Sitting of 31 October 1989

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

    CITY OF LONDON (SPITALFIELDS MARKET) BILL (By Order)
    Order read for consideration of Lords amendments.
    To be considered on Thursday 2 November.

    CITY OF LONDON (VARIOUS POWERS) BILL (By Order)
    Order for consideration, as amended, read.
    To he considered on Wednesday 1 November.

    MEDWAY TUNNEL BILL [Lords] (By Order)
    Order for Second Reading read.
    To be read a Second time on Wednesday 1 November.

    NOTTINGHAM PARK ESTATE BILL [Lords]
    Motion made,
    That the Promoters of the Nottingham Park Estate Bill [Lords] shall have leave to suspend proceedings thereon in order to proceed with the Bill, if they think fit, in the next Session of Parliament, provided that the Agents for the Bill give notice to the Clerks in the Private Bill Office no later than the day before the close of the present Session of their intention to suspend further proceedings and that all Fees due on the Bill up to that date be paid;
    That, if the Bill is brought from the Lords in the next Session, the Agent for the Bill shall deposit in the Private Bill Office a declaration signed by him, stating that the Bill is the same, in every respect, as the Bill which was brought from the Lords in the present Session;
    That, as soon as a certificate by one of the Clerks in the Private Bill Office, that such a declaration has been so deposited, has been laid upon the Table of the House, the Bill shall be read the first and second time and committed (and shall be recorded in the Journal of this House as having been so read and committed);
    That the Petitions relating to the Bill presented in the present Session which stand referred to the Committee on the Bill shall stand referred to the Committee on the Bill in the next Session;
    That no Petitioners shall be heard before the Committee on the Bill, unless their Petition has been presented within the time limited within the present Session or deposited pursuant to paragraph (b) of Standing Order 126 relating to Private Business;
    That, in relation to the Bill, Standing Order 127 relating to Private Business shall have effect as if the words "under Standing Order 126 (Reference to committee of petitions against Bill)" were omitted;
    That no further Fees shall be charged in respect of any proceedings on the Bill in respect of which Fees have already been incurred during the present Session;
    That these Orders be Standing Orders of the House. [Miss Betty Boothroyd.]
    Hon. Members: Object.
    To be considered on Thursday 2 November.

    VALE OF GLAMORGAN (BARRY HARBOUR) BILL [Lords]
    Motion made,
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    That the Promoters of the Vale of Glamorgan (Barry Harbour) Bill [Lords] shall have leave to suspend proceedings thereon in order to proceed with the Bill, if they think fit, in the next Session of Parliament, provided that the Agents for the Bill give notice to the Clerks in the Private Bill Office of their intention to suspend further proceedings not later than the clay before the close of the present Session and that all Fees due on the Bill up to that date be paid;
    That if the Bill is brought from the Lords in the next Session, the Agents for the Bill shall deposit in the Private Bill Office a declaration signed by them, stating that the Bill is the same, in every respect, as the Bill which was brought from the Lords in the present Session;
    That as soon as a certificate by one of the Clerks in the Private Bill Office, that such a declaration has been so deposited, has been laid upon the Table of the House, the Bill shall be deemed to have been read the first and shall be ordered to be read a second time;
    That the Petitions against the Bill presented in the present Session which stand referred to the Committee on the Bill shall stand referred to the Committee on the Bill in the next Session;
    That no Petitioners shall be heard before the Committee on the Bill, unless their Petition has been presented within the time limited within the present Session or deposited pursuant to paragraph (b) of Standing Order 126 relating to Private Business;
    That, in relation to the Bill, Standing Order 127 relating to Private Business shall have effect as if the words "under Standing Order 126 (Reference to committee of petitions against Bill)" were omitted;
    That no further Fees shall be charged in respect of any proceedings on the Bill in respect of which Fees have already been incurred during the present Session;
    That these Orders be Standing Orders of the House.—[Miss Betty Boothroyd.]
    Hon. Members: Object.
    To he considered on Thursday 2 November.

    BIRMINGHAM CITY COUNCIL (MISCELLANEOUS PROVISIONS) BILL [LORDS]
    Motion made,
    That the Promoters of the Birmingham City Council (Miscellaneous Provisions) Bill [Lords] shall have leave, except as provided by these Orders, to suspend further proceedings thereon in order to proceed with the Bill, if they think fit, in the next Session of Parliament, provided that the Agents for the Bill give notice to the Clerks in the Private Bill Office of their intention to suspend further proceedings not later than the day before the close of the present Session and that all Fees due on the Bill up to that date be paid;
    That, if the Bill is brought from the Lords in the next Session the Agent for the Bill shall deposit in the Private Bill Office a declaration, signed by him, stating that the Bill is the same, in every respect, as the Bill which was brought from the Lords in the present Session;
    That, as soon as a certificate by one of the Clerks in the Private Bill Office, that such a declaration has been so deposited, has been laid upon the Table of the House, the Bill shall be read the first time and referred to the Examiners of Petitions for Private Bills;
    That, notwithstanding the suspension of other proceedings on the Bill, Standing Order 171A(1) shall apply to the presenting of Petitions against the Bill brought from the Lords in the present Session and only Petitions presented under this Order shall be received as Petitions presented under Standing Order 171A(1);
    That any Petitions presented under the foregoing Order shall stand referred to the Committee on the Bill in the next Session;
    That no further Fees shall be charged in respect of any proceedings on the Bill in respect of which Fees have already been incurred during the present Session;
    That these Orders be Standing Orders of the House. —[Miss Betty Boothroyd.]
    Hon. Members: Object.
    To be considered on Thursday 2 November.

    BRITISH RAILWAYS BILL
    Motion made,
    That the Promoters of the British Railways Bill shall have leave to suspend proceedings thereon in order to proceed with the Bill, if they think fit, in the next Session of Parliament, provided that the Agents for the Bill give notice to the Clerks in the Private Bill Office not later than the day before the close of the present Session of their intention to suspend further proceedings and that all Fees due on the Bill up to that date be paid;
    That on the fifth day on which the House sits in the next Session the Bill shall be presented to the House;
    That there shall be deposited with the Bill a declaration signed by the Agents for the Bill, stating that the Bill is the same, in every respect, as the Bill at the last stage of its proceedings in this House in the present Session;
    That the Bill shall be laid upon the Table of the House by one of the Clerks in the Private Bill Office on the next meeting of the House after the day on which the Bill has been presented and, when so laid, shall be read the first and second time (and shall be recorded in the Journal of this House as having been so read) and, having been amended by the Committee in the present Session, shall be ordered to lie upon the Table;
    That no further Fees shall be charged in respect of any proceedings on the Bill in respect of which Fees have already been incurred during the present Session;
    That these Orders be Standing Orders of the House.—[Miss Betty Boothroyd.]
    Hon. Members: Object.
    To be considered on Thursday 2 November.

    BROMLEY LONDON BOROUGH COUNCIL (CRYSTAL PALACE) BILL
    Motion made,
    That the Promoters of the Bromley London Borough Council (Crystal Place) Bill shall have leave to suspend proceedings thereon in order to proceed with the Bill, if they think fit, in the next Session of Parliament, provided that the Agents for the Bill give notice to the Clerks in the Private Bill Office not later than the day before the close of the present Session of their intention to suspend further proceedings and that all Fees due on the Bill up to that date be paid;
    That on the fifth day on which the House sits in the next Session the Bill shall be presented to the House;
    That there shall be deposited with the Bill a declaration signed by the Agents for the Bill, stating that the Bill is the same, in every respect, as the Bill at the last stage of its proceedings in this House in the present Session;
    That the Bill shall be laid upon the Table of the House by one of the Clerks in the Private Bill Office on the next meeting
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    of the House after the day on which the Bill has been presented and, when so laid, shall be read the first and second time (and shall be recorded in the Journal of this House as having been so read) and, having been amended by the Committee in the present Session, shall be ordered to lie upon the Table;
    That no further Fees shall be charged in respect of any proceedings on the Bill in respect of which Fees have already been incurred during the present Session;
    That these Orders be Standing Orders of the House.—[Miss Betty Boothroyd.]
    Hon. Members: Object.
    To be considered on Thursday 2 November.

    GREATER MANCHESTER (LIGHT RAPID TRANSIT SYSTEM) (No. 3) BILL [Lords]
    Motion made,
    That the Promoters of the Greater Manchester (Light Rapid Transit System) (No. 3) Bill [Lords] shall have leave to suspend proceedings thereon in order to proceed with the Bill, if they think fit, in the next Session of Parliament, provided that the Agents for the Bill give notice to the Clerks in the Private Bill Office of their intention to suspend further proceedings not later than the day before the close of the present Session and that all Fees due on the Bill up to that date be paid;
    That if the Bill is brought from the Lords in the next Session, the Agents for the Bill shall deposit in the Private Bill Office a declaration, signed by them, stating that the Bill is the same, in every respect, as the Bill which was brought from the Lords in the present Session;
    That as soon as a certificate by one of the Clerks in the Private Bill Office that such a declaration had been so deposited has been laid upon the Table of the House, the Bill shall be deemed to have been read the first time and referred to the Examiners of Petitions for Private Bills;
    That, no petitions against the Bill having been presented within the time limited within the present Session, no Petitioners shall be heard before any committee on the Bill save those who complain of any amendment as proposed in the filled up Bill or of any matter which arises during the progress of the Bill before the committee;
    That no further Fees shall be charged in respect of any proceedings on the Bill in respect of which Fees have already been incurred during the present Session;
    That these Orders be Standing Orders of the House. —[Miss Betty Boothroyd.]
    Hon. Members: Object.
    To be considered on Thursday 2 November.

oral Answer to Questions
  EMPLOYMENT

    Factory Inspections
    Mr. Andrew F. Bennett: To ask the Secretary of State for Employment if, pursuant to his answer of 28 July, Official Report, column 1043, he will publish in the Official Report the figures on factory inspections contained in the letter.
    The Parliamentary Under-Secretary of State for Employment (Mr. Patrick Nicholls): Yes, Sir.
    Mr. Bennett: I congratulate the Minister on trying to hide the figures. Does he accept that the figures show that 20 per cent. of factories and other industrial premises have not been inspected for more than five years? Is that not a disgrace, especially when two people are killed every working day? Under the present Government, the Health and Safety Executive has been cut by about 20 per cent. Is it not high time that the Government gave safety in industry a higher priority, informed management of the existence of the Health and Safety Executive and made the executive really effective?
    Mr. Nicholls: Far from being disgraceful, the hon. Gentleman has shown that he does not know the facts which lie behind his supplementary question. He makes the assumption that all premises should be inspected the same number of times. That seems to assume that the dangers inherent in a chemical engineering factory will be same as those in a dressmaking concern. There is a rating system which ensures that inspectors look for trouble to the greatest extent where they are most likely to find it. Far from trying to hide the figures, I am surprised that the hon. Gentleman did not draw attention to the fact that a letter that I sent to him, containing the information which is to be placed in the Library, showed that the number of preventive inspections had risen by about 20 per cent. since 1985–86.
    Mr. Ian Bruce: Does my hon. Friend agree that the best inspectors of any factory are the employees, and that the inspectorate always responds to a complaint by employees at a work place so as to ensure that safety is paramount? Surely the responsibility should be on employees to alert inspectors.
    Mr. Nicholls: My hon. Friend is right. The primary responsibility for ensuring proper health and safety in the work force lies with employers and employees. Just as we could not solve crime by putting a policeman on every corner, there is no evidence that we could eliminate accidents by putting an inspector in every work place.
    Mr. Strang: Now that I have received a letter from the Secretary of State which it took him three months to write, in which he admits that he has failed to keep his promise to the House to increase the factory and agriculture inspectorates by 40 inspectors by 31 March, will the Minister take the opportunity on behalf of the Government to apologise to the House for failing to keep
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    that promise? When will the Government increase the strength of the factory and agriculture inspectorates by the 40 inspectors promised by 31 March?
    Mr. Nicholls: The only apology due to the House arising from the question would be from the hon. Gentleman for the distorted way in which he has presented the figures. The target was 590 factory inspectors in post by April 1990. That has already been achieved, which is hardly surprising as in the past two years the HSE has received all the money for which it bid from central Government. The only point at issue is why the hon. Gentleman and his hon. Friend the hon. Member for Denton and Reddish (Mr. Bennett) have persisted in choosing not to understand the figures.
    Mr. Strang: Does the Minister deny what he said?
    Mr. Speaker: Order.
    Following is the information:—
    The number of preventive inspection visits paid by the Health and Safety Executive's (HSE) Factory Inspectorate (FI) to fixed premises in each of the last four planning years is as follows:

    Year

    Numbers of Preventive Inspection Visits

    1985–86

    50,434

    1986–87

    54,876

    1987–88

    59,437

    1988–89

    60,708

    In addition, a substantial number of inspections of transient activities were carried out and visits were also paid to all types of workplaces for other purposes such as accident and complaint investigations, to give advice and to check on shortcomings previously identified.
    The HSE records show that of the fixed premises registered with FI in April 1989, 36,234 last had a preventive inspection visit five years ago, 47,974 seven years ago, 17,230 nine years ago and 23,606 11 or more years ago.

    YTS
    Mr. Evennett: To ask the Secretary of State for Employment how many people are currently participating in YTS in Greater London.
    The Minister of State, Department of Employment (Mr. Tim Eggar): The latest available figures show that there were 21,500 young people participating in YTS in Greater London.
    Mr. Evennett: I thank my hon. Friend for his reply. What proportion of YTS completers in London go on to full-time employment? Does my hon. Friend agree that YTS provides valuable training for young people?
    Mr. Eggar: I certainly agree with my hon. Friend. YTS provides extremely valuable training. Some 90 per cent. of all YTS completers in London go on to full-time employment and no fewer than 98 per cent. of all trainees entering the Bexley youth training group in my hon. Friend's constituency have found full-time employment.
    Mr. Clelland: How many youngsters suffer from accidents during their training? Will the Minister confirm that the number of accidents among YTS trainees has risen in the past few years and that as many as seven are killed and 500 injured every year under that scheme?
    Mr. Eggar: It is true that the number of accidents among YTS employees has risen, but that is because the number of youngsters on YTS has risen significantly. It is clear that young people on YTS are at least as safe, if not more so, as young people in employment generally.

    Pay Increases
    Mr. Cousins: To ask the Secretary of State for Employment what has been the trend of pay increases for (a) chairs of major companies and (b) work forces in major manufacturing companies since 1980.
    Mr. Nicholls: The Government do not produce information about pay increases for individual chairmen or work forces of companies. Average earnings of all employees in manufacturing increased by 120 per cent. between August 1980 and August 1989. No reliable information on directors' earnings is readily available. Pay is a matter for businesses to determine in the light of all the relevant circumstances.
    Mr. Cousins: In that case, does the Minister accept that it was unfortunate to publish an article in October's Department of Employment Gazette which appeared to criticise the justification for some of the large salary increases for individual company chairmen, in particular singling out Lord King of British Airways and FKI Babcock who receives more than £550,000 from his two part-time jobs with those companies? Is not that an entirely unwarranted attack on an honest worker doing his best in the marketplace?
    Mr. Nicholls: I am sure that Lord King will take great comfort from what the hon. Gentleman says. The Government, including my right hon. Friends the Prime Minister and the Chancellor of the Exchequer, have constantly made it clear that we are against unjustified pay increases. If, in the circumstances, a pay rise can be justified, so be it.
    Mr. Cran: Does my hon. Friend agree that far too many in the British work force from top to bottom, are besotted with the desire to receive unearned pay increases? Would they not be better employed trying to close the productivity gap which still exists between Britain and some of our major competitors?
    Mr. Nicholls: My hon. Friend has it exactly. It is remarkable that even after 10 years of a Conservative Government it is still possible for Opposition Members to indulge in a sterile class war every time high salaries are mentioned. If a pay rise can be justified in all the circumstances, that pay rise is a proper one.
    Mr. Fatchett: But is it not true that many company directors have this year given themselves increases often running into three figures in percentage points? How can that be justified at a time when the Government insist that ambulance staff, who contribute so much to our society, should have forced upon them an increase below the level of inflation? Why should they take a cut in real wages while the top people are getting such large increases?
    Mr. Nicholls: Any company making a decision about what its directors will be paid has to take into account a number of factors. It will have to consider whether a pay rise is necessary to attract staff of the correct calibre and whether the person will make a contribution which will
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    justify his salary. The hon. Gentleman cannot get to grips with the fact that many of the lowly or lower paid employees, whose interests he claims to represent, are better served by having companies run efficiently, and that that costs money at the highest level.

    Labour Statistics
    Mr. Amess: To ask the Secretary of State for Employment what are the latest unemployment figures for the constituency of Basildon and for the same period in each of the last six years.
    Mr. Eggar: In September 1983 there were 6,532 unemployed claimants in the parliamentary constituency of Basildon compared with 2,439 in September this year. With permission, I will publish the detailed figures in the Official Report
    Mr. Amess: Is my hon. Friend aware that the sign displaying the number of people without work in Basildon has been taken down, although the local Labour party claimed that it fell down as a result of rusty screws? Does he agree that the downward trend of unemployment in Basildon reflects the successes of local businesses, the availability of a willing work force and the underlying strength of the British economy?
    Mr. Eggar: I am pleased to congratulate employers and employees in Basildon on the considerable increase in economic activity that has led to many new jobs. If I may dare to make a recommendation to my hon. Friend, I suggest that he offers the council some new screws so that it can publicise the fact that unemployment in Basildon has fallen by more than 30 per cent. in the past year alone.
    Mr. Tony Lloyd: Is the Minister aware that the Secretary of State recently advised young people in Basildon and other areas who are presently in receipt of income support or unemployment benefit to refuse offers of jobs if they did not contain a significant training element leading to a qualification? The Secretary of State seems to agree that that is accurate. Is the Minister further aware that under the present regulations if young people refuse jobs they will have their benefit suspended? Did the Secretary of State not think through his comments or was he announcing that the regulations would be changed to allow people to refuse jobs on that basis?
    Mr. Eggar: My right hon. Friend the Secretary of State made it clear that in the 1990s we expect that youngsters will have the choice of moving into full-time education or jobs with training. That is the desire of the Government and of employers.
    Following is the information:
    In September 1989 there were 2,439 unemployed claimants in the parliamentary constituency of Basildon. The table shows the number of unemployed claimants in the constituency of Basildon for each September from 1983 to 1988. The figures are affected by the change in the compilation of the count in March 1986 to reduce over-recording and by the change in the coverage of the count from September 1988 due to the introduction of new benefit regulations for young people aged under 18.

    Unemployment in Parliamentary Constituency of Basildon

    September

    Number of unemployed claimants

    1983

    6,532

    1984

    7,050

    1985

    6,634

    1986

    6,157

    1987

    5,032

    1988

    3,495

    School-Industry Compacts
    Mr. Robert B. Jones: To ask the Secretary of State for Employment if he will make a statement on the progress of school-industry compacts.
    The Secretary of State for Employment (Mr. Norman Fowler): Forty compacts are being supported by the Training Agency. To date, some 230 schools and more than 30,000 young people are participating in compact arrangements, actively supported by more than 1,000 employers and training providers. By any standards, the initiative has made a very impressive start.
    Mr. Jones: I am grateful to my right hon. Friend for those encouraging figures. Will he confirm that they apply to urban programme authorities, not to authorities in general, and that there is also merit in compact-like arrangements in other local education authorities, from which employers, schools and businesses may profit?
    Mr. Fowler: Yes, Sir. My hon. Friend makes a good point. Compact arrangements, which were introduced only last year, have been targeted at inner-city areas. That is where the priority is, but I believe that such arrangements can be extended elsewhere.
    Mr. Morley: I welcome compact agreements, but does the Minister agree that they come nowhere near meeting the increasing skills shortage? Is he aware that more and more industries are saying that the Government are not doing enough to provide support in tackling skills shortages? In particular, employment training does not offer the specialised and relevant training that we need in a modern society.
    Mr. Fowler: The question has nothing to do with employment training for the long-term unemployed. We are talking about young people. I hope that the hon. Gentleman will support compact arrangements, which have taken off dramatically and provide good training and, above all, opportunities for young people in inner-city areas.

    Training and Enterprise Councils
    Mr. Couchman: To ask the Secretary of State for Employment how many training and enterprise councils have received development lending; and if he will make a statement.
    Mr. Cran: To ask the Secretary of State for Employment whether he will make a statement on the progress of the establishement of training and enterprise councils.
    Mr. Fowler: Thirty-five prospective training and enterprise councils from all parts of England and Wales
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    have now received development funding, and the first TECs will become operational early next year. When we launched TECs in March, we expected that it would take three to four years to complete the network. We are now far ahead of that schedule—the applications received so far already cover half the working population of England and Wales and the network will be in place by September 1990.
    Mr. Couchman: I am grateful to my right hon. Friend for his answer. Will he give every consideration to an application, which I believe is currently before him, for a TEC to be set up in my constituency—or, at least, in the area that covers it? Will he ensure that the scheme places every possible emphasis on long-term retraining for the future and does not become merely a "make-work" scheme? I understand that there is a felicitous partnership between the local authority, the Department and leading employers in the area.
    Mr. Fowler: Yes, I think that there is a unity among employers, local authorities and all the other groups involved, and I hope that that unity can be maintained. TECs are there to help with training for both the unemployed and those in employment.
    The Kent application to which my hon. Friend has referred was received at the end of October. Our initial reaction is that the proposal is of very high quality, demonstrating a real partnership in the county between leading employers, the local authority and the Training Agency.
    Mr. Cran: Will my right hon. Friend confirm that senior industrialists are contributing time to make the concept of TECs a success? I note that although there are four TECs in Yorkshire, there are none in Humberside. Can my right hon. Friend give me some comfort by telling me that Humberside may have one in the future?
    Mr. Fowler: Yes, I believe that one is in preparation. We certainly hope that that will come about, and we look forward to receiving an application from Humberside.
    My hon. Friend is entirely right—TECs are composed of senior industrialists and there is no question about the quality and commitment that those industrialists are showing.
    Mr. Madden: Can the Secretary of State tell us whether the TECs, or any other such arrangements, are available o help a group of apprenticies in Bradford facing redundancy with a year or more of their apprenticeships to go? They are anxious to complete their training and find themselves in very difficult circumstances. Can the Secretary of State do anything to help those young people?
    Mr. Fowler: I shall look into that. Certainly, in principle, there is everything that a TEC can do in such circumstances. That is one of their advantages—they deal essentially with the local labour market. Perhaps the hon. Gentleman will allow me to study the specific circumstances and come back to him.
    Mr. McAllion: The Secretary of State will be aware that the success of bodies such as the Dundee project in turning around the economy of our city in the 1980s has been based on the granting of representation to local authorities, trade unions, central Government and the

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    business community. Why has the hon. Gentleman departed from that successful formula in the establishment of the new training bodies throughout the country?
    Mr. Fowler: The Scottish arrangements are a matter for my right hon. and learned Friend the Secretary of State for Scotland, and separate legislation will be needed for that country. I have been describing the position in England and Wales. Overall, however, we want a partnership between all interests at local level.
    Mr. Jack: My right hon. Friend is to be congratulated on the training and enterprise initiative. Will he ensure that all the other Government employment services such as jobcentres and training schemes are put fully at the disposal of 200 of my constituents employed at Quality Parts at Fylde who, sadly, have been made redundant and could well benefit from the many services available to enable them to become employed again?
    Mr. Fowler: I will certainly ask the employment service to examine the position, and we shall seek to do what we can to alleviate or, indeed, solve the problem.
    Ms. Short: Has the Secretary of State seen the CBI report, published this morning, which says that Britain's training is way behind that of the rest of Europe and holding back the progress of the economy? Will he review all the rotten training initiatives that the Government have launched and then give us a proper structure of training so that British people can develop proper skills and the economy can flourish?
    Mr. Fowler: It for exactly that kind of reason that the TEC initiative has been launched. I realise that the hon. Lady has been critical of a number of other proposals, but I hope that she will recognise that the TECs involve cross-party agreement and agreement by most people at literally local level. I hope that she will not undertake the kind of activities that she undertook in regard to employment training, which do no service to training or to the unemployed.
    Mr. Hind: Does my right hon. Friend agree that the employers, who are in partnership in the training and enterprise councils, are investing about £15 billion in training? Does he agree that the Government's agreement to implement the social contract, the acceptance of minimum wages and no restriction on strikes would result in a loss of jobs and a cut in the budgets which those employers put into training, to the detriment of British industry and British jobs?
    Mr. Fowler: I very much agree with all that my hon. Friend has said, but I must point out that there is a later question on the Order Paper on that point.

    Creche Facilities
    Mr. Wray: To ask the Secretary of State for Employment what research his Department has carried out regarding the impact of the lack of creche and similar facilities for children aged under five years on female unemployment; and if he will make a statement.
    Mr. Eggar: The Department has funded a number of research projects which have looked into child care and
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    female unemployment. We are currently sponsoring research into the many issues that surround women's decisions to return to work after childbirth.
    Mr. Wray: Does the Minister agree that this country has an appalling record and that of the 12 European Community countries we have the lowest level of provision apart from Portugal? Is he aware that a survey of 100 industrial companies carried out last month by The Daily Telegraph, showed that only six provided child care facilities? By 1992, when the Single European Act comes into force, we shall be unable to meet the target.
    Mr. Eggar: I certainly do not agree with the hon. Gentleman. We have the second highest level of female participation in the work force throughout the European Community and 85 per cent. of all children under five have some kind of pre-school provision such as creches, play schools or nursery schools. That is a record of which we can and should be proud.
    Mr. Rowe: Does my hon. Friend accept that I believe, as do many other hon. Members, that it was entirely wise for the Department to wait and see what private sector initiatives would be called into being to provide creche and other facilities for women wishing to enter the employment market? Does he also accept that in view of the wide range of perks and tax-deductible expenses which operate for a large number of other purposes the Department should look closely at the tax position of facilities which make it possible for women to return to the labour market?
    Mr. Eggar: I understand my hon. Friend's concern, but he should not underestimate the considerable amount of child care provision of one kind or another that is already available. I will refer his comments to my right hon. Friend the Chancellor of the Exchequer.
    Ms. Primarolo: When will the Minister accept that we have the worst child care provision for under-fives in the European Community? Why do the Government persist in pretending that they wish women to return to the paid labour market when the biggest barrier to their return is the lack of provision for the under-fives? When will the Minister stop thinking about it and start providing those facilities?
    Mr. Eggar: The hon. Lady obviously was not listening. We have the second highest level of female participation in the work force in the European Community. Almost one in three women with children under five have jobs because they want to have jobs. Other women decide that they do not want to work when they have children under five. They should be free to make that choice.
    Mrs. Peacock: Will my hon. Friend congratulate companies which already provide creche facilities and those which are embarking on the provision of even further creche facilities to welcome back women who wish to return to work, especially the big banks which are very active in this area?
    Mr. Eggar: I entirely agree with my hon. Friend. There have been a number of important initiatives. The Civil Service is also seeking to lead the way with a number of imaginative schemes. It is important that employers should provide facilities for child care for their women employees.

    Wages Councils
    Mr. Michael: To ask the Secretary of State for Employment what initiatives he plans to take to strengthen the work of the wages councils in relation to the enforcement of wage levels.
    Mr. Nicholls: The level of compliance with wages orders is very high and no new initiatives are contemplated.
    Mr. Michael: Does the Minister accept that increasing numbers of people are now unprotected and working for a pittance? Does he not accept that the work of wages councils is supported by responsible employers and responsible employers' organisations? Will he not extend the work of wages councils to deal with irresponsible employers, including those who seem to have the ear of the Government?
    Mr. Nicholls: No. Obviously that is one of the views that has been put to the Government in the review of the wages councils. There is also a substantial body of evidence that the effect of organisations such as the wages councils is to destroy jobs. At the end of the day, the hon. Gentleman has to consider whether low pay is better than no job.
    Mr. Marlow: What effect would the social charter, aptly named in one of today's newspapers as the strikers' charter, have on the bureaucratic interventions which my hon. Friend has done so much to do away with?
    Mr. Nicholls: Its effect would certainly not be beneficial.

    Labour Mobility
    Mr. French: To ask the Secretary of State for Employment if he will make a statement on the measures he has introduced to encourage mobility of labour.
    Mr. Nicholls: My Department is active in encouraging mobility of labour. We are working at improving the supply of information about job vacancies in other areas, for instance with the initiative announced the week before last to publish vacancies on ITV's teletext service. In addition, the travel-to-interview scheme provides assistance to unemployed people who apply for jobs outside their home area.
    Mr. French: What initiatives is my hon. Friend's Department taking to seek to synchronise employment opportunity with housing availability? Is he aware that job applicants from other parts of the country for vacancies in Gloucester are unable to fill those vacancies because of the lack of housing at a price that they can afford?
    Mr. Nicholls: My hon. Friend draws attention to a very real concern. I certainly would not undervalue the travel-to-interview scheme. However, my hon. Friend is right that housing plays a very important part in the disincentive to mobility. My hon. Friend may be aware of the national mobility scheme and the tenants exchange scheme which are operated by my right hon. Friend the Secretary of State for the Environment. Furthermore, the business expansion scheme introduced in the last Budget was used as a vehicle to encourage people to provide more rented accommodation. There are a number of initiatives and my hon. Friend was entirely right to draw attention to the fact that there is no single solution.
    Mr. Beggs: I notice that the Minister accepts no responsibility for encouraging the 45,000 to 50,000 citizens of the Irish Republic who move to Great Britain and elsewhere annually to come over here. Can he tell us what analysis is being carried out of such large numbers of citizens of the Irish Republic moving to the mainland, and their impact, if any, on the unemployment registers?
    Mr. Nicholls: The mobility to which the hon. Gentleman draws attention has been going on for many years. The question concerns the initiatives being taken by the Government to encourage mobility, and that is what we have addressed.
    Mr. Andrew Mitchell: Has not the Government's extremely successful right-to-buy policy been very helpful in assisting mobility of labour? Was not that policy specifically resisted, root and branch, by the Opposition who were converted only very late in the day?
    Mr. Nicholls: Of course my hon. Friend is right, but obviously any sensible initiative on these matters will be opposed by the Opposition. I do not think that my hon. Friend should be too surprised about that.
    Mr. Cryer: Is not the Minister presented with a credibility gap when he tries to claim that the Government are increasing mobility of labour when they cancelled the grant aid system some three years ago so that poor families who want to get off the dole and get a job outside their areas have to depend on money from charity, as a constituent of mine did to cover the costs of removal? When will the Government do something about that?
    Mr. Nicholls: As I have already said to the House, the travel-to-interview scheme provides assistance for those people who need help with interview expenses, including overnight accommodation if that is what they need to take up a particular job possibility. If the hon. Gentleman has a specific case where he feels that the scheme is not working, obviously he can contact me and I shall be more than happy to look into it.

    EC Social Charter
    Mr. Colvin: To ask the Secretary of State for Employment what representations he has received regarding the progress of the European social charter; and if he will make a statement.
    Mr. Fowler: I have received a number of representations.
    At the European Council in Madrid, it was agreed unanimously that the top priority of the Community in the social area should be job creation and development. In addition, any proposals should take full account of different national practice. Action should be taken at national level unless there are demonstrable benefits to be gained from action at Community level. The Government do not believe that the present draft charter takes sufficient account of those agreements.
    Mr. Colvin: Has my right hon. Friend seen the headlines in today's newspapers which say that Britain is isolated over the social charter? Does he agree that that is hardly surprising given that we are so far ahead of our European partners— [Interruption.]—in creating new jobs and reducing unemployment? Should not our European

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    partners be following our lead in not increasing but reducing burdens on employers who want to expand and create new jobs?
    Mr. Fowler: My hon. Friend is correct. At the meeting of the Social Affairs Council yesterday, there was no doubt that a range of countries had reservations about the social charter. There is no question but that unemployment has fallen faster in Britain than in any other European country. It currently stands below the European average, and below that in France, the Netherlands, Belgium, Spain, Ireland, Greece and Italy. We believe that the social dimension should be about jobs and that the social charter simply does not live up to that. [Interruption.]
    Mr. Speaker: Order. There is a background of chatter this afternoon. It is very difficult to hear questions.
    Mr. Campbell-Savours: Is there not a strange inconsistency in the position of Cabinet Ministers, who parade their Euro-virility and credentials around the country while they stand aside and watch the Secretary of State sabotage and undermine the perfectly excellent principles behind the social charter? Is it not about time that some of them developed a little backbone and vision?
    Mr. Fowler: For good reason, the social charter is opposed by the entire Government on the ground that it simply does not live up to the aspirations that it puts forward. The Government are certainly in favour of a social dimension, by which we mean new jobs and the reduction of unemployment. The social charter will not achieve either of those objectives.
    Mr. Bill Walker: Does my right hon. Friend agree that since the end of the second world war we have had enough of this nonsense about signing pieces of paper and charters, most of which came from the last Labour Government but produced little? They resulted in inflation, unemployment and ghastly problems. We do not want such problems from Europe. More people are in work now than under the regime of the last Labour Government.
    Mr. Fowler: The charter covers a range of subjects, such as minimum wages, holiday periods and the unqualified right to strike, all of which will have detrimental effects on employment in Britain. That has not been denied by the European Commissioner in Brussels. The only question is how many jobs it will cost, not whether it will cost jobs.
    Mr. Wallace: Although the social charter may not be entirely perfect, why does not the Secretary of State try to build on its many good aspects and make constructive criticism rather than being negative? He recently made points about provision for young people, so will he explain what is wrong with the prohibition of full-time work for people under 15, the special health and safety regulations for people in work under the age of 18 and the establishing of quotas for employing people with handicaps?
    Mr. Fowler: There are a range of measures, of which health and safety is one, with which we agree. The hon. Gentleman is wrong to say that we have not played a constructive role in the debate. We have played a constructive role, and talks will continue. I should not wish to deceive the House because I believe that there are a number of fundamental defects in the charter, which I hope can be solved.
    Mr. Knapman: Does my right hon. Friend agree that most matters are better left to market forces rather than any social or Socialist charter?
    Mr. Fowler: The regulations set out in the charter will not achieve what all hon. Members want. The House deceives itself if it believes that the social charter will be good for employment or will reduce unemployment in Britain. [Interruption.]
    Mr. Speaker: Order. I again appeal to the House to listen to employment questions, which are important, and are of some concern to other hon. Members.
    Mr. Meacher: Does the right hon. Gentleman still think, like the Prime Minister, that the Euro social charter is the product of Marxism and the class struggle? If so, why has it now been agreed by every other Right-wing Government in Europe? Is the right hon. Gentleman aware that under this Government British workers now have the worst industrial conditions in Europe, with no minimum wage, no protection against arbitrary dismissal and no right to participate in decisions at the workplace? After Madrid and Kuala Lumpur, is this not yet another example of the Government and the Prime Minister being completely isolated and manifestly out of touch with public opinion here and abroad?
    Mr. Fowler: I must point out that only a couple of years ago the hon. Gentleman was running for office by supporting a proposal for Britain to come out of the Common Market altogether. [Interruption.] Yes, he was. If the hon. Gentleman disagrees with that, I shall give him the reference. In the Labour Herald of 24 September 1982, the hon. Gentleman said—[Interruption.] Does the hon. Gentleman change his principles every five years? The fact —[Interruption.]
    Mr. Speaker: Order. The Minister has a right to reply, but I hope that he will be brief.
    Mr. Fowler: The hon. Gentleman knows perfectly well that the social charter will not create jobs. It will destroy jobs and create unemployment. The hon. Gentleman should be opposed to the charter as it stands.
    Mr. Raison: Although I accept that there is much in the social charter as it stands that is questionable, are there not other elements in it that are rather good, for instance, the right not to join a trade union?
    Mr. Fowler: Indeed. There is a basis of proposals which we believe could be used for a social charter. Our objection is not to a social charter in all circumstances but to this kind of social charter.

    Manifold Industries, Leyton
    Mr. Cohen: To ask the Secretary of State for Employment whether he will review current employment laws as they relate to the threatened dismissal of staff without compensation in the light of the dispute at Manifold Industries, Leyton; and if he will make a statement.
    Mr. Nicholls: There is no obligation on any party in an industrial dispute to inform the Government about the dipute, or action which may be taken in connection with it. On the basis of such information as is available about

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    this particular dispute, however, there appears to be no reason to change any aspect of current industrial relations law.
    Mr. Cohen: Does the Minister agree that the management of Manifold Industries has treated its workers shabbily? After its initial intimidatory action, the management has avoided all negotiations, including those via the Advisory, Conciliation and Arbitration Service. The management is using Tory industrial relations law to avoid paying proper compensation, while it clears the decks to make a fortune in a future, speculative sell-out. Is not sacking workers without compensation an appalling use of Tory industrial relations law, which should be changed?
    Mr. Nicholls: It is not up to me to pass judgment on any of the matters which the hon. Gentleman raises. If his allegations are true, the workers have remedies open to them for unfair dismissal, when they may go before an industrial tribunal, or for breach of contract, when they may go before a civil court.

    Training
    Mr. McAvoy: To ask the Secretary of State for Employment how his Department intends to increase the training of workers in the private sector.
    Mr. Eggar: Training and enterprise councils in England and Wales and local enterprise companies in Scotland will ensure that private sector employers lead Britain's training effort into the 1990s. They will increase employer commitment to training and will use private and public resources. In particular, they will support employers through business growth training.
    Mr. McAvoy: That answer is astounding. Given that private sector employers are spending less than £4 billion a year directly on training, is it wise for the Government to hand over the control and direction of training to the very people who have shown no interest in training?
    Mr. Eggar: The hon. Gentleman is taking a blinkered and inaccurate view. Employers are spending £18 billion on training, not the amount that the hon. Gentleman quoted. The move towards TECs in England and Wales and LECs in Scotland has been widely supported by all sectors of the community.

