the hon. Gentleman referred is somewhat more complicated, but we shall consider it in the course of the review to which I referred.
Mr. John Fraser: Does the Secretary of State recognise that most single working parents are women, and therefore not in receipt of average male earnings, and that in inner-city areas many single working parents face massive poll tax payments next year, massive rises in housing costs and high child care costs? The effect of freezing child benefit is simply yet another disincentive to women to stay at work or return to it.
Mr. Newton: Many single lone parents such as those to which the hon. Gentleman referred receive income support or family credit. As I made clear in my statement, the measures announced this afternoon will be helpful to many lone parents. Part of the aim of the family credit further take-up campaign is to ensure that it becomes even more helpful to many lone parents.
Mr. Brian Wilson: Does the Secretary of State accept that on top of the poll tax and the cruel removal of all benefit from 16 and 17-year-olds, freezing child benefit confirms the Tories' growing reputation as the anti-family party? At the other end of the age scale is a matter of particular concern in my constituency about which I seek general elucidation. The Secretary of State gave the impression of generosity when he announced a £10 increase in income support for elderly people in residential homes. Will he confirm that the increase will be only £10—less than the rate of inflation? Does he accept that that will increase pressure on the proprietors of such homes who at present maintain people at a rate that does not cover costs and will lead to people being removed from homes when they have nowhere else to go? Does he accept that the Government's parsimonious policies are simply building up problems for the future?
Mr. Newton: I have already made extensive comments on that matter in response to an earlier question. The percentage increase represented by the £10 increase varies because of the wide variation in the existing limits. In the case of residential care homes for the elderly, which have

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given rise to special anxiety in recent months, it represents an increase from £140 to £150, which cannot be dismissed as the hon. Gentleman sought to do.
Mr. Speaker: Mr. Tony Banks.
Mr. Tony Banks: Thank you, Mr. Speaker. You are a hard man, Sir.
It is perverse of the Secretary of State to claim as a virtue the additional money being laid out by his Department this year given that his Government's policies have forced so many people into poverty in the past 10 years. Is it true that unprocessed social fund applications at departmental offices are carried over into the next year's budget rather than being taken out of the budget for the year in which the application was made, even if it shows a surplus? If so, it is grotesquely unfair and the Secretary of State must do something about it.
Mr. Newton: The mechanism of the social fund involves having regard to the priority of a particular range of claims. In the next few months I shall consider how best we can set the allocations and divisions between local offices and between different purposes of the social fund in the light of our continued monitoring.
Mr. Robin Cook: May I press the Secretary of State to say something about the cases of income support and transitional protection about which I asked him? He will be aware that not only have those people had their benefit frozen for three years, but some face a further freeze of another three or four years. Some of the most harrowing letters that I receive—and, I suspect, that he must receive—are from those caught in that trap. Whatever one's view about freezing benefits—and vigorous views have been expressed by hon. Members on both sides—there cannot be a case for freezing a means-tested benefit which is supposed to reflect costs. Will the Secretary of State ascertain whether such people could qualify for an uprating of their benefit?
Mr. Newton: It is important that we should all recognise that just under 90 per cent. of those on income support will receive an increase in this uprating. Of the remaining 10 or 12 per cent., about half will receive a partial uprating. The need for transitional protection arose from our wish to protect people during what we thought was, overall, a sensible change in the social security system. People were inescapably involved in moving from the old system to one that, as my statement has shown, is better able to target money quickly and effectively on those in need. The hon. Gentleman also knows that steps have been taken to uprate transitional protection in some of the most difficult cases—those who previously had large amounts of domestic assistance or payments in respect of respite care.

Children Bill (Proceedings)
4.45 pm
Mr. Tim Devlin: On a point of order, Mr. Speaker. Have you received a report of the events last night, which meant that consideration of the Children Bill was not completed because of the activities of hon. Members from mining areas, as Opposition Front-Bench spokesmen have admitted? It is an important measure which has been supported by both sides of the Committee. It represents thousands of hours of work by responsible children's organisations. It now appears that it will be lost because of the activities of certain Opposition Members.
Several Hon. Members rose——
Mr. Speaker: Order. Perhaps it would be helpful if I were to deal with this matter straight away.
Mr. Dennis Skinner: Further to that point of order, Mr. Speaker.
Mr. Speaker: Order. If I clear up the matter, the hon. Member may not need to raise his point of order.
Several Hon. Members rose——
Mr. Speaker: I understand that there was some delay last night in the completion of the Children Bill. I am not aware and it has not yet been reported to me that anything out of order took place.
Mr. Skinner: It is unfortunate that the hon. Member for Stockton, South (Mr. Devlin) did not stay to hear the debate last night. If he had, he would have heard an honest-to-goodness debate about the Government forcing pre-school playgroups to pay for licensing and inspection. Several Tory, Labour and Liberal Members—no mining Member of Parliament whatever—took part in the debate. There were 400 Government amendments. The Government's troops, including the hon. Gentleman, went home to bed with the result that the Children Bill was lost because the Government spokesmen pulled up the stumps.
Mr. Speaker: Order.
Mr. Skinner: This is important. The hon. Gentleman has made an allegation.
Mr. Speaker: Order. I have read about the proceedings, so I do not need to be told about them. As far as I am aware, nothing out of order took place.
Mr. Roger Sims: On a point of order, Mr. Speaker. Can you confirm, because it is not clearly understood outside the House, that any measure before the House must pass through all its stages, with amendments passed by both Houses, before it becomes law and that any Bill that does not do so by the time that Parliament prorogues falls? Are you aware that, as a result of what happened last night, there is a real danger that this Bill could suffer that fate? The Bill has had all-party support and its implementation is anxiously awaited by many caring organisations. Do you agree that if that were to happen it would not only be deplorable but would inflict great damage on the reputation of Parliament, which I know that you are anxious to guard?
Several Hon. Members: On a point of order, Mr. Speaker.
Mr. Speaker: I will take all the points of order together.
Mr. Alan Williams: On a point of order, Mr. Speaker. Unlike anyone else, you, Sir, have the privilege of reading what happened. The way in which Hansard is published means that anyone who hears this exchange will not have read what happened. It is important that we are allowed to put the record straight. It is not good enough for part-time Tory Members—[Interruption]—who are so dedicated to the legislation that they sneak off home as soon as the three-liner is concluded to attack the Opposition when the Government's incompetence in drafting their legislation led to 400 amendments which had to be dealt with in 12 hours, or at the rate of 40 per hour, or one every two minutes. As we stayed to discuss them, we do not accept the hon. Gentleman's criticism.
Several Hon. Members: On a point of order, Mr. Speaker.
Mr. Speaker: Order. These are not matters of order, although they may be matters of disagreement across the House.[Interruption.] Order. I have already said that what the right hon. Member for Swansea, West (Mr. Williams) has said is absolutely right, in procedural terms. What happened last night was in order, although it may have been unfortunate.
Mr. Nicholas Bennett: I was here at 1.50 am, and raised the matter with Mr. Deputy Speaker at the time. What happened last night was that a Division was forced by the hon. Members for Bolsover (Mr. Skinner) and for Doncaster, North (Mr. Welsh), in which no hon. Member voted with the Noes. It was clear that the intention was to force Divisions on numerous later amendments on which there is no disagreement, to keep the House here throughout today, if necessary, and lose today's business.
The hon. Member for Monk lands, West (Mr. Clarke) said last night:
"when other reasonable hon. Members representing mining areas feel it necessary to demonstrate as they have done …".
"As they have done": the Opposition Front-Bench spokeman admitted that that was what was going on. The Opposition, having reached an agreement with the Government on a Bill that is not contentious—for there is general agreement that child abuse must be dealt with as quickly as possible—welshed on that agreement. They cannot control a small minority of mavericks. Is it not time that the House ruled on whether Divisions should take place when there is no disagreement and no hon. Member votes with the Noes, merely to obstruct a Bill for other purposes?
Mr. Robert Key: On a point of order, Mr. Speaker. You will know how rare it is for a Back Bencher to persuade the Government to accept an amendment.
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After many hours of debate with hon. Members on both sides of the House, I was able to do so, and the amendment was passed unopposed on Report. Now we see that it is about to be lost. In such circumstances, is it in order for hon. Members on both sides of the House to approach the Leader of the House to seek a guillotine on the business as soon as possible?
Mr. Frank Haynes: You know, Mr. Speaker, they are a mardy lot over there—and they are being really deceitful this afternoon. [Interruption.]
Mr. Speaker: Order. As I think the hon. Gentleman knows, that word is not parliamentary. Will he please withdraw it?
Mr. Haynes: In your interests and no one else's, Mr. Speaker, I will withdraw it.
We could have got that Bill last night. Both sides of the House wanted it, but the Government Chief Whip came to the Chair and said, "I am going to move the closure," so the Government did it. They all wanted to go to bed, that was the trouble.
The Lord President of the Council and Leader of the House of Commons (Sir Geoffrey Howe): Further to that point of order, Mr. Speaker. One feature is, I think, central to the whole discussion. The Children Bill commands widespread support throughout the House. It is a good Bill, widely commended, and last night—I was here and the shadow Leader of the House was not—the Opposition Front-Bench spokesman left us in no doubt about his anxiety to see it passed. [Interruption.]
Mr. Speaker: Order.
Sir Geoffrey Howe: As is not unusual, the usual channels had made arrangements for the Bill to be discussed, and the expectation—settled and firm on both sides—was that it would be finished by a reasonable hour. That progress, however, was not made. As one of my hon. Friends has pointed out, a Division took place in which no Opposition Member voted, and the Opposition Front-Bench spokesman expressed his regret that progress had been impeded for the reasons already given. In those circumstances, there was no prospect of progress being made along the lines previously foreshadowed. My right hon. and learned Friend the Chief Whip therefore prudently said, "Let us draw stumps tonight and see whether we can make a better attempt at it on a future occasion."
The proof of the pudding may be, to a significant extent, in the eating of today's business. Let us see whether we can make sensible headway with that, as foreshadowed through the usual channels. Then we may be able to return to the other matter coolly, and fulfil what the people of this country expect—the enactment of the Children Bill, containing many Government amendments in response to the debate that has taken place.

Fisheries Legislation (Repeal)
Mr. Teddy Taylor: On a point of order, Mr. Speaker. As a means of helping today's business and safeguarding the rights of Parliament—about which I am sure the Leader of the House is very concerned—may I ask you, Sir, how it can possibly be in order for the House to consider tonight the Merchant Shipping Act 1988 (Amendment) Order 1989, which repeals, on the interim advice of the European Court, sections of a law passed by Parliament only last year which was stated by the Minister introducing the Bill to be essential if British fishing quotas were to be preserved for British fishermen?
Let me make two points. The order relates solely to the nationality provisions of vessel ownership and qualified persons. Is that not sub judice? There are two other cases involving both nationality and company domicile and residence, on which the United Kingdom Government are required to provide their final submissions by 9 and 15 November. Those cases are Nos. 221 and 213 of 1989, and are known as the Crown v. Factor Tame Ltd. and Others, initiated by Spanish fishermen. If we lost that case, another order revoking another section will be required, taking up more parliamentary time, and if we win the order itself will be revoked.
The second argument is whether it might be irrelevant and time-wasting to have a debate at all tonight. In case No. 213—before the European Court—the House of Lords, in its judicial capacity, is seeking the advice of the European Court on whether British courts, and not the British Parliament, have the right to suspend or revoke laws passed by Parliament at the request of the European Court. Surely it is silly to waste our time at a late hour, when in a short time the divisional courts in Britain may have the power to act in that legislative capacity and do the job for us. As the final date for submissions of evidence is 9 November, we have not long to wait.
I hope that you will agree, Mr. Speaker, that the constitutional issues and rights of Parliament that are involved are important and fundamental, and that, in the circumstances, to discuss the order tonight would make nonsense of parliamentary procedures.
The draft order states for all to see that copies of the judgment can be obtained from the Treasury Solicitor, and not from the House of Commons. It seems wrong to me that Members of Parliament are apparently denied even the ready availability of papers that they require to do their work. I hope that you agree, Mr. Speaker, that this is an important issue and one that matters to Parliament, whatever we are doing.
Mr. Speaker: The hon. Gentleman kindly gave me notice of his point of order, so I have been able to look into it with great care, and I have some sympathy with what he has said.
As to whether tonight's debate would be affected by the sub judice rule, I have to tell the hon. Gentleman that that rule does not apply during the consideration of delegated legislation, or to proceedings of the European Court. As to the hon. Gentleman's other points about the provisional nature of what the House is being asked to do tonight, that is really a matter for debate, not a point of order for me.
As to the availability of copies of the interim judgment of the court, copies of the judgment are available to the general public from the Treasury Solicitor, but I am informed that a copy was deposited in the House together
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with the draft order, and that copies for the use of Members are now available in the Vote Office. As to whether the debate proceeds, that is not a matter for me, but I am sure that, in the light of what the Leader of the House has just said, he will consider it.
Mr. Alan Williams: Further to the point of order, Mr. Speaker. I thank you for the helpful ruling that you have just given, and I think we are very encouraged by the fact that you feel that there is ground for sympathy with the point of view put by the hon. Member for Southend, East (Mr. Taylor).
As the Leader of the House is present, may I make a suggestion in good will, as one who is not directly involved in the issue? I have consulted my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman), who will be dealing with it for the Opposition. He assures me that he has met fishing interests from England, Scotland and Wales, all of whom are affected by the issue.
In addition, other hon. Members are as deeply concerned as the hon. Member for Southend, East about the constitutional aspects of the problem. Yet we are to have a debate of only an hour and a half. There is no way in which either side of the issue can be justifiably and fairly aired in an hour and a half. Therefore, I appeal to the Leader of the House to withdraw it this evening and bring it back, even if it has to be late at night. I am sure that hon. Members who are involved in constitutional issues will be willing to stay and debate it if a proper debate could be arranged.
Mr. Speaker: Allow me to deal with this matter. It is not a matter of order for me, as the deputy shadow Leader of the House——
Mr. Richard Shepherd rose——
Mr. Speaker: Order. It is not a matter of order for me——
Mr. Shepherd: There is a point of order.
Mr. Speaker: Order. No, please. I am on my feet. The deputy shadow Leader of the House has put a suggestion to the Leader of the House. I am sure that these matters can be discussed through the usual channels, but they are not a matter of order for the Chair.
Mr. Shepherd: There is a point of order that I think is for us and for you, Sir, as our representative in the Chair.
Mr. Speaker: Of course I always take these points of order, but the hon. Gentleman must not jump up when the Speaker is on his feet. If he has a genuine point of order, will he please put it now?
Mr. Shepherd: There is a genuine constitutional worry here. My understanding and concern—this is why I seek your guidance—is that the supremacy of Parliament meant that the most recent legislation gainsays legislation made prior to it. In this instance, the Merchant Shipping Act was passed last year, the European Communities Act was passed in the 1970s and the Single European Act was passed some years ago. By what authority, therefore, is a piece of legislation that we have passed as recently as last year being questioned or countered by authorities beyond this territory, under preceding legislation that has since been gainsaid by our last legislative expression on the matter? That is my point of order.
Mr. Speaker: That, sympathetic though I am with it, is not a point of order for the Chair. These matters have to be put to Ministers who are dealing with this particular order. It is not a matter for me.

Statutory Instruments, &c.
Mr. Speaker: With the leave of the House, I will put together the two motions relating to statutory instruments.
Ordered,
That the draft Insolvency (Northern Ireland) Order 1989 be referred to a Standing Committee on Statutory Instruments, &c.
That the draft Companies (Northern Ireland) Order 1989 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Patnick.]

Points of Order
Mr. Gerald Howarth: On a point of order, Mr. Speaker.
Mr. Speaker: On a completely different matter, please.
Mr. Howarth: Last night, the hon. Member for Barnsley, Central (Mr. Ilsley) referred to the alleged grievances of the so-called mining group of Members of Parliament who sought to prolong the debate on the Children Bill as part of their dispute with the Chairman of Ways and Means about the Associated British Ports Bill. May I point out to you, Sir, that that group consisted of——
Mr. Speaker: Order. The hon. Gentleman is shooting himself in the foot. This is not the occasion to be pointing out matters to me. He is raising a point of order. I have already said that this is not a matter of order for the Chair. The hon. Gentleman has heard what the Leader of the House said about it. We have a very heavy day before us; let us see how we get on.
Mr. Howarth: Further to that point of order, Mr. Speaker.
Mr. Speaker: No, I am not taking it. I shall take the point of order from the hon. Member for Cambridgeshire, South-East (Mr. Paice).
Mr. James Paice: Further to that point of order, Mr. Speaker. In your earlier remarks on the happenings of last night, you specifically——
Mr. Speaker: Order. I am not pursuing that matter. We have heard what the Leader of the House said about it, and as far as I am concerned, in terms of order, nothing more arises.
Mr. Tony Marlow: On a point of order, Mr. Speaker.
Mr. Speaker: So long as it is not on the matters that we have already discussed.
Mr. Marlow: It is not directly on it, but it is related. It is to do with the Statutory Instruments Committee. The point was made by my hon. Friend the Member for Southend, East (Mr. Taylor). I understand that some of this subject was covered by a meeting of a Statutory Instruments Committee yesterday at 4 o'clock. Is the report of that Committee available or not, because if it is not available, as my right hon. and learned Friend the Leader of the House is here, he might consider, in view of what you said and what my hon. Friend said, that it would be appropriate to delay any such debate until a later date, at which time that report may be available.
Mr. Speaker: The Committee did not draw the attention of the House to the statutory instrument. As to what the hon. Gentleman said, I am sure that it will have been heard by the Leader of the House.

Emphysema Compensation
5.5 pm
Mr. Geoffrey Lofthouse: I beg to move,
That leave be given to bring in a Bill to provide compensation to coal miners suffering from emphysema.
The House will be aware that, between 1982 and 1985, I presented four Bills seeking to make emphysema an industrial disease in coal mining. I have not presented a Bill since 1985 because of the promise of the Industrial Injuries Advisory Council to investigate the report published in May 1988. I am now presenting another Bill to make emphysema among miners an industrial disease. I do not intend to present evidence that I presented in speaking to my previous four Bills, which are well documented in the Official Report.
The latest ITAC report into bronchitis and emphysema was expected to give rise to more widely available industrial disablement benefit for certain disabled coal workers, but, rather surprisingly, it failed to do so. The report recommends no changes in the present system.
I have to say that I am not satisfied with the report. It still fails to consider emphysema as a distinctive disease. It ignores aspects which link it with the industrial disease pneumoconiosis, and continues to ignore vital evidence which shows a direct causal relationship between coal dust and emphysema.
Contrary to my o pinion and the feelings of the House, a mistake was made by the IIAC when it decided to investigate bronchitis and emphysema. Bronchitis has industrial aspects, but it is a more universal disease; nor is the research into its causes highly developed. Emphysema, by contrast, is an industrial disease and its research is sophisticated and advanced. It can be shown that emphysema can kill non-mine workers, but it is more prevalent in miners than others.
I also feel that it is a mistake to consider emphysema as separate from pneumoconiosis. In some coal workers, the emphysema element of their pneumoconiosis is mild, while in others it is severe. But pathologically, emphysema is clearly part of the pneumoconiotic process. That separation has led to many of the current difficulties, and persists in the IIAC report.
Of course, no one is saying that all coal workers with emphysema have acquired it because of their occupation, but compensation is always a question of balancing two tendencies—not compensating all those who have acquired the disease occupationally and compensating too many, including some who have acquired it non-occupationally.
At the moment with emphysema, the balance is very much on the side of not compensating enough miners. It is time to tip the balance, not to the other extreme, but to some reasonable middle ground. The suggestion of using the X-ray changes as an index of retained dust was sensible
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and would have avoided going to the other extreme. The reasons given in the report for rejecting that suggestion are unconvincing.
I am also dissatisfied with the way the report treats miners who smoke. Statistical tools exist to compensate for smokers and to continue the idea that miners get emphysema because they smoke. It is naive to call for research on miners who do not smoke. I believe that that is done to avoid giving men justice. I am also informed that the analysis of the appendix to the Soutour and Hurley 1986 paper is misleading—possibly deliberately.
It has repeatedly been found that there is an excess of emphysema among coal workers. That emphysema has been shown to be related to lifetime coal dust exposure, by many authorities, most notably by Huckley et al, who concluded that the association between emphysema and coal dust is likely to be causal. No report or study has failed to find a relationship between coal workers and dust exposure. Bearing that in mind, we must ask why the Industrial Injuries Advisory Council found against miners.
Yesterday, I had the privilege, if that is the right word, of visiting the Royal Courts of Justice in the Strand. The family of a deceased Kent coal miner were suing British Coal for the death of their husband and father. I do not want to go into the details of the case, hut experts expressed different opinions about the case. One can therefore understand the difficulties experienced by the Industrial Injuries Advisory Council.
In-depth, learned research into the disease, which has never been refuted, has been completed. It shows that a miner is 10 times more likely to catch emphysema than any other industrial injury. It is not good enough to say that there is insufficient evidence. The evidence will be investigated in the future. The practice of the Industrial Injuries Advisory Council has been to investigate every 10 years. If it takes another 10 years to investigate, most of the problem will have disappeared because those unfortunate men, many of whom cannot walk or lift a cup of tea to their lips, will have died. Since I first introduced a Bill on this subject in 1988, hundreds of miners have died. They did not receive justice.
It is essential that the House recognises the problems experienced by disabled miners and supports the Bill. which will give justice and due compensation to those men in their lifetimes.
Question put and agreed to.
Bill ordered to be brought in by Mr. Geoffrey Lofthouse, Mr. Alexander Eadie, Mr. Peter Hardy, Mr. Kevin Barron, Mr. William O'Brien, Mr. Allen McKay, Mr. Frank Haynes, Mr. Dennis Skinner, Mr. David Hinchliffe, Mr. George J. Buckley, Mr. Michael Welsh and Mr. Eric Illsley.

EMPHYSEMA COMPENSATION
Mr. Geoffrey Lofthouse accordingly presented a Bill to compensate coal miners suffering from emphysema: And the same was read the First time; and ordered to be read a Second time upon Thursday 2 November and to be printed. [Bill 208.]
Orders of the Day

  Companies Bill [Lords]
  As amended (in the Standing Committee), considered.
  5.15 pm
  Mr. Jeremy Hanley: On a point of order, Mr. Deputy Speaker. New clause 48 and amendment No. 303, which relates to it, are omitted from the selection list. The Committee of London and Scottish Bankers, the Law Society, Law Lords, the Association of British Insurers, the Confederation of British Industry and many others are concerned about the uncertain position of the law following the decision in re Charge Card Services and should like it to be clarified. New clause 48 was accepted by the Clerks after three or four draftings. An extremely important point of law arises that requires urgent discussion. I should be grateful if you, Mr. Deputy Speaker, would reconsider the selection for tomorrow.
  Mr. Deputy Speaker (Mr. Harold Walker): Did I understand the hon. Gentleman to say that new clause 48 is not included in the clauses on the prefatory motion?
  Mr. Hanley: I am asking you, Mr. Deputy Speaker, to reconsider the selection for tomorrow.
  Mr. Deputy Speaker: As the hon. Gentleman knows, Mr. Speaker goes through the selection list with meticulous care. If the new clause and amendment to which he referred are not included, it is because they have not been selected. I shall have further inquiries made, but I think that that will be so.
  Mr. Anthony Nelson: On a point of order, Mr. Deputy Speaker. May I ask for your help and guidance, in your capacity of protecting hon. Members' interests? We are about to embark on the Report stage of a Bill to which 300 amendments have been tabled. Admittedly, many of them are Opposition amendments, but the Government amendments are technical. You, Mr. Deputy Speaker, will understand that many hon. Members are faced with the serious difficulty of being unable to understand what are, in many cases, highly complex amendments at this stage of the passage of the Bill. At this late stage, officials and Ministers should not be allowed to bring before the House reams of amendments without giving the House and its Committees appropriate opportunity, and more thorough explanation, to consider them. You, Mr. Deputy Speaker, rightly protect the interests of Back Benchers. We do not have the resources or the staff to be able to investigate the proposals, many of which have major significance for the running of companies and the employment of people throughout the country. Will you, Mr. Deputy Speaker, advise us, or perhaps make a statement, about the practice that should be adopted for Bills such as this, and the extent to which any Government can bring forward so many amendments on Report?
  Mr. Dennis Skinner: The hon. Member for Chichester (Mr. Nelson) makes a valid point. Before you, Mr. Deputy Speaker, took the Chair, we heard about a Bill that had 400 amendments attached to it. The hon. Member for Chichester mentioned 300 amendments being tabled
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  today. I have news for him: tomorrow another 500 Government amendments will be added. It appears that the Government have allowed their legislative programme to get out of control. I think that they would he well advised to drop the Bill. Some people have been talking about bringing back the Children Bill.
  We understand that the Government are in a mess. We know that the Cabinet is at sixes and sevens, and that only two Cabinet Ministers wanted to hear the Chancellor of the Exchequer yesterday. The Government are in an old-fashioned mess, which was exemplified by one of their Back Benchers saying that he cannot understand the Bill that the Government have brought forward. Tomorrow will be even worse, and I believe that the Government would do beter to get rid of it altogether.
  Mr. Deputy Speaker: I understand the complaints about the number of amendments and the lack of time in which adequately to debate them. These are not matters for the Chair, but doubtless what has been said will have been heard by the Minister.
  Ordered,
  That the Bill be considered in the following order: New Clauses relating to Part I, Clauses 1 to 4, Schedule 1, Clause 5, Schedule 2, Clause 6, Schedules 3 and 4, Clauses 7 and 8, Schedule 5, Clauses 9 to 13, Schedule 6, Clauses 14 to 18, Schedules 7 and 8, Clauses 19 to 21, Schedule 9, Clauses 22 and 23, Schedule 10, New Schedules relating to Part I, New Clauses relating to Part II, Clauses 24 to 30, Schedule 11. Clauses 31 and 32, Schedule 12, Clauses 33 to 46, Schedule 13, Clause 47, Schedule 14, Clauses 48 to 50, Schedule 15, Clauses 51 to 53, New Schedules relating to Part II, New Clauses relating to Part III, Clauses 54 to 87, New Schedules relating to Part III, New Clauses relating to Part IV, Clauses 88 to 100, Schedule 16, New Schedules relating to Part IV, New Clauses relating to Part V, Clauses 101 to 134, Schedule 17, Clause 135, Schedule 18, New Schedules relating to Part V, New Clauses relating to Part VI, Clauses 136 to 143, Schedule 19, New Schedules relating to Part VI, New Clauses relating to Part VII, Clauses 144 to 146, Schedule 20, Clauses 147 to 176, New Schedules relating to Part VII, New Clauses relating to Part VIII, Clauses 177 to 191, Schedule 21, New Schedules relating to Part VIII, New Clauses relating to Part IX, Clause 192, New Schedules relating to Part IX, Other New Clauses, Clauses 193 to 202, Other New Schedules, Schedule 22.—[Mr. Redwood.]

New Clause 1

  POLITICAL GIFTS
  `The following section is inserted in Part VII of the Companies Act 1985—
  "234B. The directors' report shall be approved by the board of directors and signed on behalf of the board in so far as it relates to the matters specified in section 234 above and Schedule 7 to this Act, except for political purposes. Such contributions shall be reported as an annex to the directors' report such annex to be left unsigned and expressed in the form of a proposal for ordinary resolution to be approved by the company in general meeting.".'.—[Mr. Gould.]
  Brought up, and read the First time.
  Mr. Bryan Gould: I beg to move, That the clause be read a Second time.
  Mr. Deputy Speaker: With this it will be convenient to take amendment No. 1, in clause 1, page 1, line 9, at end insert
  'and
  (c) inserting a new provision to modify the presentation of company accounts so as to allow shareholders to consider contributions for political purposes separately from other business in general meeting.'.
  Mr. Gould: May I begin by welcoming the Under-Secretary of State for Corporate Affairs to his new job and to the Bill? As the hon. Member for Chichester (Mr. Nelson) said, he has arrived at a crucial moment, because the Bill is about to break the unfortunate record established by his Department in respect of the Insolvency Act 1986 and the Financial Services Act 1986. If my hon. Friend the Member for Bolsover (Mr. Skinner) is right in predicting that hundreds of new amendments will be tabled, that unhappy record will be broken with some comfort.
  In welcoming the Under-Secretary, I venture on the debate with some trepidation, because I recently read in the newspapers that this occasion is to be used by the Minister to launch a most ferocious attack on me. The reports appear in dreadfully blood-curdling terms, and I understand that I am to be portrayed as the bogy man, red in tooth and claw, and as someone with whom to frighten all right-thinking people. The only comfort that I take is that I see myself—perhaps I am mistaken—as a most unlikely bogy man, but, when I see the Minister sitting opposite me in all his meekness and mildness, I feel that he is a rather improbable hatchet man.
  The only reason that I feel that degree of trepidation, however, is that, again, the self-same reports tell me that the precise weapon with which it is intended to attack me is a book which I recently published. I should be delighted if the hon. Gentleman wishes to draw attention to the book, but I assure the House that any arrangement that the hon. Gentleman may have made with my publishers to provide further publicity to the book really has nothing to do with me. I can certainly do little about it. But if he will insist on boring hon. Members with frequent references to my book, I plead not guilty to that imposition. The responsibility must be entirely that of the hon. Gentleman.
  The book refers briefly to principles of limited liability in similar terms to those which I used on Second Reading. I fear that those who expect to find great revelations in the book will be sadly disappointed—if, that is, they have bothered to familiarise themselves with the proceedings on the Bill so far. However, the book does not deal with company donations. That is the subject of the new clause and, therefore, this brief debate. I assure the House that, for the moment at any rate, we are safe from the dreaded attack about to be launched by the hon. Gentleman.
  The new clause is an exact replica of the amendment passed in another place when the Bill began its passage with their Lordships. It is by no means a perfect provision. Opposition Members understand that it suffers from some defects, but we believe that it was worth tabling the new clause in this precise form simply to encourage the House to take a similar view of this issue to the one that was taken by their Lordships. If the Government are willing to accept the principle that lies behind the new clause, I have no doubt that the technical problems could be corrected by an appropriate amendment or new clause when the Bill returns to the other place.
  The defeat which their Lordships inflicted on the Government in the other place was rightly hailed as a great political victory—indeed it was—but it was also a great victory for common sense. The debate, vote and conclusion on that occasion demonstrated that anybody who bothered to look at the arguments—their Lordships considered the arguments very carefully—would realise the thinness of the Government's objections to what was being proposed. Accordingly, their Lordships inflicted
  886
  defeat on the Government. Predictably enough, the Government reversed that decision in Standing Committee, but, although they mustered the votes, it cannot be said that they won the arguments. The arguments remain exactly as they were when the matter was debated in the other place, and they are arguments which would convince everybody other than direct supporters of the Conservative party.
  Mr. Tim Smith: It was not a Government amendment; it was my amendment, and the Committee agreed it.
  Mr. Gould: I read the record of the Committee's deliberations with some care. I am slightly surprised that the hon. Member for Beaconsfield (Mr. Smith) should put his head forward on the chopping-block a second time. His ministerial colleague, the present Minister's predecessor, was quite rightly criticised for sheltering behind the hon. Member for Beaconsfield, who, admirable though he is, is not a direct spokesperson for the Government. It would have been much more appropriate for the Minister to advance that proposition rather than to use a Conservative Back-Bench Member to do the job for him.
  The starting point of this debate is that the matter of donations by commercial companies to political parties is one of considerable murkiness. In making that assertion, I am encouraged and sustained by the very good evidence that considerable embarrassment is felt by all parties to such transactions. Again, the best evidence for that embarrassment is the very considerable efforts made by donors and recipients—let us be clear that the only major recipient that matters here is the Tory party—to conceal what is going on. It is persuasive evidence of that embarrassment that great subterfuges are resorted to and clandestine procedures are used. Every effort is made to conceal the truth of what goes on in that murky and somewhat grubby relationship.
  That is why we saw all the revelations in The Independent earlier this year about the river companies which have only recently come to light, although they functioned for many years. We are told that all that is behind us and in the past, but, at the time, we would have been assured that there was nothing in the stories anyway. We can place little reliance on assurances that none of it happens any longer. It is considered that at least three of the river companies still exist, but it is not clear for what purpose.
  There is also the use of front organisations—again not a matter which can be disputed. The Conservative party finds it convenient to set up front organisations, of which British United Industrialists is the most prominent, so that donations can be made in an indirect fashion. The reason for that is clearly admitted by some of those involved. Lord Taylor of Taylor Woodrow, prominent in BUI, admitted that BUI provides a financial conduit for business men who are frightened of their names being displayed as supporters of the Conservatives. That is a clear admission that the purpose of setting up the front organisation is to deceive and to conceal what is really happening.
  There are also devices such as the use of special bank accounts, for example, the so-called free enterprise account at Drummonds bank. I wonder whether the Minister will enlighten us on whether that account still functions and, if so, for what purpose. It is not only the

  887
  donors who are shy in these matters, but the recipient—the Tory party—is extremely reticent. Tory party accounts make no mention of the substantial donations that its own members concede account for about 90 per cent. of Tory party income. There is a great deal of effort to conceal what is happening on both sides of the transaction.
  There is a good reason for that embarrassment. A transaction in which commercial enterprises, usually companies, pay to a political party—in this case the Government—sums of money in circumstances in which that party in government could conceivably reward such payments with commercially important decisions favouring the donors is fraught with difficulty and will always arouse suspicion—and rightly so. Such suspicion centres on relationships which involve the award of personal honours. the award of Government contracts, the making of public appointments, and the application of ministerial permissions and sanctions of various sorts. In each case in which a payment is made and a reward is either potentially available or is actually made, the only safeguard that we have in the public interest to ensure that it is not an improper relationship is that there should be maximum openness about what is going on.
  Such transactions would be bad enough if it were a matter of individuals making payments of their own money, but what is particularly worrying about company donations is that a small group of people make donations of other people's money and, presumably, expect some reward for themselves or for their company as a consequence.
  A potent example of the difficulty into which secrecy and confusion can lead us is the recent sad episode of the Monopolies and Mergers Commission report on the brewing industry. When the commission made its report, the then Secretary of State proclaimed that it was an excellent report and that he was minded to implement it in full. Some of us were just a little more sceptical, not to say cynical, about that matter. We then observed a sequence of events in which great efforts were made by the major brewing firms to lobby hon. Members, Ministers and eventually, so we understand, the Prime Minister. The all too sadly predictable upshot was that the brewers had their way. The Secretary of State who had proclaimed himself so boldly at the outset was made to look foolish and craven when he abandoned the report by the Monopolies and Mergers Commission. Perhaps nothing improper happened in that relationship. However, no one observing that course of events could fail to ask whether the success which the brewers clearly expected and eventually enjoyed did not have something to do with the fact that the major brewers are bank-rollers and paymasters of the Tory party.
  5.30 pm
  Because suspicions necessarily and naturally arise in such cases, for some 20 years now this legislature has regarded donations to political or charitable purposes as a special category. That is why the Companies Act 1967 made special rules for that kind of donation. That is why the law remains that any donation over £200 must be reported specifically in the annual report presented to the ordinary general meeting.
  Mr. Hanley: The hon. Gentleman was right to state that any donation of that sort over £200 must be stated in the directors' report. He will also know that any shareholder
  888
  can raise the subject at an annual general meeting and may vote with a simple majority whether such a payment should have been made. Surely in corporate terms democracy is available and there is also the opportunity to embarrass directors. The matter can be raised in a proper form.
  Mr. Gould: The hon. Gentleman and I have sat opposite each other in many Committees dealing with these issues. He will be aware that there were earlier occasions when I had to tell him that his interventions had come a little early. If he will exercise a little patience, I will be happy to deal with his points.
  The point that I was making, which is important to the sequence of the argument, is that there is good reason for the present company legislation to make special provision because the decision to give money to political or charitable purposes cannot, in the ordinary sense, be a commercial decision. If it was a commercial decision in the sense that it was expected to produce a direct and immediate commercial consequence or benefit to the company concerned, it would clearly be improper for the very reasons that we have just discussed. The donation cannot be made for buying a ministerial decision favourable to that company. It can be made only in propriety for a much wider purpose reflecting the general political judgment of the directors concerned. However, that is not what they are employed to do. Both shareholders and non-shareholders are entitled to make such a judgment, but the directors are employed to make a commercial judgment which, by definition, is excluded. That is why special rules are provided.
  We must then decide whether the current arrangements which recognise the special nature of such donations are adequate to protect the shareholder and assure the public interest that nothing improper is happening. The difficulty with the situation described by the hon. Member for Richmond and Barnes (Mr. Hanley) is that of course it is possible for a shareholder attending the ordinary general meeting to comment adversely on what has already happened. However, his only sanction is to vote against the whole report and vote it down. For the reasons that were explained admirably in another place when their Lordships discussed the issue, that is a highly unlikely course of action because it is well known that if that happened a great blow would be dealt to the company's commercial management with a consequent loss of confidence. That is why the sledgehammer provided by the current provisions cannot possibly be an effective weapon in the hands of disgruntled shareholders who want simply to express their opposition to this particular use of the company's resources.
  However, in that scenario, shareholders are informed retrospectively and too late. They are informed in a way that makes it impossible for them to do much about it. That is why we propose that the position should be improved so that shareholders have more control over a situation in which they are currently powerless.
  Mr. Hanley: Where in the Companies Act 1967 does it say that shareholders must vote in favour of the whole directors' report? I understood that the matter could be raised separately by the requisite number of shareholders and therefore it can be voted upon separately.
  Mr. Gould: Of course, anything can be raised and discussed separately. However, to get any effective action,

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  a special resolution would have to be tabled. The only effective way of reversing what had happened would be to vote down the whole report.
  The Government's arguments against the proposal in new clause I are totally unconvincing.
  Mr. Nicholas Baker: What would be the position of directors who proceeded to make a donation against the terms of a resolution carried at an ordinary general meeting if such a resolution had been voted down, albeit if that was not a special resolution? Will the hon. Member for Dagenham (Mr. Gould) release us from our anxieties? Will we get a discount on the price of his new book? Is that the book before him?
  Mr. Gould: Yes, this is my book and I am anxious to display it. It is available at the full price. It is called, "A Future for Socialism". Unfortunately, I do not have the right to sell it in large numbers, but I can recommend several excellent book shops which will sell it at its cover price.
  In response to the point made by the hon. Member for Dorset, North (Mr. Baker), the problem is that no special resolution could undo what had already happened. A resolution would have to be passed instructing company directors not to make such payments in future. It would be very difficult to be sure that, as shareholders move from one company to another, they keep pace with what has happened and been reported to them retrospectively.
  The Government argue that the proposals in new clause I affect only trivial amounts. They may be trivial to the company donors, but they are substantial in terms of financing a political party. In 1987 the donations amounted to £4 million. Indeed, there may be other donations which were not adequately reported. In 1984, a survey of 1,250 companies revealed that 320 had made donations—243 to the Tory party and 110 to front organisations. The proportion of companies making those gifts is quite large. Taylor Woodrow, P and O, Allied Lyons, British and Commonwealth and United Biscuits are among the companies which gave more than £80,000 last year. These are not inconsiderable sums.
  The Government's next argument is that advanced by the hon. Member for Richmond and Barnes—that the present arrangements are quite sufficient. The difficulty is that most shareholders are naturally not represented at an ordinary general meeting. Also, and I believe that Conservative Members are unwilling to acknowledge this, many shareholders are not individual or direct shareholders; they are the beneficiaries of or people with interests in pension funds and insurance companies which have major shareholdings on their behalf. There are hundreds of thousands, if not millions, of people whose contributions to pension funds and insurance companies are invested without their knowledge in companies which then, without referring to the shareholders, make political donations to the Tory party. That is an extraordinarily unsatisfactory situation and we should do what we can to correct it.
  Mr. Tim Smith: What evidence does the hon. Gentleman have that shareholders, whether direct or indirect, are dissatisfied with the present arrangements?
  Mr. Gould: Shortly I shall discuss the polling evidence that reveals public opinion, but the hon. Gentleman's question demonstrates what is wrong with the present situation. As a consequence of the amendment that he moved in Committee, and as a consequence of the status quo that he wants to preserve, it is extremely difficult for shareholders to be aware of, or to express an opinion on, precisely the question to which he has addressed our attention. Because we believe, in the interests of democracy, that shareholders should have that opportunity we want a change to be made.
  At an earlier stage in our deliberations the right hon. Member for Braintree (Mr. Newton), then Minister of Trade and Industry, suggested that there was a remedy in the hands of shareholders in the sense that if they were dissatisfied with political donations reported to them, they could sell their shareholding and move on to another company. That doctrine is extraordinary if based on any democratic principle, and it would not even work in practice. Even if an individual shareholder followed that advice, even if he were to traipse around the stock exchange to look for companies that met his criteria and even if he were prepared to accept all the transaction costs that might be involved, he could never be sure that he had not invested in yet another company that was making the political donations to which he had originally objected. He would discover that only when he attended the ordinary general meeting. The Minister and his colleagues quickly dropped that argument and we have not heard much of it since.
  Mr. Hanley: I do not want to delay the House, but surely if a prospective shareholder felt so seriously about this matter he could write to the directors to ask them about their policy.
  Mr. Gould: Why does a democratic right to exercise control over what is admitted on all sides to be a specific and rather dangerous form of donation depend upon the initiative being taken by the shareholder who fears that he may or may not be aggrieved? If we establish the principle that it is right that shareholders should have some power of control over such matters, that right should be available to them, whether or not they initiate that right. In an election no one suggests that one must apply for a vote before one receives it—one receives a vote by virtue of being a citizen. Similarly, as a shareholder, one should have a vote and that right of control.
  The hon. Member for Beaconsfield asked about the evidence as to the opinion of shareholders. The only evidence of which I am aware is a MORI poll that showed that 82 per cent. of the public—admittedly not shareholders in particular—favoured our proposal that shareholders should be consulted before political donations are made. The only instance of a ballot being taken of shareholders was, as far as I am aware, conducted by the National Freight Corporation when no fewer than 87 per cent. of shareholders voted against political donations being made. In the absence of any other evidence I believe that the available evidence is conclusively in favour of our proposition.
  If the hon. Member for Beaconsfield wants further convincing on this matter, I refer him to members of his own party. The Charter Movement, which publishes Charter News, said:

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  "Over 90 per cent. of the Party's income in 1987–88 came from donations. No information is given in the accounts about these donations, which makes it all too easy"—
  and all too understandable
  "for our political opponents to allege improprieties, which it is then impossible for Conservative supporters to counter".
  The arguments against our proposal do not carry conviction. Our proposal has widespread public support and it flows directly from democratic principle and practice. No amount of special pleading—one might almost say specious pleading—on behalf of the Tory party can displace the proposition in the new clause, which is fully supported by public opinion and which is consonant with common sense and democratic principles.
  Mr. Frank Haynes: The Conservatives adopt a one-sided approach to this argument. They made the trade unions consult their members about the political levy and they put that on the statute book. When it comes the other way round, however, they do not want to know. The shareholders are told after the donations have been made and they are not consulted about them. If the Conservatives do not accept what we are suggesting, will my hon. Friend let them know in no uncertain terms that when we get back into office after the next election we shall do it ourselves?
  5.45 pm
  Mr. Gould: My hon. Friend is right to point to the double standards which the Conservatives apply to this important issue and I endorse the point that he has made.
  The onus is on the Government, or more particularly the Conservative party, to say why a sensible reform should not be implemented. Their continued opposition to that sensible reform shows that they are prepared to put self interest above public interest. It shows that their constant espousal of shareholder democracy is a sham and how determined they are to keep from the light of day and from proper scrutiny their grubby relationship with their secret backers. It is an act that needs to be cleaned up and if the Tory party will not do that job, Parliament will, and if we have to wait for a Labour Government, Parliament, under that Government, will do that job.
  Mr. Nelson: What we have just witnessed is another death throe of the Labour party. Underneath it all it recognises that it has lost the support of enterprise and industry. The only way in which it can make up for that is to try to prevent that part of the economy from contributing freely to a party that stands for an ideology that it perceives to be in the interests of the economy, employers and company employees.
  When my hon. Friend the Member for Beaconsfield (Mr. Smith) moved an amendment on this matter in Committee—it was the first subject to be dealt with—it represented an initiative from Conservative Back Benches and was not at the instigation of the Government. It was universally welcomed in principle by Conservative Members because we believe that the directors of a company should decide what is in the best interests of that company; indeed, they are required to do so. Their interests are those of their employees, customers, creditors and shareholders.
  All companies are affected one way or another by Government policy, but certain major companies, such as those in the oil industry, the financial services industry and in defence are radically affected by the policies adopted by
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  political parties and by the Government of the day. I believe that it is proper and above board for those companies to be able to back overtly a party that stands for their interests, be they the interests of their employees, shareholders or interests relating to their specific activities.
  The new clause represents an admission by the Labour party that the productive side of the economy knows which political party is backing it. It is only because the Labour party is bereft of the policies that can lead to future stability for companies that it has sought to frustrate the right of those companies to back that party.
  Mr. Ian Gow: Will my hon. Friend please read out to the House a list of those companies that make political gifts to sustain and strengthen the Labour party?
  Mr. Nelson: I fear that I do not have that information to hand. If my hon. Friend is able to catch your eye, Mr. Deputy Speaker, I hope that he will be able to elucidate on that. It is undoubtedly true that the Labour party receives support from a variety of quarters—from the corporate sector, as well as from the trade unions.
  The hon. Member for Ashfield (Mr. Haynes) mentioned the requirement that has been placed on trade unions to ballot their members. The difference is that one can opt out of making political contributions through a trade union, whereas, other than by selling the shares, one cannot opt out of a company of which one is a member. The two cases are fundamentally different.
  Mr. Gould: The hon. Gentleman has just made a powerful point in support of our contention. I was also interested in a point that he made a moment ago when he appeared to concede that the effect of passing the new clause would be to "frustrate"—to use his word—the making of such donations to the Tory party. May I take it that he concedes that to introduce this element of shareholder democracy would produce decisions that are different from those currently taken by a small minority of directors?
  Mr. Nelson: No, I do not concede that because, as my hon. Friend the Member for Richmond and Barnes (Mr. Hanley) has already said, that right is already available to members of a company. Before the annual general meeting, members of a company are given that company's report and accounts and have adequate time in which to table any necessary resolutions and to obtain support for them. Any board of directors worth its salt—most of the boards of directors of this country's public limited companies are certainly that—would take seriously any such resolution passed at an annual general meeting.
  Mr. Derek Fatchett: Parallels with trade unions have been drawn several times. From his vast knowledge of industry, the hon. Gentleman must know that trade unions operate on exactly the same basis as companies. Under the law as it has existed from 1913—and as it still exists, with one major change—trade unions publish their political fund accounts. They present them to their annual meetings—their conferences. In those circumstances, there is an exact parallel with companies. Why did the hon. Gentleman vote for the 1984 trade union legislation, which imposed an additional duty on trade unions—to ballot their members—when he opposes such provisions for shareholders?
  Mr. Nelson: Because at that time many members of trade unions could not get out of being members of their trade unions. In many cases, their jobs depended on their trade union membership because of the closed shop. Under that reality, it was essential that there was openness in terms of trade union contributions—I welcome what the hon. Gentleman said on that—and that people had the right to opt out. In my judgment, that position is not analogous to that of a company, because the opting-out provision does not mean the same thing and cannot operate in the same way.
  Mr. Nicholas Baker: Will my hon. Friend give way?
  Mr. Nelson: Although I do not wish to prolong the debate, I shall give way briefly to my hon. Friend.
  Mr. Baker: My hon. Friend has put his finger on the important point, which is the position of directors of a company that has, by its shareholders, voted to disapprove of such payments. I put the point to the hon. Member for Dagenham (Mr. Gould)—who did not answer it—that any directors who persisted in making such donations in the face of such a resolution would not simply be doing something unwise or immoral, but would be laying themselves open to a legal action, instigated by their shareholders. The existing law is not negligible; it is powerful and directors are right to take notice of it.
  Mr. Nelson: I am obliged to my hon. Friend and agree 100 per cent. with what he has said.
  The Labour party has defended every restrictive trade and labour practice that we have tried to sweep away over recent years. The dock labour scheme is just one example. My right hon. Friend the Secretary of State for Trade and Industry is right to seek to liberalise industry and to promote profitability and reinvestment. Why should industry not be allowed to decide who is helping its ambitions, employees and shareholder interests? Companies already provide facilities for their members to question political contributions, so the new clause is redundant and unnecessary and the House should not accept it.
  Mr. David Winnick: We all know which restrictive practice the hon. Member for Chichester (Mr. Nelson) has defended. I have no doubt in my mind that the new clause and our amendment will be heavily defeated. If it was possible for the Conservative party to have a heavier Whip—perhaps a six-line Whip—it would do so. We can rest assured that there will not be a single Tory rebel on this issue. They will all troop through their Lobby accordingly.
  I also have no doubt that if people outside the House knew what we were discussing, they would believe that the Opposition have fairness, justice and reason on their side in tabling this new clause. As the beneficiary of donations from companies, the Conservative party is saying, "The law is all right. There is no need to change it." Indeed, even the existing legislation, which was enacted in 1967, was not greeted with any enthusiasm by the Conservative party at that time. The only explanation for all this is that the Conservative party is extremely reluctant to allow undue attention to be paid to the way in which it is so heavily financed by so many companies.
  If contributions were made to the Conservative party in a straightforward way, there would perhaps be less reason for tabling the new clause. However, such contributions
  894
  are not made in a straightforward way—they are made in a furtive, underhand and murky way, as my hon. Friend the Member for Dagenham (Mr. Gould) has said.
  My hon. Friend referred to the river companies. I did not use to know of their existence and I doubt frankly whether many Tory Members knew either. Indeed, at least one Tory Member is nodding in agreement with that comment. However, the river companies existed for many years and the purpose of those fake companies was quite clear. Incidentally, they were publicised in The Independent when the Sunday Times was not keen to publish the story. Their purpose was to channel large sums of money to the Tory party. Because the river companies were never publicised, until those articles appeared most people—including those in the media as well as many politicians—did not know of their existence. I would imagine that their existence was known to just a few people in the higher reaches of the Conservative party.
  British United Industrialists is another Tory front organisation. I have certainly known about it for a number of years. The function of that organisation—very likely, it has no other function—is to act as a financial link between various companies and the Tory party. Indeed, 90 per cent. of the income of British United Industrialists is simply passed on to Conservative Central Office. At one stage in the 1970s it was decided that contributions to the Conservative party should be made out to the "free enterprise account" at Drummonds bank.
  The Conservative party does not even publish a properly audited balance sheet of its finances. That is why there is so much concern about the manner in which one of the state's two major parties organises its finances in such an underhand and furtive way. It does so because it is frightened that undue attention might be paid to the sources of its money.
  If, as the hon. Member for Chichester said, the Conservative party is proud of the way in which it receives such donations, the question from myself and my hon. Friends is surely obvious—why not publish the full details? Why behave in this underhand way? The explanation is obvious also.
  Lord Taylor, the president of Taylor Woodrow, who is a leading light in these financial dealings, and whose own company is so generous to Tory funds, is quoted as saying:
  "We had to fight Harold Macmillan to avoid him going socialist. And, but for Aims of Industry, Edward Heath would have agreed to putting union leaders on the boards of companies."
  Clearly the present Prime Minister is much more to the liking of Lord Taylor as party leader than were two of her predecessors.
  Under existing legislation a company needs only list the amount under political donations. It can state that it is making a contribution to BUI, and nothing else. The shareholders will not know how that money will be sent on from BUI to the Conservative party, or perhaps to another front organisation. The new clause would mean that such contributions would be properly and separately debated at general meetings, which explains why Conservatives are so opposed to making the change.
  6 pm
  Sometimes when I study the way in which the Tory party organises its finances I wonder whether Richard Nixon and those associated with him mastermind the arrangements. He knew all about laundering money; perhaps he could have given the Tory party more advice.

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  Money is being laundered—the Minister shakes his head, but it certainly is, and the river companies would not have existed had they not been considered necessary by Tory central office.
  We are not talking about peanuts—about donations of £100 or £400 or so. Last year 16 companies alone made donations of £50,000 or more each to the Conservative party or front organisations, and the top 10 donated more than £1·5 million. The largest donation came from Taylor Woodrow, which last year contributed more than £111,000 to the Conservative party.
  I want to compare briefly the subject under debate with the way in which this same Government insisted in legislation that unions must hold ballots every ten years on whether to have a political fund. As I said when the legislation was debated, at their annual conferences unions could decide whether they wanted to continue a political fund or to discontinue or start one. The law on that was perfectly clear. Moreover, as the hon. Member for Chichester pointed out, any member of a union with a political fund can opt out—that has been the position since 1913. Any member of any trade union can tell the branch secretary that he does not want to contribute to a political fund and that is that.
  Shareholders cannot opt out in the same way. Despite all the safeguards in place at the time, the Conservative party—with no members dissenting—decided to change the law, and the trade unions had to hold a ballot every 10 years. It so happens that victory went to the trade unions. Not only did all the unions with political funds vote to keep them: one or two that never had one decided to begin one.
  However, the purpose of the exercise was quite different—the Government tried to cripple the finances of their major opponents. We have never denied of course that the Labour party's funds have always been far more limited than those of the Conservative party, but the Government were not satisfied and tried to undermine still further the financial position of their political opponents—and that from a party which claims to be in favour of parliamentary democracy.
  We are not trying in this new clause to cripple the funds of the Tory party. The proposed clause will not be passed, hut: if it were, shareholders would be able to approve, or not, donations to the Conservative party. It is likely that they would usually approve them—I would not challenge that.
  In case some Conservative Members believe that I am exaggerating—I always try to avoid that—one of the leading members of the Charter movement inside the Tory party, Peter Hardy, is quoted as saying that he has long suspected that the Conservative party has hidden reserves in secret bank accounts. If I or my hon. Friends had said that, we would have been denounced as exaggerating as usual. Presumably, Peter Hardy is as much an active Conservative supporter as any Conservative Member—the difference being that he and others in the Charter movement, such as Eric Chalker, happen to believe that their party should be run in a straightforward and honest manner. I see no reason why they should be criticised for that point of view.
  My hon. Friend the Member for Ashfield (Mr. Haynes) told my hon. Friend the Member for Dagenham that he hoped that a Labour Government would effect the sort of changes in the financing of political parties which will never he made as long as the Conservative party has a
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  majority in the House. I agree. Perhaps we should have brought about such changes when we were in office: it is regrettable that we did not.
  Conservative Members may shrug this off and call it the usual Labour party propaganda, but the more they resist modest reforms along these lines the more determined the Labour party will be when in office to make substantial changes to ensure that the Tory party is put on the same footing as the Labour party. So if trade unions which, to a large extent, finance the Labour party need to hold political fund ballots every 10 years, alongside observing the provisions from before the 1984 Act, it is only right and proper that the same should apply to companies and shareholders.
  Either we change the law along the lines being suggested now, or we perhaps should come to the conclusion that the financing of the Conservative party by big business and of my party, in the main, by trade unions is wrong, and that the remedy lies in some form of state funding. There is already state funding of opposition parties, from which the Conservative party benefited when it formed the Opposition. I am not entirely sure that that is the best remedy but I am coming round to that view more and more. Perhaps the real remedy to end many of the present controversies would be for the state to finance political parties in accordance with the number of votes they received at the previous general election. I am not entirely convinced that that is the solution, but perhaps we should consider it further at some stage.
  Mr. Richard Shepherd: The last point made by the hon. Member for Walsall, North (Mr. Winnick) has some merit. The most extraordinary thing about this debate is the sense of déja vu that it conveys. I had not appreciated that the Opposition had been converted so solidly by the arguments advanced by my party and the Government during the reforms of the trade union movement.
  What is sauce for the goose is sauce for the gander. All the arguments adduced by the Opposition spokesman, the hon. Member for Dagenham (Mr. Gould), tailor neatly with most of the arguments adduced by the Government when requiring ballots on trade union political funds. It can be argued with a sense of equity that it is not unreasonable that companies should ask their shareholders directly whether they should make a political donation. It must be reasonable.
  Some of my Conservative colleagues have said that it does not matter, and that they can be sacked anyway. I have listened to the same arguments from the trade union movement. For 60, 70 or 80 glorious years it had the perfect source of finance, and the leadership did not have to trouble the membership too much about detail. It was the leadership's right to grant funds to the Labour party. Indeed, the Labour party was created by the trade union movement.
  Our anxiety is that the public may perceive that we are the creation of big business. Clearly it will be a case of what is sauce for the goose is sauce for the gander if it is exposed that our support comes from big business. There should be a more relaxed atmosphere. The argument that the decision should be put to the shareholders may well not serve us ill, as a party. There is no evidence to suggest that it will. There is a lot of evidence for the argument advanced

  897
  by my hon. Friend the Member for Chichester (Mr. Nelson), that the judgment of the majority of shareholders will be in favour of the continuation of donations.
  I remember the Labour party's trepidation at the prospect of change in trade union legislation. There was anxiety. I have to acknowledge that there was also some triumphalism among Conservative Members that that legislation would be the end of the Labour movement as we knew it. It was thought that trade unionists who were deeply disaffected and disappointed by the conduct of the Labour party would withhold funds. In the event, it did not turn out that way. As the hon. Member for Walsall, North has just said, the legislation consolidated Labour's strength and the donations, strangely enough.
  I do not see any reason why there should be any mystery. It is not an unreasonable proposition that shareholders should vote directly on donations to political parties. That is why I call this sauce for the goose and sauce for the gander.
  There is a sense of equity and fairness in our nation. It looks blindly partisan if we say that we expect rules and regulations to be imposed on our political opponents, but that they must not apply to us. Our arguments have mirrored those made by a nervous Labour party when it had to confront the possibility of unions having to ballot their members on political donations. Companies may decide to donate money to the Labour party or that wealthy individuals, through companies, may make donations to the S whatever it is called—the SDP, I think.
  It is important that the Conservative party shows itself to be fair-minded about this matter, particularly these days. The Government should treat this issue with caution for fear that, should we reject a measure that is essentially fair, the public perception will be that we have become so particular in these matters that we want only to reinforce our own finances. We will find it in our interests to do this because the measure would give confidence to company boards, supported by the votes of their shareholders, if that is their wish.
  I beg my colleagues on the Front Bench to look at this proposal with a more open mind.
  Mr. Charles Kennedy: I support new clause I. [Interruption.] Does the hon. Gentleman wish to intervene?
  Mr. D. N. Campbell-Savours: I did not want to intervene. I was merely asking my hon. Friend the Member for Walsall, North (Mr. Winnick), from a sedentary position, whether the British School of Motoring contribution has been sorted out yet.
  Mr. Kennedy: The hon. Member for Workington (Mr. Campbel-Savours) was kind enough to give me advance warning that he intended to crack that hilarious joke, which has never been heard in this Chamber before. I gather that it refers to a body which was once known as the British Liberal party, of which I was not a member. Therefore, I am not prepared to answer or to take responsibility.
  I agree with the new clause although, after listening to the speech of the hon. Member for Walsall, North (Mr. Winnick), I feel that we should go for full state funding of political parties. Ultimately, that will be seen to be the logical step, and it is preferable to what was fairly
  898
  described by the hon. Member for Aldridge-Brownhills (Mr. Shepherd) as the sauce for the goose, sauce for the gander situation with which we have been presented in this debate, and in previous debates on the Bill.
  6.15 pm
  The frank and straightforward speech of the hon. Member for Walsall, North highlighted what, from the point of view of a third political party, is a basic criticism of the whole system. He rightly said that the bulk of Labour party funding comes from the trade union movement—I say good luck if it wants to use finances in that way—and that the bulk of Conservative party funding comes from the corporate and the private sector.
  The hon. Member for Dagenham (Mr. Gould) was critical of the Department of Trade and Industry's response to the Monopolies and Mergers Commission's report on the brewing industry. Conservative Members were critical of the Labour party's attitude to trade union legislation and to the promises in the policy review document that there would be further movement in a direction that the trade unions want. All that underpins the fundamentally unhealthy nature of having a political system that is so directly dependent, on one side of the political divide, on private sector finance and, on the other side, on the trade union movement. That clearly influences Government and Opposition policies to an unhealthy and dangerous extent. That approach has done much legislative damage to the body politic for many generations.
  Mr. Michael Brown: Can the hon. Gentleman tell the House whether he has arrived at that conclusion because of the experience of his former party—the SDP—which I understand received approximately £9,975 in the year up to 1987? It may be that that £10,000 now goes to the Liberal Democrats. Perhaps the hon. Gentleman is embarrassed by that. [HON. MEMBERS: "From Lonrho."] Yes, from Lonrho—I think that you will have heard of that company, Mr. Deputy Speaker. Is it embarrassment at receiving that sort of donation that has led the hon. Member to the conclusion that he has just put to the House?
  Mr. Kennedy: I can assure the hon. Gentleman that the party of which I am a member has not received, and is unlikely to receive, any money from Lonrho, and would turn it down if it were offered. If that party which adheres to the right hon. Member for Plymouth, Devonport (Dr. Owen) receives money from Lonrho, that is a question for him. If money from that source was paid to the then SDP in 1987, I was not aware of it. I would not have supported it, and any questions about it should be directed to the politician who now purports to be the leader of that party.
  Mr. Brown: Should the hon. Gentleman not be arguing that it is a question not whether the Conservative party needs to publish its accounts but whether the party of which he was once a member ought to publish its accounts more widely?
  Mr. Kennedy: I was once a member of that party, but if the hon. Gentleman studies the legal and constitutional terms of the merger between the Social Democractic party with the British Liberal party, he will find that that party is still within the merged party and therefore those people, to whom I shall refer as provisionals in all this, must speak for themselves. I do not take responsibility for them.

  899
  I shall return to my basic contention—[HON. MEMBERS: "It is the very man—the hon. Member for Caithness and Sutherland (Mr. Maclennan)."] I am sure my hon. Friend will write to the hon. Gentleman to answer his question. I should add that I am sponsored by nobody.
  Conservative and Labour Members have criticised each other's parties. However, in defending their own parties they highlighted the weakness and the unsatisfactory nature of the entire system. It cannot be healthy for the body politic of the country for industry to be bound financially to one side of the political divide. That is sure to influence legislation and party political attitudes and it is the mirror image of what happens on the other side of the political divide.
  Criticism has been levelled at my party and at some of its members. When the SDP came into being, we said that one cannot build a party that will not be in somebody's pocket unless one is prepared to dig into one's own pocket. The Liberal Democrats adhere to that principle. The present financial arrangements will not be changed by the Bill. The overwhelming bulk of our funding comes from membership subscriptions and through direct mail appeals to members and supporters. At the end of the day, that is healthier and fairer than the funding of political parties related to the proportion of the board of directors that a party has been able to attract at the previous election.
  If the Government will not accept the new clause as a small step, I hope they will take an early opportunity to redress the gross injustice, imbalance and incoherence of the political system which arise from our present unsatisfactory arrangements.
  Mr. Gow: The hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) criticises political parties that receive donations from companies. He said that he did not like money going from trade unions to the Labour party and from companies to the Conservative party. He suggested that such donations, and presumably other voluntary donations, should cease and that the British people should be obliged to finance the Social and Liberal Democrats, the Labour party, the Conservative party and the Scottish National party. So muddled is the hon. Gentleman's thinking that one could conclude that possibly even Sinn Fein should be supported in that way. That proposal does not find much favour among my hon. Friends, although my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd) seemed to be flirting with the idea.
  Those who wish to support political parties, whether they are members of trade unions or companies, should be free to do so. I am strongly opposed to imposing additional taxation on the British people so that they can finance political parties of whose purposes they may disapprove.
  The hon. Member for Ross, Cromarty and Skye is immensely and rightly popular in the House, but his speech contained another sad characteristic. He criticised political parties that receive donations from companies and was asked by my hon. Friend the Member for Brigg and Cleethorpes (Mr. Brown) about Lonrho. The hon. Gentleman said that he knew nothing about it. Lonrho has extensive trade dealings with the Republic of South Africa. The Financial Times of 23 February 1988, a newspaper well known to the hon. Member for Ross, Cromarty and Skye, said:
  "Lonrho, mining, trading and industrial company headed by Mr. Tiny Rowland, donated £9,775 to the Social Democratic Party last year."
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  That was in 1987. That means that at one time Lonrho, with its vast interests in South Africa, thought that it might hedge its bets and make a donation to what was then. I think, called the Alliance. The hon. Gentleman will correct me if I have my timing wrong.
  At that time, some companies and even a few people believed that it was possible for the Alliance to attract some support from the British people. I have news for the hon. Gentleman. No donation will be forthcoming from Lonrho at the next general election to the Social and Liberal Democrats. The support for that party from the trade union movement and companies and from the British people will be very slender.
  Dame Elaine Kellett-Bowman: What about the learner drivers?
  Mr. Gow: I shall come to that later.
  The hon. Member for Ross, Cromarty and Skye complained about the way in which political parties are funded. We have seen that opportunistic change of mind before by the SLD, because it characterised the abandonment of its previous support for the policy of first past the post. The SLD has grown out of the Liberal party. When the Liberal party was amassing great majorities in the kingdom by means of first past the post, it was in favour of that system. When it discovered that its support was waning and that the only way in which it could have more Members of Parliament was to alter the rules, it was in favour of doing so.
  It is a new doctrine for the inheritors of the Liberal party now to say that they are in favour of state funding for political parties and against trade unions, companies or individuals being allowed to support such parties. The reason for that is simple. It is that everybody knows that the SLD is bust. That is why it says that it should be financed by the Government. That is a most dangerous argument and it again reveals that, when the going gets rough and when that party cannot support itself by the existing rules of finance for the electoral system, it will alter course.
  Mr. Graham Allen: I support the hon. Gentleman's view about not levying the taxpayer. People should not have to pay into a state fund that finances political parties. Will the hon. Gentleman extend that argument to shareholders? Should they be levied for money for the Conservative party? Would he go further and say that consumers of beer, supermarket goods and insurance and other services should be balloted and consulted before money is taken from them?
  Mr. Gow: I propose to deal with that matter, and I shall again give way to the hon. Gentleman if he is dissatisfied with what I have to say.
  The new clause contains a proposal that retrospective approval will have to be given at an annual general meeting for donations that have been made by the board of directors. A board of directors should be free to carry out the duties laid upon it by the memorandum and articles of association of the company concerned and, of course, must act within the constraints of the Companies Acts. It should be up to directors to take decisions that fall properly to them. Of course directors are accountable to and removable by shareholders at the annual general

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  meeting. If shareholders do not like the decisions taken by the directors, those directors can be and frequently are removed.
  The new clause seeks to set a dangerous precedent. If retrospective approval has to be given for a political donation, will it also be required if directors enter into a contract with the Republic of South Africa? That question will appeal to Opposition Members. That is an interesting matter that exercised the attention of my right hon. Friend the Prime Minister at Kuala Lumpur.
  I am glad that the shadow Chancellor is in his place. I understand that some Opposition Members say that specific approval should be given by shareholders if a company enters into a contract with the Republic of South Africa. Some may say that shareholders should be asked before donations are made to charity, or that specific approval should be required before a donation is made to disaster funds. It is perfectly proper to rely on the protection given in the Companies Act 1967, and I believe that the hon. Member for Wallsend (Mr. Garrett) was in the House at that time. That Act requires disclosure of sums of more than £200.
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  The law as presently in force requires full disclosure. It is obvious that shareholders in general meetings can issue an instruction, through resolution, that no further political donations should be made. It is possible for any shareholder who does not like the donations policy of his company to sell his shares, or not to buy them if it has been the practice of the company to make donations.
  I wish to express my enduring thanks to those excellent and wise British companies and British people who continue to make donations to the Conservative party. Those people and those companies perceive in my judgment correctly—that their true interests lie in the continuation of a Conservative Government.
  Mr. Campbell-Savours: When the current arrangements for payments to political parties by companies were devised conditions were different. Only a small minority of the wider public were in a position to acquire and retain shares. We were not in what is described today as a "shareholder democracy". As one widens share ownership, one is required to reconsider the powers that are available to shareholders to influence arrangements in companies. Many of the Government's arguments about widening shareholder democracy, certainly throughout the privatisation debates, were about ensuring that shareholders—the wider public—have a stake in and some influence over the future and the potential for business. If that is the case, surely the matter should not be kept in isolation, and consideration should be given by the House to change.
  My hon. Friend the Member for Dagenham (Mr. Gould) has put to the House the proposition that simpler and more equal treatment should be meted out to trade unions, as it is to companies, regarding their political contributions. He has sought only to ensure that trade unions are treated no differently from companies and vice versa. I do not see that it is possible to argue against that. I can concur with every word of the speech of the hon. Member for Aldridge-Brownhills (Mr. Shepherd). If one is being equal in treatment, one must be open-minded about
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  those matters. If a political party might lose out by way of that arrangement, it drives us to consider the whole question of state funding of political parties.
  The hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) mentioned the British School of Motoring. I will not score any political points by drawing attention to what happened some years ago. The British School of Motoring was making contributions of several hundred thousand pounds to the Liberal party and the Liberal party was receiving them because it has no other way of funding its operation. I do not blame the Liberal party for taking the money. If that is the only way to fund one's political party, one must do it. However, we all know that what happened on that occasion was wrong. When I looked into that matter in some detail I was able to locate a debate in the House of Lords during which a Liberal peer had moved an amendment to legislation on driving schools. In the eyes of the public and Parliament his motive in moving that amendment was related to the political contribution that had been made. It may be that peer moved that amendment for the most altruistic of reasons. However, when the public saw the facts and realised that his political party was being funded by way of a substantial contribution, they naturally drew the conclusion that there must be some connection.
  I tell that story only to show that, because of the system as it is presently arranged, the public will inevitably be suspicious. Every contribution of weight that is made to the Conservative party must inevitably lead some members of the public to believe that there may be a connection with the treatment that the Conservative party gives to big business or the way particular Secretaries of State and Departments might handle business that may help companies that make contributions. I am not necessarily saying that that is what happens, but if the public are led to believe that there may be a connection, it further generates suspicion in their minds as to political contribution as against political pay-off.
  Mr. Michael Brown: The hon. Gentleman is making a very interesting and sincerely held point. However, by the same token, could it be argued—although I do not argue it—that any hon. Member who is sponsored by a trade union will be perceived in the same way?
  Mr. Allen: They do not make a direct contribution.
  Mr. Brown: The hon. Gentleman says that it is not a direct contribution. Nevertheless, the public may still be suspicious. When an hon. Member speaks on behalf of a large mining community in his constituency, and if he happens to be sponsored by a miners' union, nobody in the House disregards his points simply because he is sponsored by that union. The hon. Gentleman's point falls down on those grounds.
  Mr. Campbell-Savours: The hon. Gentleman presumes that I will be partisan in my reply, but I do not intend to be so. I accept that inevitably the public will be suspicious. Whether there is a need for that suspicion is another matter. As the House knows, sponsored Members of Parliament do not receive money from trade unions. I am sponsored by the Confederation of Health Service Employees but it pays me nothing and I would accept nothing. I would not draw a penny of expenses from the union. However, I accept that the public might conclude that there was a connection between the way in which I

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  conduct myself in the Chamber and the sponsorship arrangement in the background. All I am doing—as did the hon. Member for Aldridge-Brownhills—is trying to be neutral and say that there should be equal treatment. The hon. Gentleman did not talk in terms of suspicion, but we should not rule out the possibility that that might exist. The proof can be found in the case of BSM and the Liberal party.
  Other cases have recently come to light. I know that the case of the Westminster cemeteries and Lady Porter is controversial, and I shall try to deal with it neutrally. During the inquiries by Westminster city council into all that happened in Westminster, an argument developed about how the Conservative party was funded during the 1983 election. Many people could not work out where the money to service the Conservative campaign had come from. It may he that all the funding was proper, honourable and above board. However, as the investigations and inquiries developed and as queries about the river companies were raised in the national media, that sparked off the suspicion—wearing a more political hat than I am now, I willingly fostered it—in the minds of the general public that something might be wrong. Such suspicion arises only from the fact that at the moment we have a system that allows companies to allocate money to political parties without any accountability. I would argue that they should not be in a position to make those contributions because I am a supporter of state funding of political parties.
  My hon. Friend the Member for Dagenham hinted that the Labour Government may look sympathetically at the need to legislate to introduce such funding. However, I do not see that hint as an attempt to penalise the Conservative party in the way that the Conservative party thought that it was penalising the Labour party in 1985, through employment legislation. Were the Labour party committed to legislate on funding because we have a duty to protect all political parties, irrespective of what they believe, and ensure that they are properly funded, that would spark off the necessary debate that we need on state funding of political parties. The hon. Member for Eastbourne (Mr. Gow) is obviously opposed to this funding, but in such conditions he might look more favourably on what I think is a neutral position to take on funding.
  I only wish that the debate were less partisan. Conservative Members seem so defensive about a system that, like the hon. Member for Aldridge-Brownhills, they know is morally and in equity wrong. Instead of locking themselves into a position of inflexibility, a few more charitable gestures on the principles involved should be the order of the day. Perhaps before the end of the debate we shall have some words along those lines.
  Mr. Tim Smith: I join the hon. Member of Dagenham (Mr. Gould) in welcoming my hon. Friend the Member for Wokingham (Mr. Redwood) to the Front Bench. I was pleased when he was appointed to his new position in July because I believe that he is peculiarly well qualified to take over this responsibility, and we shall see that as our debates proceed.
  I listened carefully to what the hon. Member for Workington (Mr. Campbell-Savours) said, and we understand that he favours state funding of political parties. However, that is not what the debate is about. It is about how companies should determine political
  904
  donations. We should establish the principle of accountability and openness. We heard a lot at the beginning of the debate from the hon. Member for Dagenham about concealment, murkiness and all the rest. However, we know that the saga that was revealed in all its shock horror-status by The Independent related to what happened before the Companies Act 1967. It has specific and clear requirements about the disclosure of political and charitable donations, and we have heard about those. The key to this is that people should know what companies are doing. We now know from its accounts that Lonrho made a donation to the SDP and that many companies make donations to the Conservative party.
  Mr. Gould: What about private companies?
  Mr. Smith: I think that the same provision applies to private companies as to public companies, but I stand to be corrected. The main contributions come from the large public listed companies and disclosure is required. Even if they make the contribution to British United Industrialists, one would have thought that, because of the number of times that that organisation has been mentioned in our debate, most people would know what it stood for. The argument is about accountability and openness, and shareholders know what is happening and are in a position to challenge it if they wish to do so, and we have heard of the different ways in which they can do that.
  The hon. Member for Dagenham said that it is wrong that directors do things with other people's money, but that is what directors are paid for. They are the stewards of the shareholder's money, and it is their job to decide how to dispense that money to the best benefit of all the shareholders.
  Mr. Gould: Is there not a distinction between what directors do with the company's money in its commercial interests and what they do by way of donation to political and charitable causes? If the hon. Gentleman would not accept that, is he denying the basis of the special provisions of the Companies Act, which require disclosure in those cases?
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  Mr. Smith: Before a board of directors makes a decision to make a donation to a political party, it has a serious debate on the matter. The overriding consideration in that debate is the commercial interest. The directors ask themselves whether it is in the commercial interest of the company for it to make that donation. Many companies, not unnaturally, take the view that it is in the interests of the company to make a donation to the Conservative party because it is the party which stands for free enterprise and supports the private sector. Therefore, that is an entirely reasonable thing to do.
  Mr. Nicholas Baker: Companies see donations sent in certain political directions as more in the interests of freedom and enterprise. Is not the solution something that was mentioned in Committee when the hon. Member for Dagenham (Mr. Gould) was not there to hear it? The hon. Member for Workington (Mr. Campbell-Savours) was fair, but the hon. Member for Dagenham was motivated by revenge, and his tone was invidious. Is not the solution for the Labour party to make itself so in favour of freedom of enterprise that it will attract donations? We come back

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  to what the debate is all about when I say that the answer to making the Labour party more acceptable is, I suspect, in the book sitting by the hon. Member for Dagenham.
  Mr. Smith: My hon. Friend may be right about the book. I have bought a copy and am looking forward to reading it. The key to the matter is the commercial interest of the company, and it is on that basis that companies decide whether to make donations to political parties.
  Mr. Winnick: What evidence does the hon. Gentleman have of the serious discussions that he claims go on in companies about such donations? Are we to understand that, for example, in Taylor Woodrow—bearing in mind who is president of that company—there is a lengthy and serious discussion of the pros and cons? The discussion is likely to be similar to those that used to go on in the politburo of the Soviet Communist party. Why do not companies make it clear that they are donating to the Conservative party? What is all this business about British United Industrialists? Why, unless it is to deceive, do they use a front organisation?
  Mr. Smith: I have already dealt with that last point. It is self-evident that a decision to make a donation to a political party is a major decision by a board of directors, and not one made in two or three minutes. It is discussed carefully and many companies refuse, as a matter of company policy, to make a donation to any political party simply because they do not believe, wrongly in my view, that it would be in their commercial interests to do so. The commercial interests of the company are the foremost consideration, and the directors have the responsibility—that is why they are elected by shareholders—to make such decisions. Were we to agree to the new clause, we would be undermining the principles on which company law is based. Shareholders delegate their responsibility to directors. If they do not like what the directors are doing, they can get rid of the directors by voting them out of office. Alternatively, as my hon. Friend the Member for Eastbourne (Mr. Gow) says, they can sell their shares. Those are the options open to them.
  That brings me to the distinction between shareholders and trade unionists. We have heard much about parallels, and my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd) has said that in equity we should treat shareholders and trade unionists equally. There are, however, fundamental distinctions. An individual can be a shareholder in several companies, and many people are in that position. If such an individual does not like the stock, he can sell it, but that option is not open to a trade unionist. There are many people who, because of their employment, have to be members of a trade union. They have little choice in the matter. Furthermore, they cannot switch from one union to another. Even more important, if a trade union determines to set up a political fund, it can then have a major influence in determining the policy of the Labour party. Its block vote at the Labour party conference may play a major part in determining that party's policy. No companies have an equivalent role in the Conservative party.
  Mr. Richard Shepherd: It is my understanding that it is the Government's intention to legislate to make unlawful the closed shop, and that is legislation which I shall
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  support. That being so, the burden of my hon. Friend's argument is not sustainable. Is he saying that trade unionists may or may not belong to a trade union? If that is so, they are not obliged to make donations or vote for a contribution to be made to the political fund. This is an argument that is based on sauce for the goose being sauce for the gander. Surely it is not an unreasonable principle that shareholders should have the opportunity to vote on the issue.
  Mr. Smith: I understand the strength of my hon. Friend's feeling on this issue but I do not accept that there is a parallel between companies and trade unions. I dealt with these matters when I developed the argument in Committee. I know that it is an embarrassment to the Labour party that trade unions have major block votes and can determine the Labour party's policy. There is no comparable arrangement within the Conservative party for companies. That is why the system is such an embarrassment to the Labour party, and I understand that it is considering changing it. That is one fundamental difference, and I have mentioned others.
  I am saying that we should have a satisfactory system of accountability and openness. We should not undermine the principles of company law on which legislation is currently based.
  Mr. Fatchett: I think that the hon. Member for Aldridge-Brownhills (Mr. Shepherd) has summed up the key issues, especially when he dealt with parity of treatment. That issue goes to the heart of the political system and the heart of democracy. There have been one or two attempts by Conservative Members to obscure the issues. For example, the hon. Member for Eastbourne (Mr. Gow) has talked about retrospective legislation and retrospective decision making. With respect, the hon. Gentleman's examples of contracts with South Africa do not relate to the issues that arise as a result of political funding. There has been some embarrassment among Conservative Members because there has been no willingness to meet the arguments advanced by the hon. Member for Aldridge-Brownhills, which are based on parity of treatment.
  There has been a substantial difference historically between the ways in which trade unions have been able to make political donations and the ways in which companies have been able to do so. Inititally, trade unions have to ballot their members under the 1913 legislation if they are to have a political fund. No such condition applies to companies. Trade unions have to give their members the right to opt out, but no such condition applies to companies. The hon. Member for Beaconsfield (Mr. Smith) said that an individual could move his shares from one company to another, but he has overlooked two factors. As my hon. Friend the Member for Workington (Mr. Campbell-Savours) said, someone might want to continue to invest in a certain company but not invest in the Conservative party. The hon. Member for Beaconsfield also overlooked the fact that many shareholdings are held by institutions, and institutions may not give their members the opportunity to opt out of a particular shareholding. The defence argued by the hon. Member for Beaconsfield does not hold water.
  Within the trade union structure there is provision for ballots and the right to opt out, but in addition there is the right to study the political fund accounts at each annual

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  conference, which is the governing body. Conservative Members argue that the same right exists for shareholders, but shareholders do not have the rights of a ballot or of opting out.
  We are told that there is no need for shareholders to have further rights because the disclosure provisions are sufficient. On the other hand, we are told that boards of directors take decisions that are in the commercial interests of their companies. It appears that one of those decisions is to make a donation to the party which believes in private enterprise, that being the Conservative party. Conservative Members should understand that what the Government are doing to the economy will undermine a great deal of private enterprise within the industrial sector.
  The third largest donation made to the Conservative party in 1988 came from British and Commonwealth Holdings plc. The report of the annual general meeting of that company appeared in the Financial Times on 28 September. Presumably the decision to make the donation was taken in the interests of the company's shareholders because it is thought that the Conservative party is good for the company. The House will probably be aware that the profits of British and Commonwealth Holdings plc have declined in the last financial year by 45 per cent. The company' chairman, Mr. John Gunn, attributes that decline to one factor—the Government's reliance upon high interest rates. It seems that directors do not always take decisions that are in the best interests of their shareholders.
  I had the pleasure of considering in Committee the measure which became the Trade Union Act 1984. We were told by Conservative Members that there was a need for constant accountability, a constant flow of information and a constant process of legitimacy before trade unions could be allowed to make political donations. I think that my hon. Friend the Member for Walsall, North (Mr. Winnick) was correct when he said that at that stage there was some enthusiasm among Conservative Members in the expectation that such provisions would lead to a substantial decline in the Labour party's funding. They voted for a provision that meant that trade unions had to ballot their members once every 10 years to reaffirm the right to have a political fund. There is no similar provision or right for shareholders, and Conservative Members have not argued that there should be one. When Conservative Members said that they wanted a provision in the 1984 Act that would confirm trade unionists' support for political donations, why did they decide not to extend the same right to shareholders? The conditions that apply to trade unions do not apply to companies and their political donations.
  The hon. Member for Aldridge-Brownhills is right when it comes to the essence of the argument, and that does not necessarily mean reducing the £3·5 million that is provided to the Conservative party each year in corporate donations. The argument turns on making all donations accountable, open and legitimate, and that goes to the heart of the democratic process.
  Mr. Allen: This has been a fairly lighthearted excursion into political funding. It needs to be put on record, however, whether the intention of the Trade Union Act 1984 was as frivolous as seems to be suggested. In my view, the intention was to undermine completely the funding of the Labour party so that the party would be destroyed, thereby creating a one-party state.
  Madam Deputy Speaker (Miss Betty Boothroyd): Order. The hon. Gentleman's intervention is interesting but not relevant.
  Mr. Fatchett: I confirm what I perceived to be the intentions of Conservative Members through the 1984 legislation—to undermine the funding given to the Labour party and, in effect, to create almost a one-party state. The intention was to take the financial life blood away from the Labour party.
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  Reference has been made to books and to the pushing of various publications. My hon. Friend the Member for Dagenham (Mr. Gould) has promoted his book. I want to tell the House about an excellent book on the trade union political fund ballot. Any hon. Member who wishes to buy a copy has only to ask me, and I shall tell him at which bookshop he can buy it. I will not be diverted——
  Mr. Allen: What about television advertising?
  Mr. Fatchett: That is without television——
  Mr. Allen: It can be on television next week.
  Mr. Fatchett: I want to return to the point made by the hon. Member for Aldridge-Brownhills, which is that this debate goes to the heart of the political system and to the heart of democracy. When there is openness about political contributions, as there is in the relationship between trade unions and the Labour party, there can be no suggestion that those contributions are used for particular purposes. However, when the system is not open, when company chairmen and directors who donate to the Tory party gain more than their fair share of honours—as a result, one suspects, of those donations—when influence is exercised by various individuals, the argument for openness and accountability becomes that much stronger.
  We are not trying to reduce donations to the Conservative party; we are asking for parity of treatment. We want an open democracy with accountability by trade unions to trade unionists and by companies to shareholders. That is the essence of the argument and hon. Members should not obscure it by disclosure or by an embarrassing defence of the Conservative party's vested interests. We must relate to the issue, to parity and to democracy. If the Minister devoted his intellectual powers to that argument, I am sure that he would support new clause 1.
  The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. John Redwood): I thank the hon. Member for Dagenham (Mr. Gould) and my hon. Friend the Member for Beaconsfield (Mr. Smith) for their kind remarks.
  I wish first to respond to my hon. Friend the Member for Chichester (Mr. Nelson), who questioned the number of amendments tabled and the basis of our debates today and tomorrow. As all hon. Members can see, there are a number of Government amendments, but most of them comprise one or two types—they are either amendments to take on board the very good points made in Committee, or they result from consultation with a range of professional interests and other groups and are technically consequential upon that. I hope that there will be a spirit of co-operation in the House as most of the amendments are

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  non-political. I hope that, as we make progress, I can offer assistance to those who make good points and, wherever possible, I hope to accommodate some of their wishes.
  We began this debate with the one highly contentious issue that was bound to arise. There is a sense of déja vu because most of the ground has been well trodden already. The Opposition have not put forward any new arguments tonight that might have added to our previous debates. As others have sketched, a good piece of legislation—the 1967 Act, introduced by a Labour Government—is already in place and we are happy with the disclosure requirements that it places on companies. We intend to ensure that those requirements are not only in force, but are fully enforced. We shall carefully consider any point raised by any hon. Member who believes that there has been some dereliction of duty in the enforcement of those clear disclosure provisions.
  Members of companies need to know whether donations are being made, which is the purpose of the 1967 Act. That is bolstered by good proposals about company democracy. A range of powers would give shareholders the right at annual general meetings to raise questions, to table ordinary resolutions and to put pressure on boards of directors. Above all, there is a great deal of choice for shareholders. I know that some like to construct what they call "ethical portfolios", which do not include any company that invests in South Africa. As only one in four of the top 100 companies are wise enough to make donations to the Conservative party, there is plenty of scope and choice to construct an apolitical portfolio. However, I share my hon. Friends' view that not many, if any, of the companies in the top 100 make donations to the Labour party, so it would be quite difficult to construct a Socialist portfolio of companies. That is the problem that has led to this jealousy clause that we are debating.
  The issue should be put in perspective. To those hon. Members who would raise the question of symmetry of treatment between trade unions and companies, I must repeat that there is extensive machinery within companies, within the company law framework, which we support and intend to ensure continues. It should also be recognised that the trade unions make a much larger contribution proportionately, and in total, to the Labour party than do the top companies to the Conservative cause. In 1987 alone, one union gave £5 million—a stunning sum. The reason why the Conservative party enjoys more funds in total and does not have the same financial difficulties that so often face the Opposition is its strong basis of mass membership. It is the only party with well over 1 million members. It is an active party, well organised and capable of raising money from a range of donations from people of all sorts and styles——
  Mr. John Garrett: Tea dances.
  Mr. Redmond: Yes, tea dances do raise money for the Conservative party—and why not? People can have fun and they can raise money for the one good cause in this place.
  The origins of the Labour party's problems lie in the fact that they do not have money coming from the companies' sector. It is on this point that I must take issue with the hon. Member for Dagenham. He need not worry because I do not intend to savage him tonight. Indeed, he
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  has done a signal good service. He has produced a book that reveals in great detail exactly how he has moved well to the Left of the right hon. Member for Chesterfield (Mr. Benn), who once held many strong views on industrial policy and even had the benefit of being able to implement those views so that the public could recognise just how dreadful they were.
  I can well understand why companies will vote massively to support a Conservative Government if a party insists on threatening shareholders with renationalisation on the cheap, with damaging the interests of minority shareholders after a Government raid on a company and with separating ownership from control, which must mean taking away votes from shareholders as there can be no other explanation for that, with the suggestion that employees, trade unions, customers—an enormous group—should in many cases be ranked above shareholders and in some way be given votes just as the shareholders lose theirs and by sustaining the attack in saying that stakes must be bought in private sector companies. I can understand why, if companies are threatened with municipalised competition to provide subsidised undercutting of worthwhile businesses in the private sector; with the wish for public interest commissioners who would set investment programmes, control dividends and reduce the cash flow by lowering prices—all suggestions which are not only in the hon. Gentleman's book, but are part of the Labour policy review document. Companies will no doubt appeal to their shareholders to endorse their actions by not opposing them at annual general meetings.
  It is a sign of the success of its policy that the Conservative party is still the main party that benefits from donations by companies. There is little trouble at AGMs because shareholders clearly and intuitively understand the need to support a party of private enterprise——
  Mr. Allen: If company donations to the Conservative party are a sign of great faith in that party and a barometer of the approval of businesses for that party, can the hon. Gentleman explain why those donations are currently falling?
  Mr. Redwood: Companies are particularly keen to offer donations at election times and I am sure that if a general election were in the offing, the hon. Gentleman would find that donations increased again. It concentrates the mind wonderfully. That is when people will understand that a party of free enterprise is needed to defend the interests of shareholders from the wild policies adduced in "The Future of Socialism".
  Mr. Campbell-Savours: I spoke about the wider shareholder democracy in my brief speech. What about a shareholder in my constituency who has £500 worth of shares? If the annual general meeting is held in London and that person is at work, how can he influence the decisions taken there? The Government want people to invest, yet there may well be tens or even hundreds of thousands of shareholders in that position.
  Mr. Redwood: Shareholders can go to the meeting, organise themselves, write to the chairman and express their views in a variety of ways short of going to the meeting. The hon. Gentleman knows how democracy works in the political sphere. The same is true within a company framework. The powers are contained in

  911
  company law. The responsibilities are on the shareholders, who exercise them if they see the need to do so. It is not that that is difficult, but that shareholders do not want to do it. That is what the hon. Gentleman cannot bear.
  Mr. Campbell-Savours: The Minister has not grasped my point. The question is whether the shareholders are physically able to attend a meeting. What happens if a group of shareholders feels collectively that it wants to change a company's policy? How can it influence events? It may be that when there were few shareholders of companies——
  Madam Deputy Speaker: Order.
  Mr. Redwood: If a group of shareholders is worried about a matter, surely one of them who is retired or has a day off can attend the meeting, table a resolution and, if the right numbers are present, vote in the usual way. At company general meetings there are proxy systems and other ways of voting for a properly tabled resolution which is circulated with the general agenda.
  The Labour Government put in place a fair law which we wish to operate sensibly and well. Shareholders are happy with the present system because they are worried by the policies of the Labour party and, in particular, those of the hon. Member for Dagenham. The powers are there and I, like many other hon. Members who have spoken, wish to see wider share ownership mean a true share-owning democracy. Present company law is more than adequate to do that. The only thing that would wreck it would be if I accepted any of the wild ideas adduced by the hon. Member for Dagenham. I hope that the House will vote against the new clause.
  Mr. Gould: I confess to finding the Minister's first speech on the Bill disappointing in two respects. First, I assume that what I heard was the much-trailed, ferocious and blood-curdling attack that was to be made on me. [HON. MEMBERS: "Just wait."] It may well be that that attack is to be repeated, but I have a feeling that it will not bear repetition. From its present ineffectiveness it will become hardly effective in any respect. I had hoped for something more full-blooded and perhaps the Minister will try again for something better. In the meantime, to hon. Members who are encouraged by that ferocious onslaught to buy my book and to those who, like the hon. Member for Beaconsfield (Mr. Smith), have already done so, I immediately offer to autograph their copies and those of future proud possessors.
  Mr. Redwood: I am delighted that jointly we can advertise the hon. Gentleman's book because it will do the Conservative cause so much good. The only thing that worries me is that if he offers too many autographed copies, their value will drop, so should my hon. Friends insist on buying their own copies and on not having them autographed?
  7.15 pm
  Mr. Gould: Hon. Gentlemen have no option but to buy their own copies. The book will not be given away.
  The second disappointment in the Minister's speech can be briefly expressed. Like all his hon. Friends, except the hon. Member for Aldridge-Brownhills (Mr. Shepherd), the Minister failed to understand the real purport of our proposal. Some of them understood it but chose not to reveal it. It may be that the Minister is as deficient in his
  912
  judgment of this point as he was in his estimation of the effect of a wide readership of my book. In this debate a division has emerged. Opposition Members believe that democracy, good practice and the public interest require that directors are obliged to obtain shareholders' approval in advance of giving money to political parties. By contrast, the Government offer the present position in which it is open to shareholders, if they are properly organised and informed and sufficiently motivated to turn up to an ordinary general meeting, to initiate a response to what has already been done. They are required to remonstrate with directors in retrospect. That is not an adequate expression of what democracy requires in that context.
  On that basic point, we differ strongly from the Government who seem unable to comprehend what is at stake. It is because I find the Minister's response so disappointing and his comprehension so inadequate that we shall press the new clause to a Division.
  Question put, That the clause be read a Second time:—
  The House divided: Ayes 168, Noes 223.

  Division No. 338]

  [7.16 pm

  AYES

  Abbott, Ms Diane

  Doran, Frank

  Allen, Graham

  Dunwoody, Hon Mrs Gwyneth

  Anderson, Donald

  Eadie, Alexander

  Archer, Rt Hon Peter

  Eastham, Ken

  Armstrong, Hilary

  Ewing, Harry (Falkirk E)

  Ashley, Rt Hon Jack

  Ewing, Mrs Margaret (Moray)

  Ashton, Joe

  Fatchett, Derek

  Banks, Tony (Newham NW)

  Fearn, Ronald

  Barnes, Harry (Derbyshire NE)

  Field, Frank (Birkenhead)

  Barron, Kevin

  Flannery, Martin

  Battle, John

  Flynn, Paul

  Beckett, Margaret

  Foot, Rt Hon Michael

  Beith, A. J.

  Foster, Derek

  Bell, Stuart

  Foulkes, George

  Benn, Rt Hon Tony

  Fyfe, Maria

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

  Galloway, George

  Bermingham, Gerald

  Garrett, John (Norwich South)

  Bidwell, Sydney

  Garrett, Ted (Wallsend)

  Blair, Tony

  Gilbert, Rt Hon Dr John

  Blunkett, David

  Gordon, Mildred

  Boyes, Roland

  Gould, Bryan

  Bradley, Keith

  Griffiths, Nigel (Edinburgh S)

  Brown, Gordon (D'mline E)

  Griffiths, Win (Bridgend)

  Brown, Ron (Edinburgh Leith)

  Hardy, Peter

  Bruce, Malcolm (Gordon)

  Hattersley, Rt Hon Roy

  Buchan, Norman

  Heffer, Eric S.

  Buckley, George J.

  Hinchliffe, David

  Campbell, Menzies (Fife NE)

  Hoey, Ms Kate (Vauxhall)

  Campbell, Ron (Blyth Valley)

  Home Robertson, John

  Campbell-Savours, D. N.

  Howarth, George (Knowsley N)

  Canavan, Dennis

  Howells, Geraint

  Carlile, Alex (Mont'g)

  Howells, Dr. Kim (Pontypridd)

  Clark, Dr David (S Shields)

  Hughes, John (Coventry NE)

  Clay, Bob

  Hughes, Robert (Aberdeen N)

  Clelland, David

  Illsley, Eric

  Clwyd, Mrs Ann

  Ingram, Adam

  Cohen, Harry

  Janner, Greville

  Cook, Robin (Livingston)

  Johnston, Sir Russell

  Corbett, Robin

  Jones, Barry (Alyn & Deeside)

  Cousins, Jim

  Jones, Ieuan (Ynys Môn)

  Cox, Tom

  Jones, Martyn (Clwyd S W)

  Cummings, John

  Kennedy, Charles

  Cunliffe, Lawrence

  Leadbitter, Ted

  Cunningham, Dr John

  Leighton, Ron

  Darling, Alistair

  Lewis, Terry

  Davies, Rt Hon Denzil (Llanelli)

  Litherland, Robert

  Davies, Ron (Caerphilly)

  Livingstone, Ken

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

  Livsey, Richard

  Dewar, Donald

  Lofthouse, Geoffrey

  Dixon, Don

  Loyden, Eddie

  Dobson, Frank

  McAllion, John

  913

  McAvoy, Thomas

  Reid, Dr John

  McCartney, Ian

  Richardson, Jo

  Macdonald, Calum A.

  Robertson, George

  McKelvey, William

  Rogers, Allan

  McLeish, Henry

  Rooker, Jeff

  Maclennan, Robert

  Ross, Ernie (Dundee W)

  McNamara, Kevin

  Ruddock, Joan

  Madden, Max

  Sedgemore, Brian

  Mahon, Mrs Alice

  Sheerman, Barry

  Marshall, Jim (Leicester S)

  Sheldon, Rt Hon Robert

  Martlew, Eric

  Short, Clare

  Meacher, Michael

  Skinner, Dennis

  Meale, Alan

  Smith, Andrew (Oxford E)

  Michael, Alun

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

  Michie, Bill (Sheffield Heeley)

  Smith, J. P. (Vale of Glam)

  Michie, Mrs Ray (Arg'l & Bute)

  Steinberg, Gerry

  Moonie, Dr Lewis

  Straw, Jack

  Morgan, Rhodri

  Taylor, Matthew (Truro)

  Morley, Elliot

  Thompson, Jack (Wansbeck)

  Morris, Rt Hon A. (W'shawe)

  Turner, Dennis

  Mowlam, Marjorie

  Vaz, Keith

  Mullin, Chris

  Wall, Pat

  Oakes, Rt Hon Gordon

  Wallace, James

  O'Neill, Martin

  Watson, Mike (Glasgow, C)

  Orme, Rt Hon Stanley

  Welsh, Andrew (Angus E)

  Owen, Rt Hon Dr David

  Welsh, Michael (Doncaster N)

  Parry, Robert

  Williams, Rt Hon Alan

  Patchett, Terry

  Wilson, Brian

  Pike, Peter L.

  Winnick, David

  Powell, Ray (Ogmore)

  Worthington, Tony

  Prescott, John

  Wray, Jimmy

  Primarolo, Dawn

  Quin, Ms Joyce

  Tellers for the Ayes:

  Radice, Giles

  Mr. Frank Haynes and

  Randall, Stuart

  Mrs. Llin Golding.

  NOES

  Aitken, Jonathan

  Chapman, Sydney

  Alexander, Richard

  Chope, Christopher

  Allason, Rupert

  Clark, Dr Michael (Rochford)

  Amess, David

  Clark, Sir W. (Croydon S)

  Amos, Alan

  Clarke, Rt Hon K. (Rushcliffe)

  Arbuthnot, James

  Colvin, Michael

  Ashby, David

  Coombs, Anthony (Wyre F'rest)

  Atkinson, David

  Coombs, Simon (Swindon)

  Baker, Nicholas (Dorset N)

  Couchman, James

  Baldry, Tony

  Cran, James

  Banks, Robert (Harrogate)

  Currie, Mrs Edwina

  Batiste, Spencer

  Curry, David

  Bellingham, Henry

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

  Bendall, Vivian

  Davis, David (Boothferry)

  Bennett, Nicholas (Pembroke)

  Day, Stephen

  Benyon, W.

  Dicks, Terry

  Biffen, Rt Hon John

  Douglas-Hamilton, Lord James

  Blackburn, Dr John G.

  Dover, Den

  Blaker, Rt Hon Sir Peter

  Dunn, Bob

  Body, Sir Richard

  Durant, Tony

  Bonsor, Sir Nicholas

  Evans, David (Welwyn Hatf'd)

  Boscawen, Hon Robert

  Evennett, David

  Boswell, Tim

  Fallon, Michael

  Bottomley, Mrs Virginia

  Favell, Tony

  Bowden, Gerald (Dulwich)

  Fenner, Dame Peggy

  Bowis, John

  Field, Barry (Isle of Wight)

  Boyson, Rt Hon Dr Sir Rhodes

  Fishburn, John Dudley

  Brandon-Bravo, Martin

  Fookes, Dame Janet

  Brazier, Julian

  Forman, Nigel

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

  Forsyth, Michael (Stirling)

  Bruce, Ian (Dorset South)

  Forth, Eric

  Buck, Sir Antony

  Fowler, Rt Hon Norman

  Burns, Simon

  Fox, Sir Marcus

  Butcher, John

  French, Douglas

  Butler, Chris

  Gale, Roger

  Butterfill, John

  Gardiner, George

  Carlisle, John, (Luton N)

  Garel-Jones, Tristan

  Carlisle, Kenneth (Lincoln)

  Glyn, Dr Alan

  Carrington, Matthew

  Goodhart, Sir Philip

  Carttiss, Michael

  Goodlad, Alastair

  Cash, William

  Goodson-Wickes, Dr Charles

  Chalker, Rt Hon Mrs Lynda

  Gow, Ian

  Channon, Rt Hon Paul

  Grant, Sir Anthony (CambsSW)

  914

  Greenway, Harry (Baling N)

  Norris, Steve

  Griffiths, Peter (Portsmouth N)

  Onslow, Rt Hon Cranley

  Ground, Patrick

  Paice, James

  Grylls, Michael

  Patnick, Irvine

  Gummer, Rt Hon John Selwyn

  Pawsey, James

  Hague, William

  Peacock, Mrs Elizabeth

  Hanley, Jeremy

  Porter, David (Waveney)

  Hannam, John

  Powell, William (Corby)

  Harris, David

  Redwood, John

  Haselhurst, Alan

  Riddick, Graham

  Hayhoe, Rt Hon Sir Barney

  Ridley, Rt Hon Nicholas

  Hayward, Robert

  Ridsdale, Sir Julian

  Heathcoat-Amory, David

  Roberts, Wyn (Conwy)

  Heddle, John

  Rossi, Sir Hugh

  Hicks, Mrs Maureen (Wolv' NE)

  Rost, Peter

  Higgins, Rt Hon Terence L.

  Rumbold, Mrs Angela

  Hind, Kenneth

  Sainsbury, Hon Tim

  Hogg, Hon Douglas (Gr'th'm)

  Shaw, David (Dover)

  Hordern, Sir Peter

  Shaw, Sir Giles (Pudsey)

  Howard, Michael

  Shephard, Mrs G. (Norfolk SW)

  Howarth, G. (Cannock & B'wd)

  Shersby, Michael

  Howe, Rt Hon Sir Geoffrey

  Sims, Roger

  Hughes, Robert G. (Harrow W)

  Smith, Sir Dudley (Warwick)

  Hunt, David (Wirral W)

  Smith, Tim (Beaconsfield)

  Hunt, Sir John (Ravensbourne)

  Soames, Hon Nicholas

  Hunter, Andrew

  Speller, Tony

  Irvine, Michael

  Spicer, Sir Jim (Dorset W)

  Jack, Michael

  Spicer, Michael (S Worcs)

  Jackson, Robert

  Stanbrook, Ivor

  Janman, Tim

  Stanley, Rt Hon Sir John

  Jessel, Toby

  Steen, Anthony

  Jones, Gwilym (Cardiff N)

  Stevens, Lewis

  Kellett-Bowman, Dame Elaine

  Stewart, Andy (Sherwood)

  Key, Robert

  Stokes, Sir John

  Kilfedder, James

  Stradling Thomas, Sir John

  Kirkhope, Timothy

  Sumberg, David

  Knapman, Roger

  Summerson, Hugo

  Knight, Greg (Derby North)

  Taylor, John M (Solihull)

  Knight, Dame Jill (Edgbaston)

  Taylor, Teddy (S'end E)

  Knox, David

  Thompson, D. (Calder Valley)

  Lang, Ian

  Thompson, Patrick (Norwich N)

  Latham, Michael

  Thorne, Neil

  Lawson, Rt Hon Nigel

  Thornton, Malcolm

  Leigh, Edward (Gainsbor'gh)

  Thurnham, Peter

  Lester, Jim (Broxtowe)

  Townend, John (Bridlington)

  Lilley, Peter

  Townsend, Cyril D. (B'heath)

  Lord, Michael

  Tracey, Richard

  Lyell, Sir Nicholas

  Twinn, Dr Ian

  Macfarlane, Sir Neil

  Waddington, Rt Hon David

  MacGregor, Rt Hon John

  Wakeham, Rt Hon John

  MacKay, Andrew (E Berkshire)

  Waldegrave, Hon William

  Maclean, David

  Walker, Bill (T'side North)

  McLoughlin, Patrick

  Walters, Sir Dennis

  McNair-Wilson, Sir Michael

  Ward, John

  Madel, David

  Wardle, Charles (Bexhill)

  Mans, Keith

  Warren, Kenneth

  Maples, John

  Watts, John

  Marland, Paul

  Wheeler, John

  Marshall, John (Hendon S)

  Whitney, Ray

  Marshall, Michael (Arundel)

  Widdecombe, Ann

  Martin, David (Portsmouth S)

  Wiggin, Jerry

  Maxwell-Hyslop, Robin

  Winterton, Mrs Ann

  Meyer, Sir Anthony

  Winterton, Nicholas

  Mills, Iain

  Wolfson, Mark

  Miscampbell, Norman

  Wood, Timothy

  Morrison, Sir Charles

  Young, Sir George (Acton)

  Neale, Gerrard

  Nelson, Anthony

  Tellers for the Noes:

  Nicholson, David (Taunton)

  Mr. Tom Sackville and

  Nicholson, Emma (Devon West)

  Mr. Stephen Dorrell.

  Question accordingly negatived.

New Clause 3

  DISCLOSURE CONCERNING POLLUTION CONTROL POLICY
  '(1) Paragraph 6 of Schedule 7 to the Companies Act 1985 (Miscellaneous) shall be amended as follows—
  (2) At end insert—
  "(d) an indication of the company's policy regarding pollution control and particulars of any fines or other penalties, if any, incurred by the company in respect of breaches of the Public Health Acts 1936 and 1961, of the Clean Air Acts 1956 and 1968, of the Health and Safety at Work Etc. Act 1974 and of the Control of Pollution Act 1974.".'—[Mr. John Garrett.]
  Brought up, and read the First time.
  Mr. John Garrett: I beg to move, That the clause be read a Second time.
  The aim of new clause 3 is simply to give prominence to the urgent need for pollution control by companies, and to make them more accountable for any environmental pollution that they cause. It would oblige companies to have a written statement of their environmental policies, and to disclose breaches of environmental statutes and particulars of any judgments against them for having broken pollution control law. I am pleased that the Government are moving in our direction and I hope that the Minister will see fit to accept new clause 3.
  On 1 September, an article in The Guardian stated that the Government proposed
  "New rights of access for the public to information about companies breaching pollution control laws".
  We seek to extend access to such information to shareholders and potential investors. If the Government feel that they should legislate to inform the public about pollution by companies, I am sure that it will follow automatically that they are in favour of informing shareholders and investors.
  7.30 pm
  The article continued:
  "The Department of the Environment announced that it would be introducing urgent legislation requiring registers to be drawn up on companies involved in both industrial and air pollution…Her Majesty's Inspectorate of Pollution…and local authorities are to be required by law to establish public registers giving details of the issue of licences to companies, the track record of the compliance of companies with the terms of their licence and any details of the failure by companies to comply, including a court action."
  That is exactly what we are proposing in the new clause which suggests that that information shall be in the company's annual report.
  The article went on:
  "This kind of information is seen by green groups as vitally important if they are able to bring public pressure on companies which pollute."
  Of course, we want to see the results of the consultation,
  but, if the Government honour their obligation, that proposal seems to us to be a step in the right direction. If implemented, the proposal would inform a local community of the record of companies in regard to pollution locally. We seek to give the same information to shareholders, many thousands of whom nowadays are strongly conscious of environmental issues.
  Since this issue was discussed in Committee progress has been made in that the CBI has had an interesting change of heart. The March CBI News contained a frosty reception for the EC directive on public disclosure of information by companies on the environmental effects of their activities. The CBI graciously said that it fully agreed with the idea that the public should be given adequate information to allow them to be confident that their environment was being properly protected. However, it said that any new legislation should not go beyond what the public "needs to know", which may be costly or
  916
  burdensome to provide. It said that legislation also should not prejudice the voluntary flow of information from the controlled to the controller. That was hardly a position of openness on environmental matters.
  At that time, the CBI disagreed with the EC directive stating that companies should disclose the environmental effects of their policies and the extent to which they might pollute. However, by the October CBI News, the CBI had launched a "major new environmental initiative", an "action plan" called "Environment Means Business" and an environment management unit had been set up to work alongside the CBI's environment policy group. Warning "environmentally apathetic industries", the CBI's plan included the aim that businesses should have environmental improvement objectives, which is what we propose in the new clause, and should promote environmental performance and a high, sustainable reputation for environmental excellence. If the CBI believes that, it would not disagree that individual companies should disclose their performance in this regard. The Government should also welcome such a step. At present, we are in agreement with the CBI.
  In May, the DTI launched a campaign to alert companies to environmental challenges and opportunities, and warned companies of tougher environmental controls.
  Our intention in new clause 3 is to enable shareholders to be informed and companies to be more easily accountable to their shareholders on environmental matters. There is a growing concern among shareholders about environmental issues. As the Minister said in an earlier speech, there are now a number of investment trusts that invest only in companies that are environmentally sound. Ethical investment is growing rapidly and now accounts for more than 10 per cent. of the stock traded on Wall street.
  Throughout the western world there is a realisation that companies must be publicly accountable for their activities that may endanger the environment. Institutional investors are also taking a stronger line on environmental issues with the companies in which they invest. In my constituency, Norwich Union is requiring information from its invested companies on what steps they are taking to control pollution. In particular, the investment management of the Norwich Union wrote to ICI asking for details on its 40 breaches of pollution control laws last year on the discharge of effluent.
  As I said in Committee, some of the worst industrial pollution in Britain is committed by household names that pride themselves on their openness to their shareholders and the informativeness of their annual reports. They include ICI, Coalite and the Rio Tinto-Zinc subsidiary Staveley Industries which grossly pollutes the River Rother, and 'Coats Viyella which regularly discharges pollutants into the River Goyt. Express Foods group, a subsidiary of Grand Metropolitan, has been convicted 25 times in the past six years for discharging pollutants. Shareholders should know about that, as it might influence their investment decisions. There is no reason why Grand Metropolitan should conceal it. British Petroleum, a company which boasts of its green credentials, British Tissues, British Gas and many others frequently breach discharge limits. Prosecutions are few and not particularly onerous for the polluting company. It is cheaper for a company to pollute and pay a fine if it is caught than to install equipment to clean up the

  917
  environment. The fines for pollution are very low with a maximum penalty of £2,000, whereas in the United States the fine is $25,000 per day.
  We ask that companies should set out their environmental policies and state what they are doing to produce environmentally sound products and operate environmentally sound processes. In West Germany, company chairmen usually devote part of their annual reports to what the company has done to clear up the environment.
  The pollution control legislation to which we refer in new clause 3 is pretty comprehensive. The Public Health Act 1936 covers a wide range of statutory nuisances, including the state of premises, dust and effluent discharges and waste accumulation. The Public Health Act 1961 covers the discharge of trade effluents. The Control of Pollution Act 1974 covers waste disposal, and the Clean Air Acts deal with atmospheric pollution. If the new clause were enacted, any shareholder would know a company's policy and record on environmental pollution. The new clause goes with the grain of public and shareholder concern.
  As we know from our own constituencies, more and more people throughout the country are concerned about the polluting activities of companies. They want them controlled or stopped, and they want those companies to be publicly accountable for what they discharge.
  When we raised this issue in Committee as part of a series of amendments concerned with disclosure to shareholders, we were accused of jumping on a bandwagon. I understand that since then we have been joined on that bandwagon by the Government. The control of pollution is much more than a bandwagon; it is a concern widely and deeply felt by many people. The new clause improves just a little the accountability of companies in a very important area of public policy.
  Mr. Redwood: I am grateful to the hon. Member for Norwich, South (Mr. Garrett) for his remarks about the search for an adequate pollution control system. I am sure that all hon. Members agree with him. There must be adequate control of pollution, and information must be available to ensure that that occurs. I accept that laws are necessary to identify certain Acts as pollution control Acts. There must be a register of information so that the public are aware of what is happening, and a clear enforcement mechanism.
  A range of laws already govern a wide variety of pollution issues, some of which were mentioned by the hon. Member for Norwich, South and are mentioned in the new clause. Additional legislation may be necessary. The Government are always reviewing the adequacy of pollution laws, and will bring forward whatever measures are necessary to ensure that the laws are strong, clear and meet the clear requirement of people for adequate and strong protection against hazardous and other types of pollution.
  The Control of Pollution Act 1974 provided for registers to be available for public inspection. We need new registers to cover integrated pollution control, local authority air pollution control, and so on. The Government will be working on proposals for such new registers over the next few months.
  918
  The new clause should be withdrawn because it would clash with the idea of a register open for public inspection, and because there are other problems with it. For example, it does not cover all the laws that should be mentioned, such as the Alkali etc., Works Regulation Act 1906. It is selective, although the laws chosen are some of the most general and well known on pollution legislation.
  The purpose of companies' reports and accounts is to inform shareholders, investors and creditors. They are not generally available to the public, unless people go to considerable lengths to request them. The information suggested in the new clause would be an overburden on accounts, which primarily have a financial purpose.
  Mr. Campbell-Savours: I am sorry to intrude, but I was not on the Committee that considered the Bill and was therefore unable to follow the debate. The Minister referred to a register. Will he say what is implied in that and how it would work?
  Mr. Redwood: The register would be maintained by the relevant pollution control authority and would be available for public inspection. The proposal in the new clause would be less satisfactory, because fewer people would have access, it would be more difficult to gain access and it would clash with the idea of using registers as the buttress to pollution control legislation.
  I urge the hon. Member for Norwich, South to withdraw the new clause and to see the Government's proposals in the wider context of the general policies on the control of pollution.
  Mr. Campbell-Savours: I shall intervene only briefly because I did not attend prepared to speak this evening. However, a number of the amendments and new clauses invite comment, of which this is one.
  I shall be reasonable, as I was in the debate on new clause 1, and press the Minister a little more about the register. As I understand it, he suggested that anyone who applied to the pollution inspectorate could be informed of judgments made against a company that had offended and been penalised.
  Mr. Redwood: The Control of Pollution Act provides for the maintenance of registers, which contain information such as details of consents issued under the Act and effluent samples. If we develop the register approach more generally, it will have to be decided what should be recorded in the registers. I am urging the House to agree to public inspection registers rather than to try to include matters in company accounts—which are shown to a much more selective audience—that would be an unnecessary burden on financial statements.
  7.45 pm
  Mr. Campbell-Savours: I shall develop the use of the term "selective audience" in the course of my argument.
  If a company is found guilty of breaching the regulations, to what extent is that information communicated to the people who are in a position to influence that company's future policy? If a company breaches the regulations in the Minister's constituency or in mine, the breach and the damage to the environment would be reported within the locality by the local newspaper. Within the vicinity of the plant there may be a controversial debate about the nature of the pollution, its damage to the environment and the upset that it caused local people. It

  919
  may develop into a mature debate, with letters being written to the editor, editorial comment, articles being written by interested journalists and perhaps television programmes or magazine articles. That debate may be localised in a particular area. I live in Cumbria, and my constituency is in Cumbria. The debate that would arise following an incident and a prosecution may be confined to the area. Border Television does not transmit to London, where the annual general meeting of the company concerned may be taking place. The body of shareholders—we know that the majority of shareholders are based in the south-east—may not see that television programme or the local newspaper comment and may be unaware of the problem in the locality. They are therefore not informed, in so far as information about a prosecution or breach has not been communicated to them.
  Will the information on the registers proposed by the Government, in addition to the information that arises from the debate in the locality, be communicated to people who attend the company's annual general meeting, who might be able to exert pressure on the directors of the company? It is unlikely that shareholders in a large company such as ICI will find out from the pollution inspectorate the nature of any prosecution and what penalty was paid, because they have other things on their mind. Institutional shareholders are too concerned with the general conduct of their affairs to preoccupy themselves with the business of investing. It may be that because information about a breach is not available from the register, and because knowledge of the breach is confined to the region, there will be no debate at the company's annual general meeting.
  The new clause proposes a route whereby information can be communicated about an incident to people who are in a position to exert pressure on a company to secure change. That is crucial, and anything that restricts that flow of information is unnecessary, unreasonable and not what the public want.
  The Minister has been generous in suggesting that there may be a way forward, but there is a better way forward. If the drafting of the new clause is not acceptable today, I hope that in the future the Minister will bring forward a similar proposal. I argue that because I believe that the public want it. When I say that information is not communicated, anyone observing today's debate will know that that is the truth.
  If the Minister were to argue a case against a resolution, he should be prepared to provide examples of occasions on which shareholders set out to establish the environmental track record of their investment and when they referred to it at annual general meetings. If the Minister is not in a position to do that, in many ways he directs the House to support an amendment which ensures that the debate is on the agenda of the very group of people—apart from the board of directors, who are obviously involved—who are in a position to influence events. I thank the Minister for his generous response, but he should go further and not necessarily write off the new clause. It is not dangerous; it is moderate and sensible.
  Furthermore, if shareholders were aware of regular breach and abuse of regulation in companies in which they have made investments, in light of the developing debate on environmental protection, they would be likely to exert an influence, if only behind the scenes, to ensure that offences did not take place. I am thinking of a particular company to which I do not want to refer this evening.
  920
  However, there are major polluters in the county of Cumbria. I should like to think that shareholders would want to raise these issues. Perhaps the only way that they can be drawn to the attention of shareholders is by the approach that has been adopted by my hon. Friend the Member for Norwich, South (Mr. Garrett) as against the Minister's approach.
  Mr. John Garrett: I was deeply disappointed by the Minister's reply. He completely misunderstood the purpose of the new clause. It is complementary to the local register of polluters. It does not displace it in any way, nor is the purpose of the new clause met by a local register of companies which pollute. The local register will tell the local community that it has within it companies that pollute the environment, whereas the annual accounts will tell the owners of the company that they are investing in a company that has a bad record on pollution or no policy for protection of the environment.
  Although it is true that not everyone sees accounts, shareholders see company accounts. That is the point of the new clause. It is aimed at informing shareholders of what their companies are up to. Unfortunately, the Minister was not present in Committee, but his colleague the Under-Secretary of State was present, and we enjoyed his participation. His colleague will know that we tabled several amendments about energy use by companies, research and development, employment of the disabled and so on to improve the public accountability—the shareholder accountability—of companies. That is in the broadstream of endeavour on our part. Part of a company's accountability is that it should account to its shareholders for its environmental policies and should own up to its shareholders when it has been successfully prosecuted.
  The other argument for our new clause is that it would focus the attention of boards of directors on environmental matters. It would make them think about the issue because they would be expected to state in their annual report, directors' report, or chairman's report their aims and objectives for the environmental impact of their companies' products and processes. That would make them reduce effluent because they would be shamed into doing so if, year after year, they had to own up to polluting a local river, for example.
  Although the list of environmental legislation in our new clause may not be comprehensive, as the Minister said, it is a good start. The Government will not hit polluting companies hard enough. They should be exposed, made accountable in public, and made accountable to their shareholders for their polluting activities. Therefore, I intend to ask my right hon. and hon. Friends to support the new clause.
  Mr. Kennedy: I wish to speak for no more than one minute. I shall support the hon. Member for Norwich, South (Mr. Garrett) when he calls a Division. I underscore the point that was made by the hon. Member for Workington (Mr. Campbell-Savours). The psychology of many annual general meetings—they are generally in the south-east if not central London—becomes all the more pronounced the further north and far-flung one moves. I can think of examples in the Highlands and Islands of Scotland. I suspect that, if some major shareholders are more conscious of damage or potential damage, they might want to do something about it.
  The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. Eric Forth): The hon. Gentleman's minute is up.
  Mr. Kennedy: Not for the first time, I will disappoint the Minister by not being true to my word.
  Environmental issues now occupy a higher position on political agendas and in company reports. Companies are spending considerable sums telling us about what they are doing to be environmentally conscious and to reduce emissions, toxic wastes, pollution and so on. Through propaganda and public relations they recognise the importance of doing that, and have acted accordingly.
  We should also recognise the other side of the equation—the embarrassment and awkwardness for a company if, along with providing information about its profits, losses, investments, developments and so on, it must make explicit its shortcomings in its pollution track record. The eagerness of companies rightly to demonstrate their environmental consciousness is a further justification for pointing out the potential disincentive of possible pollutant activities. The new clause makes eminent good sense.
  I hope that, even if the Minister will not accept the specific wording of the new clause, we shall be able to get a commitment that the Government and the Department of Trade and Industry will try to take steps in this necessary direction, which is clearly a salient political and long-term issue, irrespective of our political viewpoint.
  Question put, That the clause be read a Second time:—
  The House divided: Ayes 144, Noes 193.