    Tourism
    Mr. Gregory: To ask the Secretary of State for Employment what is his estimate for the numbers employed in the Yorkshire tourism industry and the value generated for the current year; and if he will make a statement.
    Mr. Nicholls: The information is not available in the form requested, but it is estimated that in June 1989 the number of employees in employment in the hotel and catering industry in Yorkshire and Humberside was 96,000. It is estimated that overseas and domestic visitors staying in the Yorkshire and Humberside tourist board region for one night or more spent a total of £654 million in 1988.
    Mr. Gregory: Will my hon. Friend confirm that this is Britain's fastest growth industry and that it is not
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    enhanced by Socialist smears about it being a Mickey Mouse industry? Will he hold urgent discussions with the Secretary of State for Education and Science about the possibility of having more training programmes to enable more youngsters to enter this great industry?
    Mr. Nicholls: My hon. Friend is entirely right in what he says. A sector which can produce £19 billion and 38,000 jobs a year does not justify the description given to it by the Labour party.

  PRIME MINISTER

    Engagements
    Mr. Latham: To ask the Prime Minister if she will list her official engagements for Tuesday 31 October.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today. This evening I hope to have an audience of Her Majesty the Queen.
    Mr. Latham: While continuing to implement the policies which have been approved by the electorate on three occasions, will my right hon. Friend confirm that successful Governments must always be responding and listening to the real aspirations of the people?
    The Prime Minister: Yes. That is why under the 10-year policies of Conservative Governments we have created more wealth than ever before, have spread it more widely than ever before, have a higher standard of living than ever before, have higher standards of social services than ever before and have a higher reputation abroad than ever before. Yes, we have indeed been listening. I believe that those are the real aspirations of the British people.
    Mr. Kinnock: Will the Prime Minister now explain why she did not do the one thing that would have kept her Chancellor—sack her adviser?
    The Prime Minister: As I said last week, advisers are there to advise and must advise honestly and freely. Ministers are there to decide. That is the way this Government do things.
    Mr. Kinnock: The Prime Minister is being less than frank with the House and the country—[Interruption.] Does she recall that she said that she did everything possible to dissuade the Chancellor? Is not the real truth that she deliberately refused to do the one thing that would have kept him in office, which was to sack the man who, with her concurrence, was constantly undermining the Chancellor and his policy position on managing the currency?
    The Prime Minister: The Chancellor's position is unassailable—[Interruption.]
    Mr. Speaker: Order.
    The Prime Minister: In this party, Ministers decide and advisers only advise.
    Mr. Kinnock: If what the Prime Minister has said is really true, may I ask her to explain why the former Chancellor had to write:

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    "Recent events have confirmed that this essential requirement cannot be satisfied so long as Alan Walters remains your personal adviser."
    Did he make that up after he had spoken to the Prime Minister?
    The Prime Minister: Nonsense. The position is precisely as I have set it out many times. Advisers are free to advise honestly. Ministers decide —[Interruption.] The right hon. Gentleman will remember that neither Mr. Kaldor nor Mr. Balogh were exactly shrinking violets.
    Mr. Maxwell-Hyslop: Will my right hon. Friend find time today to confirm that although high interest rates are a temporary agony, to have savings destroyed and the financial working capital of every small company destroyed by inflation is a permanent and not a temporary destruction of their ability to live on trade reasonably?
    The Prime Minister: Yes. My hon. Friend has put it perfectly. It was a destruction of savings and investment under the Labour Government that lost them the complete confidence of this country. Under us, savings have kept their value. That is why we put the diminution of inflation as our top priority and we shall continue to do so.
    Mr. Ashdown: Does the Prime Minister realise that her lonely hostility to Europe has cost her four Cabinet Ministers and will cost Britain lost opportunities, lost wealth and lost prosperity in the future? How much more are we all going to have to pay for the triumph of a personal obsession over the national interest?
    The Prime Minister: Perhaps the right hon. Gentleman will read the Bruges speech properly, when he will see that half the history of this country has been bound up with Europe. It is not hostility to Europe. We believe in Europe, but a Europe based on a free economy—a deregulated Europe with freedom under a rule of law, not a regulated bureaucracy dictating to this House from Brussels.
    Mr. Gale: Has my right hon. Friend noticed the underlying confidence of the money markets in her Government's economic policy? Has she had time to contrast that with the best efforts of the Leader of the Opposition to talk sterling down?
    The Prime Minister: Yes. The money markets have remained stable in spite of the efforts of the Leader of the Opposition to talk the pound down. He did not succeed. Confidence in this Government was sufficient to hold the markets.
    Mr. Redmond: To ask the Prime Minister if she will list her official engagements for Tuesday 31 October.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Redmond: Following the disclosure in the leaked documents about the devastating effects of the privatisation of the electricity industry on the mining industry, will the right hon. Lady reconsider her attitude and not use the payroll vote to force the Bill through?
    The Prime Minister: The contracts between the electricity industry and the coal industry are still under negotiation. The hon. Gentleman is aware that in the past 10 years, we have spent about £2 million every working day on investment in the coal mines. That should enable many of them to be highly competitive in the coal that they
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    produce and to supply highly competitive coal to the electricity industry. I am sure that the hon. Gentleman will not wish to pay more for electricity than necessary and will be keen for coal to be competitive.
    Mr. Butcher: Further to the point made by the right hon. Member for Yeovil (Mr. Ashdown), does my right hon. Friend agree that if Britain were prematurely to join the exchange rate mechanism at a time when German interest rates are 7 per cent. below our own, British borrowers might avoid the domestic constraints and borrow with impunity from Germany, thus increasing the money supply and frustrating the fight against inflation?
    The Prime Minister: I am grateful to my hon. Friend. The conditions under which we shall join the exchange rate mechanism—we already belong to the European monetary system, of course—were laid down and agreed at Madrid. They are specified in stage I of the Delors report—[Interruption.] Of course the Opposition do not want the truth. It gets in their way. [Interruption.]
    Mr. Speaker: Order. The Prime Minister must have an opportunity to reply.
    The Prime Minister: The conditions are specified in stage I of the Delors report which provides for completion of the internal market, abolition of all foreign exchange controls, full implementation of a free market in financial services and the strengthening of the Community's competition policy. In those circumstances and provided that inflation in Britain has been brought down significantly, as we intend, the conditions would clearly exist for sterling to join the exchange rate mechanism. That is precisely what was laid down at Madrid and agreed by everyone.
    Mr. McFall: To ask the Prime Minister if she will list her official engagements for Tuesday 31 October.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. McFall: Despite the traumatic events of last week and the removal of her most formidable opponent from the Cabinet, the Prime Minister has declared business as usual. Can we take it therefore that she will not be recommending to her Cabinet the advice of Mayor Ed Koch of New York who said, "If you agree with me on nine out of 12 issues, support me, but if you agree with me on 12 out of 12 issues, see your psychiatrist"?
    The Prime Minister: We do things rather differently this side of the Atlantic.
    Mr. Roger King: To ask the Prime Minister if she will list her official engagements for Tuesday 31 October.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. King: Can my right hon. Friend cast her mind back to 1979 when after five years of Socialism the Chrysler car business was sold to Peugeot-Talbot for 66p after 700 strikes in 1978? Is my right hon. Friend aware that after the past eight or nine years Peugeot is now making a profit of £100 million a year and producing more cars than ever? Does that not say more for Conservative Governments and nothing at all for Socialism?
    The Prime Minister: Yes. As I said in reply to the first question this afternoon, under this Government wealth has been created and spread ever more widely. Under the last Labour Government, the Labour party took us to the IMF—bankrupt.
    Mr. Healey: Does the Prime Minister agree with Lord Hailsham who said this weekend, speaking with all the authority of a former Lord Chancellor who had served for many years in the Prime Minister's Cabinet, that for the Prime Minister to use her press officers to undermine her colleagues was not only disloyal, but dishonourable? Will she now stop that?
    The Prime Minister: This was a comment from my noble Friend. I was surprised at it and I was very surprised that he made it. It is totally untrue and in any case, I would never take it from the right hon. Member for Leeds, East (Mr. Healey), whose only adviser was the IMF.
    . Mr. Andrew MacKay: To ask the Prime Minister if she will list her official engagements for Tuesday 31 October.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. MacKay: Does my right hon. Friend agree that it would be a cruel deception to suggest that there is some painless way to bring down inflation and that if credit controls were introduced today, they would prove to be quite ineffective due to the international nature of the banking and financial markets?
    The Prime Minister: I agree with my hon. Friend. The point was made effectively in the last debate on economic affairs when my right hon. Friend the Member for Worthing (Mr. Higgins) dealt very well with the issue of credit controls. They will not work in the modern world with a free and open banking system. In an earlier debate, a former Treasury Minister in a Labour Government said:
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    "The Labour Party idea that you can have credit controls is rubbish. There is no way you can control credit except by controlling the price of credit, and the price of credit is Bank Rate."
    Mr. Nellist: To ask the Prime Minister if she will list her official engagements for Tuesday 31 October.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Nellist: Is the Prime Minister aware that in a tragic car accident last week in Coventry, the firefighters cut the cars apart, the police directed the traffic and an ambulance worker was upside down for two hours in that car infusing blood to the victim? How then this morning can Duncan Nichol say that the ambulance workers do not deserve parity with the other services? When will the Prime Minister stop chasing ambulances down to places like Clapham and King's Cross and praising ambulance workers and then treating them like dirt as she does now?
    The Prime Minister: We all praise ambulance workers for their work and do not use them cheaply as the hon. Gentleman has done. Their pay claim, as the hon. Gentleman is aware, is being negotiated and I most earnestly hope that they will keep emergency cover until the negotiations are complete.
    Mr. Marland: To ask the Prime Minister if she will list her official engagements for Tuesday 31 October.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Marland: Is my right hon. Friend aware of the valuable contribution that is made to environmental protection by recycling—[Interruption.] Will she ensure that, under the forthcoming environmental protection Bill the work of the recycler is not interrupted by misleading definitions of waste?
    The Prime Minister: Yes. Recycling, in all its forms, makes a great contribution to the economy, and we at No. 10 Downing street have introduced recycled paper.

Jaguar PLC
Mr. Speaker: I call Mr. Ridley.
Mr. Joseph Ashton: On a point of order, Mr. Speaker.
Mr. Speaker: I will take points of order after the statement.
Mr. Ashton: It is on this matter, Mr. Speaker.
3.30 pm
The Secretary of State for Trade and Industry (Mr. Nicholas Ridley): With permission, Mr. Speaker, I wish to make a statement on Jaguar PLC.
Jaguar's articles of association contain clauses preventing any individual or concert party from holding an interest in more than 15 per cent. of the company's shares. This is backed by the Government's special share which requires my written consent for changes in certain parts of the articles until they lapse on 31 December 1990 when the special share itself is due to be redeemed. Any such change in the articles would, besides my consent, also require the passing of a special resolution by shareholders in general meeting.
These provisions of the company's articles were put into place to preserve Jaguar's independence in its formative years as a free-standing company and so allow its management to concentrate on developing the business without the constant distraction of unwelcome takeover bids. In recent months, however, I understand that the chairman of Jaguar has been talking to a number of companies that are interested in forming links with Jaguar. There is a widespread perception that the company's financial and technological base needs strengthening in this way.
The restrictions on shareholdings entrenched by the Government's special share are now clearly causing uncertainties about the company's future by prompting speculation over how my powers may be exercised, so distorting the basis on which all parties involved have to reach their decisions. I have accordingly told the Jaguar management that, if shareholders pass a special resolution by the requisite 75 per cent. majority amending the ownership provisions of the articles, I shall be ready also to give my consent.
I am clear that it is in the best interests of Jaguar's management, shareholders and work force for the company's future to be assured and the present climate of uncertainty resolved as quickly as possible. I have no doubt that the Jaguar board will continue to pursue its discussions with interested parties, and assess proposals, with the aim of recommending to the shareholders the solution that it believes to be in the best interests of the company as a whole.
This statement paves the way for shareholders, with the advice of the board, to reach their own view on the options which may be available. The Government's role will henceforth be confined to consideration in the normal way of the competition policy aspects of any change in Jaguar's ownership.
Mr. Bryan Gould: I begin by welcoming the Secretary of State to the Dispatch Box and to his new responsibilities, but may I link that welcome with an expression of concern that, at his first appearance, he may
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well have lent himself to what looks suspiciously like a tactical device designed to delay the beginning of the important debate which is about to start? I commiserate with him that his first task is to announce the dispatch of yet another major British company—another victim of the Government's destructive policy towards manufacturing. His task is also to signal the disappearance of the last vestige of what had remained of the independent British car industry.
Does the Secretary of State agree that Jaguar remains and must remain a vital centre of engineering excellence of huge importance to the west midlands and that it is essential that it should remain a west midlands-based car manufacturing company with as much operational independence as possible?
Why, then, has the right hon. Gentleman so evidently abdicated his responsibilities in making this statement today? Who asked him to give up the golden share? What does it mean for other golden shares in other privatised companies? Is there now to be an open season on all golden shares? Does he not recognise that the end result of the market free-for-all which, in effect, he has announced will be that the Jaguar badge will be placed on cars designed and engineered elsewhere and that Jaguar will simply be swallowed up by one or other multinational with no guarantees or assurances whatsoever? Why did the Secretary of State not use his golden share to negotiate proper assurances from General Motors, Ford, Daimler or whomever else may be bidding while he still had a negotiating card in his hand? What is the point of putting a golden share into place if he dispenses with it as soon as it might serve a useful purpose?
Does the Secretary of State accept that his statement offers the clearest possible contrast between the irresponsibility of his Government and the proper concern that the next Labour Government will show for Britain's manufacturing base? Does he accept that his statement is a signal that, once again, market forces, for ideological reasons, will be allowed to deliver an important British enterprise to foreign predators? Does he further accept that the golden share is a charade, and that this is a black day for the west midlands and for the British car industry?
Mr. Ridley: I am surprised at the hon. Gentleman's opening remarks. He wrote to me on 20 September, stating:
"If Jaguar do indeed need the financial and investment assistance to be obtained from becoming part of a larger group, does the Government have any other (and better) solution to offer? If not, may it not be better to help to bring the matter to a conclusion as soon as is reasonably possible, rather than insisting on prolonging the uncertainty until the expiry of the golden share?"
Even when I try to respond to the hon. Gentleman's request to bring the uncertainty to an end, he is grudging in his acceptance. The hon. Gentleman also seemed to say that he understands the need for a strong group to go into some form of partnership with Jaguar, which is what I said in my statement. All that I am doing now is to clear the way so that the playing field is level betweeen all contestants and so that there is no doubt or confusion about what the Government might do in the event of a takeover bid or of other proposals being put to the shareholders.
I agree that Jaguar has done remarkably well and that it is a vital centre of engineering in the west midlands. However, I believe that it will continue to do much better

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still if it is allowed to find its future with a strong partner, which is what the board is now discussing with various people. I believe that that is therefore in the interests of the company.
No one has asked me to make this statement. I have made it because I want to make it quite clear what the ground rules are as the board begins to discuss the options before it. It would not be either right or possible for me to use the golden share to negotiate assurances of the sort that the hon. Gentleman has suggested—[HON. MEMBERS: "Why not?"] First, because it is for the board to decide the best way to safeguard the interests of the company and to recommend that to shareholders; secondly, because the golden share comes to an end at the end of next year and I would then be in no position whatsoever if a bid developed in a year or even two months from now.
Sir Dudley Smith: As one who has a fair number of Jaguar workers in his constituency, may I welcome my right hon. Friend's statement? However, although the company needs extra finance—and this is a realistic approach—will my right hon. Friend always bear in mind the need to maintain the integrity of a major name in the British car industry?
Mr. Ridley: I very much agree with what my hon. Friend says. The statement will clear the way for the management to advise its shareholders on the best long-term future for the continued expansion and prosperity of this excellent company.
Mr. Peter Snape: Does the Secretary of State remember. at an earlier stage in his successful career, when it was said at the time of the privatisation of Jaguar that such a course was necessary to free the company from the embrace of a large conglomerate? In the light of today's announcement, how can such an objective be met? Will anyone other than Sir John Egan and his board benefit from this latest betrayal of British manufacturing industry?
Mr. Ridley: I have no memory of what I said then. I would have thought that the large conglomerate to which the hon. Gentleman referred was the highly unsuccessful and bankrupt British Leyland that the Government inherited. Perhaps to fall into partnership with a strong and prosperous company might be much more helpful for the company than its association with its previous partners.
Mr. Iain Mills: Does my right hon. Friend genuinely believe—I seek his reassurance—that this co-operation with another company will lead to more jobs both at Jaguar and, with the knock-on effect, at components manufacturers?
Mr. Ridley: I would be guided by the board in that matter, but I think that the board is talking with several people, all of whom would wish to expand and to improve the company, and to make sure that the company has in future the stability that the board evidently thinks it does not have, and will not have unless some solution is found.
Mr. Robin Corbett: Does the Secretary of State not understand that, by abandoning the independence of Jaguar, he is putting at risk jobs in the car body plant in my constituency, as well as up to 50,000 jobs among the 2,000 local suppliers to the Castle Bromwich
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plant? Does he not understand that, unless this country retains a strong, large and independent car sector, our economy, long term, cannot prosper?
Mr. Ridley: First, nothing that I have said means that the company will not remain independent if that is what the board and the shareholders decide. It is up to them. They have perfectly respectable options that will leave them independent, but it is for them to decide, not me. Secondly I do not agree that this statement does anything to put jobs at risk, as the hon. Gentleman suggests. The statement safeguards existing jobs, and gives the possibility that there will be many more jobs if a successful agreement is reached.
Sir Hal Miller: Are not the Opposition ignoring the facts that the Jaguar board was engaged in negotiation with other companies, and that it could not possibly be in the interests of any purchaser to do other than keep Jaguar as a separate marque and to expand its production to compete with BMW and Mercedes?
Mr. Ridley: My hon. Friend is right. I quote again from the second letter from the hon. Member for Dagenham, of
18 October, when he said:
"The worst thing that could happen would be to create the maximum uncertainty through a Government refusal to express a view, with the result that the situation was put on ice until the end of 1990, but was then followed by a free-for-all in which the outcome would be uncertain and no assurances would be obtained."
That seems to me to be exactly what we are doing and exactly what my hon. Friend asked us to do.
Mr. Dave Nellist: Is the Secretary of State not aware of the heightened insecurity among many of thousands of my constituents who work for Jaguar and associated component suppliers, that will result from his announcement? Does he not realise the danger of the starting pistol that he has just fired for an auction among Ford, General Motors, Daimler-Benz and possibly other companies, which means that the higher the share price to the eventual victor, the higher the rate of return that it will want to squeeze out of the Jaguar work force, in order to make a profit? If the Secretary of Slate does not want the golden share, why does he not give it to the work force so that the workers can decide if, with whom or when they want a merger to take place?
Mr. Ridley: The hon. Gentleman is misinformed. The Jaguar trade unions came to see my hon. Friend the Under-Secretary and pressed on him the importance of clearing up the uncertainty so that they could see the company's future.
Mr. Nellist: They wanted the extension of the golden share.
Mr. Ridley: No, they said the uncertainty was what was worrying them. Today I have removed that uncertainty, so the matter can now be resolved.
Mr. John Butcher: Does my right hon. Friend accept that the period of uncertainty has been unsettling for my constituents, and that they will support his intention to reduce it or eliminate it? is he aware also that, far from this being a black day, it is a clay on which we know that each of the two bidders is prepared to put hundreds of millions of pounds of new investment into Coventry? Is he further aware that each has given

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commitments that research and development, part development and corporate control will remain in Coventry? Will he play his hand to reassure my constituents that the company management's objectives are also his objectives?
Mr. Ridley: When we had a Labour Government, the then Secretary of State for Trade and Industry had to come to the House to announce closures, cuts and major setbacks in our industrial life. The House should be pleased that I am able to report that a highly successful privatised company is making arrangements to provide extra investment and extra jobs for the benefit of the west midlands and the country as a whole. I believe that to be the position, and I am sure that the Jaguar board does too.
Mr. Matthew Taylor: Will the Secretary of State elaborate on his lack of consultation with the board? Did he consult the board and management of Jaguar before taking this decision? He must be aware that they have been attempting to preserve the independence of the Jaguar car company, and that the signal that he will give to the market today will be a go-ahead for a full attempt to achieve a takeover? Does he not recognise the difference between being the best man at a wedding and throwing a car company to the jackals on the stock market?
Mr. Ridley: No, Sir, it would have been wrong for the Government to consult the management. The ultimate decision is for the shareholders. I informed the management so that the statement did not take it by surprise. It is for the Government to decide what it should do in relation to the golden share and to make it clear to all who might be interested in Jaguar what the rules of the game are. I was asked to clear up the uncertainty, and that is what I have done. I do not believe that what I have announced precludes a solution which leaves Jaguar in the hands of its present shareholders. If that is the solution which the board recommends, and the shareholders accept it, it should be adopted.
Mr. Roger King: Is my right hon. Friend aware that General Motors has been in this country for nigh on 65 years, that Ford has been here for over 75 years, and that both companies are excellent United Kingdom citizens that have maintained a steady rate of investment in the United Kingdom? Is he further aware that Ford owns Aston Martin and that General Motors owns Lotus? Both British companies have retained their independence, and Lotus has a brand new sports car that is attracting orders from throughout the world, thus ensuring increased output at its factory in Norfolk. Is this not the way forward in an increasingly world-dominated motor industry? The only way in which Jaguar can gain the resources that are necessary to double and treble production is to work in partnership with some of the large companies.
Mr. Ridley: I believe that my hon. Friend has the spirit of the next decade absolutely right. I do not believe that a narrow xenophobic attitude is the way for the United Kingdom to prosper, especially when it is entering the single market of Europe, when competitiveness will be the key to success. I agree that both Ford and General Motors have had an excellent investment record in Britain over
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many years. Indeed, they kept many jobs going during the difficult years when we had a Labour Government, who brought the country to the brink of bankruptcy.
Mr. Terry Davis: Given that a few years ago the Prime Minister was trying to take the credit for the success of Jaguar, does the Secretary of State accept now that the Prime Minister's economic policies are responsible for the company's difficulties?
Mr. Ridley: No, Sir, I do not. I am glad that my right hon. Friend the Prime Minister is in the Chamber to take the credit for the next stage in the success of Jaguar.
Mr. Anthony Beaumont-Dark: Does my right hon. Friend accept that most of us realise that Jaguar need many hundreds of millions of pounds for the next generation of cars? Does he accept also that Jaguar is one of those names that is tremendously important to the United Kingdom, as Rolls-Royce was, which had to be helped at one time? Will he assure the House that, when a bid is made, which seems highly likely, by one of three people, he will consider when he calls it in what is for the long-term benefit of manufacturing capacity and not only investment in this country?
Mr. Ridley: I am grateful for what my hon. Friend says, but I do not think that I am in a position to call in any bid, let alone all the bids. It will be for the majority of shareholders—75 per cent.—to make any final decision. However, I assure my hon. Friend that I agree entirely with what he said about the importance of the Jaguar badge. Anybody who seeks to buy or to make a partnership with that company will want to preserve that unique asset and to make the most of it and its reputation as a major midlands engineering company.
Mr. Jeff Rooker: Does the right hon. Gentleman think that it is proper for him as Secretary of State to express any views at all on the matter as requested by my hon. Friend the Member for Dagenham (Mr. Gould)? For example, would he express the view that the integrity of Jaguar cannot be maintained if ultimate corporate ownership disappears 3,000 to 5,000 miles away? Now that Jaguar is into play and up for sale, is it right, when he is writing the rules of the game—"the game", as he said—that he should express a view that Jaguar should maintain all its current purchases within the United Kingdom as a percentage, with no further imports from any multinational being brought in to put British workers out of a job?
On a technical point, bearing in mind the fact that the right hon. Gentleman was not asked to make the statement, and so that we know to whom to direct our complaints about what has happened in the past half hour, who gave him permission to take up Opposition day time for the statement?
Mr. Ridley: I am happy to venture a view, as I was asked to do by the hon. Member for Dagenham (Mr. Gould), and my view is that I do not agree. I do not agree that control of the company will necessarily go overseas and, if control of the company does go overseas, it is in the best interests of those who control it to expand and to improve its performance here in Britain.
Mr. Michael Grylls: Does my right hon. Friend agree that enormous credit should go to the management and work force of Jaguar for the great

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progress that they have made since the company was privatised? A company only wants to co-operate with a successful firm, not an unsuccessful one, and the fact that Jaguar is now being courted by two big groups is good for its future. My right hon. Friend is right to remove the uncertainty and let them know what their future is, and I am sure that it will be more secure within a big firm.
Mr. Ridley: I entirely join with my hon. Friend in paying credit to the management and work force for a magnificent revival since they were freed from the shackles of public ownership by privatisation. It is perfectly possible that in the near future some company could make a bid for Jaguar. If that went to general meeting, as it would have to do, and 75 per cent. of the shareholders voted in favour of that bid, the question whether we would waive the golden share would arise in an acute form at that moment. I am sure that my hon. Friend will agree that it is better to make the announcement now, before that happens, rather than to leave everybody in a state of uncertainty, even up to the last minute when the company meets in general meeting.
Mr. Doug Hoyle: Does the Secretary of State appreciate that all those who said at the time that Jaguar was privatised that it was too small to stand on its own have been proved right? Does he also understand that today he has shown loyalty to market forces rather than to the British motor industry and its employees? Having taken away the golden share, he now has no control over whether research and development stay in Britain, and the employees have no voice. Is he not giving a disgraceful first performance at the Dispatch Box?
Mr. Ridley: The golden share never gave any Government control over matters such as the location of plants, research and development and the development of new models, and it would have been quite wrong to use the golden share, as the hon. Gentleman suggests, to try to achieve such a result. That is not at all the case. In any event, the golden share would have expired in a year's time. As the hon. Member for Dagenham (Mr. Gould) suggested, it was pointless to let that year go on with uncertainty and confusion reigning until the Government showed their hand. I am sure that I have done a service in doing that now.
Mr. Robin Maxwell-Hyslop: May a Back Bencher who was once an engineer ask the Secretary of State who is an experienced qualified engineer whether the truth of the matter is not that the Japanese have moved into the market that Jaguar once shared with Porsche and BMW and that it needs the capital which only an enormous American firm can supply if it is not only to hold its position for a few years but to dominate the market that it created by the development of new engines and new models year after year?
Mr. Ridley: As one engineer to another, I strongly agree with my hon. Friend that in this highly competitive world it is necessary to make massive investments to stay ahead of the game. If Jaguar finds a solution which does that, it will be to its advantage.
Several Hon. Members rose—
Mr. Speaker: Order. I have to have regard to the business on the Order Paper, which, as the House knows,
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is an Opposition day debate. I shall call two more hon. Members from each side before the Front Bench spokesman, but then we must move on.
Mr. Bob Cryer: Does not potential foreign ownership inevitably raise the possibility that manufacturing will move away from the United Kingdom, whether from Coventry or elsewhere? What safeguards have been provided or obtained for components suppliers, such as Hepworth and Grandage in Bradford, which is a major piston supplier to Jaguar? Do not all such questions arise from the ownership of the golden share? Is not to abandon the golden share to abandon all safeguards on investment, employment, model development and the retention of jobs in the United Kingdom? Does not the Secretary of State at the Dispatch Box today represent the funeral directors of motor manufacturing in Britain?
Mr. Ridley: No, the golden share does not allow any Government to take account of the matters that the hon. Gentleman has raised. I am convinced that the best prospect for the many components suppliers, including the one he mentioned, will be to have a strong, prosperous and expanding Jaguar. To allow Jaguar to find a solution is the best way of helping it.
Mr. Graham Bright: Although I accept that the decision can be made only in the free market by shareholders, will my right hon. Friend actively consider encouraging shareholders and other people involved in the decision to take into account the components market—many components are supplied to Jaguar by General Motors—and the prospect of General Motors bringing a brand new engine plant to this country which would work with Jaguar and Vauxhall in Luton?
Mr. Ridley: I share my hon. Friend's anxiety that suppliers to Jaguar everywhere should expand and have opportunities to increase sales. That is far more likely to be assured by allowing Jaguar to strengthen itself, if it can find a way of doing so, than by pursuing a narrow, restrictive policy which could not help the company in future.
Mr. Stan Crowther: Despite his insulting remarks about British Leyland, does the Secretary of State recall that, in June 1984, the Trade and Industry Select Committee unanimously recommended against hiving off Jaguar? In the light of all that has happened since then, does he think that the decision to push that small company into the hard competitive world without the resources of a large organisation behind it, has proved to be in the best long-term interests either of Jaguar or of Britain?
Mr. Ridley: Perhaps the hon. Gentleman preferred the position in the 1970s, when British Leyland owned Jaguar in the public sector. If his memory stretches that far, does he remember the gloom and demoralisation then, compared with the good news brought to the House today?
Mr. Jonathan Sayeed: Will my right lion Friend compare the Jaguar company of today with the moribund organisation that existed 10 years ago and tell us what lessons he draws from the comparison?
Mr. Ridley: I am certain that the disciplines of the private sector are the disciplines in which Jaguar has thriven. It has benefited from separation from a parent

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that, far from putting money into investment and research, was dragging it down through debts and burdens that resulted from its other activities.
Mr. Gould: I am sure that the Secretary of State would not wish to mislead the House. Will he therefore confirm that in my correspondence with him I urged him to use the golden share—indeed, possibly extend it—in order to negotiate with it, not to dispense with it without obtaining any guarantees or assurances? Will he also tell the House what is the point of a golden share if it is to be abandoned just when it is most needed?
Mr. Ridley: I quoted the entire sentence in order not to traduce the hon. Gentleman, but I shall quote it again. It reads:
"If Jaguar do indeed need the financial and investment assistance to be obtained from becoming part of a larger group, does the Government have any other (and better) solution to offer?"
It is probably not possible to extend the golden share. That would require a 75 per cent. vote by the shareholders, which might or might not be obtained; it would probably also require clearance from the European Commission, which is by no means a certainty, and from the stock exchange. Grave risks would be involved in any attempt to surmount all those hurdles, and it would be unlikely to succeed.
Moreover, I see no point in pretending that a golden share that expires in just over a year could be used to impose conditions on any purchaser. The purchaser would have the simple alternative of waiting until the golden share had expired before doing what he considered to be in his own interests.
Mr. Speaker: I call the Leader of the House to move the motion on the statutory instrument.
Mr. Rooker: On a point of order, Mr. Speaker. I distinctly heard, and hope that the rest of the House did as well, the Secretary of State openly admit that no one had asked him to make his statement today. We may have a new Government Chief Whip and Leader of the House, but the same sneaky tactics are still being used.
In future, Mr. Speaker, when a Minister asks your permission to make a statement on an Opposition day, can we have a debate and a vote on whether the House should give such permission? It is our time that is being taken, and nothing in today's statement could not have been said yesterday, or be said tomorrow. The statement has been made today for one simple reason—the debate that is to follow.
Mr. Maxwell-Hyslop: Further to that point of order, Mr. Speaker.
Mr. Eric S. Heffer: Further to that point of order, Mr. Speaker.
Mr. Speaker: Order. I am on my feet.
Let me draw the attention of the hon. Member for Birmingham, Perry Barr (Mr. Rooker) and the House to the new 21st edition of "Erskine May", on page 297 of which can be found the sentence that the question whether a statement is made is not a matter for the Chair. It is
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merely a tradition that the Minister who makes the statement begins it with the words "With permission"; Government statements are not made with my permission.
Mr. Joseph Ashton: Is it not a fact that, when the House is televised, there will be nothing to prevent the Government from issuing two or three statements every day to hog the 6 o'clock news broadcasts and to delay the Opposition's time with any propaganda material that the Government are prepared to give out? Surely either you, Mr. Speaker, should make a ruling, or the Procedure Committee should examine what is plainly a deliberate and gross abuse of Opposition time. We look to you, Mr. Speaker, to protect our interests by preventing Ministers from standing up and saying, "With permission" when clearly no permission is necessary, and the statement has been designed and organised solely by Mr. Bernard Ingham to run as a spoiler. You really should put a stop to it, Mr. Speaker.
Mr. John Maxton: Further to that point of order, Mr. Speaker.
Mr. Speaker: Is it on the same matter? I have already said, and the House knows, that today is an Opposition day, and all this takes time.
Mr. Maxton: Further to the point of order raised by my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker), Mr. Speaker. May I draw your attention to the Questions for Written Answer on today's Order Paper? Question No. 89, from the hon. Member for Birmingham, Northfield (Mr. King), reads:
"To ask the Secretary of State for Trade and Industry, whether he will make a statement on Jaguar plc."
It is not obvious that, until he realised that he could make the statement in the House, the Secretary of State intended to make a written statement?
Mr. Heffer: On a point of order, Mr. Speaker. I personally have no objecion to the Secretary of State making statements, but he should make honest statements. The fact of the matter is that the private enterprise system has failed. The Labour Government had to take over from a private enterprise system; we had to take Jaguar into public ownership to defend the jobs of those people. When the Secretary of State makes statements—
Mr. Speaker: Order. This is really a matter for debate, not a point of order for me.
May I say to the House again that it is not a matter for the Chair whether statements are made, but it is very much a matter for the usual channels to ensure that this sort of thing is treated with some consideration.
Mr. Maxwell-Hyslop: Further to what you accepted as three points of order running from the Opposition Benches, Mr. Speaker. Since it was claimed that the Secretary of State's statement had nothing to do with the debate coming today—[Interruption.] Yes, it was. May I put it to you, Mr. Speaker, that the Secretary of State's statement about a very important company in the engineering industry today is indeed appropriate and that the whole of his answer was appropriate to the economy of this country, which we are about to debate?
Mr. Speaker: I say again that statements are not made with my permission. I have already drawn the attention of the House to that point.
Several Hon. Members rose—
Mr. Speaker: Order. I am not going to take any more points of order.

STATUTORY INSTRUMENTS, &c.
Ordered,
That the draft Industrial Training Levy (Hotel and Catering) Order 1989 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Dorrell.]

Fuel and Energy Provision
4.6 pm
Mr. John Hughes: I beg to move,
That leave be given to bring in a Bill to require the provision of essential fuel and energy to each home, to guarantee appliances, to prevent the entry to premises without prior recorded legally authorised notice; to prevent the unauthorised removal of a fuel measuring device; to abolish standing charges; to establish local authority monitoring committees; and for connected purposes.
After disasters such as Lockerbie, Piper Alpha and King's Cross, hon. Members from all parties demanded inquiries and measures that would prevent further unnecessary loss of life. My Fuel and Energy Provision Bill incorporates the values that those hon. Members profess. it sets out to save lives by providing a number of statutory rights. It would spread a safety net for the disadvantaged members of the community—the 39,000 elderly citizens who die annually from hypothermia or diseases of the respiratory system, which will be the major killers in the cold winter months ahead.
On the occasion when I have brought the Fuel and Energy Provision Bill before the House I have wondered why those who sit on the Government Benches so resolutely oppose its progress through the House. Is there some strange logic or formula, of which I am not aware, which determines that the lives of the Hillsborough tragedy victims, or those who are dropped from hijacked airliners, are more precious than those of elderly citizens whose ignominious deaths rate merely a statistical reference or classification as "poor old souls"?
Having assessed the reaction of the House, I have to come to that conclusion, as the unnecessarily astronomical death toll of elderly citizens—39,000 each year—has failed to concern the Government or and the Prime Minister. The right hon. Lady has not been induced to dash with alacrity to the bedsides of the elderly that she has made to the hospital bedsides of tragedy victims. Yet the loss of life among the elderly is a national disaster. It is, however, one which fails to move the Government. Their indifference was demonstrated last week when the Secretary of State for Social Security refused to restore pensions immediately to their index-linked value, which would have given an increase of £12 to a single pensioner and £20 to a couple. Pensioners would not then have had to worry about the never-attainable severe weather payment in the cold winter months ahead.
The elderly are not the only people to suffer. The disabled, single mothers, young children and the unemployed also suffer from fuel poverty which an uncaring Government, the unconcerned British Gas and the uncaring electricity industry fail to address. I received a letter from the managing director, finance, at British Gas, Mr. A. Sutcliffe, who attempted to convey the company's concern for the welfare of the customer. The letter concluded:
"I believe our record demonstrates that we are fully committed to excellent service and this includes operating in an open and fair manner."
That statement is in stark contrast with the reality suffered by Mrs. O'Hanlon of 17 Coronation road, Coventry, who, having arranged for British Gas to visit her home to install a token meter, was forced to visit her doctor because her 18-month-old child was ill. When she returned home, she found that in her absence a British Gas

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official had forced entry to her property without a warrant and disconnected her meter, leaving her and her child without any source of heat.
The same kind of indifference and lack of concern for the welfare of customers is shown by the electricity industry, which, in the process of clawing back arrears from low-income groups, requires them to feed between £5 and £7 per week into a meter before they receive any electricity for heating or cooking. A recent survey showed that, in more than 90 per cent. of the cases examined, the electricity boards did not know whether the customer's household included pensioners, benefit recipients, sick or disabled persons or young children. The survey concluded that such information has not been sought by the boards.
Because of the lack of time, my Bill will fail to address those problems in this Session of Parliament. In the meantime, local authorities can demonstrate their concern for the many people who spend most of every 24 hours trapped in homes which they cannot heat because they are too poor, because they fear the bill that the postman may bring or because in their desperation they lose sight of what they are doing and an equally sightless bureaucracy disconnects them. Perhaps those homes with ill-fitting windows and doors and poor insulation, which were designed when fuel was cheap, simply will not hold the heat. The heating appliances used may be old or inefficient or require too much of the wrong fuel. Some people are just too poor. Whatever the reason, I believe that more can be done.
Sometimes it is simply a question of knowing what can be done to help. The labyrinth of social services departments, social security officers and advice centres is simply too much for someone who is struggling to keep warm. It is easier to huddle in front of the warm gas fire radiant or the bars of an electric fire than to face the queues and the smug-faced young people who seem to be too busy and who talk too quickly when they explain that it is not really a matter for their department.
I believe that councils across the country can help to resolve that problem. I suggest that councils, under the auspices of the Lord Mayor should form watchdog committees with representatives from the local offices of the Department of Social Security, the gas board, the electricity supply services, welfare workers and a general practitioner. The committee's purpose would primarily be to examine individual cases to see what assistance could be
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given to people in need. To do that job properly, a freephone helpline would be necessary, so that immediate advice could be sought and so that watchful neighbours could report their worries and be sure of a prompt investigation. I imagine that the committee would need to meet once a week during the critical months. To give the issue the full weight that it deserves, I suggest that the committee should be chaired by the chairman of the local authority, the mayor or his deputy.
Such a service would need publicity, and I am certain that the local media would be only too willing to help. Publicity would have a dual purpose. It would serve people in their homes by involving politicians and local council officials, and it would offer them advice. The advice could be of a general nature, such as stating the principles which govern the help that is available—[Interruption.]
Mr. Speaker: It is 4.16 pm. Will the hon. Gentleman bring now his remarks to a close?
Mr. Hughes: I think that we need the assistance of Dr. Dolittle.
I am not excepting myself from the amount of work that the committees would generate. I shall be available at any time to assist with their development and work.
The Fuel and Energy Provision Bill will offer a life certificate rather than a death certificate to the elderly. I request that while we are in the process of using or examining the use—
Mr. Speaker: Order. I shall now put the Question.
Question put and agreed to.
Bill ordered to be brought in by Mr. John Hughes, Mr. Dave Nellist, Mr. Ronnie Campbell, Mrs. Alice Mahon, Mrs. Audrey Wise, Mr. Don Dixon, Mr. Pat Wall, Mr. Terry Fields, Mr. Bob Cryer, Ms. Mildred Gordon, Mr. Harry Barnes and Mr. Tony Banks.

Fuel and Energy Provision
  FUEL AND ENERGY PROVISION
  Mr. John Hughes accordingly presented a Bill to require the provision of essential fuel and energy to each home, to guarantee appliances, to prevent the entry to premises without prior recorded legally authorised notice; to prevent the unauthorised removal of a fuel measuring device; to abolish standing charges; to establish local authority monitoring committees; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 3 November and to be printed. [Bill 210.]
Opposition Day
[20TH ALLOTTED DAY]
Opposition Day

  Economic Policy
  Mr. Speaker: I must announce to the House that I have selected the amendment in the name of the Prime Minister. In view of the number of right hon. and hon. Members who wish to participate, I propose to put a limit on speeches of 10 minutes between 7 and 9 o'clock.
  Mr. Dick Douglas: On a point of order, Mr. Speaker. I hesitate to interrupt the flow of remarks, but when you impose that stricture, will you take cognisance of the fact that on recent occasions Front Bench spokesmen have consumed large proportions of the time allocated? Therefore, if Back Benchers are properly to be constrained by your ruling, Mr. Speaker, the same strictures should apply to Front Bench spokesmen.
  Mr. Speaker: As the House knows, I have no authority at the moment to limit the length of speeches made by Front Bench spokesmen. Nevertheless, I hope that what the hon. Gentleman has said will be borne in mind today.
  4.19 pm
  Mr. John Smith: I beg to move,
  "That this House condemns the continuing confusion and disarray in the content and conduct of government economic policy; notes with deep concern the absence of full agreement on economic policy between the Prime Minister and the former Chancellor of the Exchequer; and deplores the continuing commitment to high interest rates which are causing such harm to industry and to the people of Britain."
  Since we last discussed economic policy in the House only a week ago, there have been some changes—some changes in the team. It was only a few weeks ago that the Chancellor of the Duchy of Lancaster—the chairman of the Conservative party—gave us the theme for the period to the next election. In his speech—the speech before Agincourt—he said:
  "We must work together as a team. A team in the Cabinet: a team in Government."
  That was at the beginning of his speech. More attention appears to have been taken of an ominously prophetic quotation towards the end of his speech—in his peroration. He said:
  "He which hath no stomach to this fight, Let him depart."
  We know that there has been a departure—the departure of the former Chancellor. He departed because he found it impossible to work in a team in which the captain does not support the leading player. In his resignation letter, the right hon. Member for Blaby (Mr. Lawson) said:
  "The successful conduct of economic policy is possible only if there is, and is seen to be, full agreement between the Prime Minister and the Chancellor of the Exchequer."
  We should do the right hon. Gentleman the credit of accepting completely what he said. Although his letter was short, it contained a terse but electric message: no Chancellor can carry out his arduous duties without the full support of the Prime Minister. In the case of the right hon. Gentleman, that support was withheld because of a preference for a part-time unelected adviser who spent only a minority of his time in this country. We are invited
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  to believe—if we are to accept some of the curious answers given in the Prime Minister's Walden interview on Sunday—that the right hon. Member for Blaby resigned because his head had apparently been turned by tittle-tattle got up by the press and that in that confused condition he had unaccountably and quite irrationally abandoned an unassailable position to leave the Government for no good reason.
  The truth—as the former Chancellor told us—was that he was entitled to expect "full agreement" on economic policy and proper support. In this curious Government. he neither got it nor was seen to receive it, and not unnaturally he went—a victim of the confusion and disarray which is, in my submission, the inevitable consequence of the subversion of Cabinet government in which the Prime Minister has been engaged for the past 10 years.
  There are two crucial areas of economic policy in which the acute divisions of policy are all too sadly evident and destructive of the public interest. Those are the approach to the possible accession of Britain to the exchange rate mechanism of the EMS and domestic economic policy, particularly in relation to the management of the exchange rate. For some time, the official stance has been that the Government would join the ERM when the time was right.
  The Deputy Prime Minister restated that in an important speech on Saturday night. He said:
  "Thus the position that we took in Madrid—one which the Prime Minister, Nigel Lawson and I all agreed—was the right one. We said 'yes' we want the existing EMS to be strengthened, 'yes' Britain should join and will join the exchange rate mechanism. We defined the conditions that would make the time right: Liberalisation of capital movements in the Community, headway in the battle against inflation—itself the crucial objective—and substantial progress on the single market."
  He added:
  "We committed ourselves to stage one of the Delors report."
  As we all know, that envisages all member states participating in the exchange rate mechanism.
  The right hon. and learned Gentleman went on:
  "That was the position in June. As the Prime Minister, Nigel Lawson and I have repeatedly stressed in the House of Commons, it remains the position now. It is of the highest importance that Her Majesty's Government is seen to remain committed to that position, clearly and in good faith."
  He added for emphasis:
  "It is important—not just for the credibility of our common European commitment but for the economic health and political strength of Britain".
  Note how important he envisages good faith—crucial to our economic health and our political strength.
  I dare say that that speech in any normal situation would not have attracted as much notice as it did, as many observers would have believed it to be a perhaps enthusiastic, but certainly not inaccurate, statement of what Government policy was thought to be. The Deputy Prime Minister, however, must have felt some twinge that it might be more significant. He apparently consulted the new Foreign Secretary and the new Chancellor of the Exchequer, but he did not consult the Prime Minister; nor did he issue the speech through his Government office or even through the Conservative party news service. He issued it on plain, unheaded notepaper.
  I hazard the guess that the right hon. and learned Gentleman did not consult the Prime Minister or use official or party channels because he did not wish there to be any impediment to the delivery of his message. His

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  instincts were probably correct because, not long before he had spoken the words at 9 pm on Saturday night, on Saturday afternoon the Prime Minister had recorded the interview on the Walden programme, which we saw on television on Sunday.
  As we all know, that interview was an event of enormous political significance, a revelation of the Prime Minister's style and approach to the problems of government, as an example of which it could not be bettered. It will be as indispensable to historians as it is to those of us who view these matters in a more contemporary frame. But it is also acutely relevant to the Prime Minister's, and therefore the Government's approach to accession to the exchange rate mechanism.
  At first the Prime Minister appeared to take the normal line:
  "We shall join the European Monetary System on the conditions we laid down in Madrid. There was nothing fudged about them"—
  curiously, no one alleged that there was anything fudged about them—
  "they were quite clear."
  Let us recollect that the Deputy Prime Minister had told us —and he was Foreign Secretary at the time—that there were three conditions: liberalisation of capital movements, progress on reducing inflation and substantial progress—no more than that—on the single market.
  That was not enough for the Prime Minister. On she went, throughout almost the entire second section of her interview, expanding conditions and extending time scales with gay abandon. Not only are exchange controls to be removed, but investment requirements on pension funds and insurance funds in all member states have to go. What is called—[Interruption.] Hold on. What is called liberal economics—with a small "I"; I suppose that we might call it Manchester school liberal economics—must be practised in all countries. A "higgledy-piggledy" system in which no one else plays by the rules must be transformed.
  It can all be summed up by saying that, if all the other member states have adopted Thatcherite policies and the Prime Minister has personally inspected them all, looked to see that all the economic fingernails are clean, we might, just might, consider joining the exchange rate mechanism.
  I observe in passing that the Prime Minister has noticed that Thatcherism has not crossed the English channel—how fortunate they are—and nor is it likely to do so. Why on earth would the other Community countries want to import the equivalent of a £20 billion balance of payments deficit and rates of inflation and interest rates much higher than obtain in their countries? But the clear message that the Prime Minister is giving is that, so long as she is Prime Minister—and that is until the next general election—Britain will not join the exchange rate mechanism.
  Mr. Tony Marlow: The right hon. and learned Gentleman deservedly has a high reputation. Would he care to enhance that reputation by putting on one side the humour and tittle-tattle and telling the House which of the Government's conditions precedent to joining the ERM—conditions that have been set out at various times by the Government and on Sunday by the Prime Minister—the Labour party accepts and with which it disagrees?
  Mr. Smith: The hon. Gentleman knows well that we have repeatedly set out the conditions—[HON. MEMBERS: "Answer."] He knows perfectly well that time and again we have proposed that Britain should join the ERM on certain prudent conditions which the Labour party—[HON. MEMBERS: "Answer."] The difference between the two sides of the House is that we are clear about what those conditions are, whereas the Government side—[Interruption.]
  Several Hon. Members rose—[Interruption]
  Mr. Speaker: Order. The right hon. and learned Member for Monklands, East (Mr. Smith) is clearly not giving way.
  Mr. Smith: We do not know, on the Government side, what the conditions are, or what time scales are in operation.
  Mr. Robin Maxwell-Hyslop: Answer the question.
  Mr. Smith: I can understand why the Conservative party wants to—[Interruption.]
  Mr. Speaker: Order. There is great pressure to speak in the debate. Hon. Members should allow the right hon. and learned Gentleman to get on with his speech.
  Mr. Neil Hamilton rose—
  Mr. Cranley Onslow rose—
  Mr. Smith: The fundamental problem—[HON. MEMBERS: "Answer."]
  Mr. Speaker: Order. The House knows the rules.
  Several Hon. Members rose—
  Mr. Speaker: Order. I say to the Government Benches that if the right hon. and learned Gentleman does not give way, hon. Members who are attempting to intervene must resume their seats.
  Mr Maxwell-Hyslop: Further to that point of order, Mr. Speaker.
  Mr. Speaker: Order. There was no point of order. I was reinforcing a ruling.
  Mr. Maxwell-Hyslop: Further to the point that was raised with you, Mr. Speaker. May I ask if it is not a fact—
  Mr. Speaker: Order. No point of order was raised with me. I rose to say, and I repeat, that if the right hon. and learned Member for Monklands, East does not give way, hon. Members who are standing must resume their seats.
  Mr. Maxwell-Hyslop: On a point of order, Mr. Speaker. The right hon. and learned Member for Monklands East (Mr. Smith) gave way. Questions were asked and certain answers were given—[Interruption.] You know as well as I do, Mr. Speaker, that if a Front Bench spokesman—[HON. MEMBERS: "Sit Down."]
  Mr. Speaker: Order. The hon. Member for Tiverton (Mr. Maxwell-Hyslop) has been in the House for a long time and knows as well as I do that I am not responsible for questions that are asked, provided they are in order, and answers that are given, provided they also are in order.
  Mr. Maxwell-Hyslop: Further to my point of order, Mr. Speaker—[Interruption.]
  Mr. Speaker: Order. [HON. MEMBERS: "Name him."] I will hear what the hon. Gentleman has to say if it is a point order, but not if it is a point of argument.
  Mr. Maxwell-Hyslop: I assure you that I rise on a point of order, Mr. Speaker—[Interruption]
  Mr. Speaker: Order.
  Mr. Maxwell-Hyslop: I will continue when you can hear me, Mr. Speaker. We are all aware that if an hon. Member is speaking and gives way and is asked a question—[Interruption.] I will wait until you can hear me, Mr. Speaker.
  Mr. Speaker: Order. I get the drift of the point that the hon. Gentleman is making. It does not appear to be a matter of order for me. I suggest that we get on now.
  Mr. Maxwell-Hyslop rose—
  Mr. Speaker: Order. I ask the hon. Gentleman to sit down.
  Mr. Maxwell-Hyslop rose—
  Mr. Speaker: Order. For the final time, I ask the hon. Member for Tiverton (Mr. Maxwell-Hyslop) to resume his seat.
  Mr. Smith: It is a great pity that the House is not currently being televised, so that the whole nation could observe the organised wrecking tactics used by the Conservative party against the Opposition. [Interruption.]
  Sir William Clark rose—
  Mr. Speaker: Order. I repeat to the House—[Interruption.] Leave it to me, please. There is great pressure to speak today. I ask the House to listen without interruption. to what the right hon. Member for Monklands, East (Mr. Smith) is saying.
  Mr. Smith: The hon. Member for Northampton, North (Mr. Marlow) asked me about our conditions. Perhaps I may be allowed the opportunity which I have been trying to take for some time, of addressing that question, despite deliberate wrecking tactics from Conservative Members. The conditions applied by the Government will frustrate our efforts to join the exchange rate mechanism. The conditions that the Labour party attaches, apart from the important question of joining at the effective rate, are that there should be adequate swap arrangements between the central banks, that there must be a well-organised regional policy within the Community, and that the thrust of the economic policies within the Community should be for growth and not for deflation.
  That approach has not only been approved by the other countries in Europe, but was substantially approved by the resolution of the European Parliament last week, for which the Conservative MEPs voted. Those MEPs, of course, have a problem in the European Parliament: no other MEPs will have them as part of their group. They feel a little detached from the Conservative party on this side of the Channel. No wonder! Perhaps "semi-detached" is an expression that may carry more menace for them.
  In her interview, the Prime Minister's clear message was that she had no intention of joining the exchange rate
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  mechanism. She said of the timing that there had to be major changes by our errant partners—all the people who do not play by the rules and who are up to all kinds of dirty tricks. She said:
  "Now all that should happen during … what is called the Delors first stage, the first stage coming towards monetary union. I hope it will but other countries have to catch up a long way before it happens."
  As she knows, there is no time limit to stage I of the Delors plan and she knows that the deadline for the single market is 1 January 1993. In so far as she claims that her conditions relate to completion of the single market, it would hardly be likely that she could make the judgment on their performance—a crucial part of her approach—before 1 January 1993. Let us remember that the last date for the next general election is June 1992.
  I submit that the only reasonable conclusion to be drawn from that seminal interview is that there is no question of the Prime Minister agreeing to join the exchange rate mechanism before the next election. That position is hopelessly at odds with the view of the Deputy Prime Minister. Is it the Prime Minister's policy that the Government do not anticipate joining the exchange rate mechanism? Is that the view of the Deputy Prime Minister, the Foreign Secretary or the new Chancellor of the Exchequer? The new Chancellor has an opportunity today to spell out his policy. If he does not, I fear that confusion will remain.
  Let me remind the House of that crucial sentence in the speech of the Deputy Prime Minister:
  "It is of the highest importance that Her Majesty's Government is seen to remain committed to that position clearly and in good faith."
  The Prime Minister's response may be clearer than the Deputy Prime Minister anticipated. However, does he believe that it can conceivably accord with the good faith that he believes to be of the highest importance and which is so important to our economy and our political strength? If it does not, can he accept what the former Chancellor could not—that a Government policy is undermined, and seen to be undermined, by the Prime Minister on national television?
  When the Deputy Prime Minister refers to good faith, I believe that he has in mind good faith within the Government—rare though such a commodity must be—and good faith in relation to the other member states in the Community. It is worth reflecting on what those member states thought when they considered the patronising tone of the Prime Minister's Walden interview. We can rest assured that there is one person who will not be worried by that. If the Prime Minister can feel sorry for all 48 other countries of the Commonwealth, why bother about a mere 11 in the European Community?
  I referrred earlier to divisions on domestic economic policy. To be fair, I believe that all members of the Government began with much the same position. In those early days, when monetarism was unchallenged within their ranks, the belief was firm that the exchange rate could be left to the market and that just controlling the money supply would keep inflation in check. Even the former Chancellor was in line then.
  In a famous reply on 3 July 1980, when asked by my hon. Friend the Member for Liverpool, Riverside (Mr. Parry) what mechanism existed for medium or long-term alteration of the exchange rate, the former Chancellor replied simply, "Market forces." That was the era of free floating when it was said that there was

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  "no stable or reliable relationship between interest rates and the exchange rate."—[Official Report, 4 November 1980; Vol. 991, c. 537.]
  However, the former Chancellor learned by hard experience. He saw the irrational and wild oscillation in the exchange rates and began to move towards the position that he had adopted by the time of his resignation—that is, managing the exchange rate and participating in international agreements to stabilise exchange rates among the G7 nations through the Plaza and Louvre accords.
  On the basis of his experience, the former Chancellor began increasingly to realise the potential value of participating in the exchange rate mechanism. Clearly he moved a long way, but the Prime Minister has not. The lady did not turn. She believed and she still believes, as she has told the House, "You cannot buck the markets." That was her reason for demolishing the Chancellor's policy of shadowing the deutschmark. It was also the reason why she summoned Sir Alan Walters back from the United States to be her adviser earlier this year. She apprehended that two issues were coming to the forefront on which, if she did not strengthen her position, she might lose out. Those were the arguments over the exchange rate mechanism and the desirability of seeking to manage the exchange rate.
  The Prime Minister also knew, as she told us eight times on Sunday, that the former Chancellor was "unassailable". I could hardly believe it when she said that again today during Prime Minister's Question Time. However, it was precisely because the Prime Minister assessed the Chancellor as unassailable that she set out to undermine him.
  Only the truly innocent believe that Sir Alan Walters was just another adviser—one of those people who advise while Ministers decide. He was more than that. He was a crucial ally of the Prime Minister. In the knowledge of his fierce opposition to joining the exchange rate mechanism, frequently and publicly expressed on both sides of the Atlantic, he was recalled to serve in No. 10. It did not take long for Sir Alan to become the alternative Chancellor, and we know the sad eventual outcome of all that. The new Chancellor will not have Sir Alan around.
  Mr. David Tredinnick: Will the right hon. and learned Gentleman give way?
  Mr. Smith: No; I hope that the hon. Gentleman will forgive me.
  If the new Chancellor seeks to develop a policy of which the Prime Minister does not approve, he will encounter the same problems as were encountered by the former Chancellor. The new Chancellor must make up his mind, and he should tell us today whether he follows the previous Chancellor's policy or whether he takes sides with the Prime Minister and believes that the markets cannot be bucked.
  While the new Chancellor carries out his duties, I urge him to be careful about the Prime Minister's praises. If she calls him brilliant, he should be wary. If he hears the words, "brilliant, brilliant", especially if the call is uttered shrilly, he should be worried. If he is ever described as unassailable, he should start to tidy his desk.
  There are echoes of the Westland affair in all this. Once again, there is a serious dispute over a European policy
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  question. The right hon. Member for Henley (Mr. Heseltine) wanted a European solution to the Westland affair. The Prime Minister did not. The right hon. Member for Henley was undermined by the leaking of a Law Officers' letter—a process assisted by unelected officials in No. 10. Business as usual, one might say.
  In the Westland affair, the Prime Minister lost two Ministers. In the present crisis, she has lost thus far only one, albeit the most senior Minister in her Government. The Deputy Prime Minister, who lost his old job in the reshuffle earlier this year, should take especial care. So should the new Chancellor.
  The new Chancellor's crucial training for his new post was not so much the two years that he spent as Chief Secretary to the Treasury; rather, it was his three months as Foreign Secretary. After he had negotiated an agreed communiqué with the representatives of the other 48 Commonwealth countries at Kuala Lumpur, his efforts were completely overturned by the Prime Minister's lengthy denunciation of the views of those very countries.
  As we approach the Council of Europe meeting to be held in Strasbourg in December, the new Chancellor should be especially vigilant; otherwise he might have been Kuala Lumpured in October only to be Strasbourged in December.
  As the new Chancellor faces the task of steering British economic policy over the next year or so, I beg him to abandon the foolish notion that a balance of payments deficit now running at an annual rate approaching £20 billion does not matter provided that it can be financed. We know to our cost the price of such financing—interest rates of 15 per cent. which are doing such deadly damage to business and industry and causing such misery for home owners from one end of the country to the other.
  Sooner or later—I earnestly hope that it will be sooner—the balance of payments deficit must begin to be reduced. In debate after debate, and only last Tuesday, Labour Members have urged the urgent need for an industrial strategy to begin the task of refashioning and rebuilding manufacturing industry. Manufacturing industry is the indispensable wealth creator and the crucially international tradeable part of our economy.
  It is interesting that, whenever we urge the adoption of an industrial strategy for manufacturing industry, the Conservatives do not believe that that is a policy. That says far more about them than it does about us. Right across the political spectrum, people are deeply worried about the future of our industry. Those who work in it, manage it, and advise it are all deeply worried. The only people who do not seem to worry about the crisis in manufacturing industry—it must be a crisis, if we have a £20 billion balance of payments deficit—are the Conservatives, and the Ministers responsible for the conduct of our economic policy.
  We will urge this alternative again and again until the message gets home—not only the Labour party, but the whole of Britain wants a strategy for manufacturing industry.
  Mr. Tim Smith: Last week the right hon. and learned Gentleman told us that he supported an industrial strategy. Will he be a little more specific? We are all concerned about the prospects. Is the right hon. and learned Gentleman talking about tax incentives or greater public spending? What policies does he have in mind?
  Mr. John Smith: I do not know whether the hon. Gentleman was present during our debate last Tuesday—he probably was—but I am prepared to accept his assurance that he is concerned about manufacturing industry. The Opposition have many more Conservative Members to work on.
  Let me spell out, as I did last Tuesday, the three crucial elements of that industrial strategy—first, the repairing of the ravages of the neglect of education and training by a massive education and training programme; secondly, a policy to introduce new technology by Government support for research and development; thirdly, a strong regional policy to tackle the continuing decline of the under-used regions of this country. Once again, one may be told—
  Several Hon. Members rose—
  Mr. Smith: Conservative Members should allow me to speak. Given what happened earlier, I have been reasonably generous in giving way at all to some Conservative Members.
  As the hon. Member for Beaconsfield (Mr. Smith) will come to realise, perhaps before his colleagues on the Government Front Bench do, that is the essential precondition of any successful economic policy for this country. The Opposition have also urged the abandonment of the one-club golfing of exclusive reliance on interest rates and recommended the limitation of bank lending as a superior alternative to the control of demand, as long as that is necesary.
  In addition, the new Chancellor should take the opportunity today to rule out tax cuts in the next Budget. He should use the Autumn Statement, again as the Opposition recommended only last Tuesday, to initiate regionally targeted public investment to strengthen education and training, and research and development, and to stimulate regional economies.
  That is not only an alternative policy—it is the alternative policy which Britain desperately needs. It is a policy which will secure our prosperity not just for the year or two to come but throughout the 1990s. Let us never forget that the crucial folly of the former Chancellor's policy was to lecture the Federal Republic of West Germany that its economic miracle was over and that ours had just begun.
  When we look at the massive trade deficit and how it has gone throughout the whole of this decade, despite North sea oil revenues, which the Conservative party had and which they frittered away, we see an adequate commentary on the effectiveness of the Government's policy. Let it not be forgotten that other countries of the EC, which, in the Prime Minister's warped view of our continent, are so badly trailing behind, have superior economies and are much better fashioned societies than ours.
  The purposes of economic policy are to be centred on four objectives—steady and balanced economic growth, control of inflation, the attainment of full employment, and reasonable equilibrium in our balance of payments. The last objective—the balance of payments—has been downgraded as we have seen a decade go by in which our North sea oil wealth has been frittered away and our economy and society made the laboratory for Thatcherite
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  experiments in free market economics, social unfairness and the retreat of Government from their proper responsibilities.
  Because of the conduct and content of Government policies, I fear that our economy has been gravely weakened and the social cohesion of our society put at risk. This country desperately needs a change in the style of Government and in the economic policies that have been pursued—a change in both the conduct and content of Government. But we are told that it is business as usual. The country received that statement as a threat, not as a promise. In an interview in the Daily Express, the Prime Minister told us that her convictions had to be seen
  "in every piece of policy."
  That must have sent a shudder through every independent-minded Minister—if there are any left in this Administration. The Prime Minister's convictions "in every piece of policy" tells us more about how the Government are run in this country than almost anything else. If it is business as usual, we will continue with a debilitating balance of payments deficit, and the highest interest rates and the highest inflation rate of leading industrial countries. I fear that, both economically and socially, we will continue to lag behind the rest of Europe.
  This confused and divided Government cannot provide the leadership which Britain needs for the 1990s. They cannot do so, because they cannot change while the Prime Minister remains at their head. As the Financial Times editorial observed on Saturday
  "As she has become pre-eminent her Government has become much more vulnerable."
  What concerns the Opposition is not so much the vulnerability of Government as the vulnerability of our country. What Britain needs is not a new Chancellor but a new Government—a Labour Government.
  4.55 pm
  The Chancellor of the Exchequer (Mr. John Major): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
  'congratulates Her Majesty's Government on the determination with which it has pursued policies to bear down on inflation and improve the supply side of the economy; welcomes the sustained growth of output, productivity, investment, employment and living standards which the United Kingdom has enjoyed as a result; and endorses the Government's resolve to continue with the policies which are in the long-term interest of the British economy.'.
  At the outset I wish to say how much I regret the resignation of my right hon. Friend the Member for Blaby (Mr. Lawson). I had the pleasure of serving with him in the Treasury for three years—for one year as Treasury Whip, and for two years as Chief Secretary. I enjoyed that experience enormously. I supported his policies and those of the Government when I was Chief Secretary. I believed that they brought increased prosperity to the country then, and I have not changed my view since then. Whatever the controversies of the day may be or may bring, I believe that history will record that few Chancellors brought about so many fundamental improvements to the economy of this country. Only the grudging and mean-spirited will deny that. My right hon. Friend was a great reforming Chancellor and will be remembered as such.
  The right hon. and learned Member for Monklands, East (Mr. Smith) made his usual forceful speech—both forceful and his usual speech. It was good music hall. He

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  has become the Jasper Carrot of parliamentary debate. For all the humour, however, it was an empty speech. It was empty of policy, it made no serious attempt to diagnose the problem, and it provided no solutions whatsoever. On the one single issue on which he was questioned by my hon. Friend the Member for Northampton, North (Mr. Marlow) it was not until some minutes had passed and someone had whispered to him that he actually provided the answer.
  There is no difficulty at all about a diagnosis of the economic problem that we face at present. As a result of over two years of exceptional growth on a scale which no one expected, least of all the Opposition, we have seen the re-emergence of inflationary pressures. They are evident both in rising domestic prices and in the growth of imports.
  Let me be quite clear about the main priority before us. It is progressively to reduce inflation and bring the economy back to the path of steady growth. There is no doubt about that. I know that inflation is not high by the standards of the 1970s, and it is still as low today as in the best month we ever saw during the period of the last Labour Government. I know, too, that some people argue that a little inflation is no bad thing, that one can live with it, that it induces a feeling of well-being and does no harm. Emphatically I do not share that view.
  I do not share that view because inflation has two particularly destructive effects. First, it damages the economy—it brings uncertainty, it discourages investment, it breeds suspicion and conflict in industrial relations, and it puts a premium on playing safe at all levels of management. It is no coincidence that the past eight years, which have seen the longest period of sustained growth—strong and steady growth—since the war, has also been the period in which inflation has been reduced.
  Ms. Clare Short: Given that inflation is destructive in all the ways that the right hon. Gentleman has described, why have the Government allowed it to rise?
  Mr. Major: The hon. Lady would have done far better to address that problem to her right hon. and learned Friend the Member for Monklands, East. She should also be aware that, if we were to see the implementation of the policies that her right hon. and learned Friend has in mind, inflation would be back in the stratosphere. I shall turn to that particular question in a moment.
  Mr. Tony Banks rose—
  Mr. Major: But the social effect of inflation is even more pernicious, as we saw during the period of office of the last Labour Government. It bears most heavily on those least able to protect themselves. In the last five years of the 1970s, with high inflation and low interest rates, pensioners saw the value of their life's savings halved and their retirement security diminished. Indeed, many pensioners today may be on social security benefits, not because they failed to save and prepare for a secure retirement—often they did so at some hardship and sacrifice—but because the Labour Government lost control of inflation and destroyed their security. That happened because the Labour Government had neither
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  the courage nor the foresight—or both—to pursue the necessary but occasionally unpopular policies to curb inflation.
  The Opposition have learnt nothing since then—as the hon. Member for Birmingham, Ladywood (Ms. Short) should know. Their present policy is clear. They would reduce interest rates prematurely and relax monetary policy. They would increase spending massively, and undermine fiscal policy.
  Mr. Tony Banks rose—
  Mr. Stuart Bell rose—
  Mr. Major rose—
  HON. MEMBERS: Give way.
  Mr. Speaker: Order.
  Mr. Major: Labour would devalue the currency as each and every previous Labour Government have done —[Interruption.]
  Mr. Speaker: Order. I must say to the House again—as I had to say to Conservative Members earlier—that if the hon. Member who has the Floor does not give way, hon. Members must resume their seats. It only wastes time to shout, "Give way, give way."
  Mr. Major: I understand that the Opposition do not like being reminded about how their policies destroyed people's security, but they deserve to be reminded because they are peddling the same policies again. The policies that they operate would not stop inflation. They would unleash hyper-inflation, with all the economic and social consequences that we saw before.
  There is no conviction whatsoever in the Opposition's concern about inflation. Their conviction is against the very policies that would curb inflation and bring it down. That is their concern.
  We need to be quite clear about the need to bring inflation down and I have no doubt whatsoever that we are right to use all the practical levers at our disposal to do so.
  Mr. Bell: I should like the Chancellor to concentrate for a moment on the Government's present policies. The OECD review stated that the Government have been raising interest rates to bear down on inflation and to stabilise the exchange rate. Is that still the policy of Her Majesty's Government?
  Mr. Major: If the hon. Gentleman will wait a moment I shall turn specifically to that point. Indeed, I have already begun to do so.
  In my judgment, we are absolutely right to use all the practical levers at our disposal to bear down on inflation. One of these—an important one, of course—is fiscal policy. One of the great achievements of my right hon. Friend the Member for Blaby has been the transformation of the Government's financial position.
  Public expenditure—[Interruption.] Opposition Members racked up debts day after day when they were in Government—we have repaid the debt that they racked up. Public expenditure remains under firm control, and we are now repaying Government debt—the debt that the Labour Government built up—on a massive scale. By the end of this financial year we shall have repaid roughly one sixth of the public debt accumulated over two centuries, at an annual saving of £3 billion in debt interest costs.

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  No one should doubt that my right hon. Friend the Member for Blaby had a tight fiscal policy, and no one should doubt that I intend to keep it equally tight.
  The key lever on inflation is monetary policy—the use of interest rates. I understand very clearly that high interest rates are often unwelcome and often painful, but they are effective and they are having their intended effect now. Spending is slowing down, with retail sales in particular falling over the past three months; so are house prices, which rose much too fast over the past two years; and so is monetary growth, which is now moving close to its target range.
  I understand very well that present levels of interest rates make things very difficult for some home owners, particularly young people who have large mortgages in relation to their incomes, but there are others who should also concern us. We also have to be concerned about those young people who could not afford to buy in the first place, because of the pace of rising prices—[Interruption.] If only for their sakes, there had to be a correction to rising house prices to prevent them being priced right out of the market. That correction is now happening—[Interruption.] It is clear that Opposition Members hate the thought of home ownership and the independence that it brings. The harsh truth is that too many people have been borrowing too much and saving too little, and high interest rates provide a direct incentive to redress that balance.
  Interest rates have other important effects, however— not least on the exchange rate. A falling exchange rate directly raises the prices of things that we buy from abroad and reduces the discipline on British industry. That can only feed inflation. A firm exchange rate helps underpin the policy to stop inflation, and for these reasons it should be clear that I favour a firm exchange rate.
  Mr. Eric S. Heffer: The right hon. Gentleman talks about the housing problem. Is he aware that the Government have been responsible for cutting council housing? They have encouraged the idea that people should buy their own homes and now they have implemented a policy of high mortgage rates, which means that the very people whom they encouraged to buy are suffering under their policies. How can the right hon. Gentleman explain why the Government should be so cruel to the people whom they encouraged to buy homes and why they are also leaving people without any houses at all?
  Mr. Major: The hon. Gentleman should bear in mind that under this Government this country has seen its greatest ever growth in home ownership—[Interruption.]—and that will continue.
  Not surprisingly, exchange markets were unsettled last Thursday, but less so than many imagined and far less than the Leader of the Opposition predicted. On Friday he said, "today when the pound plummets"—[HON. MEMBERS: "Disgraceful!"] But it did not plummet. And I hope that in future the right hon. Gentleman will keep his market predictions to himself and not seek to talk sterling down. Markets can see for themselves that policy has not been changed and will not be changed.
  Mr. John Smith: If the right hon. Gentleman believes that markets sustain the Government's policy, is he aware that a year ago today the pound was valued at DM 3.15, but today it is valued at DM 2.90? Is he also aware that
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  interest rates were then 13 per cent., but today they are 15 per cent.? What kind of market verdict is that on the Government's economic policy?
  Mr. Major: Two years ago, markets were at almost precisely the same level as they are today, a point that the right hon. and learned Gentleman has overlooked. Markets can see that policy has not been changed and will not be changed, and no change in policy means just this. It means that I will set interest rates as high as is needed for as long as is needed to bring down inflation, and in this I will continue to be guided by a range of monetary indicators, including the exchange rate.
  I will deal comprehensively with the Government's approach to economic and monetary union and the Delors report in the debate on Thursday, but I shall say something now about the exchange rate mechanism of the European monetary system.
  Mr. Jack Straw: Has she seen this speech?
  Mr. Major: As a matter of fact, my right hon. Friend has not seen the speech.
  HON. MEMBERS: Oh.
  Mr. Speaker: Order.
  Mr. Major: I am sorry to disappoint the Opposition on that point.
  The exchange rate mechanism, as its name implies, is no more than a contrivance, a means for promoting a greater stability of exchange rate between Community currencies and greater price stability. However, it is not a recipe for problem-free economic management, and it should not be seen as such. We should recognise that it does not change the economic fundamentals. It does not reduce the pain of bringing down inflation. It does not mean that a country does not need reserves and can forgo intervention in the exchange market—far from it. It does not, and cannot, absolve a country from an adequately tight monetary policy. It does not insulate a country from high interest rates. Anyone who believes that early British membership would bring interest rates in the United Kingdom tumbling down would be sadly disappointed. Indeed, the very essence of the exchange rate mechanism is a strong commitment to set interest rates at whatever level is needed to keep the exchange rate within its bands.
  Although it is no panacea, experience in recent years suggests that the exchange rate mechanism has helped participants both to bring about greater stability in exchange rates and to reduce inflation. I am in no doubt that in the right circumstances it would help us, too. But the circumstances have to be right if it is to be in our interest to join. The exchange rate mechanism will face new tests as exchange controls are abolished throughout the Community, and as the single financial market develops. In these circumstances, it would be very risky both for the United Kingdom and the present participants to introduce sterling—a currency which is traded much more widely than any other in Europe with the single exception of the deutschmark—when there is such a large differential between our inflation and interest rates and those in Germany.
  Following the Madrid summit, the Government reaffirmed their commitment to join the ERM and specified precisely the conditions under which we will do so. The question is not whether we should join, but when. I repeat the conditions now for the avoidance of doubt.