  Division No. 339]

  [7.58 pm

  AYES

  Abbott, Ms Diane

  Davies, Ron (Caerphilly)

  Allen, Graham

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

  Anderson, Donald

  Dewar, Donald

  Archer, Rt Hon Peter

  Dixon, Don

  Armstrong, Hilary

  Dobson, Frank

  Ashley, Rt Hon Jack

  Doran, Frank

  Ashton, Joe

  Dunwoody, Hon Mrs Gwyneth

  Barnes, Harry (Derbyshire NE)

  Eadie, Alexander

  Barron, Kevin

  Eastham, Ken

  Battle, John

  Ewing, Harry (Falkirk E)

  Beckett, Margaret

  Ewing, Mrs Margaret (Moray)

  Benn, Rt Hon Tony

  Fatchett, Derek

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

  Fearn, Ronald

  Bermingham, Gerald

  Flannery, Martin

  Bidwell, Sydney

  Flynn, Paul

  Blunkett, David

  Fyfe, Maria

  Boyes, Roland

  Galloway, George

  Bradley, Keith

  Garrett, John (Norwich South)

  Brown, Gordon (D'mline E)

  Garrett, Ted (Wallsend)

  Brown, Nicholas (Newcastle E)

  Gilbert, Rt Hon Dr John

  Bruce, Malcolm (Gordon)

  Golding, Mrs Llin

  Buchan, Norman

  Gordon, Mildred

  Buckley, George J.

  Gould, Bryan

  Campbell, Menzies (Fife NE)

  Griffiths, Win (Bridgend)

  Campbell, Ron (Blyth Valley)

  Hardy, Peter

  Campbell-Savours, D. N.

  Heffer, Eric S.

  Canavan, Dennis

  Hinchliffe, David

  Carlile, Alex (Mont'g)

  Home Robertson, John

  Clark, Dr David (S Shields)

  Howarth, George (Knowsley N)

  Clay, Bob

  Howells, Geraint

  Clelland, David

  Howells, Dr. Kim (Pontypridd)

  Clwyd, Mrs Ann

  Hughes, John (Coventry NE)

  Cohen, Harry

  Hughes, Robert (Aberdeen N)

  Cook, Robin (Livingston)

  Illsley, Eric

  Corbett, Robin

  Ingram, Adam

  Cousins, Jim

  Jones, Barry (Alyn & Deeside)

  Cummings, John

  Jones, Martyn (Clwyd S W)

  Cunliffe, Lawrence

  Kennedy, Charles

  Darling, Alistair

  Leadbitter, Ted

  922

  Leighton, Ron

  Quin, Ms Joyce

  Litherland, Robert

  Radice, Giles

  Livingstone, Ken

  Randall, Stuart

  Livsey, Richard

  Reid, Dr John

  Lofthouse, Geoffrey

  Richardson, Jo

  Loyden, Eddie

  Rooker, Jeff

  McAllion, John

  Ross, Ernie (Dundee W)

  McAvoy, Thomas

  Ruddock, Joan

  McCartney, Ian

  Salmond, Alex

  Macdonald, Calum A.

  Sedgemore, Brian

  McKelvey, William

  Sheerman, Barry

  McLeish, Henry

  Short, Clare

  Maclennan, Robert

  Skinner, Dennis

  McNamara, Kevin

  Smith, Andrew (Oxford E)

  Madden, Max

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

  Mahon, Mrs Alice

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

  Marek, Dr John

  Smith, J. P. (Vale of Glam)

  Marshall, Jim (Leicester S)

  Steinberg, Gerry

  Martlew, Eric

  Taylor, Matthew (Truro)

  Meacher, Michael

  Thompson, Jack (Wansbeck)

  Meale, Alan

  Turner, Dennis

  Michael, Alun

  Vaz, Keith

  Michie, Bill (Sheffield Heeley)

  Wallace, James

  Michie, Mrs Ray (Arg'l & Bute)

  Watson, Mike (Glasgow, C)

  Moonie, Dr Lewis

  Welsh, Andrew (Angus E)

  Morgan, Rhodri

  Welsh, Michael (Doncaster N)

  Morley, Elliot

  Williams, Rt Hon Alan

  Mowlam, Marjorie

  Wilson, Brian

  Mullin, Chris

  Winnick, David

  Oakes, Rt Hon Gordon

  Worthington, Tony

  Parry, Robert

  Wray, Jimmy

  Patchett, Terry

  Pike, Peter L.

  Tellers for the Ayes:

  Prescott, John

  Mr. Frank Haynes and

  Primarolo, Dawn

  Mr. Nigel Griffiths.

  NOES

  Aitken, Jonathan

  Cormack, Patrick

  Alexander, Richard

  Couchman, James

  Alison, Rt Hon Michael

  Cran, James

  Allason, Rupert

  Currie, Mrs Edwina

  Amess, David

  Curry, David

  Amos, Alan

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

  Arbuthnot, James

  Davis, David (Boothferry)

  Ashby, David

  Day, Stephen

  Atkins, Robert

  Dicks, Terry

  Atkinson, David

  Dorrell, Stephen

  Baker, Nicholas (Dorset N)

  Douglas-Hamilton, Lord James

  Baldry, Tony

  Dover, Den

  Batiste, Spencer

  Dunn, Bob

  Bennett, Nicholas (Pembroke)

  Durant, Tony

  Benyon, W.

  Evans, David (Welwyn Hatf'd)

  Blackburn, Dr John G.

  Evennett, David

  Blaker, Rt Hon Sir Peter

  Fallon, Michael

  Bonsor, Sir Nicholas

  Favell, Tony

  Boscawen, Hon Robert

  Fenner, Dame Peggy

  Boswell, Tim

  Field, Barry (Isle of Wight)

  Bowis, John

  Fishburn, John Dudley

  Boyson, Rt Hon Dr Sir Rhodes

  Fookes, Dame Janet

  Brandon-Bravo, Martin

  Forman, Nigel

  Brazier, Julian

  Forsyth, Michael (Stirling)

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

  Forth, Eric

  Bruce, Ian (Dorset South)

  Fowler, Rt Hon Norman

  Buck, Sir Antony

  Fox, Sir Marcus

  Burns, Simon

  French, Douglas

  Butcher, John

  Gale, Roger

  Butler, Chris

  Gardiner, George

  Butterfill, John

  Garel-Jones, Tristan

  Carlisle, John, (Luton N)

  Glyn, Dr Alan

  Carlisle, Kenneth (Lincoln)

  Goodlad, Alastair

  Carrington, Matthew

  Goodson-Wickes, Dr Charles

  Carttiss, Michael

  Grant, Sir Anthony (CambsSW)

  Cash, William

  Greenway, Harry (Ealing N)

  Chalker, Rt Hon Mrs Lynda

  Griffiths, Peter (Portsmouth N)

  Chapman, Sydney

  Ground, Patrick

  Chope, Christopher

  Gummer, Rt Hon John Selwyn

  Clark, Sir W. (Croydon S)

  Hague, William

  Colvin, Michael

  Hampson, Dr Keith

  Coombs, Anthony (Wyre F'rest)

  Hanley, Jeremy

  Coombs, Simon (Swindon)

  Hannam, John

  923

  Harris, David

  Peacock, Mrs Elizabeth

  Haselhurst, Alan

  Porter, David (Waveney)

  Hayward, Robert

  Powell, William (Corby)

  Heathcoat-Amory, David

  Redwood, John

  Hicks, Mrs Maureen (Wolv' NE)

  Riddick, Graham

  Higgins, Rt Hon Terence L.

  Ridsdale, Sir Julian

  Hind, Kenneth

  Rossi, Sir Hugh

  Howard, Michael

  Rost, Peter

  Howe, Rt Hon Sir Geoffrey

  Sainsbury, Hon Tim

  Hunt, David (Wirral W)

  Shaw, David (Dover)

  Hunt, Sir John (Ravensbourne)

  Shaw, Sir Giles (Pudsey)

  Hunter, Andrew

  Shephard, Mrs G. (Norfolk SW)

  Irvine, Michael

  Shepherd, Richard (Aldridge)

  Jack, Michael

  Shersby, Michael

  Jackson, Robert

  Smith, Sir Dudley (Warwick)

  Janman, Tim

  Smith, Tim (Beaconsfield)

  Jessel, Toby

  Soames, Hon Nicholas

  Jones, Gwilym (Cardiff N)

  Speller, Tony

  Kellett-Bowman, Dame Elaine

  Spicer, Michael (S Worcs)

  Key, Robert

  Stanbrook, Ivor

  Kilfedder, James

  Stanley, Rt Hon Sir John

  Knapman, Roger

  Steen, Anthony

  Knight, Greg (Derby North)

  Stevens, Lewis

  Knight, Dame Jill (Edgbaston)

  Stewart, Andy (Sherwood)

  Knowles, Michael

  Stradling Thomas, Sir John

  Knox, David

  Sumberg, David

  Lang, Ian

  Summerson, Hugo

  Latham, Michael

  Taylor, Teddy (S'end E)

  Leigh, Edward (Gainsbor'gh)

  Thompson, D. (Calder Valley)

  Lester, Jim (Broxtowe)

  Thompson, Patrick (Norwich N)

  Lord, Michael

  Thorne, Neil

  Lyell, Sir Nicholas

  Thurnham, Peter

  Macfarlane, Sir Neil

  Townend, John (Bridlington)

  MacGregor, Rt Hon John

  Townsend, Cyril D. (B'heath)

  MacKay, Andrew (E Berkshire)

  Tracey, Richard

  McLoughlin, Patrick

  Twinn, Dr Ian

  McNair-Wilson, Sir Michael

  Waddington, Rt Hon David

  Madel, David

  Wakeham, Rt Hon John

  Malins, Humfrey

  Walker, Bill (T'side North)

  Maples, John

  Walters, Sir Dennis

  Marland, Paul

  Ward, John

  Marshall, John (Hendon S)

  Wardle, Charles (Bexhill)

  Martin, David (Portsmouth S)

  Watts, John

  Maxwell-Hyslop, Robin

  Wheeler, John

  Meyer, Sir Anthony

  Whitney, Ray

  Mills, Iain

  Widdecombe, Ann

  Miscampbell, Norman

  Wiggin, Jerry

  Morrison, Sir Charles

  Winterton, Mrs Ann

  Nelson, Anthony

  Winterton, Nicholas

  Nicholls, Patrick

  Wolfson, Mark

  Nicholson, David (Taunton)

  Wood, Timothy

  Nicholson, Emma (Devon West)

  Norris, Steve

  Tellers for the Noes:

  Paice, James

  Mr. John M. Taylor and Mr. Tom Sackville.

  Patnick, Irvine

  Pawsey, James

  Question accordingly negatived.

New Clause 4

  DIRECTORS' REPORTS
  '.—(1) The directors' report of a public company laid before the company in general meeting after 31st December 1989 (not being a meeting adjourned from a date before that date) shall state, in addition to the matters required by Schedule 7 to the Companies Act 1985 (matters to be dealt with in directors' report), which, if any, of the directors at the end of relevant financial year were independent directors.
  (2) The directors' report of a major public company laid before the company in general meeting after 31st December 1989 (not being a meeting adjourned from a date before that date) shall state, in addition to the matters required by subsection (1) above and by Schedule 7 to the Companies Act 1985 (matters to be dealt with in directors' report), if at the end of the relevant financial year fewer than three of the directors were independent directors, whether the directors propose that appointments of independent directors should he made.'.—[Mr. John Garrett.]
  Brought up, and read the First time.
  Mr. John Garrett: I beg to move, That the clause be read a Second time.
  Mr. Deputy Speaker (Sir Paul Dean): With this it will be convenient to discuss the following: new clause 5—Interpretation—
  '. In this Part—
  "associate" and "associated company" have the meaning given by section 435 of the Insolvency Act 1986;
  "audit committee" means a committee of the directors of a major public company appointed in accordance with the provisions of this Act;
  "directors' report" has the meaning given by section 235 of the Companies Act 1985;
  "financial year" has the meaning given by section 224 of the Companies Act 1985;
  "independent director" means a director who is not and in the previous five years has not been—

  (a) an employee or the holder of any office (other than his office as independent director) or place of profit under the company.

  (b) an associate of any director or officer of the company.

  (c) an adviser retained by the company, or an associate or partner of such an adviser,

  (d) a person or an associate of a person who has a notifiable interest in the company for purposes of Part VI of the Companies Act 1985, or

  (e) a party to or otherwise materially interested in a substantial transaction or arrangement with the company;
  and in paragraphs (a) to (e) above, "company" includes any holding, subsidiary or associated company of the company;

  "major public company" means on any date a public company of which any issued share capital is listed on a recognised investment exchange as defined by the Financial Services Act 1986 and which in one or more of the three financial years ending on the last day of the financial year of the company immediately preceding that date satisfied two or more of the following conditions—

  (a) the amount of the turnover of the company and its subsidiaries exceeded £200 million;

  (b) the balance sheet total (as defined in section 248(3) of the Companies Act 1985) of the company and its subsidiaries exceeded £100 million;

  (c) the average number of full-time employees of the company and its subsidiaries determined on a weekly basis in accordance with section 248(4) of the Companies Act 1985 exceeded two thousand.'.

  New clause 6—Appointment of Audit Committee—
  '.—(1) Every notice calling an annual general meeting of a major public company to be held after 31st December 1989 (not being a meeting adjourned from a date before that date) shall, if no audit committee of the directors has been appointed in accordance with the provisions of this Act or if the appointment of such a committee has lapsed, include consideration of the appointment of an audit committee as a separate item of business to be transacted at that meeting.
  (2) A major public company may by ordinary resolution require the directors to appoint an audit committee of the directors in accordance with the provisions of this Act notwithstanding any provision to the contrary or the absence of any necessary provision in the articles of the company.
  (3) Where a major public company has resolved under the provisions of this Act to require the directors to appoint an audit committee, it shall be the duty of the directors of the company to make such an appointment within a period not exceeding six months after the date of the resolution.
  (4) Subject to section 3 below, the conduct, the powers, duties and proceedings of an audit committee shall be governed by such regulations as the company may from time

  925
  to time adopt by ordinary resolution and such regulations shall be part of the regulations of the company in the same manner and to the same extent as if they were regulations contained in duly adopted articles of association.
  (5) Section 380 of the Companies Act 1985 (registration etc, of resolutions and agreements) shall apply to any resolution passed by a major public company in accordance with the provisions of this section.'.
  New clause 7—Duties of Audit Committee—
  '. The duties of an audit committee shall include the following—

  (a) to hold meetings with the auditors to consider any matters concerning the company of which notice has been given to the audit committee by the auditors and to report to the directors thereon; and

  (b) to report to the directors on any other matter which in the opinion of the audit committee requires the attention of the directors.'.

  Mr. Garrett: New clauses 4 and 5 relate to companies having non-executive or independent directors, and new clauses 6 and 7 relate to the formation of those independent directors into audit committees.
  New clauses 4 and 5 represent a simple amendment in the tradition of something that goes back more than 10 years as the House has attempted to encourage public companies to appoint independent directors. I know that the late Sir Brandon Rhys Williams campaigned for this and that the hon. Member for Beaconsfield (Mr. Smith) moved the clauses relating to this in Committee. They advocated the appointment of such directors for many years. We think that it is right that that issue should be aired in this Bill at least one more time so that Conservative Members can join with us in trying to get this change through.
  This issue has been current for a long time and, as proof, I have an article with me written by the late Sir Brandon Rhys Williams which appeared in the Investors Chronicle on 17 February 1978 entitled "Why companies need audit committees". At that time, Sir Brandon was making one of his numerous attempts to get such provisions enacted in company law.
  New clause 4 requires a statement by a company as to whether it has independent directors and requires the directors' report of a major public company with fewer than three independent directors to state
  "whether the directors propose that appointments of independent directors"—
  or more independent directors—
  "should be made."
  New clause 5 defines the companies to which that provision will apply as a major public company that satisfies three simple conditions—it has a turnover of more than £200 million, a balance sheet total of £100 million or over, and employs more than 2,000 people.
  Sir Brandon's last act before his death was to introduce a Bill to this effect, which was passed unopposed on its Third Reading in the House, but which was regrettably blocked in another place by a hysterical campaign conducted by the Confederation of British Industry. At the time, I believed that that campaign was grossly over the top in its reaction to the threat to companies' independence and powers to carry out their proper duties by virtue of having the independent directors proposed by Sir Brandon. I still hold that view.
  Mr. Campbell-Savours: This is a new proposition for some of us, and as we may wish to intervene later I wonder
  926
  whether my hon. Friend could explain the relationship between the new directors and the executive directors. What would their relationship be on a day-to-day basis? Would they operate in terms of permanent accountability or timetable accountability?
  Mr. Garrett: If my hon. Friend will allow me to proceed just a little further, most of his questions will be answered more or less satisfactorily.
  This issue has been debated at great length for years. There is general consensus in the corporate community of the value of independent directors. The best run companies already have them and their numbers are increasing. A distinguished organisation PRONED—Promotion of Non-Executive Directors—exists to encourage companies to take on independent directors and to promote the concept of such directors. It has said:
  "The purpose of appointing non-executive directors is to provide the board with knowledge, expertise, judgment and balance, which may not be available if the board consists only of full-time executives."
  PRONED was set up by the stock exchange, the Bank of England and the CBI. Therefore, it is an establishment body of impeccable credentials and its aim is simply to improve the governance of our public companies.
  Non-executives can make a contribution to the long-term development of a company because of their specialist skills. They can take a detached view, and they can often see through any potential conflicts of interest on a board. In the United States, they form the majority of boards of large companies.
  PRONED suggests that there should be three non-executive or independent directors in medium-sized companies. Of The Times top 1,000 companies, only about 10 per cent. have no independent directors and 60 per cent. have three or more. There is a proposed Bank of England code which will encourage companies to have independent directors.
  8.15 pm
  Hon. Members on both sides of the Committee were disappointed that the Government opposed the concept of enshrining the position of independent directors in statute. The then Minister referred to the desirability flowing from
  "the contribution that those directors can make to the well-being of their companies".
  He went on, I fear in an unintelligible passage, to say that the definition in the new clause did not encompass all the possible types of non-executive director. He said:
  "There are degrees of executiveness … We do not wish to place in company law … rigid distinctions which are alien to the way in which British company law has developed."
  However company law has developed, companies have developed in such a way. It seemed to Opposition and Conservative Members who have advocated the cause for more years than I that the new clauses would be a useful prompt to companies to take on and benefit from independent directors.
  The Minister also denied that the passage of the new clauses would give more momentum—what we wanted—to the move towards more independent directors. He said:
  "the new clauses would not advance that valuable trend."—[Official Report, Standing Committee D, 8 June 1989; C. 275–6.]
  He then announced that the Government would oppose the new clauses, but did not tell us how the Government proposed to advance that valuable trend. I had imagined that the Government would have wanted to encourage it.

  927
  On a purely non-partisan basis, we believe that companies are better governed by boards of directors that include outside, independent or non-executive directors with no axe to grind and with the ability to take a detached view of the long-term development of the companies.
  The new clauses relating to the audit committees follow from the new clauses relating to non-executive directors. The new clauses seek to establish a procedure for listed companies whereby the relationship with the auditor would be handled by a committee of the board. Such directors would not have a personal interest in the profitability of the company and in the manner in which it is reported, in comparison with executive directors, whose pay or bonuses are likely to have a significant profit-related element. Therefore, those directors would not have the same incentive, under any circumstances, to influence the auditors.
  The typical specifications for an audit committee include that it should review financial statements prior to submission to the board for approval; review external auditors' findings and any lack of co-operation encountered during audit with a view to erasing those problems; review accounting policies for compliance with best practice; review periodically the effectiveness of systems of accounting and control; act as an advisory group to the board; review the effectiveness of internal audit and its reports; and discuss with the board and the auditors the significance of matters brought to light by audit and to make appropriate recommendations.
  The advantages available from an effective audit committee are most likely to be realised by board members who are non-executive officers of the company. Those officers should be senior, well qualified and experienced individuals who should feel uninhibited about expressing their views on important issues.
  From the auditors' point of view, they would expect the detailed contents of management letters, any qualifications in the audit report, any matters involving disagreement with the views of the board or matters pertaining to the auditors' reappointment and remuneration to be discussed.
  The case for audit committees derives directly from the argument for independent directors. Those committees help directors to fulfil their legal obligations as to the accuracy of financial statements. They give directors the opportunity to consider issues at greater length and strengthen the objectivity and credibility of financial reporting and the independence of the audit function. They are also an important adjunct to protecting the interests of shareholders and they bring an objective, outside view of the company's financial conduct.
  Therefore, I am sure that these provisions will receive the support of hon. Members of all parties. Indeed, this measure has, in effect, already passed through the House with an unopposed Third Reading. I look forward to the Government's support if it comes to a Division. We should have a Division on this, because the House should have an opportunity of expressing its view on the matter and, if we reach that stage, I expect many Conservative Members to join the Opposition in the Lobby.
  Mr. Tim Smith: I support the new clause, because it is identical to a new clause that I introduced in Committee. I support it also because the words of all the new clauses in this group are taken from the private Member's Bill which I introduced earlier this year. Those words, in turn,
  928
  were taken from the Bill that was introduced last year by the late Sir Brandon Rhys Williams, which, as the hon. Member for Norwich, South (Mr. Garrett) has just reminded us, passed through the House unopposed.
  However, I do not want to rehearse all the arguments in favour of the new clauses this evening, because we had a good debate in Committee. There was a consensus that independent directors and audit committees are a good thing. Indeed, that is why the CBI, the stock exchange and the Bank of England set up PRONED. The good news is contained in the figures that the hon. Member for Norwich, South gave the House about the proportion of The Times top 1,000 companies that now have one or more independent directors.
  The question is, how do we make progress? The companies that do not have independent directors or audit committees almost certainly need them most. In such companies, the jobs of chairman and chief executive are rolled into one and one man often dominates the board—perhaps because he has a large shareholding in the company. Those are the companies that need these arrangements, but they are the companies that do not have them at present.
  So, how are we to make progress? From experience of company law, I know that good and best practice has gradually developed to a point at which people have then said, "The time has now come when all companies should be required to do this. It is clearly the right way of going about things. We shall incorporate these things into company law." The example that I gave in Committee was the requirement to consolidate accounts. Many companies consolidated the accounts of their group companies years before the consolidation requirement was introduced in 1929. However, at that point consolidation was so widely the best practice that it was thought right to legislate.
  How are we to move forward from the present situation where 90 per cent. of companies have one or more independent directors to a position where every company has a number of non-executive directors and an audit committee?
  The proposals in the new clauses are relatively modest. In the first instance, they will simply require a company to consider the matter and to give some information to shareholders. In answer to the question, "How are we to make progress?", I shall be interested to hear whether my hon. Friend the Minister agrees that these are good ways in which to proceed and good ways of conducting companies. I shall also be interested to hear how he proposes to encourage a higher take-up of this good practice so that we eventually have a universal provision of independent directors and audit committees. If the Department of Trade and Industry believes these arrangements to be good, how does it propose to promote them?
  Mr. Jim Cousins: I follow the hon. Member for Beaconsfield (Mr. Smith) in thinking that these amendments are relatively modest and moderate, yet the Government's argument on this point in Committee was obscure to say the least.
  In Committee on 8 June, the then Minister stated:
  "The basis of argument is that by putting the matter into statute and having a separate category of independent directors, we would make it more difficult for the general movement towards more non-executive directors to take place."—[Official Report. Standing Committee D, 8 June 1989; c. 282.]

  929
  That argument is extremely perverse and hard to follow. It invites us to believe that if one brings a new category of people into existence, one is making it harder for that new category of people to come into existence. Plainly, the argument does not make sense.
  I believe that the Minister was forced into such a contorted argument because he had no other arguments at his disposal on that occasion. As the hon. Member for Beaconsfield has rightly said, there was an effective consensus in Committee—although perhaps it was not always expressed in votes—that these provisions would be a desirable development and one that fitted with the general movements in the markets at large.
  This may very well be one of the last opportunities on which we can deal with this matter in this way. Since the Standing Committee met in June and July, there have been further reports, revelations and a further air of unfortunate uncertainty about the conduct of people in the City, especially—but not only—in relation to takeover bids. The market pressure to produce a better system of director responsibility and accountability, not simply to the shareholders but to the markets at large, is almost irresistible.
  We must agree to some kind of modest proposal which is self-acting in its mechanisms and simply asks people to occupy a certain role and to carry it out properly. None of the new clauses asks for complex regulatory mechanisms. If this matter cannot be dealt with at this juncture in the development of our financial and industrial markets by putting into place simple, modest and self-acting proposals, the only other alternative at a later date will be to accede to the growing demand for precise, externally imposed regulatory mechanisms which would not suit the needs of the time so well. It would be much better and in the interests of all parties if we could achieve a self-acting, self-regulating system by inviting new categories of people to come into existence, with a new remit and a sense of their own role when carrying out these wider responsibilities.
  The stock exchange is asking us to move in precisely that direction. I noted with interest the report of the Listed Companies Advisory Committee, which was contained in the last annual report of the stock exchange. It carefully noted the need to produce a guideline for directors on investor relations which would remind directors of their wider responsibilities, not only to shareholders in that specific company, but to the investing community at large. The document outlined the legal framework that already exists and the responsibilities of directors.
  This year the stock exchange has also supported the production of a new booklet entitled "Takeover Bids—A Guide for Directors", which states
  "Understanding their legal and regulatory responsibilities is essential if directors are to take rational and defensible decisions in takeover bid situations, and to communicate them effectively."
  Obviously, that is not going as far as to underwrite our new clauses, but its meaning is clear. The financial markets and those experts in them are concerned about the lack of accountability and direction that has been shown by some directors in some key matters of grave public concern that have brought our financial markets into disrepute.
  This is a modest opportunity to set in being a new category of actors on the industrial and financial scene,
  930
  with new responsibilities and a wider remit in the spirit of the recommendations of the Listed Companies Advisory Committee. Our opportunity to do that now is precious. If we do not take it and do not put in place this modest and limited system, we shall be faced later with almost unstoppable pressure for much more complex external regulatory mechanisms such as are in place elsewhere and such as produced the Financial Services Act 1986. It must be in the interests of both sides of the House to support the new clause and to head off that track. It would be unfortunate if, after a few more years of DTI inspectors' reports and of calamities such as Eagle Trust Holdings and the unfortunate image left by the Ferranti business, we were faced further down the road with irreversible pressure to put in place something as complicated in its own way as that Act proved to be.
  Mr. Nelson: I, too, support the new clause strongly. My support follows on from my sponsorship of the private Member's Bill of the late Sir Brandon Rhys Williams and from my speeches in Committee in which I supported this measure. If the Government feel unable to accept the new clause—I hope that even now my hon. Friend will consider it sympathetically and change his mind—I shall certainly vote for it.
  8.30 pm
  This is an idea whose time has come—in fact, it came a long time ago. Something must be done now and if this measure does not pass tonight, it will, nevertheless, come. It is necessary and the only question is how many more scandals and abuses of shareholders' funds need to occur before the House is prepared to recognise in statute the need to separate some of the responsibilities and to accord to a non-executive element of boards of directors the duty objectively to assess the reports of accountants and to determine whether the affairs and liabilities of the company are being deployed in a wholly proper way.
  I also congratulate my hon. Friend the Minister on his appointment. I urge on him in the strongest possible terms the importance that I and many others attach to the new clause. This measure went through the House without objection; the Government did not roll in people to vote it down. Because of a cluster of Lords in another place, it was eventually defeated on a despicable day and in an appalling way. However, we do not support it for those nostalgic reasons. We support it because it has been shown intrinsically necessary to have on a board of directors an element who can scrutinise affairs at arm's length and separately assess whether the liabilities and assets of the company are being used with integrity or deployed to an excessive degree. This element can also assess whether, as so often happens, a dominant chief executive or chairman who may appoint all the other members of the board is abusing his position of patronage.
  No one would say that this has not happened or will not happen again. I join my hon. Friend the Member for Beaconsfield (Mr. Smith) in welcoming the extent to which so many companies have non-executive directors and the success of organisations such as Promotion of Non-Executive Directors, but the very companies that need effective non-executive directors are those that refuse to have them. They are the companies that use such directors' names on the list of directors instead of giving them an effective role of second guessing or inquiring into the policy decisions and finances of the companies concerned.

  931
  I suspect that my hon. Friend will refuse to accept the new clauses—I suppose that it would be impossible for him, as a newcomer, to move against the system, which has been in place for a long time in the Department. The system has won: it has put the House down time after time by ordering Ministers to resist this necessary measure—and I do not know why. The House of Commons, which is sovereign, has often said that this is a necessary measure, but, due to a gross error of judgment by Ministers of both parties, they have been persuaded not to proceed along the lines adopted in other countries.
  I have great personal respect for my hon. Friend the Under-Secretary. I suppose that Ministers are still not persuaded to move from a purist view of the common responsibility of directors in a unitary board structure. None of those common responsibilities will be affected or undermined by superimposing on a unitary board structure certain additional responsibilities or overt responsibilities that directors must be seen to be carrying out. They are responsibilities that all directors should carry out already, but this measure will concentrate their minds because non-executive directors will know that they have a statutory responsibility to report to the annual general meeting. They will have a similar responsibility to hear from the accountants if they are worried, for instance, about the extent to which they are lending to another company and about other financial arrangements that may appear slightly suspect.
  How many scandals and personal abuses of corporate money would have remained uncovered but for the existence of non-executive directors? Various examples have been mentioned and Blue Arrow may be one of them.
  The problem arises in the many companies in which an individual controls the show and is unwilling to have on his board—and if he has them, to use them as an audit committee—some non-executive directors. If we maintain our unitary board structure and do not pursue a continental style of supervisory and executive boards—there is much to be said for maintaining what has proved good in the past—I believe strongly that the time has come for, and circumstances have shown the necessity of, having non-executive directors within the unitary board structure. Urging people to accept this voluntarily will not work in the companies that we most want to accept it.
  Pressures exerted by people like myself and others in the House and the City on the stock exchange to make it a listing requirement of public limited companies to have an audit committee and non-executive directors have not been accepted. As so often, that is the trouble with our system of self-regulation: moves are made after events have pre-empted them. In other countries it is a listing requirement for major companies on the exchange, so why not here? Why does not our stock exchange council do exactly the same, at least for the plcs? Large private companies to which the same obligation should extend will remain, but if the plcs refuse it, there will still be problems. As long as a massive amount of personal and financial patronage rests with a few corporate individuals in this country, recent experience should have shown us that there is a strong case for a departure from the reluctance, conservatism and innate resistance on the part of the DTI's advisers to Ministers to allow a change that was universally accepted in the House on a previous occasion and that received enough support in Committee to enable the matter to he considered again tonight.
  932
  I respect my hon. Friend very much and I beg him, even if he cannot accept these measures, to throw away his notes and to speak to us from the heart telling us why he resists them and whether he will keep the door open for such a change. It would be a grave personal error of judgment, as well as a massive political one for our party, so to set ourselves against this provision that future events will be a hostage to fortune. I am not prepared to be a part of that. I have made my position clear and, like my hon. Friend the Member for Beaconsfield, I shall be consistent and support the new clause.
  Mr. Campbell-Savours: The speech of the hon. Member for Chichester (Mr. Nelson) reminded me of debates in the Committee stage of the Financial Services Bill, when he put the case for a number of new clauses and amendments as eloquently as he has spoken this evening. He and I joined together and conspired behind closed doors to try to see those amendments through the Committee. I do not mean that in any distasteful way. The proceedings on that Bill are clearly replicated by the proceedings on this Bill. whose Committee stage I was unfortunately unable to attend, although that was my fault, and I regret it.
  The issue that the Minister should tackle tonight is the one that I had to address as a member of that Standing Committee in 1986. When the Financial Services Bill was put before the Committee, Conservative Members were eager to accept the principle of self-regulation, and I understand why. Early in the debates on the Financial Services Bill most of the argument took place between Labour Members who questioned whether self-regulation could work. By the end of the Committee proceedings, I was one of those hon. Members who, following discussions with various institutions in the City, had accepted the proposition that self-regulation would work and I was willing to give way on statutory requirements, which we had begun by vigorously pursuing. I thought that if it were possible to introduce a system of self-regulation which people were motivated to ensure worked because thereby statutory controls would be avoided, that would secure the same objective. The arguments are similar this evening.
  We have two propositions before us. There are those who say let the law take its course and let those directors who default be found and prosecuted, and there are people who say let us have a system based on some form of self-regulation whereby people within the company, with an arm's-length relationship with it, are able to monitor, check and observe its activities, particularly its financial arrangements. It is clear that these audit committees would work on an arm's-length arrangement, rather than its being exclusively the responsibility of management reporting directly to the main board.
  I view this proposal in the same light as the debates on self-regulation during the Financial Services Bill Committee in 1986. The Minister should view them that way, because the alternative is clear.
  I have brought a number of cases of fraud companies—sometimes large companies—to the attention of the House. I have wondered how it would be possible to check on them without setting up a huge statutory authority which could meddle in the affairs of companies in a way that right hon. and hon. Members on both sides of the House would find unacceptable. These proposals would provide a mechanism that could secure that objective.

  933
  The hon. Member for Richmond and Barnes (Mr. Hanley) has drawn my attention to a document that encapsulates my point very clearly—a report by Peat, Marwick McLintock on the audit committee. The introduction says that, in recent years, the presentation of financial information by commercial organisations has been subject to increasingly stringent standards of accountability. This trend has been accompanied by a few highly publicised instances of fraud and corporate failure which have focused attention on the stewardship responsibilities of the boards of directors, particularly in relation to the fair presentation of financial information and the accounting controls of the business. The board of directors is legally responsible for ensuring that the financial statements give a true and fair view, yet the board's detailed involvement in the preparation of those accounts may be minimal.
  These people are reputable and know all about these matters. I presume that they have been campaigning on them for years and have consulted widely, as did members of the Committee. The board's detailed involvement in the preparation of those accounts may be minimal, however, as the financial management usually prepares the annual accounts. The board may often rely on an external auditor's expertise to ensure that no material misstatements exist.
  These people understand the problem and they are making a proposition. They know it works and, as the hon. Member for Chichester said, in other countries such arrangements are already standard practice. I support the view that he advanced that, if companies want to be listed, they should be required to comply with the arrangements, if only to safeguard the interests of shareholders in companies where large shareholdings may be held by individual directors whose power and influence on the affairs of the company is therefore draconian. Surely inside those boards one needs a committee or some independent directors who can report and give a more arm's-length, independent view of what is happening.
  8.45 pm
  I do not want to undermine my case, but I shall draw the House's attention to one independent directorate with whom I have had some dealings in the past few months which is well known to the hon. Member for Beaconsfield (Mr. Smith). The Observer newspaper has a board of independent directors which was set up prior to the takeover by Lonrho, but I feel sure that what we are advocating is not similar to that arrangement. It was a way to try to reassure the public, journalists, readers and others that the company would not be unreasonably manipulated by Mr. Tiny Rowland and his cohorts in Cheapside. Unfortunately, that board of independent directors did not do its job properly and the newspaper has been manipulated, which is why its circulation has fallen so dramatically and why it will probably be out of business in no time. That is something that the journalists on that newspaper have to sort out and it is to be hoped that Mr. Tiny Rowland will divest himself of control of that newspaper. That is not the kind of independent board of directors that we are looking for. We want a body with teeth, which has an arm's-length relationship, and which will report and consider the financial affairs of a company independently.
  934
  The Minister should consider the reasonable arguments that have been put by right hon. and hon. Members from both sides of the House when he replies to this debate.
  Mr. Redwood: I share the interests of right hon. and hon. Members on both sides of the House who have argued so eloquently in favour of more non-executive directors, particularly in companies that have not yet taken any steps towards having a reasonable number or which do not have any at all. I welcome the trend towards an increasing number of non-executive directors. As hon. Members on both sides of the House have said, that is happening. There is a healthy growth in their number on the boards of major British companies.
  Before I was elected to the House, I was a non-executive director of an industrial public company, and I hope that some of the issues I raised made a contribution to the progress of the company. I do not need persuading that non-executive directors have an important role and are desirable. Many right hon. and hon. Members have quite rightly asked me how their number will increase if there is no statutory requirement to place such people on boards. I think they will spread for the same reasons and by the same mechanisms which have caused them to spread in recent years.
  First, the excellent work by Promotion of Non-Executive Directors, which has been praised in this debate, will continue. The service that it provides by advising companies and making available lists of suitable candidates is invaluable and is encouraging many companies to increase the number or to take the step towards having some.
  Secondly, the role of the Bank of England is important, and that has been mentioned. Thirdly, the fact that it is good practice for companies to take on such people is becoming widely accepted in the City, in the financial markets and among shareholder groups, and that will lead to more pressures for non-executive appointments. Finally, there will be shareholder and banker pressure in particular cases, and perhaps more generally, if companies do not have boards that meet the requirements of shareholders and bankers when discussing company matters at the AGM or putting forward loan proposals and other financial arrangements.
  The new clause is similar to proposals voted down after extensive discussion in Committee. I have three fears about moving to a statutory system. First, I am advised that the basis of British company law depends on the creation of the category of director and the law does not recognise whether people work full time, part time or very little at all. If I accept the new clause, I cannot be sure that the rest of company law would work, because we would be intruding the concept of independent directors on existing company law based on a single category of director with general responsibilities. That could be dangerous and could have consequences not foreseen by the supporters of the new clause.
  The second matter relates to my understanding and view of how company boards work. One of my hon. Friends said that he thought that Ministers were concerned about the tradition of collective decision taking on company boards. Such a proposal, cast in the way that it is and with the modest pressures suggested in the new clause, could disrupt that tradition of collective decision

  935
  taking and could make personal relationships within boards more difficult. That might not be in the interests of shareholders or the company.
  In the end, a company depends on good debate in the board, mutual trust between all its members, and a belief by the non-executives that the chief executive or the chairman—or both if they are executive jointly—are broadly taking the company in the right direction and making the right decisions. The non-executives can apply pressures and skills to individual policies. It is rare for non-executives to have to take more decisive action about the structure of the executive board. If they were there as a separate group clearly marked by law it could create more tensions and hostilities which could create suspicions within the board. That might not be desirable.
  My final reason for not accepting the new clause is that while the House could pass the measure and each company designated under the proposal would have to appoint independent directors who would be so named by the clauses, we could not guarantee that they would be genuinely independent people. It depends on the dynamics of the company and the politics of the board, but it is possible to imagine that in companies with chief executives or chairmen who were powerful in the way that has been described devices could be formulated by which people could be appointed to the boards on the tacit understanding that they did not exercise full independence of the kind that hon. Members wish to see.
  The House should know that in their reports listed companies already have to reveal which directors are non-executive and must furnish short biographies of them. Therefore, some of the requirements for information are already met by existing arrangements for listed companies.
  I shall now deal with audit committees which I think are a good idea. When I was a non-executive director we moved to establish an audit committee and it worked out an agenda of quite useful work. At the beginning, I was a member of a board that in many respects did not operate through audit committees, and that meant that the business came to the board itself. That can be a perfectly satisfactory way to proceed. Some companies prefer to work through many committees and will have strong views on the disposition of non-executive and executive directors of those committees. Others wish to do that through the board.
  We cannot get away from the central point that if the main issue is controlling fraud or malpractice, the main defence for the shareholder in the presentation of the figures and accounts is the appointment of a good independent auditor. It is for good reason that that is a shareholder power in all companies. The auditor has a close relationship with a company, but he must be genuinely independent and must answer to shareholders. Modern audit is time consuming.
  The hon. Member for Workington (Mr. Campbell-Savours) asked if there could be delay. The answer is no, because if the audit is of systems the auditor is trying to satisfy himself that the company has systems that usually work well and guarantee honesty and accuracy of reporting. Much modern audit is systems audit and not counting the figures in each of the books.
  For those reasons, but with some reluctance, I urge the House to vote against the new clause. I am a strong believer in spreading the gospel of non-executive directors, but these proposals are not constructive in the right way
  936
  and there are good signs that shareholders, bankers and other financial market people are moving companies in that direction. I welcome that.
  Mr. Campbell-Savours: I understand the hon. Gentleman when he talks about systems in so far as he is putting to the House that the auditors he talks about are ensuring that the systems are in place when they come in perhaps once a year. Things can happen fast. A large shareholder who is a director of a company and whose holding might be worth hundreds of millions—we know that there are such directors—may well in a matter of months be able to manipulate the accounts in order to misappropriate large sums or engage in fraud. How would he be caught? Perhaps systems could be modified before the auditors about which the Minister spoke examined the accounts. Surely to some extent there is a case for having this more permanent role.
  Mr. Redwood: That is not a strong argument. Someone who tries to mislead or carry out fraud and is in a powerful position could surely hoodwink the auditors and would most surely be able to hoodwink the non-executive directors who might meet in audit committee three or four times a year. Those non-executive directors depend primarily for their information and for the agenda of their committee on matters brought to their attention by the auditor. Anyone who looks at the structure of an audit committee will conclude that the main line of protection against fraud or malfeasance or twisting of the figures lies in accurate and clear auditing by a good independent auditor.
  Mr. John Garrett: This has been a sensible and reasonable debate. The arguments in favour of our new clause were put as well by the hon. Members for Chichester (Mr. Nelson) and for Beaconsfield (Mr. Smith) as by any Opposition Member. The arguments are becoming unanswerable. The middle of the Minister's speech was an endorsement of the concept of independent directors and could well have ended with an acceptance of the new clause—until we reached his objections to independent directors being enshrined in statute.
  The Minister had three objections. He spoke of the unforeseen consequences of the clause, having foreseen the same consequences happening naturally. He had already said that if——
  Mr. Redwood rose——
  Mr. Garrett: Let me explain before the Minister jumps up. He said that the consequences of the clause are unforeseen yet it encourages the development of independent directors. He then advocated the spreading of independent directors as they have spread in the past. In other words, he accepted the principle but denied the means.
  Mr. Redwood: There is an important legal distinction here. I welcome the principle of more non-executive' directors being appointed to boards, but each of those directors would serve on those boards with full collective responsibility and would be recognised in law as being entirely the same as executive directors in terms of their responsibilities. The new clause introduces the idea that there would be a group of people called independent

  937
  directors. I cannot accept that tonight, because I have to think through the consequences of that for the rest of company law. My advice is that it could cause difficulties.
  9 pm
  Mr. Garrett: Our advice is that it would not cause the difficulties that the Minister fears.
  In the Minister's second objection, he spoke of the impact on collective decision-taking. We propose leavening the wisdom of the collective with independent minds. He said that the proposals would not guarantee that the directors would be independent. That is true, but it would increase the likelihood of having independent advice on a board of directors. Once again, he has willed the end but denied the means.
  I have tried to develop the argument that good independent objective audit would be facilitated by the existence of audit committees and I tried to explain the relationship between audit committees and the outside auditors. Given the history of the matter, it is time that the opinion of the House was tested. I ask those of progressive mind on both sides of the House to vote for the new clauses.
  Question put, That the clause be read a Second time:—
  The House divided: Ayes 159, Noes 200.

  Division No. 340]

  [9.01 pm

  AYES

  Abbott, Ms Diane

  Davies, Ron (Caerphilly)

  Allen, Graham

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

  Anderson, Donald

  Dewar, Donald

  Archer, Rt Hon Peter

  Dixon, Don

  Armstrong, Hilary

  Dobson, Frank

  Ashley, Rt Hon Jack

  Doran, Frank

  Ashton, Joe

  Dunwoody, Hon Mrs Gwyneth

  Barnes, Harry (Derbyshire NE)

  Eadie, Alexander

  Barron, Kevin

  Ewing, Harry (Falkirk E)

  Battle, John

  Ewing, Mrs Margaret (Moray)

  Beckett, Margaret

  Fatchett, Derek

  Bell, Stuart

  Fearn, Ronald

  Benn, Rt Hon Tony

  Field, Frank (Birkenhead)

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

  Flannery, Martin

  Bermingham, Gerald

  Flynn, Paul

  Bidwell, Sydney

  Foster, Derek

  Blunkett, David

  Fyfe, Maria

  Boyes, Roland

  Galloway, George

  Bradley, Keith

  Garrett, John (Norwich South)

  Brown, Gordon (D'mline E)

  Garrett, Ted (Wallsend)

  Brown, Nicholas (Newcastle E)

  Godman, Dr Norman A.

  Bruce, Malcolm (Gordon)

  Golding, Mrs Llin

  Buchan, Norman

  Gordon, Mildred

  Buckley, George J.

  Gould, Bryan

  Campbell, Menzies (Fife NE)

  Griffiths, Nigel (Edinburgh S)

  Campbell, Ron (Blyth Valley)

  Griffiths, Win (Bridgend)

  Campbell-Savours, D. N.

  Hardy, Peter

  Canavan, Dennis

  Harman, Ms Harriet

  Carlile, Alex (Mont'g)

  Heffer, Eric S.

  Clark, Dr David (S Shields)

  Hinchliffe, David

  Clay, Bob

  Home Robertson, John

  Clelland, David

  Howarth, George (Knowsley N)

  Clwyd, Mrs Ann

  Howells, Geraint

  Cohen, Harry

  Howells, Dr. Kim (Pontypridd)

  Cook, Robin (Livingston)

  Hughes, John (Coventry NE)

  Corbett, Robin

  Hughes, Robert (Aberdeen N)

  Corbyn, Jeremy

  Illsley, Eric

  Cousins, Jim

  Ingram, Adam

  Cryer, Bob

  Janner, Greville

  Cummings, John

  Jones, Barry (Alyn & Deeside)

  Cunliffe, Lawrence

  Jones, Martyn (Clwyd S W)

  Darling, Alistair

  Kennedy, Charles

  Davies, Rt Hon Denzil (Llanelli)

  Leadbitter, Ted

  938

  Leighton, Ron

  Quin, Ms Joyce

  Lewis, Terry

  Radice, Giles

  Litherland, Robert

  Randall, Stuart

  Livingstone, Ken

  Reid, Dr John

  Livsey, Richard

  Richardson, Jo

  Lofthouse, Geoffrey

  Robertson, George

  Loyden, Eddie

  Rooker, Jeff

  McAllion, John

  Ross, Ernie (Dundee W)

  McAvoy, Thomas

  Ruddock, Joan

  McCartney, Ian

  Salmond, Alex

  Macdonald, Calum A.

  Sedgemore, Brian

  McKelvey, William

  Sheerman, Barry

  McLeish, Henry

  Sheldon, Rt Hon Robert

  Maclennan, Robert

  Short, Clare

  McNamara, Kevin

  Skinner, Dennis

  Madden, Max

  Smith, Andrew (Oxford E)

  Mahon, Mrs Alice

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

  Marek, Dr John

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

  Marshall, Jim (Leicester S)

  Smith, J. P. (Vale of Glam)

  Martlew, Eric

  Smith, Tim (Beaconsfield)

  Meacher, Michael

  Steinberg, Gerry

  Meale, Alan

  Straw, Jack

  Michael, Alun

  Thompson, Jack (Wansbeck)

  Michie, Bill (Sheffield Heeley)

  Turner, Dennis

  Michie, Mrs Ray (Argl & Bute)

  Vaz, Keith

  Moonie, Dr Lewis

  Wallace, James

  Morgan, Rhodri

  Watson, Mike (Glasgow, C)

  Morley, Elliot

  Welsh, Andrew (Angus E)

  Mowlam, Marjorie

  Welsh, Michael (Doncaster N)

  Mullin, Chris

  Williams, Rt Hon Alan

  Nelson, Anthony

  Wilson, Brian

  Oakes, Rt Hon Gordon

  Winnick, David

  Owen, Rt Hon Dr David

  Worthington, Tony

  Parry, Robert

  Wray, Jimmy

  Patchett, Terry

  Pike, Peter L.

  Tellers for the Ayes:

  Powell, Ray (Ogmore)

  Mr. Frank Haynes and

  Prescott, John

  Mr. Ken Eastham.

  Primarolo, Dawn

  NOES

  Aitken, Jonathan

  Cash, William

  Alexander, Richard

  Chalker, Rt Hon Mrs Lynda

  Alison, Rt Hon Michael

  Chapman, Sydney

  Allason, Rupert

  Chope, Christopher

  Amess, David

  Clark, Sir W. (Croydon S)

  Amos, Alan

  Coombs, Anthony (Wyre F'rest)

  Arbuthnot, James

  Coombs, Simon (Swindon)

  Ashby, David

  Cormack, Patrick

  Atkins, Robert

  Couchman, James

  Atkinson, David

  Curry, David

  Baker, Nicholas (Dorset N)

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

  Baldry, Tony

  Davis, David (Boothferry)

  Batiste, Spencer

  Day, Stephen

  Bellingham, Henry

  Dicks, Terry

  Bendall, Vivian

  Dorrell, Stephen

  Bennett, Nicholas (Pembroke)

  Douglas-Hamilton, Lord James

  Benyon, W.

  Dover, Den

  Biffen, Rt Hon John

  Dunn, Bob

  Blackburn, Dr John G.

  Durant, Tony

  Blaker, Rt Hon Sir Peter

  Evans, David (Welwyn Hatf'd)

  Bonsor, Sir Nicholas

  Evennett, David

  Boscawen, Hon Robert

  Favell, Tony

  Boswell, Tim

  Fenner, Dame Peggy

  Bottomley, Mrs Virginia

  Field, Barry (Isle of Wight)

  Bowis, John

  Fishburn, John Dudley

  Boyson, Rt Hon Dr Sir Rhodes

  Fookes, Dame Janet

  Brandon-Bravo, Martin

  Forman, Nigel

  Brazier, Julian

  Forsyth, Michael (Stirling)

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

  Forth, Eric

  Bruce, Ian (Dorset South)

  Fowler, Rt Hon Norman

  Buck, Sir Antony

  Fox, Sir Marcus

  Burns, Simon

  Freeman, Roger

  Burt, Alistair

  French, Douglas

  Butcher, John

  Gale, Roger

  Butler, Chris

  Gardiner, George

  Carlisle, John, (Luton N)

  Garel-Jones, Tristan

  Carlisle, Kenneth (Lincoln)

  Glyn, Dr Alan

  Carrington, Matthew

  Goodlad, Alastair

  Carttiss, Michael

  Goodson-Wickes, Dr Charles

  939

  Gow, Ian

  Nicholson, Emma (Devon West)

  Grant, Sir Anthony (CambsSW)

  Norris, Steve

  Greenway, Harry (Baling N)

  Onslow, Rt Hon Cranley

  Griffiths, Peter (Portsmouth N)

  Patnick, Irvine

  Ground, Patrick

  Pawsey, James

  Grylls, Michael

  Peacock, Mrs Elizabeth

  Gummer, Rt Hon John Selwyn

  Porter, David (Waveney)

  Hague, William

  Powell, William (Corby)

  Hamilton, Neil (Tatton)

  Redwood, John

  Hampson, Dr Keith

  Riddick, Graham

  Hanley, Jeremy

  Ridley, Rt Hon Nicholas

  Hannam, John

  Ridsdale, Sir Julian

  Harris, David

  Rossi, Sir Hugh

  Haselhurst, Alan

  Rost, Peter

  Hayward, Robert

  Sackville, Hon Tom

  Heathcoat-Amory, David

  Sainsbury, Hon Tim

  Hicks, Mrs Maureen (Wolv' NE)

  Shaw, David (Dover)

  Higgins, Rt Hon Terence L.

  Shaw, Sir Giles (Pudsey)

  Hind, Kenneth

  Shephard, Mrs G. (Norfolk SW)

  Hordern, Sir Peter

  Shepherd, Richard (Aldridge)

  Howard, Michael

  Shersby, Michael

  Hunt, David (Wirral W)

  Smith, Sir Dudley (Warwick)

  Hunt, Sir John (Ravensbourne)

  Soames, Hon Nicholas

  Hunter, Andrew

  Speller, Tony

  Irvine, Michael

  Spicer, Sir Jim (Dorset W)

  Jack, Michael

  Spicer, Michael (S Worcs)

  Janman, Tim

  Stanbrook, Ivor

  Jessel, Toby

  Stanley, Rt Hon Sir John

  Jones, Gwilym (Cardiff N)

  Steen, Anthony

  Kellett-Bowman, Dame Elaine

  Stevens, Lewis

  Key, Robert

  Stewart, Andy (Sherwood)

  Kilfedder, James

  Stradling Thomas, Sir John

  Kirkhope, Timothy

  Sumberg, David

  Knapman, Roger

  Summerson, Hugo

  Knight, Greg (Derby North)

  Taylor, Teddy (S'end E)

  Knight, Dame Jill (Edgbaston)

  Thompson, D. (Calder Valley)

  Knox, David

  Thompson, Patrick (Norwich N)

  Lang, Ian

  Thorne, Neil

  Latham, Michael

  Thornton, Malcolm

  Leigh, Edward (Gainsbor'gh)

  Thurnham, Peter

  Lester, Jim (Broxtowe)

  Townend, John (Bridlington)

  Lilley, Peter

  Townsend, Cyril D. (B'heath)

  Lord, Michael

  Tracey, Richard

  Lyell, Sir Nicholas

  Waddington, Rt Hon David

  Macfarlane, Sir Neil

  Wakeham, Rt Hon John

  MacGregor, Rt Hon John

  Walker, Bill (T'side North)

  MacKay, Andrew (E Berkshire)

  Waller, Gary

  Maclean, David

  Walters, Sir Dennis

  McLoughlin, Patrick

  Ward, John

  McNair-Wilson, Sir Michael

  Wardle, Charles (Bexhill)

  Madel, David

  Watts, John

  Malins, Humfrey

  Wheeler, John

  Mans, Keith

  Whitney, Ray

  Maples, John

  Widdecombe, Ann

  Marshall, John (Hendon S)

  Wiggin, Jerry

  Marshall, Michael (Arundel)

  Winterton, Mrs Ann

  Martin, David (Portsmouth S)

  Winterton, Nicholas

  Maxwell-Hyslop, Robin

  Wolfson, Mark

  Meyer, Sir Anthony

  Wood, Timothy

  Miscampbell, Norman

  Morrison, Sir Charles

  Tellers for the Noes:

  Nicholls, Patrick

  Mr. Michael Fallon and Mr. John M. Taylor.

  Nicholson, David (Taunton)

  Question accordingly negatived.

Clause 3

  A COMPANY'S FINANCIAL YEAR AND ACCOUNTING REFERENCE PERIODS
  9.15 pm
  Mr. Redwood: I beg to move amendment No. 7, in page 4, line 44, leave out 'Part I' and insert 'section 3'.
  The Deputy Speaker (Sir Paul Dean): With this we shall discuss Government amendments Nos. 8, 9, 11, 12, 16, 18 to 21, 24, 31) and 32 to 67.
  Mr. Redwood: These amendments make a number of minor changes to part I. Nos. 7 and 8 replace a reference to the commencement of part 1 of the Bill with a reference to the specific provision in question, to allow for the possibility that different provisions in the part are brought into force at different times. Nos. 9 and 10 simply improve the clarity of the part, No. 12 corrects a reference, No. 20 corrects a minor error and No. 24 makes it clear how references to the day on which accounts are sent to shareholders and others are to be interpreted. Nos. 33 and 34 make a minor change to the order-making power in new section 257. They put it beyond doubt that the power includes the power to make consequential amendments elsewhere in the 1985 Act and in other enactments and to make transitional provisions.
  The other amendments are all consequential amendments of one form or another.
  Question put, That the amendment be made:—
  The House divided: Ayes 191, Noes 62.

  Division No. 341]

  [9.17pm

  AYES

  Aitken, Jonathan

  Dover, Den

  Alexander, Richard

  Dunn, Bob

  Alison, Rt Hon Michael

  Durant, Tony

  Allason, Rupert

  Evennett, David

  Amess, David

  Favell, Tony

  Amos, Alan

  Fearn, Ronald

  Arbuthnot, James

  Field, Barry (Isle of Wight)

  Ashby, David

  Fishburn, John Dudley

  Atkins, Robert

  Fookes, Dame Janet

  Atkinson, David

  Forman, Nigel

  Baker, Nicholas (Dorset N)

  Forsyth, Michael (Stirling)

  Batiste, Spencer

  Forth, Eric

  Bellingham, Henry

  Fowler, Rt Hon Norman

  Bennett, Nicholas (Pembroke)

  Fox, Sir Marcus

  Benyon, W.

  Freeman, Roger

  Biffen, Rt Hon John

  French, Douglas

  Bonsor, Sir Nicholas

  Gale, Roger

  Boscawen, Hon Robert

  Garel-Jones, Tristan

  Boswell, Tim

  Glyn, Dr Alan

  Bottomley, Mrs Virginia

  Goodlad, Alastair

  Bowis, John

  Goodson-Wickes, Dr Charles

  Brandon-Bravo, Martin

  Gow, Ian

  Brazier, Julian

  Greenway, Harry (Ealing N)

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

  Griffiths, Peter (Portsmouth N)

  Bruce, Ian (Dorset South)

  Ground, Patrick

  Bruce, Malcolm (Gordon)

  Gummer, Rt Hon John Selwyn

  Buck, Sir Antony

  Hague, William

  Burns, Simon

  Hamilton, Neil (Tatton)

  Burt, Alistair

  Hampson, Dr Keith

  Butcher, John

  Hanley, Jeremy

  Butler, Chris

  Harris, David

  Butterfill, John

  Haselhurst, Alan

  Campbell, Menzies (Fife NE)

  Hayward, Robert

  Carlile, Alex (Mont'g)

  Heathcoat-Amory, David

  Carlisle, John, (Luton N)

  Hicks, Mrs Maureen (Wolv' NE)

  Carlisle, Kenneth (Lincoln)

  Higgins, Rt Hon Terence L.

  Carrington, Matthew

  Hind, Kenneth

  Carttiss, Michael

  Hordern, Sir Peter

  Cash, William

  Howard, Michael

  Chalker, Rt Hon Mrs Lynda

  Howells, Geraint

  Chapman, Sydney

  Hunt, David (Wirral W)

  Chope, Christopher

  Hunt, Sir John (Ravensbourne)

  Clark, Sir W. (Croydon S)

  Hunter, Andrew

  Coombs, Anthony (Wyre F'rest)

  Irvine, Michael

  Coombs, Simon (Swindon)

  Jack, Michael

  Cormack, Patrick

  Janman, Tim

  Currie, Mrs Edwina

  Jessel, Toby

  Curry, David

  Jones, Gwilym (Cardiff N)

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

  Kellett-Bowman, Dame Elaine

  Davis, David (Boothferry)

  Kennedy, Charles

  Day, Stephen

  Key, Robert

  Dicks, Terry

  Kilfedder, James

  Dorrell, Stephen

  Knapman, Roger

  Douglas-Hamilton, Lord James

  Knight, Greg (Derby North)

  941

  Knight, Dame Jill (Edgbaston)

  Shepherd, Richard (Aldridge)

  Knowles, Michael

  Shersby, Michael

  Knox, David

  Smith, Sir Dudley (Warwick)

  Lang, Ian

  Smith, Tim (Beaconsfield)

  Latham, Michael

  Speller, Tony

  Leigh, Edward (Gainsbor'gh)

  Spicer, Sir Jim (Dorset W)

  Lilley, Peter

  Spicer, Michael (S Worcs)

  Livsey, Richard

  Stanbrook, Ivor

  Lord, Michael

  Steen, Anthony

  Lyell, Sir Nicholas

  Stevens, Lewis

  MacGregor, Rt Hon John

  Stewart, Andy (Sherwood)

  MacKay, Andrew (E Berkshire)

  Stradling Thomas, Sir John

  Maclean, David

  Sumberg, David

  Maclennan, Robert

  Summerson, Hugo

  McLoughlin, Patrick

  Taylor, John M (Solihull)

  McNair-Wilson, Sir Michael

  Thompson, D. (Calder Valley)

  Madel, David

  Thompson, Patrick (Norwich N)

  Mans, Keith

  Thorne, Neil

  Maples, John

  Thurnham, Peter

  Marland, Paul

  Townend, John (Bridlington)

  Marshall, John (Hendon S)

  Townsend, Cyril D. (B'heath)

  Martin, David (Portsmouth S)

  Tracey, Richard

  Maxwell-Hyslop, Robin

  Twinn, Dr Ian

  Meyer, Sir Anthony

  Waddington, Rt Hon David

  Miscampbell, Norman

  Wakeham, Rt Hon John

  Morrison, Sir Charles

  Walker, Bill (T'side North)

  Nelson, Anthony

  Wallace, James

  Newton, Rt Hon Tony

  Walters, Sir Dennis

  Nicholls, Patrick

  Ward, John

  Nicholson, Emma (Devon West)

  Wardle, Charles (Bexhill)

  Norris, Steve

  Watts, John

  Onslow, Rt Hon Cranley

  Wheeler, John

  Patnick, Irvine

  Whitney, Ray

  Pawsey, James

  Widdecombe, Ann

  Peacock, Mrs Elizabeth

  Wiggin, Jerry

  Powell, William (Corby)

  Winterton, Mrs Ann

  Redwood, John

  Winterton, Nicholas

  Riddick, Graham

  Wolfson, Mark

  Ridley, Rt Hon Nicholas

  Wood, Timothy

  Ridsdale, Sir Julian

  Sainsbury, Hon Tim

  Tellers for the Ayes:

  Shaw, David (Dover)

  Mr. Tom Sackville and

  Shaw, Sir Giles (Pudsey)

  Mr. Michael Fallon.

  Shephard, Mrs G. (Norfolk SW)

  NOES

  Ashley, Rt Hon Jack

  Jones, Barry (Alyn & Deeside)

  Ashton, Joe

  Lewis, Terry

  Barnes, Harry (Derbyshire NE)

  Livingstone, Ken

  Barron, Kevin

  Lofthouse, Geoffrey

  Bermingham, Gerald

  McCartney, Ian

  Bradley, Keith

  Madden, Max

  Campbell, Ron (Blyth Valley)

  Mahon, Mrs Alice

  Campbell-Savours, D. N.

  Martlew, Eric

  Canavan, Dennis

  Meale, Alan

  Clay, Bob

  Michael, Alun

  Clelland, David

  Michie, Bill (Sheffield Heeley)

  Clwyd, Mrs Ann

  Morgan, Rhodri

  Cohen, Harry

  Mowlam, Marjorie

  Corbyn, Jeremy

  Mullin, Chris

  Cryer, Bob

  Oakes, Rt Hon Gordon

  Cummings, John

  Parry, Robert

  Cunliffe, Lawrence

  Patchett, Terry

  Ewing, Mrs Margaret (Moray)

  Pike, Peter L.

  Flynn, Paul

  Powell, Ray (Ogmore)

  Fyfe, Maria

  Primarolo, Dawn

  Galloway, George

  Ross, Ernie (Dundee W)

  Godman, Dr Norman A.

  Short, Clare

  Golding, Mrs Llin

  Skinner, Dennis

  Gordon, Mildred

  Steinberg, Gerry

  Hardy, Peter

  Vaz, Keith

  Harman, Ms Harriet

  Watson, Mike (Glasgow, C)

  Haynes, Frank

  Welsh, Andrew (Angus E)

  Hinchliffe, David

  Williams, Rt Hon Alan

  Hoey, Ms Kate (Vauxhall)

  Wray, Jimmy

  Home Robertson, John

  Hughes, John (Coventry NE)

  Tellers for the Noes:

  Illsley, Eric

  Mr. George J. Buckley and

  Janner, Greville

  Mr. Michael Welsh.

  Question accordingly agreed to.
  9.30 pm
  Amendment proposed: No. 8, in page 4, line 47, leave out 'Part' and insert `section'.—[Mr. Redwood.]
  Question put, That the amendment be made:—
  The House divided: Ayes 168, Noes 49.

  Division No. 342]

  [9.29 pm

  AYES

  Alexander, Richard

  Gummer, Rt Hon John Selwyn

  Amos, Alan

  Hague, William

  Arbuthnot, James

  Hamilton, Neil (Tatton)

  Ashby, David

  Hanley, Jeremy

  Atkinson, David

  Haselhurst, Alan

  Baker, Nicholas (Dorset N)

  Hayward, Robert

  Batiste, Spencer

  Hicks, Mrs Maureen (Wolv' NE)

  Bellingham, Henry

  Higgins, Rt Hon Terence L.

  Bennett, Nicholas (Pembroke)

  Hind, Kenneth

  Benyon, W.

  Howard, Michael

  Biffen, Rt Hon John

  Howells, Geraint

  Boscawen, Hon Robert

  Hunt, David (Wirral W)

  Boswell, Tim

  Hunt, Sir John (Ravensbourne)

  Bowis, John

  Hunter, Andrew

  Braine, Rt Hon Sir Bernard

  Irvine, Michael

  Brazier, Julian

  Jack, Michael

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

  Janman, Tim

  Bruce, Ian (Dorset South)

  Jessel, Toby

  Bruce, Malcolm (Gordon)

  Jones, Gwilym (Cardiff N)

  Buck, Sir Antony

  Key, Robert

  Burns, Simon

  Kilfedder, James

  Burt, Alistair

  Knapman, Roger

  Butler, Chris

  Knight, Greg (Derby North)

  Butterfill, John

  Knight, Dame Jill (Edgbaston)

  Campbell, Menzies (Fife NE)

  Knowles, Michael

  Carlile, Alex (Mont'g)

  Knox, David

  Carlisle, John, (Luton N)

  Lang, Ian

  Carlisle, Kenneth (Lincoln)

  Latham, Michael

  Carrington, Matthew

  Lester, Jim (Broxtowe)

  Carttiss, Michael

  Lilley, Peter

  Cash, William

  Livsey, Richard

  Chalker, Rt Hon Mrs Lynda

  Lord, Michael

  Chapman, Sydney

  Lyell, Sir Nicholas

  Chope, Christopher

  MacGregor, Rt Hon John

  Clark, Sir W. (Croydon S)

  Maclean, David

  Coombs, Anthony (Wyre F'rest)

  McLoughlin, Patrick

  Coombs, Simon (Swindon)

  McNair-Wilson, Sir Michael

  Cormack, Patrick

  Madel, David

  Currie, Mrs Edwina

  Mans, Keith

  Curry, David

  Marland, Paul

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

  Marshall, John (Hendon S)

  Davis, David (Boothferry)

  Martin, David (Portsmouth S)

  Day, Stephen

  Maxwell-Hyslop, Robin

  Dicks, Terry

  Meyer, Sir Anthony

  Dorrell, Stephen

  Mills, Iain

  Douglas-Hamilton, Lord James

  Miscampbell, Norman

  Dover, Den

  Morrison, Sir Charles

  Dunn, Bob

  Nelson, Anthony

  Durant, Tony

  Nicholls, Patrick

  Evennett, David

  Nicholson, Emma (Devon West)

  Fallon, Michael

  Norris, Steve

  Favell, Tony

  Onslow, Rt Hon Cranley

  Fearn, Ronald

  Patnick, Irvine

  Field, Barry (Isle of Wight)

  Pawsey, James

  Fishburn, John Dudley

  Peacock, Mrs Elizabeth

  Fookes, Dame Janet

  Powell, William (Corby)

  Forman, Nigel

  Redwood, John

  Forsyth, Michael (Stirling)

  Riddick, Graham

  Forth, Eric

  Ridley, Rt Hon Nicholas

  Fox, Sir Marcus

  Ridsdale, Sir Julian

  Freeman, Roger

  Shaw, David (Dover)

  French, Douglas

  Shaw, Sir Giles (Pudsey)

  Gale, Roger

  Shephard, Mrs G. (Norfolk SW)

  Garel-Jones, Tristan

  Shersby, Michael

  Glyn, Dr Alan

  Smith, Tim (Beaconsfield)

  Goodlad, Alastair

  Soames, Hon Nicholas

  Goodson-Wickes, Dr Charles

  Speller, Tony

  Gow, Ian

  Spicer, Sir Jim (Dorset W)

  Greenway, Harry (Ealing N)

  Spicer, Michael (S Worcs)

  Griffiths, Peter (Portsmouth N)

  Steen, Anthony

  Ground, Patrick

  Stevens, Lewis

  943

  Stewart, Andy (Sherwood)

  Ward, John

  Stradling Thomas, Sir John

  Wardle, Charles (Bexhill)

  Summerson, Hugo

  Watts, John

  Taylor, John M (Solihull)

  Wheeler, John

  Thompson, D. (Calder Valley)

  Widdecombe, Ann

  Thompson, Patrick (Norwich N)

  Wiggin, Jerry

  Thorne, Neil

  Winterton, Mrs Ann

  Thurnham, Peter

  Winterton, Nicholas

  Townsend, Cyril D. (B'heath)

  Wolfson, Mark

  Tracey, Richard

  Wood, Timothy

  Twinn, Dr Ian

  Waddington, Rt Hon David

  Tellers for the Ayes:

  Wakeham, Rt Hon John

  Mr. David Heathcoat-Amory and Mr. Torn Sackville.

  Walker, Bill (T'side North)

  Wallace, James

  Walters, Sir Dennis

  NOES

  Ashton, Joe

  Jones, Barry (Alyn & Deeside)

  Barnes, Harry (Derbyshire NE)

  Lofthouse, Geoffrey

  Barron, Kevin

  McCartney, Ian

  Campbell, Ron (Blyth Valley)

  Mahon, Mrs Alice

  Campbell-Savours, D. N.

  Meale, Alan

  Canavan, Dennis

  Michael, Alun

  Clwyd, Mrs Ann

  Michie, Bill (Sheffield Heeley)

  Corbyn, Jeremy

  Morgan, Rhodri

  Cousins, Jim

  Parry, Robert

  Cryer, Bob

  Patchett, Terry

  Cummings, John

  Pike, Peter L.

  Cunliffe, Lawrence

  Powell, Ray (Ogmore)

  Dixon, Don

  Primarolo, Dawn

  Ewing, Mrs Margaret (Moray)

  Ross, Ernie (Dundee W)

  Flynn, Paul

  Salmond, Alex

  Galloway, George

  Sheerman, Barry

  Gilbert, Rt Hon Dr John

  Skinner, Dennis

  Golding, Mrs Llin

  Steinberg, Gerry

  Hardy, Peter

  Vaz, Keith

  Harman, Ms Harriet

  Welsh, Andrew (Angus E)

  Haynes, Frank

  Williams, Rt Hon Alan

  Hinchliffe, David

  Wray, Jimmy

  Hoey, Ms Kate (Vauxhall)

  Howarth, George (Knowsley N)

  Tellers for the Noes:

  Hughes, John (Coventry NE)

  Mr. Michael Welsh and

  Illsley, Eric

  Mr. George J. Buckley.

  Janner, Greville

  Question accordingly agreed to.

Clause 4

  INDIVIDUAL COMPANY ACCOUNTS
  Amendment proposed: No. 9, in page 7, line 9, at end insert 'to this Act'.—[Mr. Redwood.]
  Question put, That the amendment be made:—
  The House divided: Ayes 162, Noes 42.

  Division No. 343]

  [9.42 pm

  AYES

  Alexander, Richard

  Ground, Patrick

  Alison, Rt Hon Michael

  Gummer, Rt Hon John Selwyn

  Amess, David

  Hague, William

  Amos, Alan

  Hamilton, Neil (Tatton)

  Arbuthnot, James

  Hanley, Jeremy

  Atkinson, David

  Haselhurst, Alan

  Baker, Nicholas (Dorset N)

  Hayes, Jerry

  Batiste, Spencer

  Hay ward, Robert

  Bellingham, Henry

  Heathcoat-Amory, David

  Bennett, Nicholas (Pembroke)

  Hicks, Mrs Maureen (Wolv' NE)

  Benyon, W.

  Higgins, Rt Hon Terence L.

  Biffen, Rt Hon John

  Hind, Kenneth

  Boscawen, Hon Robert

  Howard, Michael

  Boswell, Tim

  Howells, Geraint

  Bowis, John

  Hunt. David (Wirral W)

  Braine, Rt Hon Sir Bernard

  Hunt, Sir John (Ravensbourne)

  Brazier, Julian

  Hunter, Andrew

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

  Irvine, Michael

  Bruce, Malcolm (Gordon)

  Jack, Michael

  Buck, Sir Antony

  Janman, Tim

  Burns, Simon

  Jessel, Toby

  Burt, Alistair

  Jones, Gwilym (Cardiff N)

  Butler, Chris

  Key, Robert

  Butterfill, John

  Kilfedder, James

  Campbell, Menzies (Fife NE)

  Kirkwood, Archy

  Carlile, Alex (Mont'g)

  Knapman, Roger

  Carlisle, Kenneth (Lincoln)

  Knight, Dame Jill (Edgbaston)

  Carrington, Matthew

  Knowles, Michael

  Carttiss, Michael

  Lang, Ian

  Cash, William

  Latham, Michael

  Chalker, Rt Hon Mrs Lynda

  Lester, Jim (Broxtowe)

  Chapman, Sydney

  Lilley, Peter

  Chope, Christopher

  Livsey, Richard

  Clark, Sir W. (Croydon S)

  Lyell, Sir Nicholas

  Clarke, Rt Hon K. (Rushcliffe)

  MacGregor, Rt Hon John

  Coombs, Anthony (Wyre F'rest)

  Maclean, David

  Coombs, Simon (Swindon)

  McLoughlin, Patrick

  Currie, Mrs Edwina

  McNair-Wilson, Sir Michael

  Curry, David

  Madel, David

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

  Mans, Keith

  Davis, David (Boothferry)

  Marland, Paul

  Day, Stephen

  Marshall, John (Hendon S)

  Dicks, Terry

  Martin, David (Portsmouth S)

  Dorrell, Stephen

  Maxwell-Hyslop, Robin

  Douglas-Hamilton, Lord James

  Meyer, Sir Anthony

  Dover, Den

  Mills, Iain

  Dunn, Bob

  Miscampbell, Norman

  Durant, Tony

  Morrison, Sir Charles

  Evennett, David

  Nicholls, Patrick

  Favell, Tony

  Nicholson, Emma (Devon West)

  Fearn, Ronald

  Onslow, Rt Hon Cranley

  Fishburn, John Dudley

  Patnick, Irvine

  Fookes, Dame Janet

  Pawsey, James

  Forman, Nigel

  Powell, William (Corby)

  Forsyth, Michael (Stirling)

  Redwood, John

  Forth, Eric

  Riddick, Graham

  Fowler, Rt Hon Norman

  Ridley, Rt Hon Nicholas

  Fox, Sir Marcus

  Ridsdale, Sir Julian

  Freeman, Roger

  Sackville, Hon Tom

  French, Douglas

  Shaw, David (Dover)

  Gale, Roger

  Shaw, Sir Giles (Pudsey)

  Garel-Jones, Tristan

  Shephard, Mrs G. (Norfolk SW)

  Glyn, Dr Alan

  Shersby, Michael

  Goodlad, Alastair

  Smith, Tim (Beaconsfield)

  Goodson-Wickes, Dr Charles

  Soames, Hon Nicholas

  Gow, Ian

  Speller, Tony

  Greenway, Harry (Ealing N)

  Spicer, Sir Jim (Dorset W)

  Griffiths, Peter (Portsmouth N)

  Steen, Anthony

  945

  Stevens, Lewis

  Walters, Sir Dennis

  Stewart, Andy (Sherwood)

  Ward, John

  Stradling Thomas, Sir John

  Wardle, Charles (Bexhill)

  Summerson, Hugo

  Watts, John

  Taylor, John M (Solihull)

  Wheeler, John

  Thompson, D. (Calder Valley)

  Widdecombe, Ann

  Thompson, Patrick (Norwich N)

  Wiggin, Jerry

  Thorne, Neil

  Winterton, Mrs Ann

  Thurnham, Peter

  Winterton, Nicholas

  Townsend, Cyril D. (B'heath)

  Wolfson, Mark

  Tracey, Richard

  Wood, Timothy

  Twinn, Dr Ian

  Waddington, Rt Hon David

  Tellers for the Ayes:

  Wakeham, Rt Hon John

  Mr. Greg Knight and

  Wallace, James

  Mr. Michael Fallon.

  Question accordingly agreed to.

Schedule 1

  FORM AND CONTENT OF COMPANY ACCOUNTS
  Mr. Redwood: I beg to move amendment No. 10, in page 200, line 28, leave out from beginning to end of line 31.
  Mr. Speaker: With this it will be convenient to discuss Government amendments Nos. 31 and 258.
  Mr. Redwood: These amendments concern the Dearing report on the making of accounting standards. The House might like to know that, earlier today, in answer to a question from my hon. Friend the Member for Pembroke (Mr. Bennett) I announced that Sir Ronald Dearing has accepted an invitation to become chairman designate of the Financial Reporting Council—[Interruption.] There are some hon. Members who would like to hear this announcement.
  Sir Ronald's initial task will be to negotiate with interested parties so that the new arrangements for making and enforcing accounting standards are in place by next summer. Once the body is established, it is the intention of my right hon. Friend the Secretary of State for Trade and Industry, acting jointly with the Governor of the Bank of England, to appoint Sir Ronald formally—[Interruption.]
  Mr. Speaker: Would those hon. Members who are below the Gangway and do not want to participate in this debate please leave the Chamber quietly?
  Mr. Redwood: I shall make that last sentence available to the House again. Once the body is established, it is the intention of my right hon. Friend the Secretary of State for Trade and Industry, acting jointly with the Governor of the Bank of England, to appoint Sir Ronald Dearing formally as chairman of the council.
  Clear unambiguous accounting standards, effectively enforced, are essential to the good workings of a market economy. The report of the committee chaired by Sir Ronald has been widely welcomed as identifying the way to enhance the authority and general acceptability of accounting standards. I can think of nobody better qualified to carry through the important task of setting up the new arrangements. I am delighted that Sir Ronald has agreed to undertake that role. I have always been most impressed by the work that he has done in his various jobs.
  Mr. Skinner: We should get this matter straight because we have had a lot of trouble about Alan Walters. We should be sure about where this fella stands before going any further. Will he support the Department of Trade and Industry? Will he support the Chancellor of the Exchequer or will he support the Prime Minister? Is he "one of us?" Have all those questions been answered in the positive, because if not, the Tory Government will have a lot of trouble with him. I am not worried about that and, frankly, I should like the Government to appoint somebody who would cause them a bit of trouble. However, I should like an explanation. Where does this man stand politically?
  Mr. Redwood: Sir Ronald will defend the public interest as he did as a civil servant and subsequently as chairman of the Post Office. He has a fine record of public service and this job is not connected in any way with the party political dogfight in the way in which the hon. Gentleman has tried to suggest.
  Amendment No. 10 changes the way in which the Bill gives effect to one of the central recommendations of the Dearing report—that directors should state in their accounts whether those accounts have been drawn up in accordance with applicable accounting standards. It implements the Committee's wish that any company departing from accounting standards should give reason why. It does not, however, also require the financial effects to be shown, as that is tantamount to saying that companies can never deviate from accounting standards narrowly defined.
  Anyone concerned about the accounting practices is free to question the company at the AGM before which the accounts are laid. The Financial Reporting Council will have a duty to stop departures from accounting standards becoming a scandal. It will also be the responsibility of auditors to draw attention to any departure which causes the accounts not to give a true and fair view.
  There are other reasons why the Bill in its present form is not acceptable on this point. We have argued consistently in relation to Dearing that it is important that at the end of the day standards are not given legal effect. The strength of accounting standards is that they offer a more flexible system of rules than statute can provide. We believe that a requirement to show financial effects would result in standards increasingly written and interpreted as a piece of statute law—with greater emphasis on meeting the letter rather than the spirit. Whilst we all want standards to have authority—indeed, the whole thrust of

  947
  the Dearing proposals has that end in view—I do not believe that the way to do this is to encourage greater legalism. This could all too easily shift the emphasis of accounting away from the objective of producing true and fair accounts.
  The related amendment, No. 31, simply ensures that the equivalent provision for banking and insurance companies is in step.
  Mr. Campbell-Savours: The Minister said that anyone has the right to question the accounting arrangements and standards of a company at its annual general meeting. Will the Minister turn his attention to the case of Mr. George and Mrs. Liz Davies, the husband and wife team who were ousted from the board of Next, the high street retailer, last December? At the annual general meeting of that company, the chairman refused to tell his shareholders about the golden handshake that was being paid to those two people, despite being pressed to do so by the shareholders. Indeed, a resolution calling for the sacking of the directors was tabled. What is the Minister's view of that case? What is the position on such a case as a result of the appointment of this gentleman who will obviously be setting new standards? Would the board of that company have been required to declare how much those two people were being paid as part of their golden handshake? What would happen now?
  Mr. Redwood: We shall have to let Sir Ronald set up his Financial Reporting Council and review and establish the accounting standards that he wants. Then I would be able to answer the question whether any new provision with which he might come forward would have a bearing on that case—were history to repeat itself, which is extremely unlikely.
  Amendment No. 258 would delete clause 198 from the Bill. Clause 198 was inserted in Committee——
  Mr. Campbell-Savours: Will the Minister give way?
  Mr. Redwood: No, I have answered the question.
  Mr. Campbell-Savours rose——
  Mr. Speaker: Order. The Minister is not giving way.
  Mr. Campbell-Savours rose——
  Mr. Speaker: Order. The Minister is not giving way.
  Mr. Redwood: Clause 198 was inserted in Committee against the advice of my hon. Friend the then Parliamentary Under-Secretary of State for Corporate Affairs. It was put to the Committee with passion and eloquence by my hon. Friend the Member for Beaconsfield (Mr. Smith), but everyone would accept that it does not work in its present form——
  It being Ten o'clock, further consideration of the Bill stood adjourned.
  Question put,
  That, at this day's sitting, the Companies Bill [Lords] may be proceeded with, though opposed, until any hour.—[Mr. Dorrell.]
  The House divided: Ayes 157, Noes 54.

  Division No. 344]

  [10 pm

  AYES

  Alexander, Richard

  Atkinson, David

  Alison, Rt Hon Michael

  Baker, Nicholas (Dorset N)

  Amos, Alan

  Batiste, Spencer

  Arbuthnot, James

  Bellingham, Henry

  948

  Bennett, Nicholas (Pembroke)

  Jessel, Toby

  Benyon, W.

  Jones, Gwilym (Cardiff N)

  Biffen, Rt Hon John

  Key, Robert

  Body, Sir Richard

  Kilfedder, James

  Boscawen, Hon Robert

  Knapman, Roger

  Boswell, Tim

  Knight, Greg (Derby North)

  Bowis, John

  Knight, Dame Jill (Edgbaston)

  Braine, Rt Hon Sir Bernard

  Knowles, Michael

  Brazier, Julian

  Lang, Ian

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

  Latham, Michael

  Buck, Sir Antony

  Lester, Jim (Broxtowe)

  Burns, Simon

  Lilley, Peter

  Burt, Alistair

  Lyell, Sir Nicholas

  Butler, Chris

  MacGregor, Rt Hon John

  Butterfill, John

  Maclean, David

  Carlisle, Kenneth (Lincoln)

  McLoughlin, Patrick

  Carrington, Matthew

  McNair-Wilson, Sir Michael

  Carttiss, Michael

  Major, Rt Hon John

  Cash, William

  Mans, Keith

  Chalker, Rt Hon Mrs Lynda

  Marland, Paul

  Chapman, Sydney

  Marshall, John (Hendon S)

  Chope, Christopher

  Martin, David (Portsmouth S)

  Clark, Dr Michael (Rochford)

  Maxwell-Hyslop, Robin

  Clark, Sir W. (Croydon S)

  Meyer, Sir Anthony

  Clarke, Rt Hon K. (Rushcliffe)

  Mills, Iain

  Coombs, Anthony (Wyre F'rest)

  Morrison, Sir Charles

  Coombs, Simon (Swindon)

  Nicholls, Patrick

  Currie, Mrs Edwina

  Nicholson, Emma (Devon West)

  Curry, David

  Pawsey, James

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

  Powell, William (Corby)

  Davis, David (Boothferry)

  Redwood, John

  Day, Stephen

  Ridley, Rt Hon Nicholas

  Dicks, Terry

  Ridsdale, Sir Julian

  Dorrell, Stephen

  Rumbold, Mrs Angela

  Douglas-Hamilton, Lord James

  Sainsbury, Hon Tim

  Dover, Den

  Shaw, David (Dover)

  Dunn, Bob

  Shaw, Sir Giles (Pudsey)

  Durant, Tony

  Shephard, Mrs G. (Norfolk SW)

  Evennett, David

  Shepherd, Richard (Aldridge)

  Fallon, Michael

  Shersby, Michael

  Favell, Tony

  Smith, Tim (Beaconsfield)

  Fishburn, John Dudley

  Soames, Hon Nicholas

  Fookes, Dame Janet

  Speller, Tony

  Forman, Nigel

  Spicer, Sir Jim (Dorset W)

  Forsyth, Michael (Stirling)

  Steen, Anthony

  Forth, Eric

  Stevens, Lewis

  Fowler, Rt Hon Norman

  Stewart, Andy (Sherwood)

  Fox, Sir Marcus

  Stradling Thomas, Sir John

  Freeman, Roger

  Summerson, Hugo

  French, Douglas

  Taylor, John M (Solihull)

  Gale, Roger

  Taylor, Teddy (S'end E)

  Garel-Jones, Tristan

  Thompson, D. (Calder Valley)

  Glyn, Dr Alan

  Thompson, Patrick (Norwich N)

  Goodlad, Alastair

  Thorne, Neil

  Goodson-Wickes, Dr Charles

  Townsend, Cyril D. (B'heath)

  Green way, Harry (Ealing N)

  Tracey, Richard

  Griffiths, Peter (Portsmouth N)

  Twinn, Dr Ian

  Ground, Patrick

  Vaughan, Sir Gerard

  Gummer, Rt Hon John Selwyn

  Waddington, Rt Hon David

  Hague, William

  Wakeham, Rt Hon John

  Hamilton, Neil (Tatton)

  Walters, Sir Dennis

  Hanley, Jeremy

  Ward, John

  Harris, David

  Wardle, Charles (Bexhill)

  Haselhurst, Alan

  Watts, John

  Hayes, Jerry

  Wheeler, John

  Hayward, Robert

  Widdecombe, Ann

  Heathcoat-Amory, David

  Wiggin, Jerry

  Hicks, Mrs Maureen (Wolv' NE)

  Winterton, Mrs Ann

  Hind, Kenneth

  Winterton, Nicholas

  Howells, Geraint

  Wolfson, Mark

  Hughes, Robert G. (Harrow W)

  Wood, Timothy

  Hunt, David (Wirral W)

  Young, Sir George (Acton)

  Hunt, Sir John (Ravensbourne)

  Hunter, Andrew

  Tellers for the Ayes:

  Irvine, Michael

  Mr. Tom Sackville and

  Jack, Michael

  Mr. Irvine Patnick.

  Janman, Tim

  949

  NOES

  Ashton, Joe

  Illsley, Eric

  Barnes, Harry (Derbyshire NE)

  Jones, Barry (Alyn & Deeside)

  Barron, Kevin

  Kirkwood, Archy

  Brown, Ron (Edinburgh Leith)

  Livsey, Richard

  Campbell, Menzies (Fife NE)

  Lofthouse, Geoffrey

  Campbell, Ron (Blyth Valley)

  McCartney, Ian

  Campbell-Savours, D. N.

  Mahon, Mrs Alice

  Carlile, Alex (Mont'g)

  Meale, Alan

  Clwyd, Mrs Ann

  Michael, Alun

  Corbyn, Jeremy

  Michie, Bill (Sheffield Heeley)

  Cousins, Jim

  Morris, Rt Hon A. (W'shawe)

  Cox, Tom

  Parry, Robert

  Cryer, Bob

  Patchett, Terry

  Cummings, John

  Pike, Peter L.

  Cunliffe, Lawrence

  Powell, Ray (Ogmore)

  Cunningham, Dr John

  Prescott, John

  Dixon, Don

  Primarolo, Dawn

  Ewing, Mrs Margaret (Moray)

  Salmond, Alex

  Fearn, Ronald

  Skinner, Dennis

  Flynn, Paul

  Spearing, Nigel

  Fraser, John

  Steinberg, Gerry

  Galloway, George

  Vaz, Keith

  Gilbert, Rt Hon Dr John

  Wall, Pat

  Golding, Mrs Llin

  Wallace, James

  Hardy, Peter

  Welsh, Andrew (Angus E)

  Haynes, Frank

  Hinchliffe, David

  Tellers for the Noes:

  Home Robertson, John

  Mr. Michael Welsh and Mr. George J. Buckley.

  Hughes, John (Coventry NE)

  Question accordingly agreed to.
  Bill, as amended, (in the Standing Committee), again considered.
  Mr. Redwood: I should explain to the hon. Member for Workington (Mr. Campbell-Savours) that Sir Ronald Dearing could make changes to accounting standards once the council is up and running. There is also a legal requirement to reveal compensation to directors who lose office, and that would appear in the accounts following the events in question.
  Amendment No. 258 will delete clause 198. As most accept, the clause does not work in its present form and must either be deleted or substantially revised. Clause 198 is directed at enabling the Secretary of State to delegate his power to order accounting provisions in the Act by regulation through a statutory financial reporting council. I acknowledge that the new clause does not require the Secretary of State to delegate his powers. None the less, it would be wrong in principle for the Government to support the inclusion of such a provision unless they thought it right to devolve such powers. Therefore, I ask the House to remove it from the Bill.
  Mr. Campbell-Savours: In the light of that reply, does the Minister think that legal action should be taken in the case of a company that refuses to reveal how much was paid? What is the position legally?
  Mr. Redwood: There is already a legal requirement that the information be published in the report and accounts concerning the year in which the events took place.
  Mr. Hanley: I should declare my interest as the parliamentary adviser to the Institute of Chartered Accountants in England and Wales. I add to the words of welcome to my hon. Friend the Member for Wokingham (Mr. Redwood). He may feel as if he has already been in the post for years and years. He brings a wealth of experience to his task, which he has already shown this evening, and he has approached his task in a most
  950
  constructive way. It is a great shame that activities completley unconnected with the Bill are proving more than a hiccup.
  10.15 pm
  I welcome the success of my hon. Friend the Minister in securing the appointment of Sir Ronald Dearing. We are all extremely fortunate to have secured him for such an important task. We look forward to observing the way in which he tackles the job in the months ahead.
  Paragraph 7 of schedule 1 introduces a requirement for companies to disclose and explain any material departure from accounting standards. That requirement is imposed in the explanatory foreword to "Accounting Standards". Its incorporation in statute implements one of the recommendations of Sir Ronald Dearing's report.
  New paragraphs 36A(2) and (3) bring into statute further requirements of the explanatory foreword. These are to disclose the financial effects of any departure from standards, unless this would be impracticable, and to explain any non-disclosure. Unfortunately, Government amendment No. 10 removes these requirements. I feel that that is a step backwards. If the requirements of the explanatory foreword are deliberately removed from the Bill while others are left standing, it may be difficult to enforce compliance in future. The status of accounting standards will thereby be reduced. Users of accounts will also be deprived of helpful information that would enable them to calculate what the figures would have looked like had the company followed accounting standards.
  It follows from what my hon. Friend the Minister said that he should consider in the months ahead—I do not feel that this is a matter that should divide the House—whether the extra information, which according to "Accounting Standards" should be provided for shareholders so that they are able to consider whether the departure was valid and to quantify exactly what the accounting might have been had accounting standards been adhered to, should be made available. I feel that the information is important and should be included in future. Opportunities for comparisons with other companies will be reduced if the requirements are removed. After all, it is the removing of disparity of accounting treatment that has created the accounting standards programme. The removal of disparity is best able to be seen if we can quantify the departures from accounting standards.
  Mr. John Garrett: The Opposition also welcome the appointment of Sir Ronald Dearing. He has been a most distinguished public servant both in the Civil Service and as the head of the Post Office. I understand that he is also the chairman of the Durham development corporation. That must be another reason for giving preferment.
  The amendments embody our proposals that the reasons for any departures from accounting standards in company accounts must be stated in the annual report and accounts. They delete, however, the necessity to state the financial effects of departures. We fear that in the long run this may prove to be a weakness. In the explanatory foreword to "Statements of Standard Accounting Practice" it is required that the auditors should state the financial effects of departures if that is the decision of the accounting standards board. On the whole, it will be a weaker requirement than we would have wished for, but at least the amendment goes a significant way towards opening up the whole question of departures from

  951
  accounting standards. We are willing to put up with that inconsistency until Sir Ron, in the fullness of time, produces new directives.
  Amendment No. 258 deletes the amendment successfully proposed by the hon. Member for Beaconsfield (Mr. Smith) about the formation of the Financial Reporting Council. As the Minister said, the amendment was faulty because the schedule accompanying it, which set out the constitution of the FRC, was not accepted by the Committee. The hon. Gentleman's proposals were weaker than those that we had in mind, which were for a statutory body concerned with the supervision both of accounting standards and the auditing profession—something that will come in the fullness of time. We were not entirely sold on the amendment. Eventually there will have to be some regulation covering the auditing profession. It is a large, multinational business; it no longer consists of a cottage industry with small groups of Scottish accountants, as it did when it started the better part of 100 years ago. They are enormous companies, they do not provide accounts, they are secretive in the way that they go about their business and we know little about them.
  The appointment of Sir Ron is a reasonable start and we wish him well. We look forward to—
  Mr. Skinner: I am just beginning to piece together what my hon. Friend has been saying about accounting and auditing. As the Bill began its passage some time ago, before the Ferranti—International Signal and Control fraud with the £200 million rip-off by the company and Mr. James Guerin, I wonder whether the new provisions—and my hon. Friend is not too happy with them—will help such companies to ensure that they are not ripped off. My guess is that some taxpayers' money could be used, through inflated contracts or some other method, to assist those companies through their problems. Can my hon. Friend inform us whether the conditions for auditing and accounting would fit the bill or whether the passage of time means that they need to be even stronger?
  Mr. Garrett: My understanding is that the case currently being investigated by the serious fraud office relates to the gullibility of the Ferranti board in connection with certain contracts entered into by a company that it acquired in another country. To that extent, I do not think that the question of accounting standards is involved. In the initial stages, we cannot put these issues before Sir Ron and his Financial Reporting Council.
  Mr. Skinner: I understand that a set of accountants were advising Ferranti, that those accountants were resident in this country and that they told Ferranti that ISC had a clean bill of health. If that is the case, those accountants were seriously at fault in telling Ferranti that it could go ahead. If that is proved by the investigations of the serious fraud office, it shows that there is something wrong with the way in which so-called professional auditors go through a company's books very quickly and enable a company, which attracts a great deal of taxpayers' money through defence contracts, to be milked by a bogus company in America. A British set of accountants, albeit acting at a multinational level, gave Ferranti very bad advice.
  Mr. Garrett: My hon. Friend is putting me in the position of a Minister having to answer for the conduct of Government policy on the question of accountants——
  Mr. Skinner: My hon. Friend will be in that position soon.
  Mr. Garrett: Perhaps I will, but these matters should be addressed to the Minister. Perhaps my hon. Friend can ask his questions in a subsequent debate that will arise shortly. I cannot tell him whether the valuation of ISC was carried out by auditors at the request of the Ferranti board and whether those auditors behaved improperly. Perhaps the Minister has a view on that matter as it has been referred to the serious fraud office. I cannot pass an opinion on that.
  I think that, eventually, the council that Sir Ron will head will have to take into account the conduct, behaviour and practice of auditing in general, in addition to the supervision of accounting standards with which it is presently charged. However, that is not the subject of this part of the Bill. If my hon. Friend wishes to raise the question of fraud, there is another part concerned with investigation: no doubt the Minister will be able to give an answer when we deal with that. I hope that that puts my hon. Friend's mind at rest for the time being.
  Mr. Skinner: The more I think about it, the more I recognise the Bill's importance in connection with another company in Britain that has run into serious trouble connected with homes. The ex-chairman of the 1922 Committee, Sir Edward du Cann, was involved: he was a non-executive director who ran away from the firm very quickly when he could see the so-and-so hitting the fan, as did many others.
  It seems to me that the auditors are not doing their job very well. I wonder whether my hon. Friend believes that these clauses, and Ron Dearing's appointment, can ensure that those abscesses on the body politic—or the company politic—can be cleaned up by the new provision.
  I hold the simplistic view that they cannot be cleaned up. This is all about making money, exploiting someone else, doing it as fast as possible and using a shady set of accountants to get it through. What worries me is whether, when the legislation is passed, it will be any good: will we have sorted out the accountants, or will it be in the pocket of companies which seem not to pay a blind bit of notice to all the corruption that is taking place in the City?
  Mr. Garrett: The short answer is no. The Financial Reporting Council and its chair, Sir Ron Dearing, will not have any jurisdiction over auditors or auditing. What they are trying to do is improve the quality of information given to company shareholders in company accounts, under a set of rules that govern the way in which such things are calculated. The idea is to clarify company accounts. That is the relatively narrow front on which we are operating at present.
  My hon. Friend invites me to go further. The point behind our proposal that the council should cover not only accounting and accounting standards but the conduct of the auditing profession would, I think, enable at least the public—the investors, consumers, banks and creditors—to establish rather better the performance of the auditing profession, which is relatively unregulated and very secretive.
  Mr. Hanley: It is self-regulation.
  Mr. Garrett: The spokesman for the Institute of Chartered Accountants says that it is self-regulation. That is not satisfactory, as we know from the number of actions

  953
  taken against auditors. I believe that the Government themselves are taking action against the auditors of De Lorean. These scandals are becoming more common, and this part of the Bill does not address them.
  Mr. Tim Smith: I, too, support and welcome the appointment of Sir Ron Dearing as chairman of the Financial Reporting Council. It is now 13 months since he published his report on the making of accounting standards, and I commend the Department on the way in which it has responded all the way along—first with its consultative document in January, and now with Sir Ron's appointment.
  There is scope for improvement in the quality of financial reporting. The hon. Member for Norwich, South (Mr. Garrett) is quite right: the difficulty in the past has been securing compliance with accounting standards when the whole process was largely one of self-regulation. The great step forward was the new paragraph 36A, which appears on page 200 of the Bill and states for the first time in statute law that companies must state whether accounts have been prepared
  "in accordance with applicable accounting standards".
  It goes on to say:
  "particulars of any material departure from those standards … shall be given."
  954
  As a result of the change that was made in Committee, not only the particulars but the reasons will now have to be given. My hon. Friend the Minister explained why he could not go all the way and accept the full import of that. I understand that there is concern that we would be giving accounting standards legal form. Giving them legal recognition is a great step forward, and, in due course, with the new Financial Reporting Council, under Sir Ronald Dearing's chairmanship, that will lead to an improvement in financial reporting, which is the subject of our debate.
  10.30 pm
  Of course I am sorry that the Government could not accept my proposal that the Secretary of State should send a delegation to the FRC, but I recognise that the clause as drafted is defective because it should have been accompanied by a schedule, so I understand why my hon. Friend has decided that it should be left out.
  I said in Committee that, in the long run at any rate, it might be sensible to ask the same body to look after, supervise and regulate not only accounting standards but the content of company accounts. In practice, the dividing line between the two is not particularly clear cut. Perhaps my hon. Friend should consider the possibility of giving the same body responsibility for the entire contents of a company's accounts.
  Mr. Cousins: I add my congratulations to Sir Ronald Dearing on his new appointment. Many of us remember him at the DTI in Newcastle as regional director for the Northern region back in the 1970s. He was subsequently exiled to the Post Office and we welcome his return to a more normal existence and to the position he holds in County Durham. My personal hope is that he will end his career as a member of Durham county council, which, as some of us recognise, is the most august elected body in the United Kingdom.
  The Minister is making a grave mistake in attempting to unpick the compromise that was made in Committee. He would have been far wiser had he fleshed out the free-standing clause giving the Financial Reporting Council the power that he is now removing. We all accept that the necessary additions were not made to make the clause operative. Nonetheless the Minister had that option and it is a great pity that he did not exercise it. It is quite certain that when the Financial Reporting Council under the leadership of Sir Ronald Dearing gets into business many of the pressures towards rationalising the mixed economy of regulation in accountancy and accounting standards will prove quite unstoppable.
  The current position is extremely confused. At various points in the Bill review bodies are set up by statute which have, if not legal force, quasi-legal powers which substitute for previous powers that were actionable in court.
  Tonight's attempt to unpick the compromise made in Committee will prove unfortunate. It does not get the Minister off to a particularly good start, although, obviously, we wish him well in the short time that remains to him and his colleagues. This matter will not stand still. The attempt to reverse the process that started in Committee of providing a properly-regulated authority over accountancy, accountancy practices and accountancy standards cannot be held up.
  The Government's amendment is particularly unfortunate as it does not reflect the spirit of our discussions in Committee. If the Government's amendments are carried tonight, the Bill will be an even bigger mess containing various streams of thought about how to deal with the problem, none of which is carried to a perfect, well-elaborated solution.
  It is a great regret that the Government have chosen to unpick the work carried out in Committee. I do not believe that their attempts to hold up the irresistible movement towards proper regulation of accountancy and accounting standards will be effective, and in a very short time we shall be back here discussing precisely the same problems with a further trail of incidents such as the one to which my hon. Friend the Member for Bolsover (Mr. Skinner) referred tonight, and we shall have to consider the matter again. It would have been far better and wiser if the Minister had rolled with the punch and reflected the consensus of the Committee by accepting the amendments that were passed with the support of Conservative and Opposition Members. To attempt to unpick the compromise that was achieved in Committee is to retreat on something that ultimately will prove unstoppable.
  Mr. Campbell-Savours: I wish to add my congratulations to Sir Ronald Dearing on his new appointment.
  I want to follow the remarks of the hon. Member for Beaconsfield (Mr. Smith), who, as I understand it, argued that Sir Ronald Dearing's remit should be extended beyond an examination of accountancy practices and
  956
  standards to the wider question of financial reporting of company accounts and the form that those accounts take when they are presented at annual general meetings.
  In an intervention, I raised the case of a company that was reported in the Financial Times on 26 May. I wish to comment on the article because I believe that it goes to the heart of the debate. It shows deficiencies in how accounts are presented at annual general meetings. I should like a ministerial assurance that these matters will be dealt with by Sir Ronald Dearing when he takes over his new role.
  The article refers to a settlement for
  "Mr. George and Mrs. Liz Davies, the husband-and-wife team ousted last December from their positions of chairman and product director at Next",
  which I understand is a retail group that sells clothes—[Interruption.] Some of us do not spend our time shopping in the west end—[Interruption.] Next has not made my patch yet, although I am sure that it will come in time—[Interruption.] I am prepared to take interventions if hon. Members wish to intervene and formalise matters for the Official Report. The article continues:
  "Mr. Murray Gordon, executive chairman of Combined English Stores until its takeover by Next and now chairman of Era Group, asked about the amount"—
  the amount of compensation paid to Mr. and Mrs. Davies—
  "to be told that a settlement had indeed been made but would not be disclosed as it was subject to a confidentiality agreement.
  Furthermore, shareholders were told' that no provisions would be made"—
  this answers the point that the Minister was making about matters not having to be reported in the current financial year—
  "in the 1989, 1990 or 1991 group accounts in respect of any settlement."
  Obviously, there was no intention to publish information about the compensation paid, which runs to quite a substantial sum of money.
  The article continues:
  "Mr. Robin Adshouse, an analyst at Kitkat and Aitken, suggested that Next had settled with Mr. Davies within his contract of employment, and that that kind of non-disclosure was the 'thin end of the wedge for shareholders' democracy'.
  Mr. Gordon and Mr. Pat Hammond-Turner, one-time assistant managing director of CES, both voted against the re-election of the directors."
  It is significant that the journalist draws attention to that, because earlier this evening I argued that voting against the re-election of directors did not meet the concerns being expressed by my hon. Friends. In the case of Next, such voting does not appear to have had any effect.
  If Sir Ronald Dearing's remit can be extended in the way that the hon. Member for Beaconsfield suggested, will it be possible to ensure that such information is published in the accounts that are presented at annual general meetings? Shareholders at annual general meetings are entitled to know what large sums of money are being paid in what, in effect, are golden handshakes to departing directors. In the case I mentioned, the directors may have been required to leave or left for perfectly decent and honourable reasons, but there are occasions on which people leave companies or are required to leave for what I can only describe as dishonourable reasons. They may have had their hands in the till and the shareholders or the directors want rid of them. Clearly, that did not happen in this case. I should like to be assured that shareholders have the right to know the facts.
  Mr. Redwood: I might be able to speed up proceedings by pointing out to the hon. Gentleman that in the Companies Act 1985 there is a clear requirement to show the aggregate amount of any compensation to directors or past directors in respect of loss of office. If the hon. Gentleman thinks that any accounting violation has occurred in reports and accounts filed for the relevant year in which that happened, he should let me know at my office and we will obviously see what the facts are.
  Mr. Campbell-Savours: In the light of what the Minister has said, perhaps it will be noted by the shareholders of that company that I have raised this matter on the Floor of the House tonight. Perhaps they will note also that the Minister has replied to me and expressed an interest in so far as if it is true that the directors of the company have made it clear that they do not intend to reveal the information in the years 1989, 1990 and 1991 they would have a case to draw to the attention of the Department and may have the basis for a legal action.
  Mr. Hanley: We had a discussion about this matter in Committee. I raised the point that if benefits in kind, such as occupation of property and so on, form part of compensation, there is a current loophole in the law. The then Minister said that he would plug that loophole. The Government have done so in an amendment which we hope that we will be able to discuss one day. That applies to compensation in benefits in kind other than money. The clause is not only already tight and prescribed in the existing statute, it is made even tighter by our discussions on this Bill. I am sure that the newspaper report must be wrong, and, if not, action should be taken.
  Mr. Campbell-Savours: It might be wrong, but I have another report from The Independent of 27 May this year. It states:
  "The conflict between the two sides"
  that being clearly the representatives of the shareholders, that is to say the board of the company, and the two departing directors—
  "has been resolved but neither side has any intention of disclosing the details of the settlement and have sworn each other to secrecy as a condition of the deal."
  From what the Minister is saying, that is not possible, and he is being backed by his hon. Friend the Member for Richmond and Barnes (Mr. Hanley). The article goes on to state:
  "The Companies Act 1985 states clearly that it is unlawful for a company to make to a director any payment by way of compensation for loss of office without disclosing information on the proposed payment including its amount to shareholders.
  Michael Stoddard, the new chairman of Next, told shareholders at the annual general meeting on Thursday that no provision in connection with the settlement of the Davies affair had been made in the accounts for the year ended 31 January and none was required for the current year.
  If Slaughter and May, advising Next, have discovered some way around the provisions of company legislation—assuming something of value is changing hands which seems likely"—
  which is what the hon. Member for Richmond and Barnes was coming to—
  "then Next shareholders are right to be unimpressed by such a display of legal ingenuity. And they should be concerned about the quality of information they are receiving."
  I am trying to establish that Sir Ronald Dearing, whose experience is eminent and impressive, will make it clear to all companies that that conduct is quite unacceptable. When shareholders demand that kind of information, they
  958
  should receive it. They should not be misled at annual general meetings. They are entitled to know what is happening. The money being paid out is, in effect, theirs—unless it should otherwise have been paid to the work force for some reason. In effect, the money is the property of the company. The Minister has clarified the position tonight. I hope that Sir Ronald Dearing impresses that principle upon the auditors and the accounting profession generally to ensure that reports like those to which I have referred do not appear in national newspapers and cause great concern to shareholders.
  10.45 pm
  Mr. Bob Cryer: I want to comment on this appointment. No doubt Ron Dearing has what is generally regarded to be an eminent record. I am not sure whether eminent people should be members of scrutiny bodies. Eminent people have been members of councils throughout the land. We hear that Ron Dearing is OK and that he has done a good job at the Post Office. He was a senior civil servant at the Department of Trade and Industry for several years when Sir Keith Joseph was at that Department. Sir Keith is now an eminent Member of the other place and he appointed Ron Dearing as chairman of the Post Office.
  I am not sure whether people who spend their lives among the councils and behind the closed doors of Whitehall will scour out information and cause a fuss when things go wrong. Their lives have not been like that. They are more used to saying to Ministers, "Look Minister, there's going to be a bit of trouble here unless you take evasive action". I am not overwhelmed by the notion that Sir Ron Dearing will bring some fire and brimstone to this office following the repeated scandals that have erupted in the City of London week in week out over the past few years.
  I believe that Ron Dearing would be better than someone like Sir Peter Carey who was permanent secretary at the DTI when Ron Dearing was there. As soon as Sir Peter Carey left the DTI, he cleared off to as many boards as he could lay his hands on. At least Ron Dearing has kept some sense of public service, unlike many other senior civil servants who clear off to as many boards as possible in a way that raises questions as to what they were doing before they were appointed to those boards. Questions have been raised about that.
  Before the Government came to office in 1979, they said that they would end the quangos. I believe that if we are to have those quangos, they should comprise people who will pay attention to irregularities where they happen. The members of the Financial Reporting Council have not yet been appointed. They are the Secretary of State's appointees and they are not likely to be radical members of our community. Indeed, they are produced by the Civil Service in any case from a list of the great and the good. When I was a Minister, I tried to get hold of that list and held inquiries with civil servants to find out where they got the names from and I came up against a blank wall. It was impossible to define how people received that patronage. The patrons are the senior civil servants who suggest things to Ministers and they make the appointments.
  Why not advertise for applicants for those jobs? What is wrong with that? By all means there could be a board within the Civil Service with the Minister present to make a judgment. All the other high quality jobs elsewhere in the

  959
  giant corporations are advertised and interviews are held. If we are appointing national bodies, even if they are quangos, we should adopt a different technique from the civil servants simply suggesting names to the Minister.
  The company report published by Private Eye could provide the advice needed. In issue after issue that magazine publishes information of great value. In 1973–74, when the Poulson scandal was bubbling, it was Private Eye that dared to set it all out although other papers tried to take the credit. That magazine has a good track record of exposing the seamier side of the City and it could be of great help.
  What about Paul Foot of the Daily Mirror?
  Mr. Nicholas Winterton: Thank you very much.
  Mr. Cryer: Of course "Thank you very much". We want someone at whom Tory Members will raise their eyebrows. We want them to say, "Oh. Isn't it a shocking affair appointing someone like that." But like what? Paul Foot exposes scandals in the Daily Mirror and I should have thought that that was a good background for the job. Concern for the public good is his motivating force.
  What about Norman Atkinson who was a distinguished Member of this House for many years? He has a good track record of questioning and probing Ministers and has the public concern at heart.
  Mr. William Cash: What about Eric Varley?
  Mr. Cryer: He is not a suitable person. I know that he is resting at the moment—he has been deselected—but he has been too close to the Establishment. I mentioned Norman Atkinson on the basis that he was a Back Bencher who spent his life probing and cross-examining.
  Perhaps the Minister will be able to tell us who is up for consideration. They are likely to be pillars of the Establishment who will opt for a quiet life. If they cause a few ripples, that will upset the Establishment of which they are a part. If I have suggested a few names that have raised eyebrows that is all well and good.
  Mr. Cash: Does the hon. Gentleman acknowledge that just lurking in the background, behind the pillars of the establishment of the Labour party, there is a degree of patronage in the recommendation of Norman Atkinson rather than Eric Varley? Are their credentials determined by the degree to which they move leftwards towards Marxism?
  Mr. Cryer: That is a legitimate question and I shall not make a judgment. The Secretary of State, however, will make such a judgment behind closed doors in Whitehall. In what sense will the right hon. Gentleman be accountable to the House and to the public?
  Anyone who feels that he is able to do the job and has the qualifications needed should apply. If Eric Varley or Norman Atkinson want to apply, so be it. I suggested the sort of people who would be overlooked and ignored because of their background of challenging the Establishment.
  Mr. Nicholas Winterton: What about me?
  Mr. Cryer: After the next election the hon. Gentleman will be looking for a job and he may want to apply. The hon. Gentleman displays an anti-Establishment attitude, which is certainly not confined to the Labour Benches, but
  960
  I like to think that there are many more people who hold anti-Establishment attitudes on the Labour Benches. The parliamentary Labour party has as its driving force the public good.
  The Secretary of State will make the appointments and no doubt he will receive a report, but there will he no statutory obligation on the right hon. Gentleman to make a report to the House. However, there should be such a report so that we can have an opportunity to debate it, because that in itself is an element of accountability. We often push to one side and forget that Parliament is an important element in public accountability. The fact that there is a requirement to produce a report will be at the back of the council's mind and it will be speeded on in its task by the knowledge that its work will be subject to dissidence in the House of Commons. That will help it to ensure that it is doing its job, which is no bad thing. Indeed, it is part of the job that this place is supposed to carry out.
  I hope that the Minister will be able to say that the reporting council will report to the Secretary of State and that those reports will be placed before us for proper scrutiny, debate and examination.
  Mr. Redwood: I am glad that with only one dissenting voice the House has accepted that Sir Ronald Dearing is a good choice for this post. I am sure that he will be delighted to read later this week that he has received the acclaim of the Government, Conservative Back Benchers and the official Opposition. Sir Ronald commands great respect for the work that he has done in the past. I am sure that he will bring to this task a great deal of energy, objectivity and independence of mind. My memory may be playing tricks, but I believe that he started in the Civil Service with a humble role as a clerical officer and worked his way up. I hope that in all ways his credentials will meet with approval from Opposition Members.
  The House has welcomed the Government's move towards the position identified in Committee by Opposition and Conservative Back-Bench Members in wanting to state the reasons for any departures from accounting standards. I offer that because the Commitee produced some good points and the case was well argued. That is the purpose of this amendment.
  However, I hope that the House will understand my belief that quantifying the departures would be going too far as it would give legal form to standards, which we do not wish to do, and would make departures from standards impossible. What would be the point of ever departing from standards if one had to quantify the exact consequence of so doing?
  The safeguard for the shareholders and others who are interested in the matter are that the reasons for departing will have to be stated. That means that the matter will be highlighted and come out in debate at the annual general meeting before the approval of the accounts if people feel that is a matter of concern. Of course, it would also be a matter for debate between analysts in the company and the large investors and the company if it is felt that the company is beginning to depart too far from those agreed standards.
  I turn now to the point made by my hon. Friend the Member for Richmond and Barnes (Mr. Hanley) about comparisons being difficult if some companies choose to depart from the standards. It is a matter of degree rather than a black and white issue. The application of standards

  961
  is already difficult. Many areas require the exercise of judgment, as many hon. Members with accounting experience will know. The valuation of stock is always difficult. Provisions on long-term contracts in particular are hazardous to get right and funding pension rates can be difficult to get right actuarially in the light of changing market circumstances. There are a number of areas in which there are standards, but where it is difficult to make judgments. Therefore, it is always tricky to compare one company with another because some companies are more prudent and others less prudent in their calculations of profit or balance sheet values, which is quite permissible even in the framework of standards.
  I should be reluctant to delegate law-amending powers to the FRC. It would be unprecedented to give a private body the power to amend legislation. That should remain a matter for debate between the Government and Opposition in the House and it should be for the Government to propose any changes in the legislative framework affecting accounts that may be deemed necessary in future.
  Ferranti has been mentioned several times. I do not think that that is a standards issue, or that it relates to this debate. I agree with the views expressed by the hon. Member for Norwich, South (Mr. Garrett).
  I turn finally to the issue of Next, which was raised by the hon. Member for Workington (Mr. Campbell-Savours). I was surprised that he had never seen a Next shop as Next was one of the most successful chains of stores in the early and middle '80s and can be seen in most high streets. I stand by what I said to him earlier. If the hon. Gentleman thinks that a problem has arisen in the accounts, as published, in the light of the nature of the statute concerning the requirements, he should write to my office and we will look into it.
  Mr. Campbell-Savours rose——
  Madam Deputy Speaker: Order. I cannot call the hon. Gentleman a second time, as he appreciates.
  Question put, That the amendment be made:—
  The House divided: Ayes 137, Noes 27.

  Division No. 345]

  [10.59 pm

  AYES

  Alexander, Richard

  Campbell, Menzies (Fife NE)

  Alison, Rt Hon Michael

  Carlile, Alex (Mont'g)

  Amos, Alan

  Carlisle, John, (Luton N)

  Arbuthnot, James

  Carlisle, Kenneth (Lincoln)

  Arnold, Jacques (Gravesham)

  Carrington, Matthew

  Ashby, David

  Carttiss, Michael

  Ashdown, Rt Hon Paddy

  Cash, William

  Atkinson, David

  Chapman, Sydney

  Baker, Nicholas (Dorset N)

  Chope, Christopher

  Batiste, Spencer

  Clark, Dr Michael (Rochford)

  Beith, A. J.

  Clarke, Rt Hon K. (Rushcliffe)

  Bellingham, Henry

  Coombs, Anthony (Wyre F'rest)

  Bennett, Nicholas (Pembroke)

  Coombs, Simon (Swindon)

  Biffen, Rt Hon John

  Currie, Mrs Edwina

  Boswell, Tim

  Curry, David

  Bowis, John

  Davis, David (Boothferry)

  Brazier, Julian

  Day, Stephen

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

  Dorrell, Stephen

  Bruce, Malcolm (Gordon)

  Douglas-Hamilton, Lord James

  Buck, Sir Antony

  Dover, Den

  Burns, Simon

  Dunn, Bob

  Burt, Alistair

  Durant, Tony

  Butcher, John

  Evennett, David

  Butterfill, John

  Fallon, Michael

  962

  Favell, Tony

  Mans, Keith

  Fearn, Ronald

  Marshall, John (Hendon S)

  Fishburn, John Dudley

  Martin, David (Portsmouth S)

  Forman, Nigel

  Maxwell-Hyslop, Robin

  Forsyth, Michael (Stirling)

  Meyer, Sir Anthony

  Forth, Eric

  Mills, Iain

  Freeman, Roger

  Nicholls, Patrick

  Gale, Roger

  Nicholson, Emma (Devon West)

  Garel-Jones, Tristan

  Pawsey, James

  Glyn, Dr Alan

  Redwood, John

  Goodlad, Alastair

  Ridley, Rt Hon Nicholas

  Goodson-Wickes, Dr Charles

  Sackville, Hon Tom

  Griffiths, Peter (Portsmouth N)

  Shaw, David (Dover)

  Gummer, Rt Hon John Selwyn

  Shaw, Sir Giles (Pudsey)

  Hague, William

  Shephard, Mrs G. (Norfolk SW)

  Hamilton, Hon Archie (Epsom)

  Shepherd, Richard (Aldridge)

  Hamilton, Neil (Tatton)

  Smith, Tim (Beaconsfield)

  Hanley, Jeremy

  Soames, Hon Nicholas

  Harris, David

  Speller, Tony

  Hayes, Jerry

  Stevens, Lewis

  Hayward, Robert

  Stewart, Andy (Sherwood)

  Hind, Kenneth

  Stradling Thomas, Sir John

  Howarth, G. (Cannock & B'wd)

  Summerson, Hugo

  Howe, Rt Hon Sir Geoffrey

  Taylor, John M (Solihull)

  Howells, Geraint

  Taylor, Teddy (S'end E)

  Hughes, Robert G. (Harrow W)

  Thompson, D. (Calder Valley)

  Hunt, David (Wirral W)

  Thompson, Patrick (Norwich N)

  Hunt, Sir John (Ravensbourne)

  Thorne, Neil

  Hunter, Andrew

  Thurnham, Peter

  Irvine, Michael

  Townsend, Cyril D. (B'heath)

  Jack, Michael

  Tracey, Richard

  Janman, Tim

  Twinn, Dr Ian

  Jessel, Toby

  Waddington, Rt Hon David

  Jones, Gwilym (Cardiff N)

  Wallace, James

  Kirkwood, Archy

  Ward, John

  Knapman, Roger

  Wardle, Charles (Bexhill)

  Knight, Greg (Derby North)

  Watts, John

  Knight, Dame Jill (Edgbaston)

  Wheeler, John

  Knowles, Michael

  Widdecombe, Ann

  Lang, Ian

  Winterton, Mrs Ann

  Latham, Michael

  Winterton, Nicholas

  Lester, Jim (Broxtowe)

  Wood, Timothy

  Lilley, Peter

  Livsey, Richard

  Tellers for the Ayes:

  Lyell, Sir Nicholas

  Mr. Irvine Patnick and Mr. David Heathcoat-Amory.

  Maclean, David

  McLoughlin, Patrick

  NOES

  Barnes, Harry (Derbyshire NE)

  Jones, Ieuan (Ynys Môn)

  Campbell-Savours, D. N.

  Mahon, Mrs Alice

  Cousins, Jim

  Michie, Bill (Sheffield Heeley)

  Cox, Tom

  Nellist, Dave

  Cryer, Bob

  O'Neill, Martin

  Cummings, John

  Pike, Peter L.

  Davies, Rt Hon Denzil (Llanelli)

  Powell, Ray (Ogmore)

  Ewing, Mrs Margaret (Moray)

  Salmond, Alex

  Flynn, Paul

  Skinner, Dennis

  Godman, Dr Norman A.