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  We will join the exchange rate mechanism when the level of United Kingdom inflation is significantly lower, when there is capital liberalisation in the Community, and real progress has been made towards completion of the single market, freedom of financial services and strengthened competition policy. That was the position that was set out at the Madrid summit and it remains the position today. There should be no doubt: when these conditions are met we will join—clearly and in good faith. Were it not a question of good faith, my right hon. Friend the Prime Minister would not have set out the conditions so clearly some time ago.
  Mr. A. J. Beith: How long does the right hon. Gentleman think will be a reasonable period of time within which to assess whether these things have come to pass?
  Mr. Major: As the hon. Gentleman will have understood from what I have just said, that is not wholly within our hands, for much of the action needs to be taken by other people, rather than us, so how speedily that will be done is in other people's hands as well as ours.
  Without those conditions being met, entry into the exchange rate mechanism would be neither in our interest nor in that of Europe. With them, membership of the exchange rate mechanism will bring benefits to this country as it has, in my judgment, to its present members. That is a further reason why economic policy must be addressed to bringing inflation down—both for wider economic reasons and as the necessary preliminary for entry into the exchange rate mechanism. We have set out our conditions for entry clearly. We are not hiding behind "certain prudent conditions", as the Opposition sought to do.
  Bringing inflation down is an important task, but it will be neither easy nor speedy. Inevitably, anti-inflation policy is bound to slow the economy down for a time. Therefore, I do not expect to see domestic demand growing anything like as fast next year as it has in recent years. Nor would I expect anything more than a fairly modest rate of output growth. With spending slowing down, businesses will have to take a hard look at ways to keep down their costs, including wages. If they do not succeed in that, the harsh truth is that jobs may be lost, needlessly. I hope that management and unions will ensure that that does not happen, and that Opposition Members will reinforce that message.
  In recent months, much has been made of the rapid growth of our trade deficit, not least by the right hon. and learned Member for Monklands, East. It has grown.
  Mr. Robert Sheldon: Does what the right hon. Gentleman is saying confirm that he does not believe that the exchange rate mechanism is a half-baked scheme?
  Mr. Major: The right hon. Gentleman may reflect on what I have just said. I have said that when the conditions are right we shall enter into the scheme. That is self-evident.
  In recent months, the right hon. and learned Member for Monklands, East has made much of the rapid growth of our trade deficit. It has grown, and by far more than is
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  comfortable. It cannot continue at present levels and it will not, as we have always said. In due course, it will come down as demand growth slows.
  But the Opposition paint far too black a picture of the trade deficit. What they have never been prepared to admit is that much of it reflects investment and not consumption. Over the past two years, investment has grown by 23 per cent.—the fastest two years of investment growth on record—and over the whole life of this Government investment has grown far faster than consumption. This investment does suck in imports—often capital equipment—and it may widen the trade gap in the short term. That effect is clearly unwelcome. What must be understood is that in the medium term, to the extent that these capital imports build up extra productive capacity, that will play a part in reducing future deficits. Much of today's problem is a preliminary to better performance tomorrow, and exports have been performing better and now stand at an all-time record level.
  I suppose that it was a little optimistic to expect the right hon. and learned Member for Monklands, East to acknowledge the facts on investment. Business investment is a higher proportion of gross domestic product than ever before, but as far as the Opposition are concerned, that does not count. Why not?
  In their view, it does not count because investment is not investment unless it is paid for by the taxpayer, because training is not training unless it is publicly financed by the taxpayer, and because the supply side of the economy cannot possibly be right unless it is managed from the centre. It would be a tragedy for industry if that form of thinking ever returned to the government of this country.
  Over the last decade, under our economic policies, the underlying strength of the economy has improved and British industry is in fundamentally good shape. Our approach is working. In the past two years profitability has been higher than at any time since the 1960s. There is a record rate of new business start-ups—more than 1,600 per week so far this year, by far a new record. Productivity in manufacturing has grown faster in the 1980s in the United Kingdom than in all the other major industrialised countries. And that is after two decades in which we were bottom of the league, much of the time governed by a Labour Government. Moreover, employment has risen faster over the past five years than at any time since the war and by more in this country than in any other European country.
  Mr. Graham Allen: As the new Chancellor of the Exchequer has put forward such a convincing view of how rosy the economy is, will he tell the House why in such circumstances his predecessor resigned?
  Mr. Major: I should have thought that the hon. Gentleman could do a good deal better than that. I suspect that my right hon. Friend the Member for Blaby (Mr. Lawson) will be able to speak for himself on that matter.
  None of those improvements is accidental. Each and every one of them is a direct result of the policies that we have pursued over recent years. It may be that we shall face a difficult year ahead, but if that is to be so, industry is far better motivated and equipped to handle it than at any time in the 1970s.

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  Only the Opposition refuse to recognise the changes that have occurred in the past 10 years. Their persistent denigration of the economy bears no relation to reality. Business men, both here and abroad, are well aware of the improvements that have taken place. They know that this country's economy is strong. That is why they are investing in this country at record levels. Work forces know this too. That is why workers, more involved than ever before in the success of their companies, have increased their productivity faster than in any other major industrial nation—and we have more people in work than at any time before in our history.
  I believe that people recognise that we must deal with the short-term difficulties before us, and they expect us to do so. They know that our economic prospects have been improved out of all recognition in the past decade, and they expect us to build on that. The fact that the right hon. and learned Member for Monklands, East does not recognise it is a sign of how out of touch he is now and will be shown to be at the next general election. I have no doubt that the policies that we have been following are the right ones and I propose to continue them. I see no need for radical changes in policy.
  We must never go back to the policies which nearly destroyed our economy in the 1970s and led to the inflation rate of a banana republic under the Labour Government. The Labour party is well aware of that. That is why it has invented Mr. Mandelson and his public relations gloss and disinvented Socialism. Socialism is rarely mentioned from the Opposition Front Bench except to deny that it exists. The Labour party knows what poison it is for most of the people in this country. Occasionally, even—[interruption]
  Mr. David Shaw: Listen, Kinnock!
  Mr. Major: If the Leader of the Opposition is back with us, I shall continue.
  Occasionally, even BBC interveiwers ask what Labour would do. The Leader of the Opposition tells them with delicious frankness that he has not a clue. But the Labour party's policies, however it tries to hide them, seep out one by one. The Labour party is in favour of credit controls—just as everyone else is abandoning them. It would renationalise wherever it could. It would increase taxes on companies and individuals. It would abolish the trade union legislation. The Leader of the Opposition would reinvent sector working parties. A Labour Government would spend more—[Interruption.]
  Mr. Speaker: Order. I do not need to remind the House of the pressure that there is to participate in the debate. I ask the House to give the Chancellor of the Exchequer a fair hearing for the rest of his speech.
  Mr. Major: The right hon. and learned Member for Monklands, East said a few minutes ago that he wished television were here in the Chamber. I wish that the public could see the behaviour of Opposition Members. They cannot bear the fact that over the past few years the levels of prosperity in this country have risen by an unprecedented amount and the people are well aware that that is the case. They know very well that the policies of the Opposition would take us back precisely to where we were in the 1960s. A Labour Government would spend more, borrow more and, yet again, they would devalue, as each and every successive Labour Government have done. The
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  policies that they espouse are the failed policies of the 1960s. The electorate rejected them before and it will do so again. I invite my right hon. and hon. Friends to reject the motion and to support the amendment.
  5.26 pm
  Mr. Nigel Lawson: I am old-fashioned enough to believe that my first comment on recent events should be made to this House. This is not an easy speech for me to make, and I am sure that the House will understand that. I shall do my best to be brief, and I hope that the House will assist me in this.
  I am most grateful for what my right hon. Friend the new Chancellor of the Exchequer has said about me, and I wish to take this further opportunity to wish him every success in the task that lies ahead of him. As he reminded the House, we worked closely together for just over two years, and he has my full and unstinting support.
  As for my own record, I have no doubt that I have made my share of mistakes; but I am content to be judged when the passage of time has provided a greater sense of perspective than is possible today.
  No one, however long he has held the post, lightly gives up the great office of Chancellor of the Exchequer. Certainly I did not. As as the resignation letter that I wrote to my right hon. Friend the Prime Minister clearly implies, it was not the outcome I sought. But it is one that I accept without rancour—despite what might be described as the hard landing involved. I would only add that the article written by my right hon. Friend's former economic adviser was of significance only inasmuch as it represented the tip of a singularly ill-concealed iceberg, with all the destructive potential that icebergs possess.
  I have long been convinced that the only successful basis for the conduct of economic policy is to seek the greatest practicable degree of market freedom within an over-arching framework of financial discipline to bear down on inflation. That being so, a key question is where the exchange rate fits in. Is it to be part of the maximum practicable market freedom, or is it to be part—indeed, a central part—of the necessary financial discipline?
  I recognise that a case can be made for either approach. No case can be made for seeming confusion or for apparent vacillation between these two positions. Morever, for our system of Cabinet government to work effectively, the Prime Minister of the day must appoint Ministers whom he or she trusts and then leave them to carry out the policy. When differences of view emerge, as they are bound to do from time to time, they should be resolved privately and, whenever appropriate, collectively.
  But to return to the exchange rate. Faced with the question that I posed a moment ago, my answer is, unhesitatingly, that it should be seen as an essential element of financial discipline, with the rider, incidentally, that exchange rate stability is itself an economic benefit.
  There is nothing novel, of course, in any of this. The House will recall the classical period of the gold standard before the first world war, the Bretton Woods system after the second world war, and, of course, over the past 10 years, within the European context, the EMS.
  None of these systems were or are panaceas or soft options. Tough decisions still have to be made. None of them were or are without difficulties. But those difficulties, in my judgment, are very much less than the practical diffculties and disadvantages which the world has

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  experienced during periods of freely floating exchange rates. Nor, incidentally, can there be any doubt that the less credible the exchange rate discipline is, the greater the weight that interest rates will have to bear, and the higher they need to be to maintain the necessary anti-inflationary pressure.
  Full United Kingdom membership of the EMS—I was glad to hear much of what my right hon. Friend the Chancellor said—to which, again, as my right hon. Friend the Prime Minister made clear at Madrid, this Government are committed, would signally enhance the credibility of our anti-inflationary resolve in general and the role of the exchange rate discipline in particular, and thus underpin the medium-term financial strategy. Indeed, given the existence of the EMS, our continuing non-participation in the exchange rate mechanism cannot fail to cast practical doubt on that resolve, however ill-founded such doubt may be.
  There is, I believe, one other way in which anti-inflationary credibility might be enhanced in the eyes of the market and that is why, a year ago, I proposed to my right hon. Friend the Prime Minister a fully worked-out scheme for the independence of the Bank of England. But that would be a buttress; it would not be a substitute for what I was saying earlier.
  But if full United Kingdom membership of the EMS, although not indispensable, would facilitate the conduct of economic policy in general and the battle against inflation in particular, as those already participating have demonstrated, there is also a vital political dimension.
  As my right hon. Friend the Prime Minister made clear in her Bruges speech, Britain's destiny lies in Europe as a member of the European Community—and let me be clear that I am speaking, as she speaks, of a Europe of nation states. Within that context, it is vital that we maximise Britain's influence in the Community so as to ensure that it becomes the liberal free-market Europe in which we on the Conservative Benches so firmly believe. I have little doubt that we will not be able to exert that influence effectively, and successfully provide the leadership, as long as we remain largely outside the EMS. So, for economic and political reasons alike, it is important that we seek the earliest practicable time to join, rather than the latest for which a colourable case can be made.
  Finally, a word about the short-term prospects for the British economy. There always has been, and there always will be, an economic cycle. During our period of office so far, we experienced a sharp downturn between 1979 and 1981, followed by a remarkably vigorous and prolonged upswing which lasted from 1981 right through to 1988. We are now once again on the downswing, and I see no need for a further policy tightening. While this downswing will not be as sharp as the previous downturn, not least given the very much lower level of inflation that we now have, a dull 1989 is bound to be followed by a difficult 1990.
  But from then on, I have every confidence that, with the policies that the Government have been pursuing and will continue to pursue, as we heard from the Chancellor today, the long-term upswing will continue, based on lower inflation and on the unprecedented underlying strength that the British economy now possesses.
  I have every confidence, too, that this will lead at the end of the day to a fourth election victory under the
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  leadership of my right hon. Friend the Prime Minister, whose outstanding contribution to the renaissance of Britain over these past 10 years I am proud to have been able to assist.
  Several Hon. Members rose—
  Mr. Speaker: Will those hon. Members who are not remaining please leave the Chamber quietly?
  5.36 pm
  Mr. Peter Shore: The House listened with close attention to what the right hon. Member for Blaby (Mr. Lawson) had to say. He was frank. There were no obfuscations, no skating over the reality of his disagreements and the reality of his disappointment that he felt obliged to resign his high post. As he said, he did not lightly give up being Chancellor of the Exchequer, nor was it an outcome that he sought.
  Furthermore, the right hon. Gentleman focused upon what I believe was the major and continuing source of disagreement between himself and the Prime Minister in economic policy—that is, the relative weight that they have given and continue to give to the use of exchange rate policy in the general mix of Government policy and counter-inflation strategy.
  The right hon. Gentleman has not in the past sought, or conducted himself in a way that encouraged, the affection of the House. But, if I may say to him, those of us who have disagreed with him most strongly have always respected his intellectual ability and his great intellectual candour. We have not always enjoyed it, but we have respected it. He has done himself no harm at all on either side of the House in what he has had to say in his very frank speech today.
  The right hon. Gentleman's resignation last Thursday raised for all of us three serious issues of economic policy. First is the question of the authority over economic policy of the Chancellor of the Exchequer in relation to the Prime Minister and to her advisers. Second is the question of the Government's policy towards joining the exchange rate mechanism of the EMS. Third is the question—the most important of all—of the continued and massive deterioration in our economic prospects and what the Government intend to do about it.
  The first issue has inevitably received much attention in the debate, and no doubt will continue to do so after the right hon. Gentleman's speech. I say "inevitably" because it was the right hon. Gentleman who, in his resignation letter, put clearly, as he saw them, his reasons for going. Having listened to the right hon. Gentleman, surely no hon. Member can doubt that for the best part of the past 18 months he has had major disagreements with the Prime Minister on both interest rate and exchange rate policy.
  Not only were there major disagreements, but they were made highly visible by comments both from the Prime Minister and her former economic adviser, Sir Alan Walters. When the Prime Minister told Mr. Brian Walden in a television interview on Sunday:
  "I fully backed and supported the Chancellor … somehow Nigel had made up his mind that he was going",
  she was being exceptionally economical with the truth. Today's debate would never have been staged if the Prime Minister had really wanted to keep the right hon. Member for Blaby as her Chancellor. Without further ado, she would have sacked her part-time adviser. She did not do so, and she continued to refuse to do so even when she

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  knew for certain that to retain Sir Alan would mean the departure of the Chancellor of the Exchequer. Faced with the choice of backing or sacking the right hon. Gentleman, the Prime Minister simply waited for his resignation. Sir Alan Walters's resignation settled nothing. It simply removed the surface manifestation of disagreements between the Prime Minister, her former Chancellor and her present Deputy Prime Minister.
  The result is confusion and uncertainty, or, to use the words of the right hon. Member for Chingford (Mr. Tebbit) only yesterday, "an appalling muddle" about the real thrust of Government policy and in particular their attitude to joining the exchange rate mechanism of the European monetary system. It is no good the new Chancellor making statements, partly propagandistic and partly designed to reassure people, that there is no real change in Government policy, because the nation knows that two different policies were pursued in parallel, the consequences of which we are all aware of today.
  The problem that the Government must face is the result of their long-term mismanagement of the British economy. They have presided over years of under-investment, high and costly unemployment, squandering of North sea oil reserves and, in the past three years, the growth of excessive purchasing power swollen by a falling savings ratio, a massive increase in personal borrowing and large cuts in taxation. That excess purchasing power has been reflected in both rising inflation and a horrific current account deficit.
  That is the economic background against which proposals for joining the ERM must be judged. The argument about joining the ERM in the next two or three years is now largely academic. Whether or not the Prime Minister's condition that other European countries free the movement of capital is met, and whether or not United Kingdom inflation comes down from its present rate of 7·6 per cent. to the Community average, we are in no position to join so long as our vast current account deficit pertains.
  Our £20 billion deficit on current account this year is almost 5 per cent. of our gross domestic product and the largest deficit that any major country has experienced since the end of the second world war. At its peak, the American deficit was less than 3·5 per cent. of GDP and its gradual diminution required several massive devaluations of the dollar before noticeable progress could be made. Today, no one has the faintest idea what the level of sterling should be in relation to the deutschmark and other European currencies.
  I am aware that many other conditions would need to be satisfied before Britain could contemplate membership of the ERM. My right hon. Friend the Leader of the Opposition and my right hon. and learned Friend the shadow Chancellor of the Exchequer frequently refer to the need for adequate swap arrangements between the central banks, for a co-ordinated growth strategy throughout the European Community and for enhanced regional support. All those points are important, as is the ending of exchange controls in European Community countries, but it is inconceivable that we should enter the ERM and fix our exchange rate while our huge deficit remains and we have literally no idea what the rate should be.
  Mr. Beith: Will the right hon. Gentleman give way?
  Mr. Shore: No, not for the moment.
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  If we were so foolish as to join the ERM before the problem of our deficit were resolved, we should be forced to make successive adjustments in the rate—with all the ill will that that would create—or to suffer the penalties of rising unemployment and lower output, as we became increasingly uncompetitive.
  Mr. Beith: I had formed the impression that the right hon. and learned Member for Monklands, East (Mr. Smith) would join the ERM now if his four conditions were met. Is that not the right hon. Gentleman's view?
  Mr. Shore: I am simply drawing attention to the problem of fixing a current, practicable and sustainable rate for sterling. It cannot be done now, given the horrendous size of our current account deficit.
  Our long and far from happy experience of fixed exchange rates between 1945 and 1972 in the International Monetary Fund system should also counsel caution. Two problems were repeatedly experienced. First, there were large, short-term speculative movements, with the constant danger of exhausting our reserves. Secondly, there was medium-term loss of competitiveness, due to our slower rate of growth of productivity and our tendency to higher inflation than many of our major competitors. The result was strong pressure on us throughout that period to maintain an uncompetitive rate for sterling long after we should have devalued. That forced successive Governments in the post-war period to engage in stop-go policies and made the United Kingdom growth rate unsatisfactory compared with other, faster-moving, competitor economies.
  There can be no real stability in exchange rates while there are large differences in productivity and inflation between member countries. Large differences remain today between ourselves and both Germany and France. Furthermore, as the case for periodic realignments in exchange rates becomes ever stronger, the pressure for adjustments falls on the weaker currencies and is hardly felt by the stronger ones. That lack of symmetry in the adjustment process exerts deflationary pressure on all weaker economies in fixed exchange rate systems.
  The ERM, which has been the focus of much of the debate, is no exception. Those who claim the virtues of the ERM should look at the performance of the economies of the member states. Unemployment in France has remained virtually static for the past four years and was running at 10 per cent., or 2·6 million men and women, in May this year. During the same four-year period, unemployment in Italy has risen from 9·2 per cent. to 10·7 per cent., reaching a total of nearly 2·9 million people. Unemployment of 10 per cent. in the Netherlands and Belgium has shown only a marginal improvement in the past four years.
  Those figures of 10 per cent.-plus unemployment in major European economies within the ERM compare with 6·8 per cent. unemployment in May 1989 in the United Kingdom. Most of us believe that that is still much too high, but it is well below the levels of our European neighbours.
  The only country in Europe that has seen a near return to full employment and a substantial decrease in the numbers of unemployed in the past four years is Germany, where the unemployment rate was only 5·9 per cent. in May 1989. Far from achieving convergence since the

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  formation of the ERM in 1979, the German trade surplus with other EC countries has massively increased in terms of both money and import-export ratios.
  Our experience of fixed exchange rates in the IMF—which was far from the happy one that some seem to recall—took place against a background of strong controls over the movement of capital from the United Kingdom into the outside world. We no longer have those controls; we no longer have any exchange controls. The cost of maintaining a fixed rate for sterling is bound to be much more onerous in the future than it has been in the past.
  Mr. Giles Radice: My right hon. Friend has not mentioned the way in which the inflation rates of the countries that he has named have come together. I should have thought that, if we are to discuss the convergence of the economies of those countries, we should consider that factor.
  Mr. Shore: It is one of the mix of matters that should concern all who wish to see a balanced, effective and successful macro-economic policy; but to posit the overriding importance of counter-inflation against our other major interests—growth in the economy, and the provision of jobs—is far more a Conservative philosophy than one that has commended itself to Opposition Members. All those matters need to be debated and evaluated seriously before any decision is made to return to a fixed exchange rate system.
  In my view—I address this remark particularly to the right hon. Member for Blaby—it would be both dangerous and wrong for Britain to make its decision about joining the exchange rate mechanism not on economic grounds, but as a political act—either as a gesture to demonstrate our European bona fides or, still more disastrous, as a prelude to the full-blown economic and monetary union described in stages 2 and 3 of the Delors report. We must judge such issues in the economic interests of our people, not simply as part of a madcap rush towards federalism in western Europe.
  5.51 pm
  Mr. John Townend: I am surprised that the Opposition decided to have a second Supply day to debate the economy within seven days of the first. Nothing in the economy has changed since last week: it is as strong as it was then, and has the same troublesome but, I hope, short-term problems. The only difference is that we have a new Chancellor of the Exchequer. I congratulate my right hon. Friend on his new appointment, and wish him every success in his post. He has come in at a difficult time, but his background as a banker and former Chief Secretary to the Treasury will provide him with invaluable experience, and I am sure that he will fill the position with distinction.
  Like my hon. Friends—and, indeed, many Opposition Members—I think that the former Chancellor, my right hon. Friend the Member for Blaby (Mr. Lawson), will go down in history as a great reformer. The country will, I believe, benefit greatly over the years from his reforms, particularly his reform of company taxation and the part that he played in creating the enterprise economy by reducing direct taxation dramatically and encouraging the talented in every sphere to work in this country. I find it odd that the Opposition, who were so critical of the former
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  Chancellor last week, are now turning him into their hero, although both my right hon. Friend the Prime Minister and the new Chancellor have said that there will be no change of policy, and that the Government's priority will continue to be the defeat of inflation.
  If any justifiable criticism could be made of the previous Chancellor and his policies, it would be that the Government, having brought inflation down to its lowest level for decades, have allowed it to rise again. It is easy to be wise after the event, and I think that, understandably, the former Chancellor underestimated the extent to which the economy was overheating in the first half of 1988. To be fair, I must point out that the statistics on which he and the Bank of England must work could be much better, as has been pointed out several times by the Treasury Select Committee.
  Most people, I think, agree in retrospect that monetary conditions in the first half of 1988 were too lax, and that it was a mistake to try to shadow the deutschmark at a level of DM3 to the pound when market pressures were forcing the pound up.
  Mr. John Butcher: Did my hon. Friend hear the former Chancellor say that he recommended according the Bank of England similar status to that of the German Bundesbank, and that the Bundesbank had enjoyed constitutional independence and been both a brake on inflation and a prudent guardian of the money supply in the Federal Republic, thus providing the benefits that we have seen in that country? Will my hon. Friend say a little more about what may be the ex-Chancellor's final legacy to the House, in that he has moved us in the same direction—I hope inexorably?
  Mr. Townend: I noted what the former Chancellor said with great interest, and have made a note to refer to it later in my speech.
  To shadow the deutschmark, the Chancellor reduced interest rates several times, and I think that that error played a major part in the overheating of the economy. If it had not been made, our trade deficit would now be lower, as would inflation, and interest rates would not have been able to rise so much. Taking that into account, I find it strange that so many hon. Members on both sides of the House are so enthusiastic about joining the exchange rate mechanism. When my right hon. Friend the Member for Blaby was shadowing the deutschmark, the United Kingdom was a de facto member of the ERM, and we are now paying a heavy price for that.
  Mr. Bell: The hon. Gentleman is quite right: at that time we were a de facto member of the ERM. That was the entire policy, although it certainly was not elaborated by the Treasury.
  The hon. Gentleman has criticised the former Chancellor for shadowing the deutschmark. The real reason why the economy went into disequilibrium was not that, however, but the fact that the right hon. Gentleman reduced income tax so much that he put £6,000 million into the economy.
  Mr. Townend: There is another reason, which I shall come to in a minute.
  If there was a disagreement between the former Chancellor and the Prime Minister at that time—as many commentators have said—time has proved that, once again, the Prime Minister was right. It is not often that I

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  agree with the right hon. Member for Bethnal Green and Stepney (Mr. Shore), but I thought that he made some relevant points. We are not yet fully aware of the strain that will be put on the system when the other members of the ERM abolish exchange controls.
  I also find it strange that those on the Opposition Front Bench are so keen to join a mechanism that depends on the dictate of the Bundesbank. Let me now deal with the point made by my hon. Friend the Member for Coventry, South-West (Mr. Butcher). I thought that one of the ex-Chancellor's most significant statements today was his suggestion that he had advanced to the Prime Minister proposals to make the Bank of England independent and more like the Bundesbank. That may indeed be one of his great legacies: an independent Bank of England would give us even less reason to join the ERM and experience the discipline of the Bundesbank.
  I hope that my right hon. Friend the new Chancellor will not slavishly follow an exchange rate policy, and increase interest rates to a level that will force us into a major recession. Interest rates are very high at present, and, while I accept that such rates are necessary, they are bearing down very hard on the small businesses that are the seedcorn of our future success.
  The hon. Member for Middlesbrough (Mr. Bell) referred to the shadowing of the deutschmark. Although the shadowing of the deutschmark, and the low interest rates that went with it, was partly responsible for the upsurge in inflation, the seeds of the inflation that we are now having to deal with were sown in 1986, when the Chancellor of the Exchequer stopped targeting broad money. I accept all the difficulties that in measuring broad money, but the argument in its favour was put cogently by William Rees-Mogg in a press article yesterday. His argument was most convincing. Whatever the problems of measuring broad money may be—and I accept that there are problems—may I ask the new Chancellor not to ignore it.
  The trade deficit is too high for comfort. However, it is not mirrored, as is the case with most trade deficits, by a budget deficit. The deficit is caused by the private sector spending too much, running down savings too much and borrowing too much. Over time, the trade deficit should right itself, but the position will improve more quickly if we improve the supply side of the economy.
  The major cause of the trade deficit is said to be the decline in our manufacturing base. The figures for the motor car industry show that there is a deficit of £6 billion, so the point is well made. We must ask ourselves why the United Kingdom ceased to be a car exporting country in surplus and became a car importing country in deficit. The answer is that we did not make the right cars at the right price and of the right quality, with the right after-sales service that the market wanted. Without doubt, a large part of the blame for that lies at the door of the Opposition paymasters, the trade unions.
  Mr. Austin Mitchell: Does it not have any connection with the fact that one quarter of our manufacturing capacity and 28 per cent. of our manufacturing jobs were closed down between 1979 and 1983?
  Mr. Townend: That has nothing to do with the car industry. Just look back to the 1970s—to the disruption in the car industry. At open-air meetings, there were no secret
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  ballots, and out the workers went on unofficial strike. Just look at the restrictive practices, the go-slows, the refusal to accept new technology. Management was unable to manage and the industry was dominated by militant shop stewards.
  We should cast our minds back to what happened to the Rootes family business, a fine British motor car firm that tried to stand up to crypto-Communist, Left-wing shop stewards. A strike at Acton went on for week after week. The company was financially crippled and had to sell out to Chrysler in America. British Leyland would have gone broke had it not been for the millions of pounds of taxpayers' money that were poured into it. In some factories, quality control managers were ordered to limit the number of cars that they sent back for poor quality because there would have been a strike if more than a certain number had gone back. Those cars went to the customer. That is what destroyed the British car industry.
  This Government, under the Prime Minister, have dealt with those problems. We have stopped the rot by reforming industrial legislation and by bringing the trade unions within the law. We have severely restricted picketing, blacking and sympathy strikes. The British motor car industry is beginning to rise like a phoenix from the ashes. Investment is pouring in, but sadly much of it is Japanese. Beggars, however, cannot be choosers. The Opposition's friends destroyed the industry; we need help to rebuild it. Nissan will be producing 400,000 cars within five years, Toyota 200,000 cars and Honda 200,000 cars. In the mid-1990s, that will have a significant effect on our balance of trade. We shall reduce our imports and we shall reconquer the European car market.
  All of us agree that British industry must keep down unit costs. Is it not tragic, when we have this balance of trade deficit, that the engineers are demanding a reduction in the working week to 35 hours and threatening to go on strike? If they win, that will increase our unit labour costs, at a time when we cannot afford to do so. If the Opposition want to be considered able to form a responsible alternative Government, they should tell the engineers to settle and condemn their ridiculous action.
  A reduction in the working week at this time would do more damage than at any other time in the last 10 years. The labour market is very tight. If we reduced the working week, we should reduce the number of hours of skilled labour that are available. That would lead to inflationary pressures on the skilled work force. The reason for the shortage of skilled workers is the decline in apprenticeships—again partly due to the ridiculous attitude during the last 10 years of the unions that have forced up apprentices' wages. The only place where there has been an increase in apprenticeships is the electrical industry. The union leaders have been sensible. They have decided to reform apprenticeships by reducing the length of apprenticeships and the level of pay. Therefore, apprenticeships in the electrical industry are now expanding.
  I wish the new Chancellor every success. It is quite clear that it is business as usual, that there will be no let-up in the Government's determination to solve the short-term economic problems. My hon. Friends and I are fully behind the Chancellor and the Prime Minister.
  6.6 pm
  Mr. A. J. Beith: I wish the Chancellor well and welcome him to his new job, to which he brings particular qualities, relevant experience and the courtesy that we have all come to expect from him. It is a very odd course of career that has brought him to the job at this time. If I were in the furniture removing business, I would get to know him well. His effects must have been careering up and down Whitehall at an alarming rate. As I heard the cheers of his hon. Friends, I thought that they ought to press him to their bosom while they still can, before he is moved on to something else.
  If, for example, the new Foreign Secretary is thought after a week or two to have gone native—there is a considerable risk of that, after his previous experience at the Foreign Office—the Prime Minister would be on the phone to the Chancellor, saying, "John, I need you back in the Foreign Office." It may be that the new Home Secretary will be moved yet again to another post to fill the gap that the Prime Minister creates by her manner of conducting business.
  Mr. Harry Ewing: The Chancellor has had as many job changes as the party of the hon. Member for Berwick-upon-Tweed (Mr. Beith) has had name changes.
  Mr. Beith: I am very happy with my party's name. The hon. Gentleman must be careful what he says. It is all coming out this afternoon. We now see the differences on the Government side over the European monetary system. It is impossible for Ministers to say that the policy remains unchanged after the clear assertion of the former Chancellor, the right hon. Member for Blaby (Mr. Lawson), that he believes that we should join the European monetary system in the shortest possible time. We have heard his successor pronounce a formula that is closer to the Prime Minister's words, one that we understand will have to be interpreted in the light of her words, which means that it will take an unconscionably long time to join the European monetary system.
  We have also heard from the right hon. Member for Monklands, East (Mr. Smith) a clear declaration that, if certain terms can be met—which are a little far-fetched because they rely on the Germans embarking on a policy of reflation, which seems unlikely, at best—the Labour party would take us into the EMS immediately. However, in last week's debate, senior Labour party members made pronouncements in terms that were very close to those of the Prime Minister. They could usefully hold a little seminar at which the Prime Minister, the right hon. Member for Bethnal Green and Stepney (Mr. Shore) and others could gather together to extend the list of conditions that would have to be satisfied before they could support entry into the EMS. Between them they could produce volumes of conditions. All of them represent delicate compromises by means of which each of the parties can refer to the EMS, because both parties are divided as to whether we should enter the EMS.
  The Chancellor's speech was thin on certain of the major issues on which answers are currently sought. It did not give any clear guidance about the Government's monetary policy. The Chancellor spoke of a broad range of indicators. He did not tell us whether he places his faith
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  in M0 or whether we are to have a new indicator of broad money. He did not tell us whether movements in the money supply or movements in the exchange rate will determine the level of interest rates.
  He was still unclear what he meant by his preference for a strong pound, and how far he would go to secure it. We know that he will spend our reserves to secure it, as that was clearly done on Friday, but how far will he raise interest rates to "buck the market" and keep the pound at the level he prefers? That remains unclear, and his speech added nothing to our knowledge.
  The Chancellor's words about the European monetary system demonstrate vividly that the Prime Minister's prejudices are still determining that issue. The Prime Minister is like the heroine of one of those old black-and-white films, who is always waiting to get on the train that is about to leave. The guard blows his whistle and still she will not get on board. We sit in the cinema wondering whether she will board the train or remain on the platform locked in an embrace. The Prime Minister is embracing her prejudices, her belief in national sovereignty and her conviction that, however little power we exercise, we must preserve the illusion of sovereignty. So she never boards the train.
  Mr. Butcher: I should like to put to the hon. Gentleman the same question I asked my right hon. Friend the Prime Minister this afternoon. The SLD is in favour of almost immediate membership of the exchange rate mechanism. If we did so with a margin of 7 per cent. between German and British interest rates, and if British borrowers bypassed with impunity the domestic constraints and borrowed from Frankfurt, would that not increase the money supply and add to domestic inflation? When would the hon. Gentleman suggest we join the exchange rate mechanism—now, under those circumstances?
  Mr. Beith: Borrowers are quite free to borrow in Frankfurt now. The former Chancellor quite rightly removed exchange controls and capital controls. One disincentive to borrowing abroad is uncertainty about the exchange rate, and clearly that is a changing situation. Clearly, the basis on which we would enter the exchange rate mechanism and the terms of the currency at the moment of our entry are bound to be influenced by such issues. The Conservative party is supposed to be in favour of liberal exchange rates and a free regime in which people can borrow freely in any part of Europe. I believe that any security or framework for our currency requires us to join the European monetary system as soon as we reasonably can.
  What other respite is being offered to those who now have to face a £900-a-year increase on a £30,000 mortgage as a result of the interest rate increases since March? What respite is offered to all the other victims of high interest rates?
  There can be no serious prospect of lower interest rates, unless some alternative to present policy is found. Only one element of that alternative is membership of the exchange rate mechanism. There have to be other components. There has to be a tight fiscal policy, but that should not be achieved by further cuts in the very public expenditure which is necessary to turn round our balance of payments deficit. We should not start cutting expenditure on training, research and the infrastructure, which are most in need of additional expenditure. The new

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  Chancellor, as a former Chief Secretary, was familiar with that exercise. He was so recently in that office that I was tempted to use his former title.
  If we launch into public expenditure cuts in those areas, we shall never get the trade deficit sorted out. It must therefore he achieved by other means. We have suggested increases in national insurance contributions, a commitment not to make tax cuts in the next Budget and the abandonment of the 20p in the pound tax pledge. I did not hear anything from the new Chancellor about whether he still holds to that pledge, and whether that policy is unchanged.
  We want incentives for saving, and we have suggested changes in funding policy all designed to accompany membership of the exchange rate mechanism. We certainly would not argue that that by itself would solve our economic problems. The Chancellor was building a straw man, erecting a whole structure around the idea that there are those who believe that membership of the exchange rate mechanism would sort out all our problems.
  As it is, there is no framework, no rule and no discipline now governing British economic policy. We are not in the exchange rate mechanism and we are clearly not joining it; we do not have in independent central bank; and the right hon. Member for Blaby implied that we must have one or the other if anti-inflation policy is to be credible. It would be interesting to hear whether the study of central bank independence to which he referred has been taken any further or whether it found its way into the Prime Minister's or Sir Alan Walters's wastepaper basket; and if so, for what reason. Perhaps it is to be a new source of dispute. Is it an unchanged commitment which will be continued by the new Chancellor, or will it surge forward at some point as the issue on which he resigns when he discovers that it is the subject of tittle-tattle and unwarranted things all got up by the press?
  There is no clear framework within which British economic policy operates—it is not the EMS, the independent central bank, broad money or narrow money; and it is certainly not the exchange rate. If monetarism cannot be worked by the present Government, I cannot conceive of any Government that could make it work. If a strict monetary policy tied to M0 cannot be made to work by this Government, with the authoritarian power that is exercised by the Prime Minister and that certainly was not exercised in America by President Reagan, I suspect that the experiment has been carried out and that we have demonstrated that there is no political structure short of absolute dictatorship in which pure monetarism can be applied.
  We now have the economic management of a touch on the tiller, but the Chancellor will find that two different hands are reaching for the tiller. If he is not careful, the new Chancellor will find that another hand is there before his.
  The right hon. Member for Blaby stated in his resignation letter:
  "The successful conduct of economic policy is possible only if there is—and is seen to be—full agreement between the Prime Minister and the Chancellor of the Exchequer."
  How will that ever be secured other than by subservience? How did the Prime Minister manage to contrive that what the former Chancellor wanted as his price for staying happened as soon as he had got out of the door? That is the unanswered question about the details of last week. How could she have received and accepted the very
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  resignation which had been sought the moment that the former Chancellor had departed? Did she try to dissuade Sir Alan Walters from resigning? We never found out.
  The former Trade Secretary, the right hon. Member for Chingford (Mr. Tebbit), dwelt on how dangerous it was for a captain to appear semi-detached from the team, and said that, had Lord Whitelaw still been in the Government, he would have warned the Prime Minister that she was in danger of having to choose between her adviser and the Chancellor. The Prime Minister said that the Chancellor was unassailable. What Chancellor is unassailable if his chosen exchange rate policy is publicly challenged by the Prime Minister's adviser? What Chancellor is unassailable if the Government's stated conditions for entering the European monetary system are extended every time the Prime Minister opens her mouth, and particularly every time she appears on television? The longer that interview had continued, the more conditions she could have produced to prevent our entering the exchange rate mechanism.
  It is all part of a wider issue. As the right hon. Member for Blaby pointed out, it is the tip of an iceberg. The Prime Minister's dispute with the former Chancellor, her hectoring of our European partners and her behaviour at the Commonwealth conference are all of a piece. It all rests on the belief that she alone is right and everyone else is out of step. It is no basis for running Commonwealth, Europe or Cabinet, and it comes home most particularly in Cabinet government. It means that nothing the Chancellor could say today can claim much credibility. Indeed, if his stature grows in office, his future will be shortened.
  The whole character of British government under the Prime Minister has become autocratic, centralised and patronising. Power is concentrated as never before. Cabinet government has gone the way of local government. The Prime Minister has no time for it, and the people of this country are the victims.
  Liberal Democrats are determined to secure for this country a system of government in which no future Prime Minister can exercise such unchallenged power.
  6.19 pm
  Sir Ian Gilmour: The hon. Member for Berwick-upon-Tweed (Mr. Beith) envisaged a seminar to be attended by the Prime Minister, Labour Members and himself. That is an enticing thought. I do not like seminars, but I should like to be present at that one.
  There seemed to be something of a black hole in the policy that the hon. Member for Berwick-upon-Tweed outlined, but he made some interesting remarks about the European monetary system. I shall not talk about that, neither shall I talk about Sir Alan Walters.
  There was even more of a black hole in the critical speech made by the right hon. and learned Member for Monklands, East (Mr. Smith). Although his name was not mentioned, there was the all-pervasive presence of one man throughout the speeches that the right hon. and learned Gentleman made last week and today—Mr. Walter Mondale, to whom I shall return shortly.
  I congratulate my right hon. Friend the Chancellor of his new high office, in which we all know that he will perform exceedingly well. He has a difficult task ahead, for two reasons. First, as was confirmed this afternoon, his predecessor is a man of massive intellectual distinction, knowledge and ability and, secondly, because the legacy