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

  Hardy, Peter

  Welsh, Andrew (Angus E)

  Haynes, Frank

  Hinchliffe, David

  Tellers for the Noes:

  Hughes, Robert (Aberdeen N)

  Mr. Michael Welsh and Mr. Ronnie Campbell.

  Illsley, Eric

  Jones, Barry (Alyn & Deeside)

  Question accordingly agreed to.
  Amendment proposed: No. 11, in page 200, line 35, at end insert—

  FORM AND CONTENT OF COMPANY ACCOUNTS

    'Loans in connection with assistance for purchase of company's own shares
    8A. In paragraph 51(2) (disclosure of outstanding loans in connection with certain cases of financial assistance for purchase of company's own shares), after "153(4)(b)" insert ",(bb)".'.—[Mr. Redwood.]
    Question put, That the amendment be made:—
    The House divided: Ayes 128, Noes 34.

    Division No. 346]

    [11.12 pm

    AYES

    Alexander, Richard

    Howe, Rt Hon Sir Geoffrey

    Alison, Rt Hon Michael

    Howells, Geraint

    Amos, Alan

    Hughes, Robert G. (Harrow W)

    Arbuthnot, James

    Hunt, David (Wirral W)

    Arnold, Jacques (Gravesham)

    Hunt, Sir John (Ravensbourne)

    Ashby, David

    Hunter, Andrew

    Ashdown, Rt Hon Paddy

    Irvine, Michael

    Atkinson, David

    Jack, Michael

    Baker, Nicholas (Dorset N)

    Janman, Tim

    Batiste, Spencer

    Jessel, Toby

    Beith, A. J.

    Jones, Gwilym (Cardiff N)

    Bellingham, Henry

    Kirkwood, Archy

    Bennett, Nicholas (Pembroke)

    Knapman, Roger

    Biffen, Rt Hon John

    Knight, Greg (Derby North)

    Boswell, Tim

    Knight, Dame Jill (Edgbaston)

    Bowis, John

    Knowles, Michael

    Brazier, Julian

    Lang, Ian

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

    Latham, Michael

    Bruce, Malcolm (Gordon)

    Lester, Jim (Broxtowe)

    Buck, Sir Antony

    Lilley, Peter

    Burns, Simon

    Livsey, Richard

    Burt, Alistair

    Lyell, Sir Nicholas

    Butterfill, John

    Maclean, David

    Campbell, Menzies (Fife NE)

    McLoughlin, Patrick

    Carlisle, Kenneth (Lincoln)

    Mans, Keith

    Carrington, Matthew

    Marshall, John (Hendon S)

    Carttiss, Michael

    Martin, David (Portsmouth S)

    Cash, William

    Maxwell-Hyslop, Robin

    Chapman, Sydney

    Meyer, Sir Anthony

    Chope, Christopher

    Mills, Iain

    Clark, Dr Michael (Rochford)

    Nicholls, Patrick

    Clarke, Rt Hon K. (Rushcliffe)

    Nicholson, Emma (Devon West)

    Coombs, Anthony (Wyre F'rest)

    Redwood, John

    Coombs, Simon (Swindon)

    Ridley, Rt Hon Nicholas

    Currie, Mrs Edwina

    Sackville, Hon Tom

    Curry, David

    Shaw, David (Dover)

    Davis, David (Boothferry)

    Shaw, Sir Giles (Pudsey)

    Dorrell, Stephen

    Shephard, Mrs G. (Norfolk SW)

    Douglas-Hamilton, Lord James

    Smith, Tim (Beaconsfield)

    Dover, Den

    Soames, Hon Nicholas

    Dunn, Bob

    Speller, Tony

    Durant, Tony

    Stevens, Lewis

    Evennett, David

    Stewart, Andy (Sherwood)

    Favell, Tony

    Stradling Thomas, Sir John

    Fearn, Ronald

    Summerson, Hugo

    Fishburn, John Dudley

    Taylor, John M (Solihull)

    Forman, Nigel

    Thompson, D. (Calder Valley)

    Forsyth, Michael (Stirling)

    Thompson, Patrick (Norwich N)

    Forth, Eric

    Thorne, Neil

    Freeman, Roger

    Thurnham, Peter

    Gale, Roger

    Townsend, Cyril D. (B'heath)

    Garel-Jones, Tristan

    Tracey. Richard

    Glyn, Dr Alan

    Twinn, Dr Ian

    Goodlad, Alastair

    Waddington, Rt Hon David

    Goodson-Wickes, Dr Charles

    Wallace, James

    Griffiths, Peter (Portsmouth N)

    Ward, John

    Gummer, Rt Hon John Selwyn

    Wardle, Charles (Bexhlll)

    Hague, William

    Warren, Kenneth

    Hamilton, Hon Archie (Epsom)

    Watts, John

    Hamilton, Neil (Tatton)

    Wheeler, John

    Hanley, Jeremy

    Widdecombe, Ann

    Harris, David

    Wood, Timothy

    Hayward, Robert

    Heathcoat-Amory, David

    Tellers for the Ayes:

    Hind, Kenneth

    Mr. Irvine Patnick and

    Howarth, G. (Cannock & B'wd)

    Mr. Michael Fallon.

    NOES

    Barnes, Harry (Derbyshire NE)

    Flynn, Paul

    Buckley, George J.

    Galloway, George

    Campbell-Savours, D. N.

    Godman, Dr Norman A.

    Cousins, Jim

    Golding, Mrs Llin

    Cryer, Bob

    Haynes, Frank

    Cunliffe, Lawrence

    Hinchliffe, David

    Dewar, Donald

    Hughes, John (Coventry NE)

    Dixon, Don

    Illsley, Eric

    Dobson, Frank

    Jones, Ieuan (Ynys Môn)

    Ewing, Mrs Margaret (Moray)

    Lofthouse, Geoffrey

    964

    Mahon, Mrs Alice

    Vaz, Keith

    Meale, Alan

    Welsh, Andrew (Angus E)

    Michie, Bill (Sheffield Heeley)

    Welsh, Michael (Doncaster N)

    Nellist, Dave

    Wilson, Brian

    Pike, Peter L.

    Wray, Jimmy

    Prescott, John

    Salmond, Alex

    Tellers for the Noes:

    Skinner, Dennis

    Mr. John Cummings and Mr. Ronnie Campbell.

    Spearing, Nigel

    Question accordingly agreed to.

Clause 5

  GROUP ACCOUNTS
  Amendment proposed: No. 12 in page 7, line 21, leave out 'and' and insert 'or'.—[Mr. Redwood.]
  Question put, That the amendment be made:—
  The House divided: Ayes 129, Noes 30.

  Division No. 347]

  [11.23 pm

  AYES

  Alexander, Richard

  Goodson-Wickes, Dr Charles

  Alison, Rt Hon Michael

  Griffiths, Peter (Portsmouth N)

  Amos, Alan

  Gummer, Rt Hon John Selwyn

  Arbuthnot, James

  Hague, William

  Arnold, Jacques (Gravesham)

  Hamilton, Hon Archie (Epsom)

  Ashby, David

  Hamilton, Neil (Tatton)

  Ashdown, Rt Hon Paddy

  Hanley, Jeremy

  Atkinson, David

  Harris, David

  Baker, Nicholas (Dorset N)

  Hayward, Robert

  Batiste, Spencer

  Hind, Kenneth

  Beith, A. J,

  Howarth, G. (Cannock & B'wd)

  Bellingham, Henry

  Howe, Rt Hon Sir Geoffrey

  Bennett, Nicholas (Pembroke)

  Howells, Geraint

  Biffen, Rt Hon John

  Hughes, Robert G. (Harrow W)

  Boswell, Tim

  Hunt, David (Wirral W)

  Bowis, John

  Hunt, Sir John (Ravensbourne)

  Brazier, Julian

  Hunter, Andrew

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

  Irvine, Michael

  Bruce, Malcolm (Gordon)

  Jack, Michael

  Buck, Sir Antony

  Janman, Tim

  Burns, Simon

  Jessel, Toby

  Burt, Alistair

  Jones, Gwilym (Cardiff N)

  Butterfill, John

  Kirkwood, Archy

  Campbell, Menzies (Fife NE)

  Knapman, Roger

  Carlisle, Kenneth (Lincoln)

  Knight, Greg (Derby North)

  Carrington, Matthew

  Knight, Dame Jill (Edgbaston)

  Carttiss, Michael

  Knowles, Michael

  Cash, William

  Lang, Ian

  Chapman, Sydney

  Latham, Michael

  Chope, Christopher

  Lester, Jim (Broxtowe)

  Clark, Dr Michael (Rochford)

  Lilley, Peter

  Clarke, Rt Hon K. (Rushcliffe)

  Livsey, Richard

  Coombs, Anthony (Wyre F'rest)

  Lyell, Sir Nicholas

  Coombs, Simon (Swindon)

  Maclean, David

  Cran, James

  McLoughlin, Patrick

  Curry, David

  Mans, Keith

  Davis, David (Boothferry)

  Martin, David (Portsmouth S)

  Devlin, Tim

  Maxwell-Hyslop, Robin

  Dorrell, Stephen

  Meyer, Sir Anthony

  Douglas-Hamilton, Lord James

  Mills, Iain

  Dover, Den

  Nicholls, Patrick

  Dunn, Bob

  Nicholson, Emma (Devon West)

  Durant, Tony

  Redwood, John

  Evennett, David

  Ridley, Rt Hon Nicholas

  Fallon, Michael

  Sackville, Hon Tom

  Favell, Tony

  Shaw, David (Dover)

  Fearn, Ronald

  Shaw, Sir Giles (Pudsey)

  Fishburn, John Dudley

  Shephard, Mrs G. (Norfolk SW)

  Forman, Nigel

  Smith, Tim (Beaconsfield)

  Forsyth, Michael (Stirling)

  Soames, Hon Nicholas

  Forth, Eric

  Speller, Tony

  Freeman, Roger

  Stevens, Lewis

  Gale, Roger

  Stewart, Andy (Sherwood)

  Garel-Jones, Tristan

  Stradling Thomas, Sir John

  Glyn, Dr Alan

  Summerson, Hugo

  Goodlad, Alastair

  Taylor, John M (Solihull)

  965

  Taylor, Teddy (S'end E)

  Wardle, Charles (Bexhill)

  Thompson, D. (Calder Valley)

  Warren, Kenneth

  Thompson, Patrick (Norwich N)

  Watts, John

  Thorne, Neil

  Wheeler, John

  Thurnham, Peter

  Widdecombe, Ann

  Townsend, Cyril D. (B'heath)

  Wood, Timothy

  Tracey, Richard

  Twinn, Dr Ian

  Tellers for the Ayes:

  Waddington, Rt Hon David

  Mr. Irvine Patnick and

  Wallace, James

  Mr. David Heathcoat-Amory.

  Ward, John

  NOES

  Barnes, Harry (Derbyshire NE)

  Jones, Ieuan (Ynys Môn)

  Buckley, George J.

  Lofthouse, Geoffrey

  Campbell-Savours, D. N.

  Mahon, Mrs Alice

  Cousins, Jim

  Meale, Alan

  Cryer, Bob

  Nellist, Dave

  Cunliffe, Lawrence

  Pike, Peter L.

  Davies, Ron (Caerphilly)

  Prescott, John

  Dixon, Don

  Skinner, Dennis

  Ewing, Mrs Margaret (Moray)

  Spearing, Nigel

  Flynn, Paul

  Vaz, Keith

  Galloway, George

  Welsh, Andrew (Angus E)

  Godman, Dr Norman A.

  Welsh, Michael (Doncaster N)

  Golding, Mrs Llin

  Wray, Jimmy

  Haynes, Frank

  Hinchliffe, David

  Tellers for the Noes:

  Hughes, John (Coventry NE)

  Mr. John Cummings and Mr. Ronnie Campbell.

  Illsley, Eric

  Question accordingly agreed to.

Schedule 2

  [SCHEDULE 4A TO THE COMPANIES ACT 1985] FORM AND CONTENT OF GROUP ACCOUNTS
  Mr. Redwood: I beg to move amendment No. 13, in page 204, line 2, leave out 'nominal value' and insert `appropriate amount in respect'.
  Madam Deputy Speaker: With this we may take Government amendments Nos. 14 and 15.
  Mr. Redwood: The amendments fine-tune the provisions in schedule 2, which prescribe rules derived from the seventh directive for the accounting treatment of mergers and acquisitions. Amendments Nos. 13 and 14 are brought forward in response to a point made in Committee by the hon. Member for Norwich, South (Mr. Garrett); they make a technical change to the provisions on merger accounting to ensure that present accounting practice can continue. Amendment No. 15 makes it clear how the rules on accounting for mergers and acquisitions apply when a group of companies is acquired—that is, a parent company and its subsidiary undertakings.
  Question put, That the amendment be made:—
  The House divided: Ayes 129, Noes 24.

  Division No. 348]

  [11.36 pm

  AYES

  Alexander, Richard

  Bowis, John

  Alison, Rt Hon Michael

  Brazier, Julian

  Amess, David

  Bruce, Malcolm (Gordon)

  Amos, Alan

  Buck, Sir Antony

  Arbuthnot, James

  Burns, Simon

  Ashby, David

  Burl, Alistair

  Atkinson, David

  Butterfill, John

  Baker, Nicholas (Dorset N)

  Campbell, Menzies (Fife NE)

  Batiste, Spencer

  Campbell-Savours, D. N.

  Beith, A. J.

  Carlisle, Kenneth (Lincoln)

  Bellingham, Henry

  Carrington, Matthew

  Bennett, Nicholas (Pembroke)

  Carttiss, Michael

  Biffen, Rt Hon John

  Cash, William

  Boswell, Tim

  Chapman, Sydney

  966

  Chope, Christopher

  Knowles, Michael

  Clark, Dr Michael (Rochford)

  Lang, Ian

  Clarke, Rt Hon K. (Rushcliffe)

  Latham, Michael

  Coombs, Anthony (Wyre F'rest)

  Lester, Jim (Broxtowe)

  Coombs, Simon (Swindon)

  Lilley, Peter

  Cran, James

  Livsey, Richard

  Curry, David

  Lyell, Sir Nicholas

  Davis, David (Boothferry)

  Maclean, David

  Devlin, Tim

  McLoughlin, Patrick

  Dorrell, Stephen

  Mans, Keith

  Douglas-Hamilton, Lord James

  Martin, David (Portsmouth S)

  Dover, Den

  Maxwell-Hyslop, Robin

  Dunn, Bob

  Meyer, Sir Anthony

  Durant, Tony

  Mills, Iain

  Evennett, David

  Nicholls, Patrick

  Fallon, Michael

  Nicholson, Emma (Devon West)

  Favell, Tony

  Norris, Steve

  Fearn, Ronald

  Redwood, John

  Fishburn, John Dudley

  Ridley, Rt Hon Nicholas

  Forman, Nigel

  Sackville, Hon Tom

  Forsyth, Michael (Stirling)

  Sainsbury, Hon Tim

  Forth, Eric

  Shaw, David (Dover)

  Freeman, Roger

  Shaw, Sir Giles (Pudsey)

  Gale, Roger

  Shephard, Mrs G. (Norfolk SW)

  Garel-Jones, Tristan

  Smith, Tim (Beaconsfield)

  Glyn, Dr Alan

  Soames, Hon Nicholas

  Goodlad, Alastair

  Speller, Tony

  Goodson-Wickes, Dr Charles

  Stevens, Lewis

  Griffiths, Peter (Portsmouth N)

  Stewart, Andy (Sherwood)

  Gummer, Rt Hon John Selwyn

  Stradling Thomas, Sir John

  Hague, William

  Summerson, Hugo

  Hamilton, Hon Archie (Epsom)

  Taylor, Teddy (S'end E)

  Hamilton, Neil (Tatton)

  Thompson, D. (Calder Valley)

  Hanley, Jeremy

  Thompson, Patrick (Norwich N)

  Harris, David

  Thorne, Neil

  Hayward, Robert

  Thurnham, Peter

  Heathcoat-Amory, David

  Townsend, Cyril D. (B'heath)

  Hind, Kenneth

  Tracey, Richard

  Howarth, G. (Cannock & B'wd)

  Twinn, Dr Ian

  Howe, Rt Hon Sir Geoffrey

  Waddington, Rt Hon David

  Howells, Geraint

  Wallace, James

  Hughes, Robert G. (Harrow W)

  Ward, John

  Hunt, David (Wirral W)

  Wardle, Charles (Bexhill)

  Hunt, Sir John (Ravensbourne)

  Warren, Kenneth

  Hunter, Andrew

  Watts, John

  Irvine, Michael

  Wheeler, John

  Jack, Michael

  Widdecombe, Ann

  Janman, Tim

  Wood. Timothy

  Jessel, Toby

  Kirkwood, Archy

  Tellers for the Ayes:

  Knapman, Roger

  Mr. Irvine Patnick and Mr. John M. Taylor.

  Knight, Greg (Derby North)

  Knight, Dame Jill (Edgbaston)

  NOES

  Buckley, George J.

  Lofthouse, Geoffrey

  Campbell, Ron (Blyth Valley)

  Mahon, Mrs Alice

  Cousins, Jim

  Nellist, Dave

  Cryer, Bob

  Pike, Peter L.

  Cummings, John

  Salmond, Alex

  Cunliffe, Lawrence

  Skinner, Dennis

  Davies, Rt Hon Denzil (Llanelli)

  Vaz, Keith

  Ewing, Mrs Margaret (Moray)

  Welsh, Andrew (Angus E)

  Flynn, Paul

  Welsh, Michael (Doncaster N)

  Godman, Dr Norman A.

  Wilson, Brian

  Golding, Mrs Llin

  Haynes, Frank

  Tellers for the Noes:

  Hinchliffe, David

  Mr. Harry Barnes and Mr. Eric Illsley.

  Jones, Ieuan (Ynys Môn)

  Question accordingly agreed to.
  Amendment proposed: No. 14, in page 204, line 12, leave out from 'means' to end of line 14 and insert—
  '—

  (a) shares in relation to which section 131 (merger relief) applies, in respect of which the appropriate amount is the nominal value; or

  (b) shares in relation to which section 132 (relief in respect of group reconstructions) applies, in respect of which the appropriate amount is the nominal

  967
  value together with any minimum premium value within the meaning of that section.'.—[Mr. Redwood.]

  Question put,That the amendment be made.
  The House divided: Ayes 123, Noes 25.

  Division No. 349]

  [11.49 pm

  AYES

  Alison, Rt Hon Michael

  Hunt, Sir John (Ravensbourne)

  Amess, David

  Hunter, Andrew

  Amos, Alan

  Irvine, Michael

  Arbuthnot, James

  Jack, Michael

  Ashby, David

  Janman, Tim

  Atkinson, David

  Jessel, Toby

  Baker, Nicholas (Dorset N)

  Kirkwood, Archy

  Batiste, Spencer

  Knapman, Roger

  Bellingham, Henry

  Knight, Greg (Derby North)

  Bennett, Nicholas (Pembroke)

  Knight, Dame Jill (Edgbaston)

  Biffen, Rt Hon John

  Knowles, Michael

  Boswell, Tim

  Lang, Ian

  Bowis, John

  Latham, Michael

  Bruce, Malcolm (Gordon)

  Lilley, Peter

  Buck, Sir Antony

  Livsey, Richard

  Burns, Simon

  Lyell, Sir Nicholas

  Burt, Alistair

  Maclean, David

  Butterfill, John

  McLoughlin, Patrick

  Campbell, Menzies (Fife NE)

  Mans, Keith

  Carlisle, Kenneth (Lincoln)

  Martin, David (Portsmouth S)

  Carrington, Matthew

  Maxwell-Hyslop, Robin

  Carttiss, Michael

  Meyer, Sir Anthony

  Cash, William

  Mills, Iain

  Chope, Christopher

  Nicholls, Patrick

  Clark, Dr Michael (Rochford)

  Nicholson, Emma (Devon West)

  Clarke, Rt Hon K. (Rushcliffe)

  Norris, Steve

  Coombs, Anthony (Wyre F'rest)

  Patnick, Irvine

  Coombs, Simon (Swindon)

  Redwood, John

  Cran, James

  Ridley, Rt Hon Nicholas

  Curry, David

  Sackville, Hon Tom

  Davis, David (Boothferry)

  Sainsbury, Hon Tim

  Devlin, Tim

  Shaw, David (Dover)

  Dorrell, Stephen

  Shaw, Sir Giles (Pudsey)

  Douglas-Hamilton, Lord James

  Shephard, Mrs G. (Norfolk SW)

  Dover, Den

  Smith, Tim (Beaconsfield)

  Dunn, Bob

  Soames, Hon Nicholas

  Durant, Tony

  Speller, Tony

  Evennett, David

  Stevens, Lewis

  Favell, Tony

  Stewart, Andy (Sherwood)

  Fishburn, John Dudley

  Stradling Thomas, Sir John

  Forman, Nigel

  Summerson, Hugo

  Forsyth, Michael (Stirling)

  Taylor, John M (Solihull)

  Forth, Eric

  Taylor, Teddy (S'end E)

  Freeman, Roger

  Thompson, D. (Calder Valley)

  Gale, Roger

  Thompson, Patrick (Norwich N)

  Garel-Jones, Tristan

  Thorne, Neil

  Glyn, Dr Alan

  Thurnham, Peter

  Goodlad, Alastair

  Townsend, Cyril D. (B'heath)

  Goodson-Wickes, Dr Charles

  Tracey, Richard

  Griffiths, Peter (Portsmouth N)

  Twinn, Dr Ian

  Gummer, Rt Hon John Selwyn

  Waddington, Rt Hon David

  Hague, William

  Wallace, James

  Hamilton, Hon Archie (Epsom)

  Ward, John

  Hamilton, Neil (Tatton)

  Wardle, Charles (Bexhill)

  Hanley, Jeremy

  Warren, Kenneth

  Harris, David

  Watts, John

  Hayward, Robert

  Wheeler, John

  Heathcoat-Amory, David

  Widdecombe, Ann

  Hind, Kenneth

  Wood, Timothy

  Howarth, G. (Cannock & B'wd)

  Howe, Rt Hon Sir Geoffrey

  Tellers for the Ayes:

  Howells, Geraint

  Mr. Michael Fallon and

  Hughes, Robert G. (Harrow W)

  Mr. Sydney Chapman.

  Hunt, David (Wirral W)

  NOES

  Buckley, George J.

  Cunliffe, Lawrence

  Campbell, Ron (Blyth Valley)

  Dixon, Don

  Campbell-Savours, D. N.

  Ewing, Mrs Margaret (Moray)

  Cousins, Jim

  Flynn, Paul

  Cryer, Bob

  Golding, Mrs Llin

  Cummings, John

  Haynes, Frank

  968

  Hinchliffe, David

  Vaz, Keith

  Hughes, John (Coventry NE)

  Welsh, Andrew (Angus E)

  Lofthouse, Geoffrey

  Welsh, Michael (Doncaster N)

  Mahon, Mrs Alice

  Wray, Jimmy

  Meale, Alan

  Nellist, Dave

  Tellers for the Noes:

  Pike, Peter L.

  Mr. Harry Barnes and

  Skinner, Dennis

  Mr. Eric Illsley.

  Spearing, Nigel

  Question accordingly agreed to.
  12 midnight
  The Lord President of the Council and Leader of the House of Commons (Sir Geoffrey Howe): On a point of order, Madam Deputy Speaker. I beg to move, That further consideration of the Bill be now adjourned.
  With permission I shall couple that with a short statement about changes in the business announced for this week:

  THURSDAY 26 OCTOBER—Timetable motion On the Companies Bill [Lords] and Children Bill [Lords].

  Followed by completion of remaining stages of the Companies Bill [Lords].

  FRIDAY 27 OCTOBER—Ways and means resolution relating to the Football Spectators Bill [Lords].

  Followed by completion of remaining stages of the Children Bill [Lords].

  That should provide for the House time to consider the Bills that are now before it, which I have identified, comparable in scale to the time visualised in the arrangements made through the usual channels and will ensure that the business is handled expeditiously in the remainder of the week.
  Mr. Cryer: On a point of order, Madam Deputy Speaker. The Leader of the House has used the opportunity of moving the adjournment of the debate to make a business statement. Surely it would be the proper procedure to have questions on the business statement, as is the usual case, to disentangle the business statement from the justification for moving the adjournment of the present Bill. The Leader of the House did not actually move the adjournment of the debate. Therefore, I believe that we should be given the opportunity to ask business questions about the guillotine motions.
  Madam Deputy Speaker: The hon. Gentleman knows, and I should remind the House, that the motion is debatable.
  Mr. Skinner: In common with my hon. Friend the Member for Bradford, South (Mr. Cryer) I want to object as this is the first time that I have heard a Leader of the House move the adjournment of a debate and, at the same time, indicate a change in the business by introducing a guillotine.
  I know that the right hon. and learned Gentleman is new to the job, that he has not been around a great deal and that he has a lot of trouble with the Prime Minister. He should explain, however, where in "Erskine May" this practice is allowed. I note that the Clerk is having a word with Madam Deputy Speaker and I suppose that he is trying to square it for the Leader of the House.
  This is an indication of the way in which the Government have got their business into a shambles [Interruption.]
  Madam Deputy Speaker: Order. I must hear the hon. Member for Bolsover (Mr. Skinner).
  Mr. Skinner: Here we have a Government with a 150 majority——
  Hon. Members: At the next election.
  Madam Deputy Speaker: Order.
  Mr. Skinner: If I can just correct the lager louts who have come straight from the Bar—mind you, it is not only lager.
  The Government have a majority over the Labour party of approximately 150 hon. Members. I do not count the rag, tag and bobtails. I just subtract the number of Labour Members from the number of Conservatives because tonight, for example, the Liberals—or whatever they call themselves—have not been voting with us; they have been voting with the Government. That means that the Government majority has been even greater than 150. So the Government have a majority of 150 over the Labour party, but in the Lobbies, on the last two or three votes, the Government have been able to muster only 120-odd hon. Members—and that includes my hon. Friend the Member for Workington (Mr. Campbell-Savours) who, on occasions, goes into the Tory Lobby to try to confuse them—at least, that is what he tells me.
  We have a Government with a massive majority but at the fag end of a Session they cannot get 150 hon. Members into the Lobby to get their business through. It is not the job of a Labour Opposition to get more than 20 or 30 hon. Members in our Lobby. It is the job of the Labour Opposition to make sure that we occupy Government time, especially when the Government are up against the wall at the end of a parliamentary Session. It is indicative of this state of affairs that the Leader of the House had had to come to the House to introduce two guillotine motions at five past 12 in the morning for two Bills, each of which has several hundred amendments. There is something wrong with a Government who have two Bills—with 400 amendments on one, and about 800 on the other—who do not know whether they are on this earth or Fullers. That shows not only that the Government are in a shambles, but that the Cabinet are beginning to lose their grip on the House——
  Mr. James Wallace: Perhaps the hon. Gentleman would care to contemplate the fact that in another place the Government have introduced more than 400 amendments to the Local Government and Housing Bill which at some time will no doubt have to come back to this House.
  Mr. Skinner: What can you expect? On the one hand, the Prime Minister is gallivanting around the world. She does not know what is happening in this place. She just flits in, has a photo opportunity outside, and is then off to Japan and Kuala Lumpur. She is falling out with the Commonwealth, and the Front Bench are getting the business cocked up. What does the hon. Gentleman expect? I am not surprised that the Government are in this shambles, but I should like to know what will happen when she comes back. I should like to be a fly on the wall at the Cabinet meeting tomorrow morning when she says, "What the hell's going on? I've been holding things up out there in Kuala Lumpur against 48 other Ministers, but this lot have been allowing 20-odd Labour members to run
  970
  rings round the Government and keep the House sitting until the middle of the night, losing Bills left right and centre."
  Mr. Campbell-Savours: The Prime Minister has sacked the Leader of the House once.
  Mr. Skinner: Yes, she did sack him—and she took his house off him and gave it to the Foreign Secretary, a man with some kids; then the Leader of the House complained because he wanted a mansion, so she kicked the Chancellor of the Exchequer out of his house—he has kids—and put in a man without any kids. The Government really have got themselves into a mess in the past few months.
  So I am pleased that Labour is 26 points ahead in the polls. All this disarray started when I became chairman of the Labour party. We were six points behind in the polls when I took over the chairmanship at the back end of 1988 and by the time I have finished we are 26 points in front. Some people are suggesting that I should carry on, but I do not believe in patronage. I believe in the system of elections. I have done my stint and am happy to look at the Government Front Bench—incidentally, the Secretary of State for Trade and Industry is now here. He had the job of selling water privatisation and the poll tax. According to all the communiqués from Bernard Ingham——
  Madam Deputy Speaker: Order. The hon. Gentleman makes amusing speeches, but I am sure that he will keep to the terms of the motion before us.
  Mr. Skinner: I am trying to say that the Government have lost their way. They had the reshuffle to try to present a different image, so they shifted the right hon. Gentleman to the Department of Trade and Industry. He could not sell water privatisation and the poll tax, and now he has to sell £20 billion worth of goods abroad. That shows the disarray in the Cabinet.
  Yesterday, the Chancellor spoke, and about two Cabinet Ministers turned up to hear him. Is it any wonder that Members were saying in the Lobbies tonight that they would not stop here to carry the Companies Bill through? If Ministers, they said, did not turn up for major debates, why should they turn up and vote for them in the Lobbies? That shows that the Government are now at the tether end.
  I hope that we shall have the opportunity to vote against the guillotine tomorrow, to show that we are going to fight the Government to the bitter end. I hope, too, that the Government will have the sense to pull off the Associated British Ports (No. 2) Bill—[Interruption.]
  Madam Deputy Speaker: Order. The hon. Gentleman knows as well as I do that that is not part of the motion, to which I refer him.
  Mr. Skinner: The Leader of the House made a business statement, and if I had asked him a question—as opposed to taking part in this debate—I would have told him that now that he is changing the business for Thursday and Friday I could legitimately ask him to get rid of that so-called private Bill. It is a political Bill which will allow 15 million tonnes of coal to be imported to Britain at a time when we have a £20 billion balance of payments problem.
  It is legitimate to say this in this debate because it is partly a business motion. The private Bill should be

  971
  withdrawn. It is just conceivable—although I cannot guarantee it—that if the Bill is withdrawn, we might get to the end of the parliamentary Session with less fuss and bother. If 15 million tonnes of coal are to be brought here through these ports, they will add to the massive balance of payments problem.
  I suggest that, in these last few weeks of the Session, the Leader of the House consult Back Benchers, as the last Leader of the House did. He met us in July in the Leader's room. We had a nice little discussion about the Associated British Ports (No. 2) Bill. It is important that other hon. Members know that. The Government decided to take the Bill off in July, using various methods of getting rid of it. It is legitimate to suggest that the new Leader of the House get rid of it altogether. Why should there be a carry-over motion for the Bill? It was flawed. Not only did the Chairman——
  Madam Deputy Speaker: Order. I have called the hon. Gentleman to order now on more than one occasion. He knows our procedures. I refer him to our Standing Orders—to Standing Order No. 33, to be precise, which lays down that he can debate only what is in the motion before us. The hon. Gentleman is a clever parliamentarian, and I hope that he will now return to the motion.
  Mr. Skinner: As I said earlier, that would have applied had the Leader of the House only moved the adjournment of the debate. But he did not. He came here with a hybrid motion which included a business statement and a motion to adjourn proceedings on the Companies Bill. You, Madam Deputy Speaker, and the authorities in the House, heard it all. It was a remarkable proposition——
  Madam Deputy Speaker: Order. Certainly the procedure on the two Bills to which the Leader of the House referred are open for debate.
  Mr. Skinner: Of course they are. When the Leader of the House makes a business statement, anyone can stand up and, if called by the Speaker, ask why certain other matters should not be dealt with in the statement. It is legitimate for any hon. Member to raise any subject he or she likes. I am saying that, in view of the two guillotines that are being proposed, the Leader of the House should follow the example of his predecessor—the present Secretary of State for Energy—and consider the proposition that we should get rid of that Associated British Ports (No. 2) Bill so that we can proceed.
  Madam Deputy Speaker: Order. I have referred the hon. Gentleman to our Standing Orders. I refer him to Standing Order No. 33, which is very germane to this debate. He can of course refer to the business that the Leader of the House has referred to, which are the two Bills, the Companies Bill and the Children Bill.
  12.15 am
  Mr. Skinner: As a matter of fact, the Children Bill, although it has been referred to, was not a matter for us. I came in here last night and listened to a very good debate on that Bill. About 10 hon. Members on both sides of the House took part. There were several of my hon. Friends who had served on the Standing Committee, and two or three Tories joined in. One or two Tories made comments on points of order today, but they had gone to bed, so they did not know what had happened.
  972
  A lot of Opposition Members are quite happy with the Children Bill and how it is being dealt with. We do not believe in guillotines and would much prefer it if it were dealt with properly, but nobody should assume that we can lump the Children Bill and the Companies Bill together. The Companies Bill is all about fraud and how to tighten up on it.
  I said earlier that we ought to be discussing the fraud involving Ferranti. Now that we are to have a guillotine on the debate on the Companies Bill, it is conceivable that some of my hon. Friends will not have an opportunity to talk about the massive fraud that has taken place. We shall not be able to talk about that company of which Edward du Cann was a non-executive director.
  Mr. Cryer: Tell us what happened.
  Mr. Skinner: He ran away. Just before a certain housing company went to the wall, Edward du Cann decided to pack in as a non-executive director saying, "I think there is summat smelly here. I've been taking the money all this time, but now it looks as if it is going down the pan, I am getting out of the way."
  If debates on the Companies Bill were not guillotined, it would be a good idea for hon. Members to talk about that issue. Why can non-executive directors leave firms in a hurry like that and leave someone else holding the baby, because that is roughly what happened?
  I do not think that we shall be able to discuss the Ferranti issue properly if there is a guillotine. Ferranti got into bed with this company called ISC and a fellow called James Guerin. He was a funny sort of fellow. They could not find him for a while. It is known that, by and large, Ferranti gets its money from the British taxpayer because it has large defence contracts. The auditors' inspection of the books could have been debated in the debate on the Companies Bill if there had not been a guillotine. The auditors obviously did not know what they were doing. The Companies Bill is designed to get auditors to look at these things properly.
  Mr. Campbell-Savours: What happened?
  Mr. Skinner: With Ferranti, the auditors examined the company and said, "Oh, it's all right. You can join forces with ISC. They are clean." It turned out that ISC was guilty of about a £200 million fraud. Imagine if it had been someone on social security. There are people in Britain who are locked up in gaol because they have been found guilty of a minor social security fraud, yet somehow the fraud squad has not got round to dealing properly with this matter.
  If there is a guillotine, it will be difficult to deal with issues concerning fraud in the City and elsewhere. That is why I think that some of my hon. Friends may want to speak in this short debate—they may want to reveal some of the details before the guillotine falls tomorrow.
  Mr. Campbell-Savours: What about clause 72?
  Mr. Skinner: Indeed. There is just a chance that, under the guillotine, debate on clause 72 will not be reached. The chopper will fall.
  The Government have run out of steam and the Cabinet is in total disarray. At the end of the Session the Government have piled up 400 amendments to the Children Bill and 800 amendments to the Companies Bill. They have lost their way. They cannot keep their troops

  973
  here at night. They were down to 120 hon. Members at 12 o'clock and that is the sign of a Government in retreat. I am pleased about that, but people outside the House should know. For those reasons I hope that——
  Mr. Campbell-Savours: Has my hon. Friend seen clause 67 which deals with investigations into insider dealing? The debate may be curtailed on that matter.
  Mr. Skinner: We may not be able to deal with that so perhaps we should mention it now. Is that clause about Alan Walters? The Chancellor of the Exchequer says that he is the man doing the insider dealing at No. 10. The Chancellor has a connecting door to No. 10, but he cannot get in because Alan Walters has locked it. We should be able to discuss such matters, but we will probably not be able to because of the guillotine motion.
  We will not be able to deal with Guinness. However, to be fair, the Guinness issue is now before the courts and is what we call in Latin, sub judice. Therefore, I will not discuss it now. However, as I have said, we will not be able to discuss Alan Walters, his position on the EMS and his role in the conflict between the Prime Minister and the Chancellor of the Exchequer.
  I do not know who will go first, the Prime Minister or the Chancellor. I know that many of my hon. Friends do not agree with my view, but I have money on the fact that the Prime Minister will not lead the Tory party in the next general election. Some people laughed at me when I said that on the radio 12 months ago. However, as a result of the problems with Alan Walters, the insider-dealing man, more people think it is a decent bet. They are asking me to lay off some of my money so that they can get a slice of it. It is a toss up who will go first.
  There are people within the Establishment who would like an extended debate on the Companies Bill. Those people are now saying that it is time for the Prime Minister to go. We have only to read some of the posh newspapers to see that. They are suggesting that the Prime Minister is at the tether end of her term of office. My guess is that the Prime Minister might suffer a diplomatic illness during the next parliamentary Session and that will be the end of it. If that happens, in will come the Leader of the House. He will not be moving guillotine motions then because he will be hoping that somebody else will do that for him. However, there is another bloke in the running, the right hon. Member for Henley (Mr. Heseltine). We cannot rule out the possibility of a ballot in November. Traditionally, the Tory party can have a ballot in November but we do not get a vote.
  Madam Deputy Speaker: Order. I remind the hon. Gentleman once again that he must make his comments germane to the motion before us. He is straying far from that now.
  Mr. Skinner: I was trying to say that if more Tory Members had turned up tonight, including the right hon. Member for Henley, the Leader of the House would not have been placed in this predicament. Many Cabinet Ministers have left the sinking ship as have many of the junior Ministers who usually turn up. In any other part of the parliamentary year the Division bells are rung, the Whips get on the telephone and all the junior Ministers and Cabinet Ministers turn up. They have not turned up
  974
  tonight because they think that it is the beginning of the end. If all those people had turned up, the Leader of the House would not have had to move the guillotine motion because there would have been no need for it.
  Mr. Campbell-Savours: I do not understand why.
  Mr. Skinner: There would have been 250 or 300 Tory Members in the Lobby and some Opposition Members—not me—may have felt a little cowed by the massive majorities piling up against us. My hon. Friend knows that when we came into the Chamber after the Division we heard that the Government had started with 190 and that it had come down to 183. In the next Division it came down to 160. That makes us feel buoyed and confident because we know that we are on a winning streak.
  The Government got into such a sorry state that my hon. Friend the Member for Workington (Mr. Campbell-Savours) bailed them out in a Division by voting with them. The Liberals or whatever they call themselves also voted with them. When we see that, it becomes clear that the Leader of the House has got a telephone call from somebody who said to him, "Hey up, Geoff, we are losing our troops. There is a gang of Labour MPs, one of whom has voted with us, causing trouble. They are acting like an Opposition." The Leader of the House is brought in and has to cobble together a guillotine motion on the Companies Bill and the Children Bill in order to get them through.
  The Government started the Session last October and have a massive majority of about three or four to one in the House of Lords—when they can get the Lords to work. Some of them turn up and pick up £100 a day tax free straight away. Even with that massive majority the Government cannot organise their business. The ship is beginning to sink. When I reflect upon events in the House yesterday and especially those of today, I begin to understand the opinion polls. I can understand why Labour has 48 or 49 per cent. and the Conservatives are down to 36 or 37 per cent.
  That is easy to understand when we remember that the Government are taking on the ambulance crews. That is wicked and shows that the Government are losing their touch. They should pay those people the kind of money they deserve. In our society top company directors have had 26 per cent. increases in the last 12 months, but the ambulance crews are being offered only 6·5 per cent.
  Madam Deputy Speaker: Order. I am sure that the hon. Gentleman is about to bring his remarks to a conclusion.
  Mr. Skinner: The reason for the Government losing their touch is an amalgam of all those things. They are losing their MPs in the middle of the night and are unable to hold them. When the Conservatives are down to 120 hon. Members at 12 o'clock it means trouble. Everybody knows that, and that is why the Leader of the House is here. He is not here because of any filibuster. I have not heard any filibuster. We have been voting legitimately on matters pertaining to the Bill.
  Mrs. Alice Mahon: On a point of order, Madam Deputy Speaker. I hope that the 999 service is working tonight because it looks as if we might have two casualties in the House.
  Mr. Skinner: I do not know whether to continue. I can understand the hon. Member for Calder Valley (Mr.

  975
  Thompson) dropping off to sleep. He got sacked in the big shuffle. He probably thought, "Why should I bother?" and went to sleep. He could have stayed away altogether.
  Mr. Keith Vaz: I am sorry to interrupt my hon. Friend in mid flow. Does he agree that hon. Members in all parts of the House who served diligently on the Standing Committee on the Children Bill—hon. Members such as the hon. Member for Stockton, South (Mr. Devlin) and I—were concerned when we heard from the Leader of the House that the Bill is to be guillotined? Does he accept that the Bill is a consensus matter and that Members from all parties sought negotiations and amendments to make sure that it went through? Does he also agree that people outside who have been waiting for many years for that legislation will be deeply offended at the decision to guillotine this important measure?
  Mr. Skinner: Only today Tory Members were weeping about how we did not make as much progress as they wanted to last night, when my hon. Friends were complaining about the licensing and inspection charges on pre-school playgroups, and we had some healthy debates. It is strange that the Government will now introduce a guillotine to stop my hon. Friends from speaking about these matters.
  We can regard this little episode of the Leader of the House being dragged here as healthy for us. The Government have lost their troops. The Cabinet do not know which way to turn. The monetarist philosophy is in ruins. The Government are intervening at every possible stage. The Labour party is much more confident. The rag, tag and bobtail party does not matter any more. I think that we shall look back on this night, when the Government caved in at the tail end of the Session, as indicative of a Government on their last legs. I look forward to the end of them.
  12.30 am
  Mr. Teddy Taylor: I have some brief questions for my right hon. and learned Friend the Leader of the House. We all welcome the motion because it is clear that hon. Members are far too tired, after a busy day, to consider this important Bill. It would be an outrage if people were not to hear about the important work that we are doing on the Companies Bill.
  Does the motion moved by my right hon. and learned Friend mean that we shall stop now, or does it mean that we shall stop talking about the Companies Bill, and go on to talk about the merchant shipping order? It would be an outrage if we followed the second route. The order overturns a proposal that, last year, both the Minister in charge and his Parliamentary Private Secretary said was vital for the future of British shipping. Surely we will not stop debating the Companies Bill as a result of the closure motion, and then have to talk about the order.
  Secondly, my right hon. and learned Friend the Leader of the House will be aware that if we are to do our job properly we need to have parliamentary papers. Through the good offices of Mr. Speaker, and nobody else, we got an assurance that papers would be provided in the Vote Office, outlining the judgment of the European court. Hon. Members who have it will see that unfortunately—probably because of the speed with which it was produced—a page is missing. That page could be provided if the debate were delayed. The page shows that the
  976
  document did not reach the Treasury solicitors until 18 October, which happens by chance to be the day after was presented to the House of Commons, and it was printed in the Order Paper that these items were available in the Treasury Solicitor's office. That is unusual.
  The third reason why we should not hurry with this order is that, as my right hon. and learned Friend, with his long experience of the EEC will be aware, if we vote for this order, which will allow foreign ships to be British ships as from now, it will apply only to Britain. This order does not apply to other countries. When we have all this work to do, and people want to hear about the work that we are doing, it would be an outrage to rush through, at great speed and at a late hour when no one will hear, something that will apply only to us.
  The treaty of Rome, of which I am sure my right hon. and learned Friend is well aware, says that all countries should be treated equally. Why the blazes, at half past 12 at night, we have to debate this, I do not know. Sadly, we deal with controversial, horrible, nasty and undemocratic matters about which people do not hear at 1, 2 and 3 o'clock in the morning.
  I support the motion, but I hope that my right hon. and learned Friend the Leader of the House will say that we are too tired to do important work and that it is an outrage that the debate should take place at this hour. Surely my right hon. and learned Friend will be the great democrat and protector of liberty that I know he is. I trust that he will say that we can defer for a few days something that will overturn and wreck a measure which only last year was recognised by Ministers and Back Benchers as crucial and vital if we were to support British fishermen. Let us not be dirty to our fishermen at 12.30 am. Let us stand firm by democracy. Let us for once have a real debate on a vital issue in prime time.
  Mr. Cryer: I cannot recall an announcement by a Leader of the House that sought, in effect, to move progress and, at the same time, to announce a business statement. Such a move shows the contempt that the Government have for the House. Why were not the rights of hon. Members protected by an announcement being made on the screens throughout the House that a business statement was to be made? It is a convention of the House that when a business statement is made and changes are to be announced Members have right of access to the Chamber so that they can ask questions about the statement. It is a long hallowed tradition that Members should be given the opportunity to raise pressing issues that concern them that they believe should take priority over the changes to business that the Leader of the House has made. No opportunity has been given to those hon. Members who are working in their offices to come to the Chamber to express their points of view. I would judge that the annunciator operators have merely been presented with an announcement that there is to be a debate on the adjournment of progress on the Companies Bill. That means that the traditional position of Back Benchers has been deliberately undermined by the Government not announcing a business statement.
  Mr. Nigel Spearing: I invite my hon. Friend to clarify his language. He has referred to a tradition, and a tradition in this place is often regarded by those outside as unnecessary and a delaying tactic. Is it not a good democratic practice that when a business statement

  977
  is to be made notice is given, if only for a few minutes, so that those who wish to ask a question about the change in the business arrangements can do so? Perhaps my hon. Friend will be able to tell me—he may have been in the Chamber at the time—whether the Leader of the House, in announcing that there would be a timetable motion on Friday, stated that there would be an extended sitting. That would be within the Government's rights but it is a sign of distress. I understand that a guillotine motion would continue to be debated for three hours at the conclusion of the debate on the Football Spectators Bill on Friday.
  Mr. Cryer: There will be guillotine motions on Thursday 26 October, which is tomorrow or later today. The Government will continue the debate on the Children Bill on Friday 27 October. The debate on the Bill will follow a Ways and Means resolution on the Football Spectators Bill. The Government know that there is concern about, but a good deal of consensus on, the Children Bill and they want cynically to ensure that there is something following the Ways and Means resolution that Members will wish to reach. They wish to ensure that the Ways and Means resolution on the Football Spectators Bill is not debated at length.
  The Government proclaim in loud tones and in generality that they are concerned about taxpayers' expenditure—that is money that is spent by the Government—but they do not like hon. Members such as myself speaking on Ways and Means resolutions. They regard that as an inconvenience. When they are spending hundreds of thousands of pounds, millions of pounds or, in the case of the privatisation of the water industry, billions of pounds, it is inconvenient to have an extra 45 minutes of debate after the Division at 10 o'clock. That is what the business is about on Friday. The Government are cynically curtailing debate on the Ways and Means resolution by arranging to take the Children Bill after it. They know that there will be pressure on debate. There will be those who say, "For goodness sake do not talk about money and Ways and Means. Let us get on to the Children Bill, where there is consensus." The notion that the Government are concerned about the Children Bill and are providing time for that is absolutely false. It is a cynical manoeuvre to curtail debate in this place about a subject in which this place should have some measure of interest, and that is the expenditure of money. That is one reason why the change in business has been wrapped up in the motion to curtail business on the Companies Bill.
  Although there were shouts from Conservative Members when my hon. Friend the Member for Bolsover (Mr. Skinner) raised the question of the Children Bill, the reality is that the Bill was progressing smoothly last night. There had been an extensive debate, but every hon. Member who spoke had a deep and concerned interest. Indeed, I had two amendments on the Amendment Paper concerned with charging for pre-school playgroups. A great many representations have been made to me on that matter. I have received a petition and 100 letters, including half a dozen from organisations running pre-school playgroups in my constituency that expressed great concern about the charges for registration and inspection.
  I was surprised to find that, although I had tabled those amendments, and although that usually means that one is
  978
  called fairly early in the debate, I was in fact called eighth or ninth because of the long queue to speak. Therefore, it is quite false to suggest that there was anything other than concerned and detailed discussion last night.
  Mr. Dave Nellist: While my hon. Friend was explaining the importance of the discussion on the Children Bill, I heard Conservative Members complaining about the number of votes that were taken. My understanding—and, I think, that of my hon. Friend—is that we are paid a fairly heavy salary to come to this place to vote on legislation. Are Tory Members suggesting that we are not sent here to do that? If so, what are we paid to do?
  Mr. Cryer: In fact, there were very few votes last night because the vast majority of the amendments being debated related to schedule 8. Under the Standing Orders of the House, it is not possible to vote on amendments until we reach the clause or schedule to which they apply. Hon. Members will be aware that schedule 8 is towards the end of a group of schedules which themselves are near the end of the Bill. Therefore, it was not possible to vote on my amendments.
  I must make it clear that my amendments were not tabled last night and they were in no way superfluous. I was not the only hon. Member wanting to ensure that the charges were removed. I presented the House with the choice of either removing the charge for inspection and registration or limiting the charge to a maximum of £10. The Minister said that he would not charge more than £10, so through the vehicle of my amendment the Opposition gained a valuable concession. That was not entirely satisfactory, however, because the actual amendment concerned the right of the Minister to issue orders.
  As the House knows, these are very unsatisfactory. Ministers change, and an assurance that a Minister gives does not bind other Ministers. The fact is, however, that an assurance was obtained that will go some way towards giving the pre-school playgroup organisations in my constituency some confidence in the fact of support for the figure of £10 in my amendment—support, indeed, that I received in a letter from a playgroup association representing the whole of Bradford. The time was not wasted; it was typical of the way in which the House of Commons works late at night, when there is a good deal of detailed argument and some common sense and understanding.
  12.45 am
  Mr. John Butterfill: Does the hon. Gentleman accept, however, that his attempt to justify his behaviour last night, and the intervention of his hon. Friend the Member for Coventry, South-East (Mr. Nellist), would have much more validity were it not for the fact that, in the many Divisions that were called, no one voted on his side? If there was real concern, why did no one support the hon. Gentleman in the Lobby?
  Mr. Cryer: It simply is not correct to say that many Divisions were called with no hon. Members in the Lobby. As a matter of fact, I was very sorry that my two amendments—Nos. 360 and 361—were not subjected to a Division. I would have asked for a Division to remove all possibility of charging, but—as I explained to the House—that was not possible, because my amendments affected schedule 8, which could not be voted on until that stage in

  979
  the Bill was reached, which would be at the very end of the proceedings. The truth is that not enough time has been allowed for ordinary consideration of the Children Bill.
  Mr. Skinner: I think we need to explain why there were only about three or four Divisions, and Opposition votes in all but one—the first. That was deliberate: we decided to find out how many Tory Members were present before we kicked off with the Bill. That is always a good exercise. If they are down to, say, 130 or 140, we know that they will not last very long, and tonight was a good indication. So, last night, we tested them early on. We did not want anyone to vote, so two of us tested the Tories. We found 183 in their Lobby, and we realised then that they might manage with that number for about an hour or two, but not much longer. My prediction turned out to be right. Now they are making a song and dance about no one voting in our Division; but we did not want anyone to vote in our Division. We simply wanted to find out how many Tory Members were here.
  Mr. Tim Devlin: That is not the case.
  Mr. Skinner: Oh, yes, it is. We found that there were only 183 Tory Members here—and the hon. Member who keeps rabbiting on was not here; he had gone home.
  Mr. Devlin: On a point of order, Mr. Deputy Speaker. I wonder whether you could advise the House whether the activities described by the hon. Member for Bolsover (Mr. Skinner) are an abuse of the procedures of the House.
  Mr. Deputy Speaker (Sir Paul Dean): Order. These are matters for debate.
  Mr. Cryer: I am grateful, Mr. Deputy Speaker, for your comment indicating that last night's events were perfectly proper and entirely within the provisions of Standing Orders of the House. Yet we are being accused by the Government of breaching them, when that is patently not true.
  I must say that I feel very critical of—and angry with—Conservative Members who make such imputations about the Chair. As the House knows, any occupant of the Chair would draw the House's attention to any breach of Standing Orders immediately: he would not need to wait for 24 hours for guidance from some Back Bencher seeking a quarrel where none existed. [Interruption.] My hon. Friends tell me that the hon. Gentleman is highly unqualified to make any such comment, because he was not even here: no doubt he was tucked up in his Division Bell flat.
  Mr. Brian Wilson: I am grateful as this debate has enabled me to learn about the concession which my hon. Friend the Member for Bradford, South (Mr. Cryer) succeeded in obtaining late last night. I suggest that that one concession which will be appreciated by playgroups throughout the country is considerably more valuable than anything that the hon. Member for Stockton, South (Mr. Devlin) will do in this place if he lives to be 100. To illustrate the synthetic outrage displayed by Conservative Members in their concern about the Children Bill, will my hon. Friend remind the House how many Government amendments to the Children Bill have been tabled this week? Might that not be a measure of their high regard for getting it through?
  Mr. Cryer: I understand that the Government tabled some 400 amendments to the Children Bill. That demonstrates either very bad drafting or concessions in the Committee. Frankly, given this Government's record, the notion that they would make a large number of concessions—although they allowed some on the Children Bill—is not borne out by experience. On Bill after Bill the Government have rejected our modest and minor amendments. It is obviously a mixture of drafting a Bill that is not up to the standards required by the House but approved by the Government, and a number of concessions.
  Mr. Vaz: It is important to dispel the myth that there was no co-operation between the two sides of the House concerning the Children Bill. We co-operated throughout the Children Bill, even when we had reached this stage in our deliberations. We co-operated to such an extent that we did not press new clause 5, which I proposed. to a Division because we believed that it was important to make progress. At 2.30 this morning when the hon. Member for Stockton, South (Mr. Devlin) was in bed, I and my hon. Friend the Member for Middlesbrough (Mr. Bell) argued that we should continue debating the Children Bill as it was so important to get the measure through.
  Mr. Cryer: Yes, indeed. A number of us voted that way, unlike the Government who voted for closure, of course without the assistance of the hon. Member for Stockton. South, who, as my hon. Friend pointed out, was in bed.
  My understanding is that there has been a good deal of co-operation on the Children Bill. It is quite false and inaccurate for any Conservative Member to argue that that is not the case. Although the Bill has had a great deal of cross-party support, and although it was discussed in Committee in a spirit of assistance from the Opposition, the Government have tabled a huge number of amendments. That suggests that the Government are dealing with these matters in too much haste.
  I accept that the Children Bill covers a number of delicate and difficult matters, and therefore the legislation has to be phrased very carefully, as clearly as we can, to make sure that children's rights are properly protected. But that process will not be enhanced by a guillotine—it will be denied. If we are charitable towards the Government—and that is not easy—they must realise that in what they recognise by the number of amendments that they have tabled, to be a delicate and difficult legislative area the process will not be assisted by haste. The Government have to face up to the brutal fact that the measure needs more time because the Government have frittered away the past 12 months on monster Bills such as the Water Bill which was in two volumes. They abused the House by putting through vast quantities of legislation. During proceedings on the Electricity Bill to privatise electricity, the procedure was changed, as a last gasp from the then Secretary of State for Energy who announced that a separate corporation was to be set up to finance the closure of the Magnox reactors. All that was against the background that decisions were not being taken by the Cabinet and changes were being made, yet the House is supposed to deal with this huge volume of legislation.
  I was present on Second Reading of the Children Bill. The Government embarked on a cynical manoeuvre. The Minister said that he hoped that there would be consensus

  981
  and understanding. Much common concern was expressed by hon. Members, and he said that he hoped that the Bill would not become a political issue. By their brutal treatment of the House, the Government made it a political issue. The Bill does not deserve such brutal treatment.
  The Government must accept that they will not pass legislation in the time that they have allocated. If they want to deal properly with the Children Bill they will simply have to allocate more time. Of course they do not want to do so, because their obsession with their political ideology and their fear of the Prime Minister prevents them from offering time to allow proper discussion of a decent Bill such as the Children Bill.
  Mr. Peter L. Pike: I am sure that my hon. Friend is aware that the group of amendments that we were about to debate last night on the Children Bill dealt with grandparents' rights. My hon. Friend will realise that the issue was not raised only this year, because hon. Members have been tabling early-day motions about it for years. Many people inside and outside the House will be concerned to hear that a guillotine motion is to be introduced tomorrow, thereby not allowing enough time for that important principle, and many others, to be debated properly.
  Mr. Cryer: My hon. Friend is right. One of the reasons why I voted against adjourning debate on the Children Bill was that I knew that for several years my hon. Friend the Member for Ogmore (Mr. Powell), aided by other people, had tabled early-day motions and campaigned for grandparents' rights. He was willing to move amendments to the Bill, but he was denied that opportunity, which is outrageous.
  Mr. Spearing: The earlier part of the debate to adjourn debate on the Bill was understandably, and quite properly, partisan. I suggest to hon. Members that we should not be partisan on the Children Bill. The public often worry that we are over-partisan. Is it not a fact that time and consideration of the Children Bill are of the essence to get it right? The number of amendments that have been tabled to that non-controversial Bill suggest just that. If the Government are suggesting that they, or any political party, should get themselves out of an embarrassment that they have got themselves into through unwise legislation or an overloaded timetable, or both, by sacrificing proper consideration on a non-party political basis of such a sensitive and important issue, that is surely unworthy of any Government. I therefore appeal to the Leader of the House to reconsider the principle of a guillotine on the Bill—least of all this week—and to consider another way of proceeding, such as reintroducing the Bill in the next Session of Parliament.
  Mr. Cryer: My hon. Friend is right. A further abuse of Parliament is that the Government propose to give additional powers to Ministers on many Bills. They are saying, "We have not time to deal with detailed aspects of Bills. Therefore, we shall give widespread delegated powers to Ministers to deal with the details." If the House had adequate powers for dealing with delegated legislation there might be an argument for doing that. As my hon.
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  Friends know, I chair the Joint Select Committee on Statutory Instruments. Frankly, the means of dealing with delegated powers are totally inadequate.
  Very shortly, in November, we shall have a meeting of the Commonwealth conference on delegated powers here in London. My guess is that most of the other Commonwealth countries will be able to show us a good deal of better practice in dealing with delegated legislation. One Conservative Member said that it is going to be an exciting conference. He was joking. It will be dull and detailed work. However, it is absolutely necessary if Parliament is to exercise some scrutiny of Ministers' powers, which must be examined to see whether they are using them arbitrarily or whether they are the powers that Parliament has granted.
  1 am
  That sort of work carried out by a Committee which does not have the right of debate on the Floor of the House, is best carried out in Committee upstairs and, of course, examined by all hon. Members on Report. It is far better that the House should examine Bills in detail on Report than simply shuffle off powers to Ministers and let them get on with it. That is an abrogation of our duty. By introducing this timetable motion, the Government are demonstrating an abrogation of parliamentary rights to carry out those duties. As an hon. Member implied by his lofty joke, the Statutory Instruments Committee's work is detailed. It is actually much more interesting to deal with Bills on the Floor of the House, yet we are being denied that opportunity because of the Government's obduracy.
  Mr. Nellist: To ensure that the issue is properly considered, will my hon. Friend care to play devil's advocate in his own argument and consider the opposite side of the coin? Let us consider a Labour Government bringing forth enabling legislation in the form of an industry measure, which would give a Labour Secretary of State for Industry the power to nationalise companies and then, one by one, through either a statutory instrument or regulation, hand over to the Department as and when was necessary to speed up and complete the process as quickly as possible the necessary powers to take over industry after industry. I have heard that argument put forward over the past 10 or 15 years as an elegant and efficient solution to the time-wasting delays that a Labour Government could face from a future Tory Opposition. Will my hon. Friend explore that possibility?
  Mr. Deputy Speaker: I am sure that, in responding to that question, the hon. Member for Bradford, South (Mr. Cryer) will stick to the terms of the motion that we are discussing.
  Mr. Cryer: Indeed, Mr. Deputy Speaker.
  It is an interesting train of thought. I am arguing against the proposal to adjourn the debate on the Companies Bill and also on the guillotine proposals that the Leader of the House has produced. The Government will go ahead and try to get their troops into the Lobby to support the adjournment of the debate today or tomorrow, whichever is the correct parliamentary term, to pass the guillotine motions. If a Labour Government were giving delegated powers to take into public ownership companies which were necessarily to be collectively owned and responsible to generate the devastating manufacturing economy that we shall inherit at the next general election,

  983
  the Conservative Opposition would say, "It's the slippery slope of Fascism. It's Communism gone mad. It's a Marxist dictatorship that is about to take over. Where are our rights as Members of Parliament?" That is what they would be saying and that is what they said when there was a Labour Government between 1974 and 1979.
  I was a member of that Labour Government and I recall the activities of the present Secretary of State for Trade and Industry who was then just the hon. Member for Cirencester and Tewkesbury (Mr. Ridley). After the first 12 months of disbelief that their inherited right to govern had been somehow upset, when the Conservatives finally got some confidence back, they used every dodge to delay and obstruct that Labour Government. Because they were involved in financial arrangements, the Conservatives also used lobbying organisations outside this place in a very unscrupulous way. Labour Members would not do that.
  Mr. Skinner: At the beginning of his response to my hon. Friend the Member for Coventry, South-East (Mr. Nellist), my hon. Friend the Member for Bradford, South (Mr. Cryer) referred to the Tories getting their troops through the Lobbies to get this motion to adjourn the debate carried tonight. It just crossed my mind that if the Tories were down to about 119 votes in the last Division, and as a lot of Tories want to get home to bed, if my hon. Friend the Member for Bradford, South and one or two of my colleagues continued to talk for a considerable time about this very important issue, the Government might not have the 100 votes to close the debate. If they did not have 100 votes to close it, they really would be in Dicky's meadow, wouldn't they?
  Mr. Cryer: As my hon. Friend said, the Conservative Whip is now receiving messages, no doubt from telephonic communications, calling on the loyalty of Conservatives who are asleep in bed to come here to vote.
  The Government have moved this motion, but we would prefer to be debating the Companies Bill. We do not want to examine the motion in detail. However, now that the Government have tabled it, they should not be too saddened by our desire to examine it in some detail especially given the Government's unprecedented link between the guillotine motions on the Companies Bill and the Children Bill.
  The Leader of the House did not introduce the two guillotine motions in a spirit of progress or to move on the business; he introduced them in a spirit of revenge. The Government have the troops and they have tabled the motions because we have debated issues and taken up more time than the Government had planned for. The Government do not want to have to keep their troops in the House too long. They have an unmanageable spill-over period, but they want to chop off the debate and send their troops back to their constituencies and whatever activities the Tory Members get up to. They want to give them a few days' holiday before the new Session of Parliament. That idea is not working because there is too much legislation. Our extra scrutiny is causing the Government problems and we have seen chaos over the past two days.
  As I have emphasised, the Opposition are simply examining the Bills in detail. I took part in yesterday's examination of the Children Bill. What about tonight's debate and the companies legislation?
  Mr. Vaz: Can I press my hon. Friend on the suggestion made by my hon. Friend the Member for Newham, South (Mr. Spearing)? My hon. Friend the Member for Newham, South was not aware of the detailed negotiations between the Opposition and the Minister for Health. I want to pay tribute to the Minister for Health for the way in which he conducted the Children Bill and for allowing us to discuss important matters with his officials.
  Does my hon. Friend the Member for Bradford, South (Mr. Cryer) agree that in view of the seriousness of the Children Bill, it would be a good idea—if the Leader of the House cannot guarantee what we asked for originally, namely, an extra day's debate—that the Bill should be withdrawn and reintroduced in the new Session instead of rushing through important issues such as the grandparents' rights clauses and the Government's wish, in clause 84, to abolish the ancient jurisdiction of wardship that has been with us for more than 450 years?
  Mr. Cryer: That is a useful idea. We could also drop some other item of legislation that is equally complex and lengthy, such as the Companies Bill, and reintroduce it later. A number of useful formulae could facilitate the House in its examination of the Children Bill. The Self-Governing Schools etc. (Scotland) Bill, the Employment Bill and the Local Government and Housing Bill could be dropped to make way for it.
  The Goverment may say that they promised the Prime Minister—she is on her way back from Kuala Lumpur—that all the business would be got through. Some Bills are relatively obscure and I suspect that if the Self-Governing Schools etc. (Scotland) Bill was dropped and reintroduced during the next Session it might entirely escape the Prime Minister's notice.
  The Leader of the House has the opportunity of entering into negotiations to allow the Children Bill to be exempt from the guillotine procedure. Although the Leader of the House is deep in conversation about tactics for tonight, I appeal to him on behalf of my hon. Friends.
  I remember the hon. and learned Member for Putney (Mr. Mellor) in his guise as a Minister at the Foreign and Commonwealth Office. He used to combine arrogance and vindictiveness to an unusual degree. When he made his Second Reading speech on the Children Bill he was a changed man. He was genuinely conciliatory and willing to help. Therefore, he got a response from us. There is a large degree of good will among those hon. Members who have taken the trouble to examine the Bill. No doubt that good will is shared by those hon. Members who have not taker' the trouble to read the Bill, but who agree, in principle, that it is a good thing to pass a Bill to provide more. protection for children. There is a big question over the resources necessary to finance some of its provisions, but there is an underlying consensus on the Bill, so it would not be a bad idea if the Leader of the House interjected al this stage to say that he would consider negotiations to exempt that Bill from the guillotine motion. It would be to the Government's credit if they did that. It would mean that the Government recognise that a parliamentary democracy has some merit and is not simply a mechanism by which they can push through their ideologically committted pieces of legislation and damn the rest. The rest includes the Children Bill.
  I note that the right hon. and learned Gentleman is not rising to seize that opportunity offered to him to create good will and a sense of value in the democratic processes.

  985
  If there were an agreement to remove the guillotine on the Children Bill it would mean that part of the democratic process was being used. The trouble is that the Government do not recognise democracy very much. The only ideas that they recognise are their own and they do not even recognise that this place has any part to play.
  The Children Bill was the subject of the right hon. and learned Gentleman's statement, but it is also important to consider the Companies Bill, which is a highly complicated measure. It is designed to scrutinise the operation of companies, the subject of continuous scrutiny by the House during the past 25 years. In recent years a number of items relating to company legislation have been discussed, so it will not do any harm if the Bill is reintroduced in the next Session. The fact that it was introduced in the other place suggests that the Government regard it as non-controversial. My hon. Friends and I would not regard it entirely in that way, but that is the Government's view. Frankly, because the Bill is so complicated——
  Mr. Campbell-Savours: On a point of order, Mr. Deputy Speaker. I have just seen the hon. Member for Stockton, South (Mr. Devlin) approach the Government Chief Whip, ask for the right to speak and be told that he cannot. That is an intrusion into the rights of hon. Members. If the hon. Gentleman wishes to speak, he should be allowed to do so. It is not for Whips to instruct hon. Members that they cannot speak in a debate such as this.
  Mr. Deputy Speaker: The hon. Gentleman should not speculate in the middle of another hon. Member's speech.
  Mr. Cryer: I imagine that the House would probably be a good deal better off if the hon. Member for Stockton, South (Mr. Devlin) did not speak, but I certainly defend his right to speak in the House. My hon. Friend the Member for Workington (Mr. Campbell-Savours) has done the House a service in raising this matter because if the hon. Gentleman were to speak we could all get a cup of tea while he was holding forth and come back in time for the Division. However, it is a sorry business if the Government Chief Whip is so instructing members of his own party, and it is even more disturbing that Conservative Members do not even have the guts to say "no" to the Chief Whip. They do not have sufficient independence and commitment to democracy to rise and speak. It is true that they will not get the opportunity to do so for a little while because I have a few remarks to make about the Companies Bill. After all, the Government have given us this opportunity and I am loth to allow it to pass.
  The Companies Bill is lengthy and complicated. Having had a lot of advice from their legion of civil servants—the Department of Trade and Industry has carried out inquiries into company after company and has produced many valuable reports—it is rather strange that the Government have tabled a thousand amendments to the Bill. We must consider the reasons for that. Was the Bill so badly drafted? Have there been so many changes in the positions of companies that the Government have needed to produce a thousand amendments? Surely, it is reasonable for companies to expect to have some degree of certainty about the procedures and passage of legislation. I should have thought that the degree of uncertainty in the
  986
  Government's mind, which in turn is producing uncertainty in companies, would merit the Government giving some serious consideration to deferring the Companies Bill to the next Session. That seems the proper way to proceed. I should have thought that in these circumstances, the Companies Bill deserved lengthy consideration.
  There was an unfortunate interruption in my membership of the House due to a realignment of the boundaries, but I recall the introduction of a private Bill in 1982, entitled the Lloyds Bill. Some of us opposed it because we said that self-regulation was not the answer. However, self-regulation is the path that the Government have gone down.
  Opposition Members want to try to ensure that the Companies Bill is better than the Government have proposed, and that is why we have tabled a modest number of amendments. Certainly, in comparison to the number of amendments that the Government have tabled, the Opposition have been positively parsimonious with their amendments. It is not as though the Opposition had decided to flood the Amendment Paper with amendments because if we had wanted to hold up the Bill as a simple matter of course we could have done so. That is a technique open to the Opposition, but no, we have not taken that course. We decided what we would do as a constructive Opposition, scrutinising matters carefully and disagreeing with the Government's ideology, although, as always, we were in a difficult position because this is a grey area. Should we go for all out opposition, or should we try to improve parts of the Bill and help its passage? These are matters of judgment for the Opposition. We adopted the moderate view that we should try to improve the legislation, to afford genuine protection to the people affected by the Companies Bill—the shareholders, directors and employees.
  We wanted, for instance, to improve the Bill by giving shareholders the right to ballot—not an unreasonable view, given the Government's obsession with balloting for the trade unions. We thought that we would take a leaf out of their book and give shareholders the right to decide matters such as political contributions. We tabled a new clause to that effect. We did not table 200 of them, as we could have. We tabled some carefully phrased, moulded and targeted amendments in the best traditions of a constructive Opposition who are biding their time until the general election, after which we shall produce carefully phrased, well drafted and targeted legislation when we form the next Labour Government.
  The Government have many resources at their disposal—thousands of civil servants, and advisers on whom they spend about £4 million a year at the taxpayers' expense. I noticed that The Guardian said today that these advisers are paid for largely by the Conservative party. That is not true: I tabled many questions on this and the Government would not disclose the cost——
  Mr. Skinner: The company known as the Tory party has more or less gone bust. I have just seen a junior Whip tell the Chief Whip, roughly speaking, "They ain't got a hundred." The Chief Whip pulled a face and sent him out again. That is one reason why the Chief Whip is not moving the closure on this part of the proceedings. The Government have not dared move the closure on my hon. Friend, so they are in more serious trouble than we first thought.
  Mr. Cryer: My hon. Friend raises a serious issue. The Government have trampled on parliamentary rights by proposing to adjourn this debate and by producing two guillotine motions later today, but I hesitate to contemplate the idea of their moving the closure on a debate to adjourn consideration of the Companies Bill. That would be outrageous. It is the sort of thing that happened in pre-war Germany. I cannot believe that even this Government would stoop to the gutter of anti-democratic practice and do that. [Interruption.] The hon. Member for Orkney and Shetland (Mr. Wallace) says that I am gullible. He should have said that I have a touching faith in democracy, but it has been severely wounded tonight by the Government's actions.
  My endeavours in this place have included discussions of Ways and Means resolutions. At the beginning of my speech, five or 10 minutes ago, I touched on them. On Friday there is to be a Ways and Means resolution on the Football Spectators Bill. I have raised——
  Mr. Deputy Speaker: Order. I cannot see what a motion on the Football Spectators Bill has to do with this motion.
  Mr. Cryer: Perhaps I can remind you, very humbly, Mr. Deputy Speaker, that when the Leader of the House moved this motion, he said that the Children Bill, which is to guillotined, will be taken after the Ways and Means resolution on Friday 27 October.
  One of the genuine strengths of this place is that there are a lot of loopholes, and it is possible to use this place to raise issues which I suspect is not possible in younger, more mannered, legislatures. Ways and Means resolutions have provided me and other hon. Members with interesting ways in which to raise issues.
  Mr. Vaz: I do not know whether my hon. Friend is aware that I served on the Standing Committees which considered the Children Bill and the Football Spectators Bill. The problem for those of us who have been involved with the two Bills is that there will not be enough time on Friday to consider the issues that they both raise. We understand that the Football Spectators Bill is to be amended quite substantially by the Minister for Sport and the Home Office, as a new criminal offence is to be created in clause 2. The Leader of the House's statement makes it very difficult for all of Friday's business to be considered properly, hearing in mind the fact that there is to be a guillotine motion on the Football Spectators Bill on Monday.
  Mr. Cryer rose——
  The Parliamentary Secretary to the Treasury (Mr. David Waddington) rose——
  Mr. Nellist: I spy strangers.
  Mr. Skinner: I spy strangers.
  Mr. Waddington rose in his place and claimed to move, That the Question be now put.
  The House proceeded to a Division—
  Notice being taken that Strangers were present, MR. DEPUTY SPEAKER, pursuant to Standing Order No. 143 (Withdrawal of Strangers from the House), put forthwith the Question, That strangers do withdraw:—
  The House divided: Ayes 6, Noes 132.

  Division No. 350]

  [1.28 am

  AYES

  Barnes, Harry (Derbyshire NE)

  Wilson, Brian

  Campbell-Savours, D. N.

  Flynn, Paul

  Tellers for the Ayes:

  Lofthouse, Geoffrey

  Mr. Bob Cryer and

  Salmond, Alex

  Mr. Dennis Skinner.

  NOES

  Aitken, Jonathan

  Hunt, Sir John (Ravensbourne)

  Alison, Rt Hon Michael

  Hunter, Andrew

  Amess, David

  Illsley, Eric

  Amos, Alan

  Irvine, Michael

  Arbuthnot, James

  Jack, Michael

  Ashby, David

  Janman, Tim

  Atkinson, David

  Jessel, Toby

  Baker, Nicholas (Dorset N)

  Jones, Martyn (Clwyd S W)

  Batiste, Spencer

  Kennedy, Charles

  Bellingham, Henry

  Kirkwood, Archy

  Bennett, Nicholas (Pembroke)

  Knapman, Roger

  Biffen, Rt Hon John

  Knight, Greg (Derby North)

  Boswell, Tim

  Knight, Dame Jill (Edgbaston)

  Bowis, John

  Lang, Ian

  Brazier, Julian

  Latham, Michael

  Buck, Sir Antony

  Lilley, Peter

  Burns, Simon

  Lofthouse, Geoffrey

  Burt, Alistair

  Lord, Michael

  Butterfill, John

  Lyell, Sir Nicholas

  Campbell, Menzies (Fife NE)

  Maclean, David

  Carlisle, Kenneth (Lincoln)

  McLoughlin, Patrick

  Carrington, Matthew

  Mans, Keith

  Carttiss, Michael

  Martin, David (Portsmouth S)

  Cash, William

  Maxwell-Hyslop, Robin

  Chapman, Sydney

  Meale, Alan

  Chope, Christopher

  Meyer, Sir Anthony

  Coombs, Anthony (Wyre F'rest)

  Mills, Iain

  Coombs, Simon (Swindon)

  Nellist, Dave

  Cousins, Jim

  Nicholls, Patrick

  Cran, James

  Nicholson, Emma (Devon West)

  Cummings, John

  Norris, Steve

  Cunliffe, Lawrence

  Pike, Peter L.

  Curry, David

  Redwood, John

  Davis, David (Boothferry)

  Ridley, Rt Hon Nicholas

  Devlin, Tim

  Sackville, Hon Tom

  Dorrell, Stephen

  Sainsbury, Hon Tim

  Douglas-Hamilton, Lord James

  Shaw, David (Dover)

  Dover, Den

  Shephard, Mrs G. (Norfolk SW)

  Durant, Tony

  Soames, Hon Nicholas

  Evennett, David

  Spearing, Nigel

  Ewing, Mrs Margaret (Moray)

  Speller, Tony

  Favell, Tony

  Stevens, Lewis

  Fields, Terry (L'pool B G'n)

  Stewart, Andy (Sherwood)

  Fishburn, John Dudley

  Stradling Thomas, Sir John

  Forman, Nigel

  Summerson, Hugo

  Forsyth, Michael (Stirling)

  Taylor, John M (Solihull)

  Forth, Eric

  Thompson, D. (Calder Valley)

  Freeman, Roger

  Thompson, Patrick (Norwich N)

  Gale, Roger

  Thorne, Neil

  Garel-Jones, Tristan

  Thurnham, Peter

  Glyn, Dr Alan

  Townsend, Cyril D. (B'heath)

  Golding, Mrs Llin

  Tracey, Richard

  Goodlad, Alastair

  Twinn, Dr Ian

  Goodson-Wickes, Dr Charles

  Waddington, Rt Hon David

  Griffiths, Peter (Portsmouth N)

  Wallace, James

  Gummer, Rt Hon John Selwyn

  Ward, John

  Hague, William

  Wardle, Charles (Bexhill)

  Hamilton, Neil (Tatton)

  Warren, Kenneth

  Hanley, Jeremy

  Watts, John

  Harris, David

  Welsh, Andrew (Angus E)

  Hayward, Robert

  Welsh, Michael (Doncaster N)

  Heathcoat-Amory, David

  Wheeler, John

  Hind, Kenneth

  Widdecombe, Ann

  Howarth, G. (Cannock & B'wd)

  Wood, Timothy

  Howe, Rt Hon Sir Geoffrey

  Hughes, John (Coventry NE)

  Tellers for the Noes:

  Hughes, Robert G. (Harrow W)

  Mr. Irvine Patnick and

  Hunt, David (Wirral W)

  Mr. Michael Fallon.

  Question accordingly negatived.
  Mr. Deputy Speaker: There appears to be some genuine misunderstanding about the previous Questions that I put, and there was a certain amount of noise, and spying of strangers. In order to be wholly fair to the House, and to avoid misunderstandings or difficulties, I am prepared to take the closure motion again if it is so moved.
  Mr. Waddington: I beg to move, That the Question be now put.
  Question put, That the Question be now put:—
  The House divided: Ayes 112, Noes 40.

  Division No. 351]

  [1.40 am

  AYES

  Aitken, Jonathan

  Howarth, G. (Cannock & B'wd)

  Alison, Rt Hon Michael

  Howe, Rt Hon Sir Geoffrey

  Amess, David

  Hughes, Robert G. (Harrow W)

  Amos, Alan

  Hunt, David (Wirral W)

  Arbuthnot, James

  Hunt, Sir John (Ravensbourne)

  Ashby, David

  Hunter, Andrew

  Atkinson, David

  Irvine, Michael

  Baker, Nicholas (Dorset N)

  Jack, Michael

  Batiste, Spencer

  Janman, Tim

  Bellingham, Henry

  Jessel, Toby

  Bennett, Nicholas (Pembroke)

  Knapman, Roger

  Biffen, Rt Hon John

  Knight, Greg (Derby North)

  Boswell, Tim

  Knight, Dame Jill (Edgbaston)

  Bowis, John

  Lang, Ian

  Brazier, Julian

  Latham, Michael

  Buck, Sir Antony

  Lilley, Peter

  Burns, Simon

  Lord, Michael

  Burt, Alistair

  Lyell, Sir Nicholas

  Butterfill, John

  Maclean, David

  Carlisle, Kenneth (Lincoln)

  McLoughlin, Patrick

  Carrington, Matthew

  Mans, Keith

  Carttiss, Michael

  Martin, David (Portsmouth S)

  Cash, William

  Maxwell-Hyslop, Robin

  Chapman, Sydney

  Meyer, Sir Anthony

  Chope, Christopher

  Mills, Iain

  Coombs, Anthony (Wyre F'rest)

  Nicholls, Patrick

  Coombs, Simon (Swindon)

  Norris, Steve

  Cran, James

  Redwood, John

  Curry, David

  Ridley, Rt Hon Nicholas

  Davis, David (Boothferry)

  Sackville, Hon Tom

  Devlin, Tim

  Sainsbury, Hon Tim

  Dorrell, Stephen

  Shaw, David (Dover)

  Douglas-Hamilton, Lord James

  Shephard, Mrs G. (Norfolk SW)

  Dover, Den

  Soames, Hon Nicholas

  Durant, Tony

  Speller, Tony

  Evennett, David

  Stevens, Lewis

  Fallon, Michael

  Stewart, Andy (Sherwood)

  Favell, Tony

  Stradling Thomas, Sir John

  Fishburn, John Dudley

  Summerson, Hugo

  Forman, Nigel

  Thompson, D. (Calder Valley)

  Forsyth, Michael (Stirling)

  Thompson, Patrick (Norwich N)

  Forth, Eric

  Thorne, Neil

  Freeman, Roger

  Thurnham, Peter

  Gale, Roger

  Townsend, Cyril D. (B'heath)

  Garel-Jones, Tristan

  Tracey, Richard

  Glyn, Dr Alan

  Twinn, Dr Ian

  Goodlad, Alastair

  Waddington, Rt Hon David

  Goodson-Wickes, Dr Charles

  Ward, John

  Griffiths, Peter (Portsmouth N)

  Wardle, Charles (Bexhill)

  Gummer, Rt Hon John Selwyn

  Warren, Kenneth

  Hague, William

  Watts, John

  Hamilton, Hon Archie (Epsom)

  Wheeler, John

  Hamilton, Neil (Tatton)

  Widdecombe, Ann

  Hanley, Jeremy

  Wood, Timothy

  Harris, David

  Hayward, Robert

  Tellers for the Ayes:

  Heathcoat-Amory, David

  Mr. John Taylor and

  Hind, Kenneth

  Mr. Irvine Patnick.

  NOES

  Barnes, Harry (Derbyshire NE)

  Campbell, Menzies (Fife NE)

  Buckley, George J.

  Campbell, Ron (Blyth Valley)

  990

  Campbell-Savours, D. N.

  Lofthouse, Geoffrey

  Cousins, Jim

  Macdonald, Calum A.

  Cryer, Bob

  Marion, Mrs Alice

  Cummings, John

  Meale, Alan

  Cunliffe, Lawrence

  Nellist, Dave

  Davies, Rt Hon Denzil (Llanelli)

  Pike, Peter L.

  Dixon, Don

  Prescott, John

  Dobson, Frank

  Quin, Ms Joyce

  Ewing, Mrs Margaret (Moray)

  Salmond, Alex

  Fields, Terry (L'pool B G'n)

  Skinner, Dennis

  Flynn, Paul

  Spearing, Nigel

  Foster, Derek

  Vaz, Keith

  Garrett, John (Norwich South)

  Wallace, James

  Godman, Dr Norman A.

  Welsh, Andrew (Angus E)

  Hughes, John (Coventry NE)

  Welsh, Michael (Doncaster N)

  Hughes, Robert (Aberdeen N)

  Wilson, Brian

  Illsley, Eric

  Jones, Martyn (Clwyd S W)

  Tellers for the Noes:

  Kennedy, Charles

  Mr. Frank Haynes and Mrs. Llin Golding.

  Kirkwood, Archy

  Question accordingly agreed to.
  Question put accordingly, That further consideration of the Bill be now adjourned:—
  The House divided: Ayes 113, Noes 38.

  Division No. 352]

  [1.51 am

  AYES

  Aitken, Jonathan

  Hamilton, Hon Archie (Epsom)

  Alison, Rt Hon Michael

  Hamilton, Neil (Tatton)

  Amess, David

  Hanley, Jeremy

  Amos, Alan

  Hayward, Robert

  Arbuthnot, James

  Hind, Kenneth

  Ashby, David

  Howarth, G. (Cannock & B'wd)

  Atkinson, David

  Howe, Rt Hon Sir Geoffrey

  Baker, Nicholas (Dorset N)

  Hughes, Robert G. (Harrow W)

  Batiste, Spencer

  Hunt, David (Wirral W)

  Bellingham, Henry

  Hunt, Sir John (Ravensbourne)

  Bennett, Nicholas (Pembroke)

  Hunter, Andrew

  Biffen, Rt Hon John

  Irvine, Michael

  Boswell, Tim

  Jack, Michael

  Bowis, John

  Janman, Tim

  Brazier, Julian

  Jessel, Toby

  Buck, Sir Antony

  Knapman, Roger

  Burns, Simon

  Knight, Greg (Derby North)

  Burt, Alistair

  Knight, Dame Jill (Edgbaston)

  Butterfill, John

  Lang, Ian

  Carlisle, Kenneth (Lincoln)

  Latham, Michael

  Carrington, Matthew

  Lilley, Peter

  Carttiss, Michael

  Lord, Michael

  Cash, William

  Lyell, Sir Nicholas

  Chapman, Sydney

  Maclean, David

  Chope, Christopher

  McLoughlin, Patrick

  Coombs, Anthony (Wyre F'rest)

  Mans, Keith

  Coombs, Simon (Swindon)

  Martin, David (Portsmouth S)

  Cran, James

  Maxwell-Hyslop, Robin

  Curry, David

  Meyer, Sir Anthony

  Davis, David (Boothferry)

  Mills, Iain

  Devlin, Tim

  Nicholls, Patrick

  Dorrell, Stephen

  Nicholson, Emma (Devon West)

  Douglas-Hamilton, Lord James

  Norris, Steve

  Dover, Den

  Patnick, Irvine

  Durant, Tony

  Redwood, John

  Evennett, David

  Ridley, Rt Hon Nicholas

  Fallon, Michael

  Sainsbury, Hon Tim

  Favell, Tony

  Shaw, David (Dover)

  Fishburn, John Dudley

  Shephard, Mrs G. (Norfolk SW)

  Forman, Nigel

  Soames, Hon Nicholas

  Forsyth, Michael (Stirling)

  Speller, Tony

  Forth, Eric

  Stevens, Lewis

  Freeman, Roger

  Stewart, Andy (Sherwood)

  Gale, Roger

  Stradling Thomas, Sir John

  Garel-Jones, Tristan

  Summerson, Hugo

  Glyn, Dr Alan

  Taylor, John M (Solihull)

  Goodlad, Alastair

  Taylor, Teddy (S'end E)

  Goodson-Wickes, Dr Charles

  Thompson, D. (Calder Valley)

  Griffiths, Peter (Portsmouth N)

  Thompson, Patrick (Norwich N)

  Gummer, Rt Hon John Selwyn

  Thorne, Neil

  Hague, William

  Thurnham, Peter

  991

  Townsend, Cyril D. (B'heath)

  Wheeler, John

  Tracey, Richard

  Widdecombe, Ann

  Twinn, Dr Ian

  Wood, Timothy

  Waddington, Rt Hon David

  Ward, John

  Tellers for the Ayes:

  Wardle, Charles (Bexhill)

  Mr. David Heathcoat-Amory and

  Warren, Kenneth

  Mr. Tom Sackville.

  Watts, John

  NOES

  Barnes, Harry (Derbyshire NE)

  Kirkwood, Archy

  Buckley, George J.

  Lofthouse, Geoffrey

  Campbell, Menzies (Fife NE)

  Macdonald, Calum A.

  Campbell, Ron (Blyth Valley)

  Mahon, Mrs Alice

  Campbell-Savours, D. N.

  Meale, Alan

  Cousins, Jim

  Nellist, Dave

  Cryer, Bob

  Pike, Peter L.

  Cummings, John

  Quin, Ms Joyce

  Cunliffe, Lawrence

  Salmond, Alex

  Dixon, Don

  Skinner, Dennis

  Dobson, Frank

  Spearing, Nigel

  Ewing, Mrs Margaret (Moray)

  Vaz, Keith

  Fields, Terry (L'pool B G'n)

  Wallace, James

  Flynn, Paul

  Watson, Mike (Glasgow, C)

  Foster, Derek

  Welsh, Andrew (Angus E)

  Garrett, John (Norwich South)

  Welsh, Michael (Doncaster N)

  Godman, Dr Norman A.

  Wilson, Brian

  Hughes, John (Coventry NE)

  Illsley, Eric

  Tellers for the Noes:

  Jones, Martyn (Clwyd S W)

  Mr. Frank Haynes and

  Kennedy, Charles

  Mrs. Llin Golding.

  Question accordingly agreed to.
  Bill, as amended (in the Standing Committee), to be further considered this day.
  2.2 am
  Mr. Frank Dobson: On a point of order, Mr. Deputy Speaker. I should be grateful if you could tell us whether you were notified of the intention of the new Leader of the House to make a business statement after midnight. Certainly the Opposition were not so notified—[Interruption.] Given the chiacking of those opposite, normally referred to as the Conservative party, one would have expected them to endorse the idea that the customs and practices of the House should be carried out.
  I think you will confirm that, certainly within the memory of any Opposition Member, it has been the custom and practice of the Government to inform the Opposition in advance of any intention to make a business statement in the House. We regard it as a most inauspicious start for the new Leader of the House, the first time some sort of crisis occurs, not to follow the usual courtesies. Therefore, I should be grateful to know whether you, Mr. Deputy Speaker, were notified in advance. It is only right that hon. Members should know such things in advance so that they can be in their places if they so wish.
  Let me take this opportunity to make it clear that, from 9 o'clock this evening, the official Opposition received no approaches whatever from the Government about any of the matters under consideration. [Interruption.] I understand from the cries from the Government Benches that many Conservative Members were not around. Opposition Members were present. This shambles, like the shambles of the carry-over Session, results from the Government's incompetence and inability to plan or to pass their legislation.
  In view of the fact that 18 months ago I was criticised by Mr. Speaker for not making our protests about guillotine motions clear, it is proper for me to register the
  992
  fact that we are entirely dissatisfied about not receiving the usual warning or usual courtesies that make the usual channels possible.
  Several Hon. Members rose——
  Mr. Deputy Speaker: Order. I shall deal with this point of order first. I was not in the Chair at the time, but I understand that the hon. Member for Holborn and St. Pancras (Mr. Dobson) is under a misapprehension. The Leader of the House rose to move that further consideration of the Bill be now adjourned. In doing so, as he was entitled to do, he made a speech. It is not customary for the Chair, or anyone else, to receive notice of such a motion.
  Mr. Dobson: Why have I in my possession, supplied by the Government after the statement was made, a statement that reads:
  "Business of the House.
  With permission, Mr. Speaker, I should like to make a short statement about the changes in the business for this week"?
  How was it possible for the people working the annunciator to display "Business Statement" on the annunciator when the Leader of the House rose, giving some hon. Members the opportunity to scurry into the Chamber? Why were we not given the normal warning?
  Several Hon. Members rose——
  Mr. Deputy Speaker: Order. Let me deal with this point of order. I can only repeat what I have told the hon. Gentleman, which is that what happened was perfectly in order. It may be, and I shall make inquiries about this, that when the annunciator operators realised that in moving the motion the Leader of the House had made a statement about future business, they thought it might be of some assistance to display that for the House. I repeat that what happened was perfectly in order. The Leader of the House rose to move that further consideration of the Bill be now adjourned and made a short speech. It is not normal for the Chair, or anyone else, to be informed of when such a motion is to be moved.
  Mr. Cryer: On a point of order, Mr. Deputy Speaker. The fact is that two items were dealt with. One was the motion that debate on the Companies Bill be adjourned, but there was a separate issue. The Leader of the House used the words "business statement" and announced changes in this week's business to the House. You, Mr. Deputy Speaker, were not in the Chair when I raised a point of order with Madam Deputy Speaker and asked for questions to be allowed. However, because the Leader of the House had not distinguished between the two items clearly, we continued by discussing the motion on the reporting of progress on the Companies Bill.
  The changes that the Leader of the House has announced for the business for the week are still outstanding. I cannot recall any occasion when a business statement was made—those were the words that the Leader of the House used—but hon. Members were denied an opportunity to ask questions. I was denied the opportunity to finish my speech, but I would have incorporated questions to the Leader of the House in it, expecting him to reply at the end of the debate. That was stopped by the closure motion, which was accepted rather prematurely after only an hour and a half of debate.
  Mr. Deputy Speaker: Order. The hon. Gentleman is a very experienced parliamentarian. I am sure that he is not casting aspersions on the judgment of the Chair, but it sounded rather like that.
  Mr. Cryer: If I can explain, Mr. Deputy Speaker. I was taking into account the fact that there is a convention that, ordinarily, a debate lasts two hours before a closure is accepted, but, occasionally and unusually, Mr. Speaker or a Deputy Speaker may accept a closure within a short time. This clearly must have been one of those occasions.
  Surely hon. Members should be allowed to ask questions on the business statement, as is the usual custom and practice of the House, long hallowed by the tradition of this place. As the Leader of the House used those words, it seems only right and proper that we should be given such an opportunity.
  Mr. Spearing: Further to that point of order, Mr. Deputy Speaker. I have some sympathy with the Leader of the House, having got into an office when there are several unique problems. I can understand the difficulties. However, although, as you say, it was absolutely in order to make a short speech in moving the adjournment of the debate and to explain the reason why that was being done at that time, the absence of the usual courtesies and practices of the House precluded any hon. Member from asking questions about the business statement. That is of great importance.
  Strictly speaking, in accordance with your ruling, Sir, no statement has yet been made. All we have had is a speech from the Leader of the House supporting his motion for an adjournment, which has now been passed, but we have had no statement as such. I saw the annunciator when I was in the Library, so I hastened to the Chamber, but I was too late to hear the statement by the Leader of the House.
  Would it be proper and in accordance with the practice of the House for the Leader of the House to make a statement—I think that we have a short text—and then for short questions to be asked? I have a question which I have not been able to ask and which is consequent upon the statement. If I cannot do so that way, I wonder whether I can do it through a point of order, because it is a point of order about Friday's business and its conduct.
  Mr. Nellist: Further to that point of order, Mr. Deputy Speaker. Neither you nor I were in the Chamber at 12 midnight when the Leader of the House moved the adjournment motion and announced a change of business. I was in my office upstairs, three floors above the Chamber, when, at 12 o'clock, the annunciator indicated a business statement. I suspect that 95 per cent. of hon. Members in the Chamber at the moment were not in the Chamber at 12 o'clock.
  Mr. Cryer: They were boozing. That is the truth.
  Mr. Deputy Speaker: Order. This is not a point of order for me. [Interruption.]
  Mr. Nellist: If the lager louts opposite would belt up for a second I might be able to state my point of order.
  I suspect that 95 per cent. of hon. Members currently in the Chamber were not here at 12 o'clock, because—[Interruption.]
  Mr. Deputy Speaker: Order. The hon. Member must come to the point of order.
  Mr. Nellist: I shall try to do so, Mr. Deputy Speaker.
  The annunciator did not warn of the statement. That has become the practice in recent months and years when business statements are about to be made. I have two questions. First, in future, will you, Mr. Speaker, other Deputy Speakers and the authorities in the House in charge of the annunciator system reconsider whether there must be clear guidelines on how much notice is given to the operators so that they can give a minimum amount of notice to hon. Members that a business statement is about to be made? I suggest at least half an hour.
  Secondly, given that we had no notice, in support of my hon. Friends the Members for Newham, South (Mr. Spearing) and for Bradford, South (Mr. Cryer), will you now allow questions on the business statement to be put so that hon. Members who are now in the Chamber can ask questions?
  Mr. Frank Haynes: Further to that point of order, Mr. Deputy Speaker. I sympathise with the Leader of the House. He has been flying around the world for the past five years and he is a bit out of touch with the procedures of the House. He has had to consult the Tory Chief Whip to find out what to do—[HON. MEMBERS: "He cannot hear you, Frank."] You can hear them, Mr. Deputy Speaker, but you are not doing anything about it.
  I have been in the Chamber all night. The Leader of the House stood at the Dispatch Box and said that he was going to make a business statement—[Interruption.] The Leader of the House may shake his head and say that he did not say that. I heard him say that. He made his statement about the change in the business for tomorrow and Friday.
  I want you to clarify this, Mr. Deputy Speaker. The Leader of the House is denying this by shaking his head, as he did in response to my hon. Friend the Member for Bradford, South (Mr. Cryer). I hope that Hansard is not fiddled with. That is the danger, and that would be entirely wrong.
  Several Hon. Members rose——
  Mr. Deputy Speaker: Order. I have allowed these points of order to continue for a long time. They are an extension of the motion with which we have already dealt. I can only repeat that the motion that we debated, during which some hon. Members spoke at length and were able to deploy their arguments, was perfectly in order. It was moved by the Leader of the House and the House eventually reached a conclusion on it. It is wholly out of order to extend the debate on a motion on which the House has reached a conclusion. Furthermore, I have a shrewd suspicion that we may return to this subject tomorrow—or today.
  Mr. Dobson: Further to that point of order, Mr. Deputy Speaker. You have rightly ruled, and I recognise your difficulties because you were not in the Chair at the material time, as they would say in court. I was not in the Chamber at the material time either. Having been here all evening, I was having a cup of coffee. I was not warned about the statement and neither were the Opposition Chief Whip and Deputy Chief Whip. No one was warned. Whether or not that is in order, it is plainly contrary to the usual practices.
  The present Leader of the House's predecessor and Chair of the Services Committee announced some time ago that it would be the practice to warn Members of the

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  imminence of a statement with an announcement on the annunciator. If we are to receive warnings only when it suits the Government, that undertaking was not worth the breath he spent on it.
  In view of the fact that, like me, you were not in the Chamber at the material time, will you consult with those who were in the Chamber and with Mr. Speaker to ensure that in future the customary warnings are given? Had they been given, we could all have gone home some time ago.
  Mr. Deputy Speaker: I am satisfied that my ruling is correct. The points that the hon. Gentleman is raising now are not for the Chair. They would be better dealt with through the usual channels.
  Several Hon. Members rose——
  Mr. Deputy Speaker: Order. I have already allowed points of order, which have been an extension of a debate that was concluded some time ago, to continue for a considerable period. I am not prepared to take any further points of order on the same subject. If there are points of order on a different subject, I will take them. We must be fair to the rest of the business of the House. Hon. Members on both sides of the House are waiting patiently to take part in an important debate on merchant shipping.
  Several Hon. Members rose——
  Mr. Deputy Speaker: Order. I will take no further points of order on the previous issue, which I have dealt with clearly and on a number of occasions. If there are different points, I will hear them.
  Mr. Spearing: On a further point of order, Mr. Deputy Speaker. As one of those who is waiting for the next debate, I thank you for that remark. Please stop me if the point of order that I am about to raise is within the category you have mentioned.
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  Can you tell us what is likely to happen on a point of order on Friday as to the suspension of the rule to permit any form of business of which we have heard?
  Mr. Deputy Speaker: The hon. Gentleman knows very well that the Chair is never prepared to rule on a hypothetical situation, which may or may not arise on Friday.
  Mr. Spearing: Further to that point of order. Mr. Deputy Speaker. Is it not within the knowledge of the House that some change in the arrangements for Friday is now within the official knowledge of the House? In accordance with your ruling, which I would not challenge for one moment, is it not possible to question the Leader of the House on that matter? It has been the custom to do so under other circumstances, and no doubt that custom will return. Will the Leader of the House be able to enlighten us on this matter arising out of a point of order on business for Friday? Many people who will want to come to the business that he has advertised will want to know at what time and until when that business is likely to be taken.
  Mr. Deputy Speaker: I believe that the hon. Gentleman is forgetting that I assume that there will be a business statement tomorrow in the normal way. The House will have an opportunity to question the Leader of the House then. Surely that is the practical solution to what the hon. Gentleman has suggested.
  Mr. Wallace: Further to that point of order, Mr. Deputy Speaker. I accept fully the ruling that you have just given. If I understand it correctly, you said that, in moving the adjournment of the previous debate, the Leader of the House imparted information, in a supporting speech, regarding a change in the business. Is it a matter of order in this House for the business of the week to be changed in that way, or is a statement required?
  Mr. Deputy Speaker: That is not a matter for the Chair.

Merchant Shipping
2.21 am
The Minister for Aviation and Shipping (Mr. Patrick McLoughlin): I beg to move,
That the draft Merchant Shipping Act 1988 (Amendment) Order 1989, which was laid before this House on 17 October, be approved.
Mr. Deputy Speaker (Sir Paul Dean): I should inform the House that Mr. Speaker has not selected the amendment in the name of the hon. Member for Thanet, South (Mr. Aitken).
Mr. D. N. Campbell-Savours: On a point of order, Mr. Deputy Speaker. I am sorry to delay the House, but I want to raise an important issue. I was sitting in the Tea Room and I watched the shadow Leader of the House sprint to the Chamber——
Mr. Frank Dobson indicated dissent.
Mr. Campbell-Savours: No, Frank, that is correct, the word is sprint. My hon. Friend sprinted to the Chamber because he had no knowledge of what was happening in here as he had not been given notice.
Mr. Deputy Speaker: Order. I have dealt with that point. I call Mr. McLoughlin.
Mr. McLoughlin: The order gives effect to an interim order of the president of the European Court of Justice made on 10 October 1989. The interim order by the court requires the United Kingdom to suspend, until judgment in the main proceedings, the application of the British nationality requirements for registration of certain fishing vessels set out in section 14(1), (2) and (7) of the Merchant Shipping Act 1988. The affected fishing vessels are those that were fishing under the British flag up to 31 March 1989 with a licence granted under the Sea Fish (Conservation) Act 1967.
The court order is in restricted terms. It requires the United Kingdom to suspend the application of the British nationality requirement as a condition for the registration of fishing vessels as British fishing vessels to the extent that, at present, the owners, charterers, managers and operators of such vessels must either be British nationals, or in the case of a company, have at least 75 per cent. of its shares legally and beneficially owned by British nationals and at least 75 per cent. of its directors as British nationals.
The benefit of the court order is restricted to nationals of the European Community. It does not affect the requirement that such persons must be resident and domiciled in the United Kingdom. Morevoer, it does not affect the requirement that the vessels should be managed and their operations directed and controlled from within the United Kingdom. We do not know how many additional fishing vessels will now become eligible for registration on the United Kingdom fishing vessel register. That will depend on how many have been ineligible for registration by reason only of the nationality requirements that are changed by the order.
It might help if I fill in some of the background here. Part II of the Merchant Shipping Act 1988 introduced a new register of British fishing vessels. The main intention of this register was to restrict sea fishing rights so that the
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fishing quotas granted to the United Kingdom under the common fisheries policy benefited the genuine United Kingdom fishing fleet and the British communities dependent upon fishing. There were at the time a large number of fishing vessels that were fishing against the United Kingdom quotas, operating largely out of Spanish ports, and which had only a nominal British connection.
The fishing vessel register came into full effect on 1 April 1989, but vessels could transfer to it from old registers on or after 1 December 1988. Since then the overwhelming proportion of the United Kingdom fishing fleet, numbering over 10,000 vessels, has been registered in circumstances where my right hon. Friend the Secretary of State has been satisfied that they comply with the requirements of the Act. One hundred and twenty one have been refused registration primarily because they have not been able to demonstrate that beneficial ownership is British or that the vessels are managed, directed and controlled from the United Kingdom.
In the meantime, the European Commission on 10 August 1989 instituted an action under article 169 of the EEC treaty alleging that the United Kingdom had, in its imposition of the nationality requirement in sections 13 and 14 of the 1988 Act, failed to fulfil its obligations under the EEC treaty. The United Kingdom is defending these proceedings.
The Commission also brought an application for interim measures under article 186 of the treaty asking the court
"to order the United Kingdom to suspend, as regards nationals of the other Member States, the nationality requirements enshrined in sections 13 and 14 of the Merchant Shipping Act".
Judgment in respect of that application was delivered on 10 October and the order concerns that judgment alone. My hon. and learned Friend the Solicitor-General robustly argued the case for the United Kingdom on the grounds that, among other things, interim relief ought not be ordered where the Commission's case on the incompatibility of the nationality conditions with Community law was weak. In particular, he argued that a state has the right and duty under international law to prevent the abuse of its flag and to lay down the conditions for registration of ships that will fly its flag. He further submitted that the nationality requirements at issue were both consistent with international law and necessary to uphold the system of national quotas under the common fisheries policy, which are based on nationality.
The House will remember that the common fisheries policy was negotiated in minute detail by Ministers from each member state in a whole series of monthly meetings in Brussels when this system was set up in 1982–83. However, the court accepted the Commission's view that there was a prima facie case against the United Kingdom on the nationality issue and also that in the meantime certain "quota hoppers", particularly Spanish vessels that had hitherto fished against United Kingdom quotas, were suffering loss. The court, therefore, made its interim order to limit the loss of these fishermen pending the outcome of the main action—provided that they were able to satisfy the other conditions for registration to which I have already referred.
Mr. Jonathan Aitken: At this point in his interesting narrative, perhaps my hon. Friend could clarify one point. Is it correct that, immediately prior to the passage of the Merchant Shipping Act 1988, the

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United Kingdom Government showed the text of the Act to the European Commission and were given clearance for it as being compatible with European law at that time? If that is correct, how on earth have these curious legal actions now come about?
Mr. McLoughlin: I should point out the difference between the Commission and the European Court, which is what we are discussing tonight. [Interruption.] However, these points will he covered by my hon. and learned Friend the Solicitor-General who will seek to catch your eye, Madam Deputy Speaker, at the end of the debate.
The United Kingdom is obliged to give effect to the European Court order, which is why this order is before the House for approval. I said earlier, it is not certain what precise effects the relaxation of the nationality requirement will have. It may be very little since, as was recognised by the Commission itself, no more than a few fishing vessels are considered likely to be able to meet the other requirements which remain in force.
Several Hon. Members rose——
Mr. McLoughlin: I would rather not give way now, for the simple reason that a number of hon. Members want to speak in the debate, and there will be time later for my hon. and learned Friend to reply to the debate.
I refer to the requirements for residence and domicile in the United Kingdom and the direction and control of operations from the United Kingdom, which will still need to be satisfied.
Mr. William Cash rose——
Mr. McLoughlin: It is of course possible that certain Community nationals might decide to take up residence in the United Kingdom, but this would require positive action, which would include setting up their permanent home here.
Mr. James Wallace rose——
Mr. McLoughlin: In any event—[Interruption.]
Madam Deputy Speaker (Miss Betty Boothroyd): Order. It seems to me that the Minister has said that he is not prepared to give way at this stage. Hon. Members should not persist when that has been made clear.
Mr. McLoughlin: It would continue to be necessary in all cases to establish that beneficial ownership, management and direction and control of vessels rests within the United Kingdom. It would not be enough merely to have token representation in this country——
Mr. Wallace: The hon. Gentleman is thick.
Mr. McLoughlin: If the hon. Gentleman is so interested, perhaps he should be prepared to listen.
The Government's objective remains to take all proper steps to ensure that the benefits of the United Kingdom quota under the common fisheries policy accrue to the genuine United Kingdom fishing fleet—but, of course, all such steps must be in accordance with EC law. Since the European Court of Justice has required, on an interim basis, that that portion of the 1988 Act concerning the nationality requirements for registration be suspended pending full argument and the final decision in this case, I ask the House to approve the order.
2.33 am
Dr. Norman A. Godman: I offer my congratulations to the Minister on his new portfolio. I also offer him my condolences on having to perform the unwelcome role of ministerial messenger boy for the European Court of Justice and the Commission.
The order plainly shows that even the most recently enacted legislation in this Parliament is subject to a superior and more powerful court than any in the United Kingdom. The matter raises profound constitutional implications for Parliament and the people employed in the fishing industry.
This is not the first time that the Government and Parliament have been pulled into line by the European supreme court in Luxembourg. The Government were obliged to change section 37 of the Social Security Act 1975 because of an order from the court. It was amended in section 37 of the Social Security Act 1986. Similarly, the Government had to accept a ruling from the court concerning imports of long-life milk from France and other member states.
I am sure that the Minister will correct me if I am wrong in saying that no member state has sought to reject a ruling from the court. Am I right in thinking that this is the first time that Parliament and the Government have been instructed to amend a recent Act of Parliament by way of an interim injunction issued by the president of the court sitting on his own for half a day? When the injunction was announced a fortnight ago, the EC Fisheries Commissioner, Senor Manuel Marin, claimed—I suspect gleefully—that this was the first time in the history of the Community that the Court of Justice had revoked an application of a national law as a result of an interim injunction. This is a very serious matter for Parliament arid fishing. I am sure that the hon. Member for St. Ives (Mr. Harris) agrees.
Why have the Government responded with such astonishing alacrity? In all cases concerning substantive judgments made by this supreme court, the Governments concerned, including this one, have taken several months at the very least to amend the offending national legislation or regulations. Why the unseemly haste? I suppose that the Minister will cite the urgency of this matter and say that Spanish fishing interests are experiencing severe financial difficulties. I have news for the Minister. Many of our fishing interests are experiencing financial nightmares, from the south-west of England to the north-east coast of Scotland and the west coast of Scotland.
Mr. Wallace: And further north.
Dr. Godman: I beg the hon. Member's pardon. They will not forgive me in Shetland for that.
Can the Solicitor-General, who is to wind up this disgracefully short debate, confirm that six other member states discriminate according to nationality? I believe that I am right in saying that France, Belgium, the Federal Republic of Germany, Spain—not surprisingly—Denmark and the Irish Republic discriminate according to nationality, and reserve to their national fleet the quotas that are allocated to each country each year by the Council of Ministers. If that is the case, why has the United Kingdom been singled out ahead of these other

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transgressors? We are having to amend an Act of Parliament which came into force only in January this year.
I have considerable sympathy for the legitimate points of order that were raised on this matter this afternoon by the hon. Members for Southend, East (Mr. Taylor) and for Aldridge-Brownhills (Mr. Shepherd) and by my right hon. Friend the Member for Swansea, West (Mr. Williams). The hon. Member for Southend, East raised an important point when he argued that the matter is sub judice given that other cases concerning nationality are due to be heard in the near future.
If this supreme court is conjoined with our courts, why do we have to accede with such alacrity to an interim injunction? It is disgraceful that we are debating this issue at such a late hour and for just 90 minutes.
I said earlier that this is a most important matter for our fishing industry. I remind the House of the comments made by the right hon. Member for Southend, West (Mr. Channon) when he was Secretary of State for Transport and speaking on Second Reading of the Merchant Shipping Bill. He said:
"Part II deals with the very serious problem of foreign-owned fishing vessels registering in the United Kingdom in order to fish against our EC quotas. This is, I know, a matter of concern to hon. Members who represent fishing constituencies. … These are stringent requirements, but we believe they are essential if British fishing quotas are to be preserved for British fishermen. They have been carefully drawn up in consultation with the fishermen's organisations and widely welcomed by them."—[Official Report, 28 January 1988; Vol. 126, c. 510.]
My right hon. and hon. Friends and I wholeheartedly supported the Bill. There was no Division on Second or Third Reading.
Mr. Alex Salmond: Will the hon. Gentleman give way?
Dr. Godman: No, not for the moment.
The Minister said that this interim injunction does not affect the requirement that such persons must be resident and domiciled in the United Kingdom. Will the Minister explain those words? Does it mean that if I were Jose Romero, a Spanish fisherman, I would simply have to announce my intention to live here?—[Interruption.] I agree that I do not look very Spanish. Are there to be reciprocal arrangements whereby British fishermen can fish against, for example, the Spanish quota?
The Minister said that there are now about 10,000 fishing vessels on the register. He also said that he is not sure how many additional vessels may now become eligible for registration. Is it the Minister's intention to appoint a team of inspectors to assess the eligibility of applications for registration? Does the Minister agree that the injunction confounds the system of national quotas? Does he agree that the system of national quotas, based upon nationality, is the keystone of the common fisheries policy?
My fear is that the injunction may encourage other fishing interests in Spain and elsewhere to set up home in the United Kingdom. I also believe that the interim judgment will arouse considerable concern in the fishing industry that the Spanish fishing interests may lay siege to the common fisheries policy in terms of access to grounds and quotas. The brutal truth is that there are too many fishermen chasing too few fish in European Community
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waters and elsewhere. With section 14 of the Merchant Shipping Act 1988 the Government understandably sought to restrict access to United Kingdom quotas. That endeavour has been demolished by the interim order.
The European Commission has told Her Majesty's Government, by way of the multiannual guidance programme, that the United Kingdom fishing fleet has to be reduced by over 22 per cent. by the end of 1991. In other words, fishing capacity must more closely match the demands to conserve the various stocks.
The judgment flies in the face of the sensible management of our fisheries stocks. It makes the need for a decommissioning scheme much more urgent. I know that the Ministers concerned are somewhat reluctant to introduce such a scheme because they were humiliated by Humberside trawler owners during the period of the previous scheme. Despite that continuing embarrassment, Ministers should agree to such a scheme and other conservation measures in order to protect fishing communities throughout the United Kingdom. The people in those communities, from Cornwall to Shetland, deserve nothing less. The Government, the European Court of Justice and the European Commission have failed those decent and honourable citizens of ours.
2.43 am
Mr. Jonathan Aitken: This is a pretty miserable nocturnal parliamentary occasion. Perhaps the only agreeable aspect for Conservative Members is that we are able to give a warm welcome to our hon. Friend the Minister on his debut at the Dispatch Box. We wish him well in his responsibilities. I wish that he had been able to deal with an easier subject and that he had had an easier debut. I felt that he was in the role of Postman Pat delivering an unpleasant letter to the EEC. He was bustling on his round as if he had in his sack an unpleasant smelling piece of merchandise that he did not want to examine too closely.
I have said that this is a miserable occasion and I agree with most of what was said by the hon. Member for Greenock and Port Glasgow (Dr. Godman). To anyone who cares about our Parliament, its historic sovereignty and, above all, its continuing ability to make laws for the protection of our citizens in the fishing industry or elsewhere, the wretched little order marks a humiliating and important defeat because it is an historic surrender of some constitutional importance.
This is not one of the usual common-or-garden irritating European directives which harmonise lawnmowers, make us put identical health warnings on cigarette packets or adjust our clocks in summertime when we do not want them adjusted. This is far more constitutionally profound. I shall try to take the House to the high ground of principle so that we can see the great issue that matters to any nation state and that is so woundingly being corrupted and compromised by the request that the Government have put to the House.
We need hardly remind ourselves when we debate fishing that we are a maritime nation and an island people. Throughout our history we have been surrounded by the sea and from time immemorial we have looked to our Parliament to protect our territorial waters from incursion, to safeguard our fishing grounds and staunchly to defend the livelihoods of all those who, in the beautiful words of Archbishop Cranmer,

1003
"Go down to the sea in ships and occupy their business in great waters."
There is nothing anti-European in such a stance. After all, since its inception the EC fisheries policy has always been based on the principle that nation states have national quotas. EC shipping law allows any member state to lay down national conditions for the registration of ships and the flying of flags. That is a basic point of EC law and national law.
Mr. John Prescott: And international law.
Mr. Aitken: As the hon. Gentleman says, it is also a basic point of international law.
It was in pursuance of the principle of nationality in fishing matters that the House passed the important Merchant Shipping Act 1988. Section 14 of that Act was of pivotal importance because it inserted what is no more than a normal safeguard that a British registered fishing vessel should be British owned. That means either owned by Britons or by a company which can be shown to be predominantly in the ownership of British shareholders. That is what is meant by "qualified person" or "qualified company" in that section of the Act.
That section was put forward to avoid a familiar form of cheating in international corporation activity, the erection of a brass plate behind which shareholders who are not British nationals can hide. The former Secretary of State for Transport, my right hon. Friend the Member for Southend, West (Mr. Channon), got it absolutely right when on Second Reading of the Merchant Shipping Bill he said:
"These are stringent requirements, but we believe they are essential if British fishing quotas are to be preserved for British fishermen."—[Official Report, 28 January 1988; Vol. 126, c. 510.]
We expect no less from a British Secretary of State and a British Parliament.
If the House cannot protect our fishing grounds and our fishermen, what can we do? I am glad to hear that my hon. Friend the Member for Thurrock (Mr. Janman) has been diligently researching the Division lists and has found that every member of the Government Front Bench tonight voted loyally for section 14 to be implemented. My hon. Friend the Member for St. Ives (Mr. Harris), who occupies such a prominent position in the great hall of fame of Euro enthusiasts, having been Parliamentary Private Secretary to the former Foreign Secretary, went out on a limb and eloquently supported section 14. He attacked the wicked Spanish companies behind their brass plates when he said:
"The harm that they have caused to our fishing interests is considerable. At long last we have the legislation for which I … have been fighting for many years."—[Official Report, 28 January 1988; Vol. 126, c. 532.]
He may have fought for it for many years but we shall shortly lose it. My hon. Friend's words will take some eating. In about 40 minutes we shall not have the legislation for which he fought. One little puff of Euro wind and it will be gone. The legislation for which my hon. Friend fought for so long and about which the Government went into battle will be lost.
I do not know how my hon. and learned Friend the Solicitor-General, on whose shoulders so much rests, will explain all this, but, knowing him, I expect that we shall hear an eloquent appeal to honour the rule of law. I can hear the sonorous phrases that he will shortly roll off.
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What law? The European Court of Justice has been hopping about on this issue like the worst type of kangaroo. It reminds me of that famous passage in "Alice's Adventures in Wonderland" which says "Sentence first, verdict afterwards."
All the precedents show that a European court always first decides in such cases on the issue of principle as to whether legislation by a member state is or is not compatible with Community legislation. All the signs were that it was compatible. We went, cap in hand, clutching our forelocks, to the European Commission in the first place and asked, "Is our legislation, the Merchant Shipping Act 1988, all right?" and we were told that it was all right. We were allowed to pass the Act, and the next minute it was litigating against us in court. That is not the action of good friend or partner. If the people in the Commission can bless us one minute and bring litigation against us the next, they cannot be very nice.
I cannot understand why the normal procedures were not followed by the extraordinary Euro-court, why a considered judgment on the compatibility issue was not handed down, and why that was not argued carefully. Then, if it demonstrated that national laws had to be suspended, because three wise judges had handed down judgments that everyone had to look at, at least we could see the clear legal basis for the decision.
Mr. Cash: On a number of occasions tonight we have had references to a suspension in consequence of the interim order. However, that is not what the order does. It amends the Act. It says:
"so long as this order remains in force"
it will
"have effect as if".
We may be dealing with a provision that gives the impression that it is suspending when it is amending, which is different.
Mr. Aitken: I take my hon. Friend's point. We are being asked to amend the Act. I was dealing with what the court had said, which is that it should be suspended.
The court shows breath-taking arrogance. It clearly has no idea how much these issues matter to fishermen, fishing communities, or ports—one of which I represent. In a journal called the Eurofish Report, I read a curious paragraph headed, "Two little words". That makes it sound like a nursery rhyme. It says:
"The Court president's ruling demands simply that the UK now removes the two words 'British citizen' from that Section 14(7) definition of what is a 'qualified person' and 'qualified company' as it applies … It therefore acknowledged the Commission argument that such use of 'British citizen' in this context constitued 'direct discrimination' in flagrant breach of Article 40(3) of the Treaty of Rome."
I find that breath-taking. Delete "British citizen" and insert "foreign owner", and the whole basis on which our fishing legislation and our national legislation in key strategic sectors has been based is cheerfully swept away on the basis of one judge giving an interim judgment.
My hon. Friend the Under-Secretary did his best to take on this legal brief and explain all the legal arguments deployed in favour of killing off this injunction, but he is no lawyer, and he should have added in brackets at the end of every sentence, "And we lost." The Government have had so much practice in fighting injunctions in the courts of the world ever since the Peter Wright industry got going that one would have thought that they could stop one