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  that my right hon. Friend has inherited is not as he would wish. He made a good start today with a most pugnacious and partisan speech. Although there was not a black hole in his policy, there was a small gap in it, with which I should like to deal in a moment.
  My right hon. Friend mentioned the balance of payments, although not in as much detail as I should have wished, and said that it would come down in line with inflation. The key question is whether by using a single weapon the balance of payments problem and inflation can be conquered. That is not only interesting but it is the key factor in whether we shall have a Conservative Government after 1992.
  The Government have never exactly explained how interest rates are meant to cure inflation—certainly not through controlling the money supply, as the hon. Member for Berwick-upon-Tweed suggested. I do not think that anyone believes that that now happens. But as my right hon. Friend the Chancellor seemed to suggest, they work by cutting demand, so unemployment rises and wage claims are reduced. There is pressure on companies not to accede to wage claims, and therefore inflation falls as companies' profit margins, particularly on exports, are squeezed. Clearly, that is not the only way of cutting demand and it has obvious disadvantages, which I shall mention only briefly as the House is well aware of them.
  The first disadvantage of using interest rates is that they have an immediate effect on the retail price index and therefore increase inflation. It is a perfectly respectable argument to say that mortgage interest rates should not be included in the RPI, but the fact is that increases in mortgages increase housing costs and will have an effect on wage claims later this year.
  The second disadvantage is that high interest rates have an uncertain effect over an uncertain period. The Government have been using the interest-rate weapon with increasing strength for a year, but it is still unclear when, whether, where and by how much the economy is slowing down.
  The third disadvantage is injustice. As my right hon. Friend the Chancellor freely conceded, people who have bought houses, or who are trying to do so, are, through no fault of their own, suffering grievously. High interest rates have equally important, if not more important, effects on industrial investment, which has only recently recovered, and therefore have serious implications for our future.
  The fourth disadvantage of high interest rates is their perverse effect on the balance of payments. Squeezing export margins not only makes it difficult for exporters to export but sometimes makes it almost impossible. After a year of the medicine that we have been enjoying—if that is the right word—the last quarter was the worst for the balance of payments in our history. Although the last month was slightly less discouraging than the preceding two, the last quarter has been disastrous.
  Everyone now seems to agree that a sharp fall in demand is necessary. As the policy of high interest rates has the considerable disadvantages that I have mentioned, the onus is surely heavy on the Government to prove that no other weapon could or should be used. Until now, that onus of proof has not come anywhere near being discharged. Indeed, it has hardly been attempted.
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  In his speech last week, when he was interrupted by the hon. Member for Berwick-upon-Tweed, my right hon. Friend the Member for Blaby (Mr. Lawson) dismissed out of hand the use of fiscal measures to reduce demand, curb inflation and help the balance of payments. If I understood my right hon. Friend the Chancellor correctly, he said the same this afternoon. He said that we should use all practical levers, but then said that the key lever is monetary policy. He said nothing about using fiscal policy.
  As it is now widely agreed that the tax cuts in the 1988 Budget were too high, surely this is the time to rectify that mistake. The Government's objective is to cut demand, and tax rates do that far better than high interest rates, because they are far fairer and do not hit investment but cut consumption.
  The Labour party is unable to recommend that obvious expedient—to some extent, the same applies to the Liberal Democrats, if that is the right name—because of its electoral unpopularity. We all know what happened to Walter Mondale—he has never been heard of or seen since he fought the 1984 election on a tax-increasing policy. Mr. Bush got himself into quite a lot of trouble by following the reverse of that example in 1988. The Government are not prepared to implement such a policy, because they have made such a fetish of tax cuts. We all welcome tax cuts and have done very well from them, but surely it is wholly erroneous to think that taxes should never increase. Surely the only proper way to proceed is to cut taxes when one can and raise them when one must. Surely this near-crisis is one of the occasions when taxes should be raised.
  Dr. John Marek: The right hon. Gentleman should be careful about what taxes he is talking about. He must remember that the Government have increased taxes as a proportion of gross domestic product, whereas they were about 4 or 5 per cent. lower under the last Labour Administration.
  Sir Ian Gilmour: I apologise if I did not make myself clear. I was talking about direct taxes, which I think was implicit when I mentioned the tax cuts in 1988.
  I believe that income tax should be increased and that the ceiling on national insurance contributions should be removed. That is one point about which I am in agreement with the Social and Liberal Democratic party. If taxes are not increased, it will be difficult to solve the current problem.
  Another expedient that is derided by many hon. Members on this side of the House—it certainly has great disadvantages, but I do not believe that it would be right entirely to rule it out—is some sort of credit controls. As my right hon. Friend the Member for Blaby said in his Mansion house speech, they would be very leaky and there would be massive evasion, but would there be so much evasion that they would not be worth having? There is considerable income tax evasion, but no one has suggested that we should not have income tax.
  The Government have not made the case in practice—that is important, because so far the medicine has not worked very well—and neither have they argued it properly in theory, for using only high interest rates, which have considerable disadvantages. I hope that they will think again. The enormous advantage of raising direct taxes and using direct control of credit is that the reduction in domestic demand would, so far as possible, be

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  concentrated on personal consumption, which is where it is needed. With lower interest rates and ultimately a lower real rate of exchange, industrial investment and international competitiveness would be better sustained. After we have turned what my right hon. Friend the Member for Blaby suggested will be an awkward corner, there will be a reasonable chance of achieving at a later stage sustained non-inflationary growth. There will be a real chance that the Conservative party will win the next general election.
  6.30 pm
  Mr. Doug Hoyle: The hon. Member for Bridlington (Mr. Townend) suggested that, because we were courteous and polite to the right hon. Member for Blaby (Mr. Lawson), we accepted the Government's economic policies. That is untrue. It has been said repeatedly that it is business as usual. I shudder to think about that, because it means that we shall have a £20 billion deficit by the end of the year. The former Chancellor suggested that that did not matter and neither did the fact that we will have a manufacturing deficit of £17·5 billion. Far from being a success story, the economic record of the Government since 1979 has been one of failure. Under this Government, the increase in expenditure on manufactured goods has been three times greater than the increase in what has been spent on the production of manufactured goods. That is a way to disaster.
  Since the Government took office in 1979, there has been a 20 to 25 per cent. destruction of manufacturing industry and we are paying a heavy price for that now. The growth in output since 1979 shows that this country is 17th out of the 18 OECD countries. That is far from being a success—it is a failure. If the Government continue to claim it as a success, I would not like to see what they regard as a failure.
  Last year the former Chancellor spent billions of pounds trying to keep the pound below DM3. This year he has spent billions of pounds trying to keep it above DM3. Clearly, both policies cannot be right. To continue with that policy would be akin to economic madness. The consequences of attempting to keep the pound at a level that cannot be sustained were pointed out by my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) when he said that successive Governments—including previous Labour Governments—have paid a heavy price for trying to keep the currency at a level that one cannot protect. It would be better to allow it to float downwards.
  The right hon. Member for Chesham and Amersham (Sir I. Gilmour) referred to high interest rates attracting hot money into the country. That hot money would quickly leave when interest rates came down. High interest rates mean mortgages that people cannot afford and that is under a Government who talk about a property-owning democracy. People will have to give up their homes because they cannot afford them and young couples cannot even think about buying. Even more disturbing is the cut that will take place in investment in manufacturing industry. Already we are investing less than our competitors such as France, Italy or West Germany. The Confederation of British Industry predicts that the cut will occur in 1990. As a consequence of that cut we will be less competitive and there will be a rise in unemployment.
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  That is the price that the British people will have to pay if we continue with the policies adopted by the previous Chancellor. We have heard today from the Prime Minister and the Chancellor that that is the path they will follow, whatever the consequences. It would make more sense if we kept the pound below DM3 as it would make our products more competitive in relation to Germany. it would also make imports from Germany more expensive. That would be sensible because we have a trade deficit with West Germany of £9 billion. We need to obtain a bigger share of that market. It is madness to continue with the present policy.
  We should be looking at how we can revitalise our manufacturing industry. The Conservative party does not understand manufacturing industry or what it has done to it. It is good to have an economic debate on the day that the Secretary of State for Trade and Industry said at the Dispatch Box that the Government are withdrawing the golden share from Jaguar. That will mean that the last of the totally British-owned motor manufacturers will go to the wall. It does not seem to matter that by that policy he has created a bear garden in which the multinational American companies will slug it out. It does not seem to matter that research and development in Jaguar will go overseas. The Minister does not seem to care about the consequences for Jaguar employees, or what our position in the motor industry will be.
  That is symptomatic of the Government's approach to manufacturing industry in general. It is a sad state of affairs. We ought to be looking—
  Mr. Ian McCartney: The Chancellor tried to say that the imbalance between Germany and other nations was caused by retailing and reinvestment. I was asked recently by a managing director in my constituency to visit his company. The company has a policy to buy British. It has spent six months scouring Britain in an attempt to obtain British machinery for retooling. The Government have completely destroyed that sector of the economy and that company had to buy Japanese and German machinery. That whole sector of manufacturing industry and the new technologies in packaging have been destroyed and companies cannot now buy British when they want to.
  Mr. Hoyle: That is a good point. If one goes into any plant where investment is taking place—particularly in machine tools—one finds that companies are forced to buy foreign because the goods are no longer available in this country. A large part of the destruction of the manufacturing industry has involved the machine tool industry. That seedcorn has gone. The Government are doing nothing to bring about the revitalisation of manufacturing industry. They say that we can be prosperous with a service economy. We have seen the consequences of buying goods from abroad in our £20 billion deficit.
  We ought to be trying to give incentives to manufacturing industry to strengthen the manufacturing base that we have left. One of the tragedies of Government policy was seen recently in Sunderland, where two companies wanted to recommence shipbuilding. Those companies did not want any intervention funding and would have been prepared to re-establish shipbuilding in an area where labour was still available. However, the Government went to the European Commission and were

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  ready to accept that, if the companies reopened for shipbuilding, there could be a cost of about £90 million. That is ridiculous. They ought to have said that we are going to see shipbuilding reopened in Sunderland because there is going to be an upturn. However, that is typical of the Government's outlook in relation to manufacturing industry.
  The same is true of training. The hon. Member for Bridlington talked about a reduction in the working week. The West Germans already enjoy a shorter working week, yet they are more competitive than us. The hon. Gentleman said that a shorter working week would cause a problem because of the skills shortage. That shortage exists because we are not training people and are not providing training in the new industries, such as information technology. That is one of the tragedies. The problem with the Government is that they think always in the short term, never in the long term.
  I am sorry that the new Chancellor of the Exchequer is not in the Chamber. We wish him well in his new job, but we heard a very uninspired speech from him. Much effort was needed by Conservative Members even to acknowledge that the right hon. Gentleman had completed his speech. One or two tried bravely to wave their Order Papers. We could see that there was no great enthusiasm for what he was saying.
  The right hon. Gentleman's problem is the problem of the previous Chancellor—who will be in charge of the Department? One suspects that "Fortress Thatcher" will continue and that the Prime Minister will continue to run this Department as she runs every other Department, whatever the possible cost of having the Prime Minister running that Department and whatever the possible cost to our international standing. We gather from what she said on Sunday that she will continue to do it her way and if her Ministers do not like it, they can get out of the Cabinet. That applies, of course, to the present Chancellor.
  This shows the need for a different Government who will collaborate with our European partners and end what the Bundesbank is doing in terms of deflationary policy. That must be the way forward. We need a Government who care not only about national but about regional policies. I am afraid that, judging by what we have heard from Conservative Members, we will not have that type of Government from the Conservatives. We need a new Government who will have faith in the country, our people and the future. I know that we will not get that from the Conservatives. Only a Labour Government can bring that about. [Laughter.] If I were a Conservative Member, I would not laugh so loudly. Some Conservative Members have only a short time to remain in the House.
  6.42 pm
  Mr. Quentin Davies: It must be unusual in the House for a particular economic concept to form the touchstone of a major political debate and even more unusual—it is perhaps unprecedented—for an esoteric, technical mechanism such as the exchange rate mechanism to be the source and focus of so much emotion.
  There is a perfectly coherent, valid, intellectual argument that Governments should not concern themselves with exchange rates, that the target of macro-economic demand management should be the
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  maintenance of equilibrium between money supply and productive capacity, and that Governments who interfere with exchange rates run into fundamental contradictions with sound monetary management. It is true that it is technically impossible to target a particular monetary aggregate and the exchange rate. If one targets the exchange rate, one commits oneself to increasing interest rates if the exchange rate falls below the target, thereby reducing demand. If the parity tends to move above the target, one has to reduce interest rates and increase demand. The monetary course is therefore changed involuntarily.
  One great problem for those who follow that argument is that, since the end of the Bretton Woods system in 1971—indeed, in modern history—there has never been a Government of any major western country who for any length of time have been disinterested in the level of the exchange rate. That is more than a reflection of the natural detrimental desire of all politicians to interfere in and manipulate the economy. There is a sound theoretical basis for the stance that has been adopted by all western Governments.
  First, the notorious stickiness of prices in modern economies produces a ratchet effect. Unionised labour demands nominal increases in wages to cover actual, recorded or expected inflation but does not accept nominal reductions in wages, however far prices may fall.
  Mr. McCartney: The hon. Gentleman is explaining an interesting theory about trade unionists accepting wage cuts in times of recession. Is the hon. Gentleman, with his various directorships and other arrangements providing tens of thousands of pounds for working here part time, prepared to give up some of that money, given the value of his work in the House?
  Mr. Davies: I would be in danger of being ruled out of order if I followed the hon. Gentleman's remarks. I look forward to the opportunity to debate that matter with him in another context.
  Because of the ratchet effect, if one's currency depreciates unduly, one suddenly finds that a higher level of inflation has been built in without the possibility of building it out if the parity rises.
  Secondly, there is the technical deficiency of monetarism. The theory is based on the assumption that there must be some objective measure for policy. Under modern conditions, almost no one has succeeded in finding an aggregate that tracks effectively the money supply and aggregate demand over a period. The United States may have done that—I think of M2 in the first half of this century, which is the basis for Milton Friedman's famous work on that subject and, indeed, his Nobel prize. However, no one in Great Britain has been able to find an index that even begins to play the role that the monetarists require of it.
  Thirdly, no responsible Government can contemplate a unilateral free float. If every other country is intervening to manage its exchange rate, clearly any country that declines to join that game will be the passive victim of those intervention policies. Free floating, rather like football, is probably a game that cannot be played alone. It requires others who are prepared to play by the same rules.
  The argument which is pursued enthusiastically between those who say that in no circumstances should Governments intervene in the exchange rate or adopt an

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  exchange rate policy and the supporters of the ERM is a charade. This is an elaborate debate which has nothing to do with the issue. The issue is not whether we should have an exchange rate policy but whether, if we were part of the ERM, that policy would be more effective and we could achieve given objectives at a cheaper price. That means not just a smaller use of reserves to maintain a particular parity but moving interest rates, for example, less far in either direction to counter an undesired rise or fall in parity, resulting in a smaller loss to other economic objectives.
  I find it difficult not to take the view that within the ERM, monetary policy would be more effective and, in the sense in which I have defined it, cheaper. It cannot make sense to suppose that if we were co-ordinating our use of reserves with others' use of reserves, so that intervention was in the same direction, it would not be more effective. A greater weight of demand or supply for a given currency would bear on the markets at a given time.
  There is also the great matter of confidence. There could be no greater degree of commitment by any Government to a particular exchange rate policy than to announce the exchange rate which is targeted. That would be the effect of our joining the ERM, and we have not done that up till now.
  Conversely, if we decline to join the ERM, I am afraid that we shall be sending a signal to the financial markets to the effect that we are unwilling or unable to accept the degree of discipline which is required for us to join. We would again be regarded as having a more volatile and weaker currency structurally than have the countries which are members of the ERM. That would be dangerous because a weaker currency discounts a higher level of inflation and interest rates, and the prophecies can too easily be self-fulfilling.
  The Chancellor made a positive speech today. It has been an encouraging day for those who are committed to stability in the economy and to our future prosperity to hear that our joining the ERM is no longer a question of whether but of when. We must have a viable system which is able to deliver the advantages that I have set out, and we must have the right parity at the moment when we join; DM2·85 is much closer to whatever the right parity is than is DM3·15, which was the figure not long ago. The country can take from today's debate a message of considerable encouragement. It is with pleasure that I endorse the remarks of the Chancellor.
  6.52 pm
  Mr. Stuart Bell: I was intrigued by the speech of the hon. Member for Stamford and Spalding (Mr. Davies) I was not sure whether he was referring to monetarism today, yesterday or tomorrow. It was interesting to learn that the parity of no devaluation welcomes a devaluation of the pound from DM3·5 to DM2·85. It seems that that message has not yet reached the occupants of the Conservative Back Benches.
  I was grateful when the Chancellor allowed me to intervene earlier so that I could put to him a point contained in an OECD review showing that in relation to the British economy it was Government policy that interest rates should stay as high as necessary for as long as necessary to reduce inflationary pressures. The review went on to point out that the Government had also confirmed their commitment to not accommodating
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  increases in domestic costs by exchange rate depreciation. In short, the British Government would use interest rates to stabilise the exchange rate and to fight inflation.
  I asked the Chancellor if that was still the policy of Her Majesty's Government. During his speech he elaborated on that and said clearly that he believed in a firm exchange rate. That means that he believes that the markets should be bucked. That is a clear swing away from what I can only describe as the nefarious influence of Alan Walters at No. 10 Downing street.
  Neither the Chancellor nor my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) dealt at length with the subject of credit controls. I shall not discuss that subject at length, but I trust that in clue course the Minister will examine the points that I raise. A recent paper published by the International Monetary Fund entitled "The instruments and operating procedures for conducting monetary policy in the group of five countries" showed that, while the level of short-term interest rates was the main monetary policy weapon in America, Japan, West Germany, Britain and France, it was supplemented by bank reserve ratios in all the five countries except Britain.
  Thus, within the central banks of our major competitors and allies is a measure of some control on their lending. Hence, if we are moving away, as I believe we are, from the single-club policy about which we have heard for so long—the right hon. Member for Chesham and Amersham (Sir I. Gilmour) thought that there was no other weapon—it might be useful to examine the concept of supplementing by bank reserve ratios so that we are in line with our competitors.
  We also often hear from the Government—not surprisingly, I suppose—about what our policy would be in a given situation. I am reminded of the general who approached Napoleon and said, "Suppose the enemy was to the front of you and behind you. Suppose also that the enemy was to the right and left of you so that you were surrounded. What would you do to get out of that situation?" Napoleon replied, "Get out of it? I would not have got into it." Who would get into the situation of having £20 billion deficit across the exchanges? Who would get into a situation of having inflation that does not go down? Who would get into a situation of having 15 per cent. interest rates, meaning an overdraft at 18 per cent. for those who borrow, and then ask Her Majesty's Opposition, "What would you do about that?" Our answer, which we give regularly, is that we need an industrial strategy that will offset the balance of payments deficit.
  We believe in an industrial rather than a financial strategy. We cannot allow our country to be overrun for years to come by imported products and respond only in a financial manner. The consequence of high interest rates is an added cost to all of us, whether or not we borrow, because at the end of the day those high interest rates bear on all members of the public. Only by embarking on an industrial strategy that gets British workers making goods for British consumers will we ease away from the massive deficit in our balance of payments. My hon. Friend the Member for Warrington, North (Mr. Hoyle) dealt with that issue and said that nothing was being done to revitalise industry.
  In the final analysis, we are talking about the wealth of the nation, the so-called prosperity which lies in the net worth of the personal sector, which is based on the inflated

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  value of people's homes. House prices have shot up by so much that we are becoming almost millionaires, in the poor sense of the word. Paul Getty used to describe himself as a rich millionaire. I recall once joking that I was a poor millionaire, and I have had to live with that remark ever since. With property values rising, we are getting wealthier. We have witnessed what a newspaper referred to as the embourgeoisement of the British people.
  That has nothing to do with the creation of wealth or with the productive capacity of our manufacturing base: it is happening simply because so much money is available to enable people to buy property that house prices spiral, and intangibly some of us have the impression that we are becoming richer. I say "intangibly" because, when we come to sell the family home and buy another, we have to get on the treadmill again—borrowing more money to buy another house at a greatly inflated value—and so the process continues. The bubble expands until one day, like all bubbles, it bursts.
  The Government make a vice out of their own virtues. Hardly a Chancellor's Question Time goes by without some reference to the iniquity of allowing mortgage payments to be part of the retail price index. We are constantly told that, if that did not happen, our inflation rate would be lower than that of Italy. Only the Republic of Ireland, we are told, follows the same system.
  We are told that the Government believe in and stand for a property-owning democracy. The Conservatives want everyone to own their own homes. Indeed, they arrange the financial conditions to that end, so that in the Chancellor's constituency of Huntingdon people can borrow five times their annual earnings to buy properties. The Government then complain all the way to the House of Commons about the unfairness of the system and the extent of mortgage payments ending up in the retail price index. As the Chancellor may one day want to come to the House to tell us that he is going to take mortgage payments out of the RPI, he must remind the House that other countries, which do not have the same policy and which have a large rented sector, use a rental value in the calculation of the inflation rate. The Chancellor cannot simply say that he will take mortgage payments out of the RPI and thus bring down inflation without putting something in its place, as our competitors in Europe do.
  The Prime Minister showed her solidarity with her new Chancellor today. We all know that she believes in Victorian values, but they did not necessarily work in those days and they work even less today, 100 years later. The old Victorian concept of covering one's balance of payments deficit on manufactured goods by invisibles through the City of London has died the death. Last month's deficit was reached after imports of £10·37 billion exceeded exports worth £8·4 billion. The surplus on trade in services and profits from abroad was put at £300 million —hardly a significant contribution to reducing a trade deficit which has reached such massive proportions.
  The Prime Minister certainly believes in freedom, hut it is the freedom to push up interest rates and to threaten the small business man. We have heard from the Chancellor that the number of new starts in business is 1,600 a week. He did not tell the House how many businesses close down in the same period.
  The Financial Secretary to the Treasury (Mr. Peter Lilley): The figure was net.
  Mr. Bell: I did not hear the word "net", but if the figure is net I will accept that. However, the small business men have to live with high interest rates, high overdrafts and the threat of bankruptcy. Home owners have to pay more for their mortgages. In the Chancellor's constituency of Huntingdon, five times the value of a person's salary is available to obtain a mortgage.
  In the Prime Minister's country, we have the freedom to risk our lives at work and the risks are greater because the Health and Safety Executive has been impoverished by Tory cuts. We have the freedom to borrow more than we can pay back through the banker's card, thus adding to insecurity. The OECD report said:
  "An increasing number of households may be overextended or severely constrained—because interest payments now amount to some 13 per cent. of disposable income and exceed interest receipts for the personal sector."
  We have the freedom to worry about the future of our children, the future of our educational institutions and the education system itself. Since 1982–83, the Government have cut capital spending on education and science by 10 per cent. in real terms and serious shortages of teachers now threaten educational reform. Her Majesty's inspectors stated in their 1989 report:
  "Too many teachers fear that their profession and its work are misjudged and seriously undervalued."
  The Prime Minister also gives us the freedom to leave our own homes and areas to seek work elsewhere because the Government have failed to have an appropriate regional policy. We know that average income has risen faster in the four better-off regions—the south-west, greater London, the south-east and East Anglia—but the chances of being in the bottom 10 per cent. of households in terms of earnings is greatest for the people in the west midlands and as one moves steadily north. The freedom to be homeless under this Government has doubled between 1979 and 1987, with the number of new houses completed in Great Britain falling by 17 per cent. That is the freedom in which the Prime Minister believes. It is the freedom of the condemned man. We all know the story of the condemned man who, before being taken to the scaffold, can have any breakfast he likes. That is the freedom of the British people—to have a good breakfast before the hanging.
  We heard today from the former Chancellor of the Exchequer, the right hon. Member for Blaby (Mr. Lawson). The hon. Member for Bridlington (Mr. Townend) referred to the right hon. Gentleman's speech, as did my hon. Friend the Member for Warrington, North (Mr. Hoyle). However, the fact that we respect the former Chancellor, as a House of Commons man making a statement to us, does not mean that we accept the policy that he followed for so many years.
  The steps leading to his resignation are easy to trace and they were touched on by the hon. Member for Bridlington. There was the relaxation of monetary policy in 1985. There was the devaluation of the pound which followed the fall in oil prices—another piece of sleight of hand by the former Chancellor. The party that did not devalue allowed the pound to be devalued when oil prices slipped in 1985. That gave Britain a competitive edge which ensured economic prosperity, as the country perceived it, in the run-up to the 1987 general election. We saw, in fact, a devaluation-led boom leading up to the 1987

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  election and, like the Barber boom, it was good old devaluation from the man who said that his party had never been the party of devaluation and never would be.
  The short-term benefits were there for all to see under the effective disguise of an economic miracle. That was part of the go strategy of the former Chancellor, but when it was time to put a stop to the go policy he was unable to do so. When the consequences of the go policy were high inflation and a high balance of payments deficit, when there was a serious imbalance in and destabilisation of the economy, and when the time came to bring that under control, he was unable to do so.
  Mr. Christopher Hawkins: As I believe that the hon. Gentleman is a straightforward and honest man, I wish to ask him a question before he moves too far from high interest rates. His party's alternative is to have discussions with the big banks to encourage them to lend less to the public. Has he considered that it is not enough to talk only to the big banks? His party would also have to talk to the building societies, which are now free to lend for purposes other than home ownership. There are about 500 building societies in Britain. It would also have to talk to Curry's, Dixon's, Selfridges and all the shops dishing out credit on every high street. One can pick up a few thousand quid in an afternoon just with shop credit cards. The hon. Gentleman should also consider all the moneylenders. One would need to hire the Albert hall to talk all those people and institutions out of giving credit.
  Mr. Bell: The Opposition believe that the single-club policy is neither an effective policy nor the only policy. As we have often said, the alternative is to consider the question of credit controls. I have given one suggestion to the Chief Secretary to the Treasury on ratio bank reserves and there are other possibilities. However, I do not want to go down that road as I have to wind up my speech so that my colleagues who have been sitting here patiently can speak.
  I do not want to give the impression that the former Chancellor was any kind of miracle worker. On the day he resigned, the headline in the Evening Standard said:
  "Miracle Worker or Mirage Builder".
  There is no doubt that the former Chancellor's record reads like a bad novel in which the characters are unreal and the story line naive, and in which words count for little more than to fill page upon page of paper. Only the ending has any semblance of reality, as the novel ends in tragedy.
  Last week, the former Chancellor moved an amendment to an Opposition motion in which he commended the Government on raising output. He knew all along, because he had referred to it, that the latest CBI report revealed that the volume of new orders had fallen over the past four months, the first negative result since July 1986. The right hon. Member for Chesham and Amersham referred to the economy slowing down. There was proof in the CBI report, which showed that the economy was slowing down.
  According to the latest OECD report, using the former Chancellor's own peculiar method of plucking statistics out of the air, growth over the past 10 years
  "hardly exceeded two per cent. per annum."
  I n other words, over 10 years, there was 2 per cent. growth per annum.
  In his last speech from the Dispatch Box, the former Chancellor said:
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  "The real issues are what is happening to productivity, to the quality and quantity of investment, to profitability and to training."—[Official Report, 24 October 1989; Vol. 158, c. 694.]
  In fact, when it comes to growth, the United Kingdom is still 25 per cent. behind most of the rest of Europe. It is 16th out of 21 in the European productivity league table, and in non-manufacturing the rate of productivity growth has been only one third as fast as in manufacturing. Investment stood at £3,000 per head in 1988. It is lower than that of our major competitors and it is half that of Japan. Between 1979 and 1987, investment rose by only 9 per cent., which is less than half as fast as consumer spending. Manufacturing investment fell by one third between 1979 and 1983.
  We have listened to the Chancellor of the Exchequer today. We are aware of the mountain that faces him in tackling the balance of payments deficit and the difficulties facing him with interest rates and the exchange rate mechanism with Europe. The Chancellor of the Exchequer has the Gordian knot before him, but he has no Excalibur with which to cut it.
  Several hon. Members rose—
  Madam Deputy Speaker (Miss Betty Boothroyd): Order. Before calling the next hon. Member, I remind the House that Mr. Speaker has determined that speeches should be limited to 10 minutes between 7 pm and 9 pm. The digital clocks are there for all to see.
  7.9 pm
  Mr. David Howell: I will of course obey your ruling, Madam Deputy Speaker, because I do not wish to hit an iceberg, or even the tip of one.
  It is ironic that a few years ago, when some of us in this House and elsewhere immersed ourselves in arcane questions about the European monetary system and the exchange rate mechanism, they were dismissed as boring and sexless subjects which had no political relevance. People were not generally interested in those questions. However, hon. Members now talk of nothing else. In the Tea Room and the Smoking Room, there are 650 experts on the exchange rate mechanism and why it is a good or had thing. Even those who are against it claim to know something about it.
  It is also ironic that, just when everyone has become an expert, the exchange rate mechanism has become rather more marginal to the central question of international currency and even to our national domestic issues than it was in the past. That has happened partly because of the greater attempts of the G7 nations to co-ordinate. It has also happened for a reason described by my right hon. Friend the Chancellor of the Exchequer this afternoon. The real issue is how we in this country impose monetary discipline on ourselves. In other words, the real issue is how we manage our own affairs.
  I believe that the exchange rate mechanism, when we join under certain conditions, will help at the margin to reduce some of the speculation against the pound which has mounted inevitably while we are outside the grid and others are inside. But, as my right hon. Friend the Chancellor said, the real issue is how we manage our internal monetary affairs to ensure price stability.
  In that regard it is right to ask, as this debate asks, how the Bundesbank has done it over the years. How has it been able again and again to control the monetary aggregates to deliver up a quite amazing degree of price

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  stability and so fulfil the overriding duty of maintaining the value of the currency? Neither the good Professor Sir Alan Walters, whom I greatly admire for having a very stimulating mind, nor my right hon. Friend the Member for Blaby (Mr. Lawson), the former Chancellor, was able to face that question.
  We have heard arguments about whether we should go for floating rates and monetary control or the exchange rate mechanism. However, neither Sir Alan Walters nor my right hon. Friend the former Chancellor could say how, in an economy of our size or even in a larger one, we can control the monetary aggregates. The truth is that neither the theory of floating rates with wonderful precise control of the monetary aggregates—it ought to work on paper, and Professor Walters is quite right to state that it works in theory—nor the move towards fixed and managed rates within an exchange rate grid, can work unless we know how to control the money supply and the monetary aggregates internally.
  If we do not know that, we will run into difficulties no matter whether we are part of the exchange rate mechanism or not. We are dealing with international capital flows, not with a panacea, whether the ERM or a magic adherence to money supply figures which it is impossible to get hold of.
  Even after the eruptions of last week, we must still address that issue. There are two new thoughts on the agenda that hon. Members must consider with the utmost care. The first was raised by my right hon. Friend the Member for Blaby. We should be under no illusions: in all that he said this afternoon, he made one comment of the utmost significance which will be central to our debates in future. He said that he had been thinking, as many of us have, about how to set up a genuinely independent central bank which would depoliticise monetary decisions. The politicisation of such decisions bedevils them, causing them to be taken on political rather than purely technical grounds.
  I am not talking simply about denationalisation and repealing the Bank of England Act 1946. We must unravel issues dating back to the first world war, long before going off the gold standard, when the Bank of England and the politicians from Lloyd George onwards became increasingly interwoven. We must address that very complex problem now. I was very encouraged to hear the ideas raised by my right hon. Friend the Member for Blaby, and like others I want to see them developed.
  The second new thought follows from the first. If we have an independent central bank, we can begin to operate on the money supply in ways in which we have not been able to do hitherto. We set the interest rate for money and the central bank provides unlimited quantities as lender of last resort at the price of 15 per cent. That is not controlling supply, it is controlling demand. Many of us wonder whether we can switch to operating on the bank's reserves—on the monetary base. In that case, the independent central bank would not set interest rates. Instead, it would operate on the reserves and interest rates would fall out of the end of that. They would be more volatile, as there would be no fixed interest rate.
  We must consider those two new thoughts if we are to begin to move away from the crazy and quite false argument in recent times about whether we should be part
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  of the ERM or have a floating rate. That is a stark and unreal choice on which we have paralysed and crucified ourselves.
  I understand that references to independent central banks are anathema to many Opposition Members. They think back to 1931 when they seized control of the banking system from Montagu Norman and the rest. Today the Labour party wants to return to exchange controls. That is the only way in which Labour Members can conceivably run a direct consumer credit control system. They must return to exchange controls. My recipe is no good for the Labour party. However, if my right hon. and hon. Friends believe that we are surrendering power if we move monetary policy to a more independent banking authority, they are wrong. There will be a substantial gain in the power and influence of politicians to ensure that sensible monetary policies operate in this country.
  My right hon. Friend the Member for Blaby, the former Chancellor, has confirmed that the time has come for us to have an independent central bank which can operate an effective monetary policy which ensures stability of the currency upon which everything—the jobs, growth and everything else hon. Members want—depends.
  7.17 pm
  Mr. Terry Fields: This debate is a vote of no confidence in the Government. The Opposition Benches faithfully reflect the views of the British public in their attitude to the Government.
  A week ago tonight I was billed to debate with a Tory Member of Parliament in the students' union at Liverpool University a motion that
  "this house has no confidence in the Tory Government."
  Over the summer the students' union applied to 60 Tory Members to get that debate started. As we have no Tory Members in Liverpool, the students' union thought that they would have to haul one through the Mersey tunnel. Unfortunately he could not show up. The Government cannot get a Tory Member to defend their economic policies.
  Mr. Alex Salmond (Banfff and Buchan): Will the hon. Gentleman give way?
  Mr. Fields: No. I have only just started and I have only 10 minutes to speak. Other hon. Members are waiting.
  In the European elections earlier this year, the results marked a sea change in British politics. For the first time in 10 years, there was a massive swing against the Tories. They gained their lowest percentage of votes in 100 years.
  The workers and the youth in this country hate what the Government are doing in society. More importantly, that hatred is directed at the Prime Minister and the Chancellor for causing the conditions that prevail for millions of people.
  We must move away from personal attacks, although they are very convenient. Labour Members share the glee of their constituents at what is happening on the Conservative Benches. However, we must be sober in our approach to what is happening in the economy. Those Tory characters will not suffer; instead the ordinary working-class men, women and children, the old, sick and disabled will suffer as a consequence of the Government's mismanagement of the economy.
  Hon. Members talk about opinion polls. They are faithfully reflecting what is going on. Ex-Cabinet Ministers on the Government Back Benches outnumber Ministers

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  on the Front Bench as a result of their disillusionment with what is going on. We saw in the Financial Times last week that a survey even in Lewes, Sussex, showed that most Tory voters are disillusioned with what is going on in the country. We see key issues such as the Health Service, the water and electricity industries, the poll tax and pollution militating against support for the Government. The economic collapse is politically undermined by what is going on in the House and in our legislation. The Government got away with it for a while—as long as they delivered the goods for certain sections of the community and provided inceased profit for financiers and capitalists, while squeezing poorer people to ensure that profits were maintained.
  However, the mood in the country has changed, particularly in regard to housing, health, water, gas prices, privatisation of the electricity and water industries, inflation, and mortgage rises. Whole sections of our community are turning in their tens of thousands against the Tory Government. The reason for that, which Conservative Members are too blind to see, is the decline in Britain's economy. Total disregard for investment in our industrial base is at the root of the crisis.
  One hundred years ago, Britain's share of world manufacturing exports was 33·2 per cent., 50 years ago, it was down to 20·9 per cent., and today it is at an all-time low of 8·1 per cent. We were third in the OECD league, but we are now 19th. From 1979 to 1986, there was a 13 per cent. fall in investment in this country, while other OECD countries increased their investment by one third in the five years preceding 1987.
  Those points are important. To the working class they are statistics, but we must elevate the argument to allow people to see clearly that these things do not just happen on a whim. There are deep-seated problems in the British economy. At the end of the day, British workers will pick up the tab while the jokers in the Government walk away from the problem. The key to the crisis is the lack of investment. The Government are all right taking the profits and running away with them. In 1979, they invested £10·4 billion in industry. In 1982, the figure dropped to £6·35 billion. In 1988, the level was up to £10·01 billion. That means that in 1988 the Government had reached only the 1979 level of economic investment—in real terms, the 1950 level.
  Economic growth between 1979 and 1988 was 2·1 per cent. a year, the smallest rate of economic growth in the whole nine-year period. The EEC estimates that, in the next two years, growth in Britain will be lower than that in France, Italy, Belgium, the Netherlands, Ireland, Greece, Spain and Portugal. Britain is becoming a Third-world economy.
  Statistics are one thing, but the reality of life for working people is that a woman in my constituency sold her baby aged two because she was suffering mortgage repayment problems amounting to £1,000. It means also that a guy went into a housing benefit office and set fire to the place, unfortunately killing one of the clerks, and then jumped from a six-storey block of flats. The Government are responsible for those social conditions. They are responsible for 10,000 pensioners dying every year because of neglect, hunger and hypothermia. At a stroke, the Government reduced the benefits of 5·5 million people and gave £2 billion in tax cuts to their rich friends while taking £650 million from pensioners and the unemployed and
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  low-paid. The Government and their economic policies mean personal debt and poverty for millions of our fellow citizens.
  I do not wish to speak for too long. The case will be adequately made by my hon. Friends. Although Lawson and Walters can walk away from the problem, millions of ordinary decent people in society will be stuck with nowhere to go. In that will be the seeds of destruction not only of the Government but of the system that they represent. As Socialists, we give fair warning that workers are turning towards democratic Socialism because they see the ineffectuality—[Interruption.]
  Mr. Terry Dicks: In Russia, Hungary and East Germany?
  Mr. Fields: I do not need cameras, mate. I will speak on Socialism anywhere. You know nothing about capitalism. We know a lot about your system. That is why you are cutting into education. I do not refer to you, Madam Deputy Speaker, I refer to the hon. Member for Hayes and Harlington (Mr. Dicks).
  Madam Deputy Speaker (Miss Betty Boothroyd): I trust that the hon. Member will direct his remarks through the Chair.
  Mr. Fields: As capitalism fails, not only in Britain but internationally, workers will come to the only logical conclusion: that the solution to the problems lies in the Socialist transformation of society—a democratic system of society—in which the talent, energy and resources of people cast on to the scrap heap by the Government's economic policies are put to the common good, and in which wealth creation is channelled to improve the conditions all people in society, not the spivs who are represented by this bankrupt, politically corrupt Government. The Opposition wholeheartedly oppose the Government policies and look forward to the day when we see them out of office, with an elected Labour Government carrying out Socialist policies on behalf of the people.
  7.25 pm
  Mr. Nicholas Budgen: I suppose that there are still some who believe that the control of inflation should be the judge and jury of the Government's policy. Therefore, we looked to the new Chancellor's speech for some signs of his attitude towards inflation. Three factors in my right hon. Friend's speech may give us cause for some encouragement at this time.
  First, it was significant that my right hon. Friend argued against inflation, not on the narrow economic ground that, for instance, it makes investment decisions difficult—it certainly does that—and not merely that it causes difficulty in wage negotiations, although it certainly does that. He argued on the social ground that inflation is felt most deeply by the poor. Perhaps my right hon. Friend) has the advantage of origins which make him feel that point deeply. He faces taking a risk in favour of growth or being more cautious and anxious to contain inflation, and he demonstrated that his gut instinct would be more inclined to reduce inflation.
  Secondly, his analysis of the causes of our present difficulties was rather heartening. Of course, my right hon. Friend the Member for Blaby (Mr. Lawson) believes—no doubt honourably—that our present difficulties arise from a single mistake. He says that all the great industrial

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  nations reflated after the crash in October 1987 and that he, with all other Chancellors, was inexorably and inevitably driven to follow their mistaken advice. However, our present Chancellor puts it rather more widely. He says that there was excessive expansion of the economy over about two years. He points to the excessive retail sales and to the high level of house prices during that time. For him the problem is much bigger and will require much stronger action than was envisaged by our right hon. Friend the Member for Blaby.
  The third factor in my right hon. Friend's speech should encourage those of us who believe that inflation should be substantially reduced. The last time when people saved in large measure—that is, when the savings ratio was about 15 per cent.—was between 1974 and 1976. Of course it is true that there was a high rate of inflation then, but there were also circumstances of grave political instability. Any sensible person would say to himself or herself, "My goodness me, I must have a bit of spare cash in my deposit account because I can't be exactly sure what's going to happen over the next couple of years."
  There are, of course, grave disadvantages for those of us who are party politicians when we see political disturbances or our party doing badly in the polls. Ironically, there are also economic advantages for those of us who wish to see people saving more and who wish to see control of the money supply. If people say, "My goodness me, the Tories might lose the next election. My goodness me, there could be circumstances of great uncertainty ahead," they save more. They are less inclined to borrow a bit more or to buy a more expensive house, and to that extent credit is reduced.
  Therefore, there are three factors that should enable us to give a couple of cheers for the new Chancellor. However, I withdraw the third cheer because I still find it impossible to understand what the Government's exchange rate policy is. It seems that we believe in markets when the markets hold up the value of the pound, but we do not believe in markets when they bring down the value of the pound. That is rather like believing in democracy when one wins an election, but not believing in democracy when one loses.
  The difficulty is that no one can say that the British people are firmly opposed to inflation. There was no popular outcry between 1986 and 1988 when it was quite obvious to anybody who took even a passing interest that credit was far too lax and the money supply expanding far too fast. Indeed, we were extremely popular during that period.
  It is not the process of creating inflation that is unpopular, it is the process of checking it that is unpopular. Everybody enjoys the binge but complains afterwards that the Alka-Seltzer tastes unpleasant. Therefore, while we are administering the Alka-Seltzer, it is important to try to reduce its unpleasant taste if possible.
  One way in which that can be done is to point out that a disagreeable consequence of a period of lax credit is that the exchange rate is likely to fall. It will not fall principally as a result of the words of the Leader of the Opposition. Indeed, I cannot believe that he is betraying his country if he happens to point out that there are few advantages from a lower exchange rate against the deutschmark.
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  However, to give the impression that it is within the power of Governments to hold up the exchange rate is to give the impression to the rest of the country that—if I may take the Alka-Seltzer analogy further—the Alka-Seltzer will be even more unpleasant than it is. Of course it is necessary to encourage people to save and to explain that at least personal borrowing must be reduced, but if we were to give the impression that it is also our wish heavily to squeeze manufacturing industry to a greater extent than is necessary by holding up the exchange rate—which I argue is not possible anyway, but even if it were possible and we intended to do it—we would be telling people that the squeeze will be more difficult than it would have been and that the consequences for unemployment would be much greater.
  Surely we are entitled to say, "All right, we believe that there has been an excessive expansion of credit for a couple of years, sadly, that the increase in the money supply will inevitably work its way through into price levels and one likely consequence is that the exchange rate—the pound—will fall against other currencies," because at least that means that some manufacturers will be able to take up demand from foreign countries. They will be able to export to a greater extent, even if they find that their home markets go dead. Surely we should be able to give that necessary message if we are to sustain the political will to fight the inflation that was created in the past.
  It is silly to pretend that the British people dislike inflation. Between 1986 and 1988 they have seen all the symptoms of rising inflation going through its first euphoric phase. I have never found anybody who has said, "My goodness me, it is a terrible thing—my house has gone up in value by 30 per cent. this year." As far as I can gather, everybody believes that inflation is caused by the other person's wage increase and, in spite of the great work done, I am bound to say—
  Madam Deputy Speaker: Order. I must now call the next hon. Member. Ms. Primarolo.
  7.36 pm
  Ms. Dawn Primarolo: It is not Alka-Seltzer that the Government are administering to the population of Britain and especially to its workers, it is arsenic—[Interruption.]
  Madam Deputy Speaker: Order. The hon. Lady needs to be heard.
  Ms. Primarolo: The arsenic is proving terminal for a great many workers and the pain that they are experiencing is not the pain that leads to recovery: it is the pain that leads to certain economic death.
  I wish to approach the debate from a slightly different angle. I wish to interpret and concentrate on the definition of "economics" as
  "the way society distributes its goods and benefits to the population"
  and within that,
  "the rewards that leads to and the needs it fulfils."
  Using this approach, we can take a broader look at the impact of the Government's economic policies and in so doing, we must consider the social and human consequences of those policies and whether they are morally defensible.
  I do not believe that is is morally defensible that there are beggars in our large cities across Britain. I do not

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  believe that it is morally defensible that we see people sleeping on kerbs in cardboard boxes in alleys in London, lying beside cars that cost between £20,000 and £40,000. I do not believe that an economy that produces those levels of inequality is working properly.
  Because of the time limit, I shall touch only briefly on the issues that I wish to cover. First, when judging the Government in economic terms, there has been much talk about the industrial base and our manufacturing industries. Let us consider mergers and the Government's paralysis when faced with supporting and defending our economic base and manufacturing industries. Let us consider DRG, a Bristol-based firm where thousands of people's jobs are being traded as if they were houses on a Monopoly board in a hostile bid financed by junk bonds. People's lives are being traded as if they were cattle, without any power to influence the decisions that are being taken. As a consequence of that bid, 200 engineering firms are expected to close in Bristol alone, let alone the consequences for other parts of the country. Where is the economic sense of that in terms of our future industrial policy? Where are the views that say that we are defending our economic base?
  I turn now to the major question of the inequalities in our society. About 69 per cent. of the population believe that Britain is more unequal now than it was 10 years ago. In that period, the Government have deliberately increased the inequality in our society. They have widened the gap so that the top 10 per cent. of the population have received increases of 41 per cent. while the bottom 10 per cent. have received only 1·7 per cent. Where is the economic justice in that?
  There has been much talk about borrowing. The Banking, Finance and Insurance Union produced a report entitled, "Hard times for the poor as the credit gap widens." It said—this is a surprise—that there are two worlds in our divided society—the haves the have-nots. When the haves go to banks when they have financial problems, they are provided with new services and credits. However, if the poor fall on hard times, they are denied that credit. They are forced to the moneylenders and loan sharks. That is another arcane medical treatment that the Government want to impose on the British people—using leeches on the poor.
  The Government refuse to invest in training, when £750 million is necessary for vocational training. They do not bother investing in people's houses, in the young, schools, social services, infrastructure and transport systems. Then they tell us that it makes economic sense to pawn the future to make a quick buck in the present. That is their economic strategy, and that is the strategy that both the Labour party and the people of Britain are rejecting.
  The Labour party is not alone in criticising the Government's strategy. The CBI has also done so. It produced a report, which was carried out on a regional basis. The one for our region is called, "Prosperity for the 1990s: South West's needs". It says that if we are to take advantage of future economic growth, we must have the infrastructure, the training, the houses and the transport systems to do so. We need to have investment now to ensure that our companies are producing in the future. The Government are not interested in that approach. They are interested only in making money for the people who have it now and in making sure that the people who do not have it continue not to have it.
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  The Government deal in banal explanations such as, "If it's hurting, it must be working." That is a crazy approach to people's lives. The people whom it hurts are the very people whom it is not designed to benefit. It hurts people at the bottom of the economic scale because it is about transferring money to those at the top. Those at the top get the Alka-Seltzer while we at the bottom get the arsenic. That is not good enough. It is not necessary for us to have esoteric debates about whether the current occupant of the post of the Chancellor of the Exchequer—
  Mr. Jacques Arnold: Will the hon. Lady give way?
  Ms. Primarolo: No, I will not give way because we are having to operate under the 10-minute limit and it is difficult to make a quick speech, especially for those who have been here all afternoon—unlike others.
  The Government must do more than change the Chancellor. They must change their economic policy and require all their Departments to work as a team, which they do not do now. For example, the Secretary of State for Employment tells us that young people should not take training unless it is vocational. Then the Secretary of State for Social Services penalises young people by stopping their benefit if they refuse to take any job at any price, regardless of the effect that that has on their future.
  People's lives are a misery. They are struggling to make ends meet and are being denied money from the social fund. They are being threatened with unemployment and bad housing. They can see the riches in a small section of our society developing and expanding beyond their wildest imagination, and the Government have the cheek to tell us that that is a sensible economic strategy. It is not. It is about division, inequality and unfairness, and about the Government's defeat at the next general election.
  7.44 pm
  Mr. Cranley Onslow: The first point that I shall make is a personal one, but I hope that it is one with which the House can agree. We all know that politics is a game that is played with a hard ball, and inevitably, from time to time, players will get hurt. None of us, politicians or political commentators, should take sadistic pleasure when we see it happen. For that reason especially, and because he has served the country and my party very well for many years, I regret the hurt that last week's events must have inflicted on my right hon. Friend the Member for Blaby (Mr. Lawson). I believe that that regret is shared by every one of my colleagues. His speech today was all the more remarkable for that.
  My next task must be to add my voice to the good wishes that others have already expressed to my right hon. Friend the Member for Huntingdon (Mr. Major) on his succession to the great office of Chancellor of the Exchequer. No one can deny his ability. He proved that again in full measure today. His own words said it all. With our right hon. Friend at the Treasury, the Prime Minister now leads a team that is as strong as it has ever been, and it will work together for policies in which we all believe.
  The economy is fundamentally sound, we have a tight fiscal policy, the Government's accounts are in substantial surplus and our public finances are the strongest in the western world. That is an essential part of the war against inflation. However, so too is the use of interest rates. The

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  Labour party likes to pretend that one can control inflation without using interest rates, but one cannot maintain the conditions for sound money unless one is prepared to raise the cost of borrowing. Money is simply another resource. If a Government want people to use less of it, they have to raise its price.
  When I intervened in the economic debate on 7 June, I told the right hon. and learned Member for Monklands, East (Mr. Smith) that, although his speech on 24 October contained some amusing bits, that did not conceal the fact that it was fundamentally shallow and unconvincing. I am glad to pay him a tribute now, as he clearly took my criticism to heart. His speech last Tuesday had so many funny bits in it that he almost succeeded in hiding the fact that its policy content was too thin to show if one stood it sideways. Today's speech was little better, so I am sure that the right hon. and learned Gentleman will not mind if I try to tease out some of the few threads of Labour's alternative policy that he found that he could weave into his speech on 24 October between the jokes.
  I shall start at column 684, skipping the first two and a half pages of comic invention. He said:
  "the first requirement of an alternative approach is to adopt an industrial strategy that puts the promotion of our wealth-creating manufacturing industry at the top of the national agenda for recovery."
  I hope that I am not being unfair if I say that this industrial strategy amounts to more publicly funded investment, more publicly funded training and much more public expenditure, although we have never been told how much more.
  Then, in column 686, the right hon. and learned Gentleman made it plain, when he talked about raising more money by taxation, that he would be perfectly ready to do this. We know that the Labour party is committed to massive income tax increases that would affect 95 per cent. of the tax-paying public—not forgetting its proposals for an investment income surcharge. The right hon. and learned Gentleman then dealt with credit controls, an issue that has become such a central feature of what passes for Opposition policy:
  "The Chancellor should seek to restrain the amount of credit made available by the banks. First, he should invite their co-operation in restraining lending."
  He added that he believed that the banks would co-operate, but if they did not,
  "the Government can require them to make deposits with the Bank of England, and that would have the effect of limiting the amount available for lending."
  He went on to say that he did not expect that foreign banks would take an irresponsible view if approached by the Government.
  As my right hon. Friend the Member for Worthing (Mr. Higgins) said in his speech later in the debate—it is a pity that he was not more widely reported—
  "such an idea is completely out of date because in a system of open economies without exchange controls it is simply impossible to achieve that degree of control, or even persuasion, over the international banking community."—[Official Report, 24 October 1989; Vol 158, c. 684–715.]
  If nothing else, there would be no means of making an overseas bank refuse credit to someone from this country who wanted a loan.
  What interests me even more is the fact that credit controls must mean credit rationing, and we have been given no sign of how a credit rationing scheme would work
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  and who would get priority. What, for instance, would happen to mortages? We should nor forget that mortgages account for 85 per cent. of personal borrowing. If wealth-creating manufacturing industry is to have top priority, how are the firms to be chosen and what say will the unions demand in that choice? It did not surprise me that, when the Leader of the Opposition was challenged about credit rationing by Mr. Hobday on Friday morning last week, he shot off at a tangent like a demented ferret, babbling about siege economies.
  I shall return to the exchange rate mechanism, about which we have all heard so much. The right hon. and learned Member for Monklands, East told us last week that we should
  "negotiate to join the ERM under the important and prudent conditions that the Labour party has outlined."
  The right hon. and learned Gentleman had to be prompted by my hon. Friend the Member for Northampton, North (Mr. Marlow) to remind us of those conditions, as he was again prompted today. What was his response on 24 October? He said:
  They are conditions relating to proper swap arrangements between the central banks, a policy for growth rather than deflation, and consideration of the right point at which entry to the ERM should be effected."[Official Report, 24 October 1989; Vol. 158, c. 684–5.]
  He was immediately challenged by my hon. Friend the Member for Horsham (Sir P. Hordern) to say what size of devaluation that entailed. The right hon. and learned Gentleman dodged the question, refused to give way further, and put up a great cloud of smoke by engaging in a prolonged exchange with my right hon. Friend the Member for Henley (Mr. Heseltine). We saw the same sort of tactic today. The right hon. and learned Gentleman refused to give way. He accused those who sought to intervene of organised wrecking tactics, and rode off in another direction.
  The Leader of the Opposition returned to the subject on Friday when he spoke of establishing serious conditions, and then negotiating those conditions for entry into the ERM, as something that the Government must do to assist the pound and the economy. That is a bit rich. In the first place, the "conditions" that the Labour party claims to have outlined are vague in the extreme, and virtually useless as a basis for any sort of negotiation worthy of that name.
  Even more to the point, the Government have already gone a long way down that road. The relevant terms of the Madrid summit are a commitment, and I think that the Government have the terms right. Britain will join the ERM when our Madrid conditions are met. Nothing has changed on that since last week. There is no question that we shall go into the ERM, but we shall not do so immediately, not even within the next month.
  It will take time to reduce inflation, and it will take time for other Governments to remove the controls that prevent the free movement of capital in many European countries; France is very much an example. Mr. Mitterrand should be concentrating very much on removing those controls instead of dreaming up new and unnecessary treaties of Rome in some sort of geopolitical effort to forestall forces at work elsewhere in Europe. Meanwhile, I am sure that we must be careful not to let these matters become out of proportion or to constitute some sort of totem issue. I entirely agree with those who say that the ERM is not a soft option or a panacea. Membership must be a discipline or it will be pointless, but it must be an acceptable

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  discipline. That is why it is vital that we should adhere to the straightforward and sensible terms that we have set and insist that they are met before we join.
  In all this, the people of the United Kingdom will expect us to defend their interests. If we do not stand up for ourselves, who will? That brings me back to the Leader of the Opposition. At one moment he is under control, playing the part and sticking to the script, at the next he has gone bananas. That is exactly what happened last Friday morning on the "Today" programme when the right hon. Gentleman set out to talk the pound down, to make it plummet, and to do everything in his power to damage the economy for his own short-term political gain.
  The Leader of the Opposition said recently that the Prime Minister puts her pride before her country. Everyone knows that that could not be further from the truth. What is true is that the Leader of the Opposition will be remembered as a man who will do anything, say anything and unsay it for political power. He puts his ambition first and his country nowhere. That happens time and time again.
  7.54 pm
  Mr. Graham Allen: There has been some speculation that the former Chancellor of the Exchequer resigned because of the actions of the Prime Minister or Sir Alan Walters. That is not my view. The former Chancellor of the Exchequer resigned having read the Treasury's economic forecast for next year. It is one thing for a Chancellor to carry the economic can when he is in charge of economic policy and another to be the fall guy for someone else's economic policy. The Treasury forecasts that were prepared for the Autumn Statement were available for the Chancellor to see. There was no need for a crystal ball—he read the book and got out from under. Much of the forecast information was probably available in the summer recess; all that was needed was the opportunity artificially to up the stakes on his excuse—Walters—and get out with as much political kudos as he could muster.
  Of what was the ex-Chancellor of the Exchequer frightened? What do the Treasury forecasts predict? As they are not available to Members of this place, the nearest that we can get is the London business school survey, which was published yesterday and which predicts slow down, poor growth, deceleration in output, rising inflation, falling investment and increasing unemployment—welcome to the Treasury, Mr. Major! In addition, there is a world record trade deficit, the highest inflation in industrial Europe, the highest interest rates of any of our G7 world competitors, a devaluing pound, a reducing share of global manufacturing and money market hysteria which makes lemmings seem laid back. That situation, plus the Treasury's forecast of further deterioration into recession, explains with clarity why the ex-Chancellor of the Exchequer baled out when he did.
  Parliament has been a mere spectator. Oddly enough, the debate shows why we need a more democratically elected second Chamber. It underlines once again that the House is failing in its constitutional duty of holding the Government to account. That is more evident and more desperately necessary in economic policy than in any other area. No statement on the economy has been volunteered to the House by the Government since before the Summer recess. No emergency debate was granted after that recess
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  despite the magnitude of the crisis. It has been left to the official Opposition to use one of its Opposition days to drag the Chancellor of the Exchequer to the House. In years to come, this week will be remembered as a constitutional rather than an economic crisis.
  Where is the Prime Minister in all this? We all know that the right hon. Lady lacks confidence in the House. That is evidenced by the few occasions when she makes statements, compared with the number of times her predecessors did. Unquestionably, the Prime Minister holds the House in contempt, but we are told now that the bunker mentality has gone so far that when the Cabinet met last week it did not even discuss the exchange rate mechanism, the European monetary system or the crisis involving the Prime Minister and the Chancellor of the Exchequer.
  Without agreeing to it, we have seen the development of a twisted presidential system in which Parliament and the Cabinet can be disregarded and in which no written constitutional checks can be brought to bear. Where President Nixon's Erlichman, Haldeman and Dean could be exposed, an impotent and decorative House of Commons cannot even gain access to Powell, Ingham, Griffiths and Walters. The Mother of Parliaments, like the mother in "Psycho", sits as an ancient and obsessively preened skeleton—permanently in the dark.
  We criticise the City of London for being distant and irrelevant to the "real economy", but we in this place must demand to be more than an irrelevant sideshow to the real political life of the country, which we have allowed to gravitate wholly to the Government and the press conference. That is an issue to which the Labour party must give a great deal of thought.
  In the short period that remains to me in this debate, should like to dispel some Tory economic myths peddled by the Prime Minister and her yes-men. Those myths were nicely summarised by the Economic Secretary to the Treasury when he replied to the Adjournment debate which I raised on the state of the economy on the first day following the summer recess. I am sure that he will forgive me if I use his script as the basis for some comments.
  First, he talked of generating "sustainable economic growth" over the past few years. Where is that growth? The growth that we have experienced has been generated by consumption. During 1988, the gross domestic product grew by 8 per cent. while production increased by only 5 per cent. An article in today's edition of the Financial Times tells us that there has been a rise of 23 per cent. in the number of business failures since the same period in 1986. Insolvency practitioners say that that is the tip of the iceberg. Perhaps that is the iceberg to which the former Chancellor of the Exchequer, the right hon. Member for Blaby (Mr. Lawson) referred.
  The head of the Price Waterhouse insolvency arm says:
  "The situation is now worse than in the run up to the two previous recessions."
  Market forces have not delivered investment to Britain. There has been a collapse of manufacturing and we have seen massive investment abroad. Short-termism has strangled British enterprise.
  The Government then talk of "a supply side revolution." At least there is some truth in that. There has, indeed, been a supply side revolution. For 100 years we have largely supplied our economy from home production.

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  Now our supplies are coming increasingly from abroad. That is indeed revolutionary, but it is commonly known as a balance of payments crisis.
  The Government spokesman went on to say that manufacturing productivity is growing. Manufacturing as a percentage of GDP is falling and the reason for the growth in productivity is due entirely to the bankruptcies in the period 1980–82. Inefficient manufacturing companies were eliminated from the calculations so that average productivity rose. In cricketing terms, the Conservatives have taken all the bowlers out of the batting averages and declared that the team now has a higher average. In that statistical essay, the Chancellor, who I understand is a cricketing fan, appears as the blue bearded wonder.
  Then the man from the Treasury said:
  "Businesses are at the most profitable for 20 years."
  The surge in profits stems from an economic boom generated primarily by credit-financed consumer spending, which has worsened inflation. The outlook for profit growth is for a sharp downturn as economic growth slows and costs rise. Industry has taken advantage of the improved profits in order to one-time profit-take rather than to invest in their businesses and ensure continued growth.
  The Government have also referred to "unprecedented prosperity". If they are referring to the unprecedented consumer spending of the past five years, which has been credit driven, including mortgage borrowing, they are correct. However, all the surveys show that such a period is about to end and turn into a long period of slow economic growth, high inflation and Britain having the highest interest rates in Europe. The chickens are coming home to roost and many are deeply affected by the salmonella of decayed monetarism.
  Mr. Jaques Arnold rose—
  Mr. Allen: The reference to decayed monetarism was not an invitation to the hon. Gentleman to intervene. Then the man from the Ministry said:
  "investment has grown more than twice as fast as consumption, a clear sign that British industry has confidence in the future".—[Official Report, 17 October 1989; Vol. 158, c. 118–119.]
  That is one of several Government entries in the British Statistical Institute's whopper of the year contest. Consumption is measured in billions and investment in millions, but by measuring the increase in percentage terms, the picture can be reversed. For example, a 10 per cent. increase in investment is completely overshadowed in real terms by a mere 2 per cent. increase in consumption. There can be no greater compliment to the central office public speaking courses than that Ministers still keep a straight face when delivering such statistical distortions. The CBI surveys tell a completely different story. Business investment has collapsed due to high interest rates.
  According to the Economic Secretary, the Budget surplus is an achievement unequalled in the past 40 years. Basically, it means that Government income is higher than Government expenditure, which means that the Government have either overtaxed, perhaps by accident or perhaps to depress demand, or they feel that they cannot spend their revenues in the areas crying out for public expenditure because of the inflationary consequences of
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  doing so, so they use that money for prematurely repaying debts to the money market where it can swill around looking for short-term capital gain.
  Time has caught up with me so I must wind up my remarks. In the past few years, the Conservative party has successfully perpetrated a number of other economic myths. They need to be nailed and I shall take pleasure in performing that public service in the months ahead.
  8.3 pm
  Mr. Matthew Carrington: As my right hon. Friend the Chancellor of the Exchequer said, there is no doubt, contrary to what the hon. Member for Nottingham, North (Mr. Allen) was alleging, that the United Kingdom's underlying economy is strong at the moment. We need only look at one element of that economy to see how strong it is. At the moment, industrial investment is still running high and the corporate level of profitability has been running at record levels over the past 20 years. That is a combination of facts which leads us to suppose that industrial investment is likely to be sustainable in the medium term and perhaps in the long term.
  But it is equally true that we face two major problems in the economy, and both are closely related. One is the inflation rate and the other is the balance of payments deficit which is running at far too high a level. Both those problems must be controlled in the same way—by the rise in interest rates. Interest rates are, in reality, the only way of controlling inflation.
  As my right hon. Friend the Member for Worthing (Mr. Higgins) said last week, credit controls on lending institutions would fail. They would certainly fail in the absence of exchange controls being reintroduced, because anybody wishing to borrow under those circumstances would simply go to some bank which was not subject to those credit controls. As my right hon. Friend the Member for Guildford (Mr. Howell) said this afternoon, the Labour party's underlying policy in introducing credit controls and restrictions on bank lending through special reserves and reserve deposits is inherently to suggest the reintroduction of exchange controls.
  No one welcomes high interest rates, because of their effect on people with mortgages and on small businesses. However, it must be said that the damage that they do to large businesses is much less, since, even with the change in the overall corporate borrowing level in the past year, larger businesses tend not to be net borrowers. They tend to be cash-rich, which means that the present level of interest rates tends to favour them.
  But the damage caused by high interest rates is less than the damage caused by inflation, as has come out clearly in the debate. The danger of high interest rates is that they have to be maintained for too long, in which case the damage that they do to individuals trying to find the money to pay for their increased mortgages becomes much more serious. People can always finance a short deficit on their mortgage payments, but it is much more difficult if the deficit lasts for any length of time. Inevitably, interest rates have an effect on the exchange rate and, inevitably, the two are not necessarily working in the right direction.
  There is a strong argument that the level of interest rates in the economy is too high for domestic inflation purposes, but is only just high enough for exchange rate purposes. That in itself leads to a problem which may well

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  exacerbate the slowing down of the economy to the point where it would be difficult to control a soft landing. We must hope that interest rates, for exchange rate purposes, can be brought down before too much damage is done to the domestic economy.
  Industry needs a stable exchange rate so that it can plan and market properly for export orders. In the long term, that can be achieved only by bringing the fundamentals of the United Kingdom economy into line with those of our major trading partners, which in practice means the major countries in the EC, particularly West Germany.
  That is a highly desirable goal which it has been argued would be achieved by our joining the exchange rate mechanism of the EMS. The long-term goal to join the ERM is highly desirable, but to be able to do so and to make it work, we have to bring our economy into line with the other large economies inside the ERM, principally with West Germany.
  The mechanism for achieving that is rather complicated. The problem is that the ERM is effectively a deutschmark parity mechanism. Only one currency, the deutschmark, is heavily traded within the ERM, making the ERM a monopolar parity arrangement. That is relatively easy to sustain against the international currency transactions in volumes which will be dealing inside those markets. Inevitably, that will change as France removes its exchange controls. At present, the French franc is not widely traded outside the French banks, but it must be expected that when it is, pressure will be put on the ERM.
  If the United Kingdom joins the ERM, there will be two heavily-traded currencies inside the parity, which will lead to serious problems. If there are three heavily-traded currencies, with the French franc inside the parity, we shall run the risk of blowing the ERM wide apart. There is one simple reason for that. At present, currency dealers have no idea which way bank intervention will operate in their currency. If there is a parity arrangement and dealers know within which band of parity a currency is being held, they will be able to trade currencies against each other. Foreign exchange dealers and currency dealers will know exactly where intervention will come from and will trade on a one-way ticket.
  It would not be possible to sustain the present simple ERM if we joined it. One of the major constraints is that at present the Bundesbank dictates the monetary policy of member states through the ERM. It does so effectively, but I doubt whether it could do so if sterling were in the ERM.
  I was intrigued when my right hon. Friend the Member for Blaby (Mr. Lawson) said that suggestions had been made in the Treasury that the Bank of England should be constituted with its own charter—presumably modelled on the Federal Reserve in the United States—to enable it to control the money supply independent of political decisions. That has some attractions, even in isolation, but I am afraid that it is the attraction of copping out on political decisions. It should be possible to run monetary policy sensibly and prudently without establishing the Bank of England as a separate entity.
  It is sensible to consider that suggestion as a way of resolving the inherent problems of the ERM. If the Bank of England and the Banque de France could have a relationship with a more moderately constituted Bundesbank, so that the three central banks of the major EC currencies could operate monetary policy independent of political decisions, they could run monetary policy in such a way as to produce stability of monetary policy
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  across the EC which would enable the ERM to work. That is a fundamental change towards which we should perhaps move more rapidly than we are moving towards European monetary union.
  8.12 pm
  Mr. George Howarth: I listened with great care to the opening speech of my hon. and learned Friend the Member for Monklands, East (Mr. Smith). He isolated three important elements of policy which have a direct and important effect on manufacturing industry which poses the greatest problem in our economy. No one can take lightly the fact that our economy, which has historically been based on trade, has a balance of payments deficit in manufactured goods amounting to £20 billion. No matter what Conservative Members say or think, they cannot escape the scale and depth of the problem represented by that statistic. The House must accept that, no matter what is happening on the stock exchange or which way the currency is going, if manufacturing industry, from which wealth is created, is not healthy, the rest of the economy cannot be healthy and our aims cannot be achieved.
  My hon. Friend the Member for Bristol, South (Ms. Primarolo) made an important and specific point about what is happening in the financial sector. She expressed anxiety about the effect on her constituency of a takeover bid for the DRG group of companies. That will also affect my constituency, where a factory is about to be taken over. There is no manufacturing or industrial logic to the takeover, which bears out the point made by my right hon. and learned Friend the Member for Monklands, East. The only reason for it is that the organisation making the bid wishes to reduce productive capacity in that industry. That is the direction that the economy is taking but it will not produce the goods and services that we need for the future.
  I wish to concentrate on the Government's performance in the three areas mentioned by my right hon. and learned Friend. Before I do so, I wish to comment briefly on a point made by the former Chancellor of the Exchequer, the right hon. Member for Blaby (Mr. Lawson). Bank Briefing of August 1989—hardly a Left-wing journal or centre of revolutionary ideas—said:
  "While it is usual for the company sector to move into deficit in this stage in the economic cycle, a second year of deficit would be exceptional."
  Today, the right hon. Member for Blaby, who with his experience in the Treasury is presumably better informed on these matters than most hon. Members, conceded that in his view we shall have that second year of deficit during which company finances will be in even greater difficulty than this year. That was an important revelation. Let us be clear that our economic prospects in the manufacturing sector are no great shakes.
  A further matter for concern is the future of the engineering industry. I am interested in that industry because I spent the first 10 years of my working life in it and I am sponsored by an engineering union. In The Engineer of 28 September 1989—again, hardly an organ of the Labour party—John Pullin, writing an article entitled "Battening down the hatches", stated:
  "Engineering industry is heading for the downturn, and appears to be cutting back on investment in people, products and processes—the principal tactic used in the deep recession of the early 1980s."