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judge in a Euro-court putting down a change of our law that sweeps away the great principles not just of our legislation but of international law.
The moment when the Roman empire was known to be in total collapse and disarray was when three little words no longer had any importance or any impact, and the power of the Roman Senate and the Roman emperors no longer carried any weight. Those three words were, "Civis Romanu, sum". Here, we are deleting "British citizen" from an Act. This is a sad night for parliamentary democracy and sovereignty, and I shall vote against the order.
2.54 am
Mr. James Wallace: I begin by congratulating the Minister on what I understand is his maiden speech at the Government Dispatch Box. When he refused to allow me to intervene and I persisted in challenging him, I have no doubt that he recognised that those of us who represent coastal constituencies—in some instances rather landlocked ones, but perhaps that is not his fault—reflect the passion that has been generated by the order. That is especially true of those of us who represent fishing constituencies.
It is clear from the previous contributions to the debate that there is widespread agreement about the importance of the Merchant Shipping Act 1988, a measure which received support from both sides of the House when it came before us for consideration. I believe that the support for it was such that it was enacted without a Division. It is a fact that it enjoyed all-party support, and we are all aware of the abuse which it was intended it should tackle. Spanish vessels were coming on to the British register. Alternatively, British vessels were being acquired and beneficially owned by people with substantial Spanish interests. In that way the Spanish fishing industry was getting round the restrictions that were placed on its fleet when Spain became a member of the European Community.
That did immense damage to our fishing industry in all parts of the United Kingdom. As the hon. Member for Greenock and Port Glasgow (Dr. Godman) said, the industry was damaged from Cornwall to Shetland. The Spanish have been able to fish our quotas and add tonnage to our total fishing capacity, thus placing great difficulties in the way of the industry. Our tonnage has to be reduced to meet the targets that are set under the multi-annual guidance programme. I do not think that there is any doubt about the abuse that we have been trying to tackle.
We could claim, and we did, that there was jusification for our approach given the heavy emphasis that has been placed on nationality. The quota system for fisheries is based on nationality, which is an exception to the general approach of a Communitywide application of rules. That provided a justification for the arguments that we advanced.
It appears that the British proposals were submitted to the Commission and that the nod was given. In that context it is surprising that the Commission is taking the British Government to court. It would be reasonable, even at this stage, to put the ball into the Commission's court and say, "The Community has agreed. There is a Community agreement that quotas should be divided on a
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national basis. You are aware of the problem that we are highlighting. For these quotas to be effective, it is only right that national fishing fleets catch the national quota. How do you, the Commission, suggest that we should respond to the abuse which everyone recognises?".
If the Government had not used up so much good will and political capital in fighting specious battles on issues such as the print size of the warnings on cigarette packets, they might have had a stock of credit and might have been able to advance the argument that I have outlined. They have frittered away good will in responding to so many diverse issues, and when a real national issue arises they find that they have precious little to fall back on. In this instance it is the fishing industry that will suffer.
What effect will the passing of the order have on the number of boats that might be able to come on to the register? The Minister has said that he does not know, but submissions have been made to the European Court by the Solicitor-General and others. They made it clear that the United Kingdom contended that the interim measures would be ineffectual. As I understand it, that meant that the measures would have no effect. The Minister is saying tonight something that is materially different from what the Solicitor-General submitted to the European Court. He seems to be saying that the measures could have some effect, but he does not know how much. We are entitled to have the guesstimate that his Department has made. We should be told what steps the Department is taking to try to quantify the effects in the weeks that lie ahead.
I congratulate the hon. Member for Greenock and Port Glasgow on his pointed and eloquent comments on the speed with which the Government have reacted to the interim measures, bearing in mind the time that they often take to respond to full decisions of the court. The valid argument of the hon. Member for Stafford (Mr. Cash) is that it appears that the court is asking us to suspend the relevant provision of the 1988 Act whereas the effect of the order, as I read it, would be to repeal it. As I understand section 2(2) of the European Communities Act 1972, the power given by Order in Council is to implement decisions of the Community institutions. Therefore, it is not necessary to repeal. It would be possible to suspend. Perhaps the Minister will explain why the chosen course is to repeal.
The Government have been speedy in tabling this order, but why have they not tried to devise some other provision that would achieve the same effect as that wished for through the use of the words "British citizen"? Section 14(3) of the 1988 Act gives the Secretary of State power, by regulations, to specify further requirements that must be satisfied if a fishing vessel is to be eligible for registration as a British fishing vessel. It states that it must appear
"to the Secretary of State to be appropriate for securing that such a vessel has a genuine and substantial connection with the United Kingdom."
What further consideration have Government Departments given to bringing forward further orders to try to achieve the same end, but which would also be acceptable to the Community? As the hon. Member for Greenock and Port Glasgow said, how do other countries get away with it?
I was impressed when I read the speech of the hon. Member for St. Ives (Mr. Harris) on Second Reading of the 1988 Bill. He said:
"How will the Minister or his officials determine that the provision is applied and obeyed. … I would thoroughly endorse what my hon. Friend the Member for Eastleigh (Sir

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D. Price) said earlier—that perhaps we need to play by the French rules. It is instructive that, to my knowledge, not one Spanish vessel has been transferred to the French register. The French would not tolerate it for one minute."
If the French can make effective provision to prevent Spanish vessels being put on their register, why cannot the British Government do the same? The hon. Member for St. Ives asked that pertinent question, but I do not think that he received an answer. Perhaps we will have an answer tonight.
The hon. Gentleman also said:
"My plea is to ensure that the legislation works. If it does not, the anger of fishermen, especially in Cornwall, will indeed be great. I hope and believe that it will work."—[Official Report, 28 January 1988: Vol. 126, c. 532–33.]
He had better watch out for the ire of the Cornish fishermen if he votes for this order. It will repeal the measure that he rightly championed 18 months ago.
If my hon. Friend the Member for Truro (Mr. Taylor) were not indisposed, he would be here saying these same things. Fishermen will be greatly angered and annoyed if the Government do not come up with some satisfactory means of meeting the particular abuse that we tried to cure in the 1988 Act.
3.2 am
Mr. David Harris: The hon. Member for Greenock and Port Glasgow (Dr. Godman) was a little churlish to say that the Government had not stood by the fishermen. I hope that he recognises that no one has worked harder or with more determination, right up through the House of Lords to the European Court, than my hon. and learned Friend the Solicitor-General.
Just what is the hon. Member for Orkney and Shetland (Mr. Wallace) advocating that this House should do? Is he saying that we should break the law, even one passed by a European Court? I do not believe that we should break the law, whether national or European. If the SLD, with all its pontificating about Europe, is now advocating that we should defy the European Court, let the hon. Gentleman say so.
Mr. Wallace rose——
Mr. Harris: No, I cannot give way because of the time constraints. Other hon. Members wish to speak.
No one could take any pleasure or satisfaction from this order. It has been described as "wretched", and it is. The Government have no alternative but to bring it forward if they are to obey the law. If—[Interruption.] If people think that we should not obey the law, let them say so—[Interruption.] That applies to my hon. Friend the Member for Southend, East (Mr. Taylor), who is barracking me.
I stand by every word of my speech on Second Reading, which various hon. Members have kindly quoted this evening. I have been fighting this issue for a long time—probably about eight years——
Mr. Teddy Taylor: We can do nothing here.
Mr. Harris: In fact, we could have done something before Spain joined the European Community.
Before I was a Member of the House—when I was a Member of the European Parliament—I urged the Commission to take action on its front, and urged the House to take action on its front too. I hope that my hon. Friend the Member for Thanet, South (Mr. Aitken) will
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explain to me after the debate what pressure he put on the House before Spain was a member of the European Community—when the problem was building up—to nip this in the bud. I was trying to press people to take action outside the House; I hope that he was doing the same when he was a Member of it.
In the immediate wake of the interim judgment, it has been said that only 10 or so Spanish boats will be allowed back on to our register. I believe that that is 10 too many: I do not want any Spanish boats on our register. I took pleasure in that long overdue legislation: I said in my speech that I hoped that it would work, and that it was no good having legislation if it did not.
I have a quarrel with the Commission, however. I believe that in bringing this action it is, in effect, driving a coach and horses through its own common fisheries policy. As other hon. Members have said, that policy is built on national quotas—which must mean quotas for our nation's own fishermen. I take issue with the views expressed by the European Court. Paragraph 35 of the judgment states:
"The Commission makes the observation that the establishment of the new register of British fishing vessels has had the effect of forcing the entire 'Anglo-Spanish' fleet to remain idle … The owners of the vessels in question are suffering heavy losses as a result of the vessels' remaining idle".
Yes, I think that they are suffering heavy losses, but many of us warned them when they came on to our register by bogus means—which we were daft to allow at the time—that they should be aware of what they were doing, and that if they were tipped off the register, as many of us were advocating, that was their own fault and they should have their eyes open.
Of course—as other hon. Members have said—the fact that those Spanish fishing vessels have been fishing against our quota has caused great damage to our own fishermen, and to the standing of the industry and its economy. I have no sympathy at all for the Spanish boats. The issue to which we should now direct our thoughts is, "Where do we go from here?" I support the hon. Member for Orkney and Shetland: we should find other regulations by which to prevent those 10 or so boats from coming back on to the register.
I also believe, however, that there is an urgent need to take political action, and I applaud the steps taken by my hon. Friend the Minister to rally support from other member states against the pernicious practice of quota-hopping. I am delighted that he has—apparently—obtained support from Germany and Ireland. I urge him to redouble his efforts and to try to achieve a political solution—and to put pressure on the Commission to bring forward its own proposals.
We must stamp out the practice of quota-hopping. It has done immense damage; it is undoubtedly a serious setback; but it is not the end of the story. We must go on, and make sure that the Spanish boats do not come back on to our register. If they do, we must find means of getting them off it as quickly as possible, in the interests of our own fishermen. I hope that the House will unite on that point.
3.9 am
Mr. Calum Macdonald: As a member of the Standing Committee that considered the Merchant Shipping Bill, I share the dismay that has been expressed on both sides of the House at the way in which that

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valuable section has been overturned in response to the interim ruling. As time is short, I shall not go over ground that has already been covered by other hon. Members, but we must not lose sight of the background that led to the crisis and to the need for tonight's measure. In concentrating upon the legal and constitutional matters, we should not lose sight of the crisis that fishermen are experiencing and that led to the desire to implement such a section in the Merchant Shipping Bill.
I suspect that the real significance of tonight's order is that it signals the beginning of the end of a common fisheries policy based on nations and national quotas. The current crisis in the fishing industry—the quota cuts, the gross failure to tackle the overcapacity problem, the consequential loss of FEOGA European Community finance from sections of the British fishing industry that desperately need that finance and the current debacle which has led to tonight's order—is evidence of the emerging bankruptcy of the common fisheries policy which, as has already been mentioned, is based upon the notion of national quotas. The court judgment refers to the principle of nationality which underlies the present common system in the European Community.
The root failure of that fisheries policy increasingly has been recognised, even by the European Commission in trying to get itself out of its current position. A Commission communication issued on 19 July proposes a Community framework for access to fishing quotas that appears to be moving away from a common system based upon national quotas, and shows a greater appreciation that even within a national framework distinctions between regions and localities have to be considered. Paragraph 2.5 of that communication states that
"the sense of the special needs of those regions where the population is particularly dependent on fisheries and related industries must be viewed as one of the basic principles"
that must underlie a common fisheries policy in future. The root problem is that the present common fisheries programme cannot distinguish between the different conditions which exist between regions and localities in Scotland, far less between Scotland and England. That failure has resulted in regions and localities getting dragged into a crisis which is none of their doing but which the present framework has made common to them all.
In my constituency in the Western Isles, we feel the squeeze in various ways. I have already corresponded with Ministers on those matters, and as time is short I shall not go through them. However, to get us out of the present crisis, three things must now be done. First, the Government must immediately introduce a decommissioning scheme or some other set-aside scheme. If the farmers can have such a scheme, surely the fishermen can have one too. I am taking the opportunity to raise these matters, as the Minister responsible for fisheries is in his place.
Secondly, the Government must develop a long-term strategy to reduce and contain the overall capacity of the national fleet. The Government plainly have been derelict in their failure to produce that strategy before now.
Thirdly, it is essential that the Minister develops a common fisheries approach with his European colleagues that distinguishes properly and clearly between the
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different regions and localities of the European Community and the different regions and localities of the east and west coasts of Scotland.
A common fisheries policy must recognise the different styles of fishing and the different types of fleet in each locality. It must not unnecessarily and stupidly afflict one locality with the travails of another.
Until now, the Government's response to the fishing crisis that is breaking around our heads has been pathetic. I sincerely hope that the new Minister will have the vision and determination to tackle the problems at their root, where they must be tackled before it is too late.
3.15 am
Mr. Teddy Taylor: I congratulate the Minister on his appointment. I hope that he realises that this is a very special night, although we are considering the order at 3 am.
Last year, Parliament passed a law, following weeks of debate. We thought that that was the right thing to do and that it was consistent with European law. At the time, the Minister said that the legislation was essential to safeguard the interests of British fishing. Yet, not a court but one chap, Mr. Due, has told us to scrub it. For months we worked out how we could pass legislation that was consistent with the law of Europe, but tonight it is being temporarily suspended.
It is wrong and unfair to the British people for us to be discussing the order at 3 am, when nobody will hear about it. Whether it was right or wrong for the Government to ask us to debate it at this time of the morning, people should know what is happening, but Ministers know that they will not have the slightest idea. If one said to someone in the street, "Do you know that one chap sitting in a court can suspend a law passed by Parliament which it debated for months and discussed with European officials?" he would say, "What nonsense. Parliament is supreme." The Government should be ashamed of themselves for arranging for us to debate such matters at this time, when no one will hear about them. It is wrong and undemocratic.
Mr. Cash: Has my hon. Friend noticed that the order is made by Her Majesty the Queen? It is not made by a Minister and does not recite any power derived from statute other than the European Communities Act 1972. It is simply a prerogative order.
Mr. Taylor: My hon. Friend well knows that it does not matter two hoots whether we vote against the order, and I am sure that the Solicitor-General, who fights these cases so superbly, will confirm that.
We must stop kidding ourselves. People are saying that the order will affect only 10 vessels, probably 12 but perhaps eight. Why do they not also say that in two weeks time another case will start, about which we must give our final submission? The case is called Crown v. Factortame Limited and it will raise issues of residence. The idea that the order is limited is a load of rubbish. It may be a year or 18 months before judgment is passed in that case, but by saying that the order is limited we are kidding ourselves.
My hon. Friend the Member for St. Ives (Mr. Harris) was right. We must accept that we have joined the Common Market. Whether we like it or not, the court is constantly creating new powers, not because of laws but because that is the way things are going. Can we honestly

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vote against this proposal? We can. The court made an interim judgment and said, "Please implement with urgency." How on earth is it fair and reasonable to the fishermen of Britain that we should implement something which discriminates against Britain and which does not apply to all members of the EEC? Is it not fair for us to say, "Yes, we will apply your judgment, but not until it applies to everyone"? If Spanish vessels claim to be British, why should we accept this measure until the same applies to all parts of the European Community?
When something as shameful and dreadful as this is done, why should it be that, when the papers arrived on 18 October, the Government should announce on 19 October that the matter will be debated in the next week? That is not the way to respond to such a dreadful loss of sovereignty. A huge increase of power is taken by the European Community.
What can we do? I hope that we will stop saying, "Let us have new discussions. Let us try to work out new policies. Let us have new negotiations." We must accept that, sadly and tragically, in this matter we are as effective as a county council.
On this sad night for Britain and for democracy, please will Ministers and Opposition spokesmen stop kidding themselves and pretending that things are as they are not? Please, will they accept things as they are? We should vote against the order, not because we are rejecting law and order, but because we are saying, "We will apply it when, as under the treaty of Rome, it applies to all countries of the EEC." If something nasty is driving a coach and horses through the common fisheries policy, let it apply to all members of the European Community. We should not say, "Reject law and order or the judgment." We should say, "We will apply the law, but it applies to all of us."
3.21 am
Mr. Alex Salmond: I will be brief, as other hon. Members wish to speak in the debate.
One of the problems with the hon. Member for Southend, East (Mr. Taylor) is that he is so wrapped up in his opposition to the European Community that he cannot see the Government's incompetence. At present it is not the European Community which is depriving fishermen of access to decommissioning funds or lay-off funds which would help in the current crisis; it is the total, drift and incompetence of the Government's fisheries policy. [Interruption.] The hon. Gentleman's relationship to the Secretary of State for Scotland is like Sir Alan Walters' relationship to the Chancellor, but he should let me make my speech, given the shortage of time.
Hon. Members should examine our proceedings in Committee—perhaps the hon. Gentleman has done so. They would then see that a succession of proposals to tighten up the legislation were presented to the Government by myself and other Opposition hon. Members. This is the third failed attempt to deal with flag of convenience vessels. We got no support from the Tory Members in Committee. On 18 February last year, I moved an amendment to extend qualifications to restrict flag of convenience vessels, not just to the directors of companies, with whom the Government are obsessed, but to vessel crews. It also dealt with nationality qualifications. I was told somewhat ironically that that would be contrary to and run foul of the European Court of Justice. The debate also dealt with the residential qualifications of
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crews of fishing vessels. That is just as important when defining whether they are legitimately Scottish or English as who owns them and who the company directors are. We must look at the crews manning such vessels.
I was told by the Minister that my amendment was not necessary and that the legislation was watertight or "fishtight", as he put it. Given the judgment of the European Court of Justice, will the Government come forward with a residential qualification and stipulation in respect of the crews of fishing vessels and do something about this serious matter?
I will certainly vote against this measure. It would be incredible for anyone concerned with the fishing industry to vote for a measure when the Minister has told the House that he does not know the consequences that will follow if the order is passed this evening.
We should require the Minister to tell us what further measures, such as residential qualification or associating registration with proof of title, he will introduce to stop once and for all flag of convenience vessels pilfering the quotas of Scottish and English fishermen.
3.25 am
Mr. Michael Carttiss: This subject deserves long speeches without a time limit from every hon. Member. My hon. Friends have already commented on the absurdity of our discussing this measure at 3.25 am. However, I will be brief because I know that many of my colleagues want to speak.
The hon. Member for Greenock and Port Glasgow (Dr. Godman) expressed the feelings of many hon. Members very effectively. He referred to various fishing ports, but he did not refer to those in East Anglia. I come from Yarmouth and my distinguished predecessor in this House fought tooth and nail to prevent us from joining the European Community and running into these sorts of problems.
My hon. Friend the Member for St. Ives (Mr. Harris) has been quoted on many occasions because of his sterling fight for the British fishing interests. I pay tribute to him for that. My hon. Friend wants to know where we go from here. I will go back to Norfolk county council, where I started from, because, as my hon. Friend the Member for Southend, East (Mr. Taylor) said, we arc becoming more and more like a county council, closer even than those who wanted European integration.
My hon. Friend the Minister and my hon. and learned Friend the Solicitor-General have come to the Chamber tonight like grand old Dukes of York. They were party to leading us up the hill to vote for this excellent measure and we heard quotations from the then Secretary of State telling us how important it was that we voted for it. The grand old Dukes of York are now leading us down the hill, running from the European Court of Justice. That has nothing to do with not following the rule of law or not following international agreements to which we are party.
My hon. Friend the Member for Southend, East said that one man could overturn what we have spent many months in Parliament achieving. My hon. Friend is wrong. It is the Government's choice that we are being asked to do this now. The Government could have waited for the measure to face the full Commission and then brought it back for our consideration. If I were taken to court for a speeding offence because I was travelling at 30·5 mph in a built-up area, I would go to court. If I were found guilty,

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I would pay my fine. However, it is worth contesting and it is worth contesting this measure in the interests of the fishing industry which has received very little help in recent years.
It has been said that there are too many fishermen chasing too few fish. We know that. However, why should all the fishermen be Spanish and have the support of other European countries, some of which have no interest in the fishing industry?
No one could accuse the Government, led by my right hon. Friend the Prime Minister, of kowtowing to or being supine before the EC. But this is an issue of vital importance to fishing and to the constitutional arrangements of this House. We should be standing firm.
Why make a fuss about cigarette packets? Does that matter a tinker's cuss? This issue is of enormous importance. We are talking about people's livelihoods and a fishing industry that has been decimated over the past 20 or 30 years and has virtually disappeared in some parts of the country, not least in my port of Great Yarmouth.
So, Madam Speaker——
Madam Deputy Speaker: The hon. Gentleman has elevated me somewhat.
Mr. Carttiss: It is only a matter of time, Madam Deputy Speaker.
The person who occupies the Chair in 10 years' time will be wasting his or her time if we allow this sort of order to be introduced every time the EC makes an interim injunction against us.
3.29 am
Mr. Brian Wilson: I shall be brief. We are entitled to pick up on the fact that the Government are pressing ahead without being able to give us any information about the implications of their actions. We certainly received no such information from the Minister. Seldom can any Minister at the Dispatch Box have blabbered through a speech and been so uncomprehending of what he was talking about.Will we get that information in the wind-up speech? What a pity that we shall not have a speech from a fisheries Minister who could tell us something about the fishing and legal implications of the interim decision.
We read in the Fishing News the reassuring words of the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food, who said:
"We shall need to study the judgment carefully but we do not expect that it will have much real impact. It will not let a new armada of boats into the British fishing grounds".
That is poetic stuff, but it is scarcely reassuring. We have heard mention of 10 vessels, but the Minister told us that 121 Spanish vessels were refused registration. What proportion of those vessels will subsequently be eligible to apply for registration?
It is not just the number of fishing boats that matters, but the tonnage and catching power. The pressure stock licensing farce has shown us that one can have 10 small vessels and 10 large vessels. The implications go far beyond the mere number of vessels.
If the Government cannot give us any information about the implications of the decision, surely that is a pressing argument in favour of not proceeding at such breathtaking speed. I do not need to rehearse that
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argument, but the speed with which Government have moved is bewildering. Why have the Government rushed to the House to push the order through on the basis of an interim judgment?
The hon. Member for Southend, East (Mr. Taylor) has followed a consistent line on this. Unlike many of us, he has not engaged in intellectual gymnastics to defend his position. The hon. Member for St. Ives (Mr. Harris) was right when he said that, in some cases, one defends the pro-European stance, but in others one advocates that the European law should be ignored. The Conservatives may represent the party of law and order, but, on occasions, it states that some European judgments should be ignored. Therefore, sometimes it is necessary to engage in intellectual gymnastics, but I pay tribute to the hon. Member for Southend, East who has never done so as he has always been consistent about Europe.
What we are discussing is not some great power of law and order, but the interim decision of one man. There is no obligation on the Government to act with such speed. I agree with the hon. Member for Orkney and Shetland (Mr. Wallace) that we could use next year to seek to achieve what is sought in the interim decision. That might not satisfy the anti-European stance, but it would defend our fishermen.
The Government give a low priority to fishing and peripheral matters. The French would not accept the interim decision for two minutes, but the Government have blundered on and have allowed that to happen. At the end of the day responsibility lies with the Government.
My hon. Friend the Member for the Western Isles (Mr. Macdonald) is right to say that a common fisheries policy, even within national boundaries, is an unsatisfactory mechanism. It is not nearly sophisticated enough to take into account the different nuances of the fishing industry around the shores of Britain and even within the northern half of Scotland.
The fishing industry on the west coast is very different from that in the north-east of Scotland. Indeed, it could even be said that in the past the problems of the west coast fishermen have been the east coast fishermen, more than any foreign fishermen. Because fishermen do not always see things in perspective, one of the ironies of history is that, in the referendum on EEC membership—I am sure that the hon. Member for Southend, East remembers this—those in the north-east fishing industry were among those who were deeply supportive of our entry into, or rather our remaining in, the European Community simply for their own short-term gain.
I assume that by now the right hon. Member for Suffolk, Coastal (Mr. Gummer) is safely tucked up with his prayer book and Horlicks. As a Tory Minister responsible for our fisheries, he must have set a record by winning in so short a time such an editorial in Fishing News as this:
"Could it be that Mr. Gummer is all too well aware of the mess his government is in over the fishing industry—a mess they have largely created—and has decided that the best form of defence is attack?"
The editorial concludes:
"If he and his government are not prepared to work with the industry to try to resolve the problems, they need not be surprised at the result they will get at the ballot box when the time comes. Although, judging by Mr. Gummer's present attitude, Scotland must already be regarded as a hopeless case by the Tories. For, whatever else he may be, Mr. Gummer is not a fool or a political greenhorn."

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We may dissent from some of those latter sentiments, but I am sure that the hon. Member for Southend, East, in his new role as eminence grise to the Secretary of State will take back the message that what the Tories are doing to the fishing industry in Scotland and in the rest of the United Kingdom is yet another nail in their coffin.
3.36 am
The Solicitor-General (Sir Nicholas Lyell): If I have to go into legalities at some stage, I hope that the House will forgive me, but I should first like to take a few moments to explain the interim judgment—I emphasise that it is only an interim judgment or order of the European Court—and to put it into context.
I know a great deal about this case. I have appeared at every level in—[AN HON. MEMBER: "You have lost what you knew."] The hon. Gentleman says that I have lost it, but I am afraid that that comment only shows how little he knows about it. It is a great mistake to say that we have lost this case. My hon. Friend the Member for St. Ives (Mr. Harris) was right when he brought the House to realise that that is not the case. I shall now put the position into context, adding only that I well understand the strength of feeling among hon. Members of all parties who represent fishing interests.
The hon. Member for Greenock and Port Glasgow (Dr. Godman) asked why we had to act so quickly. I must advise him and the House that the purpose of the draft order is to give effect to the obligations of the United Kingdom, arising from the interim order of the Court of Justice, which requires us to suspend the nationality requirements—the House should remember that it applies only to the nationality requirements contained in sections 14(1), (2) and (7) of the Merchant Shipping Act 1988 pending final judgment in the infraction proceedings brought under article 169 of the treaty by the Commission against the United Kingdom. Although the order of the court is only interim in nature and we shall seek to overturn it—I believe that we have reasonable arguments for overturning it—at the substantive hearing, it is our obligation to give effect to it without delay. The order is only given because there is urgency.
This country not only has a good record in obeying the law, we also have a good record in arguing vigorously and successfully in defence of our interests before the European Court of Justice——
Mr. Cash rose——
The Solicitor-General: Perhaps my hon. Friend will allow me to develop my point a little further.
My hon. Friend the Member for Southend, East (Mr. Taylor) was anxious about the fact that, as he thought, this was a prerogative order, which it is not. We are implementing the order by exercising the powers of the Crown under section 2(2) of the European Communities Act 1972 whereby, subject to schedule 2 to that Act, Her Majesty may, by Order in Council, make provision for the purpose of implementing any Community obligation of the United Kingdom. Since this order involves amendment to key provisions of an Act of Parliament, we have chosen to adopt the affirmative resolution procedure, taking account, inter alia, of the view of the Joint Committee on Delegated Legislation in its second report of 1972–73 that
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such procedure might normally be appropriate in this type of cause. That is what makes it proper to hold this full debate tonight.
Mr. Cash: Will the Solicitor-General give way?
The Solicitor-General: I want to develop my argument.
My hon. Friend the Member for Southend, East was anxious about the erosion of sovereignty, as were other hon. Members. This case involves no erosion of sovereignty over and above that which we accepted in 1972–73. While it is true that this is the first time that section 2(2) of the European Communities Act 1972 has been used to implement an order of the Court of Justice requiring the interim suspension of part of an Act of Parliament, it is no more than the exercise of a power pursuant to an obligation arising under the treaty of Rome—the obligation to give effect to an order of the Court of Justice. That obligation was accepted as part of the whole package of rights and obligations entered into by the United Kingdom when we joined the Community on 1 January 1973.
Mr. Cash: I have the greatest sympathy with the skill with which my hon. and learned Friend has sought to put the case on behalf of the Government in the Court of Justice, but does he agree that this order goes further even than the court requires? It not only suspends the Act in question—it amends it, which is more than the court is asking for.
The Solicitor-General: I respect my hon. Friend very much as a lawyer, but he is making a legalistic distinction without a difference. In realistic terms, this is a suspension——
Mr. Prescott rose——
The Solicitor-General: I want to make it very clear to my hon. Friend the Member for Thanet, South (Mr. Aitken) that it is entirely mistaken to say that we have lost the case: we have not lost it. I am disappointed that an interim order, even on a limited basis, has been made against us, and I argued vigorously and cogently that it should not have been——
Mr. Wallace rose——
Mr. Menzies Campbell rose——
The Solicitor-General: My hon. Friend the Parliamentary Under-Secretary has mentioned the arguments that I advanced at the hearing—I believe that they were cogent. We shall continue to deploy these arguments at the substantive hearing of the infraction proceedings brought by the Commission——
Mr. Wallace: Give way.
The Solicitor-General: I shall not, because I want to develop points that are of interest to the whole House.
It is mistaken to believe, as some hon. Members appear to, that the whole legislation has been suspended. As my hon. Friend said——
Mr. Teddy Taylor: No one has said this.
The Solicitor-General: The precise effect of this order will depend on how many vessels which have hitherto had strong and often dominant connections with other member states, usually Spain, can establish that they are or

1017
would have been ineligible for registration only by reason of the nationality provisions in section 14 of the 1988 Act; and that they are able in good faith to fulfil the other requirements for registration which remain in force.
The hon. Member for Banff and Buchan (Mr. Salmond) leapt up to ask why we did not introduce legislation that involved a residence provision. Before he takes that line in this sort of debate he might do the House the honour of reading the section that we are debating, because it does involve a residence condition——
Mr. Salmond rose——
The Solicitor-General: I refer to the requirements in the 1988 Act as to residence and domicile of owners, charterers, managers and operators of fishing vessels seeking to register as British fishing vessels; and to the requirement that such vessels should genuinely be managed and their operations genuinely——
Mr. Salmond rose——
Madam Deputy Speaker: Order. The Solicitor-General has made it quite clear that he does not wish to give way.
The Solicitor-General: Their operations should genuinely be managed——
Mr. Salmond rose——
Madam Deputy Speaker: Order.
The Solicitor-General: I shall give way to the hon. Gentleman in a moment when he has listened. Vessels should genuinely be managed, and their operations should genuinely be directed and controlled within the United Kingdom.
When this matter was argued, and I was before Judge Due three or four weeks ago, the Commission said that only 10 or 12 vessels would be affected. It remains to be seen. The matter will be looked at carefully and quasi-judicially by my right hon. Friend the Secretary of State for Transport. The Commission's estimate may well be right. That was its estimate of the effect of the order. The background is that between 100 and 150 vessels, mostly of Spanish origin, had hitherto been fishing.
Mr. Salmond: I wish that the Solicitor-General had done me the courtesy of listening to my argument or even reading the reports of the Standing Committee. The amendments that I moved in Committee referred to the crew of fishing vessels, not owners or directors. There is no such stipulation in the legislation. Why does he not make one rather than bringing this ridiculous order before the House?
The Solicitor-General: I acquit the hon. Gentleman of not knowing everything about this case. There are residential qualifications in relation to important licensing conditions which are the subject of further litigation.
This issue has been bedevilled for years by litigation involving fishing interests that are trying to get the profitable opportunities of fishing against United Kingdom quotas. At every stage, the United Kingdom Government are defending and, where appropriate, prosecuting appropriate litigation to look after our interests, and will continue to do so.
Mr. Prescott: Several hon. Members believe that we are amending legislation, not suspending it. If the Solicitor-General is right, and we are suspending, and the court eventually rejects the interim decision and upholds our stance, will he have to come back to the House to amend the legislation again?
The Solicitor-General: I know that there are some who believe that we are amending rather than suspending, but that is a distinction without a difference. We are putting into suspension the nationality requirements, pending the judgment of the court. If the court's judgment were in our favour in every respect except in respect of the matters covered by the order, I think that we would still have to come back—this shows why it is suspending—because the purpose of this order runs only until there is final judgment in this case, just as the interim order of the court runs only to final judgment. It is a very technical point.
Mr. Menzies Campbell rose——
The Solicitor-General: I apologise to the hon. and learned Gentleman, but I shall not give way.
I take the question, "Why should the House not vote against the order?" on the chin. It is Britain's duty to obey the law of the European Community.
Mr. Teddy Taylor: It is the duty of all countries.
The Solicitor-General: Whatever the outcome of the case may be, and however vigorously and effectively we argue the United Kingdom's case—and we shall argue it vigorously and effectively—before the European Court of Justice and the various courts in Britain to which, in one guise or another, the case will return, it is always our duty to obey orders, including the interim orders of the European Court. It is in fulfilment of that duty, and that duty alone, that the interim order of the European Court of Justice is to be given effect by the order. There are powerful and compelling reasons why we should fulfil that duty and I commend the order to the House.
Question put:—
The House divided: Ayes 68, Noes 21.

Division No. 353]

[3.49 am

AYES

Alison, Rt Hon Michael

Garel-Jones, Tristan

Amess, David

Glyn, Dr Alan

Amos, Alan

Goodlad, Alastair

Arbuthnot, James

Griffiths, Peter (Portsmouth N)

Ashby, David

Hague, William

Batiste, Spencer

Hamilton, Hon Archie (Epsom)

Bellingham, Henry

Hanley, Jeremy

Bennett, Nicholas (Pembroke)

Harris, David

Boswell, Tim

Hayward, Robert

Bowis, John

Heathcoat-Amory, David

Brazier, Julian

Hind, Kenneth

Burns, Simon

Hughes, Robert G. (Harrow W)

Burt, Alistair

Hunt, David (Wirral W)

Butterfill, John

Irvine, Michael

Carlisle, Kenneth (Lincoln)

Jack, Michael

Carrington, Matthew

Knight, Dame Jill (Edgbaston)

Chapman, Sydney

Lang, Ian

Chope, Christopher

Lord, Michael

Coombs, Anthony (Wyre F'rest)

Lyell, Sir Nicholas

Coombs, Simon (Swindon)

Maclean, David

Cran, James

McLoughlin, Patrick

Curry, David

Mans, Keith

Dorrell, Stephen

Martin, David (Portsmouth S)

Durant, Tony

Mills, Iain

Fallon, Michael

Nicholls, Patrick

Favell, Tony

Norris, Steve

Forsyth, Michael (Stirling)

Patnick, Irvine

1019

Redwood, John

Twinn, Dr Ian

Shephard, Mrs G. (Norfolk SW)

Waddington, Rt Hon David

Speller, Tony

Wheeler, John

Stevens, Lewis

Widdecombe, Ann

Summerson, Hugo

Wood, Timothy

Taylor, John M (Solihull)

Thompson, Patrick (Norwich N)

Tellers for the Ayes:

Thorne, Neil

Mr. Greg Knight and

Townsend, Cyril D. (B'heath)

Mr. Tom Sackville.

NOES

Aitken, Jonathan

Prescott, John

Barnes, Harry (Derbyshire NE)

Salmond, Alex

Campbell, Menzies (Fife NE)

Skinner, Dennis

Carttiss, Michael

Taylor, Teddy (S'end E)

Cryer, Bob

Wallace, James

Dixon, Don

Welsh, Andrew (Angus E)

Ewing, Mrs Margaret (Moray)

Welsh, Michael (Doncaster N)

Godman, Dr Norman A.

Wilson, Brian

Hughes, John (Coventry NE)

Janman, Tim

Tellers for the Noes:

Jessel, Toby

Mr. Frank Haynes and

Kirkwood, Archy

Nellist, Dave

Question accordingly agreed to.
Resolved,
That the draft Merchant Shipping Act 1988 (Amendment) Order 1989, which was laid before this House on 17th October, be approved.

Merchant Shipping
  STATUTORY INSTRUMENTS, &c.

    URBAN DEVELOPMENT
    Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Committees on Statutory Instruments, &c.)
    That the Bristol Development Corporation (Vesting of Land) (British Railways Board) Order 1989, dated 20th June 1989, a copy of which was laid before this House on 23rd June, be approved.—[Mr. Durant.]
    Question agreed to.

  Haddock Quota
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Durant.]
  4 am
  Mr. Alex Salmond: It is hardly surprising that I am here at 4 o'clock in the morning as this is my Adjournment debate, but it is a tribute to the importance that Members of Parliament representing fishing constituencies attach to the crisis in the industry that my hon. Friends the Members for Angus, East (Mr. Welsh) and for Moray (Mrs. Ewing), the hon. Member for Greenock and Port Glasgow (Dr. Godman)—the official Opposition spokesman on fishing matters—the hon. Member for the Western Isles (Mr. Macdonald), the saviour of Scottish Tories, the hon. Member for Southend, East (Mr. Taylor), and the hon. Member for Orkney and Shetland (Mr. Wallace) are here. I should also mention our silent partner, the Minister from the Scottish Office. He has had to sit quiet all evening, and, as is often his wont, no doubt he will sit quiet through this debate.
  I hope that there will be no dispute about the severity of the situation facing the industry. The exhaustion of the North sea haddock quotas is the immediate cause of the difficulty, but only the immediate cause. The species is the mainstay of the Scottish fleet, and of the processing sector. Although the debate will be answered by a Minister from the English Ministry, I hope that he appreciates that important distinction between the Scottish and English fleets. Earnings in the fleet dropped last year, and will drop again this year, with the fall concentrated on the white fish sector. Worse still, the outlook for next year is also poor.
  The vice in which the industry is caught is completed by spiralling costs, largely due to rises in interest rates. I hope that the Minister will acknowledge that, in terms both of the falling revenue and the rising costs, we are dealing with factors that are outside the control of the individual fisherman. Both the overall quotas and the level of interest rates are matters of public policy. They are not under the control of the individual fisherman. I hope that the Minister will answer a question that I have put to a number of his colleagues: what contribution does it make to the defeat of inflation generated in the south of England to wreck the finances through high interest rates of the fishing fleets in the north of Scotland?
  I hope that there will be no dispute on the importance of the industry. Some 30,000 jobs, offshore and onshore in Scotland, between the catchers, the harbours, the shipyards, the processors, the distributors are dependent on fishing. Employment in this industry is almost as significant as employment in the electronics industry, although it may not provide as many photo opportunities for the Minister of State at the Scottish Office. It is the vital dominating industry around the coastline. It is one of the great natural resource industries of Scotland. It should be developed and enhanced, not crippled and undermined.
  What we want above all from the Minister is a firm timetable for action to deal with the crisis. Two years ago, when I was first elected to the House, one of the first engagements that I took on was an invitation from the Scottish Fishermen's Federation to attend a discussion about licensing and structures policy, to respond to a Government discussion document that was released at that time. Little did I think that, some two years later, we would have made little progress in the discussions and

  1021
  consultation. It is incredible that the whole licensing and structures policy of the industry has effectively been in hiatus for that time.
  I understand that some indications were given in a letter earlier this week that was sent to the right hon. Member for Kincardine and Deeside (Mr. Buchanan-Smith), whose work for the industry is acknowledged on the Opposition Benches as well as on the Government Benches. I want to know when the Government's proposals are to be published. I want also an assurance that any aggregation within the licensing and structures policy will not favour the company sector against the share-owned boat, which is the typical pattern of ownership of the Scottish industry.
  Decommissioning is another area where action is long overdue. I do not think that any Opposition Member would seriously argue that the decommissioning of the fleet is a complete solution, but it would make a contribution to a managed reduction of the over-capacity in the industry. Is it true that the Minister of Agriculture, Fisheries and Food has torpedoed a decommissioning proposal emanating from the Scottish Office? When I made the suggestion in the press a few weeks ago I was loyally upbraided by the Minister of State, Scottish Office, who accused me in a letter of "wild speculation". Unfortunately for the Minister of State, on the very day that he wrote that letter, 11 October, under the headline "Gummer Sinks Fishers Hopes", the Minister of Agriculture, Fisheries and Food, while speaking at the Conservative party conference, was quoted in the papers as pouring cold water on any decommissioning scheme. Yet after the Scottish Grand Committee debate in July the Scottish Office was openly briefing that there would be a decommissioning scheme this autumn. Indeed, in September, the Minister of State, Scottish Office, wrote to my hon. Friend the Member for Angus, East and stated that
  "progress is being made and we hope to he in a position to make an announcement in the not too distant future."
  It seems to be clear that the Minister of Agriculture, Fisheries and Food is the stumbling block in stopping progress with the decommissioning scheme, and I shall use a few minutes of the time of the House to ask why that should be so.
  There is the well known antipathy of the Minister of Agriculture, Fisheries and Food towards the Scottish fleet. After all, I am talking of the Minister who climaxed his speech, if that is the right description, to the Conservative party conference with a quote from "Henry V". Perhaps the play was rather over-used at that conference but the Minister referred to
  "this sceptred isle, …
  This precious stone set in the silver sea".
  The last words, of course, were
  "this England."
  I do not think that we can be in much doubt where the political priorities of the Minister lie!
  It could be that the Ministry of Agriculture, Fisheries and Food has built its opposition to decommissioning on a strategy of using the elimination of the flag of convenience boats to take out capacity in the fleet. It may be that the Ministry believes that by eliminating the flag of convenience boats from the fleet it could observe the multi-annual guidance premium. The best that can be said about that strategy after the previous debate is that it is
  1022
  badly holed under the water line. I am tempted to say that, given the performance of Ministers in that debate, it is hardly surprising that we lost the case before the European Court of Justice.
  Dr. Norman A. Godman: Might it not be that the present Minister of Agriculture, Fisheries and Food has painful memories of the way in which the previous decommissioning scheme was manipulated or exploited by certain Humberside trawler owners? If the Government are to behave humanely to our fishermen, however, they must introduce a decommissioning scheme vis-a-vis the multi-annual guidance programme obligations.
  Mr. Salmond: I agree with the hon. Gentleman.
  I was coming to the "guilty conscience" theory as a third explanation of why the Minister of Agriculture, Fisheries and Food might be so blatantly blocking progress towards a decommissioning scheme. The fishermen of Scotland and those of us on the Opposition Benches drew a sharp intake of breath when we heard the Minister regaling against "the widespread abuses" of the previous decommissioning scheme. Could that be the Minister who presided over these abuses and whose Ministry was so severely criticised in the Public Accounts Committee report on that very matter? If I remember correctly, the report questioned whether the Ministry had detailed knowledge of the finances of the fishing industry. I hope that the Government and the Minister do not claim that it is impossible to have an honest decommissioning scheme. If it were, that news had better be communicated to all the other member states that are implementing just such a scheme.
  I am sure that the hon. Member for Greenock and Port Glasgow would agree with my recollection that the Public Accounts Committee did not argue against a decommissioning scheme; it said that the next one should be more effective—an honest decommissioning scheme and not just a route to siphon money towards some fishing companies that may or may not have had close relationships with the Conservative party.
  The fourth explanation of why the Minister may be blocking progress is that the Fontainebleau agreement might mean that, although the European Community funds 50 per cent. of the decommissioning costs, and although they are charged against income tax, thereby giving a further gain, it may he that the Prime Minister is worried about her rebates—about getting her money back, as she so eloquently put it. If that is the case—and we need it put on the record—the Scottish fisherman will be deprived of access to European funding because of the Fontainebleau agreement and the Prime Minister's attitude to the European Community. I hope that the Minister will not follow his colleagues in blaming the industry. I hope that he recognises that no one accepts that explanation and no one believes it.
  In The Sunday Times last Sunday—hardly a trenchant critic of Government policy—Alan Massie wrote:
  "The attempt made by John Selwyn Gummer, minister of agriculture, fisheries and food, to throw responsibility for the crisis back on the Scottish fishermen was a characteristically silly and shabby effort to evade Whitehall's responsibility."
  So let us hear no more of the nonsense that fishermen are to blame. The Government's fishing policy is in total disarray.

  1023
  The Opposition parties and the industry—both catchers and fish merchants—have offered the Government positive proposals on how to deal with the crisis. My colleagues and I put up a six-point plan and presented it to the Minister last week. We received a courteous hearing, but I wish that I could say that we had been given some sign that there would be imminent action. We proposed a lay-off scheme as an immediate response to the particular problems and to take some pressure off the scarce stocks. We proposed a decommissioning scheme, to which I have already referred. We proposed that there should be real action against industrial fishing in the North sea. I do not know whether the Minister is aware of this, but industrial fishing is taking 1 million tonnes of sand eels and Norwegian pout—the seed corn and the food source of the haddock stock in the North sea. Will the Government press for action against industrial fishing?
  We proposed that the "Hague preference", the council resolutions of 1976, he given wider application. Those resolutions recognise that there are areas of the Community dependent on the fishing industry, such as Ireland and northern Britain which should be given preference in the application of the common fisheries policy. They could be used productively to help both the catching and the processing sectors of the Scottish industry. We also want to know when the Scottish Fishermen's Federation will be given a reasoned and positive response to its proposals on conservation such as mesh size enforcement, gear restrictions and action against the discarding of small fish.
  Last in our six-point plan was our desire for the Minister to recognise that reliance on low quotas alone has proved a failure. Let us look at the haddock quota: over the past five years it has not once been overfished. Any assessment of quotas suggests that, given that the stock is now experiencing severe problems, the scientific assessment itself leaves much to be desired. We want to move the emphasis of conservation away from the low-quota system, which has failed, to other measures which can succeed.
  Finally, let me emphasise that we have never argued that our plan—or anyone else's—holds all the answers; what we demand is that something be done. I believe that the measures that the SNP has outlined would bring stability and security back to the industry. Some of these, I accept, would have to be argued for at European level, but some are being blocked by the pure inertia and incompetence of the present Government. We shall continue to hound that Government and press this case until we secure the action that is so urgently required. We need that policy action to save the industry—and to save the communities which we represent.
  4.15 am
  The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. David Curry): The hon. Member for Banff and Buchan (Mr. Salmond) began by reproaching my right hon. Friend the Minister for his overuse of "Henry V" at the Conservative party conference. My right hon. Friend did, of course, quote Shakespeare, but he clearly knows his Shakespeare better than the hon. Gentleman, because he quoted from "Richard II": it was a speech of John of Gaunt, I believeI shall not waste further time on preliminaries, although I think that we should have our literary references straight.
  1024
  The hon. Gentleman will no doubt know that yesterday—or, rather, the day before yesterday—we announced the allocation of the Hague preference for haddock. He will also know that that allocation went to the northern communities, which means predominantly Scotland—about 85 per cent. of that additional allocation, in total 5,360 tonnes. I am sure that he will recognse that that has caused disappointment and more among the English fishing communities, who are facing exactly the same strain as the Scottish fishing communities.
  No doubt the hon. Gentleman will also be interested to learn that yesterday we completed arrangements for an additional 200 tonnes of North sea haddock for the whole of the British industry, by means of a swap with Germany. Together with the previous 400 tonnes swapped with France, and 26 tonnes from the Belgians, that takes the United Kingdom quota to 55,006 tonnes—which represents 88 per cent. of the entire EEC quota for North sea haddock. Just in case the hon. Gentleman wishes me to be precise, let me tell him that we gave back some pollack and megrim from the western areas.
  I must make it clear that producer organisations that have overfished their allocations will not benefit from the additional allocation—although we recognise that it is a small one. We are pursuing the matter of further swaps, but, as everyone involved in the debate recognises, we are tackling the problem of a large amount of high technology pursuing a limited resource.
  It is true that fixing quotas is a difficult matter. In 1989 we fixed North sea haddock quotas at 68,000 tonnes, on the basis of clear scientific advice. That followed evidence of poor recruitment and high catches of juvenile fish, which led to increased discarding and drove the spawning stocks to very low levels. We insisted that there should be a mid-term review in case the scientists had got it wrong. We had that review but it confirmed the assessment, and we decided that, as our priority was to rebuild a precarious stock, we would accept that assessment.
  The advisory committee on fisheries management meets in the first week of November to recommend the 1990 total allowable catches. We shall seek action, as we have always done, on the basis of scientific advice. It is all too easy to say that the scientists have got it wrong—and fishermen have been saying that recently, and quite frequently. I must, however, warn the House against over-enthusiastic acceptance of political arithmetic. Scientists may not be infallible, but if we do not rely on objective data while seeking to improve the quality of that data, we shall find ourselves in the business of trading political multipliers, which will lead eventually to far too great a pressure on stocks.
  Mr. Salmond: Will the Minister give way?
  Mr. Curry: No. I am just about to answer some of the detailed points that the hon. Gentleman raised. I am sure that he would like me to do that.
  First, he mentioned his programme, and I shall try to cover that as best I can in the time available. He asked about a laying-up scheme. There is provision under the council regulation 4028/86 for member states to provide laying-up premium in respect of temporary withdrawal of fishing vessels. I am not sure that that is appropriate for the current circumstances of the North sea fisheries. It was not intended for the short-term problem which exists in the North sea haddock fishery and the rates are set at low

  1025
  levels. There was little interest in the earlier scheme between 1984 and 1986 because of the tight eligibility conditions. For example, the period of laying-up must be additional to normal laying-up and extend to between 45 and 150 days. Few vessels would qualify for such a scheme and in any case the scheme is not intended to fill the gaps in normal fishing activity. The danger is that a laying-up scheme might retain capacity which should go out of the industry. There is very little enthusiasm within the Community for such an approach, and, given the hon. Gentleman's enthusiasm for the Community, no doubt he would be anxious to secure its endorsement.
  Mrs. Margaret Ewing: Market forces.
  Mr. Curry: We have to reach a solution in which market forces have a role to play. I do not intend to stand at the Dispatch Box saying that it is the job of Government to manage every last iota of decision making in the fishing industry or any other industry. That is not the job of Government and I do not think that Government do it very well.
  The hon. Gentleman asked me about decommissioning which is a complex issue. A full decommissioning scheme would be expensive. The National Federation of Fishermen's Organisations recently estimated that a full scheme would cost about £45 million. We need to be sure that such expenditure would be well used. That includes being sure that vessels which might be decommissioned would otherwise not have left the fleet. We also need to be sure that any capacity removed under a decommissioning scheme would ease pressure on the fish stock. That would not be the case if ineffective capacity were removed, leaving behind the efficient vessels. In practice, it is difficult to draw up a scheme which targets the efficient vessels. Those difficulties need to be addressed in deciding whether a decommissioning scheme might be introduced.
  The hon. Gentleman asked several questions relating to the methods of management.
  Mr. Salmond: Will the Minister give way?
  Mr. Curry: No. The hon. Gentleman went on at length and then invited me to cover his six points. Perhaps I can do that first.
  He mentioned several items which relate to methods of management. He made suggestions for dealing with the discards, and I know that there are schemes which would require the landing of all fish caught. I know that there is a proposal for multi-annual quotas. Those are alternative management systems. The hon. Gentleman will know that the present Community system is based on total allowable catches, minimum landing sizes and mesh sizes and gear restrictions. Everyone recognises that it is not a perfect system, but it is probably the best way. If we were to allow people to land the fish that they had caught when the fishery was closed, we simply would not have quota management at all.
  I say seriously to the House that shortly we shall enter difficult negotiations in Brussels in the context of the mid-term review of the entire fisheries policy. It would not be sensible for the United Kingdom, which has significant advantages under the present system, to suggest that we want to throw that in the air. If we did that there are plenty of other people who would jump in immediately. We have
  1026
  spent one and a half hours discussing the problems of quota hoppers and Spanish interlopers. I cannot imagine the enthusiasm that there would be in some continental countries to see the status quo being challenged by the United Kingdom.
  It is absolutely essential that everyone in the industry makes it clear that they are committed to the legal operation of the quota system and the full observance of the rules. Those who tout illegality are simply indulging in a form of suicidal self-indulgence.
  The hon. Member for Banff and Buchan mentioned conservation, about which I am more in agreement with him. Suggestions have been put forward by the Scottish fishermen's organisations and other organisations across the United Kingdom. However, those organisations do not all agree about what they should like to see done. The suggestions cover mesh sizes and shape, restrictions on gear attachments—including the length of the extension piece and measures to prevent the ballooning of the cod end—the prohibition of the carriage of illegal gear and the one-net rule, to which I know that Scottish fishermen are particularly attached.
  We are examining those interesting ideas and shall shortly send to Brussels a paper suggesting measures based on the project put forward by the industry.
  The hon. Member for Banff and Buchan mentioned industrial fishing. We believe that the present Community controls on industrial fishing provide an adequate level of control and that there is no scientific base for banning the practice completely. By-catches of human consumption species in the North sea have fallen considerably to low levels and do not pose a threat to stocks. If that position does not continue, we shall have to reconsider it.
  The hon. Member for Banff and Buchan mentioned licences. The present ban on licence transfers that involve increases in tonnage or engine power is causing the industry problems. We shall shortly issue proposals that will provide more flexibility for fishermen when transferring licences and will not lead to an increase in the total capacity of the fleet. These measures will involve the aggregation of fishing vessels' licences.
  Suggestions have been made—I realise that the hon. Member for Banff and Buchan did not lend his name to this suggestion, but it is important that I should refer to it—that there should be an amalgamation of quotas: for example, that the United Kingdom quota for the west of Scotland haddock could be amalgamated with that for the North sea. There is much west of Scotland quota left, and, at present catch levels, about 15,000 tonnes would be available. However, it would be caught in the North sea and not in western areas.
  Mr. Salmond: I want to return to the question of decommissioning. The Minister has been extremely hostile to the prospect of a decommissioning scheme. His tone is entirely different from that of the Scottish Office. Will he confirm that there is tension between his Department and the Scottish Office on the decommissioning scheme, and that his Department is effectively vetoing a decommissioning scheme that would otherwise be supported by the Scottish Office?
  Mr. Curry: I made it clear that we are retaining the decommissioning scheme as one of the options under consideration. I made it clear that it is an expensive option. We realise that there are targets that we must attain. We

  1027
  have yet to decide which would be the best combination of measures to achieve those targets. When we reach that decision, it will be a decision of all the fisheries departments and of the Government.
  Mr. Andrew Welsh: When?
  Mr. Curry: We will reach those decisions shortly.
  Mrs. Margaret Ewing: This side of Christmas?
  Mr. Curry: Yes, certainly.
  The Spanish have entitlements to west coast stocks. If the stocks were to be amalgamated with North sea quotas, what possible grounds would we have to deny access to the North sea to Spanish vessels? To attack the present system would destroy the credibility and force of the British argument for continuing the essential structures and operation of the common fisheries policy.
  I realise that the industry is facing great difficulties. It is equally true to say that the Scottish fleet went through a period of significant profit and well-being in the mid-1980s. It made major investments in its capacity and was earning a 15 per cent. return on capital.
  1028
  A single idea will not resolve the present difficulties. Fishermen are individuals; fisheries have their own characteristics, but the problems that they face are very different. We are seeking to achieve a healthy, modern fleet that can take its own decisions on the basis of as much stability as we can achieve in the context of a common fisheries policy and a resource that is limited, moves around the sea and is subject to biological change. We must rely on a disciplined approach to fishing. Stocks must be maintained to ensure their conservation and the opportunity for British fishermen—I use the term "British fishermen" deliberately—all around the coasts of the United Kingdom. This must be in the framework of a fisheries policy that meets our interests and conserves our advantage.
  We shall shortly be taking important decisions, because the mid-term review will be of capital importance to the British fleet. We are determined to defend that interest in the future, as we have done in the past, to ensure that the United Kingdom remains a significant fishing nation.
  Question put and agreed to.
  Adjourned accordingly at half-past Four o'clock.

HOME DEPARTMENT

  Broadcasting
  Mr. John Evans
  To ask the Secretary of State for the Home Department if he will make a statement on plans to deregulate broadcasting.

  Mr. Renton
  We intend to introduce legislation which will authorise new television and radio services, set clear limits on broadcasting ownership, encourage competition and efficiency, and safeguard diversity and high quality in programming, to the benefit of viewers and listeners.

  Immigration
  Mr. Vaz
  To ask the Secretary of State for the Home Department what is the current average length of time it takes his Department to process an application for(a) registration and (b) naturalisation.

  Mr. Renton
  The average time taken to complete applications for registrations and naturalisations in September 1989 was 20 and 24 months respectively. We anticipate that there will be a substantial improvement during 1990–91 when the backlog of 1987 registrations has been cleared.

  Mr. Vaz
  To ask the Secretary of State for the Home Department what was the current backlog of unopened mail at the immigration and nationality department as at 17 October.

  Mr. Renton
  On 17 October there were 7,201 items of mail unopened. The average delay in opening correspondence, in order to deal with it. is about two weeks.

  Police Committees
  Mr. Harry Greenway
  To ask the Secretary of State for the Home Department if he will state the cost of running statutory police consultation committees for London boroughs in the past years(a) for Ealing borough and (b) for all those boroughs with a statutory police committee; and if he will make a statement.

  Mr. Peter Lloyd
  The cost of running the Ealing community and police consultative group in the 1988–89 financial year was £30,500.

  Each group operates independently and levels of expenditure are affected by the amount of each group's activity, the nature and location of the borough and the degree of council support. In the case of Ealing, the majority party borough council has refused to take up its place on the group or provide any administrative support. The cost to the Metropolitan police fund has therefore to cover the cost of independent administrative support to the group.

  The refusal of Ealing borough council—together with four other local authorities in London—to take part in the
  448
  statutory process of police-community consultation is misconceived and irresponsible. I urge them to support arrangements which are playing an increasingly important role elsewhere in London and throughout England and Wales in involving local people in policing issues that concern them. Figures for the other consultative groups which come within the Metropolitan police district are as follows:

  Figures for the 1988–89 financial year, rounded to the nearest £100

  £

  Barking and Dagenham

  8,000

  Barnet

  19,200

  Bexley

  18,900

  Brent

  6,500

  Bromley

  2,000

  Camden

  7,900

  Cheshunt

  1600

  Croydon

  7,800

  Enfield

  3,800

  Epping Forest

  5,000

  Epsom and Ewell

  4,200

  Esher

  4,000

  Greenwich

  2,100

  Hackney

  2,700

  Hammersmith and Fulham

  22,000

  Haringey

  6,900

  Harrow

  10,700

  Havering

  400

  Hertsmere

  11,300

  Hillingdon

  6,300

  Hounslow

  10,000

  Islington

  15,000

  Kensington and Chelsea

  9,200

  Kingston upon Thames

  15,200

  Lambeth

  51,400

  Lewisham

  17,900

  Merton

  6,200

  Newham

  26,600

  Redbridge

  3,800

  Reigate and Banstead

  1200

  Richmond upon Thames

  12,000

  Southwark

  20,500

  Spelthorne

  11,900

  Sutton

  14,100

  Tower Hamlets

  23,000

  Waltham Forest

  10,000

  Wandsworth

  116,700

  Westminster (includes Paddington, South Westminster, West End Central groups and Westminster-wide co-ordinating group

  47,500

  1 Estimated where final account not yet received or agreed.

  2 Part of a year only. Group in its first year.

  Note:

  Figures also include costs of lay visitors panels where established.

  Crime (Compensation)
  Mr. Frank Field
  To ask the Secretary of State for the Home Department what moves he intends taking with EEC Governments to ensure that those British subjects who are victims of crime within the EEC are able to claim compensation equivalent to the criminal injuries compensation paid to EEC nationals who are victims of crime in the United Kingdom.

  Mr. John Patten
  When we ratify the Council of Europe convention on the compensation of victims of violent crime, British citizens who suffer criminal injuries (or their dependants if they are killed) in countries party to the convention will be able to obtain compensation in those countries. We have to examine some of the detailed requirements of the convention before we ratify it.
  449
  Once we have ratified, we shall take every opportunity to encourage other countries (including the European Community countries) to do likewise.

  Fire Safety
  Mr. Cartwright
  To ask the Secretary of State for the Home Department what steps he is taking to improve fire safety in(a) offices and (b) schools.

  Mr. John Patten
  Offices where more than 20 persons are at work at any one time or more than 10 persons are at work elsewhere than on the ground floor, are already required to have a fire certificate unless they have been exempted by the fire authority from this requirement. Fire authorities have powers to enforce the requirements of fire certificates which require offices to be provided with adequate means of escape and means for fighting fire and to provide training for employees in action to be taken in the event of fire.

  In offices which do not require a fire certificate, the occupier must by law provide such means of escape in case of fire and such means for fighting fire as may reasonably be required.

  Guidance for occupiers in the form of a code of practice for fire precautions in factories, offices, shops and railway premises not required to have a fire certificate was issued in April. It is available to the public from HMSO outlets.

  The Home Office will be publishing next month a basic guide to fire safety at work which will also be available from HMSO outlets. It is aimed not only at occupiers, but at all those with management responsibility.

  Fire safety in schools is primarily a matter for my right hon. Friend the Secretary of State for Education and Science.

  Public House Bombings (Guildford and Woolwich)
  Mr. Mullin
  To ask the Secretary of State for the Home Department if he will authorise the payment of interim compensation to the four persons whose convictions for the Guildford and Woolwich pub bombings were recently quashed.

  Mr. Hurd
  It is my normal practice to make interim compensation payments where these are requested. The amount will be decided by the independent assessor.

  Mr. Mullin
  To ask the Secretary of State for the Home Department if he will consider appointing lay assessors to Sir John May's inquiry into the Guildford and Woolwich bombings convictions; and if the evidence to the inquiry will be published.

  Mr. Hurd
  I would be prepared to consider the appointment of lay assessors if Sir John May feels this is necessary for the conduct of his inquiry.

  Anybody giving evidence to the inquiry may, if they wish, publish it, and there will be hearings in public. The question of publishing evidence not given in public will be considered when the inquiry is complete.

  Anglo-Irish Relations
  Mr. Parry
  To ask the Secretary of State for the Home Department if, with a view to improving Anglo-Irish relations, he will reconsider the request of Irish Republican category 'A' prisoners held in English prisons to be 450
  transferred to Northern Ireland to alleviate the suffering and hardship caused to their families; and whether there are any plans to close a high security prison in Northern Ireland due to the dwindling prison population in the Province.

  Mr. Peter Lloyd
  Requests by prisoners for permanent transfer to Northern Ireland are considered in the light of the criteria set out in the reply by my right hon. Friend to a question by my hon. Friend the Member for Bury, North (Mr. Burt) on Friday 23 June 1989 at column 263. These criteria, which do not distinguish between category A and other inmates, deal not only with the circumstances of the inmate in question but also with any family circumstances which may be put forward in support of a transfer request. It is open to any inmate whose transer request is refused to make a fresh application which would be considered in the light of the criteria and the circumstances applying at the time of the fresh request.

  Prisons in Northern Ireland are the responsibility of my right hon. Friend the Secretary of State for Northern Ireland from whom I understand that there are currently no plans to close any prison establishment in the Province.

NORTHERN IRELAND

  Royal Ulster Constabulary
  Mr. John D. Taylor
  To ask the Secretary of State for Northern Ireland what nationalities has the chief constable of the Royal Ulster Constabulary, Mr. Hugh Annesley.

  Mr. Cope
  [holding answer 23 October 1989]: The nationality status of individuals is a private matter.

WALES

  Speech Therapists
  Mr. Michael
  To ask the Secretary of State for Wales what steps he is taking to overcome the shortage of speech therapists in Wales.

  Mr. Grist
  Speech therapy requirements have been examined in the context of the annual manpower resource planning exercise undertaken by the Health Service in Wales in 1988 and 1989. The purpose of the exercise, initiated by the manpower steering group established by the Department in 1986, is to identify future manpower requirements and enable action to be taken to meet these requirements at the all-Wales level.

  The report of the 1988 manpower resource planning exercise recommended an increase in speech therapy provision within Wales. This is being considered within the context of the provision of education and training within the NHS in Wales generally and taking into account the results of the 1989 manpower resource plans (a report of which will be available early next year), the implications of the proposals contained in the White Paper "Working for Patients" and the recommendations contained in the report of a review of the role of the combined training institute at Cardiff.

  Water Supplies
  Mr. Michael
  To ask the Secretary of State for Wales what assessment he has made of the effectiveness of measures taken following the drought which affected Welsh water supplies in 1976, especially in the light of the shortage of supplies in the reservoirs this summer.

  Mr. Grist
  A number of improvements have been made to the water supply distribution system since 1976. Of particular note is the River Wye transfer scheme and the establishment of a mini-grid system in south-east Wales. Whilst this summer was the driest since 1910 in that area, the improvements have enabled Dŵr Cymru Cyf to maintain supplies despite the low level of water in local reservoirs.

  Mr. Michael
  To ask the Secretary of State for Wales what proposals he has to ensure that water supplies in Wales are dependable even in future periods of drought.

  Number of pupils

  Clwyd

  Dyfed

  Gwent

  Gwynedd

  Mid Glamorgan

  Powys

  South Glamorgan

  West Glamorgan

  Fewer than 10 pupils

  0

  0

  0

  0

  0

  0

  0

  0

  Fewer than 20 pupils

  8

  5

  1

  2

  1

  2

  0

  0

  Fewer than 30 pupils

  17

  36

  9

  19

  3

  20

  1

  1

  Fewer than 40 pupils

  29

  77

  11

  35

  7

  29

  2

  4

  Fewer than 50 pupils

  39

  106

  13

  55

  12

  41

  2

  5

  Fewer than 60 pupils

  52

  133

  20

  74

  15

  49

  4

  5

  60–99 pupils

  39

  55

  24

  50

  35

  31

  10

  15

  100–149 pupils

  50

  60

  35

  28

  62

  13

  12

  15

  150–199 pupils

  31

  35

  56

  22

  107

  8

  36

  45

  Mr. Nicholas Bennett
  To ask the Secretary of State for Wales if he will list the number of primary schools closed by each Welsh local education authority in each year since 1974 in each of the following categories,(a) fewer than 10 pupils, (b) fewer than 20 pupils, (c) fewer than 30 pupils, (d) fewer than 40 pupils, (e) fewer than 50 pupils, (f) fewer than 60 pupils, (g) between 60 and 100 pupils, (h) between 100 and 150 pupils and (i) between 150 and 200 pupils.

  Mr. Wyn Roberts
  Information requested, in the form requested is not available. I will write to my hon. Friend.

NATIONAL FINANCE

  Data Protection
  Mr. Cohen
  To ask the Chancellor of the Exchequer what is the purpose of the office and management support system for tax compliance based at Basingstoke, Telford and Worthing; and what measures have been taken to ensure the system will comply fully with the provisions of the Data Protection Act.

  Mr. Lilley
  The Inland Revenue has introduced a new office and management support system in its specialist investigation offices. The main purpose of this relatively small computer system is to collate factual information and avoid duplicate research by the Revenue's investigators in those offices. The system will also monitor progress on investigations and includes a full range of automated office functions such as diaries, electronic mail and computational facilities. The system became
  452
  Mr. Grist
  It is the responsibility of Dŵr Cymru to ensure that water supplies within its area can be maintained at times of below-average rainfall. The company, in liaison with the NRA who have overall responsibility for water resource management, will keep the position under review.

  Primary Schools
  Mr. Nicholas Bennett
  To ask the Secretary of State for Wales if he will list for each Welsh local education authority the number of primary schools with(a) fewer than 10 pupils, (b) fewer than 20 pupils, (c) fewer than 30 pupils, (d) fewer than 40 pupils, (e) fewer than 50 pupils, (f) fewer than 60 pupils, (g) between 60 and 100 pupils, (h) between 100 and 150 pupils and (i) between 150 and 200 pupils.

  Mr. Wyn Roberts
  The information requested, based on the position at January 1989, is shown in the table:

  operational in September and is distinct from the large COP/CODA computer project which has been operational for sometime, and provides support for local tax districts.

  The Data Protection Act has been fully complied with and the system has been registered with the Data Protection Register.

  Tax Appeal Hearings
  Mr. Wigley
  To ask the Chancellor of the Exchequer what representations he has received about the revised system of testing taxpayers' cases for Inland Revenue apeal hearings before the general commissioners; and if he will take steps to ensure that the new computerised system meets the reasonable needs of accountants and others representing the appellants.

  Mr. Lilley
  Representations have been received from accountants and clerks to general commissioners on the new computerised procedures used by the Inland Revenue in listing cases for general commissioners hearings and printing the clerk's notices. An evaluation exercise will shortly be undertaken which will take full account of representations received.

  Mortgage Tax Relief
  Mr. Norman Hogg
  To ask the Chancellor of the Exchequer if he will publish a table in the Official Report showing (a) the estimated total cost of mortgage tax relief in 1989–90, (b) the average value of relief per mortgagor and (c) the numbers receiving mortgage relief broken down in the income ranges (i) under £4,000, (ii) £4,000 to £5,000, (iii) £5,000, (iv) £5,000 to £6,000 (v) £6,000 to £7,000, (vi) £7,000 to £8,000, (vii) £8,000 to £9,000, (viii)

  453
  £9,000 to £10,000, (ix) £10,000 to £12,000, (x) £12,000 to £15,000, (xi) £15,000 to £20,000, (xii) £20,000 to £25,000, (xiii) £25,000 to £30,000 and (xiv) over £30,000.

  Mr. Lilley
  Information on the distribution of mortgage interest relief by range of total income is available from projections of the data from the 1986–87

  Tax units receiving mortgage interest relief by range of total income 1989–90

  Range of total income

  Number of tax units with mortgage interest relief

  Average value of relief per mortgagor

  Cost of relief

  Thousands

  £

  £ million

  Up to £4,000

  470

  520

  240

  £ 4,001 to£ 5,000

  170

  470

  80

  £ 5,001 to £ 6,000

  170

  510

  90

  £ 6,001 to £ 7,000

  270

  520

  140

  £ 7,001 to £ 8,000

  410

  640

  260

  £ 8,001 to £ 9,000

  430

  660

  290

  £ 9,001 to £10,000

  420

  670

  280

  £10,001 to £12,000

  860

  680

  590

  £12,001 to £15,000

  1,400

  680

  950

  £15,001 to £20,000

  1,880

  740

  1,390

  £20,001 to £25,000

  1,200

  750

  900

  £25,001 to £30,000

  610

  890

  540

  over £30,000

  1,010

  1,240

  1,250

  Total

  9,300

  750

  7,000

  Rugby Players (Income Tax)
  Mr. Hinchliffe
  To ask the Chancellor of the Exchequer what income tax receipts were received on fees paid to rugby union players in the last financial year.

  Mr. Lilley
  [holding answer 23 October 1989]: I regret that it is not possible to identify from the information available about income tax receipts the amount paid by rugby union players.

TRADE AND INDUSTRY

  Financial Reporting Council
  Mr. Nicholas Bennett
  To ask the Secretary of State for Trade and Industry when he expects to make an announcement about the appointment of a chairman of the Financial Reporting Council.

  Mr. Redwood
  In the light of my Department's consultations with interested parties about the implementation of the structural proposals in the Dearing report on the making of accounting standards, I have asked Sir Ronald Dearing, and he has agreed, to become chairman designate of the Financial Reporting Council. His task will be to negotiate terms with all concerned so that the new arrangements for making and enforcing accounting standards are in place next summer.

  When the Financial Reporting Council is established, it is the intention of my right hon. Friend the Secretary of State for Trade and Industry, acting jointly with the Governor of the Bank of England, formally to appoint Sir Ronald as chairman of the council.

  Clear unambiguous accounting standards which are effectively enforced are essential to the good working of a market economy. The report of the committee chairman by Sir Ronald has been widely welcomed as identifying the way to enhance the authority and general acceptance of accounting standards. I can think of nobody who is better
  454
  survey of personal incomes and the 1986 family expenditure survey. However, all estimates are provisional.

  Latest estimates for 1989–90 are given in the table and include mortgages formerly under the option mortgage scheme which are now subsumed within MIRAS. The estimates take account of the recently announced increases in mortgage interest rates.

  qualified to carry through the important task of setting up the new arrangements, and I am delighted that Sir Ronald has agreed to undertake this role.

  DRG (Takeover Bid)
  Dr. David Clark
  To ask the Secretary of State for Trade and Industry if he will make a statement on the action he is taking concerning the proposed takeover bid for DRG by Pembridge Investments.

  Mr. Redwood
  [holding answer 24 July 1989]: The proposed acquisition by Pembridge Investments of DRG is currently being considered by the Director General of Fair Trading who will advise my right hon. Friend the Secretary of State in the normal way on the question of reference to the Monopolies and Mergers Commission.

  China (Textiles)
  Mr. Madden
  To ask the Secretary of State for Trade and Industry if he will seek to arrange for the EEC Commission to renegotiate agreements with China concerning textile imports from China within the EEC; what representations he has received about increased Chinese textile quotas to the United Kingdom; what action he is taking to reduce Chinese textile imports into the United Kingdom; and if he will make a statement.

  Mr. Redwood
  [holding answer 24 July 1989]: No. The bilateral textiles agreement negotiated between the European Community and China under the multi-fibre arrangement at the end of the last year lasts for four years. I understand the concern that has been expressed in a number of representations to me and to my Department about the increased levels of access for Chinese textile and clothing products under this agreement. However we were satisfied that the new agreement was the best that the Commission could achieve.

  We continue to watch developments closely and if unrestrained imports from China cause or threaten to

  455
  cause disruption to the United Kingdom market, Ministers would be willing to consider whether it would be in the United Kingdom interest to put a case to the EC Commission for restraint action under the provisions of this agreement.

SCOTLAND

  CBI
  Mr. Sillars
  To ask the Secretary of State for Scotland how many meetings he has had with the Confederation of British Industry in the past 12 months.

  Mr. Lang
  I refer the hon. Member to my reply on 18 October to my hon. Friend the Member for Stockport (Mr. Favell).

  Labour Statistics
  Mr. Sillars
  To ask the Secretary of State for Scotland what are the total figures and percentage rates of unemployed people in each individual Glasgow constituency; and what were the comparable figures in 1979, 1983 and 1987.

  Mr. Lang
  The information is not available in the precise form requested. The table below gives the number unemployed in each Glasgow parliamentary constituency in August 1989, the latest date for which information is available, together with comparable figures for 1983 and 1987. There are no unemployment estimates for parliamentary constituencies prior to June 1983. Percentage rates for unemployment are not calculated for parliamentary constituencies.

  Glasgow Parliamentary Constituencies

  August 1983

  August 1987

  August 1989

  Cathcart

  4,249

  4,196

  2,976

  Central

  6,754

  7,301

  5,641

  Garscadden

  6,204

  5,648

  4,482

  Govan

  5,975

  5,922

  4,609

  Hillhead

  4,939

  5,787

  4,267

  Mary hill

  7,226

  7,771

  6,097

  Pollok

  7,405

  6,945

  5,382

  Provan

  9,437

  7,915

  5,902

  Rutherglen

  7,131

  6,313

  4,574

  Shettleston

  6,610

  6,324

  5,055

  Springburn

  8,334

  8,152

  6,402

  1 There have been a number of changes in the compiliation and coverage of the unemployment count. Therefore the figures given above are not directly comparable with each other.

  Interest Rates
  Mr. Sillars
  To ask the Secretary of State for Scotland what recent representations he has received from the Confederation of British Industry about the effect of high interest rates on the Scottish economy.

  Mr. Lang
  I am aware of recent statements by the Confederation of British Industry on the interest rate rise announced on 5 October. The Government continue to believe that interest rates are the most effective weapon to counter the risks of inflation.

  Forensic Scientists
  Mr. Wray
  To ask the Secretary of State for Scotland how many forensic scientists were employed by his office in(a) Scotland, (b) the Strathclyde region and (c) Greater Glasgow for each year since 1979.

  Lord James Douglas-Hamilton
  In Scotland, forensic scientists working in police laboratories are employed by the police authority concerned. Figures of the numbers so employed are as follows:

  Scotland

  Strathclyde region (all located in Glasgow)

  1979

  21

  14

  1980

  21

  14

  1981

  21

  14

  1982

  22

  14

  1983

  34

  14

  1984

  24

  14

  1985

  25

  14

  1986

  33

  20

  1987

  33

  20

  1988

  34

  20

  1989

  38

  20

  Caledonian MacBrayne
  Mr. Dewar
  To ask the Secretary of State for Scotland if he is now in a position to announce the membership of the board of Caledonian MacBrayne.

  Mr. Rifkind
  I am at present considering possible membership of the board and will make an announcement as soon as possible.

  Correspondence
  Mr. Pawsey
  To ask the Secretary of State for Scotland what percentage of letters from hon. Members to his Department received a reply(a) in under four weeks, (b) within four to six weeks, (c) within six to eight weeks and (d) over eight weeks, in each of the last three years.

  Mr. Rifkind
  Disproportionate costs would be incurred in the preparation of an answer in the form requested. An ad hoc survey conducted within my Department during a representative period in 1988 showed an average response time of 23 days.

  Residential Homes
  Mr. Norman Hogg
  To ask the Secretary of State for Scotland how many mentally ill and handicapped people live in residential homes and hostels in Scotland.

  Mr. Lang
  As at 31 March 1988, the latest date for which information is available centrally, 226 mentally ill persons and 1,713 persons with mental handicap were resident in local authority homes and homes registered by them. Comprehensive information on unregistered accommodation is not available but 304 mentally ill and 464 mentally handicapped persons were recorded as resident in other establishments of which local authority social work departments were aware. Also at the same date 770 persons resident in homes for the elderly were described as mentally ill and some 620 as mentally handicapped.
  457
  Mr. Norman Hogg
  To ask the Secretary of State for Scotland how many physically handicapped aged under 65 years live in residential homes in Scotland.

  Mr. Lang
  As at 31 March 1988, the latest date for which information is available, there were 749 persons under 65 reported as physically handicapped in local authority homes and homes registered by them.

  One-parent Families
  Mr. Norman Hogg
  To ask the Secretary of State for Scotland what is the number of one-parent families recorded in Scotland.

  Mr. Lang
  From the latest available information it is estimated that there were some 100,000 one-parent families in Scotland in 1986.

  Institutions
  Mr. Norman Hogg
  To ask the Secretary of State for Scotland what proportion of persons aged over 75 years live in institutions in Scotland.

  Mr. Michael Forsyth
  The latest information available is from the 1981 census of population which recorded 9·1 per cent. of residents of Scotland aged 75 years and over as residing in establishments other than private households.

  Sheltered Housing
  Mr. Norman Hogg
  To ask the Secretary of State for Scotland what proportion of the total housing stock is comprised of sheltered housing; and what proportion is provided by local authorities, housing associations and the private sector in Scotland.

  Lord James Douglas-Hamilton
  Reliable information is available centrally only for public housing authorities and for housing associations. As at 31 March 1989, the latest date for which information is available, these agencies provided some 26,555 sheltered houses representing approximately 2·6 per cent. of the total stock of these agencies (1,016,000).

  This total is broken down as follows:

  Number

  Percentage

  Local authorities

  14,703

  55·4

  Scottish Special Housing Association

  1,768

  6·7

  New towns

  434

  1·6

  Housing associations

  9,650

  36·3

  Total

  26,555

  Dounreay
  Mr. Bill Walker
  To ask the Secretary of State for Scotland if he has completed his consideration of the application by the United Kingdom Atomic Energy Authority and British Nuclear Fuels plc for permission to construct a demonstration fast reactor fuel reprocessing plant at Dounreay.

  Mr. Rifkind
  I am announcing today my decision to approve this application, subject to conditions, and I have placed a copy of the decision letter in the Library.

EDUCATION AND SCIENCE

  Youth Service Training
  Mr. Bright
  To ask the Secretary of State for Education and Science (1) how many voluntary youth and community workers have received grant support for training in the youth service under the Education (No. 2) Act 1986 since the scheme came into operation;

  (2) how many youth and community workers not employed by local education authorities are likely to receive grant-supported training in the current financial year.

  Mr. Alan Howarth
  It is estimated that some 105,000 youth and community workers in England will have received training by the end of this financial year, with support through the local education authority training grants scheme. This includes more than 33,000 workers in 1989–90. Separate figures for voluntary workers are not collected centrally.

  Education (Greenwich)
  Mrs. Rosie Barnes
  To ask the Secretary of State for Education and Science what action he intends to take in the light of the London borough of Greenwich's decision to change its secondary schools' admission policy contrary to the undertakings given in its education development plan as published in February 1989, thus excluding children living in the London borough of Lewisham from local schools; and if he will make a statement.

  Mrs. Rumbold
  Inner London borough development plans were published under section 165 of the Education Reform Act 1988 as a basis for local consultation designed to inform councils' formal policy decisions. In relation to school admissions, the relevent formal decisions are those subsequently reflected in admission arrangements published, by Greenwich as by other inner London boroughs, under section 8 of the Education Act 1980. Under section 6 of that Act, parents may express a preference for any school, regardless of its location; LEAs and governors are required to comply with that expression of parental preference, subject to strictly defined reliefs as set out in sections 6(3) and (6). LEAs and governors may not as part of their admission policy refuse to admit out-of-borough pupils. Where schools are oversubscribed, admission authorities may, however, give priority to in-borough children in the allocation of places, provided they make their policy clear in the information published under section 8.

ATTORNEY-GENERAL

  Legal Aid
  Mr. Madden
  To ask the Attorney-General what representations he has received about the refusal rate to applications for legal aid from applications in Bradford; how many legal aid applications have been made by people living in Bradford in each of the last five years; and in each year to date how many applicants have been(a) successful and (b) unsuccessful.

  The Attorney-General
  The Lord Chancellor has received no representations about the refusal rate to
  459
  applications for legal aid from applicants in Bradford. Information is not collected for civil legal aid or legal aid in the Crown Court in the form requested by the hon.

  Number of applications made

  Number granted

  Number refused

  Percentage refused

  1984

  3,694

  3,377

  317

  8·6

  1985

  4,511

  3,984

  527

  11·7

  1986

  3,915

  3,586

  329

  8·4

  1987

  4,885

  4,461

  424

  8·7

  19881

  3,514

  3,241

  273

  7·8

  1No returns were received for one quarter in 1988.

ENERGY

  Nuclear Co-operation
  Mr. Cohen
  To ask the Secretary of State for Energy if he will give details of the agreement reached on nuclear co-operation between the United Kingdom and the Federal Republic of Germany; what levels of spent nuclear fuel and waste will be imported into the United Kingdom; and if he will make a statement.

  Mr. Michael Spicer
  Copies of the full text of the joint declaration on the peaceful use of nuclear energy, which was signed by the Governments of the United Kingdom ad the Federal Republic of Germany on 25 July 1989, have been placed in the Library of the House. No specific contracts for the reprocessing of spent nuclear fuel have yet been agreed as a result of the declaration. In line with Government policy, the contracts, when concluded, will provide for the return of wastes to the Federal Republic of Germany.

PRIME MINISTER

  Downing Street
  Mr. Fisher
  To ask the Prime Minister if she will make a statement on the renovations and redecorations to the Prime Minister's personal apartment at Downing street; whether a designer or architect has been appointed; and what will be the overall cost of the work.

  The Prime Minister
  [holding answer 23 October]: Apart from fitting cupboards, there has been no fundamental work on refurbishment or modernisation of the personal apartment at Downing street. Any redecoration or modernisation work has been undertaken by the Property Services Agency.

  Mr. Fisher
  To ask the Prime Minister whether Her Majesty's Government have invited designers or architects to submit plans for the erection of gates at the Whitehall entrance to Downing street.

  The Prime Minister
  [holding answer 23 October]: There has been a barrier at the Whitehall entrance to Downing street since 1973 and the present gates and railings were installed in 1982. It is intended to replace these with new gates and railings.

  Plans for new demountable railings and gates have been prepared by the Property Services Agency in consultation with English Heritage and the Royal Fine Arts Commission. These have been agreed by Westminster city council.
  460
  Member. The following figures relate to the applications for legal aid in the magistrates' courts in the Bradford police force area:

  Mr. Fisher
  To ask the Prime Minister whether Her Majesty's Government have prepared a budget for the erection of gates at the Whitehall entrance to Downing street.

  The Prime Minister
  [holding answer 23 October]: All expenditure relating to Downing street is budgeted.

  Mr. Fisher
  To ask the Prime Minister whether it is Her Majesty's Government's intention to erect gates at the Whitehall entrance to Downing street.

  The Prime Minister
  [holding answer 23 October]: There has been a barrier at the Whitehall entrance to Downing street since 1973 and the present gates and railings were installed in 1982. It is intended to replace these with new gates and railings.

ENVIRONMENT

  Greenhouse Effect
  Dr. Thomas
  To ask the Secretary of State for the Environment (1) if he has made any assessment of the claimed benefits of the greenhouse effect, made by the Soviet climatologist, Mikhail Budyko, in a paper to the United Nations environment programme in August;

  if his Department has made any assessment of the recent analysis by Dr. John Woods of the Marine and Atmospheric Sciences Division for the Natural Environment Research Council suggesting that the onset timescale for the greenhouse effect has been significantly underestimated;

  (3) what study has been made by his Department, or under consultancy to his Department, of the plankton multiplier effect on the level that global warming may reach following the greenhouse effect.

  Mrs. Virginia Bottomley
  Each of these matters is for consideration in the international review of climate change science being carried out by working group I of the intergovernmental panel on climate change (IPCC). This work is being led by the United Kingdom under the chairmanship of Dr. John Houghton, director general of the Meteorological Office and supported by funds totalling over £600,000 from the Departments of the Environment and Energy.

  Dr. Thomas
  To ask the Secretary of State for the Environment what initiatives he introduced to the Council of European Environmental Ministers to combat the greenhouse effect, at its meeting on 19 September.

  Mrs. Virginia Bottomley
  At the Council meeting on 19 September, my right hon. Friend continued to take the
  461
  lead in initiatives for the conservation of tropical forests. In particular, he supported the redeployment of resources within the European Commission towards forestry, advocated the need for close collaboration with developing countries in taking forward projects for the sustainable management of forest resources, and expressed the hope that other EC countries would support the United Kingdom initiative at the Council of the International Tropical Timber Organisation for a feasibility study on an EC-wide labelling scheme for tropical timber imports.

  Environmental Protection
  Dr. Thomas
  To ask the Secretary of State for the Environment if he has received any information from the United States of America Government or Her Majesty's ambassador in Washington DC in regard to the implications for joint environmental protection research between the United States of America and the United Kingdom, of the proposed increases in the United States budget for environmental research in 1990.

  Mrs. Virginia Bottomley
  Joint environmental protection research between the United States of America and the United Kingdom is undertaken through a variety of arrangements, including a memorandum of understanding agreed in 1987. Collaborative work also takes place through the auspices of other bodies such as the United Nations environment programme, Economic Commission for Europe, and Intergovernmental Oceanographic Commission.

  It is not possible at this stage to assess the implications for research collaboration of proposed increases in the United States budget for 1990 for environmental protection research.

  Chlorofluorocarbons
  Dr. Thomas
  To ask the Secretary of State for the Environment if he has received any information on the scientific assessment by Dr. Eric Banks of the University of Manchester Institute of Science and Technology of the potential harmful effects of chlorofluorocarbon ozone-friendly replacements, details of which were presented to the ninth European symposium on fluorine chemistry in September.

  Mrs. Virginia Bottomley
  No. I am arranging to obtain papers from Dr. Banks for assessment.

  Sellafield (Accident)
  Dr. Thomas
  To ask the Secretary of State for the Environment if he will make a statement on the accident involving radioactivity at Sellafield on 5 September; when his Department was informed; and what were the causes and consequences of the accident.

  Mrs. Virginia Bottomley
  My Department and the Ministry of Agriculture, Fisheries and Food (the authorising Departments) were informed on the afternoon of that day of an event that had led to a slight over-emptying of a discharge tank. Checks by Her Majesty's inspectorate of pollution and the Ministry of Agriculture, Fisheries and Food confirmed the view of British Nuclear Fuels that the event had not led to any breach of discharge limits or radiological consequences. A462
  press release was issued by British Nuclear Fuels later that afternoon, and full details were also included in the site's regular newsletter, copies of which are available in the Library of the House.

  Pollution Control Conference
  Dr. Thomas
  To ask the Secretary of State for the Environment if his Department was represented at the conference on the role of clean technologies in integrated pollution control, held at the University of Sheffield on 19 October.

  Mrs. Virginia Bottomley
  No.

  Waste Management Conference
  Dr. Thomas
  To ask the Secretary of State for the Environment if his Department was represented at, and presented any papers to, the conference on the future of waste management, held at the Botanical Gardens, Birmingham on 23 October.

  Mrs. Virginia Bottomley
  A paper on the Department's proposals for waste regulation was presented at this conference.

  Nuclear Waste
  Dr. Thomas
  To ask the Secretary of State for the Environment (1) what departmental papers were presented, and what departmental representation there was at(a) the PAGIS/Commission of the European Communities conference on nuclear waste in Madrid in June and (b) the Commission of the European Communities/International Atomic Energy Agency/ OECD Nuclear Energy Agency sponsored conference on the safety assessment of radioactive waste repositories, in Paris, 9–13 October;

  (2) what departmental representation was made, and what papers presented at the forum on radioactive waste repositories held in Paris between 9–13 October, organised by the Commission of the European Communities, the International Atomic Energy Agency and the Nuclear Energy Agency of the Organisation for Economic Co-operation and Development.

  Mrs. Virginia Bottomley
  Two DOE officials attended the CEC PAGIS information day held in Madrid on 30 June 1989. No Departmental papers were presented.

  Two DOE officials attended the CEC/IAEA/OECD (NEA) symposium on the safety assessment of radioactive waste repositories held in Paris from 9 to 13 October 1989. The following four papers co-authored by DOE officials were presented:

  (i) 'The OECD Nuclear Energy Agency Probabilistic Assessment Codes (PSAC) User Group; Objectives, Achievements and Programme of Activities' by B G J Thompson et al.

  (ii) 'The Development and Application of an Integrated Radiological Risk Assessment Procedure using Time Dependent Probabilistic Risk Analysis' by J-M Laurencs et al.

  (iii) 'CHEMVAL—An International Research Initiative for the Verification and Validation Testing of Chemical Speciation and Chemical Transport Computer Programs' by T W Broyd et al.

  (iv) 'Quality Assurance for Safety Assessment of Radioactive Waster Repositories' by I Hill et al.

  1. The PAGIS (performance assessment of geological isolation systems) information day held in Madrid on 30 June

  463
  1989 was organised by by CEC to report on the Commission-funded research programme assessing radiological impact of radioactive waste disposal. PAGIS consisted of a series of generic studies to assess the radiological impact resulting from the disposal of high-level radioactive wastes in clay, granite and salt formations and in ocean sediments. Scientists drawn from a number of European, including United Kingdom, establishments were involved. The conclusion of the studies is that all four options should, in principle, allow for safe disposal of radioactive wastes. Reports of the studies have recently been published. The audience consisted of politicians, scientists and industry representatives, mainly from European Community member states. Two DOE officials attended; Mr. B. D. Ponsford, director of HMIP, who participated as the United Kingdom representative, in the concluding panel discussion, and Dr. S. Brown, head of research and assessments branch of HMIP. Sir Hugh Rossi MP gave the invited introductory talk.

  2. The international symposium on the safety assessment of radioactive waste repositories held in Paris from 9–13 October 1989 was jointly organised by the Commission of the European Communities, the International Atomic Energy Agency and the Nuclear Energy Agency of the OECD. The aim of the conference was to give member countries an opportunity, based upon current experience, to summarise the state of the art on safety assessment issues and to discuss possible future developments. Two DOE officials attended; Dr. S. Brown, head of research and assessments branch, HMIP and Dr. B. Thompson, principal inspector, HMIP. A number of papers reporting work commissioned by DOE were presented as were four papers co-authored by DOE officials. The proceedings of the Symposium will be published by the nuclear Energy Agency of the OECD in due course.

  Ministerial Meetings
  Dr. Thomas
  To ask the Secretary of State for the Environment what meetings he has had since July with representatives of national, international and regional environmental pressure groups and non-governmental organisations; when they were held; what issues were raised; and if he will make a statement on his policy towards communications and co-operation with such organisations in policy development.

  Mrs. Virginia Bottomley
  Since July, my right hon. Friend the Secretary of State has met representatives of Friends of the Earth for a general discussion of environmental issues, and representatives of the Council for the Protection of Rural England to discuss countryside matters.

  In addition, my hon. Friend the Minister for the Environment and Countryside and I have had meetings on a range of environmental matters with a number of other bodies, including CLEAR, the British Conservation Trust, the Royal Society for the Protection of Birds, the Tidy Britain Group and UK 2000.

  We welcome a dialogue with constructive and well-meaning environmental groups in order to strengthen mutual understanding of the issues that we face and the policy options that are available.

  Gipsy Sites
  Mr. Pawsey
  To ask the Secretary of State for the Environment if he will give the number and location of designated gipsy sites in Warwickshire.

  Mr. Chope
  There are at present three local authority gipsy sites in Warwickshire. These are at Alvecote, near Tamworth, which has 17 pitches, at Gruff, Nuneaton, 21 pitches, and at Pathlow, near Stratford-on-Avon, 29 464
  pitches. There are, in addition, 54 caravan spaces for gipsies on eight authorised private sites elsewhere in the county.

  Local Government Finance
  Mr. Battle
  To ask the Secretary of State for the Environment if he will give illustrative figures for the level of community charge(a) under the previously proposed system and (b) following the latest changes, for 1990–91, in pounds per adult for (i) Elmbridge, (ii) Surrey Heath, (iii) Waverley, (iv) Woking, (v) Hertsmere, (vi) North Hertfordshire, (vii) Three Rivers, (viii) Bradford, (ix) Calderdale, (x) Kirklees, (xi) Leeds and (xii) Wakefield, respectively.

  Mr. David Hunt
  The latest illustrative figures are those published on 19 July. The changes to the safety net and the scheme of transitional relief announced on 11 October will not affect community charges for 1990–91, except those for individuals entitled to the relief.

  Mr. Cohen
  To ask the Secretary of State for the Environment whether he proposes to introduce regulations which ensure that a carer who resides part-time in his own home and the remainder of the time in the home of a person being cared for will only pay one poll tax liability; and if he will make a statement.

  Mr. David Hunt
  I refer the hon. Gentleman to the answer that I gave him on 27 July 1989 Official Report, column 931.

  Mr. Battle
  To ask the Secretary of State for the Environment if he will publish a table indicating which local authorities gain and which authorities lose as a result of the Government's latest decisions on safety nets and the community charge, in terms of pounds sterling per adult.

  Mr. David Hunt
  For 1990–91 there is no change from the proposal for the safety net announced on 19 July. The proposal to abolish the safety net after 1990–91 will benefit chargepayers in those areas which would otherwise have had to contribute directly to the safety net. The position of areas benefiting from the safety net will be unchanged.

  Mr. Battle
  To ask the Secretary of State for the Environment if he will publish his Department's estimate of how many households in Leeds will receive safety net payments on the community charge, according to the number of people in the household.

  Mr. David Hunt
  The information requested is not available. If the effect of the safety net is to reduce community charges in Leeds then the same reduced community charge will apply to each liable adult in every household.

  Mr. Battle
  To ask the Secretary of State for the Environment if he will publish his Department's illustrative figures on the impact of the community charge on households in Leeds as a result of the recent decision, assuming that the local authority spends at its grant-related expenditure allocation level.

  Mr. David Hunt
  I have no information on the impact of the community charge on different types of households in individual local authority areas.

  Mr. Battle
  To ask the Secretary of State for the Environment to which members of a four-person
  465
  household which qualifies for safety-net payments under community charge transitional payment the reduction will be applied.

  Mr. David Hunt
  I refer the hon. Member to the reply given by my hon. Friend the Parliamentary Under-Secretary of State to the hon. Member for Shrewsbury and Atcham (Mr. Conway) on 20 October,Official Report, column 262. Copies of the Department's further proposals document, which sets out the basis on which transitional relief should be given for larger households with three or more adults, are in the Libraries of the Houses of Parliament.

  Mr. Battle
  To ask the Secretary of State for the Environment what inflation assumptions for local authority expenditure are made in his Department's indicative figures for the impact of the community charge.

  Mr. David Hunt
  I have published no indicative figures showing my estimate of future community charge levels. Illustrative figures were provided on 19 July based on local authority spending levels in 1989–90, which required no inflation assumption.

  Radon Contamination
  Mr. Redmond
  To ask the Secretary of State for the Environment how long it takes the National Radiological Protection Board to assess an individual's home monitoring unit for radon contamination, once it has been returned after the three-month survey period; and if the results are always notified to the occupier.

  Mrs. Virginia Bottomley
  The National Radiological Protection Board usually completes assessments funded by the Department within 10 weeks of the end of the survey period. It always notifies the results to the occupier.

  Limestone Workings
  Mr. Redmond
  To ask the Secretary of State for the Environment what records are kept of old disused limestone mine workings in South Yorkshire; and where they are stored.

  Mr. Moynihan
  Since 1872, on the abandonment of mine workings plans have been required by statute to be deposited with the Secretary of State for Employment. Those for minerals other than coal are lodged with the Health and Safety Executive (Mining Records Office), and those for coal mines are lodged with the British Coal Corporation. Pre-1872 records are not kept centrally. However, mine records are held by Barnsley metropolitan borough council (as successor to South Yorkshire county council) to provide a mining advisory service to Barnsley, Doncaster and Rotherham metropolitan borough councils, and by Sheffield city council. It is not known whether any of these records would include old limestone mine workings.

  Brodsworth Hall
  Mr. Redmond
  To ask the Secretary of State for the Environment how far the negotiations of transferring Brodsworth hall, near Doncaster into the hands of the nation have progressed; and how much money the Government have put into the scheme to date.

  Mr. Trippier
  This is a matter for English Heritage and the National Heritage Memorial Fund. The Government 466
  have put no funds expressly into the acquisition of Brodsworth hall and its contents for the nation. If the negotiations with the owners prove successful it will be for English Heritage and the National Heritage Memorial Fund to find the necessary resources from their existing grant in aid.

  African Elephants
  Mr. Michael
  To ask the Secretary of State for the Environment what estimate he has made of the current rate of depletion of the number of elephants inhabiting the African continent; and whether any improvement on the rate of depletion over the past 10 years is expected.

  Mr. Trippier
  Accurate information about the rate of decline is difficult to obtain, but it is generally accepted that in the last 10 years the population has declined by about 45 per cent. In the light of this, the recent CITES conference agreed the inclusion of the African elephant in appendix I of the convention. We hope that the stricter controls which will now apply to this species will halt its decline and that numbers will increase.

  Mr. Michael
  To ask the Secretary of State for the Environment what evidence is available on the effectiveness of the British Government's contribution to international efforts to save the African elephant from extinction.

  Mr. Trippier
  The Government have played their full part in international efforts to save the African elephant from extinction and were instrumental in the setting up of the CITES ivory trade monitoring unit. We were, however, dissatisfied with the effectiveness for conservation of the controls on ivory trade and in June we called on our European partners to introduce a ban on the import of African ivory and to support appendix I listing for the African elephant. I am delighted that the appendix I listing was approved at the recent CITES conference.

  Mr. Michael
  To ask the Secretary of State for the Environment what fresh initiatives he proposes to take to help secure the future of the African elephant(a) through specifically British initiatives and (b) through joint action with European and other nations on a worldwide basis.

  Mr. Trippier
  At the recent CITES conference, the United Kingdom strongly suported the proposal to include the African elephant in appendix I of the convention. Furthermore, we were successful in obtaining approval for our resolution urging all party states to implement appendix I controls with immediate effect. It is for the African Governments concerned to work out a long-term conservation strategy to ensure the survival of this species, but we are always ready to consider any proposal from African countries for assistance with measures to conserve their populations of elephants.

  Domestic Waste
  Mr. Hardy
  To ask the Secretary of State for the Environment if he will list the names and numbers of local authorities which he considers operate satisfactory collection and recycling arrangements as far as domestic waste is concerned; and if he will list the names and numbers where such arrangements are either non-existent or inadequate.
  467
  Mrs. Virginia Bottomley
  This information is not currently held on a systematic basis for all domestic waste streams. My Department, with the Department of Trade and Industry and the assistance of local authorities, are reviewing in each local authority area arrangements to encourage recycling in order to identify best practice and raise the level of recycling facilities generally. We will also be carefully evaluating the results of the major experiment in recycling—Recycling City—in Sheffield, which is supported by the Government.

  Sheltered Housing
  Mr. Norman Hogg
  To ask the Secretary of State for the Environment what proportion of the total housing stock is comprised of sheltered housing; and what proportion is provided by local authorities, housing associations and the private sector in England and Wales.

  Mr. Chope
  Estimates derived from local authorities' annual housing investment programme returns for April 1988 indicate that, of a total housing stock of some 19,142,000, 2·3 per cent. were sheltered dwellings, of which 68 per cent. were owned by local authorities, 25 per cent. by housing associations and 6 per cent. were privately owned.

  For corresponding information about Welsh local authorities, I refer the hon. Member to my right hon. Friend the Secretary of State for Wales.

  Cash Incentive Scheme (Aylesbury Vale)
  Mr. Raison
  To ask the Secretary of State for the Environment whether he will approve an application by Aylesbury Vale district council to operate a cash incentive scheme under section 129 of the Housing Act 1988; and if he will make a statement.

  Mr. Chope
  Approval has today been given for Aylesbury Vale district council to incur expenditure of £100,000 in 1989–90 on cash incentive grants to help the council's tenants to buy homes of their own.

  Many councils are coming to realise that cash incentives offer a cost-effective means of releasing council homes for reletting to homeless families and others in acute housing need. Since section 129 of the Housing Act 1988 came into effect on 1 April this year, 38 cash incentive schemes have been approved which will enable the councils concerned to spend up to £12 million on grants to secure 1,100 vacancies for reletting. Further schemes are under consideration. This is an encouraging start. Other councils should consider putting schemes forward for approval.

  Phone and Post Boxes
  Mr. Redmond
  To ask the Secretary of State for the Environment if he will make it his policy to require the positioning of telephone boxes and postal collection boxes to have planning permission.

  Mr. Moynihan
  The General Development Order 1988 enables the Post Office, British Telecom and other licensed telecommunications operators to undertake operations without applying for specific planning permission. In some special areas the operator must give notice to the local planning authority, which has a general power to withdraw permitted development rights where there is a real and specific threat to amenity. These arrangements are 468
  designed to help the operators to fulfil their respective obligations efficiently; they have generally worked satisfactorily for many years, and my right hon. Friend sees no reason to change them.

  Radioactive Uranium, Feltham
  Mr. Redmond
  To ask the Secretary of State for the Environment if he will make a statement in respect of the radioactive uranium deposit found in a warehouse belonging to the Richmond Metal Company, in an industrial estate at Feltham, Middlesex on 13 October.

  Mrs. Virginia Bottomley
  During sorting of metal scrap at Richmond Metals on 13 October 1989, a small bar of unusually heavy metal was found which was suspected to be uranium. Checks with a radiation detector showed that the radioactive content was small and there was no hazard. Subsequent checks have confirmed that the bar is uranium.

  Her Majesty's inspectorate of pollution and the Health and Safety Executive are investigating how the uranium came to be on the premises of the Richmond Metal Company.

  Genetically Manipulated Organisms
  Mr. Burns
  To ask the Secretary of State for the Environment how many responses were made to his Department's consultation paper entitled, "Proposals for Additional Legislation on the International Release of Genetically Manipulated Organisms", and if he will make them available for public inspection.

  Mr. Trippier
  A total of 61 responses were received, of which 42 have been placed in the Department's library, where they are available for public inspection. Those which have not been deposited were from organisations or individuals who did not indicate their agreement to making their comments publicly available.

  Water Companies
  Dr. Cunningham
  To ask the Secretary of State for the Environment if he will list the names, occupations and salaries of the board members of the 10 water holding companies.

  Mr. Chris Patten
  [holding answer 19 October 1989]: The information requested is set out below for the 9 water plcs in England. Appointments to Welsh Water plc are the responsibility of my right hon. Friend the Secretary of State for Wales.

  Anglian

  Bernard Henderson, Chairman (£43,860). Formerly managing director of the Henderson Group. Deputy chairman of the Water Services Association. Non-executive director of the WRc.

  Francis Cator, Deputy Chairman (£9,317). Formerly a joint vice chairman of J. Henry Schroder Wagg. A vice-chairman of the Norwich Insurance Group and a director of Portsmouth and Sunderland Newspapers.

  Andrew Semple, Group Managing Director (£53,750).

  Alan Smith, Group Deputy Managing Director and Group Director of Finance (£48,375).

  John Simpson, Group Operations Director (£48,375).

  Alison Abbey, Non-executive Director (£7,167). Formerly

  469
  director of the Community Council for Hertfordshire and of the Railworld Development Trust and secretary of the Hertfordshire Association of Local Councils.

  John Boodle, Non-executive Director (£7,167). Managing director of British Fermentation Products, a director of G. R. Spinks and chairman of the Anglian Environment Committee of the CBI. Member of the Employment Affairs Board of the Chemical Industries Association.

  John Bradfield, Non-executive Director (£6,271). Senior bursar of Trinity College, Cambridge and a director of the Cambridge Water Company and Cambridge Building Society. Chairman of the Abbotstone Agricultural Property Unit Trust and founder and manager of the Cambridge Science Park.

  The Earl of Cranbrook, Non-executive Director (£6,271). Member of the Royal Commission on Environmental Pollution, the Broads Authority and the Harwich Haven Authority. President of the British Herpetological Society, the Suffolk Wildlife Trust and the Environmental Council. Deputy Lieutenant of Suffolk.

  Northumbrian

  Sir Michael Straker, Chairman (£30,638). Formerly chairman of the Newcastle and Gateshead Water Company. Chairman of Water Training, board member of the Port of Tyne Authority, chairman of the Council of the University of Newcastle upon Tyne and member of the University Court.

  Frank Ridley, Deputy Chairman (£14,692). Formerly chief executive of Northumbrian Water Authority.

  Mike Murden, Managing Director (£54,800).

  David Cranston, Director of Finance (£43,000).

  Robert Smith, Managing Director of Northumbrian Water (£60,000).

  Terry Harrison, Non-executive Director (£5,375). Chairman of Northern Engineering Industries, a director of Rolls-Royce and BEAMA and president of the North Coast Institution of Engineers and Shipbuilders.

  Ralph Iley, Non-executive Director (£5,375). Managing director of Cookson Group. CBI councillor.

  Professor Warren Peascod, Non-executive Director (£5,375). Professor of Environmental Control Engineering and Head of the Department of Civil Engineering at the University of Newcastle upon Tyne.

  John Ward, Non-executive Director (£5,375). Northern regional director of Barclays Bank. Other appointments include chairman of Business in the Community and deputy chairman of the Tyne and Wear Development Corporation.

  North West

  Dennis Grove, Chairman (£61,275). Formerly chairman and chief executive of Sonoco Europe and a vice president of Sonoco International.

  Brian Alexander, Managing Director of North West Water (£58,050).

  Archibald Ramsay, Group Financial Director (£68,875).

  Clare Bolton, Non-executive Director (£8,959). Partner in Deloitte Haskins & Sells, based in Manchester, and treasurer of the North Cheshire Branch of the British Institute of Management.

  James Cropper, Non-executive Director (£8,959). Chairman of James Cropper (Papermakers). Deputy Lieutenant of Cumbria.
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  Rodney Leach, Non-executive Director (£8,959). Formerly chief executive and managing director of VSEL.

  Alan Pendleton, Non-executive Director (£10,750). Formerly managing director of West's Group International and a director of Tilbury Group. A director of Chieftain Group and Kemutec Group.

  Frank Sanderson, Non-executive Director (£12,542). Formerly with Babcock International. Chairman of Acumen Technologies, Clearcall Communications and Wyatt Bros. and a director of British Water and Wastewater.

  Severn Trent

  John Bellak, Chairman (£49,020). Formerly Managing Director of Royal Doulton. Member of the Grand Council of the CBI and of the Court of the University of Keele. Non-executive chairman of Sutcliffe Speakman and a director of Control Securities.

  Tim Heywood-Lonsdale, Deputy Chairman (£12,004). Chairman of Skilbeck Holdings. Property management, farming and other directorships.

  Roderick Paul, Chief Executive (£75,250).

  Vic Cocker, Director of Business Planning and Marketing (£48,375).

  Frank Earnshaw, Director of Operations (£51,600).

  Stuart Larnder, Group Director of Finance (£64,500).

  Colin McMillan, Director of Government Relations and Company Secretary (£51,600).

  Sir Richard Baker Wilbraham, Non-executive Director (£9,854). Formerly a director of J. Henry Schroder Wagg. Deputy chairman of Bibby Line Group and Grosvenor Estate Holdings and a director of Brixton Estates, Really Useful Group and Westpool Investment Trust.

  Roger Boissier, Non-executive Director (£8,959). Deputy chairman of Pressac Holdings and a director of British Gas, Edward Lumley Holdings, T&N and a number of other companies.

  Alan Henn, Non-executive Director (£9,854). Chairman and managing director of a family jewellery business. Chairman of Beacon Broadcasting and Communications and other directorships. Justice of the Peace. President of the National Association of Goldsmiths.

  Richard Ireland, Non-executive Director (£9,854). Group finance director of Wolseley. Council member of the Birmingham Chamber of Industry and Commerce and member of the finance committee of the University of Aston.

  Andrew Simon, Non-executive Director (£7,167). Executive chairman of the Evode Group. A director of the Birmingham Region of Barclays Bank and a director of Lichfield Cathedral Arts. Council member of Keele University.

  Southern

  William Courtney, Chairman (£43,860). Formerly joint deputy chairman of Marley. Chairman of the British Board of Agrement, the Water Byelaws Advisory Service and the Water Industry Certification Scheme.

  Brian Thorpe, Deputy Chairman (£14,692). Formerly chief executive of Southern Water Authority. A vice chairman of the Scientific and Technical Council of the International Water Supply Association and a trustee of its Foundation for the Transfer of Knowledge to Developing Countries.

  John Valentine, Group Managing Director (£100,000).

  Martyn Webster, Group Finance Director (£65,000).
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  Francis Midmer, Group Technical Director (£48,375).

  Philip Girle, Non-executive Director (£7,167). Formerly a director of National Westminster Bank. Currently a director of Yorkshire Bank and the Ulster Bank.

  Sir David Nicolson, Non-executive Director (£7,167). Formerly chairman of BTR and British Airways. A director of Union Group, CIBA-Geigy, London and Scottish Marine Oil, STC and Britannia Arrow Holdings.

  John Westhead, Non-executive Director (£7,167). Group managing director of Bowthorpe Holdings.

  South West

  Keith Court, Executive Chairman (£51,063). Formerly a main board director of Blue Circle Industries and chief executive of the company's United Kingdom cement and related operations.

  Timothy Leader, Deputy Chairman (£9,317). Formerly chief executive of Simon Engineering.

  William Fraser, Managing Director of South West Water (£70,000).

  Kenneth Hill, Group Director of Finance (£53,600).

  William Dickens, Director of Technical Affairs (£43,000).

  Michael Quantick, Director of Development (£45,780).

  Simon Day, Non-executive Director (£5,375). A regional director of Granville & Company and of Regency and West of England Building Society. Farmer, deputy leader of Devon County Council, chairman of the Devon Sea Fisheries Committee and chairman of the governors of Bicton College of Agriculture.

  Lady Mary Holborow, Non-executive Director (£7,167). Chairman of the Cornwall Business Committee, Rural Development Commission. Governor of Cornwall College of Further Education.

  John Lawrence, Non-executive Director (£5,375). Director of the ICI Environmental Laboratory at Brixham.

  Kenneth Morton, Non-executive Director (£7,167). Group finance director of Kleinwort Benson Group.

  Charles Spence, Non-executive Director (£7,167). Formerly chairman, now a director of ARC.

  Charles Stuart, Non-executive Director (£7,167). Chairman and chief executive of Brymon Airways and Plymouth City Airport. Governor of Polytechnic South West and East Devon College of Further Education.

  Thames

  Roy Watts, Chairman (49,020). Formerly chief executive and joint deputy chairman of British Airways. Chairman of Armstrong Equipment, Lowndes Lambert Group Holdings and Cabletime Installations. Deputy chairman of Brymon Airways and a director of Plimsoll Line.

  Sir Christopher Leaver, Group Deputy Chairman (£11,109). Chairman of Russell and McIver. Chairman of the London Tourist Board. Former Lord Mayor of London.

  Mike Hoffman, Group Chief Executive and Chairman and Chief Executive of Thames Water (£150,000).

  Bill Harper, Deputy Chairman of Thames Water (£64,720).

  David Luffrum, Group Finance Director (57,720).

  Robert Clarke, Non-executive Director (£8,063). Deputy chairman and chief executive of United Biscuits.
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  Sir Peter Harrop, Non-executive Director (£8,063). Formerly second permanent secretary in the Department of the Environment. Chairman of the National Bus Company, a director of National Home Loans holdings, a managing trustee of Municipal Mutual Insurance, and a trustee of the British Museum.

  John Thomson, Non-executive Director (£8,063). Chairman of London & Manchester Group and Borthwicks. Vice chairman of J. Bibby & Sons and a director of several other companies, including Scottish & Newcastle Breweries.

  John Worlidge, Non-executive Director (£8,063). Formerly an executive director of BAT Industries. A director of the Rugby Group and chairman of the CBI Energy Policy Committee.

  Wessex

  Nicholas Hood, Chairman (£40,850). Formerly a director of the HAT Group before its acquisition by BET. A director of the Provident Life Association and Bremhill Industries. Member of the Water Training Council.

  Donald McLure, Deputy Chairman (£10,213). Formerly a director of Beecham Group, and subsequently chairman of Arthur Bell Distillers and a director of United Distillers. A director of London Buses, European Brands Group and the Burn Stewart Group.

  Colin Skellett, Managing Director (£50,525).

  Nicholas Wheatley, Finance Director (£72,563)

  Ron Huntington, Director of Engineering and Operations (£45,150).

  Anthony Barbour, Non-executive Director (£5,823). Formerly chief environmental scientist at the RTZ Corporation. Chairman of the European Non-Ferrous Metals Producers Environmental Committee and a visiting professor of Chemistry at the University of Manchester Institute of Science and Technology.

  Roderick Kent, Non-executive Director (£5,375). Managing director of Close Brothers Group.

  Andrew Thornhill, Non-executive Director (£5,375). Barrister at the Revenue Bar and a QC.

  Yorkshire

  Gordon Jones, Chairman (£54,825). Formerly a director of T. W. Ward and chairman of T. W. Ward (Raw Materials). Chairman of the Water Services Association.

  David Cramb, Deputy Chairman (£17,379). Formerly deputy chairman of Rowntree. A director of Tunstall.

  John Bell, Director, Enterprise Services (£43,000).

  Trevor Newton, Finance Director (£52,675).

  Tony Ward, Director, Water Services (£51,600).

  Peter Flesher, Non-executive Director (£5,375). Managing director Allied Colloids Group.

  Peter Hogg, Non-executive Director (£5,375). Chief executive of the Provident Financial Group.

  Tom Jackson, Non-executive Director (£7,167). Formerly general secretary of the Post Office Workers Union and president of the TUC, a director of BP, and a governor of the BBC.

  Toxic Waste
  Mr. Hardy
  To ask the Secretary of State for the Environment if he will ensure that right hon. and hon. Members are informed by the appropriate public bodies or agencies when it is known that toxic waste is unlawfully or improperly imported into their constituencies.

  Mrs. Virginia Bottomley
  [holding answer 24 October 1989]: The Government are committed to the principle that the public should have right of access to information held by pollution control authorities. Our proposals for forthcoming legislation include enhanced duties on waste regulation authorities to make information available. It is for the authorities to assess for themselves what information to publish in respect of alleged improprieties in the import of toxic waste.

SOCIAL SECURITY

  Young People (Income Support)
  Ms. Short
  To ask the Secretary of State for Social Security whether a young person under the age of 18 years who applies to his Department for income support on the grounds that a suitable YTS place was not available, and this situation is verified by the careers service, and the young person expresses willingness to enter a suitable place, will be granted income support either during or after he has exhausted any entitlement to bridging allowance; and if he will make a statement.

  Mrs Gillian Shephard
  The Training Agency is committed and able to provide suitable places for all young people genuinely interested in participating in YTS. There is generally no question of income support being paid on the ground of non-availability of YTS places.

  If the careers service finds that a particular young person cannot be offered a suitable YTS place it will contact the local Training Agency office. Training agents have the authority and resources to seek additional places, and to make these available as a matter of urgency.

  If, exceptionally, any young person is registered for a YTS place but is not able to start immediately, he or she may claim income support and be considered under the normal provisions including, if appropriate, the discretionary power to direct payment of benefit if that is the only means of preventing severe hardship. If a young person is entitled to income support he or she may receive it in addition to any YTS bridging allowance payable. If bridging allowance is exhausted, or not in payment for some other reason, income support may be paid alone. Young people with housing costs can also receive housing benefit.

  Loans and Grants
  Mr. Redmond
  To ask the Secretary of State for Social Security what was the total number, and percentage of(a) budgeting loans and (b) community care grants awarded to the 15 client groups defined by his Department for each of his Department's local offices in Doncaster and Wath-on-Dearne, for the financial year 1988–89.

  Mr. Scott
  I refer the hon. Member to the reply given to him on 15 June 1989 at columns 529–30. These have now been confirmed as final figures.

  Unemployment Benefit
  Ms. Short
  To ask the Secretary of State for Social Security whether claimants in receipt of unemployment benefit are entitled to undertake training or courses of education as long at they are available for work; and if he will make a statement.

  Mrs. Gillian Shephard
  Claimants in receipt of unemployment benefit are required to be both available for work and actively seeking employment. This need not prevent them from undertaking training or courses of education. Regard is had to time spent in participating in any course of vocational training or study in deciding whether a claimant has shown that he is actively seeking employment. This arrangement recognises the worthwhile efforts of many claimants to make good use of their time whilst unemployed. Nonetheless, any claimant pursuing such an activity must organise his affairs in such a way that he can make adequate efforts to seek paid employment.

  Crisis Loans
  Mr. Pike
  To ask the Secretary of State for Social Security if his Department has figures of the number of crisis loans refused on the basis of inability to repay the loan.

  Mr. Scott
  There were provisionally 1,600 refusals in the period April 1989 to September 1989 representing 0·65 per cent. of all decisions.

  War Pensions
  Mrs. Rosie Barnes
  To ask the Secretary of State for Social Security if he will give for each of the years 1984–85, 1985–86 and 1987–88 the figures for the overspend which occurred on war pensions.

  Mrs. Gillian Shephard
  The information requested is as follows:

  Grant

  Expenditure

  Overspend

  £'000

  £'000

  £'000

  1984–85

  543,700

  544,205

  505

  1985–86

  568,000

  581,256

  13,256

  1987–88

  594,000

  598,570

  4,570

  War Widows
  Mr. Alfred Morris
  To ask the Secretary of State for Social Security if he will give for the latest year for which records exist and for each of the preceding three years the number of war widows who have died in that year.

  Mrs. Gillian Shephard
  The numbers are as follows:

  Numbers

  1985

  3,407

  1986

  3,290

  1987

  3,193

  1988

  3,098

  Mr. Alfred Morris
  To ask the Secretary of State for Social Security if he will give, for the latest full year for which records exist, and for 1973, the number of those(a) under 65 years, (b) between 65 and 69 years, (c) between 70 and 79 years and (d) 80 years and over designated as war widows.
  475
  Mrs. Gillian Shephard
  The information is as follows:

  Age group

  31 December 1973

  31 December 1988

  Under 65

  36,817

  8,745

  65 to 69

  12,461

  8,245

  70 to 79

  38,695

  25,129

  80 and over

  8,208

  15,431

  Mrs. C. Halvey
  Mr. Ron Davies
  To ask the Secretary of State for Social Security if he will request the Attendance Allowance Board to reply without further delay to the hon. Member for Caerphilly's correspondence to them of 15 May, concerning Mrs. C. Halvey of 29 Heolddu Grove, Barfold.

  Mr. Scott
  [holding answer 19 October]: I understand that the board's reply was sent to the hon. Member on 20 October.

HEALTH

  Blood Donor Sessions
  Mr. Frank Field
  To ask the Secretary of State for Health (1) in what circumstances blood donor sessions may be conducted by nurse managers rather than by doctors; and whether his Department has issued any guidance to regional health authorities on the subject;

  (2) whether he will issue guidance to all regional health authorities that blood donor sessions should take place only when an appropriately qualified doctor is in attendance;

  (3) which regional health authorities have replaced medical officers managing blood donor sessions by specially trained nurses; and what representations he has received about possible risks associated with this change.

  Mr. Freeman
  At present North East Thames is the only regional health authority in which specially trained nurse managers are in charge of blood donor sessions. In this region there is no doctor present at a session, but there is immediate access to medical advice. This method of work began as a detailed pilot trial in April 1985. At that time the Department's advisory committee on the national blood transfusion service (ACNBTS) studied the detailed protocol for the scheme and the results of the trial, and its representatives, along ith 20 independent assessors, looked at the procedure in practice. The ACNBTS decided that the new procedure presented no risks to donors, and Ministers have received no representations to the contrary since the end of the trial. Any decision to implement the procedure in another regional transfusion centre would be for the region to make, in consultation with the national director of the national blood transfusion service.

  Mike Heaffey Centre
  Mr. Wigley
  To ask the Secretary of State for Health what representations he has received from the Association for Spinal Injury Research Rehabilitation and Reintegration with regard to financial support for the Mike Heaffey Centre for people with disabilities; whether his Department is now willing to give financial support for this project; and if he will make a statement.

  Mr. Freeman
  We have been informed by the association of the financial circumstances of the Mike 476
  Heaffey centre. The question of making good the shortfall in construction costs of the centre is a matter for the association to negotiate with the bodies concerned.

  Local Government Finance
  Mr. Cohen
  To ask the Secretary of State for Health what information he has on the progress in the establishment of local health pay arrangements to cover payment by student nurses of the poll tax; and if he will make a statement.

  Mr. Mellor
  It is for nursing students themselves to make arrangements to pay the personal community charge for which they are liable. Project 2000 students will pay only 20 per cent. of the community charge, like other full-time students.

  GP Operations
  Mr. Redmond
  To ask the Secretary of State for Health if he will give the number of family practitioners within the Trent regional health authority who carry out minor operations performed within their practice and such other relevant information as is available.

  Mr. Mellor
  No information is available about minor operations carried out by GPs in the Trent region. However, research studies suggest that about 27 per cent. of GPs in England and Wales provide this service from within their practice on a regular basis.

  Resource Management Initiative Scheme
  Mr. Redmond
  To ask the Secretary of State for Health if he will make a statement in respect of(a) the pilot resource management initiative at the Pilgrim hospital, Boston, (b) the ICL's financial system case mix finance module installed in all departments at the hospital and (c) what results to date have been obtained at the five other pilot sites of the Government's resource management initiative scheme.

  Mr. Freeman
  The RMI seeks improvements in patient care by involving clinicians and other health professionals more closely in the management of their hospitals and supporting this with accurate, timely and credible information from a computerised database which links activity and cost at patient level.

  The Pilgrim hospital, Boston, has been a pilot site for the resource management initiative (RMI) since April 1988. Good progress has been made. A number of experiments are under way to determine appropriate management structures for the hospital in line with the objectives of the RMI. Computer systems are being expanded and upgraded and new systems installed where a need can be shown for them.

  The ICL case-mix finance reporting module is not installed in the Pilgrim hospital.

  As a result of the work done at the pilot sites since the RMI was launched in 1986 we remain convinced that it holds the potential for significantly improving the quality and quantity of health care which the NHS provides.

  NHS Property Sales
  Mr. Redmond
  To ask the Secretary of State for Health if he will show, by regional health authority, the response received to date from general practitioners, by percentage, where health centres and clinics are proposed to be sold; and what terms and conditions will be implemented.

  Mr. Freeman
  The information requested is not held centrally.

  Drugs Prescriptions
  Mr. Redmond
  To ask the Secretary of State for Health what checks are carried out by inspectors on family practitioners who have dispensing facilities for drugs attached to their surgeries to ensure that abuses are not occurring, especially in respect of receptionists dispensing drugs on repeat prescriptions before they are signed and authorised by the family practitioner.

  Mr. Mellor
  There are no formal inspection arrangements for family practitioners who have dispensing facilities attached to their surgeries, beyond those provided for under the Misuse of Drugs Act 1971 in relation to controlled drugs. General medical practitioners are required by their terms of service to ensure that only properly signed and authorised prescriptions are dispensed.

  NHS Income Generation
  Mr. Redmond
  To ask the Secretary of State for Health what feasibility studies have been set up, and what results obtained, in respect of managerial income generation, by regional health authority; and if he will make a statement.

  Mr. Freeman
  Since the coming into effect of section 7 of the Health and Medicines Act 1988, all health authorities have the legal means, and have been encouraged to seek ways in which they may develop secondary sources of income to enhance and improve patient care, provided that any such scheme does not act to the detriment of patients themselves.

  Returns for the initial period of the income generation initiative reveal that during the tax year 1988–89, the net profit to English health authorities was close to £10 million.

  Doncaster AHA (Staffing)
  Mr. Redmond
  To ask the Secretary of State for Health what is the qualified staffing per resident population in the Doncaster area health authority; and what is the national figure.

  Mr. Mellor
  At 30 September 1988 there were 9·4 qualified doctors and dentists and 51·9 qualified nursing and midwifery staff in the NHS in England per 10,000 resident population. The figures for Doncaster health authority were 4·1 and 55 respectively.

  The Doncaster figures for doctors and dentists are not directly comparable with the national figures, because they do not include consultants and senior registrars working in the district whose contracts are held by Trent regional health authority.

  Information on other professionally qualified staff could be obtained only at disproportionate cost.

  Nurse Regradings
  Mr. Alton
  To ask the Secretary of State for Health (1) how many nurses employed by Liverpool area health authority have appealed against their regrading; and how many appeals are still outstanding;

  (2) how many nurses' regrading appeals have now been heard by health authorities in England; and if he will list the numbers still outstanding in each authority.

  Mr. Mellor
  We do not collect centrally information on the number of appeals to district health authorities.

  Local Health Services (Liverpool)
  Mr. Alton
  To ask the Secretary of State for Health how many new patients were treated by Broadgreen hospital's accident and emergency unit in the last year; and what consultation has taken place with consultants working in the unit about its future.

  Mr. Mellor
  We do not hold information centrally about the number of new patients treated at the unit. The future of the unit, along with plans for the development of other health services locally, is a matter for the health authority concerned. The hon. Member may wish, therefore, to contact the chairman of the Liverpool health authority.

  Mr. Alton
  To ask the Secretary of State for Health (1) if he will make a statement on future geriatric provision by Liverpool area health authority;

  (2) if he will make a statement on the future of Olive Mount hospital, Liverpool;

  (3) if he will make a statement on the future of the accident and emergency unit at Broadgreen hospital, Liverpool.

  Mr. Mellor
  The planning and development of health services locally is a matter for the health authority concerned. The hon. Member may wish to contact the chairman of the Liverpool health authority.

  Tranquilliser Advice Centre
  Mr. Steel
  To ask the Secretary of State for Health if the Government will fund centrally Tranx (UK) Ltd, the national tranquilliser advice centre, to prevent its imminent closure due to funding problems.

  Mr. Freeman
  Between 1983 and 1986 Tranx (Harrow) received grants of over £90,000 from the Department's central funding initiative. At the time, it was made clear that these grants were for a maximum of three years and that once central funding ended, organisations would need to look to their local statutory authorities for continued support. For the last three years Tranx (UK) has been funded by the North West Thames regional health authority and the London boroughs grants unit (LBGU). But earlier this year when Tranx (UK) was experiencing financial difficulities, the Department, exceptionally, made a further £10,000 available to clear the organisation's deficit in 1988–89.

  Discussions on future funding of Tranx (UK) are still in progress with a variety of potential funders. No decision has yet been reached, but we hope that Tranx (UK) will be able to continue its work with tranquilliser dependents.

  Clinical Psychologists
  Mr. Fraser
  To ask the Secretary of State for Health what percentage of posts for clinical psychologists in the National Health Service is currently unfilled.

  Mr. Mellor
  We do not hold this information centrally.

  Coronary Heart Disease
  Mr. Simon Coombs
  To ask the Secretary of State for Health what new initiatives he is considering to combat coronary heart disease.

  Mr. Mellor
  We are considering a number of initiatives at present, and I refer my hon. Friend to the Government's response to the Committee of Public Accounts report on coronary heart disease (Cm. 831) for further details.

  Safety (Damages)
  Mr. Ashley
  To ask the Secretary of State for Health if he will introduce legislation to permit the imposing of punitive damages on companies which have demonstrated a reckless disregard for human life, with the money raised to go to a fund to promote safety in all aspects of human activity.

  Mr. Freeman
  We would be prepared to consider any specific examples which may be brought to our attention.

  Residential Homes
  Mr. Norman Hogg
  To ask the Secretary of State for Health how many mentally ill and handicapped people live in residential homes and hostels in England and Wales.

  Mr. Freeman
  Comprehensive information is not available in the form requested. Information on the number of places in local authority, voluntary and private homes at 31 March 1987 is published in "Residential Accommodation for Mentally Ill and Mentally Handicapped People: Number of Local Authority, Voluntary and Private Homes and Places: England", a copy of which is in the Library. Provisional information for 1988 is as follows:

  Number of places

  Homes and hostels for mentally handicapped people

  28,458

  Homes and hostels for mentally ill people

  9,745

  Information for Wales is a matter for my right hon. Friend the Secretary of State for Wales.

  Mr. Norman Hogg
  To ask the Secretary of State for Health how many physically handicapped people aged under 65 years live in residential homes in England and Wales.

  Mr. Freeman
  Comprehensive information is not available in the form requested. At 31 March 1988, there were 11,691 persons aged under 65 in local authority and registered residential care homes for elderly people and younger physically handicapped people. This figure is provisional.

  Information for Wales is a matter for my right hon. Friend the Secretary of State for Wales.

  One-Parent Families
  Mr. Norman Hogg
  To ask the Secretary of State for Health what is the number of one-parent families recorded in England and Wales.

  Mr. Freeman
  The best available recent estimate of the number of one-parent families is that of 1,010 thousand in Great Britain in 1986. This was given in an article in Population Trends 55—which is in the Library. The article explains the definition used and the qualifications to be attached to the accuracy of such estimates. It is thought that, of this total, about 100,000 families are in Scotland with the balance of about 910,000 families in England and Wales.

  Institutions
  Mr. Norman Hogg
  To ask the Secretary of State for Health what proportion of persons aged over 75 years live in institutions in England and Wales.

  Mr. Freeman
  Comprehensive information about persons aged over 75 years in institutions is not collected centrally.

  At 31 March 1988 there were 188,929 people aged 75 and over resident in local authority and registered residential care homes for elderly and younger physically handicapped people. This represents 5·9 per cent. of the population aged 75 and over. The figure is provisional.

  Information for Wales is a matter for my right hon. Friend the Secretary of State for Wales.

  Community Health Councils
  Mr. Madden
  To ask the Secretary of State for Health if he will ensure that Bradford community health council and other community health councils receive free copies of the two documents referred to in his Department's press release, issued on 29 September, ref: 89/417; and if he will further ensure that community health councils continue to receive free copies of such documents.

  Mr. Freeman
  The two documents referred to in the press release gave detailed guidance to health service managers on certain aspects of proposals set out in "Working for Patients". It was not felt that the material needed to be brought to the attention of all CHCs, although the association of CHCs in England and Wales was sent copies. In view of Bradford CHC's interest in these particular documents I have arranged for it to receive copies. Decisions on the distribution of further documents to CHCs will be made in the light of their contents.

  Drax Power Station
  Dr. Cunningham
  To ask the Secretary of State for Health if he will order an immediate investigation by his Department into the effects on health of sewage bacteria contamination from the Drax power station.

  Mr. Freeman
  Thorough investigations are already being undertaken by the appropriate health and local authorities in conjunction with the public health laboratory service. The evidence so far indicates that the potential risk to public health is extremely small. No consequent illness has been reported. Investigations are continuing and I have asked to be kept informed.

  Patients
  Mr. Alfred Morris
  To ask the Secretary of State for Health what is the average number of patients on a general practitioner's list.

  Mr. Freeman
  I refer the right hon. Member to the reply that I gave to my hon. Friend the Member for Pembroke (Mr. Bennett) yesterday.

FOREIGN AND COMMONWEALTH AFFAIRS

  Namibia
  Mr. Pike
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent support Her Majesty's Government have given to the United Nations in implementing resolution 435 in Namibia.

  Mr. Waldegrave
  We have already informed the House of our substantial financial and material contribution to the United Nations transition assistance group. We are now helping with the elections themselves. We have made available an election consultant, we are transporting the ballot papers, and we are sending a group of over 40 election supervisors.

  Mr. Anthony Coombs
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the peace process in Namibia.

  Mr. Anderson
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the current steps in the independence process in Namibia.

  Mr. Waldegrave
  Implementation of the United Nations plan for Namibian independence is proceeding well. We will continue to support the United Nations' efforts to ensure that the elections are free and fair, and to assist in a peaceful transition to independence.

  United States of America
  Mr. Wood
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he next plans to visit the United States of America.

  Mr. Major
  I visited the United States twice last month. Plans for my next visit are not yet firm.

  Mr. Canavan
  To ask the Secretary of State for Foreign and Commonwealth Affairs what subjects he expects to discuss at his next meeting with representatives of the Government of the United States of America.

  Mr. Sainsbury
  My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs visited the United States last month. His next discussions with representatives of the United States Government are likely to cover the usual broad range of issues.

  Mr. Battle
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he last met representatives of the United States Government; and what was discussed.

  Mr. Sainsbury
  My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs last met 482
  representatives of the United States Government on 26 September, in the margins of the United Nations General Assembly, in New York. He discussed a wide range of issues.

  Cambodia
  Sir Russell Johnston
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he plans to have any contact with the Phnom Penh-based Administration in Cambodia.

  Mr. Sainsbury
  No, Sir.

  Mrs. Clwyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the United Kingdom's relationship with Cambodia.

  Mr. Sainsbury
  We want to see a free and independent Cambodia in which the people can elect a Government of their own choice. We are actively helping in the search for a political settlement to this end. We have no dealings with the regime installed in Phnom Penh by force of Vietnamese arms.

  Mr. Redmond
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is his present policy towards the people and Government of Cambodia; and what help is being given by the United Kingdom to assist them in their battle with Pol Pot.

  Mr. Sainsbury
  We have no dealings with the Heng Samrin regime, installed by force of Vietnamese arms. We continue to help those in need within Cambodia through our contributions to humanitarian projects. The best way to keep out the Khmer Rouge is a comprehensive political settlement which enables the Cambodian people to elect a Government of their choice.

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

  Mr. Maude
  I expect a range of Community issues to be discussed.

  Lebanon
  Mr. McWilliam
  To ask the Secretary of State for Foreign and Commonwealth Affairs what proposals Her Majesty's Government and her EEC partners have put forward to resolve the conflict in Lebanon.

  Mr. Waldegrave
  We, together with our European partners, continue to support fully the Arab League committee of three heads of state in their efforts to bring peace to Lebanon. We welcome the agreement reached at Ta'if by the Lebanese parliamentary deputies.

  NATO Information Budget
  Mr. Harry Greenway
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is the current NATO information budget; what it was in real terms five, 10 and 15 years ago; and if he will make a statement.
  483
  Mr. Waldegrave
  The forecast 1989 NATO budget is £1,160 million; it was £730 million five years ago; £281 million 10 years ago and £409 million 15 years ago. All figures are in 1988 prices.

  Middle East
  Mr. Latham
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether he will make a statement on the peace process in the middle east.

  Mr. Waldegrave
  We fully support Egyptian efforts to seek clarification of Mr. Shamir's useful elections proposal and to promote talks in Cairo between the Israeli Government and Palestinians from inside and outside the occupied territories. We look to Israel to respond positively.

  Overseas Visits
  Mr. Allen
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the overseas venues he has visited since becoming Foreign Secretary.

  Mr. Major
  Since becoming Foreign Secretary, I have visited:

  Paris—for the International Conference on Cambodia.

  Washington—for discussion with the Administration and Congress.

  New York on two occasions—to address the Economic Club and the UN General Assembly.

  Bonn—for talks with the German Foreign Minister.

  Luxembourg—for a meeting of the Foreign Affairs Council.

  Chartres—for an Informal Meeting of EC Foreign Ministers.

  Kuala Lumpur—for the Commonwealth Heads of Government Meeting.

  Detained Britons (Consular Assistance)
  Mr. David Evans
  To ask the Secretary of State for Foreign and Commonwealth Affairs, how many British citizens were detained abroad in 1988; how many of these received consular assistance; and what were the comparable figures for five years ago.

  Mr. Sainsbury
  One thousand eight hundred and seventy-seven British citizens were reported as having been detained abroad during 1988. Those detained briefly for minor offences are often not reported to us. Consular assistance was available to all who were still in detention when consular contact was established.

  Comparable figures for five years ago are not readily available and could be provided only at disproportionate cost.

  Hungary
  Mr. Ian Taylor
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will report on the current state of European Community-Hungary relations.

  Mr. Waldegrave
  EC-Hungary relations are excellent, with both parties committed to the development of closer ties through the trade and economic co-operation agreement signed last September. The Community will also be assisting Hungary's economic reform efforts through vocational training and by providing technical assistance in agriculture and the environment.

  Horn of Africa
  Mr. Andrew F. Bennett
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the situation in the Horn of Africa.

  Mr. Waldegrave
  The situation remains disturbed with continuing internal conflicts and reports of violations of human rights. There have, however, been some positive developments including the initiation of negotiations between the Ethiopian Government and the Eritrean People's Liberation Front, and the release of a number of political prisoners in Ethiopia and Somalia.

  Vietnam
  Mr. Mullin
  To ask the Secretary of State for Foreign and Commonwealth Affairs what plans Her Majesty's Government have to review their relations with Vietnam; and if he will make a statement.

  Mr. Sainsbury
  We keep our relations with Vietnam under regular review.

  EC Social Charter
  Ms. Mowlam
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent discussions he has had with M. Jacques Delors concerning the social charter.

  Mr. Maude
  My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs discussed the proposed social charter and other current EC issues with his ministerial colleagues and M. Delors at the informal meeting near Chartres on 14–15 October.

  European Foreign Policies
  Mr. Knox
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he next proposes to have discussions with his European Community partners concerning the development of common European foreign policies.

  Mr. Cryer
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he next expects to meet other EEC Ministers in political co-operation to discuss common foreign policy.

  Mr. Maude
  My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs next expects to meet his EC colleagues to discuss political co-operation matters in Brussels on 27 November. Before then, he expects to see them at the Foreign Affairs Council on 6 November in Brussels, when there may also be an opportunity to discuss political co-operation matters.

  Nicaragua
  Mr. Tony Banks
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has received regarding Her Majesty's Government's relations with Nicaragua.

  Mr. Sainsbury
  We receive representations on our relations with Nicaragua from a wide variety of sources, including hon. Members and members of the public, non-governmental organisations and the Nicaraguan embassy in London, as well as from the Government and opposition in Nicaragua.

  Chile
  Mr. John Hughes
  To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions he has had with the Government of Chile concerning the conditions under which the plebiscite will be held later this year.

  Mr. Sainsbury
  Plebiscites have been held in Chile most recently on 5 October 1988 and 30 July 1989. Both were conducted in exemplary fashion. There are no plans for any further plebiscites this year.

  Mr. Foulkes
  To ask the Secretary of State for Foreign and Commonwealth Affairs what steps he is taking to encourage the transition to democracy in Chile.

  Mr. Sainsbury
  I refer the hon. Member to the answer given to the hon. Member for Western Isles (Mr. MacDonald) on 14 June 1989.

  Drugs
  Mr. Charles Wardle
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on recent progress in the co-ordination of the international fight against drug trafficking.

  Mr. Sainsbury
  Seventy four states, including the United Kingdom, have now signed the 1988 United Nations convention against illicit traffic in narcotic drugs and pyschotropic substances. The United Kingdom has signed bilateral agreements or arrangements to trace, freeze and confiscate the proceeds of drugs trafficking with 11 countries, the latest with Malaysia on 17 October.

  Rev. Martin Smyth
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about international efforts to combat drug abuse.

  Mr. Sainsbury
  Together with other countries the United Kindgom is providing substantial assistance to Colombia. I attended a Caribbean ministerial drugs conference in Kingston from 2–4 October. Drugs were discussed at the Commonwealth Heads of Government meeting in Kuala Lumpur. I shall make a statement on United Kingdom drugs policy during the United Nations General Assembly drugs debate 3–7 November. A proposed United Nations special session on drugs is likely to be held early in 1990. The United Kingdom will host an international conference on demand reduction and cocaine in April 1990. We are discussing with our European Community partners ways of improving EC co-ordination on drugs.

  Mr. Cohen
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has received from the Colombian Government concerning the activities of British mercenaries working for drug barons; and if he will make a statement.

  Mr. Sainsbury
  As my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs made clear when he met the Colombian Foreign Minister, Sr. Londoño, in New York on 26 September, we condemn unequivocally and unreservedly the activities of those who work for drugs traffickers in Colombia. It is primarily for the Colombian authorities to take action in respect of 486
  offences committed in Colombia. We remain in close touch with the Colombian authorities on this issue. President Barco has thanked us for the help which we have extended in this matter.

  Mr. Butler
  To ask the Secretary of State for Foreign and Commonwealth Affairs what steps he is taking to help the British dependent territories in their fight against the trade in narcotics.

  Mr. Sainsbury
  We are very active in assisting local governments in the dependent territories, particularly those in the Caribbean, in their fight against the trade in narcotics. Following a survey of the Caribbean dependent territories conducted in 1986 we took steps to establish or strengthen drugs squads in the local police forces through the provision of United Kingdom personnel and equipment. In addition, a United Kingdom Customs training adviser has been running drugs awareness courses and a United Kingdom drugs intelligence officer has been establishing drugs intelligence registries in each of the territories. A new police launch was provided for the British Virgin Islands Government in 1988 and similar launches will be provided for Anguilla, Montserrat and Turks and Caicos Islands over the next six months. Training for the crews will be given by a United Kingdom team of experts.

  In July/August a team of United Kingdom experts completed a further survey of the drugs problem in the Caribbean dependent territories to assess the present situation and to make recommendations for further action. We are currently considering this report in consultation with our Governors and local administrations.

  Refuseniks
  Mr. John Marshall
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about the Government's representations on behalf of refuseniks.

  Mr. Waldegrave
  We continue to take every opportunity to press the Soviet authorities both about individual refusenik cases, and on the need for new and effective legislation which will make the refusenik problem a thing of the past.

  Mr. John Marshall
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations have been made to the Russian authorities about the case of Norbet and Natasha Magazanik and their daughter Olga and son Alexander of Moscow.

  Mr. Waldegrave
  We take every opportunity to press the Soviet authorities on individual refusenik cases such as the Magazanik family. My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs raised this case most recently with Mr. Shevardnadze in New York on 29 September. We shall maintain our pressure until this case is satisfactorily resolved.

  Mr. John Marshall
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations have been made to the Russian authorities about the case of Alexander and Yelena Rappoport and his son Vladimir of Moscow.

  Mr. Waldegrave
  We take every opportunity to press the Soviet authorities on individual cases such as
  487
  Alexander and Elena Rappoport. My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs raised this case most recently when he met Mr. Shevardnadze in New York on 29 September. We shall maintain our pressure until this case is satisfactorily resolved.

  Mr. John Marshall
  To ask the Secretary of State for Foreign and Commonwealth Affairs (1)what representations have been made to the Russian authorities about the case of Irina Tiomkinal and her son Ilya and her mother, of Moscow;

  (2) what representations have been made to the Russian authorities about the case of Roman and Ludmilla Friedman and their sons Igor and Andre of Moscow;

  (3) what representations have been made to the Russian authorities about the case of Yakov Grinberg and Basya Berelisovna and their daughter Diana and son Lev of Moscow.

  (4) what representations have been made to the Russian authorities about the case of Semion and Lida Akselrod and their sons Boris, Benjamin and David of Leningrad.

  Mr. Waldegrave
  We have not previously raised these particular cases with the Soviet authorities but we will be happy to do so if the hon. Member will provide the necessary details about each case.

  Central America
  Mr. Nigel Griffiths
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he last met the Government of the United States to discuss progress in the Central American peace process.

  Mr. Sainsbury
  We have regular discussions with the United States Administration on a wide range of issues, including Central America.

  Human Rights
  Mr. Atkinson
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the further progress required of the Soviet Union towards implementing its human rights commitment for United Kingdom attendance at the proposed Conference on Security and Co-operation in Europe human rights conference in Moscow in September 1991 to take place.

  Mr. Waldegrave
  While there have been significant improvements in Soviet human rights performance, many individual cases remain unresolved, and most of the expected new legislation is still unpublished. There is still much to be done before our well-known conditions for attendance are met. The refusal of a visa recently to the Reverend Michael Bordeaux was not a good omen.

  Somalia
  Mr. Michael
  To ask the Secretary of State for Foreign and Commonwealth Affairs what information the Government now have about the outcome of their representations on human rights in Somalia.

  Mr. Waldegrave
  Earlier in the year the Somali Government released hundreds of political prisoners and received a visit by an Amnesty International delegation. These welcome moves were followed in mid-July by the 488
  brutal suppression of demonstrations and extra-judicial executions. We have made clear our deep concern about these developments.

  China
  Mr. Dunnachie
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent discussions he has had with the Government of China; and if he will make a statement.

  Mr. Maude
  My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs met the Chinese Foreign Minister, Mr. Qian Qichen, in New York on 28 September. Their discussion concentrated on Hong Kong. They agreed on the need for co-operation to implement the Joint Declaration and the need to work for the restoration of confidence in Hong Kong.

  Mr. Battle
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether the ban on arms sales to China includes equipment for which export licences had been granted prior to the ban but which has not left the United Kingdom.

  Mr. Maude
  Yes.

  India
  Mr. Janner
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether he will make a statement concerning Britain's relations with India.

  Mr. Sainsbury
  Our relations with India are close and friendly and reflect the many points of contact and common interest between us.

  British Tourists (Injuries)
  Mr. McCrindle
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many cases have been reported to date of British tourists being injured in(a) accidents, (b) assaults and (c) civil disturbances whilst on overseas holidays since the beginning of the year.

  Mr. Sainsbury
  British missions overseas received reports of 527 accidents and 225 assaults of which British nationals were victims between 1 January 1989 and 30 September 1989. Statistics on the numbers injured in civil disturbances are not held.

  Romania
  Mr. Flynn
  To ask the Secretary of State for Foreign and Commonwealth Affairs what new initiative he plans to reduce the violations of human rights in Romania.

  Mr. Waldegrave
  We will continue to protest strongly to the Romanian Government on every appropriate occasion about violations of human rights in Romania.

  Pakistan
  Mr. Robert G. Hughes
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on Anglo-Pakistani relations.

  Mr. Sainsbury
  Britian and Pakistan's traditionally close and friendly relations have been reinforced by the
  489
  restoration of democracy in Pakistan last year and, more recently, by Pakistan's resumption this month of Commonwealth membership. The warmth of the relationship was demonstrated by the very successful visit of Prime Minister Bhutto in July.

  South Africa
  Mr. Kirkwood
  To ask the Secretary of State for Foreign and Commonwealth Affairs what role he proposes the United Kingdom should play in the ending of apartheid in South Africa.

  Mr. Waldegrave
  It is not for outsiders to try to impose a solution on South Africa. Our role will continue to be to help and encourage those who are working for peaceful change; meanwhile maintaining dialogue with the South African Government in order to reinforce its stated commitment to reform and negotiations.

  El Salvador
  Mr. Darling
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he last met the Government of El Salvador to discuss the human rights situation in that country.

  Mr. Sainsbury
  My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs has not yet had the opportunity to meet members of the Government of El Salvador.

  Human rights in El Salvador was among the subjects I discussed with the Salvadorean Foreign Minister, Dr. Manuel Pacas, on 26 September.

  Hong Kong
  Mr. Sumberg
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent discussions he has had with counterparts from other Commonwealth countries regarding the future of Hong Kong.

  Mr. Maxton
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he last met representatives of the Government of China to discuss the future of Hong Kong.

  Mr. Maude
  The future of Hong Kong has been discussed at the European Community Council in Madrid, at the Economic Summit in Paris in July, and the Commonwealth Heads of Government Meeting in Kuala Lumpur this month.

  In addition my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs has had meetings with the Chinese Foreign Minister in Paris on 31 July and in New York on 28 September.

  Mr. Roger Cooper
  Mr. Nicholas Baker
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about the continued detention in Iran of Mr. Roger Cooper and his Department's efforts to secure Mr. Cooper's release.

  Mr. Waldegrave
  Roger Cooper has been held in prison in Iran, without adequate consular access, since December 1985. We regard his detention as wholly unjustified, and 490
  have made our concerns clear to the Iranian Government both directly and indirectly on many occasions. We shall continue to take every opportunity to press for his release.

  Macao
  Mr. Alton
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the implications of Portugal's decision to grant full citizenship and right of abode to the people of Macao.

  Mr. Maude
  There has been no such decision. Portugal grants automatic full citizenship and right of abode only to people born in Portuguese territory of Portuguese parents. The 1981 Portuguese Nationality Act ended the automatic right to Portuguese nationality of children born of non-Portuguese parents in Macao. It is estimated that less than 20 per cent. of Macao residents have the right of abode in Portugal.

  Entry Clearance Interviews (Islamabad)
  Mr. Madden
  To ask the Secretary of State for Foreign and Commonwealth Affairs what action he proposes to reduce delays for those awaiting entry clearance interviews at the British embassy in Islamabad.

  Mr. Sainsbury
  Waiting times for interview at the High Commission in Islamabad have been reduced this year following an increase in the number of permanent entry clearance staff and streamlining of procedures. We continue to monitor queue lengths to ensure that applicants are seen as quickly as resources allow.

  Indian High Commissioner
  Dr. Michael Clark
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he last met the Indian high commissioner; and what subjects were discussed.

  Mr. Sainsbury
  My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs met the Indian high commissioner socially with other members of the diplomatic corps on 14 September. My noble Friend the Minister of State for Foreign and Commonwealth Affairs has had substantive discussions on a full range of issues.

  Kurdish People
  Mr. Corbyn
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the Government of Iraq concerning their treatment of Kurdish people.

  Mr. Waldegrave
  We regularly make clear to the Iraqi Government at all levels our concern over Iraq's human rights record, including its treatment of its Kurdish population.

  Bangladesh
  Mr. Knapman
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he last met the Foreign Minister of Bangladesh and what was discussed.

  Mr. Sainsbury
  My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs and the
  491
  Foreign Minister of Bangladesh both participated in the recent Commonwealth Heads of Government meeting in Kuala Lumpur.

  Afghanistan
  Mr. Kilfedder
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on Her Majesty's Government's policy towards Afghanistan.

  Mr. Sainsbury
  We have consistently supported efforts to replace the present regime in Kabul with a truly representative government acceptable to the majority of Afghans. This is the necessary preliminary to any lasting settlement and to the voluntary return of Afghan refugees.

  Kampuchea
  Mr. Devlin
  To ask the Secretary of State for Foreign and Commonwealth Affairs what assistance the British Government are giving to the republic of Kampuchea to avoid a renewal of civil war in that country.

  Mr. Sainsbury
  We do not provide aid to the Heng Samrin regime, which was installed by force of Vietnamese arms. But we have contributed towards a number of humanitarian projects inside Cambodia. Our objective remains a comprehensive political settlement which would enable the Cambodian people to elect a Government of their choice.

  Mr. Devlin
  To ask the Secretary of State for Foreign and Commonwealth Affairs what stance the British delegation to the United Nations intends to take to the possible renewal of representation of Kampuchea by the coalition Government of democratic Kampuchea.

  Mr. Sainsbury
  On 17 October the UN General Assembly once again adopted, without a vote, the report of the credentials committee. This recommended, inter alia, acceptance of the credentials of Democratic Kampuchea. After adoption, the United Kingdom representative emphasised that this should not be taken to imply support for the Khmer Rouge and made clear our abhorrence of Pol Pot.

  Prisoners of War
  Sir John Farr
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether he will reconsider the claims made by ex-prisoners of war, who were involved in the building of the Siam to Burma railway in 1941, in relation to their treatment by the Japanese at that time.

  Mr. Sainsbury
  No. The question of compensation for the suffering and damage caused by Japan during the war was dealt with in the 1951 treaty of peace with Japan. While recognising the very great debt owed by this country to those who fought against the Japanese, there are no grounds to reopen the issue now.

  Israel
  Mr. Nellist
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent representations he has made to the Government of Israel on human rights, and the continued occupation of the Gaza Strip and the West Bank; and if he will make a statement.
  492
  Mr. Waldegrave
  My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs discussed the situation in the occupied territories with the Israeli Foreign Minister on 25 September and underlined our concern that, pending their withdrawal, the Israelis should administer the territories in accordance with international law and their human rights obligations.

  United Nations
  Mr. Jack
  To ask the Secretary of State for Foreign and Commonwealth Affairs what matters he proposes to raise at the next meeting of the United Nations General Assembly.

  Mr. Sainsbury
  My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs attended the opening session of the forty-fourth session of the General Assembly between 25 and 29 September. This provided him with an opportunity to deliver a statement to the General Assembly, have formal meetings with the Secretary-General, Senor Perez de Cuellar and the newly elected President of the General Assembly, Mr. Garba, and to attend a lunch hosted by the Secretary-General for the Foreign Ministers of the five permanent members of the Security Council.

  My right hon. Friend also undertook bilateral discussions with the President of Colombia, President Barco and the Foreign Ministers of the following countries:

  USA (Mr. Baker)

  USSR (Mr. Shevardnadze)

  China (Mr. Qian)

  Japan (Mr. Nakayama)

  Hungary (Dr. Horn)

  Israel (Mr. Arens)

  Poland (Professor Skubiszewski)

  Pakistan (Mr. Yaqub Khan).

  My right hon. Friend does not expect to attend the General Assembly again this session. My right hon. Friend the Prime Minister intends to address the General Assembly on 8 November on environmental issues.

  Victim Support Groups
  Mr. Gregory
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he has plans to co-ordinate victim support groups in other EC states for United Kingdom citizens; and if he will make a statement.

  Mr. John Patten
  I have been asked to reply.

  The United Kingdom participated in work which led to the adoption in 1987 by the Council of Europe's Committee of Ministers of a recommendation on assistance to victims and the prevention of victimisation. This recommendation urged the Governments of all member states (including European Community and other member states) to take a range of steps to support victims in their own countries.

  So far as co-ordination is concerned, we have encouraged and assisted Victim Support—an independent national body which receives a grant from the Home Office—in its contacts with victim support groups elsewhere in Europe.

EMPLOYMENT

  Employment Training
  Ms. Short
  To ask the Secretary of State for Employment if he will give, for the latest available date(a) the number of starts on employment training, (b) how many were people with disabilities, (c) (b) as a percentage of (a), (d) total employment training starts under the special groups exemption, (e) how many, of (d), were people wth disabilities, (f) (e) as a percentage of (d), and (g) the sources of referral.

  Mr. Patrick Nicholls
  To 13 October 1989, the latest date for which information is available, 468,000 people had started on employment training. An analysis of individual trainee records received relating to starts up to the end of June show that about 11 per cent. were people who stated that they had a disability or health problem which affected the type of work they could do. The same analysis shows that training agents and training managers had coded about 23 per cent. of entrants in the special eligibility exemption groups. Of these special group entrants about 16 per cent. were people who stated that they had a disability or a health problem which affected the type of work they could do. The source of referral for most people on employment training is the employment service. In addition some trainees are directly recruited by training agents and training managers.

  Table 1

  Employment training filled places: September 1988 to July 1989

  Training agency region

  September

  October

  November

  December

  January

  February

  March

  April

  May

  June

  July

  South East

  3,800

  5,200

  6,300

  7,100

  8,500

  9,600

  10,000

  10,300

  10,900

  11,500

  14,500

  London

  4,600

  6,300

  9,400

  10,600

  13,300

  15,200

  16,600

  17,500

  17,900

  18,300

  19,000

  South West

  3,000

  4,300

  5,700

  6,900

  8,400

  10,000

  10,900

  11,400

  11,600

  11,800

  11,800

  West Midlands

  5,200

  7,700

  10,100

  12,100

  15,100

  18,200

  20,700

  22,300

  22,600

  22,800

  23,200

  East Midlands and Eastern

  3,900

  5,700

  7,600

  8,900

  10,600

  12,900

  14,000

  15,000

  15,400

  15,500

  16,400

  Yorkshire and Humberside

  9,800

  10,200

  14,500

  16,000

  19,100

  22,100

  24,000

  24,800

  25,100

  25,200

  25,200

  North West

  6,700

  9,900

  13,400

  15,500

  18,500

  22,500

  24,900

  26,000

  26,600

  27,600

  29,000

  Northern

  4,400

  7,100

  9,700

  11,900

  14,500

  18,000

  20,100

  21,200

  22,000

  23,000

  24,400

  Wales

  2,400

  4,400

  6,000

  7,400

  9,300

  11,900

  13,400

  14,200

  14,600

  14,800

  15,800

  Scotland

  4,400

  6,600

  9,100

  11,700

  14,000

  17,900

  21,000

  22,100

  22,500

  23,200

  23,700

  Great Britain

  48,100

  67,400

  91,800

  108,000

  131,200

  158,000

  175,500

  184,900

  189,000

  193,700

  203,000

  Table 2

  Employment training

  Percentage of trainees on placements with employers and on projects on the census date

  December 1988—June 1989

  Region

  December1

  March

  June

  Project

  Employer

  Project

  Employer

  Project

  Employer

  per cent.

  per cent.

  per cent.

  per cent.

  per cent.

  per cent.

  South East

  46

  31

  39

  31

  36

  31

  London

  43

  17

  48

  18

  42

  19

  South West

  47

  24

  45

  26

  44

  30

  West Midlands

  65

  22

  58

  20

  59

  21

  East Midlands and Eastern

  n.a

  n.a.

  57

  27

  49

  26

  Yorks and Humberside

  52

  23

  51

  25

  48

  25

  North West

  58

  24

  49

  28

  54

  27

  Northern

  66

  16

  53

  24

  53

  24

  Wales

  56

  20

  45

  27

  43

  28

  Scotland

  69

  18

  62

  21

  60

  24

  Great Britain

  58

  21

  52

  24

  50

  25

  1 Returns include trainees on CP wages.

  n.a.—available because of low number of returns.

  Ms. Short
  To ask the Secretary of State for Employment for Great Britain and each standard Training Agency region, what are the latest available statistics for
  494
  Ms. Short
  To ask the Secretary of State for Employment if he will publish up-to-date figures for Great Britain and each training agency region for each month since September 1988, the number of(a) entrants to employment training, (b) people receiving employment training allowances, (c) employment training special group starts, separately for skill shortage and labour market schemes, (d) employment training leavers and (e) employment training leavers who left before completing their action plan.

  Mr. Nicholls
  As the information requested is contained in a number of tables, I will write to the hon. Member.

  Ms. Short
  To ask the Secretary of State for Employment if he will publish up-to-date figures for Great Britain and each training agency region for each month since September 1988, the number of(a) filled places in employment training; (b) employment training trainees on work placements with employers and (c) employment training trainees on project-based placements.

  Mr. Nicholls
  The figures requested for filled places are given in table 1. Information about the number of trainees on practical training placements with employers and on projects on any one day is collected from quarterly census returns submitted by training managers. This information is available for 30 December 1988, 31 March 1989 and 30 June 1989; these figures are given in table 2.

  employment training giving a breakdown of entrants

  495
  which shows how many were male and female, the length Mr. Nicholls of time they had been out of work, their ethnic backgrounds and whether or not they had any disabilities.

  Employment training characteristics of entrants (April to August 1989)

  (all figures are percentages, figures may not total 100 because of rounding)

  Unemployment duration (months)

  Ethnic origin11

  PWD2

  Region

  men

  women

  0–5

  6–12

  13–23

  24+

  1

  2

  3

  4

  5

  yes

  no

  South East

  61

  39

  35

  26

  10

  30

  91

  2

  3

  2

  2

  15

  85

  London

  58

  42

  18

  33

  14

  35

  50

  26

  11

  6

  6

  10

  90

  South West

  67

  33

  28

  33

  11

  28

  93

  2

  1

  1

  2

  15

  85

  West Midlands

  66

  34

  24

  27

  11

  37

  78

  9

  9

  2

  2

  12

  88

  East Midlands and Eastern

  71

  29

  16

  36

  13

  35

  88

  4

  5

  1

  2

  14

  36

  Yorkshire and Humberside

  72

  28

  27

  32

  12

  29

  89

  3

  5

  1

  2

  10

  90

  North West

  68

  32

  24

  30

  13

  33

  91

  2

  3

  1

  2

  11

  89

  Northern

  73

  27

  23

  35

  12

  30

  97

  ..

  1

  1

  1

  9

  91

  Wales

  70

  30

  23

  36

  13

  28

  95

  1

  1

  1

  3

  11

  89

  Scotland

  73

  27

  17

  34

  14

  35

  97

  ..

  ..

  1

  2

  10

  90

  Great Britain total

  68

  32

  23

  32

  13

  32

  87

  5

  4

  2

  2

  11

  89

  1 Ethnic origin: 1—White, 2—Black-African-Caribbean, 3—Indian-Pakistani-Bangladeshi-Sri Lankan, 4—None of these, 5—I prefer not to say.

  2 PWD—People with disabilities. Starts to end July. Those trainees answering whether they had a long-term health problem or disability which affected the type of work they could do.

  .. =less than 0·5 per cent.

  Ms. Short
  To ask the Secretary of State for Employment, for Great Britain and each standard Training Agency region, what are the latest available statistics for employment training showing the number of trainees in each monthly period who(a) have entered employer-based work placements and the cumulative total of how many are in employer placements at the latest available date and (b) the number of trainees in each

  Employment Training

  Percentages of trainees on placements with employers and on projects on the census date December 1988—June 1989

  December1

  March

  June

  Region

  Project

  Employer

  Project

  Employer

  Project

  Employer

  Per cent.

  Per cent.

  Per cent.

  Per cent.

  Per cent.

  Per cent.

  South East

  46

  31

  39

  31

  36

  31

  London

  43

  17

  48

  18

  42

  19

  South West

  47

  24

  45

  26

  44

  30

  West Midlands

  65

  22

  58

  20

  59

  21

  East Midlands and Eastern

  n.a.

  n.a.

  57

  27

  49

  26

  Yorkshire and Humberside

  52

  23

  51

  25

  48

  25

  North West

  58

  24

  49

  28

  54

  27

  Northern

  66

  16

  53

  24

  53

  24

  Wales

  56

  20

  45

  27

  43

  28

  Scotland

  69

  18

  62

  21

  60

  24

  Great Britain

  58

  21

  52

  24

  50

  25

  1 Returns include trainees on CP wages.

  n.a. = Not available because of low number of returns.

  Ms. Short
  To ask the Secretary of State for Employment, for Great Britain and each standard Training Agency region, what are the monthly statistics for each month since June 1989 for employment training showing the(a) overall cumulative number of employment training trainees in training for each month and (b) the number of starts in each month with employment training training managers.

  Employment training filled places: June 1989 to September 1989

  Training agency region

  June

  July

  August

  September

  South East

  11,500

  14,500

  14,200

  14,900

  London

  18,300

  19,000

  19,000

  20,200

  South West

  11,800

  11,800

  11,500

  12,000

  496
  Mr. Nicholls
  The information is provide in the following table:

  monthly period who entered project-based work placements and the cumulative total of how many are in project-based placements at the latest available date.

  Mr. Nicholls
  Information about the number of trainees on practical training placements with employers and on projects on any one day is collected from quarterly census returns submitted by training managers. This information is available for 30 December 1988, 31 March 1989 and 30 June 1989. These figures are given in the following table.

  Mr. Nicholls
  Monthly information for Great Britain and each Training Agency region for each available month since June 1989 is given in the following tables. In-training figures are provided in table 1 and starts figures are provided in table 2.
  497

  Training agency region

  June

  July

  August

  September

  West Midlands

  22,800

  23,200

  23,600

  23,400

  East Midlands and Eastern

  15,500

  16,400

  16,800

  16,900

  Yorkshire and Humberside

  25,200

  25,200

  25,100

  25,200

  North West

  27,600

  29,000

  28,700

  29,100

  Northern

  23,000

  24,400

  24,700

  24,900

  Wales

  14,800

  15,800

  16,000

  16,500

  Scotland

  23,200

  23,700

  24,400

  25,100

  Great Britain

  193,700

  203,000

  204,400

  208,000

  Table 2

  Starts at Employment Training Managers: June 1989 to September 1989

  Training Agency Region

  June

  July

  August

  September

  South East

  2,400

  4,500

  1,900

  3,400

  London

  3,100

  3,100

  2,700

  4,800

  South West

  1,900

  1,500

  1,200

  2,300

  West Midlands

  3,800

  3,300

  3,200

  4,500

  East Midlands and Eastern

  2,800

  3,000

  2,500

  3,500

  Yorkshire and Humberside

  4,500

  3,800

  3,500

  5,500

  North West

  6,300

  5,300

  4,500

  6,200

  Northern

  4,100

  3,600

  3,000

  4,900

  Wales

  2,600

  2,700

  2,300

  3,700

  Scotland

  4,800

  3,400

  4,500

  5,600

  Great Britain

  36,400

  34,200

  29,300

  44,200

  Ms. Short
  To ask the Secretary of State for Employment what information he has about trainees who leave employment training early; and what is the latest available monthly estimate of the number of trainees who have left employment training early.

  Mr. Nicholls
  Information on trainees who leave employment training early is not currently available.

  Mr. Anthony Coombs
  To ask the Secretary of State for Employment what steps are being taken to improve administrative arrangements in employment training.

  Mr. Eggar
  The forms and procedures involved in the delivery of employment training are kept under review. The objective is to satisfy the requirements of public accountability and good administration whilst minimising the burden on training agents and training managers.

  All ET forms (and the guidance notes associated with them) have now been reviewed. In many cases they have been simplified, and the revised forms introduced progressively since March. Currently we are taking steps to improve the trainee attendance records for the payment of training grants and trainee allowances. We are also improving arrangements for notifying termination of training.

  I am confident that the overall effect of the action we are taking will be to ease administrative burdens while ensuring the proper use of Exchequer funds.

  Mr. Tony Lloyd
  To ask the Secretary of State for Employment if he will give the most recent details of(a) the number of filled places on the 23 large company employment training schemes listed on 27 February, Official Report, column 34, (b) any changes to the maximum number of places allocated for each of those schemes and (c) which of those schemes have since withdrawn from employment training.

  Mr. Nicholls
  [holding answer 23 October 1989]: The following table updates to 29 September 1989 the details of the 23 large company ET schemes listed in the Official
  498
  Report on 27 February at column 34. The "Maximum No. of places allocated" column shows, in brackets, the changes to the figures listed in the Official Report.

  None of the schemes lifted have withdrawn from Employment Training

  Company

  Maximum number of places allocated

  Places filled at 29 September 1989

  J. Jarvis and Sons

  1,310(-1,616)

  1,160

  J. Laing Construction

  2,181 (-157)

  1,554

  Henry Boot Construction

  495 (-455)

  222

  Invicta Training (Grand Metropolitan Catering)

  1,105 (+230)

  147

  Martin James

  650 (-85)

  552

  George Wimpey

  437 (-229)

  404

  Mowlem

  305 (-100)

  128

  Comet plc

  354

  51

  Pilkington

  230 (-70)

  181

  Ferranti

  152 (-98)

  92

  Mill Garages Ltd.

  170 (-10)

  173

  Tower Radio Ltd.

  130 (-120)

  93

  Portals Engineering Ltd.

  250

  241

  Marley Extrusions Ltd.

  200

  Nil

  Ryder Ltd.

  165 (+15)

  194

  Team Grey friars Ltd.

  380 (+ 230)

  155

  John Lawrence Group

  100 (-50)

  37

  ICI

  100 (-50)

  83

  Sumlock Business Services

  60 (-90)

  36

  R. and D. Associates

  125 (-33)

  139

  Simon Engineering

  110

  63

  Coastline Ltd.

  70 (-30)

  114

  Strategic Market International Ltd

  100

  88

  Restart
  Mr. Loyden
  To ask the Secretary of State for Employment how many Restart interviews were conducted in the last 12 months; what numbers were referred to each menu option; what numbers actually took up their referral; what numbers were referred to the unemployment benefit services for non-attendance at interview; what numbers were referred to the unemployment benefit service for non-availability; what numbers were referred to
  499
  the unemployment benefit services for refusal of suitable employment; and if he will express the numbers as a percentage.

  Mr. Eggar
  The information requested is given in the table.

  We do not know how many people ultimately start a job or other opportunity as a result of the Restart interview.

  Restart counselling: August 1988 to August 1989

  Number

  Per cent.

  Interviews

  2,194,400

  100·0

  Referred to:

  Job

  242,800

  11·0

  Jobclub

  197,600

  9·0

  Enterprise allowance scheme

  85,500

  4·0

  Restart course

  67,900

  3·0

  Employment training

  463,100

  21·0

  Other referrals1

  238,200

  11·0

  Referred to Unemployment Benefit Service:

  Non-attendance at interview

  316,400

  210·0

  Non-availability

  76,200

  3·0

  Refusal of suitable employment

  1,900

  0·1

  1 Referrals to claimant advisers, and disablement resettlement officers.

  2 This is a percentage of the number of invitations sent.

  Construction Industry (Accidents)
  Mr. Wareing
  To ask the Secretary of State for Employment what representations he has received in respect of accidents in the construction industry; and what plans he has to increase protection for those employed in that industry.

  Mr. Nicholls
  Over the last year I have answered several questions in the House and received letters from hon. Members on this subject. Additionally, the Building Employers Confederation has written to me and last April I met officials of UCATT. The number of Health and Safety Executive (HSE) inspectors devoted to construction has already risen 10 per cent. since 1988, and HSE aims to have 100 construction inspectors by 1990. Inspectors will be paying more attention to the quality of site management and levels of training and supervision. HSE will also continue to advise the industry and to vigorously enforce the law where necessary.

  The Government will shortly be making the wearing of safety helmets on construction sites compulsory and the Health and Safety Commission has recently published a consultative document setting out proposals for new regulations to strengthen the management of health and safety on construction sites.

  Training and Enterprise Councils
  Ms. Ruddock
  To ask the Secretary of State for Employment how training and enterprise councils will respond to the specific needs of ethnic businesses within local communities.

  Mr. Eggar
  Training and enterprise councils will be expected to undertake a comprehensive assessment of local market needs to enable them to draw up their corporate and business plans. Consultation with a wide range of organisations and individuals, including ethnic businesses where appropriate, will be vital to this assessment.

  National Council for Vocational Qualifications
  Mr. Harry Greenway
  To ask the Secretary of State for Employment if he will make a statement on the work being done by the National Council for Vocational Qualifications.

  Mr. Eggar
  The council's task of rationalising and reforming our vocational qualification system is well under way. Over 160 qualifications have now been accredited within the first four levels of the new national vocational qualification framework.

  A new system for recording the achievement of parts or units of the new national vocational qualifications has been developed, which will enable candidates to work more flexibly and progressively through their qualifications. In discussion with relevant professional bodies, the council has also begun to prepare the ground for extending its work to higher-level qualifications.

  Details of the council's activities are contained within its second annual report, a copy of which has been placed in the Library.

  Secondary Picketing
  Mr. John Marshall
  To ask the Secretary of State for Employment what representations he has received about secondary picketing; and if he will make a statement.

  Mr. Nicholls
  The Government receive representations on various aspects of industrial relations law. Reform of this law since 1979 has given employers, and others. the ability to restrain unlawful secondary picketing. In the last. year no formal representations have been received about this particular matter.

  Manufacturing (North-West)
  Mr. Pike
  To ask the Secretary of State for Employment what is his Department's latest assessment of the implications for jobs in the manufacturing sector in the north-west as a result of the introduction of the single market in 1992.

  Mr. Eggar
  The reduction in barriers to free movement of goods, persons, services, and capital, associated with the completion of the single European market in 1992, will provide considerable trade and employment opportunities in all regions of the United Kingdom. Future jobs growth throughout the United Kingdom depends on how well firms and workers react to these and other opportunities.

  Quarterly Attenders
  Ms. Short
  To ask the Secretary of State for Employment, at each appropriate quarterly date over the most recent three years, what was the flow of new quarterly attender claimants at the same dates, what was the stock of new quarterly attender claimants; what criteria are used by the employment service in assessing claimants when granting quarterly attender status; what steps a quarterly attender must take to show actively seeking work; and if he will make a statement.

  Mr. Eggar
  Records are not kept on the flow of new quarterly attenders.

  The number of quarterly attenders at each appropriate quarter over the last three years was as follows:

  501

  Number

  October 1986

  297,982

  January 1987

  292,270

  April 1987

  281,871

  July 1987

  269,111

  October 1987

  266,066

  January 1988

  257,897

  April 1988

  257,328

  July 1988

  248,932

  October 1988

  241,580

  January 1989

  222,289

  April 1989

  206,921

  July 1989

  183,614

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

  Mr. Nicholls
  Only local careers services hold information on the total number of young people awaiting the offer of a YTS place. There is no central record.

  The numbers of young people receiving bridging allowance was as follows:

  Numbers

  8 June

  10,310

  13 July

  10,026

  10 August

  10,261

  14 September

  9,110

  Twelve months ended 30 June 1989

  Review cases

  Allowed

  Disallowed

  Referred direct to Local Tribunal

  Revised in favour of claimant

  Revised adversely to claimant

  Not reviewed/ revised

  (a)

  48,652

  16,231

  40

  137

  320

  171

  (b)

  3,145

  16,083

  18

  242

  7,651

  297

  (c)

  47,950

  58,303

  199

  4,108

  6,433

  3,327

  (d)

  50,744

  20,868

  98

  3,632

  4,198

  3,324

  (e)

  158,558

  226,062

  382

  2,350

  714

  827

  (f)

  90,467

  70,325

  674

  521

  296

  318

  (g)

  5,400

  2,986

  17

  43

  20

  15

  (h)

  4,893

  2,438

  8

  40

  13

  15

  (i)

  983

  1,563

  5

  38

  62

  9

  (j)

  46

  103

  —

  27

  13

  2

  (a) Employed to full normal extent

  (b) Engaged in employment

  (c) Availability

  (d) Restricted availability

  (e) Leaving voluntarily

  (f) For misconduct

  (g) Neglecting to avail of employment

  (h) Refusal of employment

  (i) Refusal or premature termination of training

  (j) Refusal to carry out written recommendations

  Art and Culture
  Mr. Fisher
  To ask the Secretary of State for Employment what is the level of expenditure by the Training Agency on training in the arts and cultural industries.

  Mr. Nicholls
  Information is not available in the form requested for all Training Agency programmes. However,
  502
  Extended child benefit was not payable at the end of July or the end of August. The number of young people whose parents were receiving child benefit at the end of June was 8,941 and, at the end of September 15,957.

  Information on the number of young people receiving income support is not available.

  Adjudication Officers (Decisions)
  Ms. Short
  To ask the Secretary of State for Employment, for the 12-month period to the end of June, if he will give the decisions of adjudication officers on doubtful fresh claims, renewal claims and reviewed claims for unemployment benefit showing the numbers allowed, disallowed, referred to a local tribunal, revised in favour of claimants, revised adversely to claimants and not revised in the following categories of questions(a) employed to full normal extent, (b) engaged in employment, (c) availability, (d) restricted availability, (e) leaving voluntarily, (f) for misconduct, (g) neglecting to avail of employment, (h) refusal of employment, (i) refusal or premature termination of training, (j) refusal to carry out written recommendations, and (k) Restart.

  Mr. Eggar
  All decisions on claims for unemployment benefit are made by the independent adjudication authorities and no statistics are kept as to the manner in which the entitlement doubt arose.

  Figures on the number of decisions for failure to attend Restart are not compiled separately.

  Subject to these qualifications, the following table sets out the information requested.

  in 1989–90 the cost to the Exchequer of YTS training in the arts and related activities is estimated to be around £23 million.

  Working Hours
  Mr. Redmond
  To ask the Secretary of State for Employment if he will list for all the member countries of the EEC the average number of working hours per week for(a) 10 years ago (b) five years ago and (c) the latest year for which he has figures.

  Mr. Nicholls
  Estimates from Community labour force surveys as requested, are shown in the table:

  Persons in employment in member countries of the EEC Average hours1 usually worked per week, 1979, 1984 and 1987

  1979

  1984

  1987

  hours

  hours

  hours

  United Kingdom

  38·5

  38·3

  38·6

  Belgium

  41·4

  39·9

  38·9

  Denmark

  37·9

  36·7

  36·1

  Federal Republic of Germany

  41·2

  40·1

  39·6

  France

  42·4

  40·0

  39·4

  Ireland

  46·2

  43·1

  43·2

  Italy

  40·8

  39·9

  39·7

  Luxembourg

  40·8

  40·5

  40·2

  Netherlands

  39·7

  4n/a

  33·9

  Greece2

  —

  44·7

  43·4

  Spain3

  —

  —

  41·6

  Portugal3

  —

  —

  44·3

  1 Basic usual hours

  2 Not member country of EEC in 1979

  3 Not member country of EEC in 1979 and 1984

  4 Did not participate in 1984 Labour Force Survey

  Local Enterprise Agencies
  Mr. Parry
  To ask the Secretary of State for Employment how long the Government's local enterprise agency project schemes has been operating; how many projects in Liverpool have received support under the scheme; in which Liverpool constituencies supported schemes have been situated; and what is the total amount of support up to the present time.

  Number of staff in the grade

  Number of staff who have attended courses specifically on information technology

  Percentage of staff in the grade

  Number of staff who have attended courses with an element of information technology

  Percentage of staff in the grade

  Grade 1

  1

  1

  100

  1

  100

  Grade 2

  5

  5

  100

  1

  20

  Grade 3

  26

  10

  38

  13

  50

TRANSPORT

  Motorways
  Mr. Simon Coombs
  To ask the Secretary of State for Transport what plans he has to provide a new service area on the M4 between Heston and Membury.

  Mr. Atkins
  A service area is needed to fill the 56-mile gap between the sites at Membury and Heston. Consultants have been searching for a suitable site to meet this need. When they have reported and their recommendations have been considered I shall announce our proposals for development.
  504
  Mr. Eggar
  The local enterprise agency project scheme (LEAPS) has been in operation since April 1988. Since then six projects in Liverpool have received support. Constituencies in which projects have been or are operating are Liverpool (Riverside), Liverpool (Broad Green), Liverpool (Garston), Liverpool (Mossley Hill), Birkenhead, Wallasey, Wirral West and Wirral South. The total amount of support in Liverpool so far under LEAPS is £38,000 of public money matching an equal private sector contribution. Nationally, around £600,000 has been paid in LEAPS grants since April 1988 on the same basis.

  Efficiency Scrutiny
  Mr. Boswell
  To ask the Secretary of State for Employment what topic he proposes for his Department's next efficiency scrutiny.

  Mr. Eggar
  We have decided to set up an efficiency scrutiny to examine the reasons why some benefit claimants, having expressed an interest in one or more employment and training programme, either fail to take up a place or drop out after a very short time.

  Information Technology
  Mr. Warren
  To ask the Secretary of State for Employment how many officials in his Department at grade 3 and above have, since promotion to the level of grade 3, attended a course(a) specifically on information technology and (b) containing an element of information technology and what percentage each represents of all the staff in those grades in his Department.

  Mr. Eggar
  [pursuant to his reply, 19 October 1989; c. 233–34.]: I regret that the information given in my original reply was not up-to-date due to staff changes since 16 October. The correct information is given in the following table:

  East London River Crossing
  Mr. Cartwright
  To ask the Secretary of State for Transport how many objections have been received from(a) organisations and (b) individuals to the revised bridge proposals for the east London river crossing; and whether he intends to reopen the public inquiry into the scheme.

  Mr. Portillo
  By the end of the statutory objection period, 55 objections and representations had been received from organisations and 3,235 from individuals.

  My right hon. Friends the Secretaries of State for Transport and for the Environment announced on 17 October that they had decided to re-open the previous inquiry to consider representations about the change in the design of the Thames bridge and to hold a concurrent inquiry into the draft orders for the revised bridge design. These inquiries will he held jointly with the public inquiry into the planning application to extend the runway and to

  505
  change the operating conditions at London City airport. These inquiries are expected to be held around the middle of 1990.

  Private Hire Cars
  Mr. Cartwright
  To ask the Secretary of State for Transport what consideration he is currently giving to the introduction of a licensing system for private hire cars in Greater London.

  Mr. Portillo
  I consider representations as and when they are made to me.

  Channel Tunnel Link
  Sir John Stanley
  To ask the Secretary of State for Transport at what stage British Rail will require formal investment authority for any public investment in a new line to meet the anticipated growth in international traffic after the opening of the Channel tunnel.

  Mr. Portillo
  British Rail requires Government approval for significant expenditures.

  Sir John Stanley
  To ask the Secretary of State for Transport by what criteria he will judge whether a proposal put to him by British Rail to build a new line to meet the anticipated growth in international traffic after the opening of the Channel tunnel is environmentally satisfactory.

  Mr. Portillo
  The Government will need to be satisfied that BR has carried out an environmental assessment, and that it can provide a full environmental statement detailing the impact of the works and any mitigation measures. Ultimately it will be for Parliament to judge whether any proposals are environmentally acceptable.

  Sir John Stanley
  To ask the Secretary of State for Transport whether any proposals have been put to him by British Rail to build a new line to meet the anticipated growth of international traffic after the opening of the Channel tunnel that will run from the tunnel terminal to Swanley only.

  Mr. Portillo
  British Rail is continuing its discussions with the private sector. No firm proposal has yet been put to Ministers.

  Sir John Stanley
  To ask the Secretary of State for Transport whether it remains his policy that he will not give his approval to a proposal from British Rail to construct a new railway line between London and the Channel tunnel if the board's proposals, including environmental protection measures, fail to establish a commercial case for the contruction of a new line.

  Mr. Portillo
  Yes.

  Sir John Stanley
  To ask the Secretary of State for Transport whether, in calculating the rate of return on any public investment in a new line to meet the anticipated growth in international traffic after the opening of the Channel tunnel, he will take full account of the loss in revenue to British Rail on existing routes arising from the diversion of national and international passengers from existing routes to the new line.

  Mr. Portillo
  This would be taken into account.
  506
  Sir John Stanley
  To ask the Secretary of State for Transport whether any proposals have been put to him by British Rail to build a new line to meet the anticipated growth in international traffic after the opening of the Channel tunnel that involve public sector investment in whole or in part.

  Mr. Portillo
  The basis of British Rail's discussions with the private sector is that the construction and operation of the new line would be a joint venture in which BR would have a minority shareholding.

  Sir John Stanley
  To ask the Secretary of State for Transport whether he will direct British Rail that, in its discussions of proposals with the private sector to build a new line to meet the anticipated growth in international traffic after the opening of the Channel tunnel, the proposals are to incorporate as a minimum all those environmental protection works that have been announced by British Rail to date.

  Mr. Portillo
  I have no powers to give such a direction. I understand that the discussions between British Rail and the private sector have taken full account of BR's progress in designing the route, including environmental protection measures.

AGRICULTURE, FISHERIES AND FOOD

  Set-aside Payments
  Mr. David Nicholson
  To ask the Minister of Agriculture, Fisheries and Food if he proposes any change in the amounts payable for set-aside to take account of inflation; and if he will make a statement.

  Mr. Maclean
  I refer my hon. Friend to the answer given to my hon. Friend the Member for Suffolk, South (Mr. Yeo) on 27 July 1989 at column 950.

  Greenhouse Effect
  Dr. Thomas
  To ask the Minister of Agriculture, Fisheries and Food what initiatives to combat the greenhouse effect he introduced to the Council of Agriculture Ministers on 25 to 26 September in Brussels.

  Mr. Curry
  The greenhouse effect was not discussed at this meeting of the Council.

  Straw and Stubble Burning
  Mr. Redmond
  To ask the Minister of Agriculture, Fisheries and Food what guidance his Department has issued to farmers who store straw and stubble in open fields close to public highways and in the vicinity of private property, in respect of height of stack, and closeness to properties to avoid a fire risk.

  Mr. Maclean
  Officers of my Agricultural Development and Advisory Service will advise farmers on how to store straw in open fields in such a way as to keep to a minimum any possible risks from fire to people, highways and private property.

  Organically Grown Grain
  Mr. Redmond
  To ask the Minister of Agriculture, Fisheries and Food how many tonnes of organically grown grain have been imported during the current year; and what is the figure for organic grown grain produced in the United Kingdom.

  Mr. Maclean
  This information is not available.

  Research Projects
  Dr. David Clark
  To ask the Minister of Agriculture, Fisheries and Food what rules govern the publication of findings of research projects at his research laboratories; and if he will make a statement.

  Mr. Gummer
  When the work has been completed and necessary steps taken to protect intellectual property rights, the findings of research projects at MAFF laboratories are published in appropriate scientific journals. For research funded on a contract basis for an outside customer, the question of publication is a matter for the terms of the individual contract.

  Eggs
  Mr. Malcolm Bruce
  To ask the Minister of Agriculture, Fisheries and Food, pursuant to the answer given to the right hon. Member for Strangford (Mr. Taylor),Official Report, 20 October, columns 281–82, what percentage of eggs produced for the second quarter of 1989 were classified as free range; and what steps he is taking to encourage free range egg production.

  Mr. Curry
  Information on free range egg production is available only on an annual basis. In 1988 registered egg packing stations marketed under the description "free range eggs" (as defined in Commission Regulation (EEC) 1943/85) around 796,000 boxes of 360 eggs each. This figure is just under 3 per cent. of the estimated United Kingdom packing station throughput for the same period.

  Any encouragement for the expansion of free range egg production must come from the customer rather than the Government.

  Battery Fowls
  Mr. Blunkett
  To ask the Minister of Agriculture, Fisheries and Food what action he proposes to take to protect battery fowls being taken to slaughter; and if he will make a statement.

  Mr. Curry
  [holding answer 23 October 1989]: The Farm Animal Welfare Council is currently engaged on a study of transport conditions for poultry and I look forward to receiving its findings. In the meantime the Welfare of Poultry (Transport) Order 1988 contains detailed provisions aimed at protecting the welfare of poultry (including battery hens destined for slaughter) during loading, unloading and carriage. We have also supported the introduction of a welfare guide on handling of end-of-lay hens which the industry has prepared.

  Agriculture Council
  Mr. Tim Boswell
  To ask the Minister of Agriculture, Fisheries and Food, what was the outcome of the Brussels Agricultural Council held on 25 and 26 September.
  508
  Mr. Gummer
  [pursuant to his reply, 19 October 1989 c. 210]: I represented the United Kingdom at the 23–24 October 1989 Agriculture Council meeting together with the Parliamentary Secretary, my hon. Friend the Member for Skipton and Ripon (Mr. Curry).

  The main items discussed were the proposed reform of the Community's agricultural structures policy, the proposal to increase the Community's milk quota by 1 per cent. subject to certain conditions, proposals to amend the rules for charges on imports of pigmeat into the Community, proposals to allow additional coresponsibility levy charged on cereals to be amended after an initial harvest determination by the Commission in the light of further information, and proposed regulations governing veterinary checks on intra-Community trade. On all these points I argued strongly the well-established United Kingdom position. The President indicated that he hoped that conclusions could be reached on some or all of these issues at the November Council on the basis of a compromise proposal he expected to put forward.

  The Council also discussed the proposed Council directive concerning the protection of water against nitrate pollution on which the Environment Council takes the lead. I pointed out that this proposal had to take better account of the potential effects on agriculture, and in particular that any restraints ultimately imposed must be proportionate to the benefits gained by reducing pollution, as is required by the EEC Treaty.

  Decisions were reached on the consumption aid for olive oil for 1989–90 at the same level as applied in the previous marketing year and on extensions of less favoured areas in three member states and on a national aid for wine production in Rheinland Pfalz.

DEFENCE

  Low Flying
  Mr. Stern
  To ask the Secretary of State for Defence how many training air-miles were flown at under 500 feet altitude over national parks during the months of July, August and September.

  Mr. Neubert
  Central records are not held in a form which would enable the information requested to be provided.

  RAF Mildenhall (Pollution)
  Dr. Thomas
  To ask the Secretary of State for Defence what steps he takes to ensure that the United States Air Force management of RAF Mildenhall in Suffolk complies with standards set by Her Majesty's inspectorate of pollution in regard to off-site discharges of(a) raw sewage into the river Lark, (b) chlorinated solvents, (c) mercury, and (d) cadmium; and if he will make a statement on off-site discharges of polluting chemicals from RAF Mildenhall in relation to EEC environmental directives.

  Mr. Archie Hamilton
  The management and operation of the RAF Mildenhall sewage treatment plant is the responsibility of the Property Services Agency. Discharges from the plant are checked by both the PSA and the National Rivers Authority to ensure compliance with standards agreed between both parties. Mercury and cadmium are not used at the base, and any chlorinated
  509
  solvents are collected after use and are not discharged into the sewers. It is the Government's policy to ensure that the requirements of EC environmental directives are fully complied with. Discharges from RAF Mildenhall meet these requirements.

  Aldermaston and Burghfield
  Mr. Andrew F. Bennett
  To ask the Secretary of State for Defence what programmes have been implemented to aid staff recruitment and retention at AWE Aldermaston and at AWE Burghfield since 21 June; and what programmes it is envisaged will be implemented at these establishments over the course of the next two years.

  Mr. Neubert
  A number of measures to improve recruitment and retention at AWE (Aldermaston) and AWE (Burghfield) have been pursued vigorously for some time. These have been further assisted by introduction from 1 October 1989 of further enhancement to special pay additions for those categories of staff for which recruitment and retention needs are greatest. Recruitment campaigns are continuing, and the situation for the future will be kept under review.

  Mr. Andrew F. Bennett
  To ask the Secretary of State for Defence when it is now expected that the A90 building at AWE Aldermaston will reach its full production capacity.

  Mr. Neubert
  Production in A90 will reach its peak by the mid-1990s.

  Women Pensioners
  Mrs. Rosie Barnes
  To ask the Secretary of State for Defence if he will give for the latest year for which figures are available and the preceding three years the number of women in receipt of attributable family forces pensions who died during the year.

  Mr. Archie Hamilton
  The information requested is not directly available and could be provided only at disproportionate cost.

  Recruitment Offices
  Mrs. Rosie Barnes
  To ask the Secretary of State for Defence if he will give the latest estimate of the value of the buildings owned by Her Majesty's Government and operated as armed services recruitment offices in the United Kingdom.

  Mr. Archie Hamilton
  This information is not readily available and could be provided only at disproportionate cost.

  Family Forces Pensions
  Mrs. Rosie Barnes
  To ask the Secretary of State for Defence if he will make a statement on the purpose of the attributable family forces pensions.

  Mr. Archie Hamilton
  Attributable forces family pensions arise from the provisions of the occupational pension schemes for members of the armed forces, as amended in 1973. These amended provisions applied to personnel who gave service on or after 31 March 1973. The family pensions provide an appropriate element of income for the eligible widows and dependent children of those service personnel whose cause of death, whether in service or in retirement, is recognised as being attributable to their service in the armed forces. The provisions were intended, as far as practicable, to place service families in an overall position broadly comparable with those of other public servants whose death occurs as a direct consequence of their employment.

  Mr. Alfred Morris
  To ask the Secretary of State for Defence if he will give for each of the years 1976, 1979, 1982, 1985, 1986, 1987 and 1988 the number of widows in receipt of attributable forces family pension.

  Mr. Archie Hamilton
  The information requested is not directly available and could be provided only at disproportionate cost.

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

Class Action Procedures
Lord Mishcon Lord Mishcon asked Her Majesty's Government:
Whether a reference has yet been made to the Law Commissions for England and Wales and for Scotland on the question of amendments to court procedure to provide for a class action; and, if so, in what terms, and when it is expected that their reports will be received.
The Lord Advocate (Lord Fraser of Carmyllie): My Lords, following the recommendation of the civil justice review that one of the law reform agencies should carry out a study into representative or class actions, the possibility of such a study being undertaken by the Law Commission is under discussion. As was announced by my right honourable friend the Secretary of State for Scotland on 26th July 1988, the Scottish Law Commission has accepted a reference from my predecessor as Lord Advocate to consider the provision in Scottish civil procedure of a more effective remedy in situations where a number of persons have the same or similar rights. I understand that they have prepared a discussion paper which they expect to issue in the New Year.
Lord Mishcon: My Lords, I thank the noble and learned Lord the Minister for that reply. Does he recollect that some 18 months ago at Committee and Third Reading of the Legal Aid Bill, in response to an amendment that I had the privilege of moving, the Minister's noble and learned friend the Lord Chancellor said that these references would be considered? This is an urgent matter which, if grappled with, will save administrative and judicial time. The Law Commission for Scotland has already accepted the reference. Will the Minister inform his noble and learned friend the Lord Chancellor that one hopes that the English and Welsh Commission will follow the example of the Scottish Commission and speedily accept this reference?
Lord Fraser of Carmyllie: My Lords, as I have indicated, discussions are already being held. I understand that that follows upon the exchanges to which the noble Lord has referred during the passage of the Legal Aid Bill. Clearly, it is a project of major proportions. I am aware that the Scottish Law Commission—which is some way ahead in its consideration of the project—has already recognised that while the focus of public interest is in relation to personal injuries, the issue of representative or class actions has a wider application and may be of particular worth in the field of administrative law.
Lord Morris: My Lords, regarding the second part of the Question asked by the noble Lord, Lord Mishcon, can my noble and learned friend say when it is expected that the report will be received?
Lord Fraser of Carmyllie: My Lords, I believe that my noble friend is referring to the Scottish Law Commission when speaking of the second part of the Question. The Commission is hoping to publish a discussion paper on class action procedures early next year. As I have indicated, as regards the Law Commission for England and Wales, it is still a matter of discussion on what shall be the scope and nature of the inquiry, particularly bearing in mind the very important priorities that it otherwise has to meet.

Noxious Weeds on Set—Aside Land
2.46 p.m.
Lord Nugent of Guildford Lord Nugent of Guildford asked Her Majesty's Government:
What new measures they are taking to prevent the spread of noxious weeds in the countryside from fields which have been set-aside.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Baroness Trumpington): My Lords, since set—aside is novel, farmers will need time to develop the best management techniques, which will vary from farm to farm. We are monitoring the position carefully and would be prepared to consider further measures if these appeared necessary.
Lord Nugent of Guildford: My Lords, I thank my noble friend the Minister for her slightly emollient Answer. Is she aware that there are to be seen around our fields increasing patches of these noxious weeds, the seeds of which are blowing around to plague the fields and gardens of neighbours? Is my noble friend aware that no one likes to be the recipient of their neighbour's wild oats? Would my noble friend consider making the control of these noxious weeds one of the conditions of continuing to pay the £80 per acre for set—aside land?
Baroness Trumpington: My Lords, I take the point raised by my noble friend about not liking other people's wild oats, though I hazard a guess that both he and I have sowed a few in our time. The advice I have from ADAS is that there is no evidence that set—aside is leading directly to the increased spread of weed infestation except for thistles. Under the Weeds Act farmers have an obligation to prevent the spread of thistles. Perhaps I may commend to my noble friend, and anyone else who is interested, the publication A Practical Guide to Set—Aside. In that guide I have noted the words:
"In the first year or two, the set—aside area will be weedy, but with suitable management you should be able to develop a perennial vegetation which will be dominated by wild grasses but with a range of flowering plants, with conservation gains".
Lord Mackie of Benshie: My Lords, is the Minister aware that this problem is widespread, even in

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Scotland? Can she say whether the Government have any plans to produce a sensible scheme? Set—aside is essentially a stop—gap measure. I know that in Scotland money is being put up to investigate organic farming. I consider that to be a sensible move. Is there any move to replace set—aside in the country as a whole with a scheme which will further extensive farming regarding grassland instead of simply wasting that land in the way that is taking place at the moment?
Baroness Trumpington: My Lords, I do not want to go down the organic lane. In this Question we are talking about weeds. The correct management of set—aside land is in the interests of the participants themselves because that practice preserves the value of the land. The Government give advice notably in the practical guide to which I have referred. Fallow land should not be treated as a soft option. Those taking part in the scheme should act responsibly to avoid problems on their own or neighbouring land. Payments will be withheld if the management rules are not met.
Lord Gallacher: My Lords, does the noble Baroness recall that a year ago your Lordships' Select Committee on the European Communities looked at the first draft of proposals by the Commission for set—aside and produced a report on the subject? In that report some of the difficulties mentioned in the Question were addressed, and some solutions to those difficulties were proferred. Unfortunately, but not surprisingly, not a great deal of notice was taken of the report.
In the light of what is now developing, will the noble Baroness have another look at the summary of conclusions and recommendations in the report in order to see whether or not modifications can be made, including the rotational fallow which was put forward in the report at that time? The amount of land so far set aside amounts to only 3 per cent. of the total arable land eligible. I gather that this year not a great deal of land has been added. Thus the supervisory problem which was held to be an impediment to novel schemes is much less now than was originally anticipated. In the light of all this, is there not a case, as the noble Lord, Lord Mackie of Benshie, suggested, for a look at the whole scheme to see whether, if it is to be a permanent scheme, it cannot be suitably modified so that it is more environmentally sensitive?
Baroness Trumpington: My Lords, the total uptake for 1988–89 is 110,000 hectares, which is about 2.4 per cent. of the United Kingdom eligible area. Set—aside was never intended to act as a total means of eliminating overproduction. It was meant to help certain farmers. Local ADAS experts are available to give advice, and work currently being undertaken on our experimental husbandry farms will give the basis for further and more accurate recommendations in the future. I very much hope that they will look at the same time at the EC recommendations. As I said in my first reply, the scheme has been going for just one year. And so it is early days.
Lord Lyell: My Lords, while leaving the wild oats to my noble friend, can she say whet her farmers can obtain advice on other aspects of set—aside such as those to do with the environment?
Baroness Trumpington: My Lords, from the point of view of environmental top—up, the Countryside Commission, in consultation with the Ministry of Agriculture, is offering additional payments to farmers in the eastern counties to manage their set—aside land in ways that produce specific benefits for the environment. Some of these options involve more frequent cutting. But where a specific objective is to favour birds—for instance, the stone curlew—and other wildlife, more frequent cutting than once a year is specifically excluded.
Lord Moyne: My Lords, is the noble Baroness aware that a greater danger than thistledown is ragwort, which is known in Scotland as Stinking Willy? It causes death by convulsion in horses and otherwise in cattle. Sheep survive because they do not live long enough for the poison to build in them.
Baroness Trumpington: My Lords, I am extremely interested in the information provided by my noble friend. I can add that for spear thistle, creeping or field thistle, curl dock, broadleaved dock and ragwort or other serious infestations of wild oats, couch, black—grass or cleavers, special permission can be obtained in certain limited circumstances for the use of herbicides.
Lord Mackie of Benshie: My Lords, is any work being done on a more long—term scheme for better use of the land?
Baroness Trumpington: My Lords, various other forms of diversification are already in hand. For instance, one need not leave land as green fallow. One could have a golf course or one could have horses grazing on it. One could have caravans. There are several options. We are monitoring the position carefully. The main way to bring down the overproduction of cereals is through price.
Lord Craigton: My Lords, the noble Baroness referred to a monitoring scheme conducted by ADAS. If my information is correct, 'will she ensure that the priority given in this monitoring scheme to wildlife will be equally applicable in the case of these noxious weeds?
Baroness Trumpington: My Lords, I did not say that ADAS is conducting the monitoring. I said that our experimental husbandry farms are undertaking work which will provide the basis for further and more accurate recommendations in the future. I am quite sure that they are looking at all these points in the face of a new scheme. Obviously, we want to get it right.
Lord Borthwick: My Lords, perhaps I may mention herbs of the deep—rooted variety. In certain parts of the Alps, both in Germany and in Switzerland, these deep—rooted herbs are improving the quality of cattle and other stock. In addition, deer and many other

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wild animals roam. Does my noble friend not agree that such a situation would be welcome here?
Baroness Trumpington: My Lords, we went for the option of non—grazed set—aside because we were worried about upsetting the balance of livestock for our sheep and cattle farmers now. Therefore we did not take up that option. However, I am most interested in my noble friend's remarks.

Northern Ireland: Education Reform Order
2.50 p.m.
Lord Hylton Lord Hylton asked Her Majesty's Government:
Whether, in view of its constitutional and other implications, they will apply Bill procedure to the draft Education Reform Order (Northern Ireland).
The Parliamentary Under—Secretary of State, Northern Ireland Office (Lord Skelmersdale): My Lords, this legislation, as is the general case with such legislation for Northern Ireland during the period of direct rule, will be effected by Order in Council, subject to affirmative resolution in both Houses.
Lord Hylton: My Lords, I thank the noble Lord for his reply. Is it not very frustrating that this order, which will provide the framework for the educational future of 1.5 million of United Kingdom citizens, cannot be amended in Parliament? Further, does he appreciate that the order contains something which is quite new; namely, provision for a new funding and a new status for integrated schools?
Therefore could not this new framework be got right as nearly as is humanly possible in Parliament from the very start?
Lord Skelmersdale: My Lords, I was interested to note that the noble Lord said "from the very start", which in this case was March 1988. The substance of the draft order has already been the subject of extensive public consultation beginning with the publication of a consultation paper on that date. That was followed in October 1988 by the announcement of preliminary decisions in The Way Forward document, which is the equivalent of a White Paper.
The latest stage was publication of the proposal for the draft order in June of this year, for which a consultation period of over 15 weeks was allowed. Thus there has been extensive consultation over an 18-month period. Moreover, at each stage modifications have been made to the proposals in the light of the comments received.
Many noble Lords will no doubt feel rather jealous of this particularly elongated preparation of legislation.
Lord Cledwyn of Penrhos: My Lords, I support the noble Lord, Lord Hylton. Moreover, is it not the case that out of 25 Orders in Council affecting Northern Ireland 12 have gone through this House and Parliament without debate of any kind? Is that not a thoroughly undemocratic process? Therefore
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should not the Government consider introducing Bill procedure as suggested by the noble Lord?
Further, is it not the case that the noble Lord's honourable friend Dr. Mawhinney in the Northern Ireland Office has been discussing with all the parties involved the possibility of increased devolution, which is at the root of the problem? Can he also say what progress Dr. Mawhinney is making in the matter?
Lord Skelmersdale: My Lords, the noble Lord the Leader of the Opposition is right on almost all counts. The Government have no doubt that the ideal way to legislate for transferred matters in Northern Ireland is by discussions in a devolved government. Indeed, that is what we have all been working for over the past 18 years with varying levels of success, as the House will know.
However, while the present political climate continues, Westminster is the only place to legislate. As the noble Lord will be well aware, Parliament is nearing the end of an especially heavy legislative Session. I cannot believe that any noble Lord would welcome a full programme of legislation for Northern Ireland being grafted onto it. I believe that it would place an impossible burden on both Houses. The only alternative would be to demote Northern Ireland and that would result in a loss of much valuable legislation tailored to the needs of the Province.
Having said that, as the noble Lord is aware from the answer to one of his supplementary questions, the Government are pursuing what future there may be within a legislative arrangement which is suitable both to the people of Northern Ireland and to Parliament. I repeat now that we are always willing to hear any workable suggestions.
Lord Boyd—Carpenter: My Lords, if orders have gone through without having been debated, is that not largely due to the inaction of the Opposition?
Lord Skelmersdale: My Lords, I was rather surprised to hear the claim from the Leader of the Opposition and I must therefore confess that I rather ignored it. To the best of my knowledge and belief, Orders in Council are always subject to affirmative resolution. If that is the case, I think that my noble friend has a point.
Baroness Faithfull: My Lords, can the Minister say whether there is consultation in Northern Ireland at the initial stages when a Bill is going to come before this House? Is he aware that when I was last in Belfast I talked to the head of one of the teacher training colleges and he told me that he had not been consulted in any way concerning the last Education Bill which came before this Chamber?
Lord Skelmersdale: My Lords, consultations often happen in parallel with legislation which is to come before this House. There is then the extended proper consultation period where parties are of course informed by debates in Parliament which are widely publicised in Northern Ireland. As I say, there are various legislative steps to be taken before a draft Order in Council is laid.
Lord Cledwyn of Penrhos: My Lords, although I appreciate that the noble Lord, Lord Boyd—Carpenter, can never avoid making a party political point, even at the extremes, would the noble Lord not agree that the Opposition have been assiduous at all times in debating Northern Ireland matters? Will he also agree that that which precluded the possibilities has been the very point he made; namely, the overloading of work in this House, which is indeed the responsibility of Her Majesty's Government?
Lord Skelmersdale: My Lords, I do not think I had better move into that argument. However, as I say, to the best of my knowledge and belief these Orders in Council are dealt with by affirmative resolution. Therefore it is up to any noble Lord to contribute to the debate which must indeed be held.
Lord Tordoff: My Lords, is it not the case that if Members of your Lordships' House attempted to amend such an order, or indeed to vote against it, the noble Lord, Lord Boyd—Carpenter, would be one of the first to bound to his feet to inform us of the constitutional impropriety of such action? Although I deny that we have the right to follow the course which he would undoubtedly urge upon us, nevertheless, that is the convention of this House.
Lord Skelmersdale: Yes, my Lords; the convention of this House is exactly that. As we all know, no affirmative or indeed negative order can be amended.
Lord Prys—Davies: My Lords, the Minister referred to consultations which have taken place in Northern Ireland in respect of this order. However, he will know that there is still widespread and severe criticism of the order because it amounts to no more than a rehash of the provisions which apply to England and Wales and does not address itself to the problems of Northern Ireland. Would it therefore not increase the legitimacy of the order, and its acceptability to the people of Northern Ireland, if it were to be introduced through the Bill procedure so that Parliament could debate, test and, it is to be hoped, improve the terms of the order?
Lord Skelmersdale: My Lords, I do not think that the noble Lord's claim can be substantiated. I say that because, for example, the opting out of grant—maintained schools was dropped, except in relation to integrated schools, which are peculiar to Northern Ireland, and integrating the education package was not proposed originally but was introduced in the current proposal.
Further, so far as concerns the common curriculum, it was made much more flexible as a result of consultation because areas of study were introduced rather than a definitive list of subjects. However, I have no doubt that these are matters that we shall be debating when we receive the order, which I hope will be laid early next month.
Lord Prys—Davies: My Lords, the point is that orders can be debated but they cannot be amended.
Lord Skelmersdale: My Lords, no, they cannot be amended. As the noble Lord will be well aware, the Bill procedure is used for matters which are unique to Northern Ireland, such as fair employment. The education reform proposals differ slightly, in the ways that I have just described, from those in the Education Reform Act which was fully debated by Parliament. Issues which are unique to Northern Ireland, such as integrated schooling, form a small part only of the overall legislation and would not warrant the exceptional use of the Bill procedure.
Lord Hailsham of Saint Marylebone: My Lords, of course my noble friend is right when he says that when an Order in Council comes up for affirmative resolution it cannot be amended. However, on the assumption that there was a debate, as there is entitled to be, and that the draft resolutions then under discussion came in for serious criticism from any quarter of the House, is it not possible for the Government thereafter to introduce an amending Order in Council of their own? Would not that be the way forward?
Lord Skelmersdale: My Lords, yes. I am sure that my noble and learned friend will rem ember the end of one bitterly fought Session when our noble friend Lord Cockfield withdrew a Treasury order which was an affirmative instrument.
Lord Blease: My Lords, is not part of the problem the fact that we are overloaded with business in both Houses of Parliament? My second point is that we have the 1974 Act on the statute book. It lays down a procedural arrangement. Has the Minister not identified the problem as being mainly at the draft or consultative stage of the order? If there were more effective consultations at that stage of the legislation that might help to ease the problem. May I follow the noble and learned Lord and attempt to make a suggestion which may meet some of those problems in Northern Ireland? Would it not be possible, under the Northern Ireland Act 1974, to have draft orders more effectively and constructively considered at public sittings in the Parliament building in Stormont, under the consultative committee procedure, and chaired by the Minister dealing with the particular order?
Lord Skelmersdale: My Lords, in theory of course the thinking behind the suggestion by the noble Lord, Lord Blease, is right. However, currently there is not much likelihood of elected representatives sitting down together to form such a desirable committee. As I said earlier, the Government are open to all suggestions and I shall take up and pursue that suggestion with my right honourable friend.
Lord Mishcon: My Lords, further to the helpful suggestion made to the Minister by the noble and learned Lord, Lord Hailsham, that the Government would always listen to substantial opinion expressed in the House and would then amend things, and the Minister's happy acceptance of that proposal, may we take it that in future if the Government receive a majority of 25 or less on any amendment moved from these Benches, they will consider accepting the amendment?
Lord Skelmersdale: My Lords, I rather thought that the whole of this lengthy exchange on the Question asked by the noble Lord, Lord Hylton, was about inconsistencies and the impossibility of making comparisons. The noble Lord has therefore just achieved the impossible.

Computer Misuse: Law Commission Report
3.4 p.m.
The Lord Campbell of Croy The Lord Campbell of Croy asked Her Majesty's Government:
Whether they will consider urgently the recent report of the Law Commission on theft and wilful damage carried out through computers.
Lord Fraser of Carmyllie: My Lords, my right honourable friend the Secretary of State for Trade and Industry announced last week that, subject to the views of interested parties, he was inclined to accept the Law Commission recommendations. He added that he was currently seeking those views and that his department would be directly consulting individuals and organisations known to be interested. That consultation is also to be carried out in Scotland.
Lord Campbell of Croy: My Lords, I thank my noble and learned friend who will know that the Scottish Law Commission had already reached the same conclusion and prepared a draft Bill. As other countries have been legislating in that field, does not the United Kingdom risk losing valuable business when robberies on a massive scale and destruction of records can be perpetrated without entry into premises and, in most cases apparently, without breaking the law?
Lord Fraser of Carmyllie: My Lords, the Scottish Law Commission did a considerable amount of work on this subject in 1987 and proposed a statutory offence. The Law Commission report, which came two years later, took into account a great deal of further evidence that has emerged on the fast—moving issue of computers, and recommended two further statutory offences. It would be eminently sensible to follow the line suggested by the Law Commission for England and Wales, that it would be desirable that the criminal law in relation to unauthorised access to computers should be uniform throughout the United Kingdom. It expressed the hope that that end would be achieved by uniform provisions in legislation both sides of the Border.
The Earl of Lauderdale: My Lords, are we going to have a Green Paper and, if so, when?
Lord Fraser of Carmyllie: My Lords, there has already been one report north of the Border and a recent one this side of the Border. My right honourable friend has said that he is inclined to accept the proposals, subject to further views. I should have thought that the balance of interest and opinion was that this matter has already been considered for long enough and that if any further
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step is to be taken it should be by legislation rather than further detailed consideration.
Lord Peston: My Lords, I thank the noble and learned Lord for the last part of his answer which overrode what he said earlier about seeking the further views of interested parties. The report is outstanding and I hope that he will convey to the Law Commission the views of, I assume, most noble Lords that it is a fascinating document. Is not the report so definitive that what is now required is an urgent move towards legislation, both on the general ground that this is prima facie a criminal offence and on economic grounds? It will be in the national interest to move rapidly. Is the Minister aware that some of us were rather dismayed by the report in yesterday's Daily Telegraph that the Government were thinking of further delaying? Surely that would be a bad thing.
Lord Fraser of Carmyllie: My Lords, I am grateful to the noble Lord for his kind words about what is an excellent and full report. However, as I have already sought to indicate, it is desirable to achieve uniformity in this matter both sides of the Border. The Scottish Law Commission recommended only part of what is now proposed for England and Wales. It would seem sensible to make a further attempt to bring the Scottish proposals up to date. I do not envisage that that will be a difficult or lengthy procedure. My right honourable friend the Secretary of State for Trade and Industry has said that legislation should be brought forward when a suitable opportunity arises. I am sure the noble Lord appreciates that, as always, I will not pre—empt what might be in the Queen's Speech and the Government's programme thereafter.
Lord Hailsham of Saint Marylebone: My Lords, while I am not in any way inciting my noble and learned friend to anticipate the Queen's Speech, will he convey to his colleagues that there are many of us who would like to see more uncontentious law reforms rather than items of contentious legislation in the new programme?
Lord Fraser of Carmyllie: My Lords, I am willing to convey my noble and learned friend's view on that matter. I have noted with approval that it appears to enjoy almost universal support in the House.
Lord Campbell of Croy: My Lords, my noble and learned friend may recall that when I raised the subject at Question Time in the summer I accepted the need to restrain the amount of legislation coming forward. That appeared to be echoed in your Lordships' House. Does he agree that a Bill on this subject is unlikely to be political or contentious and need occupy only a limited amount of parliamentary time?
Lord Fraser of Carmyllie: My Lords, so far as I can gauge from what has been said in the House this afternoon, it would not appear to be an issue which would arouse much controversy. However, as I indicated, I think it is desirable that we should tidy

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up what differences there may be between England and Wales and Scotland. Thereafter, as my right honourable friend the Secretary of State for Trade and Industry said, this is a matter which should proceed to legislation.

Business
3.10 p.m.
Viscount Davidson: My Lords, it may be for the convenience of the House if I announce that the Report stage of the Local Government and Housing Bill will be adjourned at about 7 p.m. for about one hour and that during this adjournment the Merchant Shipping Act 1988 (Amendment) Order 1989 will be taken.

Local Government and Housing Bill
3.11 p.m.
The Parliamentary Under—Secretary of State, Department of the Environment (Lord Hesketh): My Lords, I beg to move that the Bill be now further considered on Report.
Moved, That the Bill be further considered on Report. —(Lord Hesketh.)
On Question, Motion agreed to.
Schedule 5 [Local Government Finance Act 1988: Amendments]:
Lord Hesketh Lord Hesketh moved Amendment No. 125A:
Page 184, line 10, leave out ("The following subsections shall be substituted for section 2(5)") and insert —
("(1) Section 2 (persons subject to personal community charge) shall be amended as follows.
(2) The following subsection shall be inserted after subsection (1)—
"(1A) But a person cannot be subject to a charging authority's personal community charge on a day which falls before 1st December 1989."
(3) The following subsections shall be substituted for subsection (5)").
The noble Lord said: My Lords, this is a purely clarificatory amendment but necessary in the light of the small number of representations received by the Government to the effect that Section 6 of the Local Government Finance Act 1988 is capable of sustaining an alternative interpretation to that which is intended. That section provides for the registration officer in each charging authority to compile and maintain a register of those subject to the charge and subsection (3) states that the register shall contain an item in respect of each community charge of the authority to which a person becomes subject on or after 1st December 1989. However, by virtue of Section 2 of the 1988 Act, most of the adult population of England and Wales has been subject to the community charge, though not liable for its payment, since the enactment of that Act.
By reference to the Act in general, and in particular Section 6(2) which states that registers must be compiled on or before that date, it is clear that the
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intention of the Act is that, on 1st December, the register should already include items for all charges to which a person is subject and that the register should be extended as required in the light of changing circumstances after that date.
I have to say immediately that it is the Government's view that, in the context of the legislation as a whole, there is little likelihood that the Act could be interpreted in any way other than in line with this intention. However, it is right that any possible uncertainties in this area should be cleared up.
These two amendments ensure that no person can become subject to the community charge before 1st December. Their effect is to make clear that comprehensive registers should be in place by 1st December. It is important that any misapprehensions on this point are laid to rest. I beg to move.
On Question, amendment agreed to.
3.15 p.m.
Lord Hesketh Lord Hesketh moved Amendment No. 125B:
Page 184, line 27, at end insert —
("—. In section 3 (persons subject to standard community charge) the following subsection shall be inserted after subsection (5)—
"(6) Notwithstanding anything in subsections (1) to (5) above, a person cannot be subject to a charging authority's standard community charge on a day which falls before 1 December 1989.
In section 5 (persons subject to collective community charge) the following subsection shall be inserted after subsection (1)—
"(1A) But a person cannot be subject to a charging authority's collective community charge on a day which falls before 1 December 1989."—").
On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 126:
Page 184, line 27, at end insert—
(". The following section shall be inserted after section 13 —
"Reduced liability.
13A. —(1) The Secretary of State may make regulations as regards any case where —

(a) a person is liable to pay an amount to an authority in respect of a personal community charge as it has effect for any chargeable financial year which is prescribed, and

(b) prescribed conditions are fulfilled.

(2) The regulations may provide that the amount he is liable to pay shall be an amount which—

(a) is less than the amount it would be apart from the regulations, and

(b) is found in accordance with prescribed rules.

(3) This section applies whether the liability to pay the amount mentioned in subsection (1) above arises under section 12 above or arises under that section read with section 13 above.
(4) The conditions mentioned in subsection (1) above may be prescribed by reference to such factors as the Secretary of State sees fit; and in particular such factors may include all or any of the following —

(a) rates for a period before 1 April 1990;

(b) the circumstances of, or other matters relating to, the person concerned;

(c) an amount relating to the authority concerned and specified, or to be specified, for the purposes of the regulations in a report laid, or to be laid, before the House of Commons;

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(d) such other amounts as may be prescribed or arrived at in a prescribed manner;

(e) the making of an application by the person concerned.

(5) the rules mentioned in subsection (2) above may be prescribed by reference to such factors as the Secretary of State sees fit; and in particular such factors may include all or any of the factors mentioned in subsection (4)(a) to (d) above.
(6) Without prejudice to the generality of section 143(2) below, regulations under this section may Include—

(a) provision requiring the Secretary of State to specify in a report, for the purposes of the regulations, an amount in relation to each charging authority;

(b) provision requiring him to lay the report before the House of Commons;

(c) provision for the review of any prescribed decision of a charging authority relating to the application or operation of the regulations;

(d) provision that no appeal may be made to a valuation and community charge tribunal in respect of such a decision, notwithstanding section 23(2) below.

(7) To the extent that he would not have power to do so apart from this subsection, the Secretary of State may —

(a) include in regulations under this section such amendment of any social security instrument as he thinks expedient in consequence of the regulations under this section;

(b) include in any social security instrument such provision as he thinks expedient in consequence of regulations under this section.

(8) In subsection (7) above "social security instrument" means an order or regulations made, or falling to be made, by the Secretary of State under the Social Security Act 1986."
In section 16 (joint and several liability: spouses) in subsection (1)(b) for "(read with section 13 above, where it is appropriate)" there shall be substituted "(or that section read with section 13 or 13A above, or both)".").
The noble Lord said: My Lords, in moving Amendment No. 126, I propose to speak to Amendment No. 154 at the same time. These amendments relate to the Statement which I made to the House on 11th October, when I announced the Government's plans to introduce a scheme of transitional relief to assist former ratepayers and their partners, and pensioners and disabled people, for whom the community charge (based on the Government's assessment of spending) would be substantially higher than their former rates bill.
Amendment No. 126 provides a regulation—making power which allows the Secretary of State to provide that where prescribed conditions are fulfilled a person's liability to pay a personal community charge may be reduced by an amount to be found in accordance with prescribed rules. The conditions for relief may be prescribed with reference to factors which the Secretary of State may prescribe, and the amendment lists in particular some which may be used.
They include rates before 1st April 1990 to enable relief to be based on a comparison between rates and community charges. Subsection (4)(b) refers to the circumstances of, or matters relating to, the person concerned. This will enable us to make special provisions for pensioners and disabled people, as I announced in my Statement.
The factors specifically mentioned include an amount relating to the authority concerned set out in a report to be laid before the other place. This is to enable the comparison for relief purposes to be
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based not on the actual community charge for the authority, but on a charge based on the assumption that the authority concerned spends in line with the Government's proposals for total standard spending as announced on 19th July. We cannot determine precisely what the figures will be until early next year; but figures will be available in early November which will allow authorities to take preliminary steps towards calculating entitlement to relief.
Among other matters the new power provides that an appeal on a decision relating to relief will not lie to a valuation and community charge tribunal. This does not reduce the grounds on which a person may appeal to a tribunal. It is, however, more appropriate that an appeal on relief should be examined by special review bodies, and this will be provided for in the regulations. This is the way in which benefit decisions are reviewed, and these decisions are similar to benefit decisions in character.
Amendment No. 154 allows for the payment of a grant to local authorities in respect of the relief scheme. This grant may cover both the revenue forgone by authorities as a result of community charges having been reduced by relief and administrative costs to the authority of setting up and administering the relief scheme. As I made clear in my Statement, the Government will meet in full a reasonable level of administrative costs. We are discussing these matters with the local authorities, and we are also commissioning a study by consultants to advise on the cost implications of the new scheme.
As I announced to the House on 11th October, the Government intend to use these powers to prescribe a scheme under which former ratepayers and their partners will, in the first year, lose no more than £3 a week, or £156 a year, as a result of the change from rates to the community charge, provided local authorities spend in line with the Government's assumptions. In addition we will provide that disabled people and pensioners who are not former ratepayers or partners of former ratepayers will be able to apply for relief to ensure that they pay no more than £3 a week in community charge, with the same proviso. We have been discussing the precise details of the scheme with the local authorities, and full details will be announced early next month when the consultations have concluded. I beg to move.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved, as an amendment to Amendment No. 126, Amendment No. 126A:
Line 3, leave out ("may") and insert ("shall").
The noble Lord said: My Lords, in moving Amendment No. 126A, I should like to speak not only to the two government amendments but to my Amendments Nos. 126A to 126G, 154ZA, 154ZB, 157A and 159A.
In this deceptively low key manner, the Minister has in effect introduced a new Bill. It has been introduced at virtually the last stage, certainly the last stage at which, even by the most rigid interpretation, it would be procedurally proper in this House.
What is now being proposed is a series of major amendments. I do not think that the Government would deny that they are major amendments, not only to the 1988 poll tax legislation on which your Lordships spent so much time last year, but also to this Bill and to amendments introduced by the Government in Committee on this Bill only two weeks ago. If ever there was an example of a Government thinking on the run, it is this Government.
As we know very well, the occasion for this is that the Minister responsible had to make a speech to the Conservative Party conference two weeks ago, at which he had to appease the Tory shires and Sir Rhodes Boyson. They had suddenly come to realise that the Act which they applauded in 1988 would not be the unmixed blessing that they thought it would be. It would not provide the replacement for what was described in the Statement as a discredited method of raising local government expenditure. It would produce quite unintended and unexpected results, which would mean that some Conservatives might suffer.
The Government cannot have their own voters suffering, can they? That would not be proper. Everything has to be put on to the people who are poorer, less able to pay. That is the principle on which this Government work. Anything which does not adhere to that principle has to be corrected at the Conservative Party conference and we have to bear the burden of putting it into law. That is what is being demanded of us with this series of amendments, and that is what we shall be concerned with this afternoon.
The Minister and the circulars from his department state that the new proposals have the benefit of simplicity. They may well do. Certainly these are far from being the longest amendments from the Government that we shall have to consider this afternoon. However, they have the benefit of simplicity at the expense of equity, as I shall show, because they are riddled with defects, some of which are deliberate no doubt and some of which have not even been thought out properly.
The Government amendments propose the end of what was to be called the safety net. Noble Lords will recall that the safety net meant that those areas which benefited enormously from the poll tax, which were basically as one might expect Conservative areas, would have to contribute on a diminishing scale over a period of three or four years to the pain suffered by those areas, which were largely poorer Labour controlled areas, which would suffer from the poll tax. Now what is being proposed is that the same diminution of the pain of the poorer areas will be continued but that it will be paid for after the first year by taxpayers as a whole out of Exchequer money rather than by the richer areas which are to benefit from the poll tax. So that is Sir Rhodes Boyson's pay—off.
Now we come to a much more significant element of the proposals. For the first time the Government have recognised that the poll tax is inequitable not only as between areas —that has been clear right from
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the very beginning —but also as between individuals and households in areas. In other words, they are now recognising what we said right at the beginning and what we said all the way through the passage of the local government finance legislation in this House, which was that the effect of the poll tax would be to make the rich richer and the poor poorer. The Government comprehensively and inaccurately denied that but they are now admitting that that is the case. They are now admitting for the first time that they have to introduce a new kind of relief for individuals and households which suffer rather than just for areas which suffer.
However, they are not introducing a relief which will result in the suffering being removed altogether. Oh no; what they are saying instead is that the remedial action to deal with suffering on the part of poorer people in our society will take place on a transitional basis; in other words, it will start in 1990 to 1991 but will disappear in a further three years. All that is happening is that, instead o f the increased poll tax bills for individuals and households being increased indefinitely, the increase will now be restricted to £3 a week. Those people such as pensioners or disabled people who are neither ratepayers nor the partners of ratepayers will have their poll tax limited to £156 a year, or again £3 a week. Those people will be paying for the first time, as they have never paid rates before.
The transitional relief operates only in 1990–91, 1991–92 and 1992–93. These are all matters, according to the amendments, to be introduced by regulation. The Secretary of State may introduce regulations but there is no compulsion on him here. There is no indication of how long, if at all, the transitional relief will be extended.
Let us first of all celebrate the recognition for the first time by the Government that the poll tax is a grossly unfair tax which will hit those most in need most heavily. If the Government had not admitted that, they would not be introducing this scheme. But now let us look at the nature of the scheme to see whether what they are proposing, quite apart from the fact that it is only transitional, will work. I suggest a number of ways in which it will not work.
The proposals for dealing with the inequity are based on a comparison between the notional rates bill in 1989–90 and the notional community charge bill in 1990–91. The great difficulty is that the notional rates bill for 1989–90 is not comparable and cannot be compared either theoretically or practically with the 1990–91 calculations. Apart from anything else, the computer system which has been set up by local authorities to implement the poll tax in 1990–91 will not speak to the computer system which already runs the rates. These are separate programmes and are very often produced on different machines by different people. That has been encouraged by the Government. Anyone who knows anything about computers knows that merging programmes which have not been designed to be merged is one of the most technically difficult things to do. I can tell the Government now, without fear of contradiction, that that system will not work.
Further, even if that system could be made to work, the nature of the rates bill and the rates

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calculations means that large numbers of people who are not at present rated will lose out on the transitional relief. I shall give the House a few examples. There are the people who pay inclusive rents and rates in houses in multiple occupation where the parts of the house in multiple occupation do not have separate rateable values. The suggestion is that somehow a notional rates bill will be calculated for those houses in separate multiple occupation. Who is going to do that? Who will do that between now and 1st April, or such shorter time as is necessary to get the community charge bills out to the electorate? That is an impossible task.
Also, people who live in hostel accommodation, like nurses in nursing homes or students in halls of residence, pay an accommodation charge in which rates are included. There is no notional rates bill for them and there cannot be a notional rates bill for them. They cannot benefit from the transitional relief which is provided.
Moreover, there are people who live in tied accommodation, for example, where the rateable value of their home forms part of the rateable value of a hospital, a school or an office block. This includes such people as caretakers. These people do not have a notional rates bill for 1989–90 and cannot benefit from the transitional relief. Then there are military personnel and other people in the services who live in barracks. These people do not pay rates now and cannot benefit from the transitional relief. These are not wealthy people who can afford to do without the transitional relief, which the Government recognise. These are the people most in need and the people who need particular attention but who will not receive it. At the very least this concept of a notional rates bill in 1988–89 with secondary ratepayers will not work.
Let us look at the notional poll tax bills in 1990–91. I apologise for the length of what I have to say but, as I have said, this is a new Bill and it deserves the proper attention of this House. It will receive that attention from this side of the House. On 19th July 1989 the Government with their outline rate support grant statement indicated what the standard spending assessment would be for 1990–91. They said at one stage that on their calculations a standard level of service would require a levy of £275. However, that is not the figure that is being used to calculate transitional relief.
The Government are now saying that what they will take into account is the 1989–90 spending, with an addition of 3.8 per cent. I leave on one side, although I do not see why I should, the fact that 3.8 per cent. is only precisely half the year on year rate of inflation at this time, so it is clear that there will be a considerable decrease in the ability of local authorities to provide their services from that figure alone. Even if that were so, we do not yet know what the expenditure of local authorities is for 1989–90. We never know until after the end of a year the expenditure of local authorities in a given year. There is no possibility whatsoever of council treasurers making sensible decisions about what they have to spend and making sensible budgets on the basis of such entirely theoretical calculations.
We do not know what the final figure will be. The only thing of which we can be absolutely certain is that it will not be enough. We can be quite certain that the honeyed words of Ministers in proposing the transitional relief will not be reflected in practice because the standard spending assessment will be lower than actual expenditure and transitional relief will not be available on the difference.
As I said, the proposal is riddled with anomalies, quite apart from the case of the secondary ratepayers. Consider the case of somebody whose partner dies on 31st March 1990; the survivor does not get transitional relief. In identical circumstances somebody whose partner dies on 1st April receives transitional relief. Is that just? Consider the position of people who become pensioners or become disabled after 31st March. Before 31st March they receive relief; after 31st March they do not. Consider the case of disabled people who are not ratepayers. A disabled person who is not a ratepayer, or the spouse or partner of a ratepayer, can receive more relief than a disabled person who is a ratepayer or the spouse or partner of a ratepayer. Is that fair? Is that just? Has that been properly thought out?
Somebody who moves house after 1st April 1990 loses transitional relief, even if forced to move by compulsory purchase order or some other outside obligation. Somebody who receives housing benefit and who lives in a house in multiple occupation will have had his benefit reduced to 80 per cent. of the notional value by the Social Security Act 1986 because he is deemed to be paying rates. However he is not a ratepayer for the purpose of qualifying for transitional relief, so he does not receive transitional relief.
Households which contain a pensioner or disabled person who is not the spouse or partner of a ratepayer where the ratepayer is on housing benefit will have their housing benefit reduced to take account of the contribution deemed to have been made to rate bills by non-dependants in the household. It is certainly not clear whether those deductions mean that those people themselves will be considered as pensioners or disabled ratepayers. How are authorities to know whether pensioners or disabled people are the spouse or partner of a ratepayer? Inquiries on the community charge forms which have gone out have not asked that question. How is that now to be determined?
I turn now to the worst example of all. Somebody who is wealthy and of pensionable age but still working and who has an occupational pension will receive transitional relief if he is not a ratepayer. A young adult who just misses qualifying for a poll tax rebate could end up paying 10 per cent. of his income on poll tax with no transitional relief because he is not a local tax payer.
Those are the defects of the proposals in terms of what they would achieve even if the arrangements could be completed. However, it should be remembered that councils are still carrying on with their rating obligations. They still have their responsibilities for council housing and for assessing the rateable value of council properties, under a part of the Bill which we debated yesterday. They are concerned with all the preparations for the poll tax.

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They are dealing with the new and increasingly complex regulations for rebates. I very much doubt whether it is practicable for local authorities to succeed with all those tasks at the same time.
I have explained the difficulty of doing so from the point of view of the computer programmes concerned. How are the councils to contact potential claimants, process and verify the claims? How are they to deal with the fact that a poll tax bill —and remember that computer programmes have been produced for a single poll tax amount —will now have to take account, totally unexpectedly, of varying amounts of poll tax for different people? No one can do that in the time that is available.
Local authorities have been encouraged to undertake major publicity campaigns on the poll tax in order to encourage people to register and to make use of their rebates. Now those campaigns will have to be changed to cover transitional relief, particularly since it is likely in some authorities that only people occupying very low rateable value properties will benefit. Councils will have to encourage the take-up of pensioner and disabled relief.
Quite apart from the practical impossibility, even if all that were possible it would result in immense administrative costs. We all know that the poll tax will cost at least twice as much to collect as rates, and probably more. All those additional regulations are now being added. The local authorities will have to bear that administrative and financial burden. Even if treasurers had a blank cheque to provide the necessary money, the staff and the technology are not available to do the work.
I turn now, briefly, to the many amendments that we have had to put down to the government amendment. Amendment No. 126A refers to the fact that the regulations "may" be made by the Secretary of State. We do not even know whether the amendments will be made. At least if they are going to do so let them say so and let us know what the damage will be.
Amendment No. 126B refers to the fact that there is no clear statement in the Government's proposals as to how long the transitional period is to last. We suggest that the Government ought to come clean and make it clear what their position will be. We certainly think that the period should be longer than three years. Poll tax will be no fairer in 1994, or indeed in 2001, than in 1990.
Amendments Nos. 126C and 126D refer to the fact that the transitional relief, which has been presented by Ministers—I do not say by this Minister—all over the country as a remedy for injustice. It will only affect those who pay the personal community charge. It will not affect the secondary ratepayers I have been talking about, who will pay their poll tax under the collective community charge provisions. That fact has also to be provided for.
Amendments Nos. 126E and 126F refer to the cases that I have already mentioned of people who are secondary ratepayers who will not benefit from transitional relief: nurses in nursing homes, students
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in halls of residence, occupants of hostels, people living in housing in multiple occupation, and so on.
Amendment No. 126G proposes that the right of appeal should be to a body set up by the local authority. It should be comparable to the provisions of this Government in respect of housing benefit. Amendments Nos. 154ZA and 154ZB change the form of words in the government amendment to make it clear that reimbursement is the criterion for financial assistance and not a reasonable estimate of costs. Nobody knows what the costs will be. It is clear that the Government do not know what the costs will be. Making a reasonable estimate at this time would simply mean that treasurers would have to provide for a great deal more additional cost than they ought to. It is the Government's own tergiversation which has put them in that position.
Finally, one must conclude, as Amendment No. 159A indicates, that, whatever the justices or injustices of the proposal —and I have shown that it is unjust—it cannot be done in 1990. It has to be put off for a year to enable the procedures to be gone through. It is an abuse of this House that measures of such complexity should be brought in at this stage. It is an abuse of Parliament that they should be brought in with inadequate time for the other place to consider them in Standing Committee. It is an abuse of the political process as a whole that the bad and inadequate thinking of the Government in 1988 and 1989 should be altered in this drastic way simply to satisfy the baying hordes at Tory Party conference. I beg to move.
Lord Somers: My Lords, when we discussed this matter last week I asked the Minister to let me know exactly what allowances were proposed for the elderly and the disabled. He apparently did not know at the time. If he still does not know, perhaps I may ask him to please find out and let me know. He may not realise that this aspect is extremely important to the people who come within those classes. I come within at least one of them. The measure will mean that certain people will find it extremely difficult to understand their situation so I should like to know exactly what the provisions are.
Lord Taylor of Gryfe: My Lords, the noble Lord, Lord McIntosh of Haringey, may be excused for making what was almost a Second Reading speech on the poll tax. He may be excused at Report stage because what we have before us is, as he said, a new Bill introduced at Report stage of the Local Government and Housing Bill. To that extent the House is indebted to the noble Lord for denouncing the provisions of what is disguised as an amendment but which introduces new principles into an Act; namely, the poll tax legislation which we have already disposed of.
I subscribe completely to the views expressed by the noble Lord, Lord McIntosh, in which he opposed the Bill on several grounds. First, there is the question of the immorality of the principle of making the rich richer and the poor poorer by this provision. I suggest to noble Lords on all sides of the House that they examine their consciences in relation to the moral principle involved in the provision.

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Secondly, as a businessman, I am inclined, in looking at operations in any of my businesses, to keep a sharp eye on costs. If any of my managers were to bring forward a proposal to collect the same amount of money and double the costs of collection, he would not be long in business. That is exactly what is happening, and I prophesy that the cost of collection in this case will not be double the existing collection charge for rates; it will be more than double. I say that on the basis of our experience of the poll tax for the past year.
I have no desire to keep the Government in office any longer than we must, but, in the light of the Scottish experience, perhaps I may say to them quite seriously that this is a totally unpopular and unacceptable piece of legislation. It is no accident that Scotland is practically a Thatcher-free zone.
I have one or two questions in connection with the provisions. When the Minister made his statement on the subject last week I asked what would be the implications for the existing position in Scotland. So popular is the tax that so far 20 per cent. of the people who became liable for it in April have not paid. Of course, some of them will be exempt and some normally run rates arrears, but that is nevertheless some indication of the problem. It is not only a problem of the reaction of people to the poll tax: 718,000 people have not paid. It also indicates —
Lord Campbell of Croy: My Lords, I am most grateful to the noble Lord. However, like me, he will have seen the reports in Scotland which show that that figure is not very dissimilar from the number of people in years past who had not paid their domestic rates by this stage of the year.
3.45 p.m.
Lord Taylor of Gryfe: My Lords, I think I said to the noble Lord that rates arrears tend to accumulate at this time, but it indicates that the new revolution in taxation, in which it is claimed that the people will feel more responsible for local government, is not having that effect. I suggest that Scotland was regarded as a guinea pig for the legislation. We have sufficient evidence from the test on the guinea pig to indicate that this is an unacceptable poll tax.
I am happy to see a Scottish Minister on the Government Front Bench. If the amendments are now being progressed in respect of the English legislation, how will the changes be effected in Scotland where the same anomalies as exist in the amendment have become apparent among the separate regions? I assume that some kind of change must be made in the poll tax legislation for Scotland which will iron out the anomaly between the less favoured areas, such as Grampian and the Borders, and other areas such as Strathclyde region. Some people feel that the Scots are occasionally a bit tiresome. They feel a little neglected now and again. But it is fair to point out that the amendments emerge only when the English experience is before us, yet the same anomalies have existed in Scotland for the past year without any attempt by the Government to make the appropriate amendments.
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I say to the Government that it is perhaps not yet too late to take us out of this most undesirable provision, even in the Government's own interest of political survival. I say quite seriously, on the basis of the Scottish experience, that this will not contribute to their existence as a government.
Baroness Carnegy of Lour: My Lords, I must follow the noble Lord because he has talked about Scotland and I live there too. The evidence is that at this moment on average 85 per cent. of those who are due to pay the community charge have done so, and in some areas the figure is 95 per cent. The local authorities say that the process is going smoothly. The Member of Parliament for Dundee, East, Mr. John McAllion, who was the chairman of the first campaign to stop people paying, has himself admitted that that campaign has failed. The people of Scotland have caught on to the way that the system works. They see what their obligations are. My experience is that many parents are extremely glad that young people now contribute to the community charge. I simply do not think that what the noble Lord has said is the case.
So far as concerns the safety net and the amelioration for people south of the Border—amelioration of the sudden change that they are likely to experience —I should point out that the situation was quite different in Scotland. To begin with, the sorting out of the differences between rating levels in Scotland, when we had the revaluation which originally triggered off the whole operation of the design of the community charge, took place in the year after the immense rate rises occurred. The noble Lord knows that perfectly well. That happened before the community charge was instituted so there was not the same need to operate a safety net. There had to be a certain shift of funding between the regions of Scotland through the Government part of the funding of local government last year. That happened. It was explained to the people of Scotland and they understood it. They have accepted it. It is complete nonsense to go on talking about how Scotland is complaining about being a guinea pig. That is not the case.
As to what is now proposed my one regret is that through it there is a compromise of the principle that everybody pays. I am rather sad about relating the relief to the number of people in the house because I do not think that that has anything to do with the community charge. I believe that it should happen only during the transitional period and the shorter the period the better. It is clear that in Scotland the new principle is understood. I should be very sorry were noble Lords to think otherwise.
Lord Ross of Newport: My Lords, we should express our condolences to the many rating authorities in this country which are faced with these major changes at so late a stage. The bureaucracy and changes involved are absolutely mind-boggling. If I were a rating officer in local government I should be longing for retirement. I do not think it is fair of central government to change schemes so late in the day.

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It is not only the bureaucracy that is mind-boggling. There are still many anomalies. For instance, someone who moves house after 1st April does not receive the transitional relief and some disabled people do not get the relief to which they are entitled. The publicity that local authorities intended to send out has now to be cancelled and they must start all over again.
Quite honestly, it is not good enough. It is about time that this Government realised that they cannot continue to use local authorities in the country as a kind of doormat and walk all over them.
Baroness Fisher of Rednal: My Lords, I should like to remind the House that in discussing this Bill we have referred to what we consider in our minds to be the poll tax but what is called the community charge. As the noble Baroness, Lady Carnegy, spelled out, the principle was that everyone should be liable to pay the tax. The reason behind that principle was that every tax payer would then be able to control his or her local authority. As noble Lords on the opposite Benches said, we had to control the spendthrift local authorities and a community charge was brought in to do it.
As my noble friend Lord McIntosh so eloquently said, this is not the same community charge Bill. This is a completely different community charge Bill. We are spending hours discussing it not only in this Chamber but also in the other place. It is a completely new community charge Bill. In it we see not that each individual is responsible but that the Treasury intends to give tax payers' money to help certain areas of the country. The figures that I have are quite substantial. To prop up this tax the Treasury will be paying out in 1991–92 a total of £400 million; in 1992–93, £200 million and in 1993–94, £85 million. That makes a total of £685 million.
Yesterday we discussed housing. It seemed that there was not any money available to put further cash into the capital accounts so that local authorities could do more repairs. However, we find now that the Treasury has some money that it can pay out. As has been said by other noble Lords: to those that hath shall be given.
The noble Lord said—I think these were his words—that no individual or couple would be more than£3 a week worse off in 1990–91. So it is £3 a week worse off if you are an old age pensioner and £3 a week worse off if you are disabled. They will be £3 a week worse off. That is a phenomenal amount for them. The Minister spoke as though he were distributing great largesse to those people. He appeared to be saying, "We only want £3 a week from you. We were going to ask for more but we shall settle for £3".
Lord McIntosh of Haringey: My Lords, perhaps my noble friend will give way. The Government are asking for a lot more than £3. The sum of £3 only applies where the local authority can keep to the standard community charge, not where the local authority in fact performs its obligations to its electorate.
Baroness Fisher of Rednal: My Lords, I am glad that my noble friend has intervened. That was going to be my next sentence—and I am not using the same brief. It does not alter the point I am making which is that those people will be much worse off.
My noble friend spoke about the abolition of the safety nets and the local authorities which would come into that category. The contributions to the national safety net arrangements will be abolished from 1991–92 onwards. We find that 236 local authorities, including Birmingham and the whole of the West Midlands districts, will have to make their contributions. That includes Dudley, which has an urban development corporation that is trying to get people back into the area because of the closure of the steel mills, and Sandwell, which had a HAT put on it under the last housing Bill. They will have to make their contributions. They do not escape the safty net contributions which can be as much as £75 per adult in those areas. The figure of £75 has been put forward in the case of Birmingham. It will mean that £65 million is being paid out to keep down the charge bills in other areas.
Noble Lords might have thought that the Government were being very gracious and trying to help those areas which need help, such as the West Midlands and others in the north. That is not so. Birmingham and the six West Midlands districts are all losers and will have to pay for the safety nets.
There is relief on the community charge in cases where there are more than two adults in a household, and the residents are pensioners or disabled. But what will happen to the larger households of an extended family? I know from my own experience in Birmingham that there are a very large number of people whom we might call our ethnic minority who have extended families living together. The owners of the house, perhaps Mr. and Mrs. Singh, have their brother, sister, grandmother or grandfather living with them. In some cases there may be up to seven or eight adults living in the one property. They are not living in overcrowded conditions but in houses in which there is enough accommodation for them.
Are all those people except for two persons not to get any relief at all? Does it mean that the other six adults in the house will each have to pay the full charge? That can confront certain classes of people with a very difficult set of circumstances. I ask the Minister to look not simply at the numbers of people who live in what may be called lodging houses or hostels but those living in extended family circumstances.
On administrative costs, as my noble friend has said, local authorities had been doing their best to ensure that everything was on the computer by the end of the year so that next year they could send out the bills. There is now a delay; there is further expense. It is important that if the Government are making a new provision, they should take over not the reasonable costs of the change but the whole cost falling on local authorities. We need an assurance from the Minister that payment for this extra work will not be the responsibility of the local authority but of the Government.