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  Clearly, well-informed sources in the financial sector and the engineering industry as well as the former Chancellor of the Exchequer believe that we are inescapably heading for a hard landing.
  The three important points made by my right hon. and learned Friend about rebuilding the economy take on even greater relevance. If we are to climb out of the recession it is important that manufacturing and, in particular, engineering companies have the resources to do so. My right hon. and learned Friend the Member for Monklands, East spoke about the need for a regional policy. What is a regional policy and how does it apply? One important aspect which affects my region, the north-west, is proper transport links. We have had various reports about the progress of the Channel tunnel, but we now know that it will be finished. What will be the consequences for the regions?
  In the August edition of the National Westminster bank Quarterly Review—I presume that hon. Members will accept that it is not a particularly biased journal—Derek Palmer, who works for the CBI, wrote:
  "the 70 per cent. of United Kingdom residents who live outside the South East will be very much on the periphery"—
  when the Channel tunnel is completed. He went on:
  "instead of the proposed London to channel tunnel high speed rail link, there are strong arguments that a high speed line to Glasgow via the North West and Birmingham would give greater benefits."
  That is what the experts are saying about the needs of regional policy
  .
  Mr. Palmer went on to compare our position with that of West Germany. According to him,
  "West Germany invests three times as much in rail transport as we do. It is planning a 2,800 mile network of 150–170 mph inter city express services including 500 miles of new line."
  Nothing like that is happening in this country. The regional infrastructure that we need if we are to take advantage of any upturn in manufacturing simply will not appear—and that is just one small aspect of policy.
  The second of my right hon. and learned Friend's important points concerned research and development. I have compared the amounts spent—as a percentage of gross domestic product—by both Government and private sector in the United Kingdom, France, the Federal Republic of Germany, Italy, Japan, Sweden and the United States. The United Kingdom is bottom of the list bar two and equal with one. That hardly suggests the sort of Government action that we must expect if we are to experience a revival of the manufacturing and engineering industries.
  My right hon. and learned Friend's third point concerned investment in training. What is happening to that? Again, let us compare our progress with that of West Germany. I have figures from the engineering industry training board—they were published in July 1988, but the position has not changed much since then. In 1987–88, 8,273 people were undergoing apprenticeships as craftsmen and technicians; in 1979, the figure was 21,000. In West Germany, the apprenticeships in industrial metalworking trades alone amount to 179,000. There are 62,000 apprentices in industrial electrical trades, 184,000 in metalworking trades and crafts and 65,000 in electrical trades and crafts.
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  Clearly ours is no recipe for an industrial revival: we have not the regional infrastructure, the research and development or the trained people. What do the Government offer? They offer youth training schemes, which between them produce qualifications for only 25 per cent. of those who take part in them. The Government have failed to take any appropriate action to help manufacturing, and their failure has imperilled the entire economy. It has placed the trade by which we live in grave difficulty. That will ensure that they lose office in the next election, and deservedly so.
  8.22 pm
  Mrs. Teresa Gorman: In one of her perspicacious and incisive speeches, my right hon. Friend the Prime Minister once said that, whereas architects live in infrastructure, most of us live in houses. A similar comment could be made about economic debate in this House.
  Politicians deal in economic theories and dogmas of one kind or another, while the rest of the world has to pay the mortgage and keep the businesses going, in the teeth of fluctuating interest rates which make it extremely difficult for them to compete or to plan ahead. I think that it is good for some of the people who listen to "Today in Parliament" on the radio to hear some sympathy from some of us—who enjoy relatively secure incomes, although we may have mortgages to pay—and from economists in their ivory towers who pass on their theories to us; to say nothing of the Treasury officials, who are even more cushioned and feather-bedded than the rest. We tell these people that they must grin and bear it, because we are going to chase our economic theory of the moment—in this case monetarism—or we tell them that we must switch to yet another theoretical device, the European monetary system, which will somehow solve all our problems.
  The Labour party is, of course, a captive of the economic theories of Karl Marx: it is stuck with the Socialist idea that not only money but every aspect of the economy can be manipulated to make it work. At present, Conservative Members are in the grip of monetarist theories of the Chicago school of economics, which believes that controlling the money supply and using interest rates to regulate inflation—which, as we all acknowledge nowadays, is caused by Governments—can somehow make the economy and the money supply turn out all right in the end.
  I think of a family known to me, three of whose members were in employment 18 months ago. For 16 years, the husband was in a good job with a good salary; now he is out of work because the company's business was money and it no longer had a job for him. The firm that apprenticed his young son has had to get rid of him because of monetary constraints, and his daughter tells me that present monthly interest on her mortgage is what she used to pay in a quarter. Those people are in severe difficulties, largely because of our constant addiction to one monetary theory or another.
  When in the grip of one of these theories, politicians tend to believe that there is no alternative. My right hon. Friend the Member for Blaby (Mr. Lawson), however, touched on one alternative: he said that he had spoken to the Prime Minister some time ago about the prospect of

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  privatising, or at least making independent, the Bank of England, and he presented the idea that banks should not be manipulated by politicians.
  There is an alternative to our entry into the EMS, with all that that might entail. The involvement of a Euro central bank and a Euro central currency would in itself lead to inflation; the European Community inflates everything that it touches, as we have seen with the common agricultural policy. The alternative is a free banking system in which the Government would no longer intervene with money supply, and would allow the value of money to be decided by the markets. We should then no longer be in the grip of an obsession with some dead economic theory.
  I should have thought that by now it was generally accepted that Governments who tinker about to stabilise either industries or money inevitably end up in some sort of crisis. Conservative Members have abandoned the idea of monopoly control of industries; we believe in the creation of free markets. We have shown that it works —in steel and road transport, for instance—but we seem to baulk at the idea of doing the same with monetary policies. We are following the traditional line that the Government know best and that, somehow or other, we can organise money to stabilise the economic system. Yet we know that the ups and downs of past years—high interest rates and low interest rates—have all been produced in response to political demands. Our present circumstances, in my view, prove the need for deregulation of our banking system.
  Instead of concentrating on yet another panacea—in this instance, the EMS and the eventual establishment of a central bank—we should think in terms of denationalising, or perhaps demonopolising, the Bank of England, and making it just another bank in competition with the other European banks—which themselves should be free to set up banking institutions in the various European countries, and to circulate their currencies in competition with one another.
  The idea of having competing currencies has also been touched on by the Government in recent times. It would mean that people who did not quite trust their own Government to keep up the value of their money, would be free to move their money into other currencies, and this would exercise some form of discipline.
  The purpose of free trade in money is to impose on monetary and financial agencies a much-needed discipline by making it impossible for any of them for any length of time to issue the kind of money whose worth could be devalued. Inflation is a product of Government policy. It would be impossible for us to have inflation if there were competing currencies and if banks were responsible for their own decisions and their own financial policies. If any bank lent more than it should, the value of its currency would automatically be devalued. People would become aware that the bank was too free with its money. They would then move their savings or their business activities to banks that followed more prudent policies.
  If we decided to invest in, say, deutschmarks, the value of that currency would rise. In turn, that would restrain its use because people would look for a cheaper alternative. These currencies would then gain strength from that confidence, and this would eventually lead to some parity of value.
  The balance of payments problem would not exist if there were a free market in currencies and free banking. We do not worry about the balance of payments between,
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  say, Lancashire and Yorkshire. We would not need to worry about it, either, between Germany and France., or between France and Britain, or between Britain and Spain if there were a free market in currencies within Europe and if the central banks of the European countries were denationalised.
  Britain could lead the way by means of its own internal monetary policies. We could decide to have competing currencies in this country. We could remove our legal tender laws which prevent that from happening and decide that the Bank of England should no longer be subject to Government control, that it should stand or fall by its own economic decisions.
  By creating a free market in money and in banking, we should be able to settle down to living our lives without constantly worrying about the fluctuating value of money, which leads to inflation, and fluctuating interest rates that are designed to correct inflation. In just the same way as we do not worry now about shopping for our groceries because we have a choice, or about shopping for our clothes because we have a choice, we should also have a choice in money and in banking.
  8.32 pm
  Mr. Jim Sillars: When the dust settles on this debate, I think that people will find that the opening lines of the Scottish National party's amendment, which has not been selected, are most apt. A grave indecision on a major economic matter still lies at the heart of the Government. The Prime Minister has told us that advisers advise and Ministers decide, but we have yet to have a clear, rational explanation as to why the adviser was preferred to the decider on economic policy. That will come back to haunt the Government time and again.
  When I returned to Westminster after almost 10 years it was like coming through a time warp. With the exception of a few electronic clocks, nothing had changed. The place had retained its wigs and garters, its delusions about its pre-eminent place in the world's democracies and its sad, tenacious hold on traditional patterns of thought, action and style from bygone days. Only one piece of the old jigsaw was missing from the time warp—an economic crisis.
  The past week has put the final piece of the jigsaw in place. It is just like old times again. Some time soon I am sure that we shall hear once again the erudite arguments which used to be swapped by the dual failures on both Front Benches about the J curve, or perhaps we shall remain entranced by the new contraption of the exchange rate mechanism, which will doubtless spawn an immense journalistic industry in the next 12 months. The right hon. Member for Guildford (Mr. Howell) already said that there will soon be 650 experts on the ERM in the House of Commons and I am sure that it will be talked about in all the pubs, clubs and golf clubs throughout the country.
  In reality, we are living through just one more episode in the saga of decline, relative to the rest of the world, witnessing the weakness and crisis of an English economy which at its core is essentially weak, and a political economy which is incapable of addressing that essential weakness.
  The core weakness of the English economy is its lack of sufficient indigenous basic resources in relation to its population and a consistent failure to overcome that weakness by investing in manufacturing at a magnitude

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  which would enable English society to buy in what it does not naturally have, add value and capture overseas markets—as the Japanese have done with an essentially core-weak economy. Faced with the challenge to invest the political economy concentrates instead on consumption, engineered to win elections over what are, in economic terms, remarkably short four-year cycles. That emphasis on consumption simply compounds the weakness and creates a series of crisis in the English economy.
  Nothing new is happening now. In 1964, the Tories bequeathed an economic crisis to Labour. In 1970, after the white heat of the technological revolution had been doused before it caught fire, Labour handed an economy in trouble back to the Tories. In 1974, the deflated ball was passed back to Labour, and in 1979 Labour passed on a shambles to the Tories. For eight years thereafter there appeared to be a break in the cycle of failure. The Tories proclaimed it a miracle, and so it was—a miraculous and spectacular robbery of £78 billion of oil wealth from Scotland, a vast sum from a resource which gave them additional revenue and simultaneously covered up the growing crisis in the balance of trade created by the continuing destruction of the manufacturing base. The miracle is that they got away with it. Without that money there would have been no election victory for them in 1987.
  Now that oil prices have been reduced and the camouflage removed, the real economy can be seen again—a bit different here and there but still essentially weak, because investment has never reached the level required to give it clout in the international arena. Now we are back in the usual crisis. The Tories have no answer, and when one analyses the speeches of the right hon. and learned Member for Monklands, East (Mr. Smith) and the hon. Member for Dunfermline, East (Mr. Brown) last week, one sees that Labour has no answer either. Both were witty and stylish, but their policies lack substance.
  The harsh fact is that if the English economy is to claw its way out of 150 years of decline it can do so only by sacrificing consumption to investment. That would require a combination of monetary and fiscal policy, of which tax increases would form a key part. The consequence would be a drastic cut in the standard of living for the hitherto boom areas of the south. Both Labour and Tories calculate that that is not politically possible, so the decline will continue.
  In the meantime, over many, many years, the Scottish economy has suffered greviously from being handcuffed to this weak English economy especially when, after the first and second world wars, centralisation—meaning London control of policy and a loss of indigenous control—became the order of the day north of the border.
  In a recent document, "Scotland's Economy", the Scottish TUC puts it well. It says:
  "We start with the dimensions of the crisis. Norway and Denmark both have populations of roughly the same size as Scotland. At the beginning of the century Scotland possessed a far more productive economy than either. Output per head was more than 50 per cent. higher. Now the position is reversed. Scotland's GDP per head is only 89 per cent. that of Denmark and 76 per cent. of Norway's."
  The document also tells us:
  "Scotland's industrial workforce today is only 58 per cent. of what it was in 1972."
  Although the STUC hoped that it would not be read as such, and has tried to massage the time scales to
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  concentrate mostly on the past 10 years, it cannot hide the consistent hammering and debilitation of the Scottish economy under both Tory and Labour regimes. In reality, the document is an indictment of both. The message that roars from its pages is that Scotland needs to be free if it is to flourish.
  All economists of whatever school now agree that the English economy hangs on the brink of recession. The Government's policy of high interest rates is deliberately designed to force it as near that brink as possible without going over the edge and losing even minimal growth. History shows, however, that policies designed to deflate the English economy deliver a killer blow to Scotland's economy, because yoked as we are in a political and economic union which Labour defends as vehemently as do the Tories, we have no choices north of the border. Cooling off down here puts us into deep freeze. We are told that all the present agony of interest rates is to cool off the overheated south of England, but we do not have any experience of overheating in Scotland.
  Of the top 10 unemployment black spot areas, Strathclyde, Fife and the Western Isles occupy three places. They represent more than half Scotland. While west Sussex has an unemployment rate of 2 per cent., in Strathclyde it is 12·9 per cent. and in Scotland as a whole it is 10·4 per cent. Those are the fiddled figures. In reality, unemployment is much higher. In Kinning park, Govan, the unemployment rate for men is 29·6 per cent. and the overall rate is 22·6 per cent. Not even in the world of the unreal, which describes Downing street today, could anyone argue that those figures represent an overheating which demands a squeeze by means of an interest rate of 15 per cent.
  The lesson to be drawn by the people of Scotland from this Tory crisis and from previous Labour ones is that the union in which we now are is redundant and damaging. Only when we move from this union to the new union of the European Community—which will enable us to make key decisions on monetary, fiscal and investment policy—will Scotland, which has an intrinsically strong economy, fulfil its potential.
  8.43 pm
  Mr. Anthony Coombs: One of the less edifying spectacles of the past two days has been the gleeful anticipation of many Opposition Members, waiting for the market to crash, the pound to plummet or a crisis to occur. Nothing more clearly demonstrates the hypocrisy of their so-called interest in the health of the economy than their profound disappointment that none of those things has happened. The markets have firmed up and the pound has been recovering. The reason is quite simple. Despite temporarily high interest rates and speculation about our entry into the exchange rate mechanism, and even despite the Chancellor's resignation, the markets recognise that the economy is underpinned fundamentally by a very strong backing.
  I could quote statistics which have been mentioned today on the record of manufacturing exports, the record of sustained growth and increases in the standard of living which seem to have eluded the hon. Member for Bristol, South (Ms. Primarolo), but I will quote first three factors to emphasise my point. First, British industry is spending on training and investing in its work force £18 billion per year, which represents £700 per year for every man,

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  woman and child in this country. What is more, that figure is expected to increase by a further 50 per cent. this year. Secondly, only last week in my constituency Brinton's, the biggest carpet manufacturer, announced a locally based investment programme of £41 million over the next five years. That does not seem to demonstrate a lack of faith in our economic policies or in the strength of the economy. Thirdly, only yesterday an article in The Independent stated:
  "The underlying strength of the economy—as measured by bank lending, declining unemployment and manufacturing output is … robust."
  Of course the Gallup poll shows a fall in consumer spending. That is the intention of high interest rates. The housing market has at last been corrected from the over-high levels that it reached. More important, the CBI survey, despite showing some slowing down in investment intentions, still forecasts a growth rate next year of between 1 and 2 per cent., which demonstrates that although growth is slow, it will not stop altogether and there will be the soft landing that the Government have targeted.
  We have obviously focused on interest rates because as my right hon. Friend the Chancellor said, the Government have regarded them as an essential tool of monetary policy. Ever since the Macmillan committee of 1931, through the short-term interest rate control of the 1950s to the interest rate controls of the past few years, the role of interest rates in affecting demand in the economy has always been the subject of some debate.
  As the hon. Member for Fulham (Mr. Carrington) rightly pointed out, there has always been a conflict between their internal role in reducing the aggregate demand through consumption, thereby reducing inflation, and their external role in increasing the exchange rate which decreases inflation but makes the elimination of the balance of payments deficit more difficult through the falling value of the pound, especially as in recent times balance of payments deficits have often been a manifestation of increased excess demand in the economy rather than rising prices.
  Against that background, I wish to make two points. First, if demand in the economy is to be properly regulated, interest rates must operate in the right fiscal and monetary environment. On Friday, I was pleased that the Chancellor said that the economy is not regulated by interest rates alone. Although he was right to raise interest rates to bring down inflation—it worked in 1984–85 and it will work now—that is more effective in the context of monetary supply control. It is significant that, over the past three years, the broad-based measure of money in the United Kingdom has risen by 100 per cent. while in Germany it has increased by only 45 per cent. and there is evidence, particularly in Australia and Spain, that despite high interest rates, if the broad level of monetary growth is not contained, it will result in increased inflation.
  I hope that the Treasury will consider renewed targeting of monetary supply. If an independent Bank of England —as mentioned by my right hon. Friend the Member for Blaby (Mr. Lawson) and my hon. Friend the Member for Billericay (Mrs Gorman)—would help, I would be quite happy about that. Interest rate policy is far more effective if fiscal policy is tight as it is at the moment. More important, interest rate policy works if it is realised that in the long term, and possibly in the short term, it cannot be used to buck the foreign exchange markets.
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  Secondly, our obsession with entering the exchange rate mechanism is bogus. The exchange rate mechanism is, as the new Chancellor of the Exchequer said today, a contrivance and not a recipe for problem-free economic management. As my right hon. Friend the Member for Blaby said, there are two strands of thought on the role of the exchange rate in anti-inflation policy, but anyone who thinks that simply joining the ERM will be a panacea for inflation-free economic growth is living in cloud cuckoo land. It is clear that, so long as the relative rates of inflation within different countries in the exchange rate mechanism are different, our entry into the ERM will be impractical.
  The Germans have recently wanted to revalue against the existing members of the exchange rate mechanism. That was emphasised by the chief economist of Paribas, who is otherwise in favour of our joining the ERM, when he said:
  "Sterling cannot conceivably join the ERM before the second half of 1990, when there could be a distinct slow down in United Kingdom inflation."
  That was borne out today by the Financial Times, which said that, far from converging, the economic policies of member countries of the ERM are diverging, if one considers their ratio of debt to GNP or their budget balances or deficits, all of which are growing further and further apart and may lead to problems for the stability of the ERM in the longer term.
  I find it hard to stomach the hypocritical and somewhat dishonest attitude of the Opposition. We did not hear much of the economic policy of the right hon. and learned Member for Monklands, East (Mr. Smith), apart from the fact that it would involve some sort of industrial strategy. The Opposition say that they want to encourage saving, so why did the hon. Member for Islington, South and Finsbury (Mr. Smith) say last year that we should reduce interest rates to deter savings and increase inflation" Why did the Labour party not cost its proposals, which will cost £40 billion, increase inflation to 27 per cent. and rob savings of their value? In its policy review, it proposes to abolish the business expansion scheme. How will that push savings into young companies? How will savings be encouraged by a wealth tax, a capital value tax or a tax on unearned income over £3,000 per year? Yet all those ideas were put forward in Labour's recent policy review.
  Labour Members talk about incentives and support for manufacturing industry. Will they explain why when the last Labour Government were in power output in manufacturing industry fell? What will be the effects on labour costs of Labour's proposed payroll tax and the less acceptable parts of the social charter? How will incentive be improved by decapping national insurance contributions and increasing the top rate of income tax to over 50 per cent., when we know that doing the opposite has not only increased yield and incentive but has made the tax system more equitable and fair? Labour Members will find it impossible to answer those questions.
  Like the economy that the Labour party left us in 1979, Labour Members are bankrupt. They are bankrupt of ideas, competence and credibility. Their concern for the health of the economy is bogus—and so is their motion, which I urge the House to reject.
  8.52 pm
  Mr. Austin Mitchell: I shall not attempt to follow the hon. Member for Wyre Forest (Mr. Coombs), because the degree of his confidence is in exactly

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  inverse ratio to the degree of his understanding. Over the next few months, he will have to maintain that balance if he is to retain his sanity.
  I do not want to comment on the fun that we have been seeing in the Fuhrerbunker or the hatred at Hatter's castle over the past week. It has been a touching spectacle, with the brave little woman getting on with the woman's work of trying to dominate the world, but being upset by emotional men throwing menopausal spasms all over the place.
  I should not want to comment on that domestic drama. However, I should like to comment on the advice given by Professor Alan Walters, because much of the argument rests on whether his advice is accurate. Professor Walters was saying, first, that the pound needs to come down and, secondly, that we should not join the exchange rate mechanism. That advice is correct, because the pound is overvalued in real terms, even according to 1986 figures, by about 17 per cent. against the deutschmark, and by 45 per cent. according to 1976 figures. It will be difficult for British industry to prevail, to compete and to send exports to the EEC. Our main problem is that 75 per cent. of our deficit is with the EEC. It will be difficult to compete against imports in our home market.
  Professor Walters seemed to be saying that the EMS is a monetarist joke that imposes on us an externally determined exchange rate decided by our competitors, whose interest it is to ensure that sterling is overvalued. It puts us back in the old sisyphean trap of struggling to maintain an externally determined exchange rate.
  If we enter the EMS, sterling will be a guy rope holding the deutschmark down. The main problem with trading in Europe is that Germany is maintaining its huge industrial expansion and surpluses by keeping the deutschmark undervalued. If the ERM becomes a means of maintaining that undervaluation, it will lead to what it has led to in France and Italy—deflation, depression and a rise in unemployment. It seems to me that Professor Walters's advice is correct. The interesting question is why the Government do not accept it.
  Britain's industrial base is threatened because of the folly of the Government's economic policy. For the first four years of their term of office we had massive deflation, which closed about a quarter of our manufacturing capacity and led to a loss of 28 per cent. of manufacturing jobs. If that deflation is followed, as it was, by a massive expansion of credit, a balance of payments deficit on the scale that we are experiencing is inevitable, because British industry cannot cope with the ensuing demand from the credit explosion.
  How do we now deal with that problem? The only way is to get the exchange rate down. The Americans, faced with a smaller deficit in trade, talked the dollar down by about 40 per cent. That requires lower interest rates, so we can use the exchange rate to return the competitive advantage of British industry and to tax imports effectively. We secure that by lower interest rates, which help to counteract inflationary consequences. Any inflationary consequences will be comparatively minor because there would be an improvement in unit costs, but we will also need to counter inflationary consequences with social co-operation.
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  The hoo-hah of the last week and the dramatic resignation of the Chancellor should be used as an opportunity, or perhaps as a smokescreen, not to say "We shall carry on with our policies", which will be disastrous and ruinous for British industry, but as an opportunity to change and accept the advice that Professor Walters offered in the first place.
  8.56 pm
  Mr. Jacques Arnold: I cannot help noting that here we are yet again with an Opposition debate on the economy. In view of the events over the past few days, I should have thought that we would be seeing a full-scale motion of no confidence in the Government. Would it be uncharitable to wonder why? Could it be that such a motion would have to be moved by the right hon. Member for Islwyn (Mr. Kinnock), and could it be that on the subject of the economy he fears that he might be kebabbed?
  We have heard many learned speeches on the exchange rate mechanism. The one message that is clear is that it is not a comfortable infant's cradle in which we would be cared for by a nice cosy German nanny. We should have to keep within the allotted exchange rate band, but we would not have the weapon of the exchange rate to keep within that band. Therefore, increased reliance would be placed on the interest rate weapon.
  Today, we rely heavily on interest rates, as every hon. Member knows. With home ownership running at about 70 per cent. of the population, householders and business men in our constituencies are coming to us with complaints about the pain that has been created by interest rates. The opinion polls reflect that concern.
  At the end of the day, the objective is to limit credit. That has been done by price rather than by rationing. It is clear that the Opposition's policy is to rely on the latter. Credit cards and personal consumer borrowing make up only 15 per cent. of total borrowing, and even the Opposition recognise that. In his Walden interview, the hon. Member for Dagenham (Mr. Gould) said:
  "We're not talking about the familiar aspects of credit control, the hire purchase restrictions, limiting credit cards and so on—these are not big elements."
  They are concerned not about that but about the 85 per cent. of personal borrowing that takes the form of mortgages.
  The Opposition would introduce rationing of mortgages. That would hit those who are trading up. The message is clear to the electorate: if someone is thinking of moving to a better home for their family, they should be prepared to go cap in hand to a bureaucrat and, even then, they will probably not obtain the increase hoped for.
  The hon. Member for Dagenham let the cat out of the bag when Brian Walden asked him if those restrictions would inevitably hit young couples. The hon. Member for Dagenham said, "Yes." Since that Walden interview the right hon. Member for Islwyn (Mr. Kinnock) and the right hon. and learned Member for Monklands, East (Mr. Smith) have trampled on each other in the rush to the microphone to say that that is not Labour party policy. The right hon. and learned Member for Monklands, East said last week—
  Mr. Neil Hamilton: Will my hon. Friend give way?
  Mr. Arnold: No, I must finish in 10 minutes.

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  The right hon. and learned Member for Monklands, East said that he would invite the banks to co-operate in the restraining of lending. When he was twitted about the likelihood of their complying, he asked a question of my hon. Friend the Member for Amber Valley (Mr. Oppenheim):
  "Is the hon. Gentleman saying that the banks would refuse to co-operate with a Government who sought to place some limit on lending? Which banks is the hon. Gentleman making that accusation about?"—[Official Report, 24 October 1989; Vol. 158, c. 687.]
  I would answer that question by telling the right hon. and learned Gentleman to look at the hoardings being put up by Lloyd's bank. It has a splendid poster which says:
  "Where can we get a loan for a decent holiday?"
  I can think of no more financially irresponsible and immoral question than that, which is trying to influence consumers to borrow for a holiday.
  Why would the banks co-operate voluntarily with a future Labour Government when the trade unions—the Labour party's own paymasters—would not co-operate with the last Labour Government? Why would the City co-operate with a Labour Government when, in Labour Weekly, the right hon. Member for Islwyn described the City as
  "the army of brokers, jobbers and other quaintly named parasites."
  Even if we were to assume that British banks would fall into line and that the Bank of England would oblige foreign banks with branches in London to comply, how would the right hon. and learned Member for Monklands, East control overseas banks and get them to comply in the absence of exchange controls?
  There are hundreds of banks established with branches located in Amsterdam. The Dutch market is free of exchange and capital controls and they could, and probably would, set up departments to handle British domestic lending. The funds flowing to and fro could not be controlled. The Opposition have not suggested a viable form of credit controls in either this debate or the debate last week.
  I would make a plea to my own Front Bench spokesmen. There may be economic merit in mopping up excess spending power, but will my hon. Friend the Minister bear in mind the fact that the pips of too many mortgage borrowers are sqeaking?
  When my right hon. Friend the Chancellor considers his Budget next year, he should consider increasing mortgage interest tax relief from the current £30,000 limit to £45,000. That would constitute a greater proportion of house prices, particularly in the south-east. He should restrict that to the standard rate tax band. That would be fiscally neutral to the higher earnings but would give relief to average and low-paid households that look to the Government for protection.
  9.3 pm
  Mr. Rhodri Morgan: This has been an interesting debate. It has been bye bye, Blaby, hello, Huntingdon. The former Chancellor attempted to explain how he became the enemy within and referred to the interesting parable of the iceberg. It was not clear to me whether he thought that the Prime Minister was the iceberg or whether he thought that she was the captain of the Titanic and that he was the iceberg.
  It is true that the Prime Minister has been busy rearranging the deck chairs in the past few days. One result
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  is that the right hon. Member for Huntingdon (Mr. Major) has become the Chancellor of the Exchequer. Obviously, we all welcome him to his new job. It is always interesting to see the Bob Cratchit of the House of Commons suddenly becoming the Scrooge, and we expect to hear many more contributions from him. He is famous for being able to devour briefs from civil servants. We are sure that the Prime Minister has recognised his talents and will send him many briefs to master over the next few years. We realise that he has his own mind, but we shall not expect the Prime Minister to let him use it much. It is clear that, from now on, the Government's policies will be made in No. 10. The Prime Minister does not necessarily choose Ministers for their talent. They are chosen in spite of it.
  The Government, especially the right hon. Member for Huntingdon, appear to believe that the balance of payments problem will be solved by high business investment. That is contradicted by two outside elements, which are probably more objective than the Chancellor. The first is the London business school survey, which we all probably read on Sunday, which showed that the balance of payments would continue with a deficit of £15 billion for the next four years and that the slowdown in the economy, which high interest rates will produce next year, will result only in a marginal decrease in the balance of payments deficit.
  We must all look forward, because this problem will concern Governments of both persuasions, and think what a catastrophe an accumulated deficit extending over a five-year period—£20 billion this year, £15 billion last year and at least another three years of deficits of £15 billion—is for the whole country. How can it be turned round? How can we produce surpluses of £15 billion to £20 billion in the following four or five years to repay credit from other countries used to finance present excessive consumption?
  Secondly, the theory is that business investment today will solve the balance of payments problem tomorrow. How can that be true, given that, during the past week, the Governor of the Bank of England has been issuing warnings about the nature of that business investment? He has made it clear over the past six or so months through informal forms of credit control that the banks are lending too much money to the property sector. There are no financial or legal sanctions that he can exact—this is an informal form of credit control. Conservative Members persist in believing that it does not and could not exist. The Governor of the Bank of England publicly announced his warning: "Please, do not lend so much money to the property sector." British industry is investing far too much in property and ergo far too little in the productive investment which might correct the balance of payments problem.
  Let there be no doubt about the nature of business investment. The boom has been in fixed assets to too great an extent. Even the Governor of the Bank of England has issued informal and, finally, public warnings to that effect. Business investment is high, but it is in the wrong sectors—those that will never reduce the balance of payments deficit. Investment in office blocks has been booming, but they do not turn themselves into exports. Yes, there can be some exports in financial services, but it can never match a deficit of £20 billion without reorientation of business investment into the productive manufacturing and highly exportable sectors. Anyone who believes that our business investment is healthy, as the Chancellor said earlier today,

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  and that it can on its own solve the balance of payments problem had better talk to the Governor of the Bank of England, because plainly he does not believe it.
  The Chancellor showed astonishing naivety today. It is clear that his previous experience as Chief Secretary, when he merely tried to add the public spending forecasts of the different Departments, has not equipped him for his onerous responsibility for overall economic policy. I do not say that in a spirit of curmudgeonliness. I welcome any new appointment which might help us to run the economy in such a way that we can look forward to some equilibrium with our overseas trading partners.
  The hon. Member for Glasgow, Govan (Mr. Stillars)—once his remarks were stripped of their Caledonian paranoia—was right to say that the right hon. Member for Blaby (Mr. Lawson) had had the good fortune to preside over such a long period of a massive injection of advantageous oil wealth into the public Exchequer as to give him the luxury of making choices that Chancellors in other decades had not had.
  The economy is almost back on a normal path now. There is still some extra bounce in it arising from our oil wealth, but that is much less than it was. We now need from the new Chancellor a direction of economic policy which will put the balance of payments deficit right. It is now at world record levels, 4 per cent. of our GNP, which is not production at home but consumption from other countries that we are having to finance. If we do not get that right, we will inherit an enormous mess when Labour takes over the government of Britain two years from now.
  9.10 pm
  Mr. Gordon Brown: I wish at the outset to welcome the Chancellor to his new position and I shall begin by saying what he should have said this afternoon. He should have said that he would introduce an Autumn Statement for investment in industry and that he would deal with the trade deficit as a serious problem. He should have conceded that supply side measures for investment, training and research and for the regions were necessary and that he would act to curb the inflation that the Government had directly created by their policy of inflating electricity and water prices and by the poll tax. He should have announced that he would open negotiations to join the exchange rate mechanism on the conditions that Labour had suggested.
  In short, the Chancellor had a marvellous opportunity, as he changed jobs, to change policies. Instead, he told us that he was determined to repeat the errors of the past. Those mistakes in the last 18 months have meant that mortgages have risen by £80 a month for the typical home owner. They have meant that business borrowing is now up by more than £1·5 billion. They have meant that company bankruptcies have risen by 18 per cent. in the last year.
  Those mistakes, which have led the CBI to worry about faltering and then falling investment, have made us, for the end of this year and next year, the slowest-growing economy in Europe, and have led the European Commission in its annual report on the British economy, published a few days ago, to say that British investment was low by European standards, that savings were pitifully
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  low, that the trade deficit would not fall of its own accord and that there was a range of weapons, beyond the exclusive reliance on interest rates, that should be used.
  Yet today, when we are faced with all the problems that business, industry, home owners and families throughout the country confront, the Chancellor made a virtue of saying that there was not the slightest need for a change of policy. There was no hint of the possibility of even the remotest fine tuning of the nation's economic policy. The Government still claim to the last detail, to the last decimal point, of their interest rate strategy, that nothing needs to be changed.
  That has been the spirit of the events of the last seven days. The first occurrence after the Chancellor resigned was that the Deputy Prime Minister told the House that their "successful policies" would continue, the economic miracle was intact. Then the new Foreign Secretary came on the radio—no doubt looking forward to the freedom of a job in which he could be far from Downing street—and said:
  "It is a long time since the Cabinet was so united on major items of policy."
  Then we witnessed incessantly on radio and television the increasingly ridiculous and ever-present figure of the chairman of the Conservative party, a one-man Saatchi and Saatchi, saying: "Everything will go on just as before."
  That was not the most reassuring statement at that time. "Just as before," he said, meaning resignation, reshuffle, confusion and disarray. "Business as usual," we were told. it was to be "the team approach".
  Our argument is that, even after weeks of division and disarray, of uncertainty and confusion, even after the resignation of a Chancellor who had been in office for six and a half years, and even after the personal adviser to the Prime Minister had resigned, the divisions which led to the resignations over the economic direction of policy remain to be resolved, and nothing that the Chancellor said today leads us to believe that they are on their way to being resolved.
  There were two questions before us after the Chancellor's resignation—why did he resign, and what is the Government's policy? We now have an answer to the first question, courtesy not of the Prime Minister in an hour-long interview on Sunday, but of the former Chancellor in a 15-minute speech this afternoon.
  Dame Elaine Kellett-Bowman: It was nine minutes.
  Mr. Gordon Brown: It was a nine-minute speech this afternoon, which was dignified and a model of what a speech in these circumstances should be. Let us recall what the Prime Minister said about the Chancellor's departure on Sunday. She said that she did not know why he had resigned. When asked whether he would have stayed if Sir Alan Walters had gone, she said:
  "I don't know, I don't know."
  She did not seem to know why he had gone.
  Can anybody be in any doubt why he resigned after what we have heard today? It was not a personality clash, some wayward gesture or a spur-of-the-moment decision. As we have heard this afternoon, it was a fundamental question of policy—a question of exchange rate policy, which is right at the heart of the Government's economic strategy. As the former Chancellor well knows, it is a matter that has not yet been resolved.

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  The former Chancellor told us three things this afternoon: first, that he believes in exchange rate management; secondly, that he had come to the conclusion that the European monetary system and the exchange rate mechanism were the best vehicle for it; thirdly, that the sooner we were able to join rather than later, the better for this country. It is perfectly clear what the dispute of which, as he said, the Walters article was the tip of the iceberg was all about. Can anybody doubt how strongly he felt about EMS?
  Mr. Lawson: If I may just set the record straight, the tip of the iceberg I was referring to was that this one article was merely the tip of the iceberg of Alan Walters's activities generally. I was not referring to the wider issues as being part of the iceberg. That is a different matter on which I was giving my views to the House.
  Mr. Brown: I am grateful to the former Chancellor. Before he arrived in the House, I said what a dignified speech he had made. The former Chancellor clarified the Walden interview in even greater detail than we had suspected. When the Prime Minister was asked whether the Chancellor would have stayed if Sir Alan had gone, she said:
  "I don't know, I don't know."
  From what the former Chancellor has now said, it is clear what the result might have been.
  No one can doubt how strongly the Chancellor felt about European monetary co-operation, no one can doubt how much he felt that the Madrid compromise was in difficulties, and no one can doubt that the issue was not just Professor Walters's activities, but the Prime Minister's apparent agreement with the views of Sir Alan. Yet this is the Prime Minister who said on Sunday—and on Thursday and again today—
  "I have always supported my Chancellor."
  The issue that still remains to be resolved is whether the Prime Minister, since Thursday's events, has ever repudiated Sir Alan Walters. Has she ever repudiated his view that the EMS was "half-baked"? Has she ever repudiated his view that the EMS had only a minimum level of plausibility? Has she ever repudiated Sir Alan's view that he spoke for the Prime Minister as well as speaking for himself'? It is not what the Prime Minister did not know on Sunday, but what she did not want to say, that is the issue. That is the question at the heart of the Government's confusion of policy, which remains even to this day.
  What are the Government's views on these major issues of economic policy or, more appropriately, what are the views of the Ministers one by one, because that is the way in which we now have to deal with these matters?
  Let us start with the views of the Prime Minister. Can anybody doubt that, although the Government's official policy was to believe in exchange rate management and co-ordination, the Prime Minister has always believed, in her own words, that one "cannot buck the market"? While the official policy for many months was for co-ordination, the Prime Minister's view is that sterling should be floating free on the foreign exchanges and determined by market forces. The Government's official view was to join the exchange rate mechanism, but what is the Prime Minister's view? Has she ever given us one good reason for joining?
  Let us consider the Prime Minister's excuses for not joining. In 1985, she said that she could not join because of the strength of the dollar. In January 1986, she rejected
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  joining because she said that the British economy was different. In March 1986, the reason was the special status of sterling. In April 1986, it was the potential drain on our reserves. In June 1986, it was speculation. In November 1986, as the Financial Times article reveals, the reason was our economic weakness. The Prime Minister said that we would go in strong—if she was going to take us in. In 1987, her reason for not joining was the deflationary impact of the links to the deutschmark. In 1988, the excuse 'was inflation, and in 1989, the number of conditions to be met has multiplied.
  In June this year, the ex-Chancellor referred to the two main preconditions for joining the exchange rate mechanism, which he identified as inflation and the removal of exchange controls. The Prime Minister, in response, said:
  "Far many more conditions must be taken into account."
  It was a question of waiting to see what happened with inflation, and even then sterling could join the EMS only if the conditions clearly existed. The Prime Minister then added cabotage, and on Sunday she added doubts about policy towards British family farms.
  Under those circumstances, is that evidence of the Prime Minister wanting to join the EMS? Is the Prime Minister looking not for arguments to go in, but for excuses to stay out? She is not looking for actions we can take, like reducing inflation, to make it possible for us to join; instead, she is looking for action that she expects others to take so that we can stay out. How many more conditions will she have added by 1990? If the Prime Minister has her way, we will not be new members of the EMS by 1990, but there will certainly be new conditions.
  Where do the rest of the Cabinet stand? Where does the Deputy Prime Minister stand? At the weekend, he said that it was of the highest importance that the Government remained committed to the position, clearly and in good faith. He said that we had to be clear about what was agreed in Madrid. How did the letter or spirit of Madrid include cabotage, which was added by the Prime Minister? How did it include dealing with the French farmers or, as the Prime Minister said, that
  "artificial and cultural barriers had to come down"?
  Is anyone in any doubt that the Prime Minister was attempting to create conditions to make it more difficult to join? Is it correct that on 24 January in a Lobby at the House, as the Daily Telegraph reported, the Prime Minister said that Britain would not join during the course of this Parliament?
  Where does the Deputy Prime Minister stand in all this? What does he think of the Prime Minister's interview? What does he think of the new conditions? The truth is that he hoisted the flag of insurrection for 18 hours and then threw up the white flag of surrender. That was the shortest rebellion in history. When will he have the courage of his convictions rather than the courage of the Prime Minister's?
  I have already welcomed the new Chancellor to his job. He has had the right training for the job over the past few weeks when he was Foreign Secretary—private humiliation, public repudiation and then instant promotion. They say that the Chancellor is ambitious. I cannot believe that. If he was truly ambitious last Thursday, he would have waited half an hour, looked at the jobs on offer and then gone for the most influential vacancy of all, that of part-time, back-stage economic adviser to the Prime Minister.