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It is to be hoped that we shall receive a pamphlet with information about where old-age pensioners and disabled people live, because local authorities have to find that out. They could not be included on the poll tax forms when they were sent out. It is important that the Government recognise that television is a marvellous medium. We have heard of the many thousands of pounds spent on trying to sell off water. At a cost that would be small in comparison the Government should launch a television campaign to ensure that people know that they can benefit if they made applications in time.
One is horrified that in a Bill on housing and local government we have further poll tax legislation. We can disregard calling such a tax a community charge in the future.
4 p.m.
Lord Boyd-Carpenter: My Lords, the debate on the amendment has taken two separate and distinct forms. The noble Lord, Lord McIntosh of Haringey, has raised the point about the inconvenience of the introduction of a major amendment at this stage. There has been a general discussion of the merits or demerits of the community charge. Indeed the noble Baroness, Lady Fisher of Rednal, in a sense—although perhaps she did not realise it—was justifying the Government's action in putting such an amendment into the Bill. If she will allow me to say so, she made a number of very practical and helpful suggestions in respect of the community charge and its administration to which I hope my noble friend and his department will pay attention.
However, unless one is to take advantage of a Bill going through Parliament to insert amendments to the earlier Act, one cannot act on these suggestions. Therefore, there is a real conflict in the criticism of the amendment. The conflict is between those who wish to make even further adjustments to the community charge—and with a major change of this kind it is very understandable that there should be many people so doing—and those who object to that being done in this way. I am sure that noble Lords were interested and encouraged to hear my noble friend Lady Carnegy of Lour pointing out how well—despite the gloomy prognostications—the community charge is operating today in Scotland. I do not propose to be led into a general argument about the community charge because one could very easily go on all night about it. I am one of those who believe that in substance, in place of rates, it is the right step to take.
I wish to deal with the objection of the noble Lord, Lord McIntosh, to the introduction of such a major amendment—no one has the slightest doubt that it is a major and important amendment—at this stage into the Bill. I ask the noble Lord to put himself—it is a rather active feat of imagination—in the position of being in government. I ask him to consider that towards the end of the Session when major changes are taking place anyhow, one finds that there are improvements and mitigations which can be made in the community charge system. I am sure that the noble Lord would not suggest that the Government should nonetheless do nothing about it. If one is near the end of the Session with such a Bill, the only
1388
practical way to make these improvements is by inserting such an amendment into the Bill.
I wholly sympathise with the noble Lord that it is extremely inconvenient for those of us who are taking part in the debate. It is particularly inconvenient for those who have the responsibility of maintaining opposition to it, with all the difficulties that opposition have. I have experienced them. I fully understand that. I hope however that the noble Lord will not feel that because of those inconveniences—the Government being convinced of the need for these improvements, which will ease the introduction of the community charge for certain less fortunate people in this country—Ministers should have held back and not taken the action that they have.
I fully support the amendment. It is the only practical way of making these improvements and of making them in time. I hope, after consideration and despite the inconvenience caused, the House will support my noble friend's amendment.
Lord McIntosh of Haringey: My Lords, before the noble Lord sits down, let me assure him that I would wish in other circumstances to reply immediately to the direct challenge that he has put to me. However, I understand that the Minister will reply to the debate before formally putting the amendment. That will give me an opportunity to come back after he replies to the debate. If that procedure meets with the approval of the House it would be more appropriate for me to reply then to the noble Lord and also deal with other points made in debate.
Lord Boyd-Carpenter: My Lords, I am sure that the noble Lord is right.
Lord Hesketh: My Lords, I shall tread carefully in order to get the procedural part correct. It may help the House if I intervene at this stage.
We have had a broad and wide ranging debate. Before replying to the specific amendment of the noble Lord, Lord McIntosh, perhaps I may deal with some of the points that were raised. The noble Lord, Lord Somers, inquired about the details concerning the disabled and pensioners. When I made the Statement on 11th October, I drew the attention of the noble Lord to the copy with examples laid out that was in the Library. However, I undertake now to arrange for that material to be dispatched directly to him. With regard to the disabled, those who count under the scheme will be people who are disabled and receiving mobility allowance, mobility supplement, severe disability allowance, attendance allowance, invalidity pension and those who are registered blind.
The noble Lord, Lord Taylor of Gryfe, as always, drew aspects of Scotland to the attention of your Lordships' House with regard to the proposals. As the noble Lord correctly observed, my noble friend Lord Sanderson of Bowden will be dealing later with these matters. My noble friend Lady Carnegy of Lour has drawn to your Lordships' attention the fact that in Scotland all is not as it would appear if one listened to the Opposition Benches when assessing the success of the community charge.

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The noble Lord, Lord Ross, was concerned with the additional burden for local authorities. We have already begun to discuss the problems with local authorities. We welcome the practical approach that has been adopted by the practitioners in the discussion. We know that there are problems and I assure your Lordships' House that we recognise that fact.
The noble Baroness, Lady Fisher of Rednal, and my noble friend Lady Carnegy drew the House's attention to the principle of the community charge and of everyone paying. It is important to remember that we already have a rebate scheme which, together with family income supplement, is worth approximately £2.5 billion and has not yet been mentioned this afternoon. That establishes the principle of helping those who are worst off in the community. All that is happening here today is that we have extended the principle by introducing a transitional relief scheme. The idea that there was no difference across the scale before the arrival of the transitional relief scheme is not true, because the rebate scheme was already in existence.
The noble Baroness, Lady Fisher, also inquired about the position of larger households. On 20th October the Government announced their proposals on transitional relief for households containing three or more persons. The noble Baroness referred to them as households which could be described as an extended family. In general, it is proposed that the transitional relief for such households should be calculated on the basis of two notional community charges.
I now address an area where I know that the noble Lord, Lord McIntosh, and I will disagree—particularly having regard to this position on a certain committee of your Lordships' House—regarding computing and the interface. We are holding discussions with the computer companies and local authorities. Preliminary indications show that the appropriate software can be designed to make rating lists and the community charge systems compatible.
I turn to Amendment No. 126A standing in the name of the noble Lord, Lord McIntosh, which is an amendment to my amendment, No. 126. It would place a duty on the Secretary of State to make regulations rather than an enabling power. I can assure your Lordships' House that his amendment is unnecessary. The Government have made it quite clear that they will be introducing a scheme of transitional relief, and I ask your Lordships to accept the undertaking given in my Statement of 11th October on this point.
Amendment No. 126B would provide for the regulations to make provision for transitional relief in every financial year from 1990 to 2000. Again we have made it clear that this is intended to be a scheme of limited life providing relief for ratepayers, pensioners and disabled people over the first three years of the community charge. A 10-year period would be simply too long.
Amendments Nos. 126C and 126D would extend the relief scheme to the standard and collective
1390
community charge. In the case of the standard charge—which the House will recall is levied in respect of property (such as second homes) which is not used as anybody's sole or main residence—local authorities already have discretion to provide relief. They have the option of levying the charge at a zero rate if they wish. As a result of amendments made during the Committee stage of this Bill, authorities have much greater flexibility to set different rates for different classes of property. The Government take the view that decisions on the level of charge to be levied on unoccupied property are properly taken by local authorities in the light of local circumstances. We believe that it would not be right for the Government to undermine this discretion by providing additional relief.
As regards the collective community charge, it would be quite wrong to include it in the transitional relief scheme. The collective charge applies in buildings where people stay for only short periods, and where it would not be practicable to register them individually for the personal charge. The Government have made it clear that relief will be available only for as long as an individual is resident in the property where he lived under the rating system. In the case of an itinerant population it would mean that relief, if it were to be given, would cease very quickly for the majority of people, and the amount of relief to which each individual was entitled would be very small. Administratively, it would also be almost impossible for local authorities to grant relief to contributors who, by definition, are not registered for the community charge and are therefore not known to the local authority. This—taken together with the fact that many community charge properties will, because of their size, have high rateable values and are therefore unlikely to qualify for relief—has led u s to conclude that it would be neither appropriate nor practicable to provide relief for contributors.
Amendment No. 126E would impose a duty on the Secretary of State to limit himself to the factors listed in the amendment which are of course rather different from those listed in Amendment No. 126. In particular, it refers to rates "paid or payable" in 1989–90, whereas the Government's amendment refers merely to "rates for a period before 1st April 1990". I can assure the noble Lord that our formulation can include both rates paid and rates payable; and the period can be that mentioned in his amendment. There is therefore no advantage in replacing it.
Similarly there is nothing in the Government's formulation which would prevent relief being given to students, nurses and people living in tied accommodation. Many such people will be entitled to relief under our proposals if they are living in a separately rated hereditament. If they are not, then they will not be eligible for relief. But I hat does not mean to say that no help is available to them. We should be clear about exactly what the Government are doing here. We are giving additional relief to people for whom the change from rates to the community charge would mean a significant increase in outgoings. This scheme is over and above the protection which is already built in to the community

1391
charge. We are not reducing the existing provisions which apply to students and people on low incomes. Students already enjoy automatic relief of 80 per cent. of the community charge. Nurses who are part of Project 2000 will also enjoy this student relief. Nurses and student nurses who are salaried will be eligible for rebates if their income is low enough to qualify them.
The protection for students and nurses which has always been built into the system will therefore continue. As regards our system of transitional relief, the local authorities will not thank us if we devise a scheme which is all-inclusive and complex. Our proposals are intended to provide additional help to certain groups of people. It is not intended to be a universal scheme and I make no apology for that.
The amendment would require the Secretary of State to take into account the circumstances of the person including age, disability and income. On the first two we have already announced to the House that special provisions will apply to pensioners and disabled people and I can give the House an assurance that the scheme will reflect that announcement. As regards income, it is the job of the rebate system to link the community charge to ability to pay and this will be the case under our new provisions. Where a charge payer is entitled to relief, and that relief is given, he may, depending on his income, still be entitled to a rebate on the amount remaining to be paid.
Amendments Nos. 126F and 126G would remove the provision allowing for special provisions for special review, and preventing appeals on such decisions being made to a valuation and community charge tribunal. I explained the Government's view on this point when speaking to Amendment No. 126.
Amendment No. 157A would require the regulations setting out the relief scheme to be the subject of affirmative resolution rather than negative resolution. This would be unusual in the context of the community charge where all the regulation-making powers are exercisable by way of instruments subject to the negative resolution procedure and even more so in the case of a transitional provision. If noble Lords think that the regulations should be debated when they are made, I have no doubt that the appropriate Motion will be made.
Amendments Nos. 154ZA and 154ZB seek to replace the provision for the Secretary of State to pay grant to local authorities in respect of revenue forgone and administrative costs with a duty to reimburse the costs certified by the chief financial officer as having been incurred.
I said in my Statement on 11th October, and I repeat now, that the Government will met 100 per, cent. of the relief actually paid to individuals. On the costs of administration we are making arrangements to meet 100 per cent. of a reasonable level of costs. This is a generous arrangement. It offers substantially more than the contribution the Government made to community charge preparation costs where the specific grant rate was 55 per cent.
1392
We are commissioning a study by consultants on the cost implications of the new scheme, and we are discussing the question of costs with the local authority associations. The Government will ensure that adequate funds are made available to meet legitimate expenditure. The Government cannot accept, however, an open-ended commitment to reimburse whatever costs an authority incurs regardless of the necessity of those costs. No government could exercise their duty towards public funds in such an irresponsible fashion.
Finally, on the night before I made the Statement on 11th October there was a plea from the Benches opposite for the Government to provide some form of transitional relief for the disabled. It was not made with respect to the Statement I made the following day but it gave me great pleasure to be able to answer that plea and to answer it positively. Here we are providing additional help. It is not novel. We already have the rebate scheme ready to go. This is to provide help where we believe that it is most needed.
Lord McIntosh of Haringey: My Lords, I am grateful to the Minister for responding to my amendments and thereby giving me an opportunity to respond to them and to those aspects of the debate which relate to them. They are rather wide-ranging because my amendments and the government amendments together necessitate a cold look at poll tax legislation as it is now proposed. It is not a matter where one can say that an opposition amendment says one thing which must be considered by itself and a government amendment says another which must also be considered by itself. If we are to act responsibly in this House we must ask how that leaves the poll tax legislation. When I look at the legislation I find that it leaves us a very long way from the claims made about it when it was first introduced in this House on Second Reading in 1988.
The principal claim made for the poll tax in 1988 was that we were to achieve a higher degree of accountability by local authorities to their electorate than had existed under the rating system in the past. Indeed, that was repeated most recently by Mr. David Hunt speaking to the Conservative Party Conference two weeks ago when he said:
"Very soon we will have a simple, clear and fair way of determining local bills for local services. At last we shall have the community charge".
We need only list very briefly the items which detract from the simple, clear and fair relationship between local expenditure and the community charge bill which community charge payers will actually pay to realise how far we are from that ideal and that claim.
First, because this is what we are debating today, we have the safety nets. They existed in the Bill as it went through this House last year but they have been, as everybody has recognised, radically changed. Secondly, we have the transitional protection for areas with low rateable value which we have debated this afternoon. Thirdly, we have the additional help for inner London boroughs. Fourthly, we have individual transitional relief which again we have debated this afternoon. Fifthly, we have the rebate system which we debated last

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year when the Bill first went through and also as this Bill has proceeded through your Lordships' House. Sixthly—and perhaps this is the most important because it is as yet unknown—there is the decision to be announced on need assessment grants.
Therefore, we are as far as it is possible to be from a simple, clear and fair relationship between local authority expenditure and the bills which the commmunity charge payers will pay. It is not just—although it is of great importance—that central government are now determining three-quarters rather than a half of the expenditure of local authorities. It is three-quarters, as noble Lords will know, because half the expenditure is in the form of grant and another quarter in the form of nationally determined non-domestic rates, so that only a quarter of local authority expenditure can actually be called to account by local inhabitants against the expenditure of their council.
It is not just that. Every single complication, every single new regulation and new provision which is made—and I do not deny that some are with good intentions; the Minister made his claim for transitional relief for the disabled and I do not deny that the intention behind that is admirable—removes further away the ideal of accountability, which was the main justification for the Bill in the first place.
I spent quite a long time—and I did not and do not apologise for that—introducing my amendments and responding to government amendments. I did not go far enough in my attacks. I completely neglected the point made so effectively by my noble friend Lady Fisher about the impossibility of dealing with this transitional relief, which is restricted to two adults in the many households where there are more than two adults. She talked about the extended family. If it is amicable, an extended family may well be able to reach an arrangement that they will share the benefit of the transitional relief accorded to two out of the six, seven or eight of them. That is a possibility.
However, let us think about houses in multiple occupation where for rating purposes in 1989–90 it is only one hereditament. Those people do not live with each other in any real sense and they must sort that matter out between themselves. They must fight it out as to who will receive the transitional relief. That is not just an administrative nightmare; it is a family or household nightmare. I cannot believe that the Government have even started to think about the implications of that restriction, which is very much played down in ministerial statements about the supposed change.
The second point on which my noble friend Lady Fisher helped the House is the £3 per week limitation. She pointed out, as I should have done, that even if it were only £3 a week—and it will be a lot more than that in many cases—it would be a very severe cut in the standard of living for many people; for example, pensioners, the disabled, the unemployed and the poorest people in our society. To us£3 a week may be the price of a couple of drinks but for those people who are most affected it
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is the difference between poverty and despair in many cases.
The noble Lord, Lord Boyd-Carpenter, chided me for complaining about the late introduction of the amendments and he talked sympathetically about the inconvenience particularly for the Opposition Front Bench. I am grateful to him for that recognition. However, I must say to him that the necessity for these amendments was obvious to the Secretary of State or the previous Secretary of State many months ago. They could have been introduced at any time.
The real reason for this timing has nothing to do with thinking in the department or thinking by Secretaries of State. It is very clear: the amendments had to be introduced as pressure built up in the Conservative Party to abolish the safety net as soon as possible and to absolve those who gain most, the Tory shires, from the extra payments which they would have to make in the short term.
That sort of pressure was sheer greed. Those are people who are already better off and who will be even more better off as a result of government legislation passed by the people who represent them and not the poorer areas. The have the nerve to come forward and press on the government that transitional relief and a transitional change between being very well off and very much better off should fall on all the taxpayers and not on them. That was sheer greed, which came to a head in the run-up to the Conservative Party Conference at the beginning of October, At that stage and only at that stage the Government yielded to that political pressure and paid that political debt.
The legislation that we shall be left with if these amendments are passed—which we already have in most of its major aspects—is something which, as I said at the outset, makes the rich richer and the poor poorer. It is a paying of political debts at the expense of the poorer people in our society. That may be in the short-term interests of the Conservative Party, although I notice that most of its representatives do not think so. But the British public knows that that is unjust and that these amendments and this legislation should be resisted. I beg to move Amendment No. 126A.
4.30 p.m.
On Question, Whether the said amendment (No. 126A) to Amendment No. 126 shall be agreed to?
Their Lordships divided: Contents, 85; Not-Contents, 126.

DIVISION NO. 1

CONTENTS

Addington, L.

Bruce of Donington, L.

Airedale, L.

Campbell of Eskan, L.

Alport, L.

Carmichael of Kelvingrove, L.

Amherst, E.

Ardwick, L.

Cledwyn of Penrhos, L.

Attlee, E.

Cocks of Hartcliffe, L.

Blackstone, B.

Darcy (de Knayth), B.

Blease, L.

David, B.

Bottomley, L.

Dean of Beswick, L.

Broadbridge, L.

Donaldson of Kingsbridge, L.

1395

Dormand of Easington, L.

Northfield, L.

Ennals, L.

Oram, L.

Ewart-Biggs, B.

Parry, L.

Fisher of Rednal, B.

Ponsonby of Shulbrede, L. [Teller.]

Foot, L.

Gallacher, L.

Prys-Davies, L.

Galpern, L.

Rathcreedan, L.

Glenamara, L.

Ripon, Bp.

Graham of Edmonton, [Teller.]

Ritchie of Dundee, L.

Rochester, L.

Grey, E.

Ross of Newport, L.

Grimond, L.

Sainsbury, L.

Hampton, L.

Salisbury, Bp.

Hatch of Lusby, L.

Seear, B.

Henniker, L.

Sefton of Garston, L.

Hooson, L.

Serota, B.

Hughes, L.

Shepherd, L.

Irving of Dartford, L.

Simon, V.

Jacques, L.

Somers, L.

Jay, L.

Stallard, L.

Jeger, B.

Stedman, B.

Jenkins of Hillhead, L.

Stoddart of Swindon, L.

Kagan, L.

Strabolgi, L.

Kilmarnock L.

Taylor of Gryfe, L.

Leatherland, L.

Taylor of Mansfield, L.

Llewelyn-Davies of Hastoe, B.

Thomson of Monifieth, L.

Tordoff, L.

Lloyd of Kilgerran, L.

Turner of Camden, B.

Lockwood, B.

Underhill, L.

Longford, E.

Walston, L.

Macaulay of Bragar, L.

Whaddon, L.

McIntosh of Haringey, L.

White, B.

Milverton, L.

Williams of Elvel, L.

Molloy, L.

Winstanley, L.

Nicol, B.

NOT-CONTENTS

Airey of Abingdon, B.

Gisborough, L.

Alexander of Tunis, E.

Goold, L.

Allenby of Megiddo, V.

Gridley, L.

Annaly, L.

Hailsham of Saint Marylebone, L.

Arran, E.

Auckland, L.

Halsbury, E.

Belstead, L.

Hardinge of Penshurst, L.

Bessborough, E.

Harmar-Nicholls, L.

Birdwood, L.

Harvington, L.

Borthwick, L.

Havers, L.

Boyd-Carpenter, L.

Henley, L.

Butterworth, L.

Hesketh, L.

Caithness, E.

Hives, L.

Campbell of Alloway, L.

Home of the Hirsel, L.

Campbell of Croy, L.

Hood, V.

Carnarvon, E.

Hooper, B.

Carnegy of Lour, B.

Hylton-Foster, B.

Carnock, L.

Killearn, L.

Carr of Hadley, L.

Kinloss, Ly.

Chelmer, L.

Kinnaird, L.

Clanwilliam, E.

Knollys, V.

Clitheroe, L.

Lauderdale, E.

Cockfield, L.

Long, V.

Coleraine, L.

Lucas of Chilworth, L.

Colnbrook, L.

Lyell, L.

Constantine of Stanmore, L.

McColl of Dulwich, L.

Cork and Orrery, E.

Malmesbury, E.

Cottesloe, L.

Manchester, D.

Craigton, L.

Mancroft, L.

Cullen of Ashbourne, L.

Manton, L.

Davidson, V. [Teller.]

Margadale, L.

De La Warr, E.

Marley, L.

Denham, L. [Teller.]

Maude of Stratford-upon-Avon, L.

Dilhorne, V.

Dulverton, L.

Merrivale, L.

Eden of Winton, L.

Mersey, V.

Elibank, L.

Monk Bretton, L.

Ellenborough, L.

Morris, L.

Elliot of Harwood, B.

Mottistone, L.

Erroll of Hale, L.

Mowbray and Stourton, L.

Ferrers, E.

Moyne, L.

Fortescue, E.

Munster, E.

Fraser of Kilmorack, L.

Murton of Lindisfarne, L.

Gainford, L.

Nelson, E.

1396

Norrie, L.

Skelmersdale, L.

O'Brien of Lothbury, L.

Stanley of Alderley, L.

Orkney, E.

Stodart of Leaston, L.

Orr-Ewing, L.

Strathcarron, L.

Oxfuird, V.

Strathclyde, L.

Pender, L.

Strathcona and Mount Royal, L.

Porritt, L.

Pym, L.

Strathmore and Kinghorne, E.

Rankeillour, L.

Reay, L.

Sudeley, L.

Renton, L.

Swinfen, L.

Renwick, L.

Terrington, L.

Romney, E.

Teviot, L.

Rugby, L.

Thomas of Gwydir, L.

St. Aldwyn, E.

Thomas of Swynnerton, L.

St. Davids, V.

Thurlow, L.

Salisbury, M.

Tranmire, L.

Sanderson of Bowden, L.

Trefgarne, L.

Seebohm, L.

Trumpington, B.

Shannon, E.

Ullswater, V.

Sharples, B.

Vaux of Harrowden, L.

Resolved in the negative, and amendment to the amendment disagreed to accordingly.
4.38 p.m.
[Amendments Nos. 126B to 126G not moved.]
On Question, Amendment No. 126 agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 126H:
Page 184, line 34, leave out paragraph (b).
The noble Lord said: My Lords, these amendments make small but important changes to the powers in the 1988 Act relating to information. They make it clear that the definition of information covers accounts, estimates and returns and enables us to ask authorities and community charge registration officers to make estimates of data where they have not yet done so.
There are a variety of powers in the 1988 Act which refer to information. Some relate to information which individuals are required to give to the community charge registration officer, others to requests from the Secretary of State for authorities to provide him with the data he needs to operate the revenue support grant system, for example. Usually, the information to be provided will be something which is already to hand and which is a matter of fact—the number of people living at an address, or the number of miles of road in the area.
But in certain cases, where something is a little uncertain, the authority or the CCRO are well placed to make an estimate, and the Secretary of State may wish to ask them for their estimate. We will need to make such a request, for example, to get estimates of the number of people who will make contributions to collective community charges, which are needed to calculate relevant population figures. Amendment No. 161A makes it quite clear that a power which enables a person to seek information enables him also to seek accounts, estimates or returns.
Amendments Nos. 126H and 154B both delete a requirement that the information sought should be in the possession or control of the authority or CCRO. Clearly, there is little purpose in trying to get information from a person or body which that person or body does not have. The deletion of this provision does not mean that we will attempt anything like that. The difficulty is that where we

1397
seek estimates, the present limitation means we could only ask for the estimates that have already been made. But it may be that an authority has not yet got round to making its own estimate of the matter, though it may have to hand all the data it would need to do so.
We would want authorities or CCROs in those circumstances to give us not only the estimates they have already made but, where necessary, estimates freshly made, but using only information they already have. We expect that all the matters on which we would seek estimates will be matters about which the authority or CCRO would have made an estimate anyway in due course. This power should cause little, if any, additional work.
The interaction of all these provisions can seem complex, but your Lordships will appreciate the importance of ensuring that the information needed for all those concerned to operate the system properly can be provided in the most sensible manner. I beg to move.
On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 127:
Page 185, line 3, at end insert—
(" .—(1) Section 30 (students) shall be amended as follows.
(2) The following subsection shall be inserted after subsection (1)—
"(1A) For the purposes of this Part a person shall be treated as undertaking a qualifying course of education on a particular day if (and only if) he fulfils such conditions as may be prescribed by regulations made by the Secretary of State."
(3) In subsection (2)—

(a) for "The regulations" there shall be substituted "Regulations under this section", and

(b) after "(1)" there shall be inserted "or (1A)".

(4) In subsection (3) for "The regulations" there shall be substituted "Regulations under subsection (1) above".
(5) The following subsection shall be inserted after subsection (3)—
"(3A) Regulations under subsection (1A) above must be so framed that undertaking a qualifying course of education for the purposes of this Part."
(6) In subsection (4) for "The regulations" there shall be substituted "Regulations under this section".
(7) The following subsection shall be inserted after subsection (5)—
"(6) A course of higher education is a course of any description mentioned in Schedule 6 to the Education Reform Act 1988." ")
Lord McIntosh of Haringey: My Lords, I did not know that the noble Lord was going to move this amendment formally. In the absence of any statement from him I welcome the amendment. As far as students are concerned, this concession reflects many of the matters that we have been putting forward as the poll tax legislation has been proceeding. We believe it to be a significant change and we are grateful for it.
On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 128:
Page 185, line 4, leave out from beginning to end of line 5 and insert—
(" .—(1) Schedule 1 (exemption) shall be amended as follows.
1398
(2) The following paragraph shall be substituted for paragraph 5 (children)—
"5. A person is an exempt individual on a particular day if the day falls within a week for which—

(a) a person is entitled to child benefit in respect of the individual, or

(b) a person would be entitled to child benefit in respect of the individual but for paragraph 1(c) of Schedule 1 to the Child Benefit Act 1975."

(3) The following paragraphs shall be substituted for paragraph 6 (students)—").
The noble Lord said: My Lords, I apologise to the noble Lord, Lord McIntosh, as regards the last amendment. I confused it with the grouping for the previous amendment which is why I moved it without any recognition of him. I hope that he will accept my apology.
Paragraph 5 of Schedule 1 of the Local Government Finance Act 1988 provides for all children, in respect of whom a person is in receipt of child benefit, to be exempt from the personal community charge. By using this universal benefit in this way the intention was to bring all individuals under the age of 18 within this exemption. However, child benefit is not paid in respect of children who have been taken into local authority residential care. It is clearly anomalous that such children should not be exempt. This amendment therefore extends the exemption to this group of individuals. The intention of the provision is unchanged and I commend the amendment to your Lordships. I beg to move.
Lord McIntosh of Haringey: My Lords, this amendment is also welcomed and we are grateful for it. It goes perhaps 1 per cent. to one-and-a-half per cent. of the way that is necessary in order to remedy the injustice that is being done by the Government in refusing to upgrade child benefits for three years running.
On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 129:
Page 185, line 9, leave out paragraph (b) and insert—
("(b) on the day he is resident in Scotland or Northern Ireland for the purpose of undertaking the course."").
The noble Lord said: My Lords, the intention of paragraph 4 of Schedule 5 of the Bill is to ensure that those students who are resident in Scotland or Northern Ireland for the purposes of attending a full-time course of education are, for the duration of their residence there, exempt from the personal community charge in England and Wales. However, there is some doubt as to whether the provision does achieve this object. This amendment clarifies the position and brings this provision into line with that at paragraph 2 of Schedule 5 of the Bill which sets out the way in which a student's place of residence will be determined while resident in England or Wales. I beg to move.
Lord McIntosh of Haringey: My Lords, the noble Lord is familiar with the 99 and the one. I do not believe I need go further than that.
On Question, amendment agreed to.
4.45 p.m.
Lord Hesketh Lord Hesketh moved Amendment No. 130:
Page 185, line 12, at end insert—
("6A. A person is an exempt individual on a particular day if—

(a) he is aged under 20 on the day,

(b) the day falls within a period in which he is undertaking a qualifying course of education, and

(c) the course is not undertaken in consequence of an office or employment held by the person."").

On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 131:
Page 185, line 13, leave out ("In Schedule 2 (administration) for") and insert ("Schedule 2 (administration) shall be amended as follows:
(1A) The following paragraphs shall be substituted for paragraph 2(2)(1)—
"(1) that a notice must be in a prescribed form,
(1a) that a notice must contain prescribed matters,
(1b) that a notice must not contain other prescribed matters,
(1c) that where a notice is invalid because it does not comply with regulations under paragraph (1) or (1a) above, and the circumstances are such as may be prescribed, a requirement contained in the notice by virtue of regulations under paragraph (f) or (k) above shall nevertheless have effect as if the notice were valid,
(1d) that where a notice is invalid because it does not comply with regulations under paragraph (1) above, and a requirement has effect by virtue of regulations under paragraph (1c) above, the authority must take prescribed steps to issue to the chargeable person a document in the form which the notice would have taken had it complied with regulations under paragraph (1) above,
(1e) that where a notice is invalid because it does not comply with regulations under paragraph (1a) above, and a requirement has effect by virtue of regulations under paragraph (1c) above, the authority must take prescribed steps to inform the chargeable person of such of the matters prescribed under paragraph (1a) above as were not contained in the notice,".
(1B) In paragraph 2(2)(m) the words from "and" to the end shall be omitted.
(1C) For").
The noble Lord said: My Lords, in moving this amendment I shall also speak to Amendments Nos. 133, 134, 149, 219 and 220. These amendments deal with administration of community charges and non-domestic rating. They substitute and amend certain provisions in Schedules 2 and 9 to the Local Government Finance Act 1988, so that regulations made under those schedules may make provision that where there is a failure of a charging authority to issue community charge or non-domestic rate demand notices in the prescribed form or containing prescribed matters, the requirement to pay the amount payable under the notice is not affected. They provide also the manner in which the regulations may prescribe the action which is to be taken to remedy the failure in such circumstances, and that failure to supply prescribed information with the notices shall not in itself invalidate those notices.
Amendment No. 133 deals with the provisions which may be made in the regulations in respect of community charge demand notices, and the information which is to accompany a notice. Amendment No. 149 deals with those which may be made in respect of non-domestic rate notices.
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Amendments Nos. 133 and 134 are consequential on Amendment No. 131. Amendments Nos. 219 and 220 make repeals consequential on Amendments Nos. 131 and 149 respectively.
As the Act currently stands, paragraphs 2(2)(1) of Schedule 2 and 2(2)(g) of Schedule 9 do not allow the regulations to provide for the circumstances where there is a failure to issue notices which are in the prescribed form or ones which include the prescribed matters, but where, notwithstanding that those notices are invalid, the cause of that invalidity is not sufficiently material to warrant rendering invalid the requirement to pay, which could create major difficulties for authorities.
The new provisions provided respectively by Amendments Nos. 131 and 149 mean that the regulations can provide that in such circumstances, for instance where something has gone wrong with the printing or where there has been some other purely administrative failing in the preparation of the notices, the requirement to pay is unaffected, but the charging authority must remedy the failure by sending the charge or rate payer a revised form of the notice or the matters which should have been issued or included, in such manner as may be prescribed.
Noble Lords will appreciate that we seek by these amendments to provide a reasonable and practicable framework for the administration of community charges and non-domestic rates. I beg to move.
On Question, amendment agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 131A:
Page 186, line 5, at end insert—
("( ) In that Schedule, the following sub-paragraph shall be added after paragraph 8(5).
"(6) The regulations shall not enable the Community Charge Registration Officer to require information from an employee of a body corporate where—

(a) the body corporate holds a lease or under-lease of the property or owns the property; and

(b) the employee does not hold a lease or under-lease of the property or own the property".").

The noble Lord said: My Lords, I hope that this amendment is an improved version of an amendment which my noble friend Lord Graham of Edmonton moved at the Committee stage. It arises from the provision in Regulation 4 of the Community Charges Administration and Enforcement Regulations 1989 which empower the community charge registration officer to require information from a responsible individual. When the poll tax Bill was going through this House I understood a "responsible individual" to refer to somebody in the household, in other words, someone who appears to the registration officer to be the most suitable person to give information about the household.
It has come to our notice that there are community charge registration officers who are proposing to use the description "responsible individual" to refer to an employee of a landlord organisation. By such an organisation we mean principally housing associations because they form the largest group of landlord organisations which may be concerned. It

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seems to the housing association movement that it should not be saddled with the responsibility, I nearly said, of being coppers' narks. It is not quite like that, but very nearly.
The relationship with their tenants is not enhanced by a requirement by a community charge registration officer that an employee should have to give information about the household. Employees of housing associations do not necessarily have to know about the composition of the household, and in many ways it is right that they should not have to know. They are not in loco parentis for their tenants. Their tenants are individual adults in households and are responsible for their own destiny. I do not know whether the practice of demanding information is widespread but it ought not to be allowed. The amendment would prohibit it. I hope that the Government will find some sympathy for its purpose. I beg to move.
Lord Hesketh: My Lords, as the noble Lord pointed out, a similar amendment was moved by the noble Lord, Lord Graham, in Committee. The amendment concerns the ability of a community charge registration officer to obtain information from corporate bodies on those people who are tenants or who sub-lease accommodation from that corporate body. Regulation 4 of the Community Charge (Administration and Enforcement) Regulations 1989 allows community charge registration officers to designate only individuals, aged 18 or over, not corporate bodies, as being responsible for providing information in respect of such properties. Consequently, the effect of this amendment would be to prevent community charge registration officers receiving any such information from corporate bodies.
The Government do not accept such a restriction on the information which can be made available to a community charge registration officer. There may be situations where an individual not in residence in a particular property is, nonetheless, the person best placed to answer for the occupants of that property. The owner or leaseholder of the property may be a body corporate and, consequently, an employee of that body may be the most appropriate, or indeed, the only appropriate individual to designate in respect of that property.
The legislation does provide protection against the unreasonable use of the power to designate individuals. Section 23 of the Local Government Finance Act 1988 provides that any person who is aggrieved by being designated as a responsible individual may appeal against the designation: first to the registration officer; and, if the decision is not revoked, to an independent valuation and community charge tribunal. If the designation is unreasonable it will not survive this appeal process.
In view of its effects, and bearing in mind the protection afforded to individuals already successfully enshrined in the legislation, the Government have no alternative but to resist the noble Lord's blandishments.
Lord McIntosh of Haringey: My Lords, the position as I now understand it is worse than it appeared to be in Committee. At that time the noble Lord appeared to be under the impression that a responsible individual could only be an individual aged 18 or over. He resisted the notion that a responsible individual could be an employee of a body corporate such as a landlord organisation. When pressed by my noble friend Lord Graham, he went on to say that he would be happy to hear any evidence of the kind of abuse we had referred to. The National Federation of Housing Associations replied to this invitation on 17th October—only a week after the Committee date. It has not had a reply so far as I know. Is the Minister able to say whether a reply has been prepared and what the reply contains?
Lord Hesketh: My Lords, I can assure the noble Lord that it will be receiving a reply. It will be based on the answer I have given this afternoon to the noble Lord's amendment. We believe that the protection in the Bill is satisfactory.
Lord McIntosh of Haringey: My Lords, the protection on which the Minister is now relying is the protection of the appeals procedure. That was not the burden of the complaint. The burden of the complaint is that employees of housing associations are being required to report on the family composition of their tenants. It is none of their business, and they do not think that it is any of their business to report on the family composition of their tenants. The appeals procedure has nothing to do with it. It is not a question of the quality of the information they provide. It is a question of the intrusion into the personal privacy of the tenants of housing associations. That is an unsatisfactory response.
I hope that by the time we come to Third Reading there will have been a proper reply to the National Federation of Housing Associations. If that reply appears to be as inadequate as the answer we have been given today, we shall have to act further at that stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Hesketh Lord Hesketh moved Amendment No. 132:
Page 186,1ine 6, leave out ("In that Schedule the") and insert—
("In paragraph 9 (information) in sub-paragraph (1) for "is mentioned in sub-paragraph (2)" there shall be substituted "falls within sub-paragraph (2) or (2A)".
(2A) In paragraph 9, in sub-paragraph (2) after "The information" there shall be inserted "falling within this sub-paragraph".
(2B) In paragraph 9, the following sub-paragraph shall be inserted after sub-paragraph (2)—
"(2A) The information falling within this sub-paragraph is information whether, on any day specified in the request, any person so specified is undertaking a qualifying course of education."
(2C) The").
On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 133:
Page 186, line 20, leave out ("In that Schedule").
On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 134:
Page 186, line 21, leave out ("In that Schedule").
On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 135:
Page 190, line 3, at end insert—
("(16) The Secretary of State may by order amend subsection (11) above by the insertion of such additional factors as he thinks fit." ").
The noble Lord said: My Lords, the House may welcome a little background to this amendment. Section 40 of the Local Government Finance Act 1988 makes provision for multipliers, up to a maximum of two, to be applied to the standard community charge on the basis of classes of property defined by the Secretary of State in regulations. However, local authorities have found these arrangements too rigid to enable them to classify properties in a sufficiently flexible manner to meet their needs.
Consequently, as noble Lords are aware, amendments to Section 40 were introduced, and agreed to, in Committee. These give local authorities the ability to specify their own classes of property for the purposes of defining multipliers for the standard charge, but only on the basis of certain factors specified in the provision. The Secretary of State retains the power to define maximum multipliers on certain classes of property but the local authorities may charge up to twice the standard charge on those classes which they themselves define.
The purpose of this simple amendment is to give the Secretary of State the ability to define additional factors in relation to which the local authorities may specify classes. It does not enable the Secretary of State to remove or amend any factors already contained in the provision. The power may be used only to increase the factors authorities can take into account, and its purpose is to enable him to respond if it becomes apparent that the existing factors are insufficient to allow local authorities to exercise their discretion in cases where it would be entirely appropriate for them to do so. I beg to move.
On Question, amendment agreed to.
The Paymaster General (The Earl of Caithness)The Paymaster General (The Earl of Caithness) moved Amendment No. 135A:
Page 190, line 13, leave out ("In section 44 (occupied hereditaments: supplementary) in") and insert (".—(1) Section 44 (occupied hereditaments: supplementary) shall be amended as follows.
(2) In").
The noble Earl said: My Lords, with the leave of the House, I should like to speak to Amendments Nos. 135B, 136, 137, 139, 162, 216A and 216B. Section 44 of the 1988 Act contains a power which it was intended should be used to make rules providing for charging authorities to reduce the rate bill of a property which is partly occupied. The intention was broadly to follow the provisions of Section 25 of the General Rate Act 1967. However, the regulation power was found not to be wide enough. Amendments Nos. 135A and 135B therefore introduce a new section in the 1988 Act which makes the appropriate provisions.
Amendments Nos. 137, 139 and 162 make provision for charging authorities to serve completion notices on the owners of new buildings when the building is complete or where in the authorities' opinion the works remaining to be done can be completed within three months. The notice can be withdrawn where agreement on a completion date is reached with the ratepayer and there is a right of appeal to the valuation and community charge tribunal for the ratepayer where he disputes the date in the notice. These provisions generally follow those which apply under the General Rate Act 1967.
Amendments Nos. 216A and 216B are amendments to the repeals in Schedule 12 to the Bill consequent on Amendment No. 135B. Amendment No. 136 is a drafting amendment.
These amendments will enable unoccupied property rating under the Local Government Finance Act 1988 to work properly. They largely replicate provisions in existing legislation which is to be repealed when the 1988 Act takes effect. They are the result of extensive discussions with the local authority associations and the professions. I commend them to the House. I beg to move.
On Question, amendment agreed to.
5 p.m.
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 135B, 136 and 137:
Page 190, line 14, at end insert —
("(3) Subsection (3) shall be omitted.
The following section shall be inserted after section 44 —
partly occupied hereditaments.
44A. —(1) Where a hereditament is shown in a charging authority's local non-domestic rating list and it appears to the authority that part of the hereditament is unoccupied but will remain so for a short time only the authority may require the valuation officer for the authority to apportion the rateable value of the hereditament between the occupied and unoccupied parts of the hereditament and to certify the apportionment to the authority.
(2) The reference in subsection (1) above to the rateable value of the hereditament is a reference to the rateable value shown under section 42(4) above as regards the hereditament for the day on which the authority makes its requirement.
(3) For the purposes of this section an apportionment under subsection (1) above shall be treated as applicable for any day which—

(a) falls within the operative period in relation to the apportionment, and

(b) is a day for which the rateable value shown under section 42(4) above as regards the hereditament to which the apportionment relates is the same as that so shown for the day on which the authority requires the apportionment.

(4) References in this section to the operative period in relation to an apportionment are references to period beginning—

(a) where requiring the apportionment does not have the effect of bringing to an end the operative period in relation to a previous apportionment under subsection (1) above, with the day on which the hereditament to which the apportionment relates became partly unoccupied, and

(b) where requiring the apportionment does have the effect of bringing to an end the operative period in relation to a previous apportionment under subsection (1) above, with the day immediately following the end of that period and ending with the first day on which one or more of the events listed below occurs.

(5) The events are —

(a) the occupation of any of the unoccupied part of the hereditament to which the apportionment relates;

(b) the ending of the rate period in which the authority requires the apportionment;

(c) the requiring of a further apportionment under subsection (1) above in relation to the hereditament to which the apportionment relates;

(d) the hereditament to which the apportionment relates becoming completely unoccupied.

(6) Subsection (7) below applies where —

(a) a charging authority requires an apportionment under subsection (1) above, and

(b) the hereditament to which the apportionment relates does not fall within a class prescribed under section 45(1)(d) below.

(7) In relation to any day for which the apportionment is applicable, section 43 above shall have effect as regards the hereditament as if the following subsections were substituted for section 44(2)—
"(2) A is such part of the rateable value shown for the day under section 42(4) above as regards the hereditament as is assigned by the relevant apportionment to the occupied part of the hereditament. (2A) In subsection (2) above "the relevant apportionment" means the apportionment under section 44A(l) below which relates to the hereditament and is treated for the purposes of section 44A below as applicable for the day."
(8) Subsection (9) below applies where —

(a) a charging authority requires an apportionment under subsection (1) above, and

(b) the hereditament to which the apportionment relates falls within a class prescribed under section 45(1)(d) below.

(9) In relation to any day for which the apportionment is applicable, section 43 above shall have effect as regards the hereditament as if the following subsections were substituted for section 44(2)—
"(2) A is the sum of —

(a) such part of the rateable value shown for the day under section 42(4) above as regards the hereditament as is assigned by the relevant apportionment to the occupied part of the hereditament, and

(b) one half of such part of that rateable value as is assigned by the relevant apportionment to the unoccupied part of the hereditament.

(2A) In subsection (2) above "the relevant apportionment" means the apportionment under section 44A(1) below which relates to the hereditament and is treated for the purposes of section 44A below as applicable for the day."
(10)References in subsections (1) to (5) above to the hereditament, in relation to a hereditament which is partly domestic property or partly exempt from local non-domestic rating, shall, except where the reference is to the rateable value of the hereditament, be construed as references to such part of the hereditament as is neither domestic property nor exempt from local non-domestic rating."").
Page 190, line 14, at end insert —
(" . —(1) Section 45 (unoccupied hereditaments: liability) shall be amended as follows.
(2) In subsection (1)(d) for "description" there shall be substituted "class".
(3) The following subsections shall be inserted after subsection (8)—
"(9) For the purposes of subsection (1)(d) above a class may be prescribed by reference to such factors as the Secretary of State sees fit.
(10) Without prejudice to the generality of subsection (9) above, a class may be prescribed by reference to one or more of the following factors —

(a) the physical characteristics of hereditaments;

(b) the fact that hereditaments have been unoccupied at any time preceding the day mentioned in subsection (1) above;

(c) the fact that the owners of hereditaments fall within prescribed descriptions" ").

Page 190, line 16, at end insert —
(" . The following section shall be inserted after section 46—
"Unoccupied hereditaments: new buildings.
46A. —(1) Schedule 4A below (which makes provision with respect to the determination of a day as the completion day in relation to a new building) shall have effect.
(2) Where—

(a) a completion notice is served under Schedule 4A below, and

(b) the building to which the notice relates is not completed on or before the relevant day,

then for the purposes of section 42 above and Schedule 6 below the building shall be deemed to be completed on that day.
(3) For the purposes of subsection (2) above the relevant day in relation to a completion notice is—

(a) where an appeal against the notice is brought under paragraph 4 of Schedule 4A below, the day stated in the notice, and

(b) where no appeal against the notice is brought under that paragraph, the day determined under that Schedule as the completion day in relation to the building to which the notice relates.

(4) Where—

(a) a day is determined under Schedule 4A below as the completion day in relation to a new building, and

(b) the building is not occupied on that day,

it shall be deemed for the purposes of section 45 above to become unoccupied on that day.
(5) Where —

(a) a day is determined under Schedule 4A below as the completion day in relation to a new building, and

(b) the building is one produced by the structural alteration of an existing building,

the hereditament which comprised the existing building shall be deemed for the purposes of section 45 above to have ceased to exist, and to have been omitted from the list, on that day.
(6) In this section —

(a) "building" includes part of a building, and

(b) references to a new building include references to a building produced by the structural alteration of an existing building where the existing building is comprised in a hereditament which, by virtue of the alteration, becomes, or becomes part of, a different hereditament or different hereditaments."").

On Question, amendments agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 138:
Page 190, line 27, leave out paragraph 20.
The noble Earl said: My Lords, in moving this amendment, I shall, with the leave of the House, speak also to Amendments Nos. 138A, 138B, 140, 142 and 143. This group of amendments are minor drafting amendments. I beg to move.
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 138A:
Page 191, line 26, at end insert —
("(3A) In subsection (7)(b) the words "at a prescribed rate" shall be omitted.").
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 139 and 140:
Page 192, line 37, at end insert —
(". The following Schedule shall be inserted after Schedule 4 —
"SCHEDULE 4A
NON-DOMESTIC RATING: NEW BUILDINGS (COMPLETION DAYS)
Completion Notices
1. —(1) If it comes to the notice of a charging authority that the work remaining to be done on a new building in its area is

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such that the building can reasonably be expected to be completed within 3 months, the authority shall serve a notice under this paragraph on the owner of the building as soon as is reasonably practicable unless the valuation officer otherwise directs in writing.
(2) If it comes to the notice of a charging authority that a new building in its area has been completed, the authority may serve a notice under this paragraph on the owner of the building unless the valuation officer otherwise directs in writing.
(3) A charging authority may withdraw a notice under this paragraph by serving on the owner of the building to which the notice relates a subsequent notice under this paragraph.
(4) Where an appeal under paragraph 4 below has been brought against a notice under this paragraph, the power conferred by subparagraph (3) above shall only be exercisable with the consent in writing of the owner of the bulding to which the notice relates.
(5) The power conferred by subparagraph (3) above shall cease to be exercisable in relation to a notice under this paragraph once a day has been determined under this Schedule as the completion day in relation to the building to which the notice relates.
(6) In this Schedule "completion notice" means a notice under this paragraph.
2. —(1) A completion notice shall specify the building to which it relates and state the day which the authority proposes as the completion day in relation to the building.
(2) Where at the time a completion notice is served it appears to the authority that the building to which the notice relates is not completed, the authority shall propose as the completion day such day, not later than 3 months from and including the day on which the notice is served, as the authority considers is a day by which the building can reasonably be expected to be completed.
(3) Where at the time a completion notice is served it appears to the authority that the building to which the notice relates is completed, the authority shall propose as the completion day the day on which the notice is served.
Determination of completion day
3. —(1) If the person on whom a completion notice is served agrees in writing with the authority by whom the notice is served that a day specified by the agreement shall be the completion day in relation to the building, that day shall be the completion day in relation to it.
(2) Where such an agreement as is mentioned in subparagraph (1) above is made, the completion notice relating to the building shall be deemed to have been withdrawn.
4. —(1) A person on whom a completion notice is served may appeal to a valuation and community charge tribunal against the notice on the gound that the building to which the notice relates has not been or, as the case may be, cannot reasonably be expected to be completed by the day stated in the notice.
(2) Where a person appeals against a completion notice and the appeal is not withdrawn or dismissed, the completion day shall be such day as the tribunal shall determine.
5. Where a completion notice is not withdrawn and no appeal under paragraph 4 above is brought against the notice or any appeal under that paragraph is dismissed or withdrawn, the day stated in the notice shall be the completion day in relation to the building.
Position pending appeal
6. —(1) Where an appeal under paragraph 4 above is brought against a completion notice, then in relation to any day on which the appeal is pending section 45 above shall apply by virtue of section 46A(4) above as if the day stated in the notice had been determined under this Schedule as the completion day in relation to the building to which the notice relates.
(2) The Secretary of State may make regulations providing for the making of financial adjustments where subparagraph (1) applies but the day stated in the completion notice is not actually determined as the completion day in relation to the building to which the notice relates.
(3) Regulations under subparagraph (2) above may include—

(a) provision requiring payments to be made,

(b) provision requiring payments to be made together with payments of interest, and

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(c)provision as to the recovery(by deduction or otherwise)of sums due.

(4) For the purpose of deciding, for the purposes of this paragraph, whether an appeal is pending on a particular day, the state of affairs existing immediately before the day ends shall be treated as having existed throughout the day.
Duty to inform valuation officer
7. —(1) A charging authority shall supply to the valuation officer a copy of any completion notice served by it.
(2) If a charging authority withdraws a completion notice, it shall inform the valuation officer of that fact.
(3) A charging authority shall supply the valuation officer with details of any agreement to which it is a party and by virtue of which a completion day is determined under this Schedule in relation to a building.
Supplementary
8. Without prejudice to any other mode of service, a completion notice may be served on a person —

(a) by sending it in a prepaid registered letter, or by the recorded delivery service, addressed to that person at his usual or last known place of abode or, in a case where an address for service has been given by that person, at that address;

(b) in the case of an incorporated company or body, by delivering it to the secretary or clerk of the company or body at their registered or principal office or sending it in a prepaid registered letter or by the recorded delivery service addressed to the secretary or clerk of the company or body at that office; or

(c) where the name or address of that person cannot be ascertained after reasonable inquiry, by addressing it to him by the description of "owner" of the building (describing it) to which the notice relates and by affixing it to some conspicuous part of the building.

9. —(1) This paragraph applies in the case of a building to which work remains to be done which is customarily done to a building of the type in question after the building has been substantially completed.
(2) It shall be assumed for the purposes of this Schedule that the building has been or can reasonably be expected to be completed at the end of such period beginning with the date of its completion apart from the work as is reasonably required for carrying out the work.
10. —(1) Section 46A(6) applies for the purposes of this Schedule.
(2) In this Schedule —
"completion notice" has the meaning given by paragraph 1(6) above;
"owner", in relation to a building, means the person entitled to possession of the building;
references to the valuation officer, in relation to a charging authority, are references to the valuation officer for the authority." ")
Page 192, line 38, at end insert —
("(1A) In paragraph 7 (agricultural buildings) in each of subparagraphs (1)(b) and (3), for "(together with the body".").
there shall be substituted "or are together with the body".").
The noble Earl said: My Lords, these amendments have already been spoken to and therefore I beg to move.
On Question, amendments agreed to.
Lord Colnbrook Lord Colnbrook moved Amendment No. 140A: Page 192, line 38, at end insert—
("(1A) In paragraph 5(1)(a) after "livestock" insert "or the breeding or rearing of horses and ponies").
The noble Lord said: My Lords, in moving this amendment, I should like with the leave of the House to speak also to Amendment No. 141A. I do not think that I need detain your Lordships very long in discussing this amendment because we had considerable discussions about the rating of stud

1409
farms in Committee and on Report when dealing with the Local Government and Finance Bill 1988. However, I shall explain why I am returning now to the point.
Perhaps I may remind the House briefly how the matter arose. For over half a century it was accepted by successive governments and by no fewer than 13 Parliaments that the law classed the breeding and rearing of horses and ponies as an agricultural activity which was therefore exempted from paying rates. It was not until the 1980s that an attempt was made to test this interpretation of the law in the courts. It was only in December 1987 that it was decided by this House that the law was not in fact as everyone had believed it to be for so long and that stud farms had to pay rates.
Amendments to the Local Government and Finance Bill in precisely the same terms as in Amendment No. 140A were moved in Committee by the noble Lord, Lord Mason of Barnsley, and on Report by me. They attracted support from a considerable number of your Lordships. The Government, while professing themselves unable to accept the amendment, acknowledged that there was a case. They indicated that they had in mind to exempt at least the small breeder of horses and ponies and said that they would consult with the representatives of the horse and pony breeding industry as to how this could best be achieved.
These consultations have been continuing now for 16 months, but the Government have still not reached any conclusion. Paragraph 31(9)(2A) in Schedule 5 to the present Bill states that the Government will do something by Order in Council, but they do not as yet know what that will be. The simplest and best action for them to take is for them to accept Amendment No. 140A. That would not only restore the position to that which they, their predecessors, the breeders of horses and ponies and everyone else, were content with for over 50 years, but it would also have two other advantages.
First, it would keep this country more in line with other European Community countries. With the Government so keen on progressive harmonisation in the period up to and beyond 1992, this must be a step which they would welcome.
Secondly, the government are encouraging farmers to develop alternative uses of their land. An increasingly popular activity in the country is the riding of horses and ponies. Indeed, the Government actually give grants from public funds to encourage pony trekking. It seems hardly consistent, to say the least, that they should give public money to encourage the use of horses and ponies and at the same time impose large rate bills on those who breed the animals.
However, if the Government will not accept Amendment No. 140A, I hope that they will accept Amendment No. 141A. It will be seen that this amendment simply writes into the Bill the precise size of establishment which will be exempt, rather than leaving it to the Minister to produce an unamendable Order in Council at a later stage. In my view, this is a much better way of legislating.
I do not think that the Minister will seriously quarrel with the figure that I have put in the amendment —that is, a floor area of 500 square metres. In the consultations to which I have referred, I think it has been made clear to the Minister's officials that all those who actually breed and rear horses and ponies regard this as the minimum they need if they have two brood mares and their followers. I am encouraged in this belief by what his honourable friend Mr. Michael Howard, the then Minister for Local Government, has said in letters, especially one dated 25th July last year addressed to Sir Charles Morrison the Member for Parliament for Devizes. In the letter he agrees that what the Government seek to do is to exempt from payment of rates buildings used for the keeping and breeding of horses up to a maximum consistent with the keeping of two horses. I assume —and I should be grateful if my noble friend would confirm—that he means two mares because you do not breed from a gelding.
Mr. Michael Howard then went on to say in the letter that the Government's intention is to reassure the great majority of breeders that they will not have to pay rates. That is a valuable assumption. Again, I hope that my noble friend will repeat that that is still the Government's intention. Of course, the matter will be placed beyond doubt if the Government accept Amendment No. 140A or, as a fallback position, Amendment No. 141 A. I hope that they will do so. I beg to move.
The Earl of Caithness: My Lords, there are many of us in the Chamber today who will remember the extensive discussions we had both in Committee and on Report while discussing the Local Government Finance Act 1988 regarding a similar amendment to that moved by my noble friend this afternoon. At the conclusion of those debates I conceded that where farmers kept one or two horses for their own enjoyment or for breeding on a small sicale, largely as a hobby, rating could be an unwelcome additional burden as well as presenting some practical valuation problems.
At this point I should stress the word "hobby". It is exactly the same word that I used during earlier discussions. This is where my noble friend and I start to have different points of view. He was clearly not talking about the hobby breeder, whereas the Government have said all along during the discussions on the 1988 Act, and again now, that we are talking about the small scale hobby breeder.
Having made those comments, we recognised that there may be better ways of approaching the definition of the de minimis exemption We proposed. We undertook to examine the problem in conjunction with representatives of the horse breeding industry and to bring forward legislation at a later date. On that basis both sides agreed to withdraw their amendments.
Discussions have taken place and this Bill provides for the deduction of a standard amount from the rateable value of buildings associated with the breeding and rearing of horses and ponies where that activity is carried out in conjunction with an agricultural operation on agricultural land. Your

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Lordships will find that in Schedule 5(31)(9). Those proposals go considerably further than extending the exemption to the farmer who breeds horses as a hobby. They also extend to the horse breeder who farms. We have deliberately left the amount of the reduction to be set by order so that we can set it at a level consistent with values being determined for stud buildings in the present revaluation of non-domestic property and so that it can be updated in line with future revaluations. There have been several discussions with the breeders about the proposed amount and we shall consult them further before choosing a final figure. We asked the Valuation Office to carry out a survey of the likely rateable values of stud buildings in the new rating list in order to inform the decision, and that information has been passed to the breeders. We shall have the opportunity to consider our proposals further, if we wish, when the statutory instrument containing our proposed figure is laid. That seems to me to be a wholly reasonable position.
I have listened carefully to what my noble friend has said about the historic position of stud farms and I have not heard anything that has not previously been said in this House. Stud farms have not been derated as a matter of law as my noble friend implied yet again. If they were not assessed or were taken out of assessment, that practice grew up on a misunderstanding of decisions in the 1930s which were either not binding in law or were given in a context other than a rating one. The ruling of your Lordships' House in the Whitsbury Farm and Stud Ltd. appeal case showed that the breeding of horses and ponies is not an agricultural activity for the purposes of the General Rate Act 1967. That is the starting point of our consideration. There is nothing to be gained from rehearsing arguments about past practice.
The commercial breeding of horses and ponies is a business like any other. Some horse breeding businesses may be extremely lucrative, others may not be so. That situation is no different from any other class of business. Whether horse breeding is carried out commercially on a large scale or on a small scale in the hopes of producing a Derby winner or successful eventer, like any other business it benefits from local authority services and like any other business, from the department store to the corner newsagent and the industrial conglomerate to the village blacksmith, it should pay its fair share of rates.
Any new exemption means a greater burden on other ratepayers and community charge payers. I can see no reason why they should be asked to subsidise the horse breeding industry. It cannot be justifiable totally to exempt the horse breeding industry from rates when large numbers of small corner shops will face considerable increases in rate bills purely as a result of the revaluation of non-domestic property. I cannot believe that your Lordships would wish to produce such an injustice.
I can however appreciate some of the concerns that my noble friend has expressed and which give rise to Amendment No. 141A. The definition of agriculture varies throughout legislation for the different purposes of income tax, land use planning,
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rating and agricultural grants. Stud farms fall within the definition in some cases because the operation is similar to and subject to the particular problems of farming. In other cases they are excluded, because of their intensive use of buildings or because the business is not concerned primarily with the production of food for human consumption. I can assure my noble friend that the definition of agriculture contained in our proposed provision has been drafted in such a way that it applies only to that provision. It has no implications for the manner in which stud farms will be treated under other provisions in the Local Government Finance Act or any other legislation.
My noble friend has proposed that the amount of reduction in rateable value should be based on an area of 500 square metres. That could work out at a figure of £7,000 or more in the major breeding centres. Viewed against the background of our original commitment to provide a de minimis exemption, that is a considerable sum. It means that many perfectly viable commercial breeding establishments will not make any contribution towards the cost of local government services from which they benefit along with may other small businesses. The basis on which the reduction is determined is more complex than the deduction of a standard amount of rateable value and also adds an unwelcome additional burden on the valuation office by requiring it to measure all stud buildings. That would be a particularly onerous task in the largest establishments, which will benefit only marginally from the reduction. Our proposal has all the merits of a fair system and is one that can be easily understood by breeders.
Let me repeat an assurance given by the then Minister for Local Government in a letter dated 25th July 1988 to my honourable friend the Member for Devizes, Sir Charles Morrison, to which I know the breeding industry attaches importance. We recognise that there is concern among the very large numbers of breeders who keep only one or two horses and who breed on a small scale. We have proposed that buildings used in conjunction with agricultural land for breeding and rearing horses and ponies should be exempt provided they do not have a rateable value larger than a figure (to be set by order) consistent with the keeping of two horses. The Government need to consider what figure would be justified and we hope to announce shortly what that will be.
5.15 p.m.
Lord Colnbrook: My Lords, will my noble friend allow me to interrupt him? When he says two horses, he means two mares, does he not?
The Earl of Caithness: My Lords, there could be one mare and one gelding.
Lord Colnbrook: My Lords, in that case it sounds very much—I hope that I am wrong—as though my noble friend is taking something back. Is he saying that the only exemption is for someone who keeps just one mare? That is a very small breeder. It is not what I understood, although I may have

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misunderstood the matter. Is he saying that the exemption would be only for the accommodation required for one mare and its followers? That is much less than I expected. I believe that others felt the same. I hope that he will be able to say that a small breeder is someone who has one or two mares. That is not much.
The Earl of Caithness: My Lords, that is what I said about a minute ago. I said that we recognised that there is concern among a large number of breeders who keep one or two horses only and breed on a small scale. My noble friend then asked me whether that would be two mares. I said that it could be a mare and a gelding. That is still one or two horses. We are talking about a small point. I do not believe that my noble friend has anything to fear. I hope that what I have said will reassure the great majority of breeders that they will not have to pay rates.
Lord Colnbrook: My Lords, there is still a little confusion. I accept that the Government will still not accept Amendment No. 140A, which would restore the position to what everyone believed it to be. I am glad that they are still prepared to have further discussions about the exemption with those engaged in the breeding of horses and ponies. I want to make it clear that a great deal hinges on the definition of a small breeder. I know that it is difficult to define.
If the Government were to say that the definition is limited to someone who has one mare only, that is the smallest exemption they can give. I do not believe that that is what they want to do. Accommodation for two horses could be for two mares—it does not have to be all the time, but it could be—and their followers. That is a small breeder. Those who breed horses and ponies—I do not myself—believe that that is normal for someone who breeds horses or ponies for his own amusement and pleasure. I hope that I am right in my belief that that is what the Government mean. On the assumption that it is, I seek leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Caithness The Earl of Caithness moved Amendment No. 141:
Page 193, line 42, at end insert —
("(4A) In paragraph 2, in subparagraph (6) for the words from "day the alteration" to the end there shall be substituted "material day."
(4B) In paragraph 2, the following subparagraph shall be inserted after subparagraph (6)—
"(6A) For the purposes of subparagraph (6) above —

(a) where the determination is occasioned by a proposal for an alteration disputing the accuracy of a previous alteration to the list, the material day is the day by reference to which the matters mentioned in subparagraph (7) below fell to be assessed when determining the rateable value with a view to making the disputed alteration;

(b) where the determination is occasioned by any proposal for an alternation other than one disputing the accuracy of a previous alteration to the list, the material day is the day the proposal is made;

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(c) where the determination is occasioned otherwise than by a proposal for an alteration, the material day is the day the alteration is entered in the list." ").

On Question, amendment agreed to.
[Amendment No. 141A not moved.]
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 142 and 143:
Page 195, line 24, leave out ("and 2A" ") and insert ("to 2B" ").
Page 195, line 26, leave out ("and 2A" ") and insert ("to 2B" ").
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 144:
Page 195, line 38, at end insert—
("(1A) In paragraph 7(1) for the words from "Regulations" to "that" there shall be substituted "In relation to a relevant financial year the Secretary of State may make regulations providing that".
(1B) In paragraph 8(3) for "section 57" there shall be substituted "paragraph 7".").
The noble Earl said: It may be for the convenience of the House if I speak also to Amendments Nos. 145, 146, 147, 148, 156, 157, 158, 159 and 218. These are clarifying and technical amendments. I can of course go into details if your Lordships wish. I beg to move.
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 145:
Page 197, line 29, leave out from beginning to ("year") in line 30 and insert—
("(1) Subparagraph (1A) below applies in a case where the notional chargeable amount for a hereditament for each day in a relevant year exceeds the base liability for the hereditament for each day in the year.
(1A) The appropriate fraction for the hereditament for each day in the").
On Question, amendment agreed to.
Lord Ross of Newport Lord Ross of Newport moved Amendment No. 145A:
Page 198, leave out lines 3 to 14.
The noble Lord said: My Lords, in Amendments Nos. 145A and 147A, as well as the following amendment, Amendment No. 147B, we deal with the introduction of the non-domestic rate. Noble Lords may recall, although I do not suppose any noble Lords present will do so, that: when the Government made the Statement on the phasing which was to take place over the introduction of the non-domestic rate they decided to phase it in over five years. As the Minister himself has just said, some shopkeepers and factories in the south of England will face some quite traumatic increases. The fact is, however, that certain parts of the country will obtain reductions, particularly the Midlands and the North-West.
The amendments came from the Merseyside Chamber of Commerce which would obviously welcome the reductions as a chance to restore the industrial base which has been hit so hard in those parts of the country. Members of the chamber of commerce are incensed at the fact that their

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reductions will be the second phase; they will not receive the benefit immediately the new lists come into effect next year.
The effect of Amendment No. 145A—I hope this will be the effect because Schedule 5 is very complicated—is to delete paragraphs (6) and (7) on page 198. We presume that these concern the powers of the Secretary of State to determine the rate of phasing for those whose rate bills should be reduced. That is where the NCA is less than the BL, the BL being the base liability and the NCA being the notional chargeable amount. I prefer the following amendment on the issue which covers much the same point. I therefore give notice that I do not intend to press Amendment No. 145A but I shall raise the matter again on Amendment No. 147B.
Amendment No. 147A is linked with this amendment but it is rather more important. Without it, the charge for the properties which would have phased reductions or increases in rate liability in 1990 will be based on a property which has been reduced in size and value prior to 1990. There are cases where properties are being demolished at this time or reconstituted or reduced in size. Valuation officers are only human, they cannot possibly be expected to serve proposals to reduce assessments in all such cases before 31st March 1990, even as they know about them.
This is an attempt to cover those properties where demolition has either been completed or where they are undergoing complete reconstruction. I think that is worthy of note by the Government who ought to try to do something about it. I beg to move.
The Deputy Speaker (Lord Alport): My Lords, I have to advise your Lordships that if this amendment is agreed to I shall not be able to call Amendment No. 147.
The Earl of Caithness: My Lords, the first amendment, No. 145A, would remove the provisions which enable the Secretary of State to set the limits on annual reductions in rate bills by order. As your Lordships will know, we have just considered the Government's own minor amendments to these provisions, including amendments to clarify the purpose of this order-making power.
It is important to all businesses expecting rate reductions that the Secretary of State should retain maximum flexibility to set the annual limit as high as possible in the light of the best information available, consistent with the requirement that the transitional scheme should be self-financing. I have assumed that the purpose of this amendment is to secure that the percentage limits placed on the reductions in rate bills are the same as those on increases in bills.
The Secretary of State intends to set the limits as high as possible. He has indicated in another place that on the basis of the latest information these will be around 15 per cent. for small premises and around 10 per cent. for large premises. But the final percentages can only be set when the cost of protection against increases is known.
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The reason why the percentage limits on gains will be lower than those on increases is simply that gainers have on average larger rate bills than losers. The figures chosen must ensure that the non-domestic rate pool balances each year. It is for that reason that I cannot accept the amendment of the noble Lord, Lord Ross, in which he argues for effectively arbitrary limits which would prevent a transitional scheme operating, as I have just outlined.
The noble Lord may feel that the taxpayers should make good any shortfall. This is a point which I shall address when we come to Amendment No. 147B, when it arises in a somewhat starker form.
The second amendment, Amendment No. 147A, alters the provisions for determining the rateable value used for the purposes of calculating the baseline rate bill on which businesses' entitlement to transitional relief is assessed. Under paragraph 6 of Schedule 7A, the baseline bill is to be calculated by reference to the rateable value on 15th February 1989 or the date on which the property first entered the valuation list, whichever is later. The only exceptions to this rule are where the rateable value changes as a result of a proposal by a valuation officer to alter the list, regardless of when the proposal is made; or where it changes as a result of a proposal made by someone else, provided that the proposal was received by the valuation officer before 15th February.
The reason for this restriction on proposals by other people was to prevent ratepayers from mounting spurious appeals to try to better their position under the existing rating system purely in order to benefit from transition. The Government were in fact aware that some firms of private surveyors were encouraging businesses to mount such appeals on a "no win, no fee" basis. If this possibility had not been blocked, the valuation courts and the valuation office might have been overwhelmed with the volume of appeals which would have been generated, putting the timetable for the revaluation at risk and delaying appeals against the 1990 list. Many of these appeals would have been against values which had been challenged unsuccessfuly before, or which had stood unchallenged for 16 years. However, it was not intended to block ratepayers' rights to make proposals generally. They can still make proposals for change if they wish, but the changes will only have effect for determining their liability for rates for 1989–90, not for transitional purposes.
The effect of the amendment would be to allow a revised rateable value to be used in calculating the baseline bill in cases where an owner or occupier of a hereditament makes a proposal following physical changes to the property before 31st March 1990. However, there is nothing in the amendment to indicate the kind of physical changes which would trigger the right to propose a change of value.
Even the most minor change would seemingly qualify. This amendment, if carried, would therefore open up the very floodgates regarding appeals which the Government have been so anxious to keep tightly shut, for the reasons that I have already stated.

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Of course, I realise that ratepayers whose property has changed significantly would have cause to feel aggrieved if they were unable to secure a change in its rateable value and were held to an unrealistic baseline level. But it is open to them to ask the valuation officer to make a proposal to alter the value in such cases. Valuation officers have a duty to maintain the rating list and would be expected to make such a proposal if they thought that the change warranted it. In addition, we would intend to use the proposed regulation-making power under paragraph 11 of Schedule 7A to ensure that where valuation officers are unable to take account of changes which occur close to the 31st March 1990 qualifying date for transition then they will be able to certify what the value would have been, had they been able to make proposals in time. This certification will be subject to appeal to a valuation and community charge tribunal.
In conclusion, the Government feel that the amendment is largely unnecessary because the matters it seeks to address can better be dealt with in other ways.
Lord Ross of Newport: My Lords, I am grateful to the Minister for the second part of his reply. He may have set a few minds at rest. There are some people who suspect that they could be losers in a situation where they make structural alterations to property which might reduce the rateable value. The Minister has covered that position very fully and therefore I shall not move Amendment No. 147A and beg leave to withdraw Amendment No. 145A.
Amendment, by leave, withdrawn.
The Earl of Caithness: moved Amendments Nos. 146 and 147:
Page 198, line 3, leave out subparagraph (6) and insert —
("(6) Sub-paragraph (6A) below applies in a case where the notional chargeable amount for a hereditament for each day in a relevant year does not exceed the base liability for the hereditament for each day in the year.
(6A) The appropriate fraction for the hereditament for each day in the year shall be such as is —

(a) specified for the case by order made by the Secretary of State, or

(b) found in accordance with rules prescribed for the case by order so made.").

Page 198, line 9, leave out ("deciding whether to make, and in making,") and insert ("making").
On Question, amendments agreed to.
[Amendment No. 147A not moved.]
5.30 p.m.
Lord Ross of Newport Lord Ross of Newport moved Amendment No. 147B:
Page 200, leave out lines 1 to 37.
The noble Lord said: My Lords, this amendment comes back to the issue which we dealt with very briefly on Amendment No. 145A. It is the question of those who will gain, and there will be some, from the revaluation. The Government have not been explicit about their treatment to date. In outline we understand that the Government's plan is to hold
1418
back the gains to occupiers of property who find that their rate bills will go down. Some of this money will then be used to fund the limitation on losses for those whose bills will go up.
The Government cannot specify the abatement of gains until details of the rating revaluation are known later this year. As I said earlier, the type of property likely to have gains slowed down is industrial property in the North and in the Midlands. Those are just the areas where we should encourage further employment and industrial growth. Those areas will be paying for the relief to city centre shops, new warehouses and light industry in other parts of the country, particularly in the South-East.
The Government should be warned that there are many pitfalls, injustices and anomalies with the nationally nominated non-domestic rate, as there are with the poll tax. The slowing down of gains to pay for losers could be the first issue to cause an uproar when ratepayers wake up to it. They will do so when the lists are published at Christmas and they start to understand just what has hit them.
It was a colleague of the noble Earl who said at Blackpool that the gainers should not subsidise the losers. I believe that he expected me to throw that at him and I am doing so right now. Those who will have the benefit of this measure have waited long enough for it. The constant postponement of revaluations going back to 1972 has meant that in some parts of this country industrialists and others have had to pay rates based on a higher assessment than should be the case. When there is a benefit due to them, they should be entitled to receive it in full and not have it phased in slowly to lessen the impact of increases elsewhere. I beg to move.
Lord Sefton of Garston: My Lords, I feel I am an unsuitable person to speak to this amendment because I believe that it is the first time in my life that I have ever supported a chamber of commerce in its desire to improve things for its members. In this regard I speak not only on behalf of the Merseyside Chamber of Commerce and Industry but also the national association of chambers of commerce.
The Government have lectured to us today about fairness, equity and the common sense of introducing correct methods of expenditure into our national life. I have been told over the past eight to nine years how much money has been granted to Liverpool by this Government in order to improve the commercial standing of Merseyside and how all that money would help Merseyside to provide more jobs and contribute to the welfare of the nation. I accept that perhaps that was the intention, but it has not been very successful. I regret that the money has not achieved those objectives. One of the reasons why it has not assisted in any way in improving the situation of Liverpool is the fact that the Government give with one hand and take away with another.
It is a longstanding complaint of mine that one way in which the Government take away from the North and give to the South is through the subsidies that they give to the South as regards London weighting and through the overloading of the economy of the South with government activities.

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The net effect of those activities is to worsen the situation in the South-East with regard to congestion, while leaving the northern regions devoid of any investment at all.
Millions were spent on the Albert Dock. One would have expected the Government to go beyond that and help Merseyside further along the line towards regeneration. However, all they did was to enable the Merseyside development corporation to provide a lot of open vacant space inside many buildings that were tarted up from the outside. Unfortunately not many jobs came out of the exercise.
One of the difficulties that commerce has battled against in Liverpool is the fact that rateable values have been exaggerated in a way that never should have happened. When the Government stopped the revaluation in 1982, we had to search for a reason for that as we were not given a proper explanation. However, it is evident when one considers the matter that the revaluation was stopped because most of the commercial businesses in the South-East would have been hit very badly indeed, while the commercial businesses in the North would have been helped.
Now the Government are going further. They are not attempting to redress the balance in any way but rather to worsen the situation in that areas like Merseyside and Newcastle are now to be made to pay benefits to the South. Under this part of the Bill or rather under the powers that the Minister takes in this part, the Government will prevent the South-East and the wealthier parts of the country from losing out and restrict the gains that would have occurred in places like Merseyside and Newcastle. What is worse still, the Government do not in this case, as they do with the poll tax in order to pacify the mouthy Conservatives at their conference, decide that they will pay for the relief in the South or in the wealthier parts. Oh no, that will not happen, but the Government will take the money from the poorer parts of the country and use it to pay for the relief to the wealthier parts.
I shall give the House an example of what will happen to two different companies in Merseyside. One is a large manufacturing company with a current rateable value of £400,000 and the other is a medium-sized company with a current rateable value of £46,000. The new rate payable without phasing in the case of the large company would be £245,000. With the phasing that is now proposed by the Government, it would be £1,350,000. So at one fell swoop they will take from that large company in Liverpool over £1 million, which it should gain if correct rateable values were levied all over the country. The Government will not put that money in the Exchequer. They will use that million pounds to pay for people, mainly in the South-East, who will be classified as the losers. That is what will happen to that large company. I have no doubt that that large company also has interests in the South-East and in other wealthy parts of the country, so to some extent it will be taking the money out of one pocket and putting into another. But the Government have spent a long time putting money into places like
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Liverpool in order to allow smaller companies to grow.
The medium sized company which is probably based and, has interests only in Merseyside will pay under the new rate without the phasing £38,500 a year. With phasing the rate would be £160,000. If that kind of difficulty were visited upon everyone, I should not object. But that company in Liverpool will pay about £120,000 a year in order to assist people in more affluent areas. That estimate of the effect of the introduction of the unified business rate was made by the Merseyside Chamber of Commerce, which is perhaps a little biased.
I have a commentary by Michael Postlethwaite, Partner, Matthews and Goodman of Liverpool, a firm which has business all over the country and would not wish to be biased. It would like to get the figures right. It says in 1989–90 the rate for a modern office in Liverpool or Newcastle would be £4.14 per square foot. Without phasing in 1990–91 it would be £2.14; with phasing it would be £3.91. That estimate cannot be said to be biased or to have been formulated by myself or by the Merseyside Chamber of Commerce. It is a rational explanation of what will happen.
If they know what is to happen, I cannot understand why noble Lords on the other side of this Chamber can go even half way to accepting it. They have lectured us about the need to assist small companies and to give them a fair break. The noble Lord, Lord Hesketh, boasted today about the £2.4 billion that is to be given in relief to ordinary people in respect of the poll tax. I have no objection to that. However, I should like to see sufficient employment in places like Merseyside for the poll tax not to bear so heavily upon people. We could have such a situation if the government were really intent on helping small businesses to grow in Merseyside, but it is evident that they are not.
It is evident that the pressures that have been brought to bear on the Government in the South are such that they have closed their eyes to the retrogressive effect of the measures. It is no use lecturing Merseyside, Newcastle, the North-East or the rest of the country about how they should pull themselves up by the bootstraps if the Government pursue a policy which takes the boots away from them, let alone the bootstraps. That is what is happening.
I should like to make one more point about the question of the assistance that the Government have given to the North-West. Perhaps I may take as an example the place that I know best, Merseyside. Two years ago I asked the Government, in this House, whether they had considered the auditor's report on the Merseyside Dockland Development Corporation. That report said that because of the economic pressures and built-in growth element in the South-East the London Dockland Development Corporation was a success but because there was no inbuilt growth in Merseyside it was doubtful whether the Merseyside Development Corporation should go ahead. That was two years ago. The Government are still considering that auditor's report. Just before the House rose for the Summer Recess I asked the same question. There was no reply.

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It is quite evident that the Government could not care less about people north of Watford. When the impact of the Channel Tunnel is taken into account, and considering all the money that has been ploughed into transport infrastructure in the South-East and the impact of this particular tax on small companies in Liverpool, this can be seen to be one of the most unjust actions that the Government have ever taken. Worse still, it will be uneconomic and it will be bad government.
I thought that we should have opposed the clause in the Bill which gave the Minister power to introduce the scheme. I was advised that this was the best place to oppose the measure. In effect, we are appealing to the Government to follow the same principles that they say they are following in respect of the poll tax. If there is to be relief for a hard-done-by area then that relief should be provided out of the pool of government funds. The money should not be taken from the poorer elements of the economic community in order to benefit those who are much better off, mainly because of the inbuilt growth in London and the South-East. That is our plea.
Before I sit down I should like to ask the Minister to tell the House honestly whether or not he sees the justice of what I have said, regardless of the briefs which he receives from the department. If the losers under the unified business rate are to be assisted, is it right that that assistance should come from the gainers? Is that morally justified? Is it economically justified?
5.45 p.m.
Lord McIntosh of Haringey: My Lords, in responding to the previous amendment moved by the noble Lord, Lord Ross of Newport, the Minister described Amendment No. 147B as putting the issue in starker terms. It does indeed, as noble Lords who have already spoken to it have made clear. My noble friend Lord Sefton asked what the principle could be in treating the national non-domestic rate differently from the poll tax when, as we all know, £685 million from the Exchequer is to be given in the form of the new transitional relief—plus probably about £200 million in transitional relief in the first year to London boroughs in respect of ILEA. Altogether, nearly £900 million is to be given from the Exchequer in relief for individual poll tax payers in more wealthy areas.
It is no good asking for principle. In asking for principle my noble friend Lord Sefton is speaking into a void. The question that we have to ask ourselves is: cui bono? Who benefits? The concession of nearly £1,000 million of public money is made to protect Conservative voters. Will something now be done to protect industry and commerce in the north, north-east and north-west of our country where the need for industry and for employment and jobs is most desperate?
The Earl of Caithness: My Lords, the effect of the amendment is to remove from the basic transition scheme for the new non-domestic rating system the provisions which govern the limit on gains for those
1422
who stand to benefit from the changes. The intention is to enable gainers to have their gains immediately.
While I have sympathy with the motive which lies behind the amendment it is difficult for me to recommend it to the House. It is necessary to keep in mind that rate bills will change under the new system for two reasons: the introduction of the uniform business rate poundage and the first non-domestic revaluation for 16 years. In some cases, those factors will reinforce each other to the disadvantage of the ratepayer; in others, they will both work to the ratepayer's benefit. And in yet other cases the two changes will run in opposite directions and will cancel each other out to a lesser or greater extent.
Because of that combination of circumstances,the particular position of any individual ratepayer is, to some extent, fortuitous. We think it right that the more fortunate should help pay for those who are less fortunate. The arrangements we have put forward in the Bill do just that. If the amendment before us is accepted, however, the cost of helping the losers would have to come from elsewhere.
There is, of course, more than one way in which the cost of paying for losers might be met. One option would be to ask the taxpayer to foot the bill. But the cost of allowing gainers to have their gains immediately would be some £1.1 billion in the first year, and a further £2 billion in the next four years. I see no reason why the contribution from businesses should be reduced by such an amount. In addition, most taxpayers will already be paying a contribution to the cost of local authority spending through their community charge. I am sure that noble Lords are not suggesting that they should also pay part of the business contribution on top of that.
The other option would be to put a premium on the non-domestic rate poundage using our powers under paragraph 7 of Schedule 7 to the 1988 Act. The Government considered that option very carefully, but our conclusion was that, in order to keep the non-domestic rate pool in balance, the poundage in the first year would have to be set at a level some 25 per cent. or more above the level at which it might otherwise have been set. That would have diminished the gains of the main beneficiaries of the new system, would have turned many gainers into losers and would have exacerbated the position for losers.
In conclusion, adopting the amendment proposed would, in the Government's view, leave the transitional scheme with considerable disadvantages over the arrangements that we have proposed.
Noble Lords have suggested that, because the Government have agreed to fund the transitional relief scheme for the community charge and, from the second year, the area safety net as well, they should offer similar assistance to businesses. The Government do not accept that the two cases are comparable. Overall, business is getting a good deal from the new rating system. The yield from business rates is to be held broadly constant in real terms between 1989–90 and 1990–91, and in future years the poundage cannot go up more than the RPI. I am sure that the noble Lord, Lord Sefton of Garston,

1423
will be pleased to hear that in view of some of the increases that have been suffered in his area. We do not see why business should expect, over and above that, a substantial cut in its aggregate rates burden.
Secondly, the bulk of the shift in rates burden which will take place after April is attributable not to the uniform business rate, which is certainly a new initiative, but to revaluation which is a necessary feature of the rating system and is long overdue. I put it to the House that business should not expect a handout from the taxpayer on that account. Quite apart from that, we on this side of the Chamber know that the taxpayer's pocket is not bottomless. The Government have to decide priorities for expenditure between competing claims and in this case we felt that the easing of the impact of the introduction of the personal community charge was the right way to use available resources.
Lord Sefton of Garston: My Lords, before the Minister sits down, perhaps he will say whether he agrees with me that, since 1982 in particular and well before, the companies to which I referred have paid more than they should have done if re-rating had taken place over the whole of the country? What does he say about the money that they have lost in that regard? Does he not think that someone somewhere has a right to compensation?
The Earl of Caithness: My Lords, if my memory serves me right, both the previous Labour Government and this Government did not carry out the revaluations. That is one of the causes of the problem. It is some 16 years since there was a revaluation. That exacerbates the distortions already in the system from the previous revaluation. I agree with the noble Lord on that.
Lord Ross of Newport: My Lords, I am grateful for the support of the noble Lord, Lord Sefton of Garston, who spoke with personal knowledge of Merseyside. I apologise for the fact that my noble friend Lord Evans of Claughton cannot be here today. I know that he spoke to the noble Lord, Lord Sefton, about the amendment.
I suspect that by next April, when the valuation list comes into effect, industry and much of commerce will be knocking hard at the Government's door saying that they have to do something rather more than just phase in the new rating over five years if they are to stay in business. I suggest that much of industry in this country is already starting to face real difficulties. Certainly, the building industry in particular and much of commerce, including smaller shopkeepers, are also facing great difficulties, as we have seen. The receivers are being called in in quite a substantial number of sizeable chains of shops. We shall face a serious situation if interest rates remain as high as they are at the present time.
One of the facts that the Government will have to face is that they must bring in some industrial concessions. We should divide the House on the issue because here was a chance for the Government to do something realistic for those areas of the country which are still suffering high rates of
1424
unemployment —18 per cent. and above in some parts. It seems only equitable to me that the provisions for the poll tax payer should also come in for the commercial ratepayer.
5.54 p.m.
On Question, Whether the said amendment (No. 147B) shall be agreed to?
Their Lordships divided: Contents, 75; Not-Contents, 116.

DIVISION NO. 2

CONTENTS

Airedale, L.

Lloyd of Kilgerran, L.

Amherst, E.

Lockwood, B.

Ardwick, L.

Longford, E.

Attlee, E.

Macaulay of Bragar, L.

Birk, B.

McGregor of Durris, L.

Blease, L.

McIntosh of Haringey, L.

Bottomley, L.

Mackie of Benshie, L.

Broadbridge, L.

Molloy, L.

Campbell of Eskan, L.

Nicol, B.

Carmichael of Kelvingrove, L.

Northfield, L.

O'Neill of the Maine, L.

Cocks of Hartcliffe, L.

Oram, L.

David, B.

Parry, L.

Donoughue, L.

Prys-Davies, L.

Dormand of Easington, L.

Robson of Kiddington, B.

Ennals, L.

Rochester, L.

Ewart-Biggs, B.

Ross of Newport, L. [Teller.]

Falkland, V.

Seear, B.

Fisher of Rednal, B.

Sefton of Garston, L.

Foot, L.

Serota, B.

Gallacher, L.

Shepherd, L.

Galpern, L.

Simon, V.

Glenamara, L.

Stallard, L.

Graham of Edmonton, L. [Teller.]

Stedman, B.

Stoddart of Swindon, L.

Grey, E.

Taylor of Blackburn, L.

Grimond, L.

Taylor of Gryfe, L.

Hampton, L.

Taylor of Mansfield, L.

Hatch of Lusby, L.

Thomson of Monifieth, L.

Houghton of Sowerby, L.

Tordoff, L.

Irving of Dartford, L.

Turner of Camden, B.

Jacques, L.

Underhill, L.

Jay, L.

Walston, L.

Jeger, B.

Whaddon, L.

Jenkins of Hillhead, L.

White, B.

John-Mackie, L.

Williams of Elvel, L.

Kennet, L.

Winstanley, L.

Listowel, E.

Winterbottom, L.

Llewelyn-Davies of Hastoe, B.

NOT-CONTENTS

Ailesbury, M.

Cork and Orrery, E.

Alexander of Tunis, E.

Cornwallis, L.

Allenby of Megiddo, V.

Cottesloe, L.

Alport, L.

Craigavon, V.

Arran, E.

Craigton, L.

Ashbourne, L.

Cranbrook, E.

Belstead, L.

Davidson, V. [Teller.]

Blyth, L.

De La Warr, E.

Boardman, L.

Denham, L.

Borthwick, L.

Dormer, L.

Boyd-Carpenter, L.

Eden of Winton, L

Caithness, E.

Elibank, L.

Campbell of Croy, L.

Elliot of Harwood, B.

Carnegy of Lour, B.

Erroll of Hale, L.

Carnock, L.

Faithfull, B.

Carr of Hadley, L.

Ferrers, E.

Chelmer, L.

Fortescue, E.

Clanwilliam, E.

Fraser of Kilmorack, L.

Clitheroe, L.

Gisborough, L.

Coleraine, L.

Gray of Contin, L.

Colnbrook, L.

Greenway, L.

Constantine of Stanmore, L.

Gridley, L.

1425

Hailsham of Saint Marylebone, L.

Onslow, E.

Orkney, E.

Hardinge of Penshurst, L.

Orr-Ewing, L.

Harvington, L.

Oxfuird, V.

Havers, L.

Pender, L.

Henley, L.

Platt of Writtle, B.

Hesketh, L.

Pym, L.

Hives, L.

Rankeillour, L.

Home of the Hirsel, L.

Reay, L.

Hood, V.

Renwick, L.

Hooper, B.

Rugby, L.

Hylton-Foster, B.

St. John of Bletso, L.

Killearn, L.

Salisbury, M.

Kimball, L.

Sanderson of Bowden, L.

Kinnoull, E.

Scebohm, L.

Knollys, V.

Skelrnersdale, L.

Long, V. [Teller.]

Somers, L.

Lucas of Chilworth, L.

Stanley of Alderley, L.

Lyell, L.

Stodart of Leaston, L.

McColl of Dulwich, L.

Strathclyde, L.

Malmesbury, E.

Strathcona and Mount Royal, L.

Margadale, L.

Marley, L.

Strathmore and Kinghorne, E.

Maude of Stratford-upon-Avon, L.

Sudeley, L.

Merrivale, L.

Swinfen, L.

Mersey, V.

Teviot, L.

Milverton, L.

Thomas of Gwydir, L.

Monk Bretton, L.

Thomas of Swynnerton, L.

Morris, L.

Thurlow, L.

Mottistone, L.

Tranmire, L.

Mowbray and Stourton, L.

Trefgarne, L.

Moyne, L.

Trumpington, B.

Munster, E.

Ullswater, V.

Murton of Lindisfarne, L.

Vaux of Harrowden, L.

Nelson, E.

Vinson, L.

Norfolk, D.

Wise, L.

Norrie, L.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
6.2 p.m.
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 148 and 149:
Page 201, line 32, after ("provision") insert ("is a provision").
Page 202, line 35, leave out ("in paragraph 2 (collection and recovery) the ") and insert ("paragraph 2 (collection and recovery) shall be amended as follows.
(2) The following paragraphs shall be substituted for subparagraph (2)(g)—
"(g) that a notice must be in a prescribed form,
(ga) that a notice must contain prescribed matters,
(gb) that a notice must not contain other prescribed matters,
(gc) that where a notice is invalid because it does not comply with regulations under paragraph (g) or (ga) above, and the circumstances are such as may be prescribed, a requirement contained in the notice by virtue of regulations under paragraph (e) or (f) above shall nevertheless have effect as if the notice were valid,
(gd) that where a notice is invalid because it does not comply with regulations under paragraph (g) above, and a requirement has effect by virtue of regulations under paragraph (gc) above, the payee must take prescribed steps to issue to the ratepayer a document in the form which the notice would have taken had it complied with regulations under paragraph (g) above,
(ge) that where a notice is invalid because it does not comply with regulations under paragraph (ga) above, and a requirement has effect by virtue of regulations under paragraph (gc) above, the payee must take prescribed steps to inform the ratepayer of such of the matters prescribed under paragraph (ga) above as were not contained in the notice,".
1426
(3) In subparagraph (2)(h) the words from "and" to the end shall be omitted.
(4) The")
On Question, amendments agreed to.
Lord Ross of Newport Lord Ross of Newport moved Amendment No. 149A:
Page 203, line 18, leave out ("believes will assist him in") and insert ("requires for the purposes or).
The noble Lord said: My Lords, this concerns a problem faced by the Brewers' Society. The Minister may recall that I raised this matter when the Local Government Finance Act 1988 was passing through this House. Brewers were particularly concerned about what is now paragraph 5 of Schedule 9, which in substance reproduces Section 82 of the General Rate Act but gives the valuation officer power to serve a notice asking for such particulars as may be required. The word "required" is no longer modified by the word "reasonably".
I raised that matter previously and received an assurance from the Government that there was no intention on their part to slip through unnoticed an extension to the power of valuation officers in cases in which they are assessing public houses. That assurance was given in June last year.
However, in paragraph 39 of Schedule 5 to this present Bill there is an amendment to paragraph 5(1) of Schedule 9 which empowers a valuation officer to serve a notice on an owner or occupier of a hereditament,
"requesting him to supply to the officer information … which is specified in the notice, and … which the officer reasonably believes will assist him in carrying out functions conferred or imposed on him"
in connection with the making of valuation lists. Clearly the amendment provides valuation officers with very wide-ranging powers to request information backed by penal sanctions.
I shall not delay the House any longer than need be. However the fact is, as the Minister well knows, that quite a deal of correspondence on this issue has taken place between the brewers and the Department of the Environment. I should like to quote from a letter of 25th May addressed to a Mr. Town at the Department of the Environment in which a suggestion was put forward by the brewers that,
"If the Secretary of State exercised his regulation-making powers in such a way as to ensure that returns relating to public houses were not admissible in evidence [to valuation courts] the problems of confidentiality in connectin with disclosure before the tribunals would no longer arise".
In response to that letter a reply was sent by Miss Lorraine A. Reid on 3rd August 1989, in which she said:
"We appreciate that the circumstances under which returns should be admissible in Valuation and Community Charge Tribunal (VCCT) proceedings is a sensitive issue and have therefore decided that this matter should be specifically addressed in the forthcoming consultation paper covering the procedure once an appeal is referred to a VCCT. In reaching a conclusion on this matter we will of course be taking account of the points which you [the brewers] raise and any made in response to the consultation paper".
I move this amendment in the hope that the Minister will be able to bring us up to date on this issue and elucidate the matter further, or, if he

1427
cannot do so, at least accept the amendment. I beg to move.
The Earl of Caithness: My Lords, I am sure that noble Lords will recall as well as I do the discussions that the noble Lord, Lord Ross of Newport, and I had on 13th June 1988. I refreshed my memory by reading Hansard this morning.
In proposing these amendments the noble Lord, Lord Ross, in effect seeks to negate the intention behind paragraph 39 of Schedule 5. While I can understand the concerns raised by the noble Lord I do not feel that they need give rise to such an amendment. In our view, paragraph 39 represents no real departure from the intention behind existing provisions. It allows the valuation officer to seek information that he believes will assist him in his assessment rather than merely the information which he requires. It has been argued that the information actually required for a valuation is very limited and in any case no more than has been used in past assessments. We feel that it would be reasonable to allow the valuation to be based on the best information available.
Concern has been expressed at the possibility that the valuation officer would take this power as an invitation to go on a fishing expedition; that is to say, seeking information on topics which go much beyond his statutory responsibilities. Of course I understand the concerns of those who have raise this matter with the noble Lord, in particular the Brewers' Society.
I can assure your Lordships that not only is this not what we have in mind but also that we believe it would be impossible to use the power in that way. Like any public servant, the valuation officer is under a duty to act reasonably and in a way that supports his public role. Were he to stray outside his remit and seek non-relevant information, he would, I believe, find it difficult to use his statutory powers to obtain that.
Concern has also been expressed over the confidentiality of the information that the valuation officer may obtain through the proposed power as set out in paragraph 39 of the schedule. It is to safeguard the confidentiality of such information that the valuation officer is currently drawing up—and agreeing with the industries concerned—a code of practice that will safeguard the proper interests of the ratepayer, while at the same time allowing proper use of the evidence to be made. That will give guidance on when information is or is not to be made available to third parties, or produced at a tribunal.
Amendments Nos. 149A and 149B are negative in intent. I can assure your Lordships that the powers contained in paragraph 39 will not be used improperly to expose commercially sensitive information and ratepayers who are properly assessed have nothing to fear from it.
Lord Ross of Newport: My Lords, I am grateful to the Minister for his reply. No doubt those who are interested in the subject will study with interest what he said. It is a pity that we removed the word "reasonably" from the Bill last year. It is too late
1428
to restore that now. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 149B not moved.]
The Earl of Caithness The Earl of Caithness moved Amendment No. 150:
Page 206, line 21, at end insert —
("1A) In subsection (2) after "require" there shall be inserted "the Secretary of State or".").
The noble Earl said: My Lords, with the leave of the House I speak also to Amendments Nos. 151, 152 and 153. These are broadly technical amendments and enable the 1988 Act to work better by enabling charging authorities to comply with their duties to issue community charge and rate notices in prescribed form. I beg to move.
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 151 to 153:
Page 206, line 22, leave out ("subsection") and insert ("subsections").
Page 206, line 25, after ("require") insert ("the Secretary of State or").
Page 206, line 28, at end insert —
("(2B) Where any person other than the Secretary of State fails to supply information to a charging authority in accordance with regulations by virtue of subsection (2) or (2A) above he shall be liable to indemnify the authority against any loss or damage which the authority sustains in consequence of the failure." ").
On Question, amendments agreed to.
Lord Hesketh Lord Hesketh moved as a manuscript amendment, Amendment No. 153A:
Page 207, line 30, at end insert —
("51A. —(1) Section 84 (special provision for transitional years) shall be amended as follows.
(2) In subsection (3) the following paragraphs shall be substituted for paragraphs (b) and (c) —
"(b) may contain provision for one transitional year, or for more than one, as the Secretary of State thinks fit;
(c) may make different provision for different authorities;
(d) if it contains provision for more than one transitional year, may make different provision for the different years."
(3) In subsection (5) after "transitional year" there shall be inserted "for which the report contains provision".").
The noble Lord said: My Lords, the amendment relates to the transitional arrangements for the introduction of the community charge. It deletes the requirement in Section 84 of the Local Government Finance Act 1988 for the transitional report to make adjustments to the grant settlement for the next four years. This is a consequence of my announcement on 11th October, and after the first year the transitional safety net will be abolished. Subsection (3)(b) of Section 84 of the 1988 Act requires that a transitional period report should set out the adjustments to be made for the settlement for the next four years. The result of my announcement is that we shall not need to make any adjustment after the first year.
There is an element of doubt as to whether this will be possible under the provision as it presently stands. The amendment avoids the small element of doubt and makes it clear that there is no need for safety net adjustments after the first year.
I apologise that your Lordships did not have notice of the amendment. The need for it emerged as we began to prepare the statutory document necessary to put our proposals into effect. It contains no element of new policy and is merely intended to ensure beyond doubt that the proposals announced on 11th October can be implemented. That does not prevent me from apologising to the House for its late arrival. I beg to move.
Lord McIntosh of Haringey: My Lords, we accept the assurances of the Minister that the amendment does not contain new policies. It is not easy to verify it ourselves in the time available. On behalf of these Benches, we accept the apologies that he has offered to the House for the submission of a manuscript amendment. He is aware that it causes difficulties for us. On the other hand, since the Government have spent the whole afternoon—indeed, much of the last four days of business—introducing amendments which at the very last minute correct their earlier mistakes, I do not suppose it is all that surprising. It is the general procedure and the way in which this Bill is being put forward and amended at a late stage that is unacceptable to us, not the transgression for which the apology has been offered.
On Question, amendment agreed to.
6.15 p.m.
Lord Hesketh Lord Hesketh moved Amendment No. 154:
Page 207, line 34, at end insert —
("52A. The following shall be inserted after section 88 — "Community charge grants
Community charge grants.
88A. —(1) If regulations under section 13A above have effect as regards a chargeable financial year the Secretary of State may, with the consent of the Treasury, pay a grant to a charging authority as regards that financial year.
(2) The amount of the grant shall be such as the Secretary of State may with the consent of the Treasury determine.
(3) A grant under this section shall be paid at such time, or in instalments of such amounts and at such times, as the Secretary of State may with the consent of the Treasury determine.
(4) In making any payment of grant under this section the Secretary of State may impose such conditions as he may with the consent of the Treasury determine; and the conditions may relate to the repayment in specified circumstances of all or part of the amount paid, or otherwise.
(5) In deciding whether to pay a grant under this section, and in determining the amount of any such grant, the Secretary of State shall have regard to his estimate of the aggregate of—

(a) any amount which, in consequence of the regulations, the authority might reasonably be expected to lose, or to have lost, by way of payments in respect of community charges as they have effect for the financial year concerned, and

(b) any administrative expenses the authority might reasonably be expected to incur, or to have incurred, in giving effect to the regulations in their application to the financial year concerned." ").

[Amendments Nos. 154ZA and 154ZB as amendments to Amendment No. 154 not moved.]
On Question, Amendment No. 154 agreed to.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 154A:
Page 209, line 9, at end insert —("57A.
("57A. The following section shall be inserted after section 117—
Termination of occupier's liability to rates
"117A —(1) After Section 3 of the Landlord and Tenant Act 1985 there shall be inserted the following section—
Liability with respect to rates
(1) This Section applies to any landlord who is under express or implied obligation to pay rates on behalf of an occupier of any premises let by him as a dwelling and where the rent lawfully recoverable from the occupier includes an amount attributable to rates.
(2) Not later than 31st March 1990, a landlord to whom this section applies shall serve on the occupier a written notice in a form prescribed by the Secretary of State which shall contain the following details —

(a) the amount of the rent payable in respect of rates;

(b) the termination of the occupier's liability to make payments under subparagraph (a) above to the landlord as from 1st April 1990, it shall be an offence for any landlord to whom this Section applies to collect from any occupier any amount previously attributable to rates as identified in subparagraph 2(a) above.

(4) If any landlord to whom subsection (3) applies fails to comply with the provisions of subsections (2) and (3) he shall commit a summary offence and be liable on conviction to a fine not exceeding level 4 on the standard scale.
(5) The Secretary of State may by order make regulations modifying or extending the provisions of subsections (1) to (4) above and such an order shall not be made unless a draft of it has been laid before, and approved, by a resolution of, each House of Parliament".").
The noble Lord said: My Lords, the House will be aware that on an earlier occasion we discussed this vexed question of tenants who by intent or design may find that they are paying not only their current rent and rates but also their community charge. The Minister was sympathetic to the point. We wish to avoid this unfairness. We know it has been estimated that in Scotland £40 million is being filched from the pockets of tenants and landing substantially in the pockets of landlords. Much of that money is not tenants' money but government money by way of grants.
The matter of the unfairness and the need to make the provision clear on the face of the Bill was raised at an earlier stage. We wish to avoid a landlord receiving more than he is entitled to, and the tenant having to pay more than he is obliged to do.
In the Official Report on 11th October, at col. 308, the noble Lord, Lord Campbell of Croy said:
"I agree, in principle, with what the noble Lord said".
The noble Lord, Lord Coleraine, said that he shared the concern of the noble Lord, Lord McIntosh, at the situation. Quite decisively the noble and learned Lord, Lord Brightman, put the matter to the noble Earl, Lord Caithness, at col. 316:
"I cannot believe that a provision to achieve this justice would be beyond the skill of the parliamentary draftsman".
The noble Lord, Lord Harmar-Nicholls, contributed to the debate by saying that it would be grossly unfair for the legislation to relieve the landlord of the rates and not pass this benefit along.
I know that there has been correspondence between the noble and learned Lord, Lord Brightman, and the Minister about the way in which

1431
it can be achieved. The amendment seeks to give effect to that. It may not be the best drafting, but that can be improved. Perhaps I may remind the Minister that when my noble friend Lord McIntosh raised this issue the Minister said at col. 318:
"I am taking the matter away with the best will so that it may be looked at again. If Members of the Committee are disappointed it will not be because of my lack of trying".
I know that at times the Opposition are very trying to the Minister. We wish yet again to give him an opportunity to put right what we believe is an injustice and an unfairness. I very much hope that the Minister will accept the amendment. I beg to move.
Lord Campbell of Croy: My Lords, I took part in the debate at Committee stage on a similar amendment. I should like to ask noble Lords on the Opposition Bench this question. Am I not right in thinking that there is a misprint in line 2 of subsection (2) as it appears on the Marshalled List? Should not the word "be" be omitted? I shall proceed on that basis.
Lord McIntosh of Haringey: My Lords, yes, that is so.
Lord Campbell of Croy: My Lords, I must thank the noble Lord, Lord McIntosh, for the kind words that he said about me at the end of our last debate. At Committee stage I offered some information from experience in Scotland, where the community charge has been in effect for just over six months.
I informed your Lordships that on my small estate in Scotland I had done what the noble Lord had advocated. Some weeks before 1st April I informed my tenants that on 1st April their rents would be reduced by the exact amount of the domestic rates in the previous year. The noble Lord, Lord Graham, overlooked the fact that my purpose in intervening on the last occasion was to say that during the past six months I have realised that I may have made a mistake for the reason which I shall explain again. It is because unexpected extra expenditure is arising for landlords of private tenancies in Scotland as a result of the interpretation of the Scottish Act. They arise from the imposition of the standard community charge on the property at times in addition to the personal community charge which the tenants are paying.
I gave a personal example of a strange interpretation by the Highland regional authorities. Although a cottage was let under a lease during the period in question and the lease required at least two months' notice, a standard community charge was suddenly imposed for two months. I am glad to tell your Lordships that the matter was resolved last week. If the authorities' original interpretation had been maintained I should have been tabling amendments to the Bill at this late stage or seeking to promote a private Peer's Bill in order to clarify the situation. That interpretation was certainly not what we intended when we in this House considered the Scottish Bill.
While I acted in the way advocated by noble Lords opposite and reduced the rents, I believe that it
1432
would be a mistake to impose a duty on landlords as proposed in the amendment. I believe that for reasons which I gave and for others which I shall now give. First the words:
"the amount of rent payable in respect of rates",
appear in the amendment and the amount must be notified. It is impossible to know the amount for the year in question and I challenge anyone to do so. The best that one can do, as I did, is to take the amount for domestic rate bills in the previous year—
Lord McIntosh of Haringey: Will the noble Lord give way?
Lord Campbell of Croy: My Lords, I shall continue for a while and then give way because I shall refer to the noble Lord's earlier comments.
The domestic rate bills for 1990–91, were they to be prepared, are unlikely to be exactly the same as those for the previous year—they could be more or less. For one or two properties on my small estate there were smaller rate demands for the year immediately following the Scottish revaluation five years ago although their valuations had been doubled. That is an interesting reflection on the confusion that existed among those unfamiliar with the rating system between valuation notices and annual rates bills. It caused most of the trouble which existed in Scotland at that time.
The amount mentioned in subsection (2)(a) of the amendment is impossible to calculate. Only the previous year can be inserted, and that is not a precise exercise.
When speaking to Amendment No. 126A the noble Lord, Lord McIntosh, pointed out the difficulty in relating the equivalent of the local councils' expenditure and total rate demands for 1989–90 with those to come in 1990–91. Were the system to continue the bills for domestic rates in 1990–91 could be estimated only roughly. I give way to the noble Lord.
Lord McIntosh of Haringey: My Lords, with all due respect, the noble Lord is under a misapprehension. The amendment refers to Schedule 5, which is concerned with the English and Welsh but not the Scottish legislation. Subsection (2) provides that a notice shall be served not later than 31st March 1990. In England and Wales that is the year in which rates are payable and refers to the current year. Therefore it refers to a year in which rates are payable so the difficulty to which he refers in Scotland does not arise. If the amendment is agreed similar amendments must be moved for Scotland.
Lord Campbell of Croy: My Lords, I still believe that it is difficult to know what the domestic rates would have been during the year in which they would have been paid were it not for the fact that the system had changed.
Lord McIntosh of Haringey: With respect, we know the domestic rates for 1989–90 because we are paying them.
Lord Campbell of Croy: My Lords, then it is the following year in which there would be a change. The point must arise when one changes from one system to another.
I shall move on to another objection to the amendment. It is that landlords may meet the extra expenditure arising from the standard community charge. I recognise that the situation is different in England and Wales because the new legislation is now going through, whereas we are living with legislation which came into effect on 1st April. However, in matters of taxation I believe that the basic principles should be the same over the whole of the United Kingdom. Therefore, I suggest that landlords in England and Wales should watch the way in which the Scottish Act is being interpreted and be ready for similar interpretation. It will mean that suddenly they will be paying the standard charge during periods when the dwelling is not let.
For example, when a tenancy is changed after a letting of several years it is normal and correct practice for the landlord to carry out repairs and redecoration before reletting. With the best planning, availability of builders and painters and quick advertising there may be an interval of up to three months. In Scotland local authorities propose to impose the standard community charge for that period. That was not the intention when the Scottish Bill passed through Parliament. Our purpose was to levy a charge on second homes.
However, officials concerned with registration and collection appear to view any residential dwelling as being revenue-producing throughout the year, as was the case with domestic rates. When tenants have left, the personal community charge is no longer forthcoming. If the tenants leave a local authority's area their monthly payments are lost to it. The view appears to be that the dwelling should, when empty, contribute the standard charge during the interim period. That interim period between tenancies is a normal part of providing rented accommodation because during it there is a proper overhaul. If the standard charge is to be imposed during that required and normal break, landlords will have to make provision for the extra expenses. Unfortunately, if such an interpretation prevails rents must be higher than they need be. The proposal in the amendment does not take that point into account.
Again I have referred to the Scottish legislation because the present legislation is still under consideration. However, as regards short lets in Scotland the 1987 Act places a responsibility for the community charges on the landlords and not the tenants. Therefore, those holding a short tenancy could find themselves not responsible for the charges and could leave and the landlord could find himself responsible. However, short tenancies provide a useful service in Scotland as well as in England and Wales. In fact, the country benefits from the willingness of those who are prepared to live an unsettled existence as a result of employment. I believe that similar provisions should be made in England and Wales in order to ensure that those extra charges are considered and do not fall upon the landlord in an unexpected manner. I urge Ministers
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concerned with Scotland and England and Wales to examine those points in the best interests of orderly private letting and reasonable rents for tenants. Surely that should be separated from the designation of second homes.
I have great sympathy with all the officials in Scotland who are bringing in this new system of local government taxation, which is an immense task. My home is in what was my constituency and I have been helping former constituents to fill in the forms and commiserating with the officials whom I have known in the past who are coping with the introduction of this new system.
6.30 p.m.
Lord Monson: My Lords, as I was not here when we debated this matter in Committee, perhaps I may say that I strongly support the principle of this amendment, whatever technical defects there may or may not be in the drafting. I believe that it would be utterly immoral if landlords were allowed to pocket moneys paid to them by tenants in respect of rates which are no longer due.
Lord Coleraine: My Lords, I remain in support of the principle behind this amendment, but as in Committee, I feel disturbed by the actual terms of it. I believe I am right in saying that subsection (3) of the new clause which the noble Lord proposes has disappeared from the Marshalled List. However, if this follows the clause before us in Committee —that is, to provide that it would be an offence for the landlord to collect an amount previously attributable to the rates—I should be inclined to continue my reservations as to the actual terms of the amendment.
This afternoon I should like to remind my noble friend that my concern in Committee was on behalf of private tenants who had no right of recourse under either the Rent Act or the Housing Act as assured tenants because they may have been above the Rent Act limits or because they were living in flats made out of converted houses in which the landlord was living.
I assume from the fact that no amendment in my noble friend's name appears on the Marshalled List that he has found it difficult to produce an acceptable amendment. I hope that when he explains the position to us he will deal with the situation of private tenants to which I have just referred.
Lord McIntosh of Haringey: My Lords, although my noble friend Lord Graham moved the amendment, it is in my name and I owe an apology to the House. As the noble Lord, Lord Coleraine, rightly pointed out, subsection (3) of the amendment is missing from the Marshalled List. That makes the amendment hopelessly defective, and without waiting for the Minister's response it is better to withdraw the amendment as noble Lords have not had an opportunity to see the amendment as it was drafted. Therefore, it would be impossible for me to ask noble Lords to take a decision on this matter. I believe that the only right thing for me to do is to withdraw the amendment.
The Earl of Caithness: My Lords, I am grateful to the noble Lord. I fully appreciate that that is a most honourable course to take.
I should like to say to the House that in Committee the noble Lord, Lord Northfield, raised the question of whether we could go further as regards putting a booklet into libraries, and so on. The noble Lord suggested that we should draw attention to tenants' possible rights to a rent reduction in the literature which accompanies the first community charge bills next April. I am pleased to be able to tell the House that, as so often, we have been persuaded by the elegant argument of noble Lords opposite and this time by the noble Lord, Lord Northfield. We have taken on board his suggestion. My right honourable friend the Secretary of State proposes to include reference to those rights and the availability of the explanatory booklet in the notes which charging authorities will be required to attach to community charge bills under regulations to be laid prescribing the form and content of those bills. I hope that that is helpful to the noble Lord, Lord McIntosh, when he considers this matter for another stage.
Lord McIntosh of Haringey: My Lords, I am grateful for that. I believe that we must be careful not to trespass on the time of the House since the amendment is defective through my fault.
Lord Northfield: My Lords, before my noble friend withdraws his amendment perhaps I may say that I am grateful to the noble Earl for taking on board my suggestion. He tries to be helpful to the House within the limits of government policy, and that is half a loaf. However, I am sure he will recognise that in Committee we said that we preferred an amendment to the statute rather than the suggestion he has now made. I thank him very sincerely, but perhaps he will take on board that we hope that on Third Reading he will still consider an amendment to the law. If the noble and learned Lord, Lord Brightman, can help us to produce a succinct amendment for Third Reading, that will be very good. However, that does not detract from my thanks to the noble Earl for trying to be helpful on this occasion.
Lord McIntosh of Haringey: My Lords, I believe that both interventions have been helpful in enabling us to decide what to do to correct our mistake on Third Reading. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Hesketh Lord Hesketh moved Amendment No. 154B:
Page 209, line 34, leave out paragraph (b).
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 155:
Page 210, line 20, at end insert—
("England and Wales: separate administration
. — (1) Section 140 (separate administration in England and Wales) shall be amended as follows.
(2) In subsection (1) after "VII" there shall be inserted ", and paragraphs 1 to 4 of Schedule 12A below,".
(3) In subsection (2) the word "and" at the end of paragraph (e) shall be omitted, and after paragraph (f) there shall be inserted "and
(g) separate reports under Schedule 12A below shall be made."
(4) In subsection (3) after "VII" there shall be inserted ", and paragraphs 1 to 4 of Schedule 12A below,".").
The noble Earl said: My Lords, I shall speak also to Amendment No. 217. In Committee we introduced amendments to add a new Schedule 12A to the Local Government Finance Act 1988. These are minor amendments to Schedule 12A to allow the Secretary of State to make separate population reports for England and Wales. I commend them to your Lordships. I beg to move.
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 156 and 157:
Page 212, line 28, leave out ("(9A)") and insert ("(9B)").
Page 212, line 28, at end insert —
("( ) In subsection (4) the words "57 or" shall be omitted.").
On Question, amendments agreed to.
[Amendment No. 157A not moved.]
Lord Hesketh Lord Hesketh moved Amendments Nos. 158 and 159:
Page 212, line 31, leave out first ("subsection") and insert ("subsections").
Page 212, line 32, leave out ("(9A)") and insert—
("(9A) The power to make an order under paragraph 5 of Schedule 7A below shall be exercisable by statutory instrument, and no such order shall be made unless a draft of it has been laid before and approved by resolution of each House of Parliament.
(9B)")
On Question, amendments agreed to.
[Amendment No. 159A not moved.]
Lord Hesketh Lord Hesketh moved Amendment No. 160:
Page 214, line 47, after ("which") insert ("is a notifiable authority and which").
The noble Lord said: My Lords, I shall speak also to Amendment No. 161. These amendments delete the requirement for the Secretary of State for the Environment in England and charging authorities in Wales to notify parish councils in England and community councils in Wales of the relevant population of charging authorities on which they precept.
Under Schedule 12A to the Local Government Finance Act 1988, the Secretary of State for the Environment must notify relevant authorities in England of the figure which he has calculated for their relevant population. A similar duty is placed on charging authorities in Wales. This is necessary for the purposes of apportioning precepts and levies. However, where the relevant authority is a parish council in England or a community council in Wales, relevant population plays no part in the apportionment of their precept. Therefore they do not need to know this information and it serves no purpose for them to be notified of it. I commend these amendments to your Lordships, and I beg to move.
On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 161:
Page 215, line 11, after ("which") insert ("is a notifiable authority and which").
On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendments Nos. 161A and 162:
Page 215, line 32, at end insert —
("Information
64A. In section 146 (interpretation) the following subsection shall be inserted after subsection (5)—
"(5A) Unless the context otherwise requires, "information" includes accounts, estimates and returns." ")
Page 215, line 34, leave out ("In Schedule 11, in") and insert ("Schedule 11 (tribunals) shall be amended as follows.
(2) In paragraph 2 (jurisdiction) the following paragraph shall be inserted at the end—
"(c) paragraph 5 of Schedule 4A above."
(3) In").
On Question, amendments agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 163A:
Page 216, line 30, leave out paragraph 68 and insert —
("68. —(1) Paragraphs 3, 8, 45, 47, 49 and 57 above shall come into force at the expiry of the period of 2 months beginning on the day this Act is passed.
(2) Paragraphs 42(3), 52 and 54 above shall come into force on such day as the Secretary of State may by order made by statutory instrument appoint; and

(a) different days may be so appointed for different provisions or for different purposes;

(b) section 187(3) of this Act shall apply to an order under this subparagraph as it applies to an order under section 187(2)

(3) The 1988 Act shall be treated as having been enacted with the amendments made by this Schedule, except in so far as the amendments are made by paragraph 6, 50, or 59 above or any of the paragraph mentioned in subparagraph (1) or (2) above.").
The noble Lord said: My Lords, I beg to move Amendment No. 163A which has been substituted for Amendment No. 163. We now come to the final amendment on Schedule 5. This is purely a technical amendment which revises the provision for the commencement of Schedule 5. The effect is to bring into force those provisions mentioned in sub-paragraph 68(1) two months after Royal Assent. Those in sub-paragraph (2) will be brought into force by order when it is appropriate to do so. The remaining amendments will, from the date of Royal Assent, be treated as having always been part of the 1988 Act. However, for those provisions mentioned in sub-paragraph (3), the degree of retrospective effect will be circumscribed in the way those paragraphs provide. I beg to move.
On Question, amendment agreed to.
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 164:
After Clause 139, insert the following new clause —
("Reduced liability for personal community charges: Scotland.
. —The following section shall be inserted after section 9 of the Abolition of Domestic Rates Etc. (Scotland) Act 1987—
"Reduced liability for personal community charge.
9A. —(1) The Secretary of State may make regulations as regards any case where —

(a) a person is or was liable to pay, in respect of any time in such financial year as is prescribed, the personal
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community charge determined by a local authority in respect of that year; and

(b) prescribed conditions are fulfilled.

(2) Regulations under this section ma) provide that the amount of a person's liability in respect of personal community charge shall not be such amount as it would be apart from the regulations or, as the case may be, such amount as it was, but instead such smaller amount as is arrived at in accordance with prescribed rules.
(3) The conditions mentioned in subsection (1) above may be prescribed by reference to such factors .as the Secretary of State sees fit; and in particular such factors may include all or any of the following—

(a) rates for a period before 1 April 1989;

(b) the circumstances of or other matters relating to the person concerned;

(c) an amount relating to the local authority concerned and specified, or to be specified, for the purposes of the regulations in a report laid, or to be laid, before the House of Commons;

(d) such other amounts as may be prescribed or arrived at in a prescribed manner;

(e) the making of an application by the person concerned.

(4) The rules mentioned in subsection (2) above may be prescribed by reference to such factors as the Secretary of State sees fit; and in particular such factors may include all or any of the factors mentioned in subsection (3)(a) to (d) above.
(5) Without prejudice to the generality of section 31(2) of this Act, regulations under this section may include —

(a) provision requiring the Secretary of State to specify in a report, for the purposes of the regulations, an amount in relation to each local authority;

(b) provision requiring him to lay the report before the House of Commons;

(c) provision for the review of any prescribed decision of a local authority relating to the application or operation of the regulations.

(6) To the extent that he would not have power to do so apart from this subsection, the Secretary of State may—

(a) include in regulations under this section such amendments of any social security instrument as he thinks expedient in consequence of the regulations under this section;

(b) include in any social security instrument such provision as he thinks expedient in consequence of regulations under this section;

and any such amendments or provision may be deemed by the regulations or, as the case may be, instrument to have come into effect prior to the date of coming into force of the regulations or instrument.
(7) In subsection (6) above "social security instrument" means an order or regulations made, or falling to be made, by the Secretary of State under the Social Security Act 1986." ").
The noble Lord said: My Lords, I beg to move Amendment No. 164. I shall speak also to Amendment No. 165. We have already had under a previous debate amendments enabling a scheme of transitional community charge relief to be introduced in England. I do not intend to go over much of the same ground again, because my right honourable friend the Secretary of State for Scotland has already made it clear that the Scottish scheme will encompass many of the same details as that which is proposed for England, both in relation to the people targeted for relief and the threshold at which relief will become payable.
Where the Scottish provision differs from the English is that it has been drafted to allow for the scheme to be made retrospective in Scotland and thus applied in respect of the financial year 1989–90. As my right honourable friend has made clear, we

1439
are undertaking detailed discussions with the Scottish local authorities before we decide finally on the details of the scheme that we will adopt. The new clause contained in Amendment No. 164 has been drafted so as not to inhibit the scope of these discussions.
My colleagues and officials have already met with CoSLA and further meetings have been arranged. Following these discussions we will be reaching decisions on a number of outstanding issues, including the financial years in respect of which the scheme will operate. These decisions will be made very shortly.
Amendment No. 165 makes similar provision to the English Amendment No. 154 and allows for the payment of grant to local authorities in respect of the relief scheme. The grant may cover both the revenue forgone by authorities as a result of community charges having been reduced by relief, and administrative costs to the authorities of setting up and administering the scheme. I beg to move.
Lord Carmichael of Kelvingrove: My Lords, I thank the Minister for his explanation, particularly for the fact that the payments will be retrospective. He gave a fairly reasonable explanation and has written to me. I am grateful to him for his help.
Baroness Carnegy of Lour: My Lords, I listened carefully to what the Minister said and, of course, these provisions are welcome in Scotland. Could he just tell me what is the effect of all this on the Scottish version of the safety net? He did not mention that. Could he enlighten the House?
Lord Sanderson of Bowden: My Lords, I am grateful to the noble Lord, Lord Carmichael of Kelvingrove, and also to my noble friend. If I may enlighten her as regards the safety net, in the light of the announcement made by my noble friend Lord Hesketh in your Lordships' House on 11th October, my right honourable friend the Secretary of State for Scotland has been considering the position north of the Border where a safety net has been operated on a self-financing basis during the current year. My right honourable friend will make a detailed announcement about this matter as soon as possible. But his broad intention is that there should be comparable arrangements north and south of the Border, taking account of the fact that the community charge was introduced 12 months earlier in Scotland. I hope that with that explanation my noble friend will understand the situation.
On Question, amendment agreed to.
6.45 p.m.
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 165:
After Clause 139, insert the following new clause—
Community charge grants: Scotland.
(" . The following section shall be inserted after section 23 of the Abolition of Domestic Rates Etc. (Scotland) Act 1987—
PART IIIA
COMMUNITY CHARGE GRANTS
Community charge grants.
. 23A —(1) If regulations under section 9A have effect in respect of a financial year, the Secretary of State may, with
1440
the consent of the Treasury, pay a grant to a local authority in respect of that year.
(2) The amount of the grant shall be such as the Secretary of State may, with the consent of the Treasury, determine.
(3) A grant under this section shall be paid at such time, or in instalments of such amounts and at such times, as the Secretary of State may, with the consent of the Treasury, determine.
(4) In making any payment of grant under this section the Secretary of State may impose such conditions as he may, with the consent of the Treasury, determine; and the conditions may relate to the repayment in specified circumstances of all or part of the amount paid, or otherwise.
(5) In deciding whether to pay a grant under this section, and in determining the amount of any such grant, the Secretary of State shall have regard to his estimate of the aggregate of —

(a) any amount which, in consequence of the regulations, the local authority might reasonably be expected to lose, or to have lost, by way of payments in respect of community charges in respect of the financial year concerned; and

(b) any administrative expenses the local authority might reasonably be expected to incur, or to have incurred, in respect of the financial year in giving effect to the regulations." ").

On Question, amendment agreed to.
Schedule 6 [Amendment of Scottish Enactments]:
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 166:
Page 218, line 9, at end insert —
("Application of regulations about determination of net annual value
In section 6 of the Valuation and Rating (Scotland) Act 1956, after subsection (8B) further provision as to regulations relating to determination of net annual value) there shall be inserted the following subsection—
"(8C) For the purposes of subsection (8B) above, cases may be defined, described or classified by reference to such factors as the Secretary of State thinks fit.
(8D) Without prejudice to the generality of subsection (8C) above, a case may be defined, described or classified by reference to one or more of the following factors —

(a) the physical characteristics of lands and heritages;

(b) the fact that lands and heritages are unoccupied or are occupied for purposes prescribed by the regulation or by persons of descriptions so prescribed." ").

The noble Lord said: My Lords this amendment is necessary in order to make clear that, in prescribing the levels of decapitalisation rate to apply to the 1990 revaluation, classes of property can be defined in regulations in terms of the physical characteristics of the subjects and by the nature of the occupier. Your Lordships in Committee agreed a parallel provision for England and Wales. I beg to move.
Lord Carmichael of Kelvingrove: My Lords, I thank the Minister for that explanation. All I should like to say is that we look forward to the revaluation of 1990.
On Question, amendment agreed to.
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 166A:
Page 219, line 41, at end insert—
(" . In paragraph 4 of Schedule 1A to the Abolition of Domestic Rates Etc. (Scotland) Act 1987 (exemption of the

1441
severely mentally impaired) there shall be added at the end the following subparagraphs —
"(6) Regulations under subparagraphs (5) above may provide that, in the circumstances set out in the regulations, a certificate given for the purposes of subparagraph (1)(c) above shall continue to have effect for the purposes of this paragraph notwithstanding that the definition of severe mental impairment upon which the certificate proceeds has been substituted by the regulations.
(7) Regulations under subparagraph (5) above made in respect of the financial year 1989–90 may provide that a person—

(a) who was not within the old definition of severely mentally impaired but who, being within the new definition of that expression, is exempt; and

(b) in respect of whom such conditions as are prescribed are fulfilled

may be treated as having been exempt as from such date prior to the coming into force of the regulations as may be provided for in the regulations.
(8) In subparagraph (7) above, the "old" definition is the definition in force immediately before the coming into force of regulations under subparagraph (5) above and the "new" definition is the definition being substituted for the old definition by regulations under that subparagraph." ").
The noble Lord said: My Lords, your Lordships will recall that my noble friend Lord Hesketh announced to the House on 11 th October that we had decided to extend the exemption from the community charge for people who are severely mentally impaired so as to include people who are impaired as a result of a degenerative brain disorder or mental illness. The changes necessary to implement these proposals will be made by regulations made under existing legislation. The amendment we are now considering, is by way of a Scottish consequential and is necessary to take account of the fact that the community charge is already operating in Scotland. It makes provision to allow people who become exempt as a result of the new regulations to have their exemption backdated; and it ensures that those who are already exempt, who will have had to obtain a certificate from a doctor saying that they are severely mentally impaired, do not have to apply again for a new certificate when the new definition of severe mental impairment comes into force.
These may seem quite minor adjustments in comparison with much of what your Lordships have been discussing in the context of this Bill, but they have been sought by Scottish local authorities and will be welcomed by a wide range of people, particularly those who are themselves responsible for the care of a severely mentally impaired person in the community. I beg to move.
Lord Carmichael of Kelvingrove: My Lords, again I must thank the Minister for his statement and for putting down this amendment. One should not look a gift horse in the mouth, but we discussed this very thoroughly during the passage of the Scottish Bill and it is a pity that it was not included then. Perhaps we could have saved some time both then and in respect of this Bill. Late though it is, we are grateful for the amendment.
Lord Lloyd of Kilgerran: My Lords, I join the chorus of thanks to the Minister. In their absence, I
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am sure that I can say on behalf of my noble friends from Scotland that they join me in thanking him for his explanation.
Lord Sanderson of Bowden: My Lords, I thank noble Lords. The solution to the problem was difficult to find. Once we had hit on it so far as attendance orders were concerned, we were able to move quite quickly. I thank both noble Lords for the contribution.
On Question, amendment agreed to.
Clause 141 [Special grants]:
Lord Hesketh Lord Hesketh moved Amendment No. 167:
Page 132, line 8, leave out from ("grant") to end of line 22 and insert (" (in this section referred to as a "special grant") in accordance with this section to a charging authority.
(2) Before making any one or more special grants, the Secretary of State shall make a determination stating, with respect to the special grant or, as the case may be, each of the special grants—

(a) to which authority it is to be paid,

(b) the purpose for which it is to be paid, and

(c) the amount of the grant,

and that determination shall be made with the consent of the Treasury and shall be specified in a report (to be called a special grant report) which shall contain such explanation as the Secretary of State considers desirable of the main features of the determination.
(3) A special grant report shall be laid before the House of Commons and, as soon as is reasonably practicable after the report has been so laid, the Secretary of State shall send a copy of it to any charging authority to whom a special grant is proposed to be paid in accordance with the determination in the report.
(4) No special grant shall be paid unless the special grant report containing the determination relating to the grant has been approved by a resolution of the House of Commons.
(5) A special grant report may specify conditions which the Secretary of State, with the consent of the Treasury, intends to impose on the payment of (or of any instalment of) any special grant to which the report relates; and the conditions may require the provision of returns or other information before a payment is made to the local authority concerned or relate to the use of the amount paid, or to the repayment in specified circumstances of all or part of the amount paid, or otherwise.
(6) Without prejudice to compliance with any conditions imposed as mentioned in subsection (5) above, a special grant shall be paid at such time or in instalments of such amounts and at such times as the Secretary of State may, with the consent of the Treasury, determine.
(7) For the purposes of this section each of the following is a charging authority —
(a) a district council").
The noble Lord said: My Lords, in moving this amendment I shall also speak to Amendment No. 223. It may help the House if I explain first the background and the reasons why these amendments have been brought forward. Clause 141 provides a power for the Secretary of State to pay grants to charging authorities. It was envisaged that the power would be used to pay grants to local authorities towards the cost of implementing the community charge. the Government have made available £55 million towards expenditure of this activity in 1989–90. Following recent developments, it is now proposed to use this power as the basis for paying some other grants also.
As the House will know, my right honourable friend the then Secretary of State for the

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Environment announced in July in another place that as part of the 1990–91 grant settlement for local authorities there would be two new, transitional specific grants. One is to be paid to local authorities in inner London which will be taking over from ILEA responsibility for education from next April. ILEA currently spends considerably more than the Government assess that it needs to.
In the longer term the successor authorities (that is the inner London boroughs) should be able to make substantial improvements in efficiency and should be able to secure economies in provision which will bring expenditure down to more reasonable levels. It will, however, take some time for those savings to come through. In order that charge payers will not face too high a burden in the meantime, the Government have announced a transitional grant over five years which will be worth £100 million in the first year.
The other transitional grant is for areas where domestic rateable values have been very low. People in these areas will face proportionately the largest changes as they adjust to the new local government finance system. We have therefore proposed an extra grant over and above the protection these areas will already receive from the area safety net to cushion the impact. This grant is again expected to be worth about £100 million in the first year.
The House will also be aware from my statement on 11th October that the area safety net introducing the community charge is to be abolished after the first year. We have, however, promised that the areas which would have received protection from the safety net in the three later years will have that protection provided by a specific grant.
It is proposed to use the power in Clause 141 as the statutory basis for making payments of all these grants. The bulk of government support for local authorities will continue to be provided through the revenue support grant system, set out in Part V of the Local Government Finance Act 1988 and distributed in accordance with reports made under these powers. The new grants which have been proposed are all supplementary to rate support grant and are intended to deal with particular problems during the transitional period.
From what I have said it will be clear to the House that the Government are proposing to make rather more extensive use of the power than had orginally been envisaged. We have therefore thought it right to bring forward this amendment. The main effect of the amendment is to require the approval of another place before grants can be paid under the power. It is right that Parliament should have the means to scrutinise and control expenditure on grants such as these. The amendment requires the Secretary of State to set out the purposes for which the grants are being paid and the amounts in a report which is to be laid before and approved by another place. In this way proper accountability will be maintained. I commend the amendment to the House. I beg to move.
Lord McIntosh of Haringey: My Lords, I do not wish to sound ungrateful but this is only a framework
1444
for grants and no indication of the level of grants. The Minister has mentioned figures in his speech but they do not appear anywhere in the legislation. We do not disapprove of the statutory provision or of the fact that another place should be consulted. But it must not be claimed that there is any substantial statutory increase proposed.
On Question, amendment agreed to.
Schedule 7 [Compensation provisions of Landlord and Tenant Act 1954, Part II]:
[Amendment No. 168 had been withdrawn from the Marshalled List.]
Lord Reay Lord Reay moved Amendment No. 168A:
Page 224, line 39, leave out ("subsection (5A)") and insert ("subsections (5A) to A5D)").
The noble Lord said: My Lords, Schedule 7 concerns the compensation provisions for business tenants of mixed hereditaments under the Landlord and Tenant Act 1954, Part II, in consequence of the abolition of domestic rates. The purpose of these amendments to the schedule is to include those business tenancies which will have no rateable value as from 1st April 1990 because they will be classed as domestic property. Only a small number of cases will be involved but they concern, for example, the tenant of a house in which he lets bedsits as a business. Another example is that of a block of free-standing garages which a tenant lets out. Such premises will be classed as domestic property in future and therefore not be rated.
We propose that compensation for loss of tenure should be based on a notional rateable value where a holding is of wholly domestic property. The notional rateable value will be an amount equal to the rent at which it is estimated the holding might reasonably be expected to let from year to year. Any dispute is to be referred to the Commissioners of Inland Revenue for decision by a valuation officer with appeal to the Lands Tribunal, as is customary in such disputes under Part II of the 1954 Act. The proposal is to be subject to the same transitional arrangements detailed in Schedule 7. I beg to move.
On Question, amendment agreed to.
Lord Reay Lord Reay moved Amendment No. 169:
Page 224, line 41, leave out ("any").
The noble Lord said: My Lords, in moving the last amendment I should have said that I was also speaking to Amendment No. 169. I beg to move.
On Question, amendment agreed to.
Lord Reay Lord Reay moved Amendment No. 169A:
Page 225, line 7, at end insert—
("(5C) If the whole of the holding is domestic property, as defined in section 66 of the Local Government Finance Act 1988, for the purposes of subsection (2) of this section the rateable value of the holding shall be taken to be an amount equal to the rent at which it is estimated the holding might reasonably be expected to let from year to year if the tenant undertook to pay all usual tenant's rates and taxes and to bear the cost of the repairs and insurance and the other expenses (if any) necessary to maintain the holding in a state to command that rent.

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(5D) The following provisions shall have effect as regards a determination of an amount mentioned in subsection (5C) of this section—

(a) the date by reference to which such a determination is to be made is the date on which the landlord's notice under section 25 or, as the case may be, subsection (6) of section 26 of this Act is given;

(b) any dispute arising, whether in proceedings before the court or otherwise, as to such a determination shall be referred to the Commissioners of Inland Revenue for decision by a valuation officer;

(c) an appeal shall lie to the Lands Tribunal from such a decision, but subject to that such a decision shall be final.").

The noble Lord said: My Lords, I spoke earlier to this amendment also. I beg to move.
On Question, amendment agreed to.
[Amendment No. 170 had been withdrawn from the Marshalled List.]
Lord Lucas of Chilworth Lord Lucas of Chilworth moved Amendment No. 171:
After Clause 147, insert the following new clause:
("Charges: temporary traffic signs
Notwithstanding any enactment or rule of law to the contrary, or the provisions of sections 145 to 147 above, a highway authority may not impose a charge for permitting temporary traffic signs to be placed on or near any road in their area by an organisation representative of road users under section 65 of the Road Traffic Regulation Act 1984, as amended by the Roads (Scotland) Act 1984 in its application to Scotland.").
The noble Lord said: My Lords, I beg to move this amendment which stands in my name and that of my noble friend Lord Errol of Hale. We discussed the substance of this amendment during the Committee stage. During that discussion my noble friend the Minister said that he was quite willing to take the amendment back and discuss it. My noble friend Lord Errol then withdrew the amendment.
I am grateful to my noble friend the Minister because he has had further discussions both with my noble friend and others and within the department. I shall be looking forward to hearing from him the outcome of those discussions. It is perhaps only necessary to remind the House that this amendment, which introduces a new clause, seeks to clarify the law. It attempts to ensure that highway authorities in England and Wales and roads authorities in Scotland do not impose a charge when exercising their statutory power under the Road Traffic Regulation Act 1984 to permit temporary traffic signs.
The difficulty here is that, while one London borough has waived charges that it sought to impose on one of the motoring organisations in respect of the erection of temporary traffic direction signs, there is no certainty that other local authorities, highway and roads authorities may not seek to introduce charges. It is this uncertainty that gives rise to the thought that the motoring organisations such as the Automobile Association, the Royal Automobile Club and in certain circumstances the Cyclists' Touring Club may reduce their service in this direction. If such charges were introduced the whole scheme would become uneconomic.
Furthermore, these organisations erect traffic direction signs free of charge particularly for the
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Metropolitan Police on such occasions as the state opening of Parliament, the Trooping of the Colour and the Remembrance Day service, in fact on any occasion where there is likely to be a large concentration of people and where traffic needs to be diverted.
There is another problem. My noble friend the Minister gave an assurance that were these charges to become widespread or prevalent the Secretary of State would take powers to prevent the charges. All this would take possibly a year because the system would have to be monitored, proof would have to be raised, and then the necessary regulations made, all of which would take a long time. It seems to my noble friend and me, and indeed others in your Lordships' House, that it would be better if we were, so to speak, to lock this stable door before the horse actually bolts. That is what the amendment seeks to do. With that explanation, I hope that my noble friend the Minister will feel convinced of the rightness of the amendment and that your Lordships will see fit to accept it. I beg to move.
7 p.m.
Lord Underhill: My Lords, perhaps I may, as I did at the Committee stage, support the noble Lord in his amendment. I am not going to repeat all the arguments I put forward on that occasion. I think that the Committee generally recognised that there were important reasons why we should have an amendment of this kind. However, there are two questions I should like to put to the Minister.
The Minister said that the Road Traffic Regulation Act 1984 gave authority to highway authorities to give consent for the erection of these signs, but that it was silent as to whether a charge should be made. The amendment refers to Clauses 145 and 146 of this Bill. So far as I can see, Clause 145 empowers the Secretary of State to
"make regulations providing that a charge may be imposed in respect of anything".
Has such a regulation been made in respect of signs? If not, the local authority that made a charge did so illegally.
In addition the noble Lord, Lord Reay, said that if this became prevalent then action would be taken to stop it spreading. Can he say under what subsection—I presume of Clause 146, which gives power to the Secretary of State to amend provisions regarding charges—the Secretary of State would have power to prevent such a thing? I am anxious to see that no authority is permitted to make such charges for the erection of these signs. Therefore, would it not be more sensible to argee to what most noble Lords said, and put this in the Bill, and then there will be no need to worry about it at all? Further, the answers to my two questions need not be given.
Lord Errol of Hale: My Lords, I should like to add a few I hope somewhat different words from those I used when I proposed this amendment at the Committee stage of the Bill. There is absolutely no logic for a local authority to make such a charge for permitting temporary direction signs to be erected. The local authority does not plan where they shall be sited; it does not produce signs itself or paint on

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the directions; it does not erect them or take them down afterwards; it does not provide posts or fittings where the existing street furniture is inadequate. It does nothing except sign a routine authority for the work to be done by the RAC, the Automobile Association or the CTC.
Really this is simply an attempt to raise additional revenue by any means that the local authority can think of. If started by one local authority, as has been attempted, it could quickly spread to other local authorities as a useful source of supplementary revenue that the council can obtain without any effort on its part: for the charge is not in connection with the signs or their erection, it is just, if I may say so, a bogus charge. Once it had caught on, however hard the Secretary of State tried to prevent it in future—and the powers that we are going to learn about make it possible that he can stop it—the local authorities would argue that they were being deprived of a useful source of revenue, and a nasty row could develop over their being deprived of what had become an acceptable form of revenue.
This may seem a small matter in terms of a charge of £10 per sign, which was what was proposed by this local authority. But the Automobile Association, for example, put up 84,000 signs last year, charging about between £7 and £8 a sign. The true cost of them of course is subsidised by the AA as a service to the road-using public. To add £10 a sign as a form of local tax would increase the total charge to the Automobile Association by nearly £1 million a year. The AA itself could not afford to meet this, and it is likely that organisations would either reduce the number of signs well below the numbers required, or small organisations, especially rural charities, would probably drop out altogether.
The AA and the RAC might have to withdraw the service, which, incidentally, as my noble friend said, is provided free to the Metropolitan Police for a number of national events in the metropolis. It is highly unlikely that local authorities could provide a comparable service at such a low cost. I doubt if they would try. The road-using public would be the losers. Before sitting down, I should like to thank the Minister for his courteous reply in the earlier debate and for showing such considerable sympathy for these views in our subsequent talks with him. I hope that he will now be able to accept this amendment.
Lord Reay: My Lords, as my noble friend Lord Lucas of Chilworth pointed out we discussed these matters at some length in Committee on 11th October. Since then we have been able to reflect further on the matters raised on that occasion. I appreciate the strength of the arguments and also the strength of feeling of my noble friends on this matter. Before stating the Government's position I should like to make one point. We are concerned that the proliferation of signs by the motoring organisations should not depart from the general principle that they are for traffic-regulation purposes and not intended as a commercial venture.
I hope that the motoring organisations will be prepared to co-operate together with the local
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authority associations in the development of a code of practice governing these matters. On the basis of that expectation, and after careful consideration, I am happy to tell my noble friends and the House that the Government are willing to accept these amendments. In view of that, I think that, as he acknowledged, the second question of the noble Lord, Lord Underhill, does not need to be answered. With respect to the first question asked by the noble Lord, Lord Underhill, no regulation was made and I believe that in that case the AA received the legal opinion that the charges had not been made legally.
I should like to add one minor caveat. We are having a further look at the wording of Amendment No. 171. I am led to believe that there might be technical defects in the drafting. If there are, we shall bring forward a government amendment at a later stage. With those remarks, I am sure that the House will welcome these amendments without further ado.
Lord Lucas of Chilworth: My Lords, I am grateful to my noble friend—and I am sure that the House is grateful also—for this decision. I noted carefully—and I have little doubt that my noble friend Lord Errol also noted carefully—the Government's general view on signing and the expectation they have. I feel sure that the motoring organisations concerned will tomorrow read in Hansard what the Minister has said, and I would be confident that they would take heed of what he has said in this regard. I beg to move.
On Question, amendment agreed to.
The Earl of Strathmore and Kinghorne: My Lords, I beg to move that further consideration on Report be now adjourned until 8.10 p.m.
Moved accordingly, and, on Question, Motion agreed to.

Merchant Shipping Act 1988 (Amendment) Order 1989
7.10 p.m.
Viscount Davidson Viscount Davidson rose to move, That the draft order laid before the House on 17th October be approved [28th Report from the Joint Committee].
The noble Viscount said: My Lords, this order gives effect to an interim order of the President of the European Court of Justice made on 10th October 1989. The interim order by the court requires the United Kingdom to suspend until judgment in the main proceedings the application of the British nationality requirements for registration of certain British fishing vessels set out in Section 14(1), (2) and (7) of the Merchant Shipping Act 1988. The affected fishing vessels are those which were fishing under the British flag up to 31st March 1989 with a licence granted under the Sea Fish (Conservation) Act 1967.
The court order is in restricted terms. It requires the United Kingdom to suspend the application of the British nationality requirement as a condition for the registration of fishing vessels as British fishing vessels to the extent that, at present, the owners,

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charterers, managers and operators of such vessels must be either: British nationals, or in the case of a company, have at least 75 per cent. of its shares legally and beneficially owned by British nationals and at least 75 per cent. of its directors as British nationals.
The benefit of the court's order is restricted to nationals of the European Community. It does not affect the requirement that such persons must be resident and domiciled in the United Kingdom. Moreover it does not affect the requirement that the vessels should be managed and their operations directed and controlled from within the United Kingdom. We do not know how many additional fishing vessels will now become eligible for registration on the United Kingdom fishing vessel register. That will depend on how many have been ineligible for registration by reason only of the nationality requirements that are changed by this order.
It may help if I fill in some of the background here. Part II of the Merchant Shipping Act 1988 introduced a new register of British fishing vessels. The main intention of this register was to restrict sea fishing rights so that the fishing quotas granted to the United Kingdom under the common fisheries policy benefited the genuine United Kingdom fishing fleet and the British communities dependent upon fishing. There were at the time a large number of fishing vessels which were fishing against the United Kingdom quotas, operating largely out of Spanish ports and which had only a nominal British connection.
The fishing vessel register came into full effect on 1st April 1989, but vessels could transfer to it from old registers on or after 1st December 1988. Since then the overwhelming proportion of the United Kingdom fishing fleet numbering more than 10,000 vessels has been registered in circumstances where my right honourable friend the Secretary of State has been satisfied that they comply with the requirements of the Act. One hundred and twenty-one have been refused registration primarily because they have not been able to demonstrate that beneficial ownership is British or that the vessels are managed, directed and controlled from the United Kingdom.
In the meantime the European Commission on 10th August 1989 instituted an action under Article 169 of the EC treaty alleging that the United Kingdom had, in its imposition of the nationality requirement in Sections 13 and 14 of the 1988 Act, failed to fulfil its obligations under the EC treaty. The United Kingdom is defending these infraction proceedings.
The Commission also brought an application for interim measures under Article 186 of the treaty asking the court,
"to order the United Kingdom to suspend, as regards nationals of the other Member States, the nationality requirements enshrined in sections 13 and 14 of the Merchant Shipping Act".
Judgment in respect of that application was delivered on 10th October and this order concerns that judgment alone. My honourable and learned friend the Solicitor General robustly argued the case for the United Kingdom on a number of grounds.
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Among other things, he submitted that interim relief ought not be ordered where a Commission's case on the incompatibility of the nationality conditions with Community law was weak. In particular, he argued that a state has the right and duty under international law to prevent the abuse of its flag and to lay down the conditions for registration of ships which will fly its flag.
He further submitted that the nationality requirements at issue were both consistent with international law and were necessary to uphold the system of national quotas under the common fisheries policy, which are based on nationality. The House will remember that the common fisheries policy was negotiated in minute detail by Ministers from each member state in a whole series of monthly meetings in Brussels when this system was set up in 1982–83. However, the court accepted the Commission's view that there was a prima facie case against the United Kingdom on the nationality issue and also that in the meantime certain "quota hoppers", particularly Spanish vessels which had hitherto fished against United Kingdom quotas, were suffering loss. The court, therefore, made its interim order to limit the loss of these fishermen pending the outcome of the main action—provided that they were able to satisfy the other conditions for registration to which I have already referred.
The United Kingdom is now obliged to give effect to the European Court order, which is why this order is before the House for approval. It is, as I said earlier, not certain what precise effect the relaxation of the nationality requirement will have. It may be very little since, as was recognised by the Commission itself, no more than a few fishing vessels are considered likely to be able to meet the other requirements which remain in force.
I refer to the requirements for residence and domicile in the United Kingdom and direction and control of operations from the United Kingdom, which will still need to be satisfied. It is of course possible that certain Community nationals might decide to take up residence in the United Kingdom, but this would require positive action, which would include setting up their permanent home here. In any event, it would continue to be necessary in all cases to establish that beneficial ownership, management and direction and control of vessels rests within the United Kingdom. It would not be enough merely to have token representation in this country.
The Government's objective remains to take all proper steps to ensure that the benefits of the United Kingdom quota under the common fisheries policy accrue to the genuine United Kingdom fishing fleet—but, of course, all such steps must be in accordance with EC law. The European Court of Justice has required, on an interim basis, that that portion of the 1988 Act concerning the nationality requirements for registration be suspended pending full argument and the final decision in this case.
Before I move the Motion, I feel that it would be helpful and would perhaps save some time if I answered more fully some of the points which were raised last week on the occasion of the Question of the noble Lord, Lord Stoddart of Swindon. He asked

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whether it was not intolerable that a court sitting in a foreign land could instruct the British Parliament to alter an Act of Parliament. I cannot accept this. The relationship between Community and national law was considered at the time of our accession. In joining the European Community we accepted an obligation to comply with Community law. This includes compliance with orders from the European Court of Justice. It is now a fact of life within the Community that Community law prevails over any conflicting provisions of national law. The European Communities Act 1972 provides machinery for giving effect to Community law. Hence the draft Order in Council that we are debating tonight.
I hope that I have already gone some way towards answering the points raised by the noble Lords, Lord Jay and Lord Underhill, about the effect of the order on the British fishing industry. I do not believe that the order would let in an armada of quota hoppers.
My noble friend Lord Campbell of Croy asked how the fishing quota system could continue to operate if the European Court's decision were to allow fishing boats to change their nationality at will and with ease. The interim order by the European Court is a very limited change. It does not change the existing requirements on residence and domicile, and it should have no effect on the common fisheries policy quota system.
The noble Lord, Lord Tordoff, asked me to consider the implications of the order for shipping safety and the dangers of over-fishing, particularly in the seas around Cornwall. On safety there should be no implications since all vessels fishing against the United Kingdom's quota will continue to have to be registered in the United Kingdom and will therefore be subject to the United Kingdom's statutory safety requirements. There should also be no effect on fish stocks. The order will have no effect on the EC fishing quotas and, as I have indicated earlier, the order is unlikely to lead to any significant increase in the number of vessels eligible to fish against the United Kingdom's quota—whether around Cornwall or elsewhere.
I hope that I have now answered the questions which were put to me last Thursday. I ask the House to approve the order. I beg to move.
Moved, That the draft order laid before the House on 17th October be approved [28th Report from the Joint Committee].—(Viscount Davidson.)
Lord Underhill: My Lords, the House is grateful to the noble Viscount for explaining this order and for dealing with some of the points which were raised during Question Time last Thursday. Perhaps I may say at the outset that I am still unhappy with the order but that I appreciate the attitude taken by the Government in resisting the application made by the Commission to the European Court. I think that the Government took the right stance. The attitude I should like to take up in this matter is that of my party in relation to accepting the position of Britain within the EC.
The Minister has explained that it was the European Commission which sought the declaration from the Court of Justice. He dealt with some of the
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provisions of subsection (1) of Section 14 around which the whole case revolves. The court document sets out the history of fishing quotas and that of the Spanish fishing vessels which noble Lords will recall was the subject of very detailed consideration during deliberations on the Bill which is now the Merchant Shipping Act 1988.
Paragraph 15 of the court order sets out the agreed transitional system which limits the number of fishing vessels flying the Spanish flag which may fish in waters of member states to 300 vessels of which only 150 may pursue fishing activities at any one time. Paragraph 21 of the court document is most important. It points out that under the articles of the Rules of Procedure, an interim judgment may not be given,
"unless there are circumstances giving rise to urgency".
As I mentioned in one of my supplementary questions last Thursday, the issue of "urgency" must be examined. The legal arguments are set out in a document and, as the noble Viscount said, the court found that the requirement of a prima facie case is settled.
The following paragraphs in the document deal with the matter of urgency. They state that the Commission informed the court that the British conditions had had the effect of forcing the entire Anglo-Spanish fleet to remain idle which had led to serious financial damage.
In the circumstances I must repeat some of the questions which were put last Thursday. I must also comment upon some of the points made by the noble Viscount. The news release of MAFF of 11th October quoted a comment on the judgment by Mr. David Curry, the Government's fisheries Minister. It reads,
"The Court's Order only requires us to suspend temporarily the nationality restrictions of Section 14 … the requirement that owners of British fishing vessels shall be resident and domiciled in the UK remains, as does the need for the vessels to be controlled and managed from here".
In my view the Minister's comments which were quoted in the release do not bring out an important point: Articles 3 of the order now before the House makes clear that a vessel must be "Community-owned" and not "British-owned" as at present set out in Section 14(1)(a) of the Act. This emphasis on Community ownership is repeated in relation to Sections 2 and 7 of the Act. Moreover, the explanatory note to the order further emphasises that point. The explanatory note also explains that the court ruling relates to,
"vessels which were fishing under the British flag up to March 31st 1989 and were owned by nationals of member States of the European Communities".
These vessels will be allowed to fish under the British quota but the noble Viscount has said that only a few will be involved. However, he cannot give any actual figures or say how the situation could develop. Is this part of the explanatory note in accordance with the president's order which is set out at the end of the court document? For the benefit of noble Lord, and with the leave of the House, perhaps I may be permitted to read that order. It says:
"Pending delivery of the judgment in the main proceedings"—
which, incidentally, we are told may take two years—
"the United Kingdom shall suspend the application of the nationality requirements laid down in Section 14(1)(a) and (c)

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of the Merchant Shipping Act 1988, read in conjunction with paragraphs (2) and (7) of that section, as regards the nationals of other Member States" —
noble Lords will note that there is no comma or full stop here—
"and in respect of fishing vessels which, until 31st March 1989, were pursuing a fishing activity under the British flag and under British fishing Licence".
I have no knowledge of the law. But does that not mean that the position of the vessels which were fishing until 31st March are covered by this order and that their activities—which were denied by the Act—must be continued? Moreover, what about the reference to,
"as regards the nationals of other Member States".
Does this mean that provided they fulfil other requirements they can fish in British waters? In my view that point is rather important.
The European Court made its ruling as a matter of great urgency. If the Minister is correct in stating that the interim ruling will have little effect, and if the noble Viscount is correct in repeating that statement, where does the court's argument stand on the question or urgency? Surely the matter of urgency does not then arise.
If many vessels are involved this could lead to a situation as regards quotas whereby British fishermen could be out of work. Surely that is a matter of urgency for the United Kingdom. Therefore the question regarding the number of vessels involved, and the number that will be involved, is rather important. Moreover, even if only a few vessels are affected, as Section 14 (1)(b) of the Act still stands under the court order, could not these Community owners arrange for their vessels to be controlled and managed within the United Kingdom? Thus, despite the court ruling, more Spanish vessels and more vessels of other Community states could be allowed to fish to the detriment of British fishermen. In my view this point was not clarified in the statement made by the noble Viscount this evening.
I should like to follow briefly an issue raised by the noble Viscount as regards international law. From the legal advice given to the Government I should like to know, despite our acceptance of the Community treaty, whether that can obviate the right of any nation to decide under international law what should be the basis of registration of a ship and the entitlement to fly that flag. We are told that the conditions which the Government thought were the basis of international law are those imposed by other member states for flying their flag. Is that, or is that not, the position? If it is the position, then obviously it is one of great seriousness.
I noticed that an article which appeared in The Times on llth October stated that this case sets an important legal precedent in that it appears to be the first time that the Commission has suspended a new British law before taking a decision on its incompatibility with Community legislation. I should like to know whether that statement is correct? I think that that is one point which must be settled.
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If the Commission is so urgently concerned with discrimination and if only a few vessels are involved—although that point has still to be clarified—would it not be advisable for the Commission to spend its time dealing with the opening of cabotage to merchant shipping of all member states? Should it not also take action against the fiscal advantages and discrimination practised by many Community states in support of their merchant shipping and port industries?
It must be proved to us first that only a few vessels are involved; and secondly, that this is a matter of great urgency. If it is not a matter of great urgency, then I suggest that the points I raised at the end of my remarks are ones of greater urgency to member states and especially to the merchant shipping of this country.
7.30 p.m.
Lord Campbell of Croy: My Lords, I thank my noble friend for explaining the order. I also understand the unease about the suspension of part of a British statute which was expressed in Question Time last week and which will no doubt be expressed again this evening. I propose to draw attention to a general matter, which I find most disquieting, which looks to the future, far beyond the order. Of course, I shall not discuss the case which is now before the court, but the fact that the action has been brought at all by the Commission raises questions for the future.
The action relates to a dispute between the United Kingdom and owners of certain fishing boats about eligibility for the new United Kingdom register for fishing vessels. If the EC is to proceed towards interchangeability of nationality, that may be a desirable aim. I, for one, do not object to it in principle. It is, however, completely inconsistent with the regime devised as the cornerstone of the EC common fisheries policy—the system of national quotas agreed from time to time for individual member nations' nationally registered fishing boats.
Under the common fisheries policy, the fishermen's boats are treated in accordance with their nationality, and the quotas of scarce or conserved fish (those much in demand) are divided accordingly. That system, negotiated with great difficulty, could not be continued and would have to be changed to something different if the separate nationalities are to become merged or interchangeable through everyone eventually assuming similar rights in one another's countries within the EC. The two policies are contradictory. They are both being pursued at the moment, and the Commision is the agency.
The part of the Commission which is concerned with fisheries has the duty of supervising the operation of the quota system, relying entirely upon different nationalities. The part of the Commission concerned with establishment matters, and rights of participation in the capital of companies, is no doubt doing its duty as it sees it, to reduce restrictions arising from nationality within the EC.
It is probably not the Commission's fault that, unless the situation is taken in hand, the result of both those activities could be chaos. The situation

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may be worrying for other industries apart from the sea fish industry and in other areas of activity. It is developing into a minefield for the sea fishing industries. I put that in the plural because it is not just the British industry. There are others in the EC who will find the decision disrupting. They will be damaged if the quota system is made useless and inoperative.
The Spanish fishermen's organisations, based in Spain, have been in touch with me from time to time. They deplore the attempt at quota hopping, as it is called, of the boats which try to disguise themselves as British. The genuine Spanish fishermen do not sympathise with their renegade colleagues because they undermine agreements which have been reached and make for bad feeling between Spanish and British fishermen.
It might be argued that the quota system could still work, with allowance made for additional boats which have changed their flag; but it would be difficult to keep abreast of numbers. Four years ago there were about 50 Spanish boats which had established themselves and registered at British ports. From my latest count a few months ago, the figure is now 150; it may be more. If it becomes easy to adopt a new nationality within the EC, or nationalities are virtually pooled so that everyone can assume the rights of other nationals within other countries, changes of flag could be frequent and unpredictable; in other words, when skippers of fishing boats can change their flags as often as their shirts or socks, the whole basis of the common fisheries policy will collapse. Confidence within the various fishing industries will evaporate. Scarce fish will become scarcer.
Noble Lords will be aware that the species under threat around our shores and in EC fishing areas is haddock. They are disappearing and need special conservation measures which have been extremely hard on the fishermen involved. For a period in the recent past, the herring had to be protected from extinction. There was a total ban on fishing for herring in some areas.
The quota system has played, and continues to play, an essential part in all that as a fair and orderly control over the modern, effective catching power of the fishing fleets. It will not be easy to devise and reach agreement upon a new common fisheries policy. I am sure that the Government agree that if the quota system had to be scrapped it would be a formidable task to replace it.
I have seen the policy develop from close at hand. I was the Minister most concerned when the United Kingdom joined the EC in 1972–73. I was a close observer of the later negotiations, the enlargement of the Community with Spain and Portugal joining, and the problems of the fishing industries involved at that time.
I fully support the Government in the attitude that they have taken—I made that clear, as others of your Lordships did, when Part II of the Bill was going through your Lordships' House—and I must give a warning that the pursuit of EC objectives in one area may bring tumbling down EC achievements in other areas.
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I thank my noble friend Lord Davidson for his assurance tonight and his response to the supplementary question that I was able to put last week. This evening I have set out my concerns about the more distant future if apparently conflicting policies are pursued within the EC.
Lord Stoddart of Swindon: My Lords, like my noble friend Lord Underhill, I cannot see why there is such urgency about bringing forward the order. It appears that other people in another place are of the same opinion, because this afternoon the question of whether the order should be proceeded with was raised by Mr. Taylor, the honourable Member for Southend, East.
I had hoped, because I listened to that exchange, that the Government were listening. The Leader of the other place was present. I assumed that his silence implied consent; that is, consent to the arguments which were put by Mr. Teddy Taylor, but it seems that I was completely wrong and that the Government have decided to press on regardless, despite the serious constitutional issues which arise from the court's judgment and the implications for British fishermen and their livelihoods.
My views on the EC, I hope, are well known and, of course, correct. I cannot help but be contemptuous of the obsequious alacrity with which the Government appear to accede to every whim of the EC and its institutions. The order, for example, was prepared within seven days of the court's edict. No wonder the court and the Commission see this country as a soft touch. What other item, say of domestic legislation, would be dealt with within seven days? We should be shouting "hooray" of course if it were; but here we have an order from the EC which is processed and put into the system within seven days of the edict delivered by the court. As I say, no wonder they think in Europe that this country is a soft touch.
It is remarkable that we should be such an easy touch. Only in 1988 the Government were urging the Merchant Shipping Act on Parliament. I must quote from the speech of the then Minister, Mr. Channon, during the Second Reading of the Bill in the House of Commons on 28th January 1988. He said:
"Part II deals with the very serious problem of foreign-owned fishing vessels registered in the United Kingdom in order to fish against our EC quotas. This is, I know, a matter of concern to hon. Members who represent fishing constituencies. We are introducing stringent new eligibility requirements for the registration of fishing vessels in the United Kingdom. A fishing vessel would need to be beneficially owned as to at least 75 per cent. by British citizens resident and domiciled in the United Kingdom or wholly owned by a qualified company. There will be powers to specify additional eligibility requirements.
"These are stringent requirements, but we believe they are essential—"
let me underline that—
"if British fishing quotas are to be preserved for British fishermen. They have been carefully drawn up in consultation with the fishermen's organisations and widely welcomed by them".—[Official Report, Commons, 28/1/88; col. 5]
Bearing in mind that strong support of Part II of the Act, why do we give in so easily to an edict from the European Court which, perhaps even in just a small measure, will hurt our British fishing industry?

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As I said last Thursday, only months after that speech was made and the Act came into operation, we are told by this court sitting in a foreign land that from an Act of Parliament passed by both Houses of Parliament, with agreement largely on all sides, we must remove any reference to vessels having to be British-owned. We must write into the Act a provision which removes the rights and privileges and which affects the livelihoods of British fishermen so that they now have to be shared with the nationals of 11 other nations. There are no comparable rights for British nationals in other EC countries. There are no reciprocal arrangements. British fishermen cannot go to Spain and do the same as the Spanish can here.
Why then do the British Government give in so easily, if there are no reciprocal arrangements? The fact is that the British Government and, it seems, the British courts appear to be less ready than other EC countries to protect the fundamental rights of their nationals. Perhaps I may quote from an article which appeared in the Financial Times on 13th April 1989 and which supports that contention:
"In the face of the overconfident and extremely free interpretation of European Community law by the EC Commission and the European Court, the attitude adopted by the UK courts appears distinctly diffident and timid".
Those are not my words but the words of the Financial Times. The article continues:
"This contrasts with the attitude of German courts which provide Luxembourg judges with more references than courts of any other member state, but jealously guard the fundamental rights of German nationals and residents.
"The French courts have a different solution to the problem: they see no need of asking the European Court for interpretation of Community laws and regulations, the meaning of which seems clear to them".
So there is a contrast between the way in which we deal with and protect the interests of our nationals and that of other members of the EC.
It is quite ironic that the first Queen Elizabeth, 400 years ago, defeated and sent packing the Spanish Armada, but now, in the reign of the second Queen Elizabeth, a Spaniard in the form of Senor Marin—the fisheries commissioner—can come to the Queen's realm and tell British fishermen, as he did in Aberdeen on 6th April, that their fishing fleets will have to be cut by up to 22.5 per cent. in the coming years.
In my view the constitutional position is very serious indeed, as I made clear last Thursday. The matter was raised again in the House of Commons today and from that it would appear that the position is even worse than I had realised. It now seems that, in the light of other references which were made to the court in Strasbourg, we in this country may very well find that the traditional situation whereby Parliament legislates and the courts administer will change and the courts of this land will be allowed, under a Brussels edict, to set aside Acts of Parliament.
In conclusion, there is a convention that the House of Lords does not vote on orders. Generally speaking, I agree with that convention. However, I understood that the House of Lords was supposed to look after constitutional matters and had a role in protecting
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the constitution. In matters of this kind, I believe that the convention that the House of Lords ought not to vote on orders should be set aside. I do not know that we, or I, shall test the matter tonight. However, the noble Lord, Lord Tordoff, raised a very serious question regarding the lights of this House. The more we have orders of this kind the more we shall have to consider exactly what the role of this House is.
7.45 p.m.
Lord Jay: My Lords, the Minister said that it was necessary to look at the background of the order. However there are some facts in the background which he did not mention. One is that had this country never accepted the common fisheries policy, we should still have—as Norway does—a 200-mile fishing zone of our own. Norway has successfully preserved its zone. That was not done here. As a result of the common fisheries policy, this country contributed something like three-quarters of the total stock of fish to the pool. I understand that under the British quota the British fishing industry is only able to take out about 16 per cent. as opposed to the three-quarters put in. Those are the basic facts to the background.
In addition, it is apparently true—and the Minister will say if I am wrong—that of the fishing vessels entitled to draw on the British quota, about 10 per cent. are now Spanish owned. I believe it is also true that the present fisheries commissioner in Brussels is Spanish. If that is not correct, the Minister will tell me.
On top of all that, we now find that the interests of the British fishing industry are to be even further damaged by this provision forced on our legislation so that we cannot in effect mention the fact of British citizenship in a piece of legislation of this kind. The Minister, brushing this aside, said that all these matters were discussed when the EC legislation was passed, and that was the end of it. However, I cannot recall that the public were told at the time of the referendum, or indeed in debates in the House of Commons, that membership would make it impossible for the British Parliament to mention British citizenship in an Act of the British Parliament. If my memory is at fault there, the Minister can say so.
When one turns from those considerations to the practical effect of what is now proposed, and how many vessels will be affected and what the consequences will be for the British fishing industry, it seems to me that we are left wholly in the dark. We are told that there still has to be a residential qualification for the owners of the vessels in question. It seems curious that one cannot mention nationality and the matter of citizenship, but one is still allowed to mention nationality, apparently, when it is a question of ownership and residence. Surely what matters from the point of view of practising fishermen is how many vessels will be affected by the change. If it is now true that some 10 per cent. of the vessels which are entitled to draw on the British quota are Spanish owned, will this residential qualification reduce that 10 per cent. to 7 per cent., 5 per cent. or even less, or will it,

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numerically, have only a completely negligible effect? I should have thought we were at least entitled to know that. So far we have not been told.
I wish to put the assertion of my noble friend Lord Stoddart of Swindon in the form of a question. Is it the case that this measure is not reciprocal? Is it a fact that for some obscure reason it is not possible for British fishermen, presumably by acquiring a residence in Spain, then to draw on the Spanish quota in the same way as the latter will be allowed to do in regard to our quota? I must confess that, even after hearing the Minister who did his best with the brief he has, I find deplorable the situation into which step by step we have now been pushed. If no further information can be given, I should very much deplore it if this order had to be passed by both Houses of Parliament.
Lord Parry: My Lords, I am grateful to the noble Lord, Lord Tordoff, who has allowed me to speak before him. I wish to declare an interest as the chairman of the Milford Docks Company, from which role I draw a profit. The House will be aware that some time ago I warned that there was a danger that the Government would find themselves in a position of illegality in regard to the general law of the EC over this exclusivity issue. I do not rise tonight to say "I told you so", and nor do I dissent from some of the difficulties faced by my noble friends.
I was an opponent of our entry into the EC and I am sceptical about the EC at the present time to say the least. Yet ironically I find myself with a wholly different problem for the Minister. I must remind him that the port of Milford Haven was the base of the Welsh fishing fleet at a time when it put some 100 ships to sea. At present the indigenous fleet at Milford Haven is down to between seven and nine vessels, of which about half a dozen only are at sea at any given time. Over the course of our lifetimes we in Wales have seen the decline of a basic part of the economy of Wales, and particularly of West Wales. We regret that deeply.
I have always supported the indigenous fishermen. I wish to protect them and ensure that they get the opportunity to fish. Nevertheless, times change and we have entered the EC. We are almost on the eve of 1992 when some of the arguments that have been presented here this evening will have taken their place in the history of the evolution of Europe.
I have already put to the noble Viscount, Lord Davidson, the fact that a part of the fleet at Milford Haven is Spanish. However, I must repeat that for the record. The fleet is Spanish in the sense that some of its operators were originally Spaniards who came to settle in Milford Haven. The Couceiro family have worked for a long time to obtain a proper right to fish as British nationals within the British system. The father of that family has been a citizen since about 1955. His son has been a citizen for at least 15 years and the other son who is a participating partner is a British born citizen. That family can in no sense be called quota hoppers or renegades either to their nationality or to the work they are trying to do. Without picking up a specious
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issue, I simply wish to point out that we are talking here about people who have tried to make their way within the British system and to obtain British nationality.
If this decision were clear cut, I do not think many of us would have much trouble with it. However, unless the Minister can give me some satisfaction later this evening, I must contend that it is not. Twelve modern vessels, each worth anything from £300,000 to £500,000, owned by one Spanish-Welsh or Welsh-Spanish family, whichever way one cares to look at it—I am conscious that a lot of time has been taken over this issue but it is vital to put the Welsh issue on the record—have been tied up for seven to eight months at the wall at Milford Haven. During that time the company in which I have declared an interest built a new ice factory to service the fishing industry to try to keep it alive and sought and obtained support for funding it from the Welsh Office. We have spent nearly £½ million on the provision of new facilities to strengthen the whole fleet; that is the indigenous fleet and those who are able to fish within the limit.
The land based employees at this one company amount to 12 people. The indigenous fishing people ashore adds up to a similar number and the sea based members of the fleet would number 50 if they were all at sea. If a willing seller made these ships available to a willing buyer at this time, the seller would have a valuable asset which would command a global sum of about £2 million. However, the vessels are tied up at the wall at a cost of £400 a day. Although my noble friends are right, given their concerns, to argue that there is no great haste for the decision to be clarified, the sooner the matter is clarified and resolved the better it will be for fishing in West Wales.
The figures that I have quoted have been certified on affidavit before the courts. We now have a potential fleet of 12 boats of the Couceiro family and six to nine boats from the indigenous fleet. One could add to that the fisherman, Ramon Ileria, who sought British nationality because he wished to live and to trade within the regulations. If we added up all those boats, we would have the beginnings of a modern fleet and Milford Haven could offer a modern facility of value to Wales.
The noble Viscount, Lord Davidson, was not certain about the precise effect of the order. My noble friend Lord Underhill also raised that issue. Is the Minister able to confirm that his right honourable friend the Secretary of State for Transport has appointed an inspector who will investigate the issues affecting the registration of the Couceiro fleet and others at Milford Haven and has asked the inspector to report to him? I realise that the Minister may need to take advice on that, and I shall be only too happy to receive an answer either directly or indirectly. It does not matter to me how I receive it as long as I receive one. In the meanwhile I ask the Minister to impress upon his right honourable friend, if there is such an inspector and if the intervention of the inspector is likely to be a lengthy process, the need for haste to a good decision on the issue with regard to that fleet.

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I say again to the Minister and to the House that if British nationality and British control requirements are satisfied, since there are only two years to go to 1992 and an open seas policy, in this case I should welcome a decision.
Earl Attlee: My Lords, I shall be exceptionally brief in order to give time for the noble Lord, Lord Tordoff, to wind up and for the noble Viscount to reply.
I support what the noble Lord, Lord Underhill, said about cabotage. I also support the noble Lord, Lord Stoddart, who pointed out that the Spanish can fish in our waters but we cannot fish in theirs.
8 p.m.
Lord Tordoff: My Lords, I shall also be extremely brief. This has been a fascinating debate. We have heard the Teddy Taylor appreciation society and the anti-European monarchist party speak. We have heard challenges to the rights of the European Courts. The question of Community law versus domestic law has been raised. We have to take the rough with the smooth. Many of us, particularly on this side of the House, are grateful to the Courts in Europe for preserving human rights in this country when the present Government are trying to erode them, particularly in the area of individual freedom.
From these Benches, as committed Europeans, it is easier for us to be critical of the Community when it makes mistakes. We believe that the Community is making a mistake in this case. There is a widely held view that Spanish fishermen are cheating. It is very difficult to pin it down precisely, but the quota system is being nibbled away at the edges by some fishermen. However, I take the point of the noble Lord, Lord Parry, that those who have come to settle here and who have provided a certain amount of inward investment are greatly to be appreciated and should be supported.
If the Commission is acting unfairly, as many speakers tonight believe it is, it should be made clear to the Commission that it is in its interests to see that the quota system is applied properly. As the noble Lord, Lord Campbell of Croy, said, fishing quotas have been a very important means of dealing with extremely difficult problems relating to national demands on fish. They have also provided a basis for some conservation of fish stocks.
Reference was made to the years when herring disappeared from the North Sea. I well remember that. I remember being at a party conference many years ago at which a trawlerman who was speaking in a debate pulled a herring out of his pocket, flung it into the audience and said, "Pass that round. It might be the last one you see". For many of us it was the last one that we saw for several years. The herring stocks in the North Sea reached the point almost of no return. Fortunately the situation has recovered. However, there is no doubt that fishing quotas have been an important factor in preserving stock.
The Government ought to be saying to the Commission, "You have agreed national quotas.
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They have been agreed over a long period. It is up to you to defend those quotas when there are genuine problems". That there is a genuine problem in this case there can be no doubt. As the noble Viscount said, his right honourable and learned colleague in another place has been defending the position before the European Court and, from what he said, has been putting the case very well.
It is to the Commission that we should say that we are being treated unfairly. Not only are we being treated unfairly but there are also problems in other countries. One of our difficulties is that we normally address the Commission in such strident terms—like a collection of fishwives, if I may use the expression, although on the whole fishwives are rather more polite than our present Prime Minister. If we stopped shouting at the Commission, started to talk to it and explained our problems we might make more progress.
There is a genuine problem here. It is not restricted entirely to this country. Like the noble Lord, Lord Underhill, I have before me the MAFF news release which said that Mr. Curry had just returned from a fact-finding visit to the German fishing industry and that support for the UK's position had been expressed by his colleagues in Germany, Ireland and Denmark. It also said that other member states would be arguing for stronger rules to protect their fishing industries. I should be glad to know whether the noble Viscount can tell us whether there have been further discussions with other European Community countries because that seems to me to be the way forward.
I am most grateful to the noble Viscount for his answers to the supplementary question that I raised to a Question last week. I am perfectly satisfied with what he said. On the assurance that little change will take place as a result of the interim order we would certainly not push our objection further. However, the Minister and his colleagues in the Government must recognise that there is genuine concern in this House, as in another place, even among those Members who are fervent believers in the European Community. Genuine criticism from them might be listened to more sympathetically than from those who are diametrically opposed to the whole concept of Europe.
Viscount Davidson: My Lords, I am most grateful to noble Lords who have taken part in the debate on the order. We are a little pressed for time but I shall do my best to answer as many of the points raised as possible.
On a general point I must emphasise that it is a fact of life in the Community that Community law prevails over any conflicting provisions of national law. The European Court of Justice has now required the UK to suspend the nationality provisions of the Merchant Shipping Act pending final judgment on their compatibility with EC law. Of course we argued before the Court against suspension. But I must say to the noble Lord, Lord Stoddart, that we take our obligations seriously, including European Court of Justice judgments, because we believe that it is in the UK's interest for the Community to have strong institutions and a sound framework of law. So we intend to implement the Court's ruling. I do not

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wish to continue the debate as to whether or not we should have joined the Common Market.
I must emphasise that the European Court of Justice works within the confines of the treaties. It is an independent and impartial court and has by no means always decided in favour of the Commission.
The noble Lord, Lord Underhill, referred to a statement in The Times to the effect that the Court had made a ruling requiring a change in the law without there being any determination that UK law was in breach of Community law. Such a ruling is in the nature of an interim measures ruling. As the noble Lord has pointed out, the Court has to be satisfied only that there is a prima facie case before it will be entitled to grant interim measures. The purpose of such an order is not to determine the rights of the parties but to hold the position pending final determination.
Regarding urgency, the rule of Community law, a well established rule as the European Court of Justice has itself said on a number of occasions, is that,
"The implementation of a judgment has to be commenced immediately and must be completed as soon as possible".
In this case the urgency arose because the owners of the vessels which will benefit from the order could go bankrupt very swiftly. For them, therefore, the matter is urgent. It is in relation to them that the Court—and I repeat, the Court—considered the matter urgent. Of course I am not in a position to speak on behalf of the Court.
The noble Lord, Lord Underhill, said that the requirement that beneficial ownership be vested in persons domiciled and resident in the United Kingdom remains. Therefore present owners could not just arrange for their vessels to be controlled from the UK; they would themselves have to become resident and be domiciled here. I might write to the noble Lord to explain more fully what "resident" and "domiciled" mean. I would have said so now but I am trying to hurry.
Concerning cabotage, I can confirm that it is still the Government's intention to secure freedom of cabotage within the European Community. That is why we took the power to control cabotage in the 1988 Act. However, that issue is outside the scope of the order and would be better discussed on a more appropriate occasion.
My noble friend Lord Campbell of Croy spoke about the conflict of EC policies. We agree that there is a conflict between the EC policy on fishing quotas and the interim order of the court. However, that is a wider question than the one we are considering tonight. I can assure my noble friend that we shall continue fighting the issue in the context of the court action.
The noble Lord, Lord Jay, was correct on one point; namely, that the EC Fisheries Commissioner is Spanish. The UK contributes 75 per cent. of the fish but has only 37 per cent. of the quota. Only one per cent. of the UK fleet is Spanish-owned and the Fisheries Commissioner is Spanish.
The noble Lord, Lord Stoddart of Swindon, spoke about the UK being called—I believe that this is
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what he called it—a soft touch. The UK is indeed the first country against which infraction proceedings have been introduced by the Commission, although I understand that proceedings have been instituted against Ireland in a related matter. We understand that infraction proceedings will be opened in the very near future—within three months—against the fishing vessels legislation of six countries, namely, Belgium, Denmark, Germany, Spain, France and Ireland. The decision on proceedings against another four countries—Greece, Italy, the Netherlands and Portugal—is to be taken within one month.
The noble Lord, Lord Tordoff, asked about discussions with the other member states on quota hopping. The fisheries Minister will be holding such discussions over the next few months.
The noble Lord, Lord Parry, asked about an inspector being appointed by my right honourable friend. I can tell him that Clearmaine has now been informed that the Secretary of State has appointed an inspector to investigate the eligibility of the vessels for registration. That seems the best way of dealing with the case. The inspector will take account of the Order in Council once it is approved by both Houses of Parliament and made by the Privy Council.
Lord Jay: My Lords, before the Minister sits down, will he say whether British fishermen will have corresponding reciprocal rights in Spanish waters?
Viscount Davidson: Not at the moment, my Lords.
On Question, Motion agreed to.

Local Government and Housing Bill
8.12 p.m.
Consideration of amendments on Report resumed.
The Minister of State, Home Office (Earl Ferrers): moved Amendment No. 172:
After Clause 149, insert the following new Clause—
("Contingency planning and co-ordination in respect of emergencies or disasters.
—(1) In section 138 of the Local Government Act 1972 (powers of principal councils with respect to emergencies or disasters) after subsection (1) there shall be inserted the following subsection—
"(1A) if a principal council are of the opinion that it is appropriate to undertake contingency planning to deal with a possible emergency or disaster which, if it occurred,—

(a) would involve destruction of or danger to life or property, and

(b) would be likely to affect the whole or part of their area, they may incur such expenditure as they consider necessary on that planning (whether relating to a specific kind of such possible emergency or disaster or generally in relation to possible emergencies or disasters falling within paragraphs (a) and (b) above)."

(2) In subsection (3) of that section—

(a) for the words from the beginning to "authorise" there shall be substituted "Nothing in this section authorises"; and

(b) for the words "the power conferred by that subsection is" there shall be substituted "the powers conferred by subsections (1) and (1A) above are".

(3) At the end of the section there shall be added the following subsections—
"(5) With the consent of the Secretary of State, a metropolitan county fire and civil defence authority and the London Fire and Civil Defence Authority may incur expenditure in co-ordinating planning by principal councils in connection with their functions under subsection (1) above.
(6) In this section "contingency planning" means the making, keeping under review and revising of plans and the carrying out of training associated with the plans."").
The noble Earl said: My Lords, in moving this amendment, it may be for the convenience of the House if I speak also to Amendments Nos. 172A to 172G, 221 and 224, all of which relate to the same subject.
At the Committee stage, I undertook to bring forward a government amendment following the discussion on amendments tabled by the noble Lord, Lord McIntosh, and by my noble friend Lord Renton and others. Further amendments have now been tabled by several noble Lords and, as I suggested, it would be helpful if we could take all those together.
The government amendments now before your Lordships' do two things: they extend the powers already available to local authorities under Section 138 of the Local Government Act 1972, and they give new powers to fire and civil defence authorities to co-ordinate borough or district emergency planning.
The first point is essentially a clarification of the existing powers. Under Section 138, a local authority may incur expenditure—these are the words of the Act—
"where an emergency or disaster involving destruction of or danger to life or property occurs or is imminent or there is reasonable ground for apprehending such an emergency or disaster".
That would allow an authority to plan, for example, to deal with a river that has a history of flooding, but it might not allow an authority to incur expenditure on making contingency plans against the possibility of a disaster which could not be foreseen such as that which occured in October 1987, which was a one-in-300-years storm. In many cases, of course, planning on that basis already takes place. The purpose of the amendment is to confirm that it is lawful, not to signal a government belief that the total expenditure level in that area should necessarily rise.
With regard to subsection (3) of the new clause, which covers the new powers for fire and civil defence authorities, I listened carefully to the arguments of the noble Lord, Lord McIntosh, and of my noble friend Lord Renton when they introduced their amendments in Committee and I have reflected on them since. There is, I think, broad agreement that fire and civil defence authorities should have a co-ordinating power in relation to emergency planning by the boroughs or districts. But the difference, between us, such as it is, lies in whether the fire and civil defence authorities on the one hand or the boroughs on the other should have the duty and therefore the last word. The amendments of the noble Lord, Lord Graham of Edmonton, and of my noble friend Lord Renton seek to give the fire and
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civil defence authorities, and indeed other local authorities, a duty to plan and to require the boroughs to comply.
Perhaps I may return to the duty point later, but, however we look at it, we come back at the end to the fact that action in a disaster—for instance, providing emergency accommodation—is the legal function of the boroughs and requires the use of their resources. It could not be right that fire and civil defence authorities, which have neither those functions nor those resources, should ultimately be able to determine how the boroughs conduct what is by law their business.
But the noble Lord, Lord McIntosh, included in his amendment at Committee stage a number of detailed proposals which largely reflect how we would like to see the new provisions being operated. Similar points are included in the amendment of the noble Lord, Lord Graham today. I have thought about those points carefully, but I do not believe that it is necessary to spell out in the statute arrangements which can be established administratively.
We would of course expect fire and civil defence authorities to consult the districts or boroughs in drawing up their co-ordinated plans. It would indeed be difficult to see how it could reasonably be done otherwise. Similarly, we would expect the boroughs to co-operate in the provision of the necessary information. This is clearly an area of common interest. Both sides of the equation will be concerned to make the planning for emergencies as effective as possible.
In turn, the Government will be concerned to see that that commonsense approach is taking place. The expenditure by fire and civil defence authorities requires the consent of the Secretary of State, and we shall be looking to ensure that their proposals recognise the legal responsibilities of the boroughs and districts and take into account the co-ordinating which may already exist, and to ensure that, as far as possible, they have the support of the boroughs or districts.
That is why it would be difficult to advise noble Lords to accept the suggestion of the noble Lord, Lord Graham, to delete the requirement for the Secretary of State's consent. If, on the other hand, a particular borough sees no apparent need for the co-ordination of its plans with those of others, I am sure that the new civil emergencies adviser would want to look carefully at what was going on, find out why a local authority takes such an apparently insular view and see whether or not that reflects the best practice that is carried out elsewhere.
We believe that in that way we can ensure that the new powers are used sensibly. The funding for that co-ordinating work is through the precept mechanism. Existing civil defence resources may already be used under the Civil Protection in Peacetime Act 1986, and the main expenditure will relate to staff time. The effect of the precept by the fire and civil defence authorities on any one borough or district will be minimal and it can, we believe, be met within the existing resources of the boroughs or districts. There may even be some offsetting savings for boroughs or districts in terms of work which is

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done by fire and civil defence authorities and which is ultimately to their benefit.
The new clause, which is in the name of my noble friend, widens the scope of sensible emergency planning. Given common sense, I think that it can make a significant difference to the quality of planning in our major cities. The amendment to Clause 187 allows the Secretary of State to appoint a day for the provisions to come into force, and Amendment No. 224 allows the Long Title to be altered in order to reflect the substance of the new clause.
I come now to the question of duty and whether it is desirable to have a statutory duty. I listened carefully at Committee stage to the arguments made by various noble Lords that we should go further and impose a general duty on all local authorities to plan for civil emergencies. I realise the attraction of that course and have considered the amendments that have been tabled by various noble Lords this evening.
In view of the concerns expressed by your Lordships, we have looked again at this matter with some care. I understand, and have a great deal of sympathy for, those concerns but I believe that we need a more detailed assessment of precisely what local authority needs are in this area. The area of local authorities' powers, their duties and responsibilities, is a complicated one. If there is a need for a duty to plan, should it be just that and no more? Or should it be, as the noble Lord, Lord McIntosh, suggested in his amendment, that the Secretary of State should have a power to prescribe what should be included in those plans and to assess the quality of those plans? These are important issues that must be determined if we want to take the right decision.
My right honourable friend the Home Secretary and I will therefore be asking the new adviser to tackle this issue as a matter of priority. We shall want him to look closely at what is happening in practice on the ground and talk to individual chief executives, county emergency planning officers, local government organisations and the emergency services. He will be asked to advise on what is necessary and what is desirable for local authorities to have or be told in order to achieve proper effective emergency planning. We shall want him to report on that aspect of his responsibilities as soon as practicable. I think it is important that we get this matter right.
I can well understand the view that has been expressed by my noble friend Lord Renton and other noble Lords—to put it simply, if the local authorities have a duty to prepare for war which is unlikely to happen, they ought to have a duty to prepare for peacetime emergencies which we know are happening with an all too hideous frequency. The whole question is posed not because there are no preparations being made; indeed there are. The question is whether a duty is the best or indeed the only way of ensuring that emergency planning by local authorities is as effective as it possibly can be. That is what I want to find out.
Even if I knew the answers to those questions—and with respect I do not think that your Lordships know them either—there would not have been time between Committee stage and now to clear all the hurdles and draft an amendment which would stand the test of time, or indeed the scrutiny of my noble friend Lord Renton, which might be an even more monstrous hurdle to overcome.
I hope that your Lordships will accept that I have taken on board the anxiety of my noble friend Lord Renton and other noble Lords and that we intend to take action on this issue. I hope that noble Lords will consider that the amendments in the name of my noble friend Lord Hesketh are a step in the direction in which we all wish to travel and will approve of them. I beg to move.
Lord Graham of Edmonton: moved, as an amendment to Amendment No. 172, Amendment No. 172A:
Line 5, leave out from beginning to ("which") in line 7 and insert ("Where an emergency or disaster is possible").
The noble Lord said: As well as to Amendment No. 172A I should like to speak to Amendments Nos. 172B, 172C, 172D and 172E. I am flabbergasted that the Government, when they want to, can draft a whole Bill and spatchcock it into the current Bill in respect of the poll tax, but when it comes to a matter of producing something positive in the field of emergency planning in peacetime the Minister can spend ten minutes to tell the House how difficult it is. So be it. I shall not waste the time of the House by either answering in detail the arguments of the Minister or even putting forward our arguments, because the attitude of the Minister and the Government says it all.
Of course the amendment tabled in the name of the noble Lord, Lord Hesketh, is a tiny step in the right direction, but the Minister knows—because the information that I have is the same information as he has—that there is a dreadful sloth around when it comes to finding the funding and making plans. Sadly, whenever an emergency arises people ask, "Why were we not better prepared for it?" The Minister knows, because he follows these matters very closely, that that is the moment when people realise that it is too late.
The Minister and the Government have on their shoulders an enormous responsibility and, as a consequence, after this Bill is enacted, a dreadful responsiblility for failing to take the opportunity presented by this Bill figuratively to kick the backsides of some local authorities and others to encourage them to do what we all know will need to be done at some time in some future emergency.
I do not intend to take more than two or three minutes on this point because it is an exercise in futility. We should literally be wasting the time of the House because the Minister has indicated that he will call for reports, ask for consultation and be satisfied that there is a need and a will and so on. In my view all that is simply procrastination. I am very disappointed with the scene that the Minister has set for what could have been a very enterprising and innovative section of the Bill. I beg to move.
Lord Renton: My Lords, I wish to refer to the first of the amendments set down in my name; namely, Amendment No. 172F. This amendment stands also in the name of my noble friends Lord Mersey and Lady Blatch. It is a simple amendment to the Government's amendment. It would have the effect of putting beyond doubt that the FCDAs would have the power which the Government say they ought to have, think they are giving to them and which we all want them to have.
I have listened carefully to the words of my noble friend Lord Ferrers this evening. He again repeated what he said at Committee stage—that the FCDAs should have co-ordinating power. I think there is still a doubt as to whether the government amendment gives them that co-ordinating power.
In the new subsection (5) which is to be added to Section 138 of the Local Government Act 1972—that new subsection (5) is on page 25 of the Marshalled List—we find that the FCDAs:
"may incur expenditure in co-ordinating planning by principal councils".
It may be that my noble friend is absolutely confident that that gives them the power but I say that by accepting my simple amendment he would achieve legal certainty and put the matter beyond doubt.
What I am saying at the moment is purely technical. But of course this evening we are discussing something more important than the mere technicality of achieving what we all want. As I explained at Committee stage, and as the noble Lord, Lord Graham of Edmonton, mentioned this evening—and indeed as I thought my noble friend mentioned when referring to the consent of the Secretary of State—it is not enough for the FCDAs to have power to co-ordinate unless they can be sure that the people whose plans they are supposed to be co-ordinating have an obligation to prepare such plans.
One of the worst things that Parliament can do is to enact a dead letter—a nullity. There is a risk that in relation to some of the councils concerned—not all, but some—that is just what we shall be doing. I do not want to take up time with this matter. Because I am a very keen supporter of this Government and a great admirer of the Home Secretary and of all that is being done by him and my noble friend Lord Ferrers, I simply say that I am surprised that the opportunity is being missed. We are dealing at length with a 300-page Bill but we are not prepared to add just one page to it. We are adding half a page: we might just as well have added a page and have done the thing properly.
It is obvious that we shall not achieve what we want tonight. I hope that the step-by-step approach on which the Home Secretary has embarked will produce something as soon as the people require. The people of this country know about the risk of peace time disasters. They are not content with clever improvisation when a disaster occurs. They feel that the plan should be fully prepared and should be good and that the local authorities should have a duty to be ready. I hope that we shall not have to wait many Sessions of Parliament before the full result is achieved.
8.30 p.m.
Earl Ferrers: My Lords, I am grateful for the views, which I always respect, of my noble friend Lord Renton. I was astonished by the outburst of the noble Lord, Lord Graham. He said that the Government can alter everything, with reference to the poll tax, so why on earth can we not alter this aspect? He castigated me for speaking for 10 minutes. I agree that it was a long time to speak. However, I thought that it is a serious subject about which the noble Lord, like my noble friend Lord Renton, was concerned. I tried to put the Government's view as carefully as possible. The noble Lord, Lord Graham, castigated me. He and his colleagues have spent their time castigating the Government over this Bill, describing it as ill thought up. The noble Lord, Lord McIntosh, said that it was legislation being done on the run. As soon as I say to the noble Lord that he has made a very serious point, as has my noble friend Lord Renton, and that we are considering it and trying to find the best way to put this into operation but that when it is in operation we wish to ensure that it is right, the noble Lord accuses me of procrastinating. I do not think that he can have it both ways.
Lord Graham of Edmonton: My Lords, I did not castigate the Minister for taking 10 minutes; I castigated him for telling us in some detail at the end of 10 minutes why one needed to exercise care, to consult, to examine, to revise and, ultimately, to be sure, before putting forward such a measure. I simply pointed out that five hours ago this House was faced with a new Bill in relation to the poll tax. The argument that one needs to be careful when drawing up legislation goes out of the window when it suits the Government's macro-economic policy on the poll tax.
If I gave the Minister the impression that I did not respect the fact that he had taken a long time to explain the Government's policy, I apologise. What I said was that the Minister had explained the Government's policy but it did not amount to a row of beans.
Earl Ferrers: My Lords, I cannot castigate the noble Lord again. I shall tell him as politely as possible that he is out of order because he is speaking twice on Report stage. However, we shall let that pass.
I accept my noble friend's reservations. I know that he is concerned. He believes that if his words were inserted it would make it clear that the FCDAs should have a power. My noble friend says that the words that we have in the amendment do not give that power—that power is merely implied. My noble friend Lord Renton is a distinguished lawyer and a very astute draftsman. He knows that if we put provisions into the Bill which are different from those already in the Act people will draw comparisons. If my noble friend looks at Section 138 he will see the wording:
"the council may incur such expenditure".
Those are almost exactly the same words as used here, namely:
"may incur ‖expenditure".

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If we were to insert the words which my noble friend proposes for clarification—which I quite understand—we would be drawing a distinction between the powers that the FCDAs would now have and the powers which the local authorities have. As he knows, lawyers ferret around in Acts of Parliament to note differences. I hope that my noble friend will accept that it would be better to follow the format used previously.
My noble friend said that people want to know that we are well organised for peace time disasters; he argued that there is a duty for us to be ready. I believe that the response to peace time disasters has been remarkable. A great deal of planning is going ahead. There is no clear view, for instance, among local authorities of the need for a power. Indeed, the Association of County Councils does not want one. It does not see that it is necessary.
I have given your Lordships an assurance that it is a matter on which we are greatly concerned. It is one that we intend to pursue. I hope that even the noble Lord, Lord Graham of Edmonton, will not consider that in that matter we are procrastinating.
Lord Graham of Edmonton: My Lords, in view of what the Minister has said, I shall withdraw my amendment in favour of that of the noble Lord, Lord Renton.
Amendment to the amendment, by leave, withdrawn.
[Amendments Nos. 172B to 172E not moved.]
Lord Renton Lord Renton moved, as an amendment to Amendment No. 172, Amendment No. 172F:
Line 26, after ("Authority") insert ("shall have power to coordinate and").
The noble Lord said: My Lords, having moved the amendment I shall immediately withdraw it. In doing so I have to say that I do not accept the technical explanation given by my noble friend. However, if he thinks that it is all right I suppose that we must agree that it stand. I beg leave to withdraw the amendment.
Amendment to the amendment, by leave, withdrawn.
On Question, Amendment No. 172 agreed to. [Amendment No. 172G not moved.]
[Amendment No. 173 had been withdrawn from the Marshalled List.]
Baroness Blatch Baroness Blatch moved Amendment No. 173ZA:
After Clause 150,
("Electronic transfer of Documents.
The Local Land Charges Act 1975)
.—(1) In subsection (2) of section 9 of the Local Land Charges Act 1975, the words "A requisition under this section must be in writing, and" shall be omitted.
(2) In subsection (2) of section 14 of that Act after the word "include" there shall be inserted "(a)", and at the end of that subsection there shall be inserted the following paragraphs—
(b) provision for the use of electronic means in the making of requisitions for, and in the issue of, official search certificates, notwithstanding subsection (3) of section 231 of the Local Government Act 1972 (service of docucments on local authorities):
Provided that—

(i) such rules shall not provide that a requisition is duly made by electronic means, except where the local authority to whom it is made consents to the use of those means, or that an official search certificate is duly issued by electronic means, except where the person requiring the search consents to the use of those means; and

(ii) such consent may be given either generally or in relation to a specified document or description of documents, and either before or after the making of the requisition or the issue of the certification; and

(c) provision to modify the application of sections 10 and 11 above in cases where—

(i) the rules provide for the making of a requisition for, or the issuing of, an official search certificate by electronic means, and

(ii) there has been any error or failure in those means.").

The noble Baroness said: My Lords, I offer the apologies of the noble Lord, Lord Lloyd of Kilgerran, who is not present. I hope that the House will understand that he cannot be present for this amendment. I should also like to record my thanks to him for his unstinting efforts and support in preparing the amendment which I believe will help local authorities to be more efficient and to improve their service to the consumer.
The need for the amendment arises from the increasing use of computers by local authorities. There is no doubt that the electronic transfer of documents and information has become more common place. The advantages of using technology are well established. It reduces costs and provides a better and more efficient service. More enlightened local authorities are constantly looking for new ways to apply technology. However, current legislation often provides obstacles. The purpose of this amendment is to remove some of them.
One area which lends itself to the use of technology is that of land charge services which are part of every conveyancing transaction. Delays when buying a house can be troublesome to the consumer but more importantly they can cause serious delays in the mobility of the housing market. A new company has been formed to enable local authorities to provide searches electronically so reducing delays and providing a better and more efficient service. I know that the work carried out by the Land Charges Company Limited has the support of Ministers.
There is a more general need to allow for the electronic transfer of information documents. I hope that it will not be long before the Government look at current legislation and find the areas which inhibit progress.
The amendment is deliberately limited in scope. Having discussed the matter with the departments it is not timely for a more general amendment to be tabled. It is known to be supported in principle. It is enabling only—an important point to make at this time. It allows for the making of rules to allow local authority searches to be sent and received electronically. It does not prevent any local authority from continuing to write documents by hand and to send them manually. I am convinced that it will improve the service. I know that the amendment has the support of the Law Society, the Society for Computers and Law and various local government organisations.
It is important to note that the amendment also allows for the rules to make provision for suitable means of verification of electronic messages. For a long time that has been a stumbling block in the minds of many people but verification is an important point. Finally, it will apply only where the parties have agreed to use electronic communications. I beg to move.
Lord McIntosh of Haringey: My Lords, if it is in order I should like to speak from the Dispatch Box, as chairman of the computer sub-committee of your Lordships' House. In doing so I support most strongly the amendment moved by the noble Baroness. It is minimal at the present time. However, weekly we are installing new fax machines in various offices in the Palace, and when even the Public Bill Office has a machine, surely the time has come for them to be recognised in local government. I hope that it will be a beginning in the breakthrough of recognising the possiblities of modern technology.
Lord Reay: My Lords, Amendment No. 173ZA would amend the Local Land Charges Act 1975 so that requisitions for searches and search certificates could be made and issued by computer. As my noble friend Lord Hesketh made clear in Committee, the Government welcome the thought behind the amendments. We accept that in a small way they will help to speed up conveyancing. We could not then offer drafting resources to produce an acceptable version but we offered discussions with officials to see how progress could be made. We are grateful to the noble Lord, Lord Lloyd of Kilgerran, and his advisers for their efforts to make progress.
The noble Lord, Lord Lloyd, and my noble friend Lady Blatch have offered the House the option of including the main amendment either as a new clause or in Schedule 11. The Government believe that it is more appropriately included as a new clause. We also believe that the drafting of the amendments needs some improvement and in consequence propose to bring forward drafting improvements at a later stage.
We are glad to accept Amendment No. 173ZA. When we reach the point we shall be happy also to accept consequential Amendment No. 212A. It will not then be necessary to move Amendment No. 200A.
Baroness Blatch: My Lords, I am enormously grateful to my noble friend for his reply. I am also grateful for the co-operation of the department.
On Question, amendment agreed to.
8.45 p.m.
Lord Stanley of Alderley Lord Stanley of Alderley moved Amendment No. 173A:
Before Clause 153, insert the following new clasue—
("Housing accommodation
.—(1) Part II of the Housing Act 1985 (Provision of Housing Accommodation) shall be amended by the inclusion of the following section after section 32—
"32A—No condition shall be attached by the Secretary of State to the payment of grant to a local housing authority, or to the giving of a consent to:
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(i) the disposal of land, or

(ii) the use of funds, or

(iii) the payment of grant to a housing association

by a local authority, which would require such authority or housing association to grant occupiers a right to acquire the full equity or any specified share of the equity of any dwelling which is constructed in a rural parish with a population of 3000 people or less."
(2) Part II of the Housing Act 1988 (Housing Associations) shall be amended by the inclusion of the following section after section 50—
"50A—No condition shall be attached by the Housing Corporation to the payment of grant to a housing association or to the giving of consent to the use of funds by a housing association, which would require such housing association to grant to occupiers a right to acquire the full equity or any specified share of the equity of any dwelling which is constructed in a rural parish with a population of 3000 people or less." ").
The noble Lord said: My Lords, in order to set the scene I must spell out again the main plank of the amendment. As I explained in Committee, its purpose is to help local, less well-paid persons to become part owners with a housing association of a house in their village or vicinity. The type of person we have in mind would be a district nurse, a farmworker, a postman or a retired tenant farmer. All such persons are vital to the community's well-being. Indeed, if we force those people out of our villages and replace them with rich commuters or second-homers the whole of our society will suffer.
I am happy to say that in their consultation paper issued last week the Government most certainly accepted that point. Their scheme and that outlined in our amendment involve the Secretary of State, aided by the local authority, giving to a local owner planning permission in respect of land which would not normally receive approval for the building of part-owned houses for local persons by a housing association. So far, so good; we are all in agreement.
It is on the question of how to get the houses funded and built that those supporting the amendment part company with the Government's scheme. The Government insist that every part-owner must be allowed to staircase up to 100 per cent. full ownership. Unless that is allowed no grant will be paid. The problem with that idea—noble Lords opposite might use the word "dogma"—is that there is a great danger that the house will be lost to any further local person.
I am pleased to say that in the Government's new proposal the housing association will have a right to repurchase its house so that it can be used for the next local postman or similar local person. However, the trouble is that the Government's scheme, good though it is on intention, just will not work. I am still supported in that statement by 19 organisations involved in the matter.
The Government's scheme will not work because, first, there will be a need for top-up funds when the occupier sells to the housing association. That top-up fund will come from the housing association's approved development programme, thus leaving fewer funds available for replacement role houses. Our scheme would require no such top-up fund.
Secondly, under the Government's scheme the occupier will have a right to sell in the open market,

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thus losing the house for a new local person, if the housing association does not repurchase within four weeks of being notified. With that condition I do not believe that any lawyer will advise a landlord, housing authority or local authority to sign a binding0020Section 52 agreement ensuring that the land will return to local use. Therefore, the land will not be forthcoming and I have received a number of letters from prominent landowners stating just that. I received letters yesterday, since the Government announced their new scheme.
Thirdly, the Government will not be able to guarantee funds in perpetuity to meet their obligation to repurchase the houses. Indeed, I must quote from the letter of my honourable friend Mr. Chope on the matter which was brought to your Lordships' attention by the noble Lord, Lord Carter, in Committee. My honourable friend said:
"I should sound a note of caution at this point".
He was talking about money.
"Housing association grant cannot, of course, be available in unlimited amounts for role-shared ownership. Nevertheless, associations wishing to develop the new shared ownership schemes will be able to compete for resources from the Housing Corporation in the normal way and responsibility for deciding which associations and schemes to invest in rests with the corporation, although the corporation's investment programme is heavily oversubscribed".
Do I need to say more to convince your Lordships that the Government's scheme will not work? But if some noble Lords are still not entirely persuaded they must accept that the categoric statement made by my honourable friend Mr. Chope will mean that housing associations will be very reluctant indeed to commence building the houses in case no funds are available for repurchase. When could anyone at any time rely on continual Treasury funding? Pigs really will fly when that day comes. In contrast to the Government's scheme our amendment would, first, require no further government funding after the similar initial grant given in the government scheme. Secondly, landowners would be confident that the houses would return to the local postman, for example, and so would offer more land. Thirdly, there would be a quicker turnover of houses. Fourthly, our scheme would prevent what I call windfall success or money allowing a local person to become a yuppie—I must use the word—or second home owner living in a low cost, fully owned house in a beautiful village.
I must conclude, but before doing so I should like to thank my noble friend Lord Hesketh and his advisers for seeing the noble Lord, Lord Carter, who sadly cannot be here today, and myself and our advisers, and for the courtesy that they have shown. As a result, we have narrowed our amendment and I still hope, against all the odds, that my noble friend on the Front Bench may see his way to accepting our new amendment. The government scheme accepts the problem and perhaps puts the key in the door. Our amendment would unlock it, and I commend it to your Lordships. I beg to move.
Lord Hylton: My Lords, I rise to support my noble friend Lord Stanley on this amendment, which he has so clearly moved. I should like to recount some
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personal experiences which I have recently had in connection with low cost housing.
I was invited to a meeting in the southern part of the county of Avon which adjoins the city of Bath and which has a number of thriving and prospering towns within it, as well as many villages. I thought it was to be a general, open meeting. To my surprise, I found myself closeted with the chief executive and his principal officers. They explained to me their difficulty, faced with a very small housing investment programme and with the sale of many council houses from their previous stock. They simply asked me whether I was in a position to provide, within their district, any site on which this sort of low cost housing could be built. I said that I would try.
Equally, in the next-door county of Somerset I am in the preliminary stages of negotiation with the English Villages Housing Association about providing a site adjoining an existing rural village. However, I assure the Government and the House that I should be extremely hesitant and doubtful about proceeding if the Government have their way and it is not clear that the houses to be built will remain in perpetuity available for the class of people for whom they are intended.
We all want to make sure that a social asset remains for the benefit of a particular place. The question is: how do we ensure that? We want that to happen, as my noble friend Lord Stanley pointed out, for the sons and daughters of local people, for incoming key workers and especially for the lower paid in whatever category who cannot buy houses on the open market.
Therefore, we are faced with a choice of two methods. The Government suggest repurchase, and in this amendment we suggest a ceiling to the amount of equity which the individual can buy. If we take the repurchase road, there are many variables. For example, there is the willingness or otherwise of purchasers to buy more than 50 per cent. There is the question of future inflation, future rises in house prices which may be more or less than inflation, and future interest rates. All those factors make forecasting extremely difficult.
In that context I must ask: have Her Majesty's Government sought the views on these matters of the Housing Corporation? I ask that because of the ways in which the Housing Corporation and the Treasury have always worked and still work. I very strongly suspect that the Housing Corporation will be in favour of a ceiling, which is the method advocated in this amendment.
I can see only one way in which the Government could in future satisfy the rather varying requirements of the providers of land, the housing associations who will build and manage the houses and the future purchasers. That would be to establish a separate pot of money—let us call it that—for low cost housing which would have to be replenished annually so that the production of houses could continue and which would also, in my view, need to benefit from any windfall receipts which might accrue. To the best of my knowledge, the Government have not offered such a solution and it

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would be completely unprecedented were they to do so. That is why I commend this amendment to your Lordships as a far more certain remedy.
Lord Dean of Beswick: My Lords, I rise very briefly to support this amendment so ably moved by the noble Lord, Lord Stanley of Alderley, supported by the noble Lord, Lord Hylton. I believe that they have covered all the arguments for this amendment in a very constructive and acceptable way. On that basis, I rise to support it on behalf of the Members on this side of the House.
Lord Milverton: My Lords, I hope that Her Majesty's Government will be able to accept this amendment. I rise to give my support to it. From material I have received dealing with the matter with which we are concerned, I believe that the amendment is right, good and proper, and I sincerely hope that the Government can accept it. As the noble Lord opposite said, the movers have covered all the points. I hope that this time Her Majesty's Government will be able to be flexible and not just say that it is a good idea but that they accept it.
The Lord Bishop of Salisbury: My Lords, this amendment is of particular interest to the Church of England because many of the 43 English dioceses have between them considerable and well-distributed parcels of land in small communities, many of which could be of great potential help to the rural housing shortage.
In my own diocese and others in the South-West region, there has already been a good deal of stocktaking to see which land could be released for this purpose. Next month in London there is to be a national conference for representatives from all the dioceses to encourage and advise us on how to do more for the specific need of low cost housing in rural areas.
However, the Church shares the view of landowners mentioned by the noble Lords, Lord Stanley of Alderley and Lord Hylton. Before releasing land which it may have held for centuries, even for a cause as good as this, it will want assurance that such action will not run to waste, as would be the case if houses built on such land were in the relatively short term to be sucked into the vortex of the free housing market. There is no doubt in my mind that valuable land resources can be, and will be, forthcoming from the Church if there are strong enough guarantees that the initial good intention will be carried through for a reasonably extended future. For this reason, I am sure I speak for many dioceses in the Church in supporting this amendment.
9 p.m.
Lord Northbourne: My Lords, the noble Lord, Lord Stanley, has put the case very well. I want to take up only a couple of minutes of your Lordships' time, because I am myself involved in a scheme of this nature with the Samuel Lewis Housing Trust and a group of landlords, including the Church Commissioners, in the eastern part of Kent. The problem with this scheme is that you cannot make the figures stack unless you have free, or virtually
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free, land and a grant from the Housing Corporation. If you have a grant from the Housing Corporation, you are then subject to the staircasing provision as it stands at the moment.
I very much welcome the Government's proposals, because obviously they show an intention to support the objective of providing cheap starter homes in the countryside. The trouble is that as the matter stands at present the proposals will not work. I say this with some authority, because I have talked to the Samuel Lewis Housing Trust, in the light of the new proposals which came out after the. Committee stage, and they have told me that they absolutely could not on the basis of those proposals give an assurance to the landowners that this land would in perpetuity, or even for a period of 21 years, be used exclusively for the purpose of cheap housing for starter homes for people living in the countryside. They could not do it, because they could not be sure that they would have the money available to operate the Government's buying-in proposals.
There is another problem, because in many cases these schemes are put together on the basis that the council will give permission under a Section 56 notice, planning by exception, on land which would not be available for normal housing needs. The Dover District Council have assured me that they could not give permission under the Government's proposals because again they could not be sure that the land would continue to be used for the purpose of inexpensive starter homes.
There are therefore two great difficulties. I should like to be able not to support the amendment. But the Government must give absolute assurances, and there has to be an assurance that the Housing Corporation would enter into a binding contract with housing associations to make the money available for the repurchase within the four weeks which are available, and outside their agreed development programme. If it was inside the ADP, the difficulty would be that a housing association would have to hold money back, because they could not be sure when one of these options would suddenly be offered to them. So the money available through the Housing Corporation must be outside the ADP.
In addition, one would want an assurance that under this arrangement the Housing Corporation would not severely restrict the number of schemes in order to avoid their liability. Unless the Minister can give these assurances, I think that the amendment is the best solution.
Lord Gisborough: My Lords, I do not want to take up the time of the House, but I should like to support my noble friend and I hope that the Government will accept this amendment.
Lord Dormer: My Lords, I also heartily support the amendment moved by the noble Lord, Lord Stanley of Alderley. From my own experience, I know what real anxiety there is in rural areas as the retiring age approaches. Many worthy people indeed from all walks of life who have spent their lives in the rural areas naturally wish to remain in those areas in the future and view with great distaste any removal elsewhere. I should like to support the amendment.
Lord Vinson: My Lords, I broadly support the purpose of this amendment. With other noble Lords, I remain deeply unhappy about the right to full staircasing. I personally should like to see it limited to a lower level. Without that, I fear that, despite the assurances of the CLA, many owners will be unwilling to release land for low cost housing and local authorities will be unwilling to grant exceptional planning consents.
The key point, the acid test, remains as to whether the Government's new proposals giving pre-emption rights to housing associations to buy back shared equity property are, in fact, sufficient comfort to encourage landowners to come forward. By and large, houses built under equity arrangements are not the cheapest housing in the accepted sense of the word, but middle priced housing, to enable people on lower incomes to take the first step on the house purchase ladder.
Of course, many of those earning low incomes in rural areas are simply not able to afford to enter the housing market via the shared equity route and depend on truly low cost housing to rent. This being so, in future owners of land for their own comfort will be inclined to put a restrictive covenant on land they make available for local needs, specifically tying that land to rented accommodation. Thus the very development we want to see—a mixture of rented and shared equity housing—simply will not happen. The opportunity will be denied to many rural people to take that first step on the housing ladder.
This is precisely the opposite of the Government's intentions. The Government have indeed gone some way to meet the general concerns with their proposals for buy-back, but they will not get the results they really want without some limit of full staircasing. I hope that the Government will give further thought to this matter when considering the debate.
Lord Ross of Newport: My Lords, very briefly may I support the right reverend Prelate, because I was a founder member of the Isle of Wight Housing Association in 1974. I attacked the Church at that time, because they wanted to build executive-type homes in the grounds of our rectory. As I was a sequestrator for 15 years, I fought that very hard and then the archdeacon at the time said "Form a housing association". We did so and he became our first chairman. The first four and a half acres was glebe land at a place called Chale Green in the Isle of Wight, where we built housing to rent for people in lower income groups. At that time, the option of buying was not available to them.
I know that the Church has glebe land in this country which could be made available. The noble Lord, Lord Vinson, spoke with conviction and he knows. He has chaired the development commission and looked after the rural areas. We have to do something about this. Where I live, in a very rural part of Shropshire, people of retirement age would like to play a part in setting up some sort of housing association that would provide homes for sons of the families in those areas. But they will not do it unless they have some guarantee that those properties will remain and be available to their successors. I beg the Government to accept this amendment or come up with something like it.
Lord Henniker: My Lords, I strongly support everything that has been said. I am chairman of a rural housing association. I do not have a direct interest in shared ownership, but it puts a much heavier weight on those of us who have to provide rented housing if all the schemes in my own county for shared ownership are held up by this uncertainty over staircasing. My own feeling is that it is quite impossible that a pre-emption clause will ever meet the case.
I am a landlord, and over the past years I have put a pre-emption clause on every house that I have sold. When it came time for me to redeem the pre-emption clause it was a farcical operation because the price had risen 10 or 12 times. The Government are being asked for an assurance that they will fill a bottomless pit. This is a most important amendment. My whole life is taken up with trying to provide rural housing for people with low incomes, of whom there are many in my county of Suffolk. Wages in the county have not gone up as fast as perhaps they should. What happens with this amendment will have a very great effect on the whole of the rural housing movement. I know that the Government are anxious that rural housing should be provided. I know that those who have been strenuously involved with the rural housing movement will be deeply disappointed if this amendment is not accepted by the House.
The Lord Bishop of Worcester: My Lords, I cannot go back to Worcester in the course of duty without saying that I greatly hope that the reassurance will be given. This amendment has been effectively supported by all sides of the House. One must remember that the matter concerns communities as well as individuals. I can take noble Lords to villages in Worcestershire where young people can live no longer. They are very close to retirement communities where it is not worth while having a shop, a school or a pub. There has been a flight from the countryside. People cannot find low cost housing and have to live in the town and commute to the country.
The Government have already seized this problem and have recognised it to some extent. I hope that they will give the required assurance because we are talking not only about people's homes and their work but also about communities of a balanced and cross-section nature. We want balanced communities. We do not want a flight from the countryside.
Baroness Blatch: My Lords, I believe this amendment started life as the Jopling amendment. It found considerable support in the other place and in this House. There is no doubt that there is widespread support from all parties to resolve the rural housing problem. I do not wish to sound a dissenting note, but I wish to pose some questions to my noble friend the Minister. I hope he will deal with them when he replies.
I have been trying to work out in my mind the difference between the government's scheme as it has been set out and what is proposed in this amendment. One of the arguments used concerns

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repurchasing costs and where the money will come from. Whether one repurchases a home under the government scheme or through some limited staircasing scheme, there will be repurchasing costs. These may vary from 60 per cent. to 100 per cent. The housing association will have to take back the house. I note that the noble Lord, Lord Stanley, is unhappy about what I am saying.
Lord Stanley of Alderley: My Lords, I shall deal with the point in summing up.
Baroness Blatch: My Lords, if a purchaser is staircasing a home, it will need to be repurchased for it to be sold to somebody else, who will then have the benefit. Therefore, there will be repurchasing costs. The costs will come from a housing association or a local authority. They will be competing for resources that could be spent for the development of other properties. I am trying to work out in my mind whether we are talking about the difference between the limit on staircasing and what would be the 100 per cent. figure.
There is a difference in the frequency of turnover. One of the arguments in favour of having some limit on staircasing is the fact that there will be a faster turnover and local authorities will have young or disadvantaged people coming into occupation of these houses more quickly. As I understand the government scheme, pre-emption rights remain. There are no windfall gains other than to the housing association or the local authority. Therefore, the benefits from any cheap land that is offered remain with the authority. That benefit can be retained and possession of the house can go to the kinds of people we have been talking about this evening.
I am in some difficulty in deciding what is the particular factor that is at stake. I am not sure whether we are talking about the degree to which one would have to repurchase the home or whether we want some firmer guarantees from my noble friend the Minister when he replies as regards the reoccupation of such homes being undertaken by the people we wish them to go to; namely, the disadvantaged, the needy and young people in rural areas. It is important that possession of these houses goes to the right people and that they do not find their way on to the open market.
There is a question-mark overhanging the matter of four weeks for someone to respond to the sale of a home. It seems to me to be a very short period in which to decide whether there are the funds to repurchase and the ability to do so. Therefore, I wonder whether any flexibility can be offered on the timing of that. The objective is universal across the House that there needs to be a resolution to the problem of providing low-cost homes in rural areas. I support the principle, but I should like to know the distinction now between what the Government have on offer and what is offered by the amendment moved by the noble Lord, Lord Stanley of Alderley.
9.15 p.m.
Lord Cornwallis: My Lords, I also should like to support the amendment. Recently in our local area we produced a questionnaire which was delivered to
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every house in the village. We received a 78 per cent. response to it. The biggest worry from everybody was the lack of rural housing. It is quite the most burning question in local politics—and there I mean politics with small "p" and not with a capital "p".
I welcome the fact that the Government have recognised the situation, but I wonder whether the present scheme that the Government are proposing was—as I believe the noble Lord, Lord Hylton, was also speaking—drawn up by the Housing Corporation. Can the Minister tell the House whether the Housing Corporation preferred the scheme as envisaged by this amendment rather than the one put forward by the Government?
This question was asked by the noble Lord, Lord Carter, who said at the Committee stage:
"It would help the Committee if Members knew that the Housing Corporation and its chairman fully support the proposals".—[Official Report, 11/10/89; col. 443.]
Sadly, the Minister did not reply to the noble Lord, Lord Carter. I think he owes it to the noble Lord to give us an answer tonight. If he does not, perhaps the noble Lord, Lord Stanley of Alderley, will press him to do so. I support the amendment.
Viscount Bledisloe: My Lords, at the Committee stage the noble Lord, Lord Carter, declared an interest on the grounds that he was, or was associated with, a landowner who wished to provide land for one of these low cost housing schemes. It seems to me a little curious to declare an interest in the sense that one wishes to give away something for less than its value, but, in so far as that is an interest to declare, I likewise declare it. I also have been actively seeking to pursue a low cost housing scheme in our village from land that I am very willing virtually to give away, provided that the situation and the conditions are such that it can remain within the community.
The law as it at present stands does not allow that. I have to say that the law as the Government intend it to be equally does not convince me to pursue that scheme. It is no good the noble Lord, Lord Hesketh, or the Government pursuing the logic of their scheme if that logic does not in fact convince the donor landlord that it will work, and "it don't convince me". If it "don't convince me" and landowners in my situation, it is no good that it is logically right, because the scheme will not happen.
Lots of reasons have been advanced to explain why it does not work logically, but I have to say that I also think that the government scheme is remarkably naive. Offers of first refusal mean that you have to match the offer that you are told has been made. It is not very difficult to conceive of somebody who is in one of these house's finding a yuppie friend and saying to the Housing Association, "I have been offered this fancy price. Are you going to match it?" The Housing Association either says, "That is all bluff, and we won't match it", or it says, "All right. That seems awfully large but I have to keep it in the community and I match it", and the pair of them are laughing all the way to the bank to split the spoils.
First refusal, as the noble Lord on my right said, does not work when you cannot say to the person

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who has proposed the offer, "If I don't match it, you are bound to buy", and there is no way the government scheme can say that. Quite apart from the logical differences, this is shot through with impracticalities. I have to say—and a large number of non-party and non-committed landowners are with me—that the government scheme just does not carry them with it. If it does not carry them, then it does not matter whether it is logically sound, because it will not work.
Lord Monk Bretton: My Lords, I suspect that my noble friend Lord Stanley may be right about this matter. Low cost housing in rural areas is certainly the most explosive rural issue. It closely concerns all those who live and work in the countryside and it closely concerns the maintenance of the social structure of our villages as we have known them. I am heartened indeed by the Government's interest in this issue but I am not absolutely sure that they are right in taking staircasing the whole way. I am very much influenced by the views of the National Agricultural Centre Housing Trust. I set great store by and pay credit to the work of Moira Constable of that organisation.
It appears to be the view of the NAC Housing Trust that the noble Lord, Lord Stanley, is right. In fact I think it is the view of just about everyone with experience in this area except the Government that my noble friend's amendment is right. That point weighs heavily with me. It is absolutely vital that the low cost housing scheme should make its mark and be a success in the countryside. I also remember what the noble Lord, Lord Carter, asked the Minister in Committee. It was not clearly answered as regards the views of the Housing Corporation. My noble friend the Minister owes the House an explanation about that.
Lord Hesketh: My Lords, I must congratulate my noble friend Lord Stanley and other noble Lords and right reverend Prelates on the persistence with which they have all returned to this important subject of low cost housing in rural areas. I welcome the opportunity to restate the Government's position because it is clear that there was a considerable misunderstanding of what was being proposed when we considered the issue in Committee.
There is no dispute between us on the central concern which underlies this amendment—the need to provide low cost housing to those who need it in rural areas. We agree completely that there needs to be a way to retain shared ownership housing for local needs in many rural areas. I set out to the Committee the steps that the Government have taken over the past year to meet the special housing needs of rural areas—the provision of additional resources to the Housing Corporation; our initiative on planning permission specifically for low cost housing developments; the changes that my right honourable friend the Chancellor of the Exchequer announced in the Budget in respect of gifts of land to housing associations; and our increased support to the National Agricultural Centre Rural Trust.
The proposal contained in the amendment, as my noble friend Lord Stanley made clear, is that shared
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owners in rural areas should not necessarily be able to staircase the full ownership of their properties. Instead local authorities or housing associations would be able to impose an arbitrary ceiling on the amount that they should own. I must say that this causes us difficulties. The right to home ownership is a fundamental plank of the Government's housing policies. The imposition of an artificial limit on staircasing cuts across it.
If it were a matter of choosing between the two policies—that is, the need for low cost accommodation in rural areas and the promotion of home ownership—we would be on the horns of a dilemma. However, that is not the position. It is possible to have both.
My noble friend Lord Caithness announced on 7th February that we had decided to allow housing associations to prevent shared ownership housing phasing passing on to the general market in those rural areas where it may be especially hard to replace. Let me reiterate the essence of what is proposed. This will be done by requiring the shared owner to offer the house back to the association when he wished to move on. The association would buy it back from him and reallocate it to another person on shared ownership terms. That is the way we can retain the house to meet local housing needs without having to deny individual occupiers the opportunity to progress if they so wish to full ownership of their homes.
Mention has been made this evening of the four-week period. I feel that I must reiterate to the House that this was included in the discussion document for no reason other than the possibility that at some future date, no matter how far away, the position may be reached where the housing association's job has been done and there is no requirement. That is all that it ever was or ever would be intended for.
Great play has been made of the fact that there is in some way a sinister plan whereby the four-week period actually imposes a restriction on the scheme we propose. Nothing could be further from the truth. The Housing Corporation is at present consulting widely on the details of the scheme. It would apply not just in areas where it may be especially hard to replace shared homes but where planning permission had been given on the basis that the site would be available solely for low cost housing or where a private landowner had made land available at below market cost for that purpose.
I was interested to hear the suggestion of the noble Lord, Lord Vinson, concerning restrictive convenants. That is what this proposal and the consultation period is for. Indeed, at this moment we are having consulations. It was clear during the course of the debate in Committee that many noble Lords had not had sufficient opportunity to study the proposals which the corporation had brought forward and that there was concern lest they fall short in some respect of the assurances which your Lordships were seeking.
I hope that I can remove that concern. The main worry was on the grounds of cost. Perhaps I may repeat now in terms that the Housing Corporation

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will provide any additional grant which is necessary. The noble Lord, Lord Stanley, referred to my honourable friend Mr. Chope. I should like to make it absolutely clear that what Mr. Chope was referring to was the entry into the scheme; he was not referring to the further funding which will be guaranteed once a scheme has been accepted. That is an important difference.
We shall be looking to enable associations to exercise their pre-emption rights in respect of properties falling within the scheme. They will do so by making housing association grant available to top up the funding which the association requires. There was concern about the unpredictability of the demands that the scheme would place upon them. However, repurchases will not happen overnight. As with any property transaction, there will be a period while lawyers carry out their work and so in practice there will be no difficulty about making funds available as part of the normal management of the approved development programme.
The amount of money required is small in the size of the whole programme, a programme which upon present plans is set to expand from £800 million this year to 1.3 billion in 1991–92. I must make it absolutely clear that once a property has been accepted within the scheme the funding will be available.
Concern has been expressed by some that that is not necessarily the best use of public moneys. They would prefer shared ownership to exist as a form of ownership in its own right, with grant available at a set percentage and the owner not able to purchase additional shares. It has been suggested that that would be a more cost effective use of public moneys. I have to say that the calculation is one that it is impossible to do with certainty. Under their proposals grant would be locked into the scheme. Under our proposals grant is repayable each time a shared owner buys an additional tranche of equity which can then be recycled to other projects, enabling others to buy.
It is arguable that the government scheme will provide more rather than less flexibility, as is being proposed in the amendment. Whatever the balance of advantage, the fact is that such schemes do not meet one of the Government's prime objectives, which is the right to own one's own home.
Now I do not wish to give the impression that the Housing Corporation scheme is set in aspic. That is why it is now the subject of consultation. Consultation is taking place. The noble Lords, Lord Hylton and Lord Bledisloe, asked what the Housing Corporation's view is. Discussions are taking place with Ministers. Those discussions are private. We expect the Housing Corporation to have a point of view. We expect many outside your Lordships' House to contribute to a document which will provide a satisfactory answer to the problem.
Lord Stanley of Alderley: My Lords, perhaps I may interrupt my noble friend on that important point. The noble Lord, Lord Carter, raised it in Committee, and so my noble friend has had plenty of time to
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think about it. The noble Lords, Lord Hylton, Lord Cornwallis and Lord Monk Bretton, raised it. Does the Housing Corporation like the government scheme as much as mine? Can my noble friend get on the Dispatch Box and say yes?
Lord Hesketh: My Lords, I do not want to upset the Box Protection Society and damage Her Majesty's property! I answered my noble friend's question by saying that we have a period of consultation which is being run by the Housing Corporation, which of course has a point of view.
A particular issue here will be the areas to which the scheme should apply. The proposals the Housing Corporation has put forward are in line with its proposals for the special rural programme. That is targeted primarily on settlements in rural areas with a population of less than 1,000, a lower figure than that proposed in the amendment. The other two categories—where planning permission is given specifically for low cost housing for local needs or landowners make land available at below market value—could of course be in any rural area, regardless of population or proximity to a larger settlement or town. The process of consultation may throw up anomalies or other areas that should be included. Indeed, that is one of the attractions of an administrative scheme; such changes can be made quickly and easily.
The important point is that whatever limits are set the areas concerned should be ones in which there are genuine difficulties in securing an adequate supply of low-cost housing for local needs. Where the turnover of housing is reasonable there will be a supply of other property that the association can buy to replace any that has been purchased outright by the shared owner. It is only where turnover is low and it would be difficult to get planning consent for new build that it is important to ensure that property can be bought back to maintain the local housing stock. We shall look carefully, with the corporation, at the points made in tonight's debate.
In the Government's view therefore the amendment is unnecessary. The scheme that my noble friend Lord Caithness announced in February provides the assurance to housing associations that funds are now available for pre-emption and the assurance local planning authorities and landowners need that they can go ahead without fear with schemes for low cost housing. Indeed I was most pleased to hear from the Country Landowners' Association that it has been reassured now that details of the repayment scheme are available. Their president informs me that, provided there is no impediment to a landowner when making a gift of land insisting that a housing association should exercise its right to repurchase—and that is a matter between the landowner and the housing association—the repurchase scheme appears to deal with the problem in a satisfactory manner. They tell me that they therefore no longer support an amendment on these lines. I very much welcome that statement of support from the Country Landowners' Association.
I am in any case also advised that the amendment put forward by my noble friend Lord Stanley is

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somewhat defective. It is unclear whether it is aimed at conditions formally attaching to a consent or to what is in the Secretary of State's mind when formulating his policy on whether or not to grant consent. That is not quite all. There is also no definition provided in the amendment of "rural parish" and there is no current definition of the expression. Existing rural parishes became simply parishes on local government reorganisation in 1974.
However, I repeat that we are not absolutely wedded to every detail of the scheme on which the Housing Corporation is consulting. We are willing to consider the changes in its operation which are suggested, as I pointed out earlier on the points which the noble Lord, Lord Vinson, made with regard to restrictive covenants.
I urge all who are concerned about this issue to look carefully at the paper and to let the corporation have their comments. I do not believe that the amendment before your Lordships tonight will in any way provide a satisfactory solution. I go further than that and say that no proposal that is before your Lordships—be it the Government's or the amendment tonight—will provide an immediate satisfactory solution to a problem which is very difficult to solve in rural areas.
Viscount Bledisloe: My Lords, before the noble Lord sits down perhaps I may ask this. He has referred to a decision of the Country Landowners' Association. If tomorrow at its council meeting the association reverses that decision, will the Minister undertake that on Third Reading the Government will support the amendment?
Lord Hesketh: My Lords, I thought that I referred to the president rather than to an officer. However, it is fair to say that the noble Viscount would not expect me to speculate until presented with hard and firm evidence.
Lord Stanley of Alderley: My Lords, I wish to thank all noble Lords for their contributions. With so much support throughout the House, it was an enormous privilege to move this amendment.
Perhaps I may deal with the slightly sensitive problem of the opinions of the officials of the Country Landowners' Association. They have every right to change their minds, but I suggest to my noble friend and to your Lordships that we should be well advised to treat the views of those officials with suspicion until the membership decides. I could read out to your Lordships a number of letters from prominent members of that association, but I shall not do so for two reasons. First, the Anglo-Saxon language might offend the delicate sensibilities of your Lordships. Secondly—a much more important and serious point—the vital matter to which we must address ourselves tonight is whether your Lordships agree with the amendment which I have had the privilege to move. I wonder whether noble Lords agree with the 19 organisations that still support it, or with the one black sheep which has jumped over the fence. Perhaps I should go to collect that black sheep back in order to keep the right reverend
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Prelates happy. I shall try to do so in the coming months.
We now come to the serious matters. The financial points were clearly stated by my noble friend Lord Hylton. I could go over them again for my noble friend Lady Blatch, but this is a complicated subject. Suffice it to say that perhaps I could add a little, although I do not know how I can do so after the very careful explanation of my noble friend Lord Hylton. At the end of the day, although we may have made savings by staircasing and we may have collected that money back, the way in which the Treasury and the Government work is that the money will go into a central pile.
At the end of the day when one comes to look for more money one has to indent—that is old Army language—each year for that sum. The Treasury will not take into account as regards the amount it gives up the fact that one has handed money back in previous years. The Treasury has other concerns, such as hospitals, on which to spend money. The Housing Corporation will not know what its liability is at the beginning of the year. That brings me to my next point. I fully accept what my noble friend on the Front Bench says as regards the Government guaranteeing to repurchase property involved in any scheme brought into being. However, no schemes will be initiated as bodies will be too frightened to do so, as noble Lords have said.
My noble friend said that the Government had made more money available. That is true and I am most grateful for that, but I come back to the statement of my honourable friend Mr. Chope, who said that the money had to spread over a wide sea. We all know there is a desperate need for a vast amount of money.
I shall leave the matter of the four-week period, although I have to say that the document states quite clearly that property would have to be repurchased within four weeks of being put on the market. I think that will have to be changed, although I accept the assurances given by my noble friend on the Front Bench.
There is the vital point of what the Housing Corporation thinks about the measure. The corporation proposed the scheme that the Government are discussing today, but it was ordered so to do. My noble friend was unable to tell your Lordships, despite being pressed by four or five noble Lords, whether the corporation was in favour of this scheme. I have to draw the conclusion that it is not. I am only sorry that we could not telephone Sir Hugh Cubitt, who is chairman of the corporation, as he is in Australia.
As regards the amendment being defective, that is an old hardy perennial. We shall of course put that right or the Government will put it right at the end of the day. I conclude that the Government have merely shifted the goal posts as regards the scheme; they have not widened them. I commend the amendment to your Lordships.
9.43 p.m.
On Question, Whether the said amendment (No. 173A) shall be agreed to?
Their Lordships divided: Contents, 111; Not-Contents, 38.

DIVISION NO. 3

CONTENTS

Addington, L.

Longford, E.

Airedale, L.

Lovell-Davis, L.

Attlee, E.

Macaulay of Bragar, L.

Avebury, L.

McIntosh of Haringey, L.

Birk, B.

Mackie of Benshie, L.

Blease, L.

Mayhew, L.

Bledisloe, V.

Meston, L.

Blyth, L.

Milner of Leeds, L.

Bonham-Carter, L.

Milverton, L.

Borthwick, L.

Monk Bretton, L.

Broadbridge, L.

Monkswell, L.

Callaghan of Cardiff, L.

Moyne, L.

Campbell of Eskan, L.

Mulley, L.

Carmichael of Kelvingrove, L.

Murray of Epping Forest, L.

Nicol, B.

Cocks of Hartcliffe, L.

Northbourne, L.

Cornwallis, L.

Northfield, L.

Craigavon, V.

Ogmore, L.

Darcy (de Knayth), B.

Oram, L.

David, B.

Parry, L.

Dean of Beswick, L.

Peston, L.

Dormand of Easington, L.

Pitt of Hampstead, L.

Dormer, L.

Ponsonby of Shulbrede, L.

Ennals, L.

Prys-Davies, L.

Ezra, L.

Rea, L.

Falkender, B.

Reilly, L.

Falkland, V.

Robson of Kiddington, B.

Fisher of Rednal, B.

Rochester, L.

Fitt, L.

Ross of Newport, L.

Foot, L.

Russell, E.

Forester, L.

Salisbury, Bp.

Gallacher, L.

Seear, B.

Galpern, L.

Sefton of Garston, L.

Gisborough, L.

Serota, B.

Gladwyn, L.

Shepherd, L.

Graham of Edmonton, L.

Simon, V.

Grey, E.

Somerset, D.

Hampton, L.

Stallard, L.

Harris of Greenwich, L.

Stanley of Alderley, L. [Teller.]

Hatch of Lusby, L.

Henderson of Brompton, L.

Stedman, B.

Henniker, L.

Stoddart of Swindon, L.

Hooson, L.

Strabolgi, L.

Houghton of Sowerby, L.

Teviot, L.

Hughes, L.

Thomson of Monifieth, L.

Hylton, L. [Teller.]

Tordoff, L.

Irvine of Lairg, L.

Turner of Camden, B.

Irving of Dartford, L.

Underhill, L.

Jay, L.

Walston, L.

Jenkins of Hillhead, L.

Wedderburn of Charlton, L.

John-Mackie, L.

White, B.

Kilbracken, L.

Williams of Elvel, L.

Kilmarnock L.

Wilson of Rievaulx, L.

Listowel, E.

Winstanley, L.

Llewelyn-Davies of Hastoe, B.

Wise, L.

Worcester, Bp.

Lockwood, B.

Young of Dartington, L.

NOT-CONTENTS

Arran, E.

Henley, L.

Belstead, L.

Hesketh, L.

Blatch, B.

Hives, L.

Boardman, L.

Hooper, B.

Caithness, E.

Kimball, L.

Carnegy of Lour, B.

Kinnoull, E.

Carnock, L.

Long, V.

Coleraine, L.

Lucas of Chilworth, L.

Colnbrook, L.

Lyell, L.

Cullen of Ashbourne, L.

Morris, L.

Davidson, V. [Teller.]

Mountevans, L.

Denham, L. [Teller.]

Norfolk, D.

Elles, B.

Oxfuird, V.

Ferrers, E.

Pender, L.

1490

Reay, L.

Swinfen, L.

Renton, L.

Thomas of Gwydir, L.

Sanderson of Bowden, L.

Trefgarne, L.

Strathclyde, L.

Trumpington, B.

Strathmore and Kinghorne, E.

Westbury, L.

Resolved in the affirmative, and agreed to accordingly.
Clause 156 [Removal of exception to the right to buy]:
9.51 p.m.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 173B:
Page 145, line 10, leave out ("be omitted") and insert ("apply to a dwelling-house as thereunder determined by the Secretary of State only where such a dwelling-house was completed before the date of Royal Assent, or such other date thereafter as the Secretary of State may specify.").
The noble Lord said: My Lords, in moving this amendment I should like to speak also to Amendment No. 173BA, in the name of the noble Lord, Lord Vinson; Amendment No. 173C; Amendment No. 173D, in the name of the noble Lord, Lord Monk Bretton; and Amendment No. 215A.
With this amendment we return to an issue that was raised very belatedly in Committee in this place only two weeks ago. I do not think that I have ever been conscious of an issue on which there was more strong feeling that something slightly out of place was being done. The matter has been debated in this House on many occasions over the last nine years. Indeed, my noble friend Lady Birk, whose name is to the amendment and who will speak on it, has been involved in most of the debates on the issue. I do not therefore think that it would be appropriate for me to take up too much of the House's time in rehearsing the arguments, but there are two kinds of arguments here.
The first point on which I know that many noble Lords felt strongly is that it was wrong for the Government to introduce—late at night on the last day of the Committee stage of a Bill which had already completed virtually seven days of Committee consideration in this Chamber and several months of consideration in another place—an issue which had no particular relevance to the necessary substance of the Bill. It introduced into the Bill a completely new element which had not been raised at any stage before and which could have been raised by the Government or by any noble Lord at any stage during the consideration of the Bill in this House; yet it was introduced without warning, without notice, at that very late stage.
That was the issue which I know caused deep offence to many noble Lords who are not particularly party political—it is one of the advantages of this place that there are many who are not party political—but who are jealous of the privileges and rights of the House and of Parliament. They felt it was wrong that such an element should be introduced. The Minister did not claim that any new facts had come to the Government's notice. He just said that they had thought about the issues of the

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right to buy and that they thought it was an appropriate time to introduce a new amendment. So that is the issue of procedure, if one likes to call it that. I attach to it the same importance which other noble Lords have given it. I think that it is of considerable but not overriding importance.
The second issue is that of substance. I am aware that on this matter there are very strongly held views. In particular noble Lords whom I much respect, who have defended and still defend in this House the rights of disabled people, feel very strongly that the right to buy ought to have been extended (and indeed was extended) to housing designed for the disabled. They draw the analogy that it ought to be extended to housing developed and intended for elderly people, people of pensionable age. I understand and respect their feelings.
However, as I have said on a number of occasions, I think that they are wrong because I believe that the balance of our concern, consideration and compassion ought not so much to be with the minority of disabled or elderly people who live in accommodation which is suitable for them (they are fortunate to do so) and also have the resources to exercise the right to buy, even if at a discount (they are fortunate to have those resources), but with the very much larger number of disabled and elderly people who do not live in housing that is appropriate to their condition and capabilities or who, if they do, are nowhere near having the resources to enable them to take advantage of the right to buy. I suggest that particularly in the case of the elderly the balance must lie there. There is a very much larger number of people in the second and third categories. The balance must be with those people who are more in need and need our compassion, concern and protection more than the others.
There is no perfect answer to this problem. Nothing will ever resolve all the difficulties and achieve all our desires. If there were an unlimited supply of housing designed for the disabled and for the elderly we should not be at odds on this issue. We should be able to agree with the noble Lord, Lord Swinfen, and the noble Baroness, Lady Masham, who supported the Motion in Committee. Unfortunately it is not so. The fact of the matter is that there is a desperate shortage of housing particularly suitable for those of pensionable age. That housing must be preserved for those who do not yet have it and those who need to come into it and have it when it becomes available.
The Government's amendment which was carried at Committee stage means that that housing will no longer become available. It will go out of the stock of housing suitable for elderly people. Indeed in many cases it would be available to people who not only would not need it themselves but who would in fact disturb the enjoyment of that housing by the elderly people in their blocks.
There are a number of amendments on this issue before the House. Our amendment does not in any way seek to bend the rules of the House. We do not
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propose to reverse the decision which was taken in Committee. Our amendment is much more limited. We believe that such a provision should apply to a dwelling-house:
"only where such a dwelling-house was completed before the date of Royal Assent, or such other date thereafter as the Secretary of State may specify".
In other words we are providing—and I should have thought that it as a legislative principle of great importance—that this legislation should not be retrospective. I believe that this is a modest amendment. I do not think that it goes as far back toward justice as we wish. However, I commend it to the House and hope that it will achieve the agreement not only of the House but of the Government as well. I beg to move.
10 p.m.
Lord Callaghan of Cardiff: My Lords, I happen to be patron of a housing association in Cardiff and I should just briefly like to tell the House that this matter is arousing considerable feeling. There is a feeling that sharp practice has been involved here. It seems to me to be utterly wrong to introduce this measure so quickly and, I am told, without consultation. I do not know whether that is true but that is what has been reported to me.
I wish that my noble friend's amendment went further. Frankly, I think that it is too modest on the basis of what I have been told. As I understand it, we are having great difficulties in the housing associations because we have to increase rents. We may well find ourselves unable to provide accommodation for those groups for which we should provide accommodation. I understand that accommodation provided for elderly people which will have a warden will still be exempted. That is good. However, I believe that about 50,000 houses providing accommodation which have been reserved so far for elderly people's needs will now become available for sale. I cannot understand why ideology should be carried to this limit.
If what I am told is true—and I am relying on the information that I am given because as a patron I do not have first-hand acquaintance—it seems to me almost a scandal that these houses should now be removed from protection. If I am wrong I shall be corrected. If they are now to be sold off, it is highly unlikely that they will again become available for letting to elderly people. There is a great shortage of accommodation for elderly people, as I know from my experience in Cardiff.
I look for an explanation from government. I cannot understand why in the very last stages of the Bill they have included a substantial number of houses in the category which is to be made available for purchase. I hope that the explanation from the Government will be more satisfactory than the information that I have been given. I am told that no assessment has been made of the overall impact of this change. I hope that my noble friend will push the amendment to a Division. If he does, I shall walk through the lobby with enthusiasm.
Baroness Birk: My Lords, I rise to support what has been said by the noble Lords, Lord McIntosh and Lord Callaghan. The housing world reacted with alarm and tremendous concern directly after the inclusion was announced in the Bill of Clause 156. It was announced in this House late at night, without warning, with no consultation and without proper explanation. The issue came up just before midnight at the Committee stage two weeks ago. It has been extensively debated in this House for nearly 10 years. During that time I was involved in the discussions. I did not see the result as a triumph—neither a personal triumph nor a triumph for the Opposition—but a triumph for good sense, a triumph for this House and a triumph for spreading more adequately the housing that is needed for elderly people.
What has changed since we managed to have the provisions changed in 1980 and 1984? The exemption was won on all these occasions, although there were certain people who were against it. What viable explanation can the Government give to justify reversing the position on a controversial question of enormous significance to future generations? We have had cries of discrimination. This point has been made every time the question has been brought up in order to justify the case. It was mainly the argument on which the Minister leaned when he replied two weeks ago at Committee stage.
Age Concern, which is the largest body working for the elderly, acknowledges that in one sense excluding these properties is discrimination and that in an ideal world it would not be necessary since there would be sufficient housing for everyone. However, it states that, although it has not received any inquiries from tenants who feel that they have been unfairly denied the right to buy, it accepts that there may well be tenants whose applications have been turned down and who may feel discriminated against. The organisation goes on to state that it receives daily inquiries from elderly people who need alternative rented housing which meets their special needs. If the stock begins to be sold, availability of such rented accommodation will become even more scarce. The present low level of building by local authorities means that most properties sold under the right to buy schemes are not being replaced.
That is the view of other social and housing organisations which are concerned about the matter. Those most concerned with providing homes for the elderly in urban and rural areas are looking to this House to do again tonight what it has done so many times before and of which it has been justly proud. They are looking to this House to safeguard purpose built and adapted housing for future generations of the elderly. And, remember, we are an ageing population. We have a priceless asset—an investment in houses which cannot be replaced. Let us be quite clear that the practical effect of the Government's proposal will he that virtually no such housing is built in the future.
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I agree with my noble friend that our amendment is far from perfect and that it is very modest, as was pointed out by my noble friend Lord Callaghan. However, at least it safeguards the existing stock. It is a modest amendment which the House, for the sake of its reputation, should support.
Lord Ross of Newport: My Lords, our support for the amendment was clearly stated by myself and by my noble friend Lord Evans in Committee. I believe that there are times when this House must act as the conscience of the nation and I hope that it will do so tonight in respect of this issue.
Lord Irving of Dartford: My Lords, I should like to intervene on behalf of local authorities. Many authorities such as Dartford have spent a great deal of money installing dispersed alarm systems and central heating in one-bedroomed flats and bungalows which are suitable for the elderly but not part of designated sheltered housing schemes. The clause is a threat to such investment—past, present and future—aimed at adapting the local authorities' housing stock to cope with the rapid growth in the frail elderly which is forecast to take place between now and the end of the century. If that need is to be met the investment must continue. Under the Bill it will be impossible.
Lord Hylton: My Lords, I have added my name to the amendment. I shall speak briefly, endeavouring not to repeat myself. Tonight noble Lords must decide whether they wish to retain the social assets of bungalows and flats for the purposes for which they were built. The question is: should those social assets be preserved or should they become market commodities perhaps with futures attached?
Many noble Lords will be familiar with the concept of trusteeship. I submit that Parliament is the trustee of the social assets of the whole community. We shall be neglecting our duty if we prefer the financial interests of the present occupants of old people's housing to the remaindermen. By that I mean future generations of retired and elderly people. For that reason I commend the amendment to your Lordships. It is a considerably better amendment than that tabled by the noble Lords, Lord Vinson and Lord Monk Bretton, which, in my view, is far too limited.
Lord Murray of Epping Forest: My Lords, I should like to put forward for consideration one small but significant factor. During this time of an ageing population many district councils have houses with two or three bedrooms being occupied by old people who have lived there all their lives and whose families have grown up and left. They are stuck there. They are not necessarily going to move unless they can be offered smaller and more convenient accommodation of the sort which is the subject of this amendment.

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My experience of my own local authority is that it is extraordinarily valuable to be able to free and make available larger houses which can then be taken up by younger and growing families. To put a stop to that would ossify matters and would freeze the occupation of many of these large houses. I should have thought that that would run counter to what is clearly a government objective which all of us would share.
Baroness Darcy (de Knayth): My Lords, this amendment worries me because, as I read it, it would once more make it possible to refuse the right to buy to people with disabilities.
Along with the noble Lord, Lord Swinfen, I was originally opposed to giving disabled people the right to buy, albeit reluctantly because it was discriminatory. I took that view because we needed to retain the small and valuable stock of purpose-built and substantially adapted houses. We both changed our minds last year because of what had happened and I should like to tell your Lordships what that was.
Some of your Lordships may remember when the noble Lord, Lord Swinfen, moved his amendment last year which allowed disabled people the right to buy their purpose-built and substantially adapted homes, he cited the case of a disabled man whose house was by no means substantially adapted; for example, he could not turn round in the kitchen in his wheelchair or fit his adapted car into the garage. However, he had been refused the right to buy on the grounds that it was substantially adapted although his able-bodied neighbour down the road had an almost identical house—and I say "almost identical" because the neighbour had a kitchen big enough for the man to turn round in his wheelchair.
The amendment was carried and we thought that gave disabled people the unfettered right to buy. But what has happened? This man is still being refused the right to buy on the grounds that his house is exempted under Schedule 5(11). The Government put that right in Committee. If this amendment is carried, as I read it, this man will once more be unable to buy his house, which differs very little from that owned by his neighbour except that his neighbour's house is more suitable. If I have misread the amendment, I am sure I shall be corrected.
As I read it, the Housing Act 1985, when amended by the Housing and Planning Act 1986, in Schedule 5 (11)(1)(b) states that the right to buy does not arise if the dwelling house was:
"let to the tenant or a predecessor in title of his for occupation by a person of pensionable age or a physically disabled person".
I hope that I am wrong and I shall be delighted if I am told that. However, as it is, I believe that this is unacceptable discrimination and I cannot support the amendment.
Lord Swinfen: My Lords, perhaps I may begin by correcting the noble Lord, Lord McIntosh of Haringey, on one point. He said that Schedule 5(11) to the Housing Act 1985 was mentioned for the first time when the Government brought forward their amendment in Committee. In fact, I mentioned that
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paragraph in my speech on Second Reading earlier this summer. Admittedly I mentioned it not in relation to elderly people but in relation to physically disabled people.
The noble Baroness, Lady Darcy (de Knayth), who has just spoken, is quite correct in telling your Lordships that, if this amendment is agreed, it will leave in the 1985 Act a badly drafted piece of legislation which, in my view, was designed to prevent the sale at that time of local authority housing which was particularly suitable for elderly people who were also physically disabled.
Last year your Lordships agreed to give physically disabled people the right to buy. At that time the amendment which I moved was very ably supported by certain noble Lords on the other side of the Chamber. A number of them came into the Lobby with me when the Committee divided. I do not know whether the noble Lord, Lord McIntosh, in his amendment, means to reverse that decision. But that would be the effect of this amendment, because there are a large number of local authorities who, despite the decision of Parliament last year to allow the right to buy to physically disabled people, are now denying that right to buy using paragraph 11 of Schedule 5 to the Housing Act 1985, as subsequently amended. A number of them have actually changed their reasons for refusing the right to buy following the decision made last year.
Should the House agree the amendment this evening, I shall have no alternative but to bring forward at Third Reading the amendment that I had tabled for discussion at Committee stage, but which I was unable to move because it had already been overtaken by acceptance of the Government's amendment. My amendment was to deal specifically with the case of physically disabled people.
We spoke at length at Committee stage about the question of discrimination and whether or not elderly people should have the right to buy. I personally think they should, but it is getting late so I shall not go further into that matter tonight. But I must advise the House that, if necessary, I will definitely bring forward the amendment that I had previously tabled to ensure that the right to buy for physically disabled people continues.
Lord Graham of Edmonton: Minister!
10.15 p.m.
Lord Hesketh: My Lords, I can assure the noble Lord, Lord Graham, that I still have eyes in my head. In 1986 in your Lordships' House the noble Baroness, Lady David, successfully moved an amendment to the Housing and Planning Bill taking away the jurisdiction of the Secretary of State. The reason given was that the Secretary of State had taken too severe a view of what constituted housing particularly suitable for elderly people. How ought the Secretary of State to deal with applications for determinations in the future if these amendments were accepted?
One possibility is that he would approach the task in much the same way as before from the inception of the right to buy in 1980. When he lost his

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jurisdiction, he had made a grand total of some 519 determinations on properties on the right to buy. I wonder whether the noble Lord, Lord McIntosh, envisages that the Secretary of State will be equally selective in future.
Alternatively, the Secretary of State could follow what appears to have been the practice of local authorities who have been making their own decisions since January 1987. Faced with an application for determination he could ask: Is this a flat or a bungalow? Does it have easy access and proper heating? Are there no more than two bedrooms? Is it reasonably near shops and buses? Was it let for occupation by an elderly person? If the answer to all these questions was yes, he might agree to exclude the property from the right to buy unless there was some special reason not to do so. We know that this approach works. It has led to over 6,000 tenants being denied the right to buy in less than three years.
The noble Lord may say that this is a middle way, that he expects the Secretary of State to be more ready to exclude properties from the right to buy than he was formerly, but not so ready as local authorities have been. In that case, we need to know how the Secretary of State is to achieve that balance. If he is asked to make a statutory determination he must consider the case on its merits. He cannot have a target of making a certain number of determinations each year, and refuse to make any more once the quota is used up. I can offer no assurance that the Secretary of State would find it possible to make determinations in greater numbers than in the past.
In Committee I invited your Lordships to support the repeal of paragraph 11 for the sake of fairness to elderly and disabled tenants who cannot understand why their homes should be treated differently from other council properties. If their homes clearly belonged to a special category of special housing which needed to be retained for renting I am sure that the tenants would accept this, but if such a category exists no one has yet succeeded in defining it in a way that is generally acceptable.
The noble Lord, Lord Callaghan, asked a question at the introduction of Clause 156. I repeat what I said in Committee. We were prompted to consider this subject by the amendment tabled by the noble Lord, Lord Swinfen, and the noble Baroness, Lady Masham, as regards amending the law concerning elderly persons' housing occupied by disabled people. We conceded and felt that outright appeal rather than modification was the right way. That is how we came to have Clause 156.
There are two other matters which it is important to remember. I stress again that Clause 156 is not about sheltered housing. It is designed to confer the right to buy on tenants of individual houses or flats with no special facilities or support. Paragraph 10 of Schedule 5 to the Act is specifically aimed at sheltered homes and schemes with a resident warden or a non-resident warden and a common room. Those schemes remain outside the right to buy. If the wording of paragraph 10 needs reconsideration we can certainly look at it.
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There is another factor which we believe it is important to take into account. Not so long ago life expectation was not so great but today there are many elderly tenants of 60 or 62 years of age who can quite easily look forward to another 20 years in the house which they feel they have a right to acquire.
In conclusion, there is a fact that we must face. We believe that there is an inherent unfairness. The noble Baroness, Lady Birk, suggested earlier this evening that there was little evidence of the desire for the right to buy by such people. The Department of the Environment has very considerable evidence. The noble Baroness is quite entitled to say "He would say that, wouldn't he?" On Monday I saw the noble Baroness, Lady Masham, who told me that since last week her mailbag had been filled with letters from elderly people who were very pleased to hear the news.
Baroness Birk: My Lords—
Lord Hesketh: Perhaps I may return to the remarks made by the noble Baroness at the Committee stage of this Bill. She said that we were not to be led in this House by any cries of fairness. As long as it is my honour to stand at this Dispatch Box for this Government, we support the cause of fairness for the elderly, who wish to have the same rights as everybody else.
Lord McIntosh of Haringey: My Lords, I am sorry to say that the Minister has repeated the arguments that he put forward in Committee. I do not believe that he has added anything new. However, there is a very valid and important point which has been raised by the noble Baroness, Lady Darcy (de Knayth), to which I wish to reply quite specifically. She has done what nobody else has done and that is to look at the detail of paragraph 11 of Schedule 5 to the 1985 Act. That part of the Act refers not only to persons of pensionable age but also to those who are physically disabled.
In correcting the wrong that was done at the Committee stage, it would not be right to neglect the fact that the Chamber has already taken a considered view with a much larger vote than was available at 12.17 a.m. two weeks ago as regards the physically disabled. I undertake on behalf of the noble Baroness that if this amendment is carried now I shall bring forward an amendment or amendments at Third Reading which will see to it that the protection which is given to physically disabled persons under paragraph 11 of Schedule 5 will be restored in full.
When I looked at the Housing Act 1985 I found a spelling error. There appears the word "predessor in title" instead of "predecessor in title". I wonder whether anyone has noted that. The Minister has not done so because he seems to give the impression that this measure applies only to individual houses. I remind the House that the paragraph refers to housing which is particularly suitable for occupation by persons of pensionable age having regard to, first, its location, and, secondly, its size, design, heating system and other major features. That means that the paragraph is widely drawn and covers a large amount of housing designed for elderly people, much

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of it in special locations with special courtyards, and so on.
The argument has been well rehearsed. We do not need to go into it any further. I wanted to respond to those points made in debate. In view of the fact that this matter has been considered so many times in your Lordships' House, we would wish to proceed to a Division.
10.26 p.m.
On Question, Whether the said amendment (No. 173B) shall be agreed to?
Their Lordships divided: Contents, 94; Not-Contents, 36.

DIVISION NO. 4

CONTENTS

Addington, L.

Lovell-Davis, L.

Attlee, E.

Macaulay of Bragar, L.

Avebury, L.

McIntosh of Haringey, L.

Birk, B.

Mackie of Benshie, L.

Blease, L.

Meston, L.

Bledisloe, V.

Milner of Leeds, L.

Blyth, L.

Milverton, L.

Bonham-Carter, L.

Monkswell, L.

Broadbridge, L.

Monson, L.

Callaghan of Cardiff, L.

Mountevans, L.

Campbell of Eskan, L.

Mulley, L.

Carmichael of Kelvingrove, L.

Murray of Epping Forest, L.

Cledwyn of Penrhos, L.

Nicol, B.

Cocks of Hartcliffe, L.

Northbourne, L.

Craigavon, V.

Northfield, L.

David, B.

Ogmore, L.

Dean of Beswick, L. [Teller.]

Oram, L.

Dormand of Easington, L.

Parry, L.

Ennals, L.

Peston, L.

Ezra, L.

Pitt of Hampstead, L.

Falkender, B.

Ponsonby of Shulbrede, L. [Teller.]

Falkland, V.

Fisher of Rednal, B.

Prys-Davies, L.

Fitt, L.

Rea, L.

Foot, L.

Reilly, L.

Gallacher, L.

Robson of Kiddington, B.

Galpern, L.

Rochester, L.

Gladwyn, L.

Ross of Newport, L.

Graham of Edmonton, L.

Russell, E.

Grey, E.

Salisbury, Bp.

Hampton, L.

Seear, B.

Harris of Greenwich, L.

Sefton of Garston, L.

Hatch of Lusby, L.

Serota, B.

Henderson of Brompton, L.

Shepherd, L.

Henniker, L.

Simon, V.

Hughes, L.

Somerset, D.

Hylton, L.

Stoddart of Swindon, L.

Irvine of Lairg, L.

Strabolgi, L.

Irving of Dartford, L.

Thomson of Monifieth, L.

Jay, L.

Tordoff, L.

Jenkins of Hillhead, L.

Turner of Camden, B.

John-Mackie, L.

Underhill, L.

Kilbracken, L.

Wedderburn of Charlton, L.

Kilmarnock, L.

White, B.

Listowel, E.

Williams of Elvel, L.

Llewelyn-Davies, of Hastoe, B.

Wilson of Rievaulx, L.

Winstanley, L.

Lockwood, B.

Young of Dartington, L.

NOT-CONTENTS

Arran, E.

Caithness, E.

Belstead, L.

Carnock, L.

Blatch, B.

Clanwilliam, E.

Boardman, L.

Coleraine, L.

Borthwick, L.

Colnbrook, L.

1500

Cork and Orrery, E.

Lyell, L.

Darcy (de Knayth), B.

Morris, L.

Davidson, V. [Teller.]

Oxfuird, V.

Denham, L. [Teller.]

Pender, L.

Elles, B.

Reay, L.

Ferrers, E.

Renton, L.

Gisborough, L.

Sanderson of Bowden, L.

Henley, L.

Strathmore and Kinghorne, E.

Hesketh, L.

Swinfen, L.

Kimball, L.

Thomas of Gwydir, L.

Kinnoull, E.

Trefgarne, L.

Long, V.

Trumpington, B.

Lucas of Chilworth, L.

Ullswater, V.

Resolved in the affirmative, and agreed to accordingly.
10.34 p.m.
Lord Vinson Lord Vinson moved Amendment No. 173BA:
Page 145, line 10, at end insert—
("The Secretary of State shall make determinations excluding from the right to buy dwelling-houses that are particularly suitable for and which it has been the practice of the landlord to let for occupation by persons of pensionable age. Such determinations shall only be made in areas referred to in section 157(1) of that Act and shall be made in such a way as to enable local authorities in rural areas to meet their statutory obligations to rehouse elderly agricultural and other workers.")
The noble Lord said: My Lords, I hope it will assist the House if I explain the purpose of the amendment. Whether it has been negatived by the result of the Division we have just had I cannot say, but I do not think that that is the case because it applies to specialist housing, both built and as yet unbuilt.
Like many in the House, I wholly support the philosophy that lies behind the right to buy legislation. However, at the same time I recognise the inadequacy of the present housing market and feel that for several sectors of society the right to be housed is the greater priority for the time being. I wholly accept that the Government are leaving in place some constraints on the right to buy which may have been overturned by the recent Division; namely, by withholding the right from those of pensionable age living in sheltered housing which has a warden or a common room. I accept that the Government have made a modest gesture to meet this problem. However, I do not believe that it goes far enough, particularly in rural areas which have a different problem from urban ones.
Over the past years, local authorities have built for old people many homes which do not have a full-time warden or share a common room. Indeed, why should they have either? As other noble Lords have pointed out tonight, plenty of people who retire at 65 are perfectly capable of looking after themselves and, it is to be hoped, will not need extra care of that kind for many years. There is thus a substantial stock of pensioner housing that will no longer remain excluded from the right to buy unless the clause on which we have just voted is enacted fully. It is precisely this stock in rural areas which the amendment sets out to safeguard.
The houses in question are often very attractive, in or on the edges of villages, and if sold to the existing occupants would at once command a very useful premium on the open market as wholly desirable residences. There is indeed an increasing

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demand for pensioner housing. If this is to be met, it means replacing the stock by new building at a much higher rate. Frankly, this would be daft. While housing authorities and housing associations in urban areas have a mountain of problems, they do at least administer a reserve stock that is broadly in the same locality. However, in rural areas the loss of pensioners' homes in a village would often mean the total loss of such homes in that immediate locality.
Old people who had hoped to be rehoused in the community in which they had lived would in practice have to be offered homes many miles away from their social links and often in an urban environment. This would be quite contrary to the Government's expressed desire to encourage care in the community. Noble Lords will also be aware that in rural areas local authorities have a statutory obligation to rehouse elderly agricultural workers and their wives if they are displaced through the loss of tied cottages.
This amendment seeks to make a half-way position between the current law on the right to buy in rural areas and that which the Government are proposing unless they drastically alter their position in view of the proceedings just now. My proposals would not affect the right to buy of the physically disabled and would still leave the determination as to what is qualifying accommodation entirely in the hands of the Secretary of State. In practice, these proposals are a compromise Clause 11. If they were adopted he would have to agree with local authorities what the need is for such pensioner housing, and what it is likely to be. This is likely to be based on the availability of those houses that traditionally have been earmarked for persons of pensionable age and are currently excluded from the right to buy. It would be paradoxical if the Government stimulated the disposal of the very homes that local authorities need to meet their statutory obligations, not least when there is a substantial waiting list for such properties.
This amendment does not open the floodgates that would enable recalcitrant local authorities to stick a bell on the wall and call it an old people's home, but it would reduce the possibility of more well-heeled incomers moving into highly desirable housing with a resultant loss of retirement homes which are badly needed and consequent damaging effects on the balance of communities that this would bring. I hope my noble friend will consider that there is merit in the amendment. I beg to move.
Lord Monk Bretton: My Lords, in Committee I said that the repeal of paragraph 11 of Schedule 5 to the Housing Act 1985 would create difficulties in the context of smaller rural communities. I was extremely worried about that. The repeal was put through at short notice. It seems that the position has been somewhat, though not altogether, changed.
Because things happened so quickly there was not much time to find suitable amendments to put down at Report stage. I put down an amendment and then also put my name to the amendment of my noble friend Lord Vinson because I felt that we wanted more shots to the bow. This action is one which
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might be described as a "Committee stage activity" and, indeed, one would rather have done this in Committee. I must therefore apologise; but the truth is that there was simply no time available in Committee.
It is my intention to refer to both amendments in my remarks. As a matter of fact I am prepared to accept the arguments of my noble friend Lord Hesketh in the main. Giving the elderly the right to buy will not deplete the reletting vacancies of English local authorities by quite as much as some people originally thought. He made those points in Committee and I think that he was right.
However, what I cannot accept is the argument that this proposal will be the answer to the problem in all areas, especially rural areas. I say that because in those rural areas, and in small communities, averages will prove misleading. Moreover, my noble friend was really dealing with averages when he advanced the whole theory behind this proposal. We cannot rely upon increased housing association activity to solve every problem in small villages.
It should be mentioned that last year 600 dwellings were built under the housing, association scheme—that is, in rural areas—for the whole of England. Under half of that figure were for elderly people. Therefore, even if there is a good increase in the building of that kind of housing, it will have to be pretty big before it will have much impact on the situation.
The Government's theory on the matter seems to presuppose a continuous increase in the supply of housing to let which will enable the selling-off proposals to work. Of course, in smaller villages things do not happen quite like that; at best, they happen in fits and starts—if they happen at all. Moreover, proposals to build further houses in small rural communities very often run up against the most appalling planning opposition, and so on. Indeed, that can happen in villages both in and out of national parks and areas of outstanding natural beauty. It is not an easy matter.
It also appears that the building of this low-cost housing is to depend upon gifts, or near gifts, of land in those villages and that it is not certain where they will be—whether there will be such gifts or such land available in every village. It should also be mentioned that in small villages it is now prettty well known that the right to buy is exercised more rapidly than is the case elsewhere, especially in what I would call "rural suburbia"; for example, places like Surrey where it happens even faster.
I must now return to the matter of the two amendments in hand. I shall not say much about Amendment No. 173D because I think that it is the least appropriate at present. I say that because I am not satisfied with it as it is. Moreover, it would definitely need limiting to rural areas in some way or another. I commend to the House Amendment No. 173BA moved by my noble friend Lord Vinson. It has certain advantages of flexibility. It relates to villages in areas of outstanding natural beauty and national parks, but its successful operation depends upon the Secretary of State's willingness to designate other areas sufficiently widely. I attach great

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importance to achieving that aim, although I am not sure whether the amendment will be sufficiently effective. The designations must be extensive enough to provide local authorities with the means adequately to meet their statutory obligations. Housing authorities in rural areas have rather more statutory duties in that respect than those in other areas.
I hope that my noble friend the Minister will take the amendment away and consider it further. I do not want to make an issue of the matter now but it is of sufficient importance that we may have to divide on it sooner or later. Now would not be a suitable occasion in view of the rushed way in which we have had to deal with it.
This is an old battleground. During the passage of the Housing and Building Control Bill in 1984 the House insisted on an amendment relating to housing for the elderly. Housing in smaller parishes has not changed sufficiently since then to enable a different view to be taken.
10.45 p.m.
Lord Hesketh: My Lords, perhaps I may interrupt my noble friend because it may help the House. The effect of the amendment which has just been carried, as I understand it, is to restore to the Secretary of State the task of deciding whether or not individual houses or flats should be excluded from the right to buy. That will be the case in all parts of England and Wales. The present amendment would restore that jurisdiction to certain rural areas only. That appears to be subsumed within the amendments of the noble Lord, Lord McIntosh, which have just been carried. For that reason I feel that it would probably be more suitable for my noble friend to withdraw the amendment.
Viscount Bledisloe: My Lords, is that correct? The amendment which has just been carried applies only to houses which have already been built whereas the amendment moved by the noble Lord, Lord Vinson, would apply to houses constructed in the future.
Lord Northfield: My Lords, that is one reason why I wanted to intervene. I refer to the position in the private sector. When my company is planning new settlements in the countryside we are under considerable pressure, which we happily accept, to offer land at low or nil value to local authorities in those rural areas so that they can fulfil their statutory obligations to house elderly people, retired agricultural workers and so on. It will be difficult for us to continue to make those offers of land if we find that the result is that the right-to-buy provisions apply and the elderly person sells the house, bungalow, or whatever it is, for which we have given the land. This is a difficulty because what will happen will be that in planning any settlement we shall have to charge rather more for some building lots for other people in order to subsidise these ones for the retired. Then we shall find that that retired person goes off with the swag. That is impossible.
All the amendment is doing, very helpfully, is saying to the Minister, "When you look at the rural
1504
areas as a whole and take into account the obligations to house the elderly and retired in these categories, you must be careful to make sure that they can carry out those obligations. You must not push the right to buy so far that they cannot do it". That would be a help to the private sector in planning the future in the way we wish. It would help to get a balanced community when we build in the future.
Lord McIntosh of Haringey: My Lords, as the person who moved the original Amendment No. 173B, which has just been agreed to, I must confirm what was said by the noble Viscount, Lord Bledisloe, and my noble friend Lord Northfield. The amendment which has been carried refers only to housing completed before the date of Royal Assent or at such later date as the Secretary of State may specify. Therefore, as my noble friend Lord Northfield says, it does not apply to future dwellings built in rural areas.
The amendments moved and spoken to by the noble Lords, Lord Vinson and Lord Monk Bretton, add to and are complementary to what has just been agreed. I claimed to speak to them when I moved Amendment No. 173B. I thought that they had been debated, although the noble Lords concerned did not intervene. I should have thought that the right course would be that since I claimed to speak to them, since they were grouped and nobody challenged the grouping, they should now be accepted, as Amendment No. 173 will be accepted.
Lord Renton: My Lords, I have said nothing in relation to all these amendments so far. I voted with the Government on the amendment of my noble friend Lord Stanley and I voted with the Government just now on that of the noble Lord, Lord McIntosh. It seemed to me that the amendment moved by my noble friend Lord Vinson had, as the noble Lord, Lord McIntosh, pointed out, virtually no time limit. The power which it contains can be carried into the future and it seems to me to deal with the crux of the matter:
"dwelling-houses that are particularly suitable for … occupation by persons of pensionable age".
Such determinations shall be made only in rural areas, to enable local authorities,
"to meet their statutory obligations to rehouse elderly agricultural and other workers".
I personally regret the acceptance of the last two amendments. But I think the best way of rectifying the matter might well be to accept the amendment moved by my noble friend Lord Vinson.
Lord Hesketh: My Lords, I certainly do not agree with the noble Lord, Lord McIntosh. Every list of groupings that I have seen today differs from the presentation which he has just given to suggest that the amendment we are now on and the amendment that follows it should be included in the decision on the previous amendment.
The amendment tabled by my noble friends would restore in certain rural areas the Secretary of State's function of determining which properties should be excluded from the right to buy as being particularly suitable for occupation by elderly people. The rural

1505
areas in question would be national parks, areas of outstanding natural beauty and rural areas designated by the Secretary of State under Section 157 of the Housing Act 1985. So the intention of my noble friends, as I understand it, is that the tenants of non-sheltered housing for elderly people should generally have the right to buy, but that in certain rural areas the Secretary of State should have the power to exclude properties at the landlord's request.
In speaking to the amendments moved by the noble Lord, Lord McIntosh, I explained why it did not seem right to restore the Secretary of State's jurisdiction. I have to say that those reasons still seem to the Government to hold good, even if the jurisdiction were only to be exercisable in certain rural areas. If that is the case, we have a fundamental problem in deciding what we mean by housing which is particularly suitable for elderly people outside sheltered schemes. That problem does not go away just because we confine our attention to rural areas. The problem may be smaller but it is still there.
The amendment would specifically require the Secretary of State to make determinations in such a way that local authorities were enabled to rehouse elderly agricultural and other workers. Local authorities are required by the Rent (Agriculture) Act of 1976 to use their best endeavours to provide suitable accommodation for retiring agricultural workers who are required to leave their present homes. I understand the point that my noble friends have in mind, but it would be difficult for the Secretary of State to take that into account in considering an application by a local authority to have a specific property excluded from the right to buy. There would not, we believe, be a way of knowing when that property might be available for reletting to a retired worker if the present tenant did not buy it.
The case which my noble friends have put forward for retaining homes for reletting in rural areas is one that is sometimes made with respect to right to buy sales generally. To meet concerns of these kinds without making tenants in rural areas second-class citizens the legislation already allows local authorities and housing associations selling housing in certain rural areas to impose restrictions on resale. Section 157 referred to in the amendment allows them to reserve rights of pre-emption or a power to refuse consent to resales unless the new owner is to be a person with a local connection. I do not think it would be right to say in addition that a rather strangely defined category of dwellings let to elderly tenants should not be eligible for the right to buy at all if they happen to be in rural areas.
However, I have listened closely and I recognise that there is a real concern on the part of my noble friends as regards the housing needs of small rural communities. I shall be happy to discuss this matter with them and explore what ways there may be of meeting their concern. On that footing, I hope that my noble friend may see fit to withdraw his amendment.
Lord Vinson: My Lords, I am grateful for the significant support that this amendment has received from all sides of the House. In the general hubbub
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following the last Division I said I hoped that the measure had not been negative as it applied to houses both past and future. However, I fear the Minister did not hear that. Obviously, the whole matter is very much back in the melting pot. It would be wrong to press this amendment when to a great degree it has been overtaken by the recent Division. I am grateful for the reassurances given by the Minister. I shall not press the matter further at this stage. However, I look forward to hearing his modified proposals on Third Reading. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 173C:
Page 145, line 11, leave out ("repeal by this Act of") and insert ("operation of subsection (1) above in relation to").
The noble Lord said: My Lords, I have already spoken to this amendment. I beg to move.
On Question, amendment agreed to.
[Amendment No. 173D not moved.]
Schedule 9 [Amendments of Parts IX, XI, XVII and XVIII of the Housing Act 1985]:
Lord Dean of Beswick Lord Dean of Beswick moved Amendment No. 173E:
Page 231, line 15, at end insert ("and for the words "in default of the person on whom the repair notice was served" there shall be substituted "in a case where the repair notice has not been complied with" ").
The noble Lord said: My Lords, this clutch of amendments, Nos. 173E, 173F, 177ZA to 177ZC, 215B and 215C, refer to the problem of houses in multiple occupation. This matter was referred to both on Second Reading and in Committee when certain amendments were suggested.
If an authority serves a notice under Section 352 requiring works to be carried out on houses in multiple occupation and the recipient of the notice fails to carry out the works, the authority can then do so itself and recover the expenses from the person on whom the notice was served. Amendments Nos. 173E, 173F and 177ZA to 177ZC widen this power to enable the expenses to be recovered from the person having control of or managing the house in multiple occupation. That would aid local authority enforcement and bring the provisions covering houses in multiple occupation into line with those for ordinary tenanted properties.
Amendments Nos. 215B and 215C remove redundant references to Section 366, which is repealed by paragraph 54 of Schedule 9 to the Bill. I beg to move.
11 p.m.
Lord Reay: My Lords, the amendments make small and important changes to the processes by which local authorities enforce notices on houses in multiple occupation and recover their expenses. It has in the past been difficult for local authorities to enforce notices on houses in multiple occupation where changes of ownership take place, and the

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amendments make technical improvements to the process. I know that the noble Lord, Lord Dean of Beswick, has waged a long campaign to reform the law relating to houses in multiple occupation and I pay tribute to his efforts in that area. I believe that he supports many of the changes that we are making in this Bill. The amendments tighten up the processes set out in the Bill, and I am glad to accept them.
Lord Dean of Beswick: My Lords, I am grateful to the Minister for his reply and for his generous tribute to me and to the campaign in which I have been involved. It would be remiss of me not to mention that a great many Members on all sides of your Lordships' House and in another place have given the cause their total support. I can say on behalf of all the individuals and organisations involved that they will accept the amendments, minor though they appear, very gratefully as a step in the right direction. Once again I express my sincere thanks to the Minister.
On Question, amendment agreed to.
Lord Dean of Beswick Lord Dean of Beswick moved Amendment No. 173F:
Page 232, line 7, after ("control" ") insert ("for the words "subject to section 191(3A)" there shall be substituted "subject to sections 189(1B), 190(1C) and 191" and ").
On Question, amendment agreed to.
Lord Reay Lord Reay moved Amendments Nos. 174 and 175:
Page 240, line 12, after ("constructed") insert ("or subsequently adapted").
Page 240, line 14, leave out from ("to") to ("constitutes") and insert ("a part of a building which, whether by virtue of this subsection or without regard to it").
The noble Lord said: My Lords, these amendments make two minor but important changes to the definition of "house in multiple occupation" in Section 345 of the 1985 Housing Act which now includes a "flat in multiple occupation".
Amendment No. 174 widens the definition to allow for cases where a multi-occupied flat has been provided by conversion of a larger property rather than being originally constructed as a flat. Amendment No. 175 makes it clear that any reference to a flat in multiple occupation covers multi-occupied parts of buildings whether they fall within the definition in the subsection or not.
These are useful technical amendments to ensure that a local authority is not prevented from acting on multi-occupied property which may not fall within the most usual categories. I beg to move.
On Question, amendments agreed to.
Lord Reay Lord Reay moved Amendments Nos. 176 and 177:
Page 243, line 32, leave out ("and other") and insert ("and all apparatus, systems and other things provided by way of ").
Page 243, line 32, at end insert ("and at the end of that subsection there shall be added the words "and to ensure that all means of escape from fire are kept clear of obstructions".").
The noble Lord said: My Lords, these two amendments expand slightly the definition of those matters about which the Secretary of State may make management regulations under Section 369 of the
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Housing Act 1985. Those regulations, which are being updated for issue next year, will apply automatically to all houses in multiple occupation.
At present managers are required to ensure the repair, maintenance, cleansing and good order of facilities in the property. We added "adequate other fire precautions" to the standard in an earlier amendment at Committee, but it is not clear that that is sufficiently precise to enable the regulations to cover all aspects of maintenance of anti-fire devices. Amendment No. 176 accordingly makes it clear that those will be within scope by inserting the words,
"all apparatus, systems and other things provided by way of fire precautions".
Amendment No. 177 also amends Section 369 by providing that the regulations may ensure that managers keep all means of escape from fire clear of obstructions. These are useful, technical amendments. I beg to move.
Lord Graham of Edmonton: My Lords, we on this side of the House appreciate very much the sense of the amendments. We certainly think that they are sensible. The great problem is enforcement. The Government are making provision in the Bill for proper and better management in an area where there may be disaster after disaster. Those can be avoided if the Government will just bear in mind that it is one thing to lay down duties and responsibilities but another to make sure that the people who have the function of carrying them out have the resources to do so. I appreciate that that is not the function of the amendment or of the Bill, but it is a point that should be borne in mind.
On Question, amendments agreed to.
Lord Dean of Beswick Lord Dean of Beswick moved Amendments Nos. 177ZA to 177ZM:
Page 243, line 49, after ("code)") insert ("in the first place where they occur").
Page 244, line 37, leave out from ("works") to end of line 38 and insert ("in a case where the notice referred to in subsection (1) has not been complied with").
Page 245, line 12, leave out ("paragraph 5") and insert ("in paragraph 1 (introductory) for the words "in default of the person on whom the notice was served" there shall be substituted "in a case where the notice has not been complied with".
(1A) In paragraph 2 of that Schedule (recovery of expenses), in sub-paragraph (1)—

(a) in paragraph (a) after the words "dwelling-house" there shall be inserted "house in multiple occupation"; and

(b) for paragraph (b) there shall be substituted—

"(b) where the works were required by a notice under section 352 or 372 (notices relating to houses in multiple occupation), from the person having control of the house or the person managing the house, as the authority think fit;".
(1B) Paragraph 5 of that Schedule").
Page 249, line 43, leave out from ("(1)") to ("in") in line 44 and insert ("applies").
Page 249, line 46 at end insert —
("(3A) Subsection (2) applies in relation to a flat in multiple occupation with the substitution for any reference to a dwelling-house which is a flat of a reference to the flat in multiple occupation.").
Page 250, line 10, leave out from ("dwelling-house") to ("is") in line 11 and insert ("house in multiple occupation or building").
Page 250, line 23, after ("dwelling-house") insert ("house in multiple occupation").

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Page 251, line 20, after ("dwelling-house") insert ("or house in multiple occupation").
Page 251, line 36, after (" "flat" ") insert ("except in the expression "flat in multiple occupation" ").
Page 251, line 37, leave out from ("(2)") to end of line 38 and insert—
(""house in multiple occupation" and "flat in multiple occupation" have the same meaning as in Part XI;").
Page 251, leave out line 48.
Page 251, line 50, at end insert—
(""flat in multiple occupation section 623"
"house in multiple occupation section 623"").
The noble Lord said: My Lords, I beg to move these amendments en bloc.
On Question, amendments agreed to.
Clause 159 [Reports to tenants etc. on local housing authority functions]:
Lord Dean of Beswick Lord Dean of Beswick moved Amendment No. 177NZ:
Page 148, line 19, leave out ("three") and insert ("six").
The noble Lord said: My Lords, prior to publishing a consultation paper on the introduction of performance indicators to the local authority housing service on 10th October, the Department of the Environment held a series of meetings with housing practitioners and representatives of the relevant professional bodies. I understand that the point was made during that pre-consultation exercise that it will be impossible for local authorities to supply and publish information within three months of the conclusion of any financial year, as it would be for central government. I understand that the Department of the Environment has therefore conceded that point. I also understand that it agreed that six months is a more reasonable period for the presentation of the reports to tenants. Will the Government be prepared to accept the amendment?
Lord Hesketh: My Lords, I am happy to accept the amendment.
On Question, amendment agreed to.
Lord Dean of Beswick Lord Dean of Beswick moved Amendment No. 177A:
Page 148, leave out lines 30 to 34.
The noble Lord said: My Lords, once again I shall be as brief as possible. The amendment will delete subsection (5), which states:
"The power to make a determination under subsection (1) above may be so exercised as to make different provisions for different cases or descriptions of cases, including different provision for different areas, for different local housing authorities or for different descriptions of local housing authorities."
In other words, a Secretary of State may require different local authorities to provide different information on the housing service on different days of the week. This is an unnecessarily general and strong new power that the Secretary of State is giving himself. The different cases or descriptions of cases might, for instance, all be Labour-controlled authorities or inner London boroughs or metropolitan districts. The Government should at
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least be strongly encouraged to give a clear statement of why the subsection is included in the Bill. I beg to move.
Lord Hesketh: My Lords, the effect of the amendment would be to prevent Her Majesty's Government from making determinations which could allow different provision to be made to cater more closely to differing needs of authorities because of, say, size or location. I do not think that that would make much sense.
In particular, local housing authorities in Wales experience different conditions and circumstances from their counterparts in England and we would want to ensure that we had sufficient flexibility to enable that to be recognised. It would be quite wrong for the provisions in the Bill not to allow enough room for manoeuvre should the Secretary of State for Wales and the Welsh housing authorities decide that different reports to tenants are needed in Wales from those that are wanted in England.
Nor would it be right for the clause not to recognise that within England or within Wales the Secretaries of State might wish to have the flexibility to require different amounts of information to be given to tenants in different authorities. In this era of tenants' choice, would it, for example, be sensible for an authority left with a handful of properties to give the same level of information to its tenants as one still managing thousands of houses? I think not. The first authority should have the protection of the clause as presently drafted.
I can, however, allay fears that Her Majesty's Government intend to use this provision to single out housing authorities for individual determinations as some form of punishment. That is not our intention.
I hope that the noble Lord, Lord Dean, will accept these arguments, in particular the reassurance that I have been able to give him, and that he will consequently feel able to withdraw his amendment.
Lord Dean of Beswick: My Lords, I am glad of the reassurance that the Minister gave, but I am still of the opinion that it would have been better to accept the amendment. I believe that it is better to have a national basis on which to assess than continually allow the Secretary of State to make his own determinations. However, I have no intention of pressing the issue. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Dean of Beswick Lord Dean of Beswick moved Amendment No. 177B:
Page 148, line 39, at end insert—
("(8) Before making a determination under this section, the Secretary of State shall consult such representatives of local government as appear to him to be appropriate.)
The noble Lord said: My Lords, the proposal to introduce performance indicators for the local authority housing service has the general, cautious support of the local authority associations. The Association of Metropolitan Authorities certainly believes that its members should provide

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information for tenants. However, comments made by Mr. Michael Howard, the Minister for Water and Planning, at the Conservative Party Conference seemed to indicate that the Government are considering making those indicators statutory and will tighten them up in future years so that comparisons can be made between local authorities at the regional and national levels.
On 10th October the Department of the Environment issued to the local authority associations and other interested bodies a consultation paper on performance indicators and, as I understand it, comments were due to be back with the Department of the Environment in early December. This subsection is designed to ensure that at least the local authority associations are consulted on any change to these proposals in future years.
On the basis of what I have said I hope that the Minister will feel inclined to be sympathetic and will accept this amendment. I beg to move.
Lord Hesketh: My Lords, it is with the greatest of pleasure that I accept the noble Lord's amendment.
Lord Dean of Beswick: My Lords, one should give brief thanks for small gifts. I thank the noble Lord.
On Question, amendment agreed to.
[Amendment No. 177C not moved.]
Lord Ross of Newport Lord Ross of Newport moved Amendment No. 177CA:
After Clause 165, insert the following new clause:—
("Court orders and the possession of property by landlord.
.—(1) Section 7 of the Housing Act 1988 shall be amended in accordance with the provisions of subsections (2) and (3) below.
(2) In section 7(3) the words "… subject to subsections (6) and (6A) below…" shall be substituted for the words "… subject to subsection (6) below…"
(3) After section 7(6) there shall be inserted a new subsection 6A as follows:—
"6A (a) The Court shall not make an order for possession on any ground which the landlord or any predecessor in title of the landlord seeking such possession has promised shall not be used against the tenant, whether that promise is continued in the original tenancy or any subsequent variation thereof, or in a separate contract of release.
(b) This subsection does not alter or limit the existing law in relation to waiver or estoppel."").
The noble Lord said: My Lords, I cannot be as brief as I am sure the House would like me to be at this time of night because I have to raise a rather important matter, which I believe should be of concern to the Government. In moving this amendment I shall also address a few remarks at the end to Amendment No. 202ZA which is grouped with it.
I believe that this is a very important amendment. The National Consumer Council has just received an authoritative counsel's opinion warning that contractual clauses purporting to give assured tenants enhanced security of tenure may be unenforceable. For example, Clause 4(2) of the National Federation of Housing Association's model tenancy agreement, intended for use with tenants' choice transfers and already in use for thousands of
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"voluntary transfer" tenants' agreements, may in fact be unenforceable. In respect of tenants' choice, the Housing Corporation's proposals for enforcing security of tenure clauses may be procedurally ineffective and also ultra vires.
The National Consumer Council rightly says that it is gravely concerned about this situation. Council tenants wanting to choose a new landlord may be penalised by facing considerably stricter mandatory grounds for possession. They are likely to perceive this as involving a significant reduction in their security of tenure. Independent landlords may be prevented from attracting council tenants with promises that they will retain their security of tenure. It cannot be fair or reasonable that such tenants and non-council landlords are possibly penalised in this way. The Government have called for an even playing field for tenants' choice. Surely that should also apply in this context.
The consumer council is aware that the true legal situation will not be clear until the matter is settled in court. Nonetheless, on the basis of the best legal advice it can obtain, it is clear that there is a substantial risk for tenants that the clauses in question are unenforceable. On the basis of its close contact with tenants, it feels that the problem is likely to undermine tenants' confidence and support for tenants' choice.
The situation is perhaps worse for the thousands of council tenants already transferring under voluntary transfers. They have for the most part been promised that they will retain their rights. Their tenancy agreements explicitly state this. The fear is now being expressed that they have been misled, even if unintentionally. I am not accusing the Government in any way. Once again we fear that such tenants will be distressed and angry. The programme of voluntary transfers may be disrupted until the position is corrected. I am sure that the Government—who wish to see it corrected—will be concerned about the matter. There is another aspect to the problem. Many thousands of new assured housing association tenants have clauses promising enhanced security of tenure. The National Consumer Council fears that these clauses are also unenforceable; that those tenants may also have been unintentionally misled.
It is for those reasons that we believe that the amendment before your Lordships' House is necessary if tenants are to be able to rely on the security of tenure written into their tenancy agreements.
I have lengthy copies of advice from eminent counsel, Robin Allen, who advises that a statutory amendment is the most sensible solution to this problem. I shall not bore the House by reading the 18 pages referring to the first part of the amendment. I shall read his conclusion. He states:
"My conclusion for the purposes of this part of this advice is that there is a serious problem about the inconsistencies between the enhanced protection given by the terms of the model agreement"
—the NFHA agreement—
"which appear to exclude all but one ground for mandatory possession and in the case of that ground modify its terms."

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While he considers that there is a substantial argument which may be mounted to justify a tenant seeking to rely on terms of agreement in the face of a landlord who seeks to enforce the express wording of the 1988 Act, he cannot advise that such a tenant would be certain of success.
Finally, I read from the second part of the conclusion. I dare say that the Government have seen these documents already. Having gone through a second opinion on this model agreement, he says that it would appear that the amendment which is before the House tonight is the only sensible way to ensure that this otherwise appropriate and useful model agreement—the NFHA agreement—is in fact effective. In other words, eminent counsel is saying that there is a grave risk that if a rogue landlord challenges the issue in the courts, a tenant who thinks he is perfectly safe, having the same security of tenure—having moved from council tenancy to housing association tenancy, or to a private landlord—may find that he does not have the security that he has been promised.
The justification for the second part of the amendment is this. We think the tenants ought to have the right of independent, financial and legal services so that they are informed of such a possibility. That is what the second amendment provides. The legal financial housing issues raised by such transfers are obviously many and complex. Legal advice is needed on the terms of any proposed tenancy agreement, and whether tenants' existing rights are preserved.
Some local authorities who are pursuing voluntary transfer—asking tenants to move from council tenancies to housing associations tenancies—are not willing to fund such advice. If noble Lords were asked to give advice to tenants who were placed in this situation, possibly favouring a move to a housing association, they would have to say that in the light of the advice given by eminent counsel the tenants would be absolutely stupid to do so. However, they ought at least to be given the opportunity to obtain that advice and be helped with it. Unfortunately, some local authorities are not willing to fund the advice. For example, the London Borough of Redbridge is currently pursuing the transfer of its general needs housing to a newly created housing association. Although it has set aside the sum of £500,000 to pay for the cost of doing so, it is unwilling to give tenants more than a few hundred pounds to pay for advice. The tenants' participation advisory service estimates that about £10,000 may be sufficient to pay for such advice.
I shall not continue because I assume that the Government have been made aware of the problem. Therefore, I hope that in reply the Minister will assure me that they have the matter under serious consideration and intend to do something about it. If they will not accept my amendment then at least they should bring forward their own amendment on Third Reading. The situation puts in jeopardy the whole question of the transfer of letting accommodation from the public to the private sector. I beg to move.
The Earl of Caithness: My Lords, I am grateful to the noble Lord for raising the matter and also for the representations that we have received from the National Consumer Council.
Part I of the Housing Act 1988 provided for most new lettings by private landlords, including housing associations, to be assured tenancies. The assured tenancy regime provides long-term securing of tenure with only strictly circumscribed grounds of posssession by the landlord. Be that as it may, it is open to the proposed new landlord to offer the tenant contractual rights additional to those provided in the statute.
The NCC has kindly made available to my department an opinion of counsel it has recently received on this matter. I think that it would be fair to say that the main message to emerge, and one with which I agree, is that, in the highly unlikely instance of a landlord reneging on a contractual undertaking he had publicly given not to exercise a statutory ground of possession, there are good reasons to think that a tenant would be likely to be successful in obtaining a remedy, although there is as yet no directly applicable case law.
I am bound to say that I consider it extremely unlikely that a potential rogue landlord would have had much success in persuading a local authority to agree to sell to him or the Housing Corporation to approve him for tenants' choice. Most, though not all, landlords engaged in these activities are besides likely to be registered housing associations, which are subject to most rigorous monitoring by the Housing Corporation, backed by draconian sanctions in any cases of misconduct or mismanagement. Tenants will besides be very reluctant to entrust themselves to a new landlord unless they are thoroughly satisfied as to his bona fides.
It seems to us a grave mistake to legislate now to provide for a remedy which in all probability would in any event be obtainable in the courts were the situation envisaged ever to arise. If experience were to show, contrary to our expectations, a need for a statutory remedy, that could be considered in all the circumstances of the time and against the background of a real rather than hypothetical case.
I turn to the second of the noble Lord's amendments, No. 202ZA. I hope to persuade him that it is not needed and is inappropriate. It is inappropriate because there are fundamental differences between tenants' choice and voluntary transfers. The main difference which is relevant here is that in the case of tenants' choice the local authority may not be a willing party to the disposal. That is the price one has to pay for giving tenants the right to choose. As a result, it would not be reasonable to expect the local authority to carry out the consultation of tenants or to explain the proposal. That responsibility lies with the applicant landlord. In those circumstances, we have introduced an outside body in the form of the Housing Corporation to oversee the process.
In the case of a voluntary transfer, the involvement of the corporation is not necessary. By definition, the local authority is a willing party. The onus is on the authority to spell out the proposals to tenants. It

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is given that responsibility by Schedule 3A to the Housing Act 1985. A tenant who wants information or assistance can seek it from the authority.
Lord Ross of Newport: My Lords, it is a great pity that we have to raise this matter at 11.25 in the evening. Of course, the Government are satisfied and believe that tenants who transfer have this security. However, it is not quite good enough to rely on that and say, "We think it is all right but we may have to reconsider that situation if the case came before the courts". We have counsel's opinion on this and it cannot lightly be set aside.
I am trying not to be destructive but, rather, constructive. There is no doubt that unless some sort of copper-bottomed guarantee is given, future transfers just will not happen because tenants will be worried, and rightly worried, if counsel is saying—the Government have had the advantage of seeing the opinion though perhaps they have not had very long to study it; I have certainly read it—that there may be a possibility that at some future date they do not have that security.
I am sure the Minister will agree that it is very important that these NFHA agreements and others should be found to hold water. I do not wish to divide the House but I hope the Government will consider what I said and what is in counsel's opinion before Third Reading to see whether or not they can give a further assurance. Who is to meet the cost if a rogue landlord takes somebody to court on this issue? That could be very expensive and there is no way in which the unlucky tenant who thinks he is perfectly safe will be able to fund that. I believe that should be underwritten in some way. I throw that out as a possibility. I wish to be constructive rather than destructive and I hope that the Government will look again to see whether or not they can give a guarantee as regards this matter. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 178 [Security of tenure on ending of long residential tenancies]:
11.30 p.m.
Lord Coleraine Lord Coleraine moved Amendment No. 177D:
Page 165, line 1, after ("a") insert ("contractual").
The noble Lord said: My Lords, this clause deals with the rights of long lessees of flats at the end of their leases. I shall move and speak to two amendments designed to improve this clause and in a further amendment I shall ask your Lordships to omit the clause from the Bill. At this point, I should repeat the declaration of interest which I made on Second Reading. I live in a flat, the lease of which expires in 12 years' time. When your Lordships hear me speak you will realise that I am concerned in the second and third amendments which I shall move but not in the amendment to which I am now speaking.
Clause 178(3) is intended to withdraw from 15th January' 1999 the right of long lessees of flats at low
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rents the protection of the Rent Act when the lease has ended. The clause will make those tenants assured tenants in accordance with the regime set up by the Housing Act 1988. The effect of that will be that market rents will be paid rather than Rent Act fair rents.
The Government say that those provisions are to be postponed until 1999 in order to give a period of adjustment and to take some account of the fact that hefty premiums are paid for the short periods at the end of leases, so that some leases will sustain financial loss if those rights are lost. I consider those arrangements for a period of adjustment to be defective and unfair to lessees.
Section 3 of the Landlord and Tenant Act 1954 provides that at the term date of a lease the tenancy will continue until terminated, and there are other provisions in the Act which provide for termination. It will continue at the previous ground or low rent. At the term date the landlord can consider whether he has grounds to terminate the continued tenancy and obtain possession. If not, he can terminate the continued tenancy and create a Rent Act statutory tenancy. He would then be entitled to a fair rent.
Clause 178(3) provides that a long tenancy in existence on 15th January 1999 will be subjected to the new assured tenancy regime. This was not generally appreciated, but it became apparent during and after the Committee stage debate that this can apply to leases which will have expired long before 1999 just as much as to leases expiring then. It will apply if by that date the landlord has not terminated the continued tenancy to bring about a statutory tenancy.
Circumstances in which a landlord might take what may seem a quixotic action and leave the continued tenancy to run on until 15th January 1999 are when he thinks his best financial interest would be served by foregoing the right to increase from a low rent or a ground rent to a fair rent in the period before 1999, in order to receive much higher market rents after 1999.
Assuming a long lease coming to an end in 1993, the landlord sees a well established, healthy young couple in possession. They are not going to want to move for years to come, so it may well be in the landlord's interest to continue collecting the ground rents for a few years more, in order to be certain of an open market rent from 1999 and for what may be the best part of the tenant's lifetime thereafter.
What this means is that lessees whose leases are going to expire between now and 1999 cannot be certain they will retain their statutory tenancies in 1999. This seems to me altogether undesirable and I should be very surprised if it was really the intention of the Government. My proposal is that only long lessees, whose leases expire on or after 15th January 1999, should be subject to the assured tenancy regime.
It may be that my amendment is defective because of ambiguity as to what is a contractual tenancy in these circumstances. But my noble friend Lord Hesketh is well aware of my concern. If he finds the drafting defective I hope he will offer to take away

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my proposal and come back with his own amendment at Third Reading.
I should remind your Lordships that this clause had its birth in the White Paper preceding the 1988 Housing Act. It then proved too difficult to draft. It has again proved too difficult to be drafted properly for this Bill; nevertheless it is now before us. I mention this because I and others who have studied the Act were not originally aware of the features which I am drawing to your Lordships' attention tonight. I should like to read from the department's explanatory memorandum to the White Paper of 1987 which led to the Housing Act. It said:
"A transitional period of 10 years from the date of commencement is therefore proposed during which Part I of the 1954 Act will continue to apply in its present form to existing long leases on expiry. The new regime will apply to leases expiring after the transitional period".
That is what I am asking the Government for. I beg to move.
Lord Monson: My Lords, having read with extreme care the earlier criticisms of the noble Lord, Lord Coleraine, of Clause 178, made both at Second Reading and at Committee stage, I do at one level very much sympathise with him. But on another level I have to point out that successive governments for almost 75 years have interfered clumsily with the law of contract and with the rather more metaphysical law of supply and demand, insofar as these laws relate to housing. Because of this any major shift in the law is bound to dash somebody's expectations. Those who have such hopes consider them to be legitimate but, objectively speaking, I do not believe that that can be so however much one may sympathise with those who are caught out.
Let us cast our minds back a little more than 20 years. After the introduction of the Leasehold Reform Act 1967, may leaseholders who had paid a pittance for leasehold houses in the expectation that they were buying a wasting asset suddenly found themselves enormously wealthy overnight, following the decision of the then Labour Government to extend leasehold reform from a limited number of working-class, mainly terraced houses in South Wales, to embrace Georgian and Victorian houses in Chelsea, Kensington, Pimlico, Hampstead, Dulwich and so on. One of my close relations by marriage was one of those who benefited enormously from this Act.
The losers were two-fold. The first were those who had sold their leasehold interest just before the Act was introduced in the expectation that they were selling a wasting asset. The second losers were the ground landlords, many of them charities. What I am trying to point out is that there are bound to be random winners and losers. The latter will very understandably feel aggrieved until such time as governments cease to interfere clumsily with the law of contract and the law of supply and demand for housing so that the latter is brought into balance as is the case in most countries in continental Europe.
For all the hardship that this clause inflicts on certain individuals, I believe it is designed to advance towards this goal. So while there may be
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room for minor improvements to the clause, by and large I support it.
Lord Hesketh: My Lords, I am sure it is always good for the erudition of your Lordships' House to have a contribution from the noble Lord, Lord Monson. One matter that I do remember about the Leasehold Reform Act is that even the late Dick Crossman was rather shocked by the probity of it. I recall that fact from reading his diaries this summer for the second time.
This is the first of a series of amendments that my noble friend has tabled relating to the long residential tenancy provisions in the Bill. As my noble friend said, the aim of this amendment is to ensure that only existing long leases whose term date falls on or after 15th January 1999 would be affected by the new provisions. Under the Bill as drafted, the new regime established in Schedule 10 will apply to those existing long tenancies whose fixed term has expired prior to 15th January 1999, but which have not by that date been terminated under the current procedure set out in the Landlord and Tenant Act 1954. It has always been a basic feature of the 1954 Act regime that when the fixed term of a long tenancy expires, the tenancy continues to run on as a long tenancy unless and until brought to an end under the procedure laid down in the Act.
My noble friend has argued that as 15th January 1999 gets closer, there will be an incentive for landlords to delay taking the necessary action to terminate a long tenancy following the expiry of the fixed term because by doing so they will be able to create an assured tenancy rather than a Rent Act tenancy. But I do not regard this as in any way self-evident, bearing in mind that a tenancy remains a long tenancy after the fixed term has expired, with the tenant thus continuing to pay only a low rent until the landlord acts to create a new tenancy. I find it hard to believe that many landlords will be willing to accept a ground rent, which will typically amount to £100 or so per annum, for a significant period in the hope that the market rent will be much higher than the fair rent. It is, of course, impossible to predict what the relationship between fair rents and market rents will be in 1999.
We were of course aware of the point that my noble friend has raised when the Bill was introduced. As I said in Committee, we are satisfied that the transitional provisions that we have written into the legislation will be sufficient to ensure that no existing tenant is unfairly treated by virtue of the changes we are proposing. I hope that, in the light of this, my noble friend will withdraw his amendment.
Lord Coleraine: My Lords, I certainly would not withdraw the amendment in the light of what my noble friend has said. I have put forward what I think is an improvement to the Bill and what would certainly bring it into conformity with the original expressed intentions of the Government and relieve a lot of anxiety on the part of many lessees whose leases are going to expire in the period leading up to 1999. As I have said, I consider that the whole clause should be taken out of the Bill, and in the

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circumstances I would wish to do no more than to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Coleraine Lord Coleraine moved Amendment No. 177E:
Page 165, line 12, at end insert—
("(3A) Subsection (3) above shall not apply to a tenancy if on the date of expiry of the term of years certain of that tenancy, whether before or after 15th January 1999, the tenant or one of the tenants is a person who was at any time before the date of commencement of this section the tenant or one of the tenants under the same tenancy or the spouse of any such person.").
The noble Lord said: My Lords, this amendment is designed to ensure that existing tenants under long leases affected by Clause 178(3) and their spouses do not have their rights taken from them by this clause, irrespective of when their leases expire. It does not seem reasonable that these particular existing tenants should have their personal rights taken away from them on the wholly artificial grounds that their statutory tenancies are not now in existence. This would be, to my way of thinking, unacceptably retrospective legislation.
I would also submit that unless we are to say that an existing statutory tenant is to lose Rent Act protection from 1999 we should not give different treatment to existing long lessees who may be said to be pregnant with Rent Act protection, however long a period of gestation there may be before that Rent Act protection begins.
Only the other day I had a letter from a lady in Kensington. She told me that she and her husband are lessees of a one-bedroomed flat. Their lease expires in 2006, when her husband will be 76 and she will be 61. Her worry was what would happen to them then. Surely it is not reasonable for that couple to be denied Rent Act protection whenever their lease ends, and to be treated less favourably than another person who happens to be a statutory tenant now and perhaps became one by claiming Rent Act protection against an unwilling landlord. I beg to move.
Lord Hesketh: My Lords, this amendment seeks to ensure that existing long residential tenants and their spouses would retain their entitlement to a Rent Act tenancy under Part I of the Landlord and Tenant Act 1954 irrespective of the date on which the long tenancy was brought to an end. If they assigned their tenancy after Clause 178 came into effect the new tenant would be subject to the 15th January 1990 cut-off date for such an entitlement.
As my noble friend has said, the amendment is aimed at protecting the expectations of existing tenants. It would however mean that the new Rent Act tenancies could arise for a very long period indeed—the lifetime of existing tenants and their spouses—because many long leases have periods of 99 years or longer.
As I said in Committee, we entirely accept the need to safeguard the position of tenants with long leases which have only a few years to run, and in particular of those who bought the tail-end of leases at a price which reflects an expectation that they will
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qualify for Rent Act tenancy when the long lease ends. We believe, however, that we should only allow new Rent Act tenancies to arise for finite period, long enough for the people affected to adjust to the new situation and make appropriate arrangements. Our judgement is that the 10-year period that the Bill allows is adequate, which is why we resist my noble friend's amendment.
Lord Coleraine: My Lords, my noble friend is clearly adamant on this point, and, for the same reason as with the previous amendment, I beg leave to withdraw this amendment.
Amendment, by leave, withdrawn.
11.45 p.m.
Lord Coleraine Lord Coleraine moved Amendment No. 177F:
Leave out Clause 178.
The noble Lord said: My Lords, the proposed transfer of tenants under long residential tenancies from the fair rent system to the open market assured tenancy regime from 1999 is a radical change from our long leasehold law and calls for the closest attention of this House. It would amount, in my opinion, to a mischievous destabilisation of the relationship which exists between landlords of flats and their tenants in the sensitive closing years of long leases. It would do this for no compelling reason.
I am sorry to have to say that we have here what seems to me a doctrinaire insistence that a commitment, which I unreservedly share, to making the move from controlled rents to the fixing of rents by market forces must be the one factor which ousts all other relevant considerations; the be-all and end-all of legislative thinking.
I say that this is doctrinaire and destabilising because it would not have effect for nine years and during that period any sane observer of the leasehold scene would surely have expected a government of any complexion to have introduced a comprehensive reform of leasehold law.
The way in which this is presented by my noble friend on behalf of the Government is that the nine-year period is a period of grace for flat owners, reducing their financial loss. I submit that that is a false analysis. It assumes that there would be a case for transferring to the assured tenancy system now. There is no such case. There will be no such case as long as the existing statutory tenancy system on a fair rent basis continues for other statutory tenants; because there is no reason why we should treat long residential tenants less favourably than straightforward Rent Act statutory tenants. If anything, long residential tenants have greater claim to their rights than the others.
I raised the question at Second Reading of why this legislation should be introduced at this time. No answer was given to that question but since then I have had helpful correspondence with my noble friend who has put the Government's position to me. Subsequently in Committee—when the Government at three o'clock in the morning finally introduced this legislation in the form we now have it—my noble friend explained that under the

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provisions of the Landlord and Tenant Act 1954 a tenant may remain in his home when the long tenancy comes to an end as a statutory tenant under the Rent Act 1977.
My noble friend went on to say:
"It would in our view be a total nonsense to perpetuate this regime, given the changes which have been brought in under the Housing Act".—[Official Report, 11/10/89; col. 506.]
My noble friend was referring to the fact that new tenancies are now to be assured tenancies and that no more statutory tenancies are to be created under the Rent Act. That was all he had to say to justify the Government's proposals. He offered no arguments.
I should add that in reply to the debate my noble friend added the thought that long leases can be for 99 or 999 years. He then told the Committee that to permit all lessees under existing leases to enjoy Rent Act protection would have meant permitting the creation of new Rent Act tenancies on a virtually indefinite basis. If I may borrow my noble friend's turn of speech, that one really is total nonsense, as I shall seek to demonstrate.
Section 1 of the Landlord and Tenant Act 1954 gives to long lessees what is termed the protection of the Rent Act when their leases come to an end. They do not have any specific Rent Act protection other than that which is given to the generality of statutory tenants. No doubt the time will come—and I hope it does—when government decide that Rent Act protection is no longer needed by tenants. When that time comes and rent protection is abolished generally the protection of the Rent Act will automatically be removed from 1954 Rent Act tenants. There will then need to be no discriminational differentiation between them and other statutory tenants.
I remind the House how all statutory tenants were treated on an equal footing in the Housing Act last year. Until then a statutory tenancy could, for the time being, pass twice to relatives following the death of the statutory tenant. Now, by Section 39 of the Housing Act, a statutory tenancy may pass once only. This affected the right enjoyed by the 1954 Act tenants in exactly the same way as it did other statutory tenants and no need was seen then for the erection of an elaborate pile of legislation or to give them nine years in which they were to adjust to their diminished circumstances. Why then, when the time is eventually ripe, should the Government not deal in exactly the same way with fair rents, both for the 1954 Act and for other statutory tenants?
By asking that there should be similarity of treatment between these types of tenancies, noble Lords will see that I am very far indeed from advocating the preservation of rent control into eternity; or for 99 years or, of necessity, even for nine years. It may be that in the normal way no further statutory tenancies can be created under the Rent Act, but these 1954 Act tenants have vested rights which, for the most part, they will have legitimately bought. The proposed legislation will strip many flat owners of rights which have gone with long leases of flats since before the Landlord and Tenant Act 1954. And in the nearly 50 years which have elapsed since then, other factors have
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intervened to reinforce the need to maintain the rights of long lessees under the 1954 Act regime.
The nature of our long leasehold system, the physical differences between a block of flats and a single house, the problems which are inherent during the tail end years of a long lease, all would seem to me to make it irresponsible at this time to step in and disturb a delicate balance by weakening the position of tenants as against their landlords. I remind the House that virtually all these landlords will have acquired their reversion; with full knowledge of the rights of tenants under the 1954 Act. It is well known that many of the owners of short lease reversions in London are speculators.
There is the difficulty with the last years of a lease of a flat—I am talking of a remaining term which may be as long as five years—that it cannot easily be mortgaged but in many parts of London may easily cost£100,000 for a 10 or 15-year lease. At the same time, there is the accruing and accrued liability to pay for the building to be put into tenantable repair at the end of the lease, but the provisions for the repair of the block may be vexatious or badly expressed.
This liability for repairs is nowhere near so serious in the case of lessees of houses. A long lessee of a house is the master of his own fortunes when it comes to carrying out the necessary repairs. In addition he has had since 1967 the right to enfranchise under the Leasehold Reform Act. The tenants of flats are in a totally different position. The landlord will usually be responsible for carrying out repairs and the tenants have only a limited say as to what repairs are carried out, when they are carried out, or at what cost. There are landlords who do net carry out repairs, hoping in this way to persuade their tenants either to surrender their leases or buy long terms. These tenants have to live with the likelihood that, when the repairs are finally carried out, it will be they, the tenants, who will have to foot the bill for the increased cost which will have resulted from the delay. Flat owners do not have —but it is widely recognised that consistency would demand that they should have —a fair claim to be given the same right to enfranchise as was given to long residential tenants of houses under the 1967 Act. So the clause is to be regretted also because it takes away rights from flat owners when fairness and consistency of legislation suggest that their rights should be protected and enhanced rather than diminished.
I have explained that this clause would not come into effect for nine years, but for nine years it would add to the problems facing flat owners. I ask my noble friend to take it away and not to proceed further with it. I put it to him that this clause is deeply offensive to many flat owners. To omit it now might be a prudent exercise in damage limitation. The clause is an irrelevance. It is no more than a theoretical exercise in free market economics. It achieves nothing of present significance beyond the creation of ill will and concern and some destabilising of the landlord and tenant relationship.
I know that for some two years a great deal of time and energy has been expended in the department in bringing before us what we have now. But on the

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other hand, I should like to give the Government an opportunity not to shoot themselves in the foot. After all—and I offer my noble friend this thought—if you are in danger of shooting yourself in the foot, the prudent course is to put the gun away. I suggest that to change into iron boots should be the less preferred course of action. I beg to move.
Lord Hesketh: My Lords, I fear that if I shot myself in one foot then I might have to shoot myself in the other.
My noble Friend has argued that Clause 178 should be deleted from the Bill, because it will not have any effect until 1999, and well before then legislation should be introduced to reorganise comprehensively the law as it relates to residential leasehold property.
The Government are, of course, well aware of the concerns to which my noble friend referred. The Nugee Committee was set up in 1984 to investigate the problems of leasehold blocks of flats, and its report provided a thorough and useful description of those problems and proposed a range of measures to deal with them.
The Government accepted almost all of the report's recommendations, and they formed the basis of the Landlord and Tenant Act 1987. Residential leaseholders now have a right of first refusal when blocks of flats are sold; they enjoy significantly strengthened rights to consultation over service charges and insurance arrangements; and we have provided them with stronger remedies against inadequate management. These provisions came into force only relatively recently. The Department of the Environment proposes to carry out research into the effects of the legislation next year, and we clearly need to have the results of that before we can decide whether anything more needs to be done.
In addition to this legislation, the Government have accepted the Law Commission's recommendations on the creation of a completely new form of ownership to be known as commonhold. Legislation to give effect to this is being prepared. We do not yet know, however, when the legislation will be introduced. And final decisions on its form, including the question of whether leaseholders should have a right to switch to commonhold against the wishes of their landlord, have still to be taken. My noble and learned friend the Lord Chancellor will make an announcement about all this in due course.
Your Lordships will see, therefore, that the prospect of further legislation on leasehold matters is uncertain. Clearly, if such legislation is introduced, it will have to take account of the existing law, including this clause and the related schedule. But I do not believe that these provisions, which are essentially consequential on the introduction of the assured tenancy regime in the Housing Act 1988, should be held on ice until decisions on these wider questions about the future of the leasehold system are taken. For these reasons, we resist my noble friend's amendment.
Lord Coleraine: My Lords, I was interested in my noble friend's digression into the history of the Nugee Committee report, the 1967 Act and the Government's acceptance of the idea of commonhold. I do not think that they have very much to do with the issue before the House tonight, but, in the absence of any support and in view of the lateness of the hour, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 10 [Security of Tenure on Ending of Long Residential Tenancies]:
Lord Hesketh Lord Hesketh moved Amendments Nos. 178 and 179:
Page 253, leave out lines 13 and 14.
Page 253, line 44, at end insert—
(""undisputed terms" shall be construed in accordance with paragraph 11(1A) below").
The noble Lord said: My Lords, these are technical amendments to Schedule 10. I beg to move.
On Question, amendments agreed to.
Lord Coleraine Lord Coleraine moved Amendment No. 179A:
Page 255, line 6, at end insert ("and specifies particulars of any such ground or grounds").
The noble Lord said: My Lords, I have received advice from SHAC as regards this and the following group of amendments. I should say that we are interested in exploring whether in the transfer of long leasehold tenants to the assured tenancy regime there is any possibility of tenants dropping, or being pushed, through the net and out of protection altogether.
This amendment affects paragraph 4(6) of Schedule 10, which deals with the termination of tenancies by the landlord on various specified grounds. When a landlord wants to recover possession from a long leaseholder holding over after the lease has ended, a notice must be served terminating any continuing tenancy which has arisen by virtue of the schedule. The notice must inform the former leaseholder about the ground, or grounds, of possession the landlord proposes to rely upon in court.
There is, however, no requirement that the notice to resume possession must state details or particulars of the grounds; for example, the amount of rent arrears or the particular obligation of the tenancy which has been broken. The amendment ensures that particulars of any grounds raised are stated in the notice.
The requirement to give details of any grounds alleged applies where a landlord serves a notice seeking possession against an assured tenant under the Housing Act 1988. There is no reason in principle that I can see why that should not apply also where a landlord seeks possession against a former long leaseholder under the new regime. I beg to move.
Lord Monson: My Lords, having been rather lukewarm over the previous amendments moved by

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the noble Lord, Lord Coleraine, I have to say that there is a great deal to be said for this series of amendments.
12 midnight.
Lord Hesketh: My Lords, as my noble friend has said, the amendment relates to the form of the notice that the landlord must serve if he wants to secure possession of the dwellinghouse when the long tenancy comes to an end. Under paragraph 4(5)(b) the notice must state the ground or grounds on which he proposes to apply to the courts for possession.
As with many other aspects of Schedule 10, paragraph 4(5)(b) mirrors the equivalent provision in the Landlord and Tenant Act 1954—in this case Section 4(3)(b). That provision does not require particulars of the ground to be stated.
I appreciate that, following pressure in the House during the passage of the Housing Act 1988, a provision requiring particulars to be stated was written into the provisions relating to notice of proceedings for possession of dwelling houses let on assured tenancies. As I have said, the general precedent that we have followed in Schedule 10 is that of the 1954 Act rather than the 1988 Act.
I should point out, however, that under paragraph 4(1) of Schedule 10 my right honourable friend is required to prescribe the form that a notice to resume possession must take. The prescribed form will require the landlord to state the particulars of each ground under which he intends to seek possession, so the point that the amendment addresses wiil be fully met, albeit by secondary rather than primary legislation.
I hope that in the light of that reassurance my noble friend will withdraw his amendment.
Lord Coleraine: My Lords, I am considerably reassured by what my noble friend said. I should still have thought that the Government could give consideration to looking not so far back as the 1954 Act when they come to deal with this point. The precedent in the 1988 Act is clear and it should be written on to the face of the Bill. Nevertheless, I am grateful to my noble friend for his assurance. I shall read what he said. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Hesketh Lord Hesketh moved Amendments No. 180 to 192:
Page 258, leave out lines 51 to 53 and insert ("and").
Page 259, line 5, at end insert—
("(1A) Where, under paragraph 10(2) above, a tenant's notice is referred to a rent assessment committee, any reference in this Schedule to the undisputed terms is a reference to those terms (if any) which —

(a) are proposed in the landlord's notice or the tenant's notice; and

(b) do not relate to the amount of the rent; and

(c) are not disputed terms.").

Page 259, line 14, leave out ("agreed") and insert ("undisputed").
Page 259, line 19, leave out ("agreed") and insert ("undisputed").
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Page 259, line 23, leave out ("agreed") and insert ("undisputed").
Page 259, line 38, leave out ("agreed") and insert ("undisputed").
page 259, line 41, leave out ("agreed") and insert ("undisputed").
Page 260, line 3, after ("(a)") insert ("if the committee decide that there are no disputed terms and that there is no dispute as to the rent, paragraph 10(2)(b) above shall apply as if the notice had not been so referred;
(b) where paragraph (a) above does not apply then, so far as concerns the amount of the rent under the tenancy, if there is a dispute as to the rent").
Page 260, line 5, leave out ("or") and insert ("and").
Page 260, line 9, leave out ("(b) the agreed") and insert—
("(c) where paragraph (a) above does not apply and there are disputed terms, then, so far as concerns the subject matter of those terms, the terms determined by the committee under sub-paragraph (2) above shall be term s of the tenancy and, so far as concerns any undisputed terms, those").
Page 260, line 10, after ("shall") insert ("also").
Page 260, line 35, leave out from first ("of ") to ("are") in line 36 and insert ("paragraph 11 above, what the disputed terms").
Page 260, leave out lines 41 to 45.
On Question, amendments agreed to.
Lord Coleraine Lord Coleraine moved Amendment No. 192A:
Page 263, line 28, after second ("of ") insert ("or includes").
The noble Lord said: My Lords, the amendment seeks to amend paragraph 16(1) of Schedule 10. The paragraph is designed to ensure that leaseholders do not lose security of tenure on the expiry of a long lease by taking periodic tenancies at a low rent. Paragraph 16 provides that whatever the length of the new tenancy, it will be deemed to be a long tenancy if the property let under the new tenancy consists of the whole or any part of the property let under the previous tenancy.
It is easy to envisage a situation where a landlord approaches a tenant and says, "If you will give up that inconvenient bedroom, you will have a new lease and you will have this larger bedroom". If the tenant, who will no doubt not ask for or receive advice, accepts that kind offer of a new tenancy, the protection will go entirely. The amendment seeks to extend the existing safeguard contained in the Bill to cover that situation. I beg to move.
Lord Hesketh: My Lords, as my noble friend has said, the amendment relates to paragraph 16 of Schedule 10, which deals with new tenancies at a low rent granted to the same tenant on the ending of a long tenancy at a low rent. In essence, paragraph 16 is aimed at ensuring that such tenants do not lose the protection afforded by the schedule if they take on such new tenancies.
As I said in Committee, Schedule 10 is modelled closely on the provisions in the Landlord and Tenant Act 1954 that it will replace. Paragraph 16 of the schedule is the direct equivalent of Section 19 of the 1954 Act. Section 19 also uses the phrase,
"the whole or any part of the property",
I am not aware that the sort of problems which my noble friend has referred to have arisen in relation to Section 19. If there have been no problems where landlords are faced with Rent Act tenancies at so called "fair rents" —artificially suppressed below market level —why should they arise under the

1527
schedule, where landlords will be able to charge market rents once assured tenancies are created?
There are three further points that I should make. The first is that under the schedule tenants who remain in occupation after their long tenancies are brought to an end will do so as assured tenants paying market rents. Since landlords will be receiving a reasonable return on their investment, it is hard to see why they should be determined to avoid such tenancies arising.
The second is that I find the whole notion of landlords of blocks of flats having spare rooms sitting empty which they can add to flats when they bring long tenancies to an end not entirely possible. The third is that people buying property on long leases will almost always employ solicitors to handle the transaction. They are therefore much more likely to seek legal advice when their landlord offers them a new tenancy than are ordinary protected or assured tenants. Their advisers will be able to tell them if the landlord's proposals are unsatisfactory. I hope that in the light of these comments my noble friend will be able to withdraw his amendment.
Lord Coleraine: My Lords, my noble friend seems to assure the House that there are no loopholes here to be closed. I shall obviously have to read what he has said in order to see whether I agree. Nevertheless, if there are loopholes, it may be the case that paragraph 16 is in similar terms to the equivalent provisions of the Landlord and Tenant Act 1954. But that does not seem to me to be a good reason for not blocking a loophole if one exists. However, in the circumstances I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Coleraine Lord Coleraine moved Amendment No. 192B:
Page 264, line 6, after ("17") insert ("(1)").
The noble Lord said: My Lords, paragraph 17 of Schedule 10 allows landlords and leaseholders to agree prior to the termination of the long lease on the grounds of a future tenancy that there shall be a future tenancy at a rent other than a low rent and otherwise on terms to be agreed between the parties, as I understand it.
There is no requirement that the new tenancy must be an assured tenancy or that it may not be an assured shorthold or that the mandatory grounds for possession cannot be brought into play by the landlord. As drafted, paragraph 17 opens up the possibility that landlords may seek to persuade tenants to take on new tenancies on the expiry of long leases which will have no or very little security of tenure because, for example, they are shortholds.
To create an assured shorthold tenancy, or to use grounds 1 to 5 of the mandatory grounds for possession against assured tenants, notice must be given to the tenant before the grant of the new tenancy. It need not be given before the parties enter into the agreement to create the new tenancy. For example, the parties could agree that a weekly tenancy be granted to the tenant when the long lease ends. Subsequently, shortly before the tenancy is
1528
actually granted, the landlord may give to the tenant written notice that the property may in future be required as the only or main home of himself or his spouse. By so doing he makes this mandatory ground available in future to himself.
Similarly, the parties could agree that the term at the end of the long lease should be the grant of a one-year lease. Subsequently, shortly before the tenancy is actually granted the landlord can give the tenant a notice that the new tenancy is to be a shorthold, thus ensuring that the tenant can be evicted without any grounds for possession being proved once the one-year fixed term has expired. I feel sure that these possibilities were not within the contemplation of the Government when this schedule was drafted. The amendment seeks to preserve the leaseholder's security by ensuring that the new tenancy must be an assured tenancy which is not a shorthold and that the landlord cannot bring into play the mandatory grounds for possession, I to 5. I beg to move.
Lord Hesketh: My Lords, I think I am correct in saying that my noble friend also spoke to Amendments Nos. 192C and 192D. These amendments relate to paragraph 17 of Schedule 10 which disapplies the schedule in cases where the landlord and tenant agree to the grant of a new tenancy which is not at a low rent. If the parties agree such a tenancy, they obviously do not need to invoke the provisions of the schedule aimed at establishing one.
As my noble friend has said, under paragraph 17 of the schedule as drafted, the landlord and tenant can agree to an assured or an assured shorthold tenancy. But the crucial word is "agree". If the tenant does not want to accept the tenancy that the landlord offers him, he is free to refuse it and will then retain the protection afforded by Schedule 10. If the landlord wants to create an assured shorthold, he has to serve the prescribed shorthold notice before the tenancy is entered into. That notice states clearly that the landlord may have the right to repossession when the fixed term expires and it tells tenants to get advice if they do not understand it. So tenants will have clear notice of what they are being offered.
As I said in relation to the previous amendment, long leaseholders will almost certainly have employed solicitors when they entered into their leases and are therefore likely to take legal advice when the term date approaches and the landlord starts to take steps to set up a new arrangement. I do not believe, therefore, that tenants will be cheated out of their rights in the way that has been suggested.
My noble friend also argued that paragraph 17 should be amended so that the schedule's provisions will be disapplied only if the landlord offers an assured tenancy in respect of which possession will not be recoverable under grounds 1 to 5 of Schedule 2 to the 1988 Act. Grounds 2 to 5 are clearly irrelevant to the case where the dwelling-house has previously been let on a long tenancy. Ground 1 is very unlikely to be relevant as the landlord would have had to have occupied the dwellinghouse as his only or principal home at some time before the long tenancy began. As my noble friend will appreciate,

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in most cases the landlord will be a company or a trust rather than an individual and could not therefore satisfy this requirement. But if such a case were to arise, the landlord could only be confident that he would be able to use ground 1 if he served written notice before the tenancy was entered into. So again the tenant will have notice of what is proposed and does not have to agree if he does not like it.
I hope that in the light of what I have said my noble friend will feel able to withdraw his amendment.
Lord Coleraine: My Lords, I wish to clarify something between myself and my noble friend. In dealing with mandatory ground 1 he said that on the rare occasions, as he put it, where the landlord was not a company or a trust and ground 1 might apply—that is to say, the notice might be given that the resumption of possession was needed for the landlord's family—the tenant would have to have notice of this. The point I have been making is that the tenant would receive the notice after the agreement had been reached to have the extended term or the new tenancy at the end of the long lease. So it does not appear to me to be helpful to suggest that the tenant gets this notice when my complaint has been that he gets the notice too late.
My noble friend suggested that in most cases a tenant in the situation we are describing would have the benefit of a solicitor's advice. However, speaking as a solicitor myself I do not think one should legislate on the basis that a solicitor's advice Nv!1 be obtained on all occasions. However, my noble friend had a lot to say about the amendment and I shall obviously need to read very carefully what he has said when Hansard is published. Unless he has any further comments to make on the question of the notice in connection with mandatory ground 1, I beg leave to—
Lord Hesketh: My Lords, speaking with the leave of the House, notice would have to be served before the assured tenancy is created, as I understand it.
Lord Coleraine: My Lords, my point is that the landlord can agree with the tenant that at the end of the long lease another tenancy will be created. The trouble is that there is a period between the agreement and the creation of the new tenancy in which the landlord can spring upon the tenant the fact that mandatory ground 1 may be applied. Nevertheless, I am sure that we shall look at the question again if need be. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 192C and 192D not moved.]
12.15 a.m.
Schedule 11 [Minor and Consequential Amendments]:
Lord Hesketh Lord Hesketh moved Amendment No. 193:
Page 269, line 8, at end insert—
("The Social Work (Scotland) Act 1968.
For paragraph 8 of Schedule 3 to the Social Work (Scotland) Act 1968 (expenses of children's panel members) there shall be substituted the following paragraph—
"8. A local authority may pay—

(a) to a member or possible member of the children's panel;

(b) to a member of the Children's Panel Advisory Committee

such allowances as may be determined by the Secretary of State; and he may determine differently in relation to different cases or classes of case.".)
On Question, amendment agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 193A:
Page 269, line 15, at end insert—
("Local Authority Social Services Act 1970.
15A. In section 2(1) of that Act, after "a social services committee" there shall be inserted "or sub-committee".")
The noble Lord said: My Lords, in speaking to Amendment No. 193A I should like to speak also to Amendments Nos. 195A and 195B.
With the leave of the House, I should like to make a technical change to tidy up Amendment No. 193A, on the advice of parliamentary counsel. Where it reads:
"15A. In section 2(1) of that Act,"
under the heading:
"Local Authority Social Services Act 1970",
it would clearly be proper to say:
"15A. In section 2(1) of the Local Authority Social Services Act 1970, after 'a social services committee' there shall be inserted 'or sub-committee'."
In other words, instead of "that Act" it should read:
"the Local Authority Social Services Act 1970".
I should like to move the amendment with that alteration to it.
At Committee it was agreed, in connection with my Amendment No. I 84ZB, that it was right that local authorities should follow the very sensible and practical practice of appointing all of their committees and sub-committees at the first meeting of the council in each municipal year., instead of pretending that the sub-committees are appointed by the committees and leaving it till later in the year so that nobody knows whether they are a member of a committee or not. The three amendments tidy up aspects of committee appointment which we neglected to deal with at Committee stage. I beg to move.
Lord Reay: My Lords, the noble Lord, Lord McIntosh, has explained fully the purpose of the amendments. There are some minor drafting changes which we would wish to make at a later stage. In the meantime we are happy to accept the amendments as a useful extension of the provisions which the noble Lord introduced at Committee.
Lord McIntosh of Haringey: My Lords, I thought that I had made the drafting change, on the advice of parliamentary counsel. However, I am happy

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to move the amendment on whatever terms are acceptable.
On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 194:
Page 269, line 33, at end insert —
(". In section 94(5)(b) of that Act (allowances not to be treated as pecuniary interests), after the word "below" there shall be inserted the words "or under any scheme made by virtue of section (schemes for basic, attendance and special responsibility allowances for local authority members) of the Local Government and Housing Act 1989".").
On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 195:
Page 269, line 33, at end insert —
("18A. In subsection (6) of section 97 of the Local Government Act 1972 (exclusion of disability from speaking and voting by reason of small shareholdings), for £1,000 there shall be substituted £5,000.").
The noble Lord said: My Lords, in the absence of my noble friend Lord Rippon, I should like to move Amendment No. 195. I beg to move.
Lord McIntosh of Haringey: My Lords, the noble Lord, Lord Rippon, had taken great care to ensure that I would be here to move that amendment. I take deep offence at this "insult".
Lord Monson: My Lords, the noble Lord, Lord Rippon, had not taken any care whatsoever to ensure that I was here. However, I was on the point of leaping to my feet to move his amendment in the absence of anyone else rising to do so. It is a very sensible amendment. The retail price index has increased a good deal more than five fold since 1972, whichever month in that year one happens to choose. The amendment is therefore not only logical and sensible but, if anything, somewhat modest. I am delighted that the Government have moved it for us.
On Question, amendment agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 195A and 195B:
Page 270, line 3, leave out ("and")
Page 270, line 6, at end insert—
("(c) in subsection (4), after "may appoint a committee" there shall be inserted "or a sub-committee; and
(d) in paragraph (b) of subsection (4), before "may appoint"
there shall be inserted "(in the case of a committee)" ").
The noble Lord said: My Lords, I have already spoken to Amendments Nos. 195A and 195B. I beg to move the amendments en bloc.
On Question, amendments agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 196:
Page 270, line 6, at end insert —
(". Sections 173 and 173A of that Act (attendance allowance and financial loss allowance) shall be amended as follows—

(a) for the words "local authority", wherever they occur, there shall be substituted "parish or community council";

(b) in subsection (3) of each of those sections, for the word "authority" there shall be substituted "council"; and

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(c) for the words "body to which this section applies" in subsection (4) of section 173 there shall be substituted "parish or community council".

In section 175 of that Act (allowances for conferences and meetings)—
(a) in subsection (I) (allowances payable), for the words from "allowances in the nature of onwards there shall be substituted "allowances in the nature of an attendance allowance and an allowance for travelling and subsistence, as they think fit.
(1A) Payments made under subsection (1) above shall be of such reasonable amounts as the body in question may determine in a particular case or class of case but shall not exceed—

(a) in the case of payments of an allowance in the nature of an attendance allowance, such amounts as may be specified in or determined under regulations made by the Secretary of State; and

(b) in the case of payments of an allowance in the nature of an allowance for travel and subsistence in respect of a conference or meeting held in the United Kingdom, such amounts as may be specified under section 174 above for the corresponding allowance under that section;

and regulations made by the Secretary of State may make it a condition of any payment mentioned in paragraph (a) above that, in the financial year to which the payment would relate, the aggregate amount which the body in question has paid or is already liable to pay in respect of any prescribed allowance or allowances does not exceed such maximum amount as may be specified in or determined under the regulations."
(b) in subsection (3B) (conferences to which section applies in relation to joint boards and committees), for the words "such body as is mentioned in section 177(1)(d) or (e) below" there shall be substituted the words "body which is a joint board, joint authority or other combined body all the members of which are representatives of local authorities".
—(1) Subsection 177 of that Act shall be amended as follows.
(2) For sub section (1) (bodies to which sections 173 and 175 apply) there shall be substituted the following subsection—
"(1) Subject to paragraph 4 of Schedule 2 to the Education Act 1980 (application of certain allowances to appeal committees), sections 174 and 175 above apply —

(a) to the bodies specified in section 19 (1) of the Local Government and Housing Act 1989, except—

(i) the Common Council;

(ii) a body established pursuant to an order under section 67 of the Local Government Act 1985 (successors to residuary bodies); and

(iii) without prejudice to section 265 below, the Council of the Isles of Scilly;

(b) to any prescribed body on which a body to which those sections apply by virtue of paragraph (a) above is represented; and

(c) to any parish or community council."

(3) For subsection (2) (meaning of "approved duties") there shall be substituted the following subsection—
"(2) In sections 173 to 176 above 'approved duty' in relation to a member of a body, means such duties as may be specified in or determined under regulations made by the Secretary of State."
(4) In subsection (4) (members not excluded from discussion of allowances), at the end there shall be inserted the words "or under any scheme made by virtue of section (Schemes for basic, attendance and special responsibility allowances for local authority members) of the Local Government and Housing Act 1989".
In section 178(2) of that Act (regulations with respect to allowances), for the words "177 or 177A" there shall be substituted "or 177".").
On Question, amendment agreed to.
[Amendment No. 197 had been withdrawn from the Marshalled List.]
Lord Hesketh Lord Hesketh moved Amendments Nos. 198 to 200:
Page 270, line 31, leave out from beginning to ("(recording)") in line 41 and insert—
(".In section 38(4)(b) of the Local Government (Scotland) Act 1973 (allowances not to be treated as pecuniary interests) after the word "Act" there shall be inserted the words "or under any scheme made by virtue of section (Schemes for basic, attendance and special responsibility allowances for local authority members) of the Local Government and Housing Act 1989."
In section 47 of that Act (allowances for conferences and meetings)—
(a) in subsection (1) (allowances payable), for the words from "allowances in the nature of" onwards there shall be substituted "allowances in the nature of an attendance allowance and an allowance for travel and subsistence, as they think fit.
"(1A) payments made under subsection (1) above shall be of such reasonable amounts as the body in question may determine in a particular case or class of case but shall not exceed—

(a) in the case of payments of an allowance in the nature of an attendance allowance, such amounts as may be specified in or determined under regulations made by the Secretary of State; and

(b) in the case of payments of an allowance in the nature of an allowance for travel and subsistence in respect of a conference or meeting held in the United Kingdom, such amounts as may be specified under section 46 above for the corresponding allowance under that section;

and regulations made by the Secretary of State may make it a condition of any payment mentioned in paragraph (a) above that, in the financial year to which the payment would relate, the aggregate amount which the body in question has paid or is already liable to pay in respect of any prescribed allowance or allowances does not exceed such maximum amount as may be specified in or determined under the regulations.
(b) in subsection (3A) (conferences to which section applies in relation to joint boards and committees), for the words "such body as is mentioned in section 49(1)(c) or (d) below" there shall be substituted the words "body which is a joint board, joint authority or other combined body all the members of which are representatives of local authorities".
—(1) Section 49 of that Act shall be amended as follows.
(2) For subsection (1) (bodies to which sections 46 and 47 apply) there shall be substituted the following subsection —
"(1) Sections 46 and 47 above apply—

(a) to the bodies specified in section 19(2) of the Local Government and Housing Act 1989; and

(b) to any prescribed body on which a body to which those sections apply by virtue of paragraph (a) above is represented.".

(3) For subsection (2) (meaning of "approved duties") there shall be substituted the following subsection —
"(2) In sections 46 to 48 above "approved duty", in relation to a member of a body, means such duties as may be specified in or determined under regulations made by the Secretary of State.".
(4) In subsection (4) (members not excluded from discussion of allowances), at the end there shall be inserted the words "or under any scheme made by virtue of section (Schemes for basic, attendance and special responsibility allowances for local authority members) of the Local Government and Housing Act 1989".
In sub-paragraph (1) of paragraph 7 of Schedule 7 to that Act").
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Page 271, line 22, at end insert—
("In section 4 of the Local Government (Scotland) Act 1975 (valuation appeal committees) after subsection (7) there shall be inserted the following subsection—
"(7A) There shall be paid to members of a valuation appeal committee and to members of a local valuation panel such allowances as may be determined by the Secretary of State".").
Page 271, line 23, leave out ("the Local Government (Scotland) Act 1975") and insert ("that Act").
On Question, amendments agreed to.
[Amendment No. 200A not moved.]
Lord Reay Lord Reay moved Amendment No. 201:
Page 272, line 10, leave out from ("subsection") to end of line 12 and insert ("(1) after the word "officer" there shall be inserted "or other person".").
The noble Lord said: My Lords, this amendment applies to registers of local authority loan instruments maintained under Clause 43 and certain standard provisions relating to registers. They follow the corresponding provisions in the Companies Act. I beg to move.
On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 202:
Page 273, line 6, at end insert —
("The Education (Scotland) Act 1980
In Schedule Al to the Education (Scotland) Act 1980, for paragraph 9 there shall be substituted the following paragraph—
"9. There shall be paid to members of an appeal committee constituted in accordance with this Schedule such allowances as may be determined by the Secretary of State.").
On Question, amendment agreed to.
[Amendment No. 202ZA not moved.]
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 202A:
Page 274, line 31, at end insert—
("51A. In section 82 of the Housing Act 1985 (security of tenure) at the beginning of subsection (2) there shall be inserted the words "Subject to subsection (2A) below".
(2) After subsection (2) of that section there shall be inserted the following subsection—
"(2A) Where the landlord obtains an order for the possession of the dwelling house and the court has under section 85(3) imposed conditions on the stay or suspension of execution of the order or on the postponement of the date of possession, the tenancy ends on the date of execution of the order"").
The noble Lord said: My Lords, at an earlier stage of the proceedings an amendment in comparable terms was moved by the noble Lord, Lord Ross, but it was rejected by the Government. The purpose of this amendment is to ensure that those with suspended possession orders against them do not lose their rights as secure tenants until eviction, rather than when the suspended order is broken. On previous occasions we have drawn on the experience and the policy of the London borough of Redbridge, which was one of denying a right to consultation to those with suspended possession orders against them in connection with a proposed voluntary transfer to a newly created housing association.
I must tell the House that I am now advised that on 23rd October—in other words, at the beginning of this week—at a meeting of that council's housing committee, officers admitted that the right to

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consultation had been denied to all those with outstanding possession orders against them. They did not know in the case of specific individuals whether the suspended possession order had been broken; nor had they considered whether in the case of specific individuals a new tenancy might have been granted by the payment and acceptance of rent after the suspended order had been broken. On that occasion, the committee decided to withdraw those properties from the sale where there were outstanding possession orders and to consider what to do in respect of those properties at a later time.
I am sure that both the Minister and the House are aware that we are dealing with people in wretched circumstances who should be given not only the benefit of the doubt but every consideration in those circumstances. The purpose of the amendment is to redress that situation. I beg to move.
Lord Hesketh: My Lords, where there is a secure tenancy and the landlord has obtained an order for possession which has been suspended on certain conditions, the tenancy comes to an end on the day when the tenant first commits a breach of the conditions. The effect of the amendment would be to cause a secure tenancy to end on the date of execution of the order for possession. So the tenant would retain for a longer period the rights and obligations which a secure tenancy implies, such as the right to buy and the right to vote in any ballot about a voluntary transfer of housing stock from a local council to some other landlord.
I believe that the present position is the right one and that this change is both inappropriate and undesirable. If tenants do not fulfil conditions placed on court orders—and those most commonly relate to payment by instalments of rent arrears—we must ask the question whether that group of tenants ought to have the right to buy or the right to vote to change landlord. Could they afford a mortgage or the rent of a different landlord if they cannot meet the debts as required by the court? I would suggest not.
Furthermore, it does not necessarily follow that, in the event of a breach, the landlord will immediately apply for the possession order to be executed and, in appropriate circumstances, the conduct of both parties might lead to a new secure tenancy arising. It is difficult to generalise on this point since the behaviour of both parties will vary from case to case. But it has to be recognised that, in some circumstances, the amendment would not have an effect. I urge the noble Lord, Lord Graham, to resist the temptation of his amendment.
Lord Graham of Edmonton: My Lords, the Minister invites me to resist the temptation of my own amendment. That is a difficult process at any time and certainly at twenty-five minutes past midnight.
The Minister makes a fair point that one who is aware of all the circumstances, all the rights and obligations, in effect has his eyes wide open and knows what happens when he takes steps which put
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him on the wrong side of the law. In fact, I mentioned what had happened in the London borough of Redbridge only this week. I think that that is very significant in the context in which I raised the matter.
But I am sure that the Minister will not give way on this matter tonight. He said that it was right and proper that the present situation should prevail. I take the opposite view. However, I shall not press the issue tonight. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Chairman of Committees (Lord Aberdare): My Lords, perhaps I may revert for a moment to Amendment No. 198. I put it in the terms of the amendment as printed. In fact there is a printing error. The amendment should read:
"Page 270, line 31, leave out from beginning to ("(recording)") in line 32".
It should not read "line 41".
With that correction I hope that your Lordships will allow acceptance of the amendment to stand.
Lord Ross of Newport Lord Ross of Newport moved Amendment No. 202AA:
Page 274, line 31, at end insert—
("51A. In section 87 of the Housing Act 1985 (persons qualified to succeed tenant) in subsection (b) after the words "resided with the tenant" there shall be inserted "(whether in the dwelling-house or elsewhere)".")
The noble Lord said: I raise this matter again as I did in Committee. It deals with the matter of trading down where council tenants perhaps living in property with rather more accommodation than they need give up possession and move to a smaller property.
In this amendment one seeks to make sure that those who happen to live with that particular tenant do not lose any of their rights. In rejecting the amendment previously, the noble Lord, Lord Hesketh, on behalf of the Government, said that the amendment would enable a partner who had never lived in the property to succeed to the tenancy of a tenant who had been absent from home for a year or who was retaining it as his principal private home. He said that it would open the door to abuse, undermining the principle that tenancies should be allocated so far as possible on the basis of need. With respect, I suggest that that is not the case.
The person wishing to succeed to the tenancy would still have to satisfy the landlord or the court that he or she was living in the property and that it was his or her only or main home at the time of the tenant's death. Accordingly it is hard to see how there could be any more room for abuse than there is under the current law or that the principle of allocating tenancies on the basis of need would be undermined. The potential successor would also have to satisfy the landlord or the court that he or she had lived with the tenant in the 12 months up to the tenant's death, the only difference being that it need not be at the property itself. I beg to move.
Lord Hesketh: My Lords, the noble Lord, Lord Ross, tabled a similar amendment during Committee

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stage. He will not be surprised to learn that my view is the same now as it was then. The effect of Amendment No. 202AA would be that, to succeed to a secure tenancy, a member of the tenant's family no longer has to reside in the dwelling 12 months prior to the tenant's death but merely has to have resided anywhere with the tenant for a minimum of 12 months.
As drafted, the amendment would enable a partner who had never lived in the property to succeed to the secure tenancy of a tenant who had been absent from the home for a year while retaining it as his principal home. I am afraid that that would open the door to abuse and would lead to minimal conditions for justifying succession to a secure tenancy. These in my view would be too slight. And I believe that, in needy cases—say, where children were involved—the landlord would allow the family to stay on.
In the light of those remarks, I hope that the noble Lord, Lord Ross, also will be able to resist the temptation of his amendment.
Lord Ross of Newport: My Lords, it seems to me that I heard the same remarks about a week ago. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
12.30 a.m.
Lord Ross of Newport Lord Ross of Newport moved Amendment No. 202AB:
Page 274, line 31, at end insert—
("51A. In section 89 of the Housing Act 1985 (succession to periodic tenancy) after subsection 2(b) there shall be inserted the following paragraph—
"(2)(c) of two or more spouses of the tenant such one of them as may be agreed between them or as may, where there is no such agreement, be selected by the court."").
The noble Lord said: My Lords, at least on these Benches we try! The amendment seeks to remove the distinction between spouses and cohabitees, thus allowing the cohabitee to succeed to the secure tenancy without having to clock up the minimum period of 12 months. It also means that the cohabitee of an unmarried tenant would be given preference over other members of the tenant's family in the decision about who can succeed. Where two or more people claimed to be the tenant's spouse, the court would select who was to succeed in the event of a dispute. I raised the matter earlier but we have now concluded the discussion about the courts.
In Committee the noble Lord, Lord Hesketh, stated:
"We have no evidence that this situation has presented a problem for secure tenancies in the past".
Whatever may have been the position in the past, cohabitation is clearly a growing phenomenon and it is only right that the law should not discriminate against cohabitees in this area, as it does not do so in deciding succession rights of assured tenancies under the Government's own Housing Act 1988. I beg to move.
Lord Hesketh: My Lords, the amendment would provide for a dispute between two or more spouses over succession to a secure tenancy to be settled by the courts. I am not aware that there have been disputes over successions to secure tenancies. It is not an issue that has been raised with us by local authority associations. I can see that the courts would be the natural forum to settle disputes but I cannot see in practice that we shall need to give them this extra duty. I am of course prepared to look at any evidence of problems that the noble Lord may care to send me. But I am afraid that at the moment I cannot accept the amendment.
Lord Ross of Newport: My Lords, with that invitation, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Dean of Beswick Lord Dean of Beswick moved Amendment No. 202B:
Page 275, line 2, at end insert—
("53A. In section 131 of the Housing Act 1985 (limits on amount of discount), there shall be added after sub-section (3) the following subsection—
"3A) Any determination under sub-section (3) above shall specify that, where the landlord is a registered housing association and the dwelling has been provided either fully or in part by private finance, the discount shall not reduce the selling price by more than the total cost of the provision of the dwelling." ").
The noble Lord said: My Lords, the amendment seeks to protect the position of a non-charitable housing association which transfers one of its secure tenants or one of its assured tenants with a preserved right to buy to a property provided partly or fully by private finance should that tentant subsequently exercise right to buy. The amendment was withdrawn at Committee stage for consideration of the Government's response.
Under Section 35 of the Housing Act 1988 a secure tenant of a housing association who transfers to another property owned by the same association is entitled to retain their secure tenancy. For a non-charitable housing association this also means that the secure tenant retains the right to buy that property at a discount under the Housing Act 1986. Similarly, former public sector secure tenants whose properties are transferred to a housing association retain their preserved right to buy even if they transfer to another property owned by the association.
Changes in the funding regime for housing associations mean that many new properties are provided either wholly by private rather than public funding or by a mixture of public and private funding. Existing provisions to limit the amount of discount available to tenants exercising their right to buy were established prior to any substantial use of private funding by housing associations and prior to transfers of public sector housing stock to other landlords.
The current cost floor rules were drawn up in 1984. The calculation of the cost floor, established to ensure that the discount to which the tenant is entitled does not reduce the selling price of the dwelling below its cost of provision, does not take

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account of private sector funding. The noble Lord, Lord Hesketh, stated in Hansard at col. 453 on 11th October that,
"Costs incurred by the landlord on relevant works are included. In the case of the construction of the dwelling-house, not only the costs of construction but also the costs of site development works and the acquisition of land are to be taken into account. So are major works of improvements".
The current Housing Corporation circular, issued in 1985 but still the only guidance to housing associations, is quite clear. It tells associations to exclude from cost floor calculation all cost not funded by public subsidy. This quite clearly excludes the private funding together with associated cost such as deferred interest payments or penalties for early redemption of the loan.
At present housing associations run the risk of facing a substantial underfunded loss unless the existing rules are changed. At present they are very wary of permitting transfers which could result in the exercise of right to buy on mixed or privately-funded property. The amendment would clarify the position which does not seem to be as clear cut as the Minister previously indicated. I beg to move.
Lord Hesketh: My Lords, the amendment is identical to one moved in Committee by the noble Lord, Lord McIntosh, about which I subsequently wrote to him. As I explained in Committee, a tenant exercising the right to buy is allowed discount only to the extent that it does not reduce the purchase price below the sum of the costs incurred by the landlord in acquiring, building or improving the property. These costs can be summarised, to use the words of the amendment, as
"the total cost of the provision of the dwelling".
The noble Lord has referred to the concern of housing associations about cases where a tenant with the ordinary or preserved right to buy applies to buy a property within the association's stock financed from private sources on terms including penalties for early redemption. The cost of such penalties would be unlikely to count as a cost for the purposes of the cost floor rule. However, it is difficult to see how the rule could reasonably be extended to cover penalties arising under the particular financial arrangements by which the property was funded. It is surely not right to discriminate between tenants on the basis of the particular financial package negotiated by their landlord.
In the light of that explanation, I hope that the noble Lord will find this an opportunity to resist a temptation.
Lord Dean of Beswick: My Lords, I was about to say that I was grateful to the Minister for his reply. However, as he has given me no comfort, that would be rather false. At this time of night and at this stage of the Bill, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Ross of Newport Lord Ross of Newport moved Amendment No. 202C:
Page 275, line 2, at end insert—
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("53A. In section 113 of the Housing Act 1985 (member of a person's family) in subsection (1)(a) leave out the words "or he and that person live together as husband and wife" and after subsection (2) of that section insert the following subsection—
"(3) For the purpose of this Part, a person who lives together with another person as his wife or husband shall be treated as his spouse."").
The noble Lord said: My Lords, I rise to the temptation to move yet another amendment. It seeks to recognise the reality that large numbers of public sector tenants live together as husband and wife although they may not be married. At the moment the state fails to recognise that fact. It is also out of line with the law for Rent Act tenants and assured tenants under the Housing Act 1988. For both groups of private sector tenants the Housing Act 1988 makes no distinction between married people and cohabitees in deciding what rights the person has to accede to a tenancy. The amendment seeks to bring the law in the public sector in line with that for the private sector.
In Committee the Government queried the use of both genders, given that the Interpretation Act 1978 provides that reference to "he" covers both genders. The amendments were modelled on Section 17(4) of the Housing Act 1988 covering the position of succession to assured tenancies which refers to both genders. In any event, the amendment has been re-worded to refer only to the male gender. I beg to move.
Lord Hesketh: My Lords, the effect of Amendment No. 202C would be that a person living with another person as wife or husband would be treated as the spouse. We have no reason to believe that the redefinition within Amendment No. 202C is necessary or desirable. We are not aware that problems have arisen in this connection. However, if the noble Lord would like to send me details of cases I shall be happy to look into them, although I cannot guarantee that we shall be able to do anything about it in this Bill. In the light of that explanation, I hope that the noble Lord will be able to withdraw his amendment.
Lord Ross of Newport: My Lords, I am tempted to make sure that the noble Lord receives about one hundred letters through the post next week. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Strathmore and Kinghorne The Earl of Strathmore and Kinghorne moved Amendment No. 203:
Page 279, line 1, at end insert—
(". In section 61(3) of the Housing (Scotland) Act 1987 (application of right to buy to tenants under secure tenancies granted after acquisition by landlord of defective dwelling) for "282(3)" there shall be substituted "282(2) or (3)").
The noble Earl said: My Lords, this is a technical amendment which remedies an unintended effect made on consolidation of the Scottish housing legislation in the Housing (Scotland) Act 1987. The policy intention behind Section 61(3) of the Act is to ensure that a tenant who had his defective home repurchased by his landlord does not have to meet the two-year qualifying period before he can apply to exercise the right to buy. The provisions as they

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stand only disapply the waiting period to tenants of non-public sector landlords. This amendment will disapply them also to tenants of public sector landlords. I beg to move.
On Question, amendment agreed to.
Lord Reay Lord Reay moved Amendment No. 204:
Page 281, line 20, at end insert—
("(2) At the beginning of subsection (4) of that section there shall be inserted the words "Subject to section 38 (4A) below".").
The noble Lord said: My Lords, Amendments Nos. 204 and 205 are minor amendments which follow on from Amendment No. 188C which noble Lords agreed in Committee. I beg to move.
On Question, amendment agreed to.
Lord Reay Lord Reay moved Amendment No. 205:
Page 281, line 35, after ("above") insert ("so long as the tenancy continues to be held by a body which would have been specified in subsection (1) of section 80 of the Housing Act 1985 if the repeal of provisions of that section effected by this Act had not been made").
On Question, amendment agreed to.
Lord Ross of Newport Lord Ross of Newport moved Amendment No. 206:
Page 282, line 6, at end insert —
(". In Schedule 2 to that Act (grounds for possession of dwelling-houses let on assured tenancies) at the end of Ground 6 (landlord intending to demolish or reconstruct) there shall be added the following paragraph —
"For the purposes of this ground, every acquisition under Part IV of this Act shall be taken to be an acquisition for money or money's worth; and in any case where —

(i) the tenancy (in this paragraph referred to as "the current tenancy") was granted to a person (alone or jointly with others) who, immediately before it was granted, was a tenant under a tenancy of a different dwelling-house (in this paragraph referred to as "the earlier tenancy"), and

(ii) the landlord under the current tenancy is the person who, immediately before that tenancy was granted, was the landlord under the earlier tenancy, and

(iii) the condition in paragraph (b) above could not have been fulfilled with respect to the earlier tenancy by virtue of an acquisition under Part IV of this Act (including one taken to be such an acquisition by virtue of the previous operation of this paragraph),

the acquisition of the landlord's interest under the current tenancy shall be taken to have been under that Part and the landlord shall be taken to have acquired that interest after the grant of the current tenancy." ").
The noble Lord said: My Lords, this amendment arises from a gap which my colleague Simon Hughes MP in the other place raised with the Government when this Bill was in Committee there. It relates to tenants choice landlords who might use ground 6 of Schedule 2 to the Housing Act to obtain vacant possession for their tenants. I believe that the Government may have some sympathy for this amendment. I beg to move.
Lord Reay: My Lords, the noble Lord, Lord Ross of Newport, has explained the purpose of this amendment, which we are happy to accept.
Lord Ross of Newport: My Lords, I am very grateful to the Government for their co-operation and I also express my thanks to my colleague Simon Hughes.
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On Question, amendment agreed to.
Lord Reay Lord Reay moved Amendment No. 207:
Page 282, line 14, at end insert—
("96. In Schedule 18 to that Act (enactments repealed) at the end of paragraph 4 at the end of that Schedule (scope of repeals of section 80 of the Housing Act 1985) there shall be added "and
(c) do not have effect in relation to a tenancy while it is a housing association tenancy."").
The noble Lord said: My Lords, this amendment fulfils an undertaking which my noble friend Lord Caithness gave at Committee stage to the noble Lord, Lord Graham of Edmonton, to consider an amendment about establishing security of tenure for certain types of housing association tenant who might not otherwise have full security.
The amendment which the Government are now bringing forward has been drafted to meet the concerns expressed by the noble Lord, Lord Graham. Its effect is to establish that, in cases where a housing association tenancy under the pre-1988 Act regime is not also a secure tenancy, it may nonetheless become a secure tenancy if it subsequently meets the normal conditions for such a tenancy.
This is a small but useful measure to deal with a minor anomaly in the existing legislation. I am grateful to the noble Lord for bringing the point to the Government's attention and I hope that your Lordships will agree to the amendment.
Lord Graham of Edmonton: My Lords, I am grateful not only to the noble Earl, Lord Caithness, for his assurances but also the Minister and his advisers for giving effect to my suggestion, although perhaps going on a different route to that which we proposed but securing the same purpose. I assure the Minister that the National Federation of Housing Associations has asked me to convey to the Minister that it is very grateful for the notice which has been taken of what it sees as a genuine concern. We are grateful to the Minister for doing what he has done.
On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 208:
Page 282, line 14, at end insert —
("The Social Security Act 1989
. In paragraph 2(6) of Schedule 8 to the Social Security Act 1989 (interpretation of provisions relating to incapacity for work), for paragraphs (a) and (b) of the definition of "councillor's allowance" there shall be substituted the following paragraphs—

"(a) section 173 or 177 of the Local Government Act 1972 or a scheme made by virtue of section (Schemes for basic, attendance and special responsibility allowances for local authority members) of the Local Government and Housing Act 1989, other than such an allowance as is mentioned in section 173(4) of that Act of 1972 or in section (Schemes for basic, attendance and special responsibility allowances for local authority members) (2) of that Act of 1989; or

(b) section 49 of the Local Government (Scotland) Act 1973 or a scheme made by virtue of section (Schemes for basic, attendance and special responsibility allowances for local authority members) of the Local Government and Housing Act 1989, other than such an allowance as is mentioned section (Schemes for basic, attendance and special responsibility allowances for local authority members) (2) of that Act of 1989".").

On Question, amendment agreed to.
Schedule 12 [Enactments repealed]:
Lord Hesketh Lord Hesketh moved Amendments Nos. 209 to 212:
Page 285, line 26, column 3, at end insert—

("In section 177, subsection (2A) and in subsection (3), the words "(but not for the purposes of subsection (2A) above)".

Section 177A.

In section 178, in subsection (1), the words "and 177A".").

Page 285, line 27, column 3, at end insert—

("section 265A(1)(g).").

Page 285, line 50, column 3, at end insert—

("Section 45 and 45A. Section 49(1A). Section 49A.").

Page 286, line 23, at end insert—

("1975 c. 30.

The Local Government (Scotland)Act 1975.

In Schedule 6, in Part II,(Scotland) Act 1975. paragraph 46.").

On Question, amendments agreed to.
Baroness Blatch Baroness Blatch moved Amendment No. 212A:
Page 286, line 29, at end insert—

("1975 c. 76.

The Local Land Charges Act 1975

In section 9, in subsection (2),the words from the beginning to "in writing, and".").

The noble Baroness said: My Lords, this amendment is consequential on Amendment No. 173ZA. I beg to move.
On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendments Nos. 213 to 215:
Page 286, line 37, at end insert—

("1980 c. 20.

The Education Act 1980.

In Schedule 2, in paragraph 4, the words 173(4) and".").

Page 286, line 39, at end insert—

("1980 c. 65.

The Local Government, Planning and Land Act 1980.

Section 26(1) to (3).").

Page 287, line 14, column 3, at end insert—

("In Schedule 14, paragraphs 19 and 20.").

On Question, amendments agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 215A:
Page 289, leave out line 45.
The noble Lord said: My Lords, this amendment is consequential on Amendment No. 173B. I beg to move.
On Question, amendment agreed to.
12.45 a.m.
Lord Dean of Beswick Lord Dean of Beswick moved Amendment No. 215B:
Page 289, line 49, column 3, after ("notices)"") insert ("and the word "366", in paragraph 2(2)(b) the word "366").
The noble Lord said: My Lords, this amendment has already been spoken to. I beg to move.
On Question, amendment agreed to.
Lord Dean of Beswick Lord Dean of Beswick moved Amendment No.215C:
Page 289, line 57, column 3, at end insert ("; and in paragraph 8(1) the word "366").
The noble Lord said: My Lords, this amendment, too, has already been spoken to. I beg to move.
On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 216:
Page 290, line 16, at end insert—

("1980 c. 10.

The Local Government Act 1986.

Section 11.").

On Question, amendment agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 216ZA:
Page 290, line 31, column 3 at end insert—
("Schedule 20, paragraph 10(3)").
The noble Lord said: My Lords, this amendment refers to the Housing (Scotland) Act, on which I am such a noted expert. It is brought to our attention by the Convention of Scottish Local Authorities. The problem which they have identified relates to the repurchasing of defective housing by the local authority from which the tenant purchaser has already bought the property.
It seems somewhat contrary to Amendment No. 203, which has just been agreed and which was moved by the noble Earl, Lord Strathmore and Kinghorne. But the problem which has been identified is that if a local authority repurchases defective housing from a tenant purchaser, Clause 9(1) of Schedule 20 to the Housing (Scotland) Act provides that the tenant purchaser should get, in effect, 95 per cent. of its defect-free value. So far so good. What then happens is that, under Section 282 of the 1987 Act, the former purchaser may, if he or she wishes, in addition to receiving 95 per cent. of the defect-free value be given a secure tenancy of the house when it is sold back to the local authority, or may be given secure tenancy of a similar property if the council subsequently has to demolish the original property. The third twist is that, if the council puts further resources into remedying the defects, the tenant is free to reapply to buy the house or a replacement house at the full discount.
This appears to the Convention of Scottish Local Authorities to be anomalous, and the amendment would ensure that, where a property is not offered back to the authority with vacant possession, the repurchase price can be adjusted by the local authority or the district valuer taking into account this equivalent to a sitting tenancy. I beg to move.
The Earl of Strathmore and Kinghorn: My Lords, I cannot accept this amendment, which is contrary to a central principle of the housing defect legislation. That principle has always been that eligible owners should be offered repurchase at 95 per cent. of the defect-free value so that they receive, broadly speaking, the price they might have expected to get on selling their house had the house not turned out to be defective. So, in these circumstances, the amount an owner receives in excess of the defective value should be seen as compensation.
The principle was discussed during the passage of the housing defects legislation, along with the proposal in that legislation to offer a secure tenancy to the former owner. The question of discounting the price paid to the owner who wishes to remain as a secure tenant was also raised, but the main argument against such a discount is that, while the majority of

1545
former owners would want to buy another property in the open market following repurchase, some would find it difficult to do so. This could be for a number of reasons. For example, traditional houses often have higher values than those of non-traditional construction; former owners might also have to repay part of their right-to-buy discount, or any outstanding mortgage debts and then not find it easy to take out a new mortgage; for example, because of their age. As for any existing tenant, it was felt that it would be wrong for former owners to lose their security of tenure as a result of the housing defects statutory provisions. Their position is therefore preserved, and I see no reason to remove this right. With that explanation, I hope the noble Lord will withdraw his amendment.
Lord McIntosh of Haringey: My Lords, I am sure that the Scottish local authorities who were concerned about this matter will read very carefully what the noble Earl has said and, pending such reconsideration, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Hesketh Lord Hesketh moved Amendments Nos. 216A to 220:
Page 291, line 2, leave out ("(2)") and insert (", in subsection (2),").
Page 291, line 3, at end insert ("and subsection (3),").
Page 291, line 16, at end insert—

("In section 140(2) the word "and" at the end of paragraph (e).").

Page 291, line 16, at end insert—

("In section 143(4) the words "57 or" ").

Page 291, line 18, after ("2,") insert ("in paragraph 2(2)(m), the words from "and" to the end.").
Page 291, line 28, after ("9,") insert ("in paragraph 2(2)(h), the words from "and" to the end.").
On Question, amendments agreed to.
Clause 187 [Short title, commencement and extent]:
Lord Hesketh Lord Hesketh moved Amendment No. 221:
Page 168, line 9, after ("140") insert ("[contingency planning and co-ordination in respect of emergencies or disasters]").
On Question, amendment agreed to.
Lord Lucas of Chilworth Lord Lucas of Chilworth moved Amendment No. 222:
Page 168, line 21, after ("147") insert ("(charges: temporary traffic signs)").
The noble Lord said: My Lords, this amendment is consequential upon Amendment No. 171, to which your Lordships have already agreed. I beg to move.
On Question, amendment agreed to.
In the Title:
Lord Hesketh Lord Hesketh moved Amendments Nos. 223 and 224:
Line 18, leave out from ("grants") to ("to") in line 19. Line 22, after ("to';') insert ("and planning by").
On Question, amendments agreed to.

Midlands Metro Bill
Returned from the Commons with the amendments agreed to.
House adjourned at nine minutes before one o'clock.

  NATO PLANNING PROCEDURES
  NATO PLANNING PROCEDURES
  PRESCRIPTIONS AND LIMITATION OF ACTIONS: REPORT
  PRESCRIPTIONS AND LIMITATION OF ACTIONS: REPORT
  ASYLUM CLAIMANTS: STATISTICS
  ASYLUM CLAIMANTS: STATISTICS
  MR. SELAHATIN OZBERK
  MR. SELAHATIN OZBERK