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  What are the Chancellor's views on European monetary co-operation? Let us consider what he said when he first addressed that subject in November 1981. He last spoke in detail on that matter as a humble Back Bencher. He said:
  "At the beginning of the parliamentary recess I firmly believed that Britain should not enter the European monetary system. I have returned to the House, having spoken to firm after firm in my constituency, believing that the sooner we enter the European monetary system to improve exchange rate stability the better it will be for our exports and our interests generally. I have no doubt that that is the right course."—[Official Report, 4 November 1981; Vol. 12, c. 68.]
  What was right—[Interruption.] The Chancellor does not think that he said it. It appears in Hansard of 4 November 1981. What was the right course to be followed, immediately and unconditionally? The right course then is apparently not the right course now. Does the Chancellor still believe that the sooner we enter the better? Does he still believe that it is still the right course unconditionally? What are the Chancellor's real views? From what he said this afternoon, hon. Members did not get a full appreciation of his views—it was "on the one hand, on the other hand."
  The truth was in an answer to an intervention by my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), who asked whether the Chancellor believed that the EMS is half-baked. The Chancellor would not or could not answer the question. He refused to repudiate Sir Alan's view. If he believes that the EMS is half-baked, why does he not say so? If he believes, against Sir Alan, that it has only a minimum level of plausibility, why does he not say so? If the Chancellor wishes to intervene now and repudiate Sir Alan's view, I should be happy to let him do so.
  On what terms did the Chancellor accept the job? Did he ask that Sir Alan be removed? Clearly not. Did he ask that the Prime Minister drop her view that the EMS is half-baked, or did he just say, "Yes, Prime Minister"? Did she say, "My adviser will be in touch"? The only thing that we can say with certainty after the Chancellor's speech today, which added to rather than ended the confusion, is that his position is unassailable. Where are we now? We have a Prime Minister who is clearly hostile to European monetary co-operation, senior Ministers who are in favour of it, and a Chancellor who has not made up his mind. The divisions will still remain to be resolved, and they go right to the heart of economic strategy. Do the Government believe in management of our economy or do they believe that they cannot buck the market?
  What will the Cabinet Ministers do? Will they stand up to the Prime Minister? Look at the Cabinet—the right team for Britain's future. Last month's right team for Britain's future has given way to this month's right team for Britain's future. Last month's right team has less future than could possibly have been foreseen.
  What of the Ministers themselves? The Prime Minister was directly asked about that on Friday. Jean Rook asked:
  "You are accused of refusing to recognise your Cabinet as a team or working with it. What is your reaction?"
  The Prime Minister replied:
  "A leader must lead, must lead firmly, must have firm convictions and must see that these convictions are reflected in each piece of policy."
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  There was not a mention of the team at all, no mention of working together, and not even a mention of the chairman of the Conservative party.
  On "Panorama" last night, the Foreign Secretary came nearest to giving us the answer to how to deal with the Prime Minister. How does he deal with the Prime Minister? He answered:
  "to argue, but courteously. Then you will find yourself being contradicted, and sometimes told you don't know what you are talking about."
  [Interruption.] Obviously, the Ministers know what it is all about. The Foreign Secretary went on to state:
  "But if you persevere, and have good arguments on your side, then you will find you will gain ground."
  The right hon. Members for Henley (Mr. Heseltine) and for Shropshire, North (Mr. Biffen), Lord Pym, Lord Prior and now the former Chancellor—the people who have persevered—have gained ground, but the ground that they are on is the Government Back Benches.
  Who are the real decision makers in the Government? Faced with a choice between a Chancellor of six and a half years' standing, whom she had praised as brilliant, wonderful and marvellous, and a part-time adviser two months back, for most of the time contactable only by telephone, the Prime Minister chose her back-stairs adviser. When faced with the choice between the adviser, as she said, with only the power to advise and the Minister with the power to decide, she chose the adviser. Why? I suspect that it was because, in her own words, he is "one of us". It was the most damaging appointment of an adviser by a head of Government since—I was going to say, since Caligula's horse, but at least the horse stayed in Rome and worked full-time.
  What sort of Cabinet do we have? Ministers sweep into Downing street in chauffeur-driven cars and wave to the television cameras as they ascend the steps of No. 10, but then find that the only person who listens to them is the policeman on the door. We have "do-as-you-are-told" Ministers in a "speak-when-spoken-to" Cabinet in a "Yes, Prime Minister" Government.
  Our argument is not about the constitutional theories of government or about the end of Cabinet government or the pretence of it; it is about the lives and aspirations of millions of people throughout the country and about how they have been hit by the failures of a Government who are now divided. They tell us that we are going to have a soft landing, they tell the passengers to fasten their safety belts, but all we can hear is the noise of the squabbles in the cockpit about who has the controls.
  They have had 10 years, at the end of which the Chancellor still tells us that the economic miracle is intact, but that his policies are going to hurt. Why are they going to hurt if there is an economic miracle? It is because the balance of payments deficit is the worst that we have ever known—yet the Chancellor cannot even admit that it is a problem. No other country has a deficit so big, yet the Government cannot concede that it is worthy of action. Inflation is the highest of all our major competitors, yet the Government came into power 10 years ago with the objective of zero inflation. We have the highest interest rates and the highest mortgate rates in the world. I advise Conservative Members that they cannot begin to solve those problems as long as the philosophy is "you can't buck the market".

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  What did the Prime Minister say about all this on the Walden interview on Sunday? When faced with these difficulties facing industry, business, home owners and families, she said:
  "Let's get down to the success we've had … the way in which people now copy Thatcherism, as they call it, the world over … Country after country is following our policies. They come in and say to me: 'We've tried everything else, now we'll try Thatcherism'".
  Is France, with a 3 per cent. inflation rate, aspiring to the Thatcherite inflation rate of 7·5 per cent.? Is West Germany, with a trade surplus, attempting to strive towards the Thatcherite deficit that is approaching £20 billion? Is Japan, with 5 to 6 per cent. interest rates, aspiring to the Thatcherite miracle of interest rates at 15 per cent.? How many other countries aspire to deficits of the size that we have, and how many other countries aspire to inflation rates and interest rates at our levels? The Thatcherite miracle is not for export, because, as everybody knows, the miracle does not exist.
  At the end of this week, where are we in the future course of policy for this country? The former Chancellor has gone because the Prime Minister preferred an itinerant adviser to a senior Minister—a court favourite to a Cabinet Minister. We have a new Chancellor who has been unable to tell us his view, but who has added to the confusion over exchange rate management rather than resolved it. We have a Foreign Secretary who says that the Government's job is to persuade people, when it is clear that it is his job and that of his colleagues to persuade the Prime Minister. We have a Deputy Prime Minister who raised the standard of revolt, but lowered it immediately afterwards. Yet that is what we are told is the "right team" for Britain's future. Is anybody in any doubt that, with the Cabinet divided and Conservative supporters throughout the country in disarray, we have now entered the first days in the final collapse of the Government—
  Dame Elaine Kellett-Bowman: Rubbish.
  Mr. Brown: The real question that we must ask this evening is, who can now look to the Government for support? On Sunday, on that Walden interview, there was no mention of the problems people have or of those facing industry and business. These problems cannot be solved if we have a Prime Minister who is so out of touch and so protected from reality by unelected advisers that she does not even acknowledge that the problems exist. We need Cabinet government and democracy, and we need a Government who will take action to solve our economic problems. For that, the country will have to look to Labour.
  9.35 pm
  The Chief Secretary to the Treasury (Mr. Norman Lamont)I start by joining my right hon. Friend the Chancellor of the Exchequer in paying tribute to my right hon. Friend the Member for Blaby (Mr. Lawson). My right hon. Friend was a good friend to me and it was a matter of great sadness to me that he felt that he had to resign. I worked with him for some three and a half years, and those were stimulating and enjoyable years. My right hon. Friend has had a great impact on this Government, as my right hon. Friend the Chancellor said, but not just as Chancellor of the Exchequer. As Financial Secretary to the Treasury, he played a key part in the abolition of exchange controls. As my right hon. Friend the Chancellor
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  said, it will be for history to judge the significance of the tax reforms introduced by my right hon. Friend the Member for Blaby. I believe that both sides of the House will agree that the speech that my right hon. Friend made was one of force, eloquence, and enormous lucidity, and it retained, as my right hon. Friend always does, a capacity to surprise. Those are the qualities which the people who have worked with my right hon. Friend know he has and for which they appreciate him.
  Mr. Radice: If the former Chancellor's speech was so good, and if his case was so good, why did the Chief Secretary not resign with him?
  Mr. Lamont: I spent no less than six or seven hours last week trying to persuade my right hon. Friend not to go, not simply because I did not wish him to resign bat because I felt that it was a mistake, that it was unnecessary for him to resign and that his position, although difficult, was not impossible. Having expressed that view to my right hon. Friend, it would have been false if I had behaved any differently, and I know that my right hon. Friend agrees with me.
  It is curious, as my right hon. Friend the Member for Guildford (Mr. Howell) and my hon. Friend the Member for Stamford and Spalding (Mr. Davies) pointed out, that an issue as esoteric and narrow as the European monetary system should come so to dominate a debate as it has dominated the House today. My right hon. Friend the Chancellor has taken the first possible opportunity to emphasise that he wants to join the exchange rate mechanism as soon as the conditions set out after the Madrid summit can be satisfied. My right hon. Friend has made it crystal clear that he intends that they should be satisfied. He also went on to sound a note of caution by saying that the ERM is not a panacea. It is neither the salvation nor the ruin of the British economy. It is not. as the hon. Member for Berwick-upon-Tweed (Mr. Beith) suggested, that my right hon. Friend wanted to put up some Aunt Sally to knock down. It is because of the feeling that my right hon. Friend and I have, like many other hon. Members, that sometimes it is important to put this issue in perspective.
  We must remember that the British economy has been managed at different times with different exchange rate regimes. We have had fixed rates and floating rates, and it is not obvious, at least to me, that economic success is correlated exclusively with one or the other. There are, as my right hon. Friend the Chancellor said, no soft options either inside or outside the EMS. If we are inside it, we shall still have to use interest rates to link our currency with low-inflation currencies. If we were outside the EMS, and even if the currency floated freely, which is not the Government's policy, we would still have a tight squeeze to contain inflationary pressures. Either way, there are no soft options.
  Mr. D. N. Campbell-Savours: The right hon. Gentleman has said that the position of the ex-Chancellor of the Exchequer last week was difficult. How was it difficult?
  Mr. Lamont: My right hon. Friend the Member for Blaby has expressed his view and the reasons why he resigned. I do not wish to add to anything that has been said on that score.
  The Opposition—
  Several Hon. Members rose—
  Mr. Lamont: I am not giving way.
  The Opposition have argued that there are divisions—
  Mr. Stuart Bell: The Minister has said that his position was difficult but that it was not impossible for him to stay in his job. Will he tell the House why his position was difficult?
  Mr. Lamont: The hon. Gentleman misheard me. If he reads the report of the debate in Hansard he will note what I said.
  The Opposition have sought to present themselves as the party that is united on the issue of the ERM. Those of my right hon. and hon. Friends who were present for the debate on the economy last week will agree, I am sure, that I was able to demonstrate fairly clearly that there are considerable divisions within the Opposition. The right hon. and learned Member for Monklands, East (Mr. Smith) believes that it is important to enter the ERM because the volatility of the currency matters. The hon. Members for Sedgefield (Mr. Blair) and for Dagenham (Mr. Gould) do not think that the volatility of the currency matters at all. The hon. Member for Dagenham has said that he has a general hostility to the prospect of full membership. That is the view of a member of the shadow Cabinet, not of a part-time adviser to the Labour party. Is the hon. Member for Dagenham going to resign or not?
  We are not surprised about the issues on which Opposition Members disagree, because we are used to them disagreeing. More remarkable is the point on which they all seem to agree. It is not clear, however, why they think that their long list of conditions would be more easily satisfied than those laid down by the Government. Their list is much longer than the Government's, much more amorphous and much more difficult to satisfy. It is the Labour party which is likely to lay down conditions that will never be satisfied.
  The Opposition want what they call the deflationary tendency in the ERM to be removed. That is the issue on which all Opposition Members seem to be agreed. That is the most astonishing feature of all. For the majority of people, the essence of the ERM is to join it so that currencies will converge towards the lowest inflation rate, towards the German rate. That is why people want to join it. The Labour party is the only group I can think of that wishes to join it while not accepting the main reason for it.
  The Labour party's policy document states:
  "Substantial changes would therefore be required before the next Labour Government could take sterling into the exchange rate mechanism".
  The Labour party wants to subvert the monetary discipline that the system can provide. That is something that the Germans, for instance, could never tolerate. Further, the Labour party's policy document tells us that there must
  "be less reliance on interest rate adjustment and more on co-operation between central banks."
  That is mere wishful thinking. How can a Government run a monetary policy without using interest rates? Perhaps someone would tell me that.
  The Labour party wants to undermine the position of the Bundesbank. Labour's proposals to link the ERM to growth and to remove its deflationary bias would, if any of our European partners were foolish enough to accept
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  them, drive the Germans out because those proposals are not consistent with the Bundesbank's constitutional duty to secure price stability.
  It is extraordinary that everyone who advocates participating in the ERM is usually attracted to it as an anchor against inflation—except the Labour party, which does not want to join it until it is sure that it cannot be a bulwark against inflation. That is not surprising because we know that, whether in or out of office, Labour is always the party of inflation.
  My hon. Friend the Member for Bridlington (Mr. Townend) asked why we were having this debate today. After all, we had an economic debate last week. Perhaps in future we shall have economic debates once a week, or twice a week. That would be a good thing—far better than doing the public expenditure survey round or sitting in the Star Chamber. I would not mind. But perhaps we are having an economic debate for the reason to which my hon. Friend the Member for Gravesham (Mr. Arnold) referred—that although the Labour party knew that it had to initiate a debate, it did not dare put down a censure motion and have a censure debate. Mr. Mandelson decided that the matter would be better handled by the right hon. and learned Member for Monklands, East (Mr. Smith) and the hon. Member for Dunfermline, East (Mr. Brown), and that is why we are having an economic debate today.
  Perhaps I am doing Opposition Members an injustice. Perhaps the real purpose of having a debate is so that Opposition Members could give those parts of their speeches that they did not give us last week—the bits that dealt with their policies. Those were the bits that we were to wait for.
  It is hardly surprising. The right hon. and learned Member for Monklands, East belongs to the Crossman school of politics. My hon. Friends will recall that some years ago, when the late Mr. Crossman published a Labour policy document on pensions, he was asked by the press why it did not contain any figures. He replied that it did not have any figures because they would all be shot to bits by the Tories. That is the attitude that the right hon. and learned Gentleman takes. He knows that he cannot produce any policies which will not be shot to bits by the press and will also please his hon. Friends.
  Mr. George Foulkes: On a point of order, Mr. Speaker. Page 6104 of today's Order Paper gives the title of today's debate as "Government economic policy". The Minister is not addressing himself to that issue.
  Mr. Speaker: There is also a Government amendment.
  Mr. Lamont: We can all see that the Opposition have enormous confidence in themselves. They are terrified that we shall discuss their policies. That is a real advertisement for their confidence.
  In the past week, the right hon. and learned Member for Monklands, East, who does not believe in policies, has been in a bit of difficulty because he is being pressed all the time by the media. He is being asked what he will do and how his credit controls will operate. The right hon. and learned Gentleman has managed to get through by putting on his best Glasgow family doctor appearance and looking confident.
  Mr. Onslow rose—
  Mr. Lamont: I shall give way in a minute. [Interruption.]
  Mr. Speaker: Order. I hope that the House will settle down. We have 10 minutes left.
  Mr. Lamont: I have always thought that the right hon. and learned Gentleman—"Dr. Smith"—would be a very good Glasgow general practitioner. He is very nice, very charming and very reassuring, with a good bedside manner. No doubt he would be one of those doctors who whisper in the patient's ear, "I think that that Mrs. Thatcher has gone a little too far with the NHS," but in every other way he would be excellent. The only trouble is that we would be wondering, has he kept up to date? Has he not read any textbooks, or articles in the Lancet? Does he know about the latest medicines that are available on the market? The more we listen to the right hon. and learned Gentleman, the more extraordinary and old-fashioned his policies seem.
  Mr. Harry Ewing: On a point of order, Mr. Speaker. I should like to help the Chief Secretary. For the past five minutes he has been going on about doctors. If there is a doctor in the House who can provide him with a couple of tranquillisers, the debate will proceed much better.
  Mr. Speaker: I think that what would help the Chief Secretary, indeed, the whole House—would be for hon. Members to listen to his speech with the same care with which they listened to the speech of the right hon. and learned Member for Monklands, East (Mr. Smith).
  Mr. Lamont: We know that Labour is not a tolerant party—we know how easy Labour Members find it to listen to any argument against themselves—and that has been illustrated tonight.
  Mr. Morgan: Will the Chief Secretary give way?
  Mr. Lamont: No.
  When the right hon. and learned Member for Monklands, East was asked on the radio the other day what his policy was against inflation, he replied, "Industrial strategy." I must say, I was astonished. I know that the right hon. and learned Gentleman had to say that he believed in industrial strategy when he was Secretary of State for Trade, but it never occurred to me then that he really believed in it. Nor did it occur to me that he could really believe in it today. Whatever else his industrial strategy may be, it has nothing to do with the immediate problem of inflation that faces us now.
  The truth is that the right hon. and learned Gentleman has no policy—he simply has a phrase, albeit rather less coarse than the sort of phrase that the Leader of the Opposition uses when he is asked what is Labour party policy. We are told that Labour policy is to be one of backing winners—its record on that was not very good last time—and innovative technology. I think that we would be a bit more impressed by that if we had not sat here, year after year, listening to the right hon. and learned Gentleman ask for more money for shipbuilding, coal and all the other sectors that are not exactly at the leading edge of British industry. The idea of an industrial strategy is mildewed, moth-eaten and one might even say half-baked.
  Does anyone really believe that the investments of the Industrial Reorganisation Corporation and the National Enterprise Board when Labour was in office did the British motor industry any good whatever? Is not the future of
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  today's motor industry, as a result of our policies of privatisation and attracting foreign investment, better than it ever was under Labour's "industrial strategy"?
  Mr. Morgan rose—
  Mr. Lamont: No, I will not give way.
  It was the same when the IRC and NEB were investing in industrial technology. My hon. Friends may not remember the plethora of companies named after Greek islands and Greek gods. The gods may have been immortal, but the companies certainly were not, and they cost the taxpayer many millions of pounds. If we had never benefited from the activities of the NEB and the IRC, can anyone imagine that our industrial performance would have been any different? Of course it would not have been, although the taxpayer would have been billions of pounds better off.
  What the right hon. Member for Monklands, East forgets is that in that golden age—that wonderful period when we had an industrial strategy—industrial production went down. What we need is not an industrial strategy in the sense in which he means the phrase, but a strategy for profits and commerce. That is what we have had lately, and that is why the health of our commerce and industry is better that it has been for years.
  Whenever the right hon. and learned Gentleman has a problem, he has only one answer—to call a meeting. When he was asked a few years ago what he was going to do about car imports he said, "I'm going to call a meeting with the multinationals." He was asked what he was going to do about imports when he was Secretary of State for Trade. He said, "I'm going to call a meeting of the central working party." When the right hon. and learned Gentleman was asked last week how he would operate credit controls, he said that he would call a meeting of the bankers. The only answer he has is to call a meeting
  Credit controls did not work in the 1970s and they will not work now. The right hon. and learned Gentleman forgets that credit controls would also be highly damaging to British industry. Have the Opposition forgotten the effect of credit controls on the car industry in particular? Do they want to reintroduce the stringent credit controls that were imposed on the car industry? There is no doubt that their reintroduction would be vastly more damaging to investment—
  Mr. John Maxton: Will the right hon. Gentleman give way?
  Mr. Lamont: There have already been a large number of interventions. I do not intend to have my speech disrupted by the hon. Gentleman.
  The reintroduction of credit controls would have a very damaging effect on industry. Last year, the president of the Society of Motor Manufacturers and Traders said:
  "High interest rates, though painful, are a far more palatable solution than the reintroduction of credit controls. Those we most certainly do not want. The whole tactic was hopeless to manage and very destablising."
  That is the view of manufacturing industry, and the right hon. and learned Member for Monklands, East, ought to take it into account.
  The right hon. and learned Gentleman also put forward the policy of supply side Socialism. We are told that the Opposition will free up the market and free up the workings of the economy. What a supply side policy normally means is liberalisation—lifting the burden of

  273
  bureaucracy and less intervention. Supply side policies are precisely the opposite of what the Opposition want. They want more bureaucracy and more intervention.
  What are the examples of supply side Socialism? One example is an extension of the dock labour scheme. The way to free up the British economy, however, is to abolish the dock labour scheme. Another example of supply side Socialism is to extend the legal immunity of secondary picketing—what a way to encourage inward investment, and what an embarrassment for the British economy.
  The Opposition have no policy. After their defeat in the last general election, the hon. Member for Dagenham said:
  "No amount of slick presentation can work if we do not have something sensible to say."
  Getting the sensible things to say has been their difficulty. It was their problem then and it remains their problem today.
  Mr. Morgan: Will the Chief Secretary now tell the House what it has been waiting to hear for the last 20 minutes? When he said that the Chancellor's position was difficult, did he mean that in his three and a half hours of discussion he and the Chancellor were hoping to go to the Prime Minister together and say, "Walters must go"?
  Mr. Lamont: The hon. Gentleman is building fiction upon fiction. If he reads Hansard he will see that his interpretation is wholly wrong.
  The Opposition have tried to make this a debate about the Prime Minister's style. If it is a debate about that, why have they not had the courage to put down a no confidence motion?
  Mr. Derek Foster rose in his place, and claimed to move, That the Question be now put.
  Question, That the Question be now put, put and agreed to.
  Question put accordingly, That the original words stand part of the Question:—
  The House divided:Ayes 238, Noes 342.

  Division No. 363]

  [10 pm

  AYES

  Abbott, Ms Diane

  Brown, Gordon (D'mline E)

  Adams, Allen (Paisley N)

  Brown, Nicholas (Newcastle E)

  Allen, Graham

  Brown, Ron (Edinburgh Leith)

  Alton, David

  Bruce, Malcolm (Gordon)

  Archer, Rt Hon Peter

  Buchan, Norman

  Armstrong, Hilary

  Buckley, George J.

  Ashdown, Rt Hon Paddy

  Caborn, Richard

  Ashley, Rt Hon Jack

  Callaghan, Jim

  Ashton, Joe

  Campbell, Menzies (Fife NE)

  Banks, Tony (Newham NW)

  Campbell, Ron (Blyth Valley)

  Barnes, Harry (Derbyshire NE)

  Campbell-Savours, D. N.

  Barnes, Mrs Rosie (Greenwich)

  Canavan, Dennis

  Barron, Kevin

  Carlile, Alex (Mont'g)

  Battle, John

  Cartwright, John

  Beckett, Margaret

  Clark, Dr David (S Shields)

  Beith, A. J.

  Clarke, Tom (Monklands W)

  Bell, Stuart

  Clay, Bob

  Benn, Rt Hon Tony

  Clelland, David

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

  Clwyd, Mrs Ann

  Bermingham, Gerald

  Cohen, Harry

  Bidwell, Sydney

  Coleman, Donald

  Blair, Tony

  Cook, Frank (Stockton N)

  Blunkett, David

  Cook, Robin (Livingston)

  Boateng, Paul

  Corbett, Robin

  Boyes, Roland

  Corbyn, Jeremy

  Bradley, Keith

  Cousins, Jim

  Bray, Dr Jeremy

  Cox, Tom

  274

  Crowther, Stan

  Litherland, Robert

  Cryer, Bob

  Livingstone, Ken

  Cummings, John

  Livsey, Richard

  Cunliffe, Lawrence

  Lloyd, Tony (Stretford)

  Dalyell, Tam

  Lofthouse, Geoffrey

  Darling, Alistair

  Loyden, Eddie

  Davies, Rt Hon Denzil (Llanelli)

  McAllion, John

  Davies, Ron (Caerphilly)

  McAvoy, Thomas

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

  McCartney, Ian

  Dewar, Donald

  Macdonald, Calum A.

  Dixon, Don

  McFall, John

  Dobson, Frank

  McKay, Allen (Barnsley West)

  Doran, Frank

  McKelvey, William

  Douglas, Dick

  McLeish, Henry

  Duffy, A. E. P.

  McNamara, Kevin

  Dunnachie, Jimmy

  McWilliam, John

  Dunwoody, Hon Mrs Gwyneth

  Madden, Max

  Eadie, Alexander

  Mahon, Mrs Alice

  Eastham, Ken

  Marek, Dr John

  Evans, John (St Helens N)

  Marshall, David (Shettleston)

  Ewing, Harry (Falkirk E)

  Marshall, Jim (Leicester S)

  Ewing, Mrs Margaret (Moray)

  Martin, Michael J. (Springburn)

  Fatchett, Derek

  Martlew, Eric

  Faulds, Andrew

  Maxton, John

  Field, Frank (Birkenhead)

  Meacher, Michael

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

  Meale, Alan

  Fisher, Mark

  Michael, Alun

  Flannery, Martin

  Michie, Bill (Sheffield Heeley)

  Flynn, Paul

  Michie, Mrs Ray (Arg'l & Bute)

  Foster, Derek

  Mitchell, Austin (G't Grimsby)

  Foulkes, George

  Moonie, Dr Lewis

  Fraser, John

  Morgan, Rhodri

  Fyfe, Maria

  Morley, Elliot

  Galloway, George

  Morris, Rt Hon A. (W'shawe)

  Garrett, John (Norwich South)

  Morris, Rt Hon J. (Aberavon)

  Garrett, Ted (Wallsend)

  Mowlam, Marjorie

  George, Bruce

  Mullin, Chris

  Gilbert, Rt Hon Dr John

  Murphy, Paul

  Godman, Dr Norman A.

  Nellist, Dave

  Gordon, Mildred

  Oakes, Rt Hon Gordon

  Gould, Bryan

  O'Brien, William

  Graham, Thomas

  O'Neill, Martin

  Grant, Bernie (Tottenham)

  Owen, Rt Hon Dr David

  Griffiths, Nigel (Edinburgh S)

  Parry, Robert

  Griffiths, Win (Bridgend)

  Patchett, Terry

  Grocott, Bruce

  Pendry, Tom

  Hardy, Peter

  Pike, Peter L.

  Harman, Ms Harriet

  Powell, Ray (Ogmore)

  Hattersley, Rt Hon Roy

  Prescott, John

  Healey, Rt Hon Denis

  Primarolo, Dawn

  Heffer, Eric S.

  Quin, Ms Joyce

  Henderson, Doug

  Radice, Giles

  Hoey, Ms Kate (Vauxhall)

  Randall, Stuart

  Hogg, N. (C'nauld & Kilsyth)

  Redmond, Martin

  Home Robertson, John

  Rees, Rt Hon Merlyn

  Hood, Jimmy

  Richardson, Jo

  Howarth, George (Knowsley N)

  Roberts, Allan (Bootle)

  Howell, Rt Hon D. (S'heath)

  Robertson, George

  Howells, Geraint

  Rogers, Allan

  Howells, Dr. Kim (Pontypridd)

  Rooker, Jeff

  Hoyle, Doug

  Rowlands, Ted

  Hughes, John (Coventry NE)

  Ruddock, Joan

  Hughes, Robert (Aberdeen N)

  Salmond, Alex

  Hughes, Roy (Newport E)

  Sedgemore, Brian

  Hughes, Simon (Southwark)

  Sheerman, Barry

  Illsley, Eric

  Sheldon, Rt Hon Robert

  Ingram, Adam

  Shore, Rt Hon Peter

  Janner, Greville

  Short, Clare

  Johnston, Sir Russell

  Sillars, Jim

  Jones, Barry (Alyn & Deeside)

  Skinner, Dennis

  Jones, Ieuan (Ynys Môn)

  Smith, Andrew (Oxford E)

  Jones, Martyn (Clwyd S W)

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

  Kaufman, Rt Hon Gerald

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

  Kennedy, Charles

  Smith, J. P. (Vale of Glam)

  Kinnock, Rt Hon Neil

  Snape, Peter

  Lambie, David

  Soley, Clive

  Lamond, James

  Spearing, Nigel

  Leadbitter, Ted

  Steinberg, Gerry

  Lestor, Joan (Eccles)

  Stott, Roger

  Lewis, Terry

  Strang, Gavin

  275

  Straw, Jack

  Welsh, Michael (Doncaster N)

  Taylor, Mrs Ann (Dewsbury)

  Wigley, Dafydd

  Taylor, Matthew (Truro)

  Williams, Rt Hon Alan

  Thomas, Dr Datydd Elis

  Williams, Alan W. (Carm'then)

  Thompson, Jack (Wansbeck)

  Wilson, Brian

  Turner, Dennis

  Winnick, David

  Vaz, Keith

  Wise, Mrs Audrey

  Wall, Pat

  Worthington, Tony

  Wallace, James

  Wray, Jimmy

  Walley, Joan

  Young, David (Bolton SE)

  Wardell, Gareth (Gower)

  Wareing, Robert N.

  Tellers for the Ayes:

  Watson, Mike (Glasgow, C)

  Mr. Frank Haynes and Mrs. Llin Golding.

  Welsh, Andrew (Angus E)

  NOES

  Aitken, Jonathan

  Colvin, Michael

  Alexander, Richard

  Conway, Derek

  Alison, Rt Hon Michael

  Coombs, Anthony (Wyre F'rest)

  Allason, Rupert

  Cope, Rt Hon John

  Amery, Rt Hon Julian

  Cormack, Patrick

  Amess, David

  Couchman, James

  Amos, Alan

  Cran, James

  Arbuthnot, James

  Critchley, Julian

  Arnold, Jacques (Gravesham)

  Currie, Mrs Edwina

  Arnold, Tom (Hazel Grove)

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

  Ashby, David

  Davis, David (Boothferry)

  Aspinwall, Jack

  Day, Stephen

  Atkins, Robert

  Devlin, Tim

  Baker, Rt Hon K. (Mole Valley)

  Dicks, Terry

  Baker, Nicholas (Dorset N)

  Dorrell, Stephen

  Baldry, Tony

  Douglas-Hamilton, Lord James

  Banks, Robert (Harrogate)

  Dover, Den

  Batiste, Spencer

  Dunn, Bob

  Beaumont-Dark, Anthony

  Eggar, Tim

  Bellingham, Henry

  Emery, Sir Peter

  Bendall, Vivian

  Evans, David (Welwyn Hatf'd)

  Bennett, Nicholas (Pembroke)

  Evennett, David

  Benyon, W.

  Fairbairn, Sir Nicholas

  Bevan, David Gilroy

  Fallon, Michael

  Biffen, Rt Hon John

  Favell, Tony

  Blackburn, Dr John G.

  Fenner, Dame Peggy

  Blaker, Rt Hon Sir Peter

  Field, Barry (Isle of Wight)

  Body, Sir Richard

  Finsberg, Sir Geoffrey

  Bonsor, Sir Nicholas

  Fishburn, John Dudley

  Boscawen, Hon Robert

  Fookes, Dame Janet

  Bottomley, Peter

  Forman, Nigel

  Bottomley, Mrs Virginia

  Forsyth, Michael (Stirling)

  Bowden, A (Brighton K'pto'n)

  Forth, Eric

  Bowden, Gerald (Dulwich)

  Fowler, Rt Hon Norman

  Bowis, John

  Fox, Sir Marcus

  Boyson, Rt Hon Dr Sir Rhodes

  Franks, Cecil

  Braine, Rt Hon Sir Bernard

  Freeman, Roger

  Brandon-Bravo, Martin

  French, Douglas

  Brazier, Julian

  Gale, Roger

  Bright, Graham

  Garel-Jones, Tristan

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

  Gill, Christopher

  Browne, John (Winchester)

  Gilmour, Rt Hon Sir Ian

  Bruce, Ian (Dorset South)

  Glyn, Dr Alan

  Buck, Sir Antony

  Goodhart, Sir Philip

  Budgen, Nicholas

  Goodson-Wickes, Dr Charles

  Burns, Simon

  Gorman, Mrs Teresa

  Burt, Alistair

  Gorst, John

  Butcher, John

  Gow, Ian

  Butler, Chris

  Grant, Sir Anthony (CambsSW)

  Butterfill, John

  Greenway, Harry (Ealing N)

  Carlisle, John, (Luton N)

  Greenway, John (Ryedale)

  Carlisle, Kenneth (Lincoln)

  Gregory, Conal

  Carrington, Matthew

  Griffiths, Peter (Portsmouth N)

  Carttiss, Michael

  Grist, Ian

  Cash, William

  Ground, Patrick

  Chalker, Rt Hon Mrs Lynda

  Grylls, Michael

  Channon, Rt Hon Paul

  Hague, William

  Chapman, Sydney

  Hamilton, Neil (Tatton)

  Chope, Christopher

  Hampson, Dr Keith

  Churchill, Mr

  Hanley, Jeremy

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

  Hannam, John

  Clark, Dr Michael (Rochford)

  Hargreaves, Ken (Hyndburn)

  Clark, Sir W. (Croydon S)

  Harris, David

  Clarke, Rt Hon K. (Rushcliffe)

  Haselhurst, Alan

  276

  Hawkins, Christopher

  Meyer, Sir Anthony

  Hayes, Jerry

  Miller, Sir Hal

  Hayhoe, Rt Hon Sir Barney

  Mills, Iain

  Hayward, Robert

  Miscampbell, Norman

  Heath, Rt Hon Edward

  Mitchell, Andrew (Gedling)

  Heathcoat-Amory, David

  Mitchell, Sir David

  Heddle, John

  Moate, Roger

  Heseltine, Rt Hon Michael

  Monro, Sir Hector

  Hicks, Mrs Maureen (Wolv' NE)

  Montgomery, Sir Fergus

  Higgins, Rt Hon Terence L.

  Moore, Rt Hon John

  Hill, James

  Morris, M (N'hampton S)

  Hind, Kenneth

  Morrison, Sir Charles

  Hogg, Hon Douglas (Gr'th'm)

  Morrison, Rt Hon P (Chester)

  Holt, Richard

  Moss, Malcolm

  Hordern, Sir Peter

  Moynihan, Hon Colin

  Howard, Michael

  Mudd, David

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

  Neale, Gerrard

  Howarth, G. (Cannock & B'wd)

  Needham, Richard

  Howe, Rt Hon Sir Geoffrey

  Nelson, Anthony

  Howell, Rt Hon David (G'dford)

  Neubert, Michael

  Howell, Ralph (North Norfolk)

  Newton, Rt Hon Tony

  Hughes, Robert G. (Harrow W)

  Nicholls, Patrick

  Hunt, David (Wirral W)

  Nicholson, David (Taunton)

  Hunter, Andrew

  Nicholson, Emma (Devon West)

  Hurd, Rt Hon Douglas

  Norris, Steve

  Irvine, Michael

  Onslow, Rt Hon Cranley

  Irving, Charles

  Oppenheim, Phillip

  Jack, Michael

  Page, Richard

  Jackson, Robert

  Parkinson, Rt Hon Cecil

  Jessel, Toby

  Patnick, Irvine

  Johnson Smith, Sir Geoffrey

  Patten, Rt Hon Chris (Bath)

  Jones, Gwilym (Cardiff N)

  Patten, John (Oxford W)

  Jones, Robert B (Herts W)

  Pattie, Rt Hon Sir Geoffrey

  Jopling, Rt Hon Michael

  Pawsey, James

  Kellett-Bowman, Dame Elaine

  Peacock, Mrs Elizabeth

  Key, Robert

  Porter, Barry (Wirral S)

  Kilfedder, James

  Porter, David (Waveney)

  King, Roger (B'ham N'thfield)

  Portillo, Michael

  Kirkhope, Timothy

  Powell, William (Corby)

  Knapman, Roger

  Price, Sir David

  Knight, Greg (Derby North)

  Raison, Rt Hon Timothy

  Knight, Dame Jill (Edgbaston)

  Rathbone, Tim

  Knowles, Michael

  Redwood, John

  Knox, David

  Renton, Rt Hon Tim

  Lamont, Rt Hon Norman

  Rhodes James, Robert

  Lang, Ian

  Riddick, Graham

  Latham, Michael

  Ridley, Rt Hon Nicholas

  Lawrence, Ivan

  Ridsdale, Sir Julian

  Lawson, Rt Hon Nigel

  Rifkind, Rt Hon Malcolm

  Lee, John (Pendle)

  Roberts, Wyn (Conwy)

  Leigh, Edward (Gainsbor'gh)

  Roe, Mrs Marion

  Lennox-Boyd, Hon Mark

  Rossi, Sir Hugh

  Lester, Jim (Broxtowe)

  Rost, Peter

  Lightbown, David

  Rowe, Andrew

  Lilley, Peter

  Rumbold, Mrs Angela

  Lloyd, Sir Ian (Havant)

  Ryder, Richard

  Lloyd, Peter (Fareham)

  Sackville, Hon Tom

  Lord, Michael

  Sainsbury, Hon Tim

  Lyell, Sir Nicholas

  Sayeed, Jonathan

  Macfarlane, Sir Neil

  Scott, Rt Hon Nicholas

  MacGregor, Rt Hon John

  Shaw, David (Dover)

  MacKay, Andrew (E Berkshire)

  Shaw, Sir Giles (Pudsey)

  Maclean, David

  Shaw, Sir Michael (Scarb')

  McNair-Wilson, Sir Michael

  Shelton, Sir William

  McNair-Wilson, Sir Patrick

  Shephard, Mrs G. (Norfolk SW)

  Madel, David

  Shepherd, Colin (Hereford)

  Major, Rt Hon John

  Shepherd, Richard (Aldridge)

  Malins, Humfrey

  Shersby, Michael

  Mans, Keith

  Sims, Roger

  Maples, John

  Skeet, Sir Trevor

  Marland, Paul

  Smith, Sir Dudley (Warwick)

  Marlow, Tony

  Smith, Tim (Beaconsfield)

  Marshall, John (Hendon S)

  Soames, Hon Nicholas

  Marshall, Michael (Arundel)

  Speed, Keith

  Martin, David (Portsmouth S)

  Speller, Tony

  Mates, Michael

  Spicer, Sir Jim (Dorset W)

  Maude, Hon Francis

  Spicer, Michael (S Worcs)

  Maxwell-Hyslop, Robin

  Squire, Robin

  Mayhew, Rt Hon Sir Patrick

  Stanbrook, Ivor

  Mellor, David

  Stanley, Rt Hon Sir John

  277

  Steen, Anthony

  Vaughan, Sir Gerard

  Stern, Michael

  Viggers, Peter

  Stevens, Lewis

  Waddington, Rt Hon David

  Stewart, Allan (Eastwood)

  Wakeham, Rt Hon John

  Stewart, Andy (Sherwood)

  Walden, George

  Stewart, Rt Hon Ian (Herts N)

  Walker, Bill (T'side North)

  Stokes, Sir John

  Walker, Rt Hon P. (W'cester)

  Stradling Thomas, Sir John

  Waller, Gary

  Sumberg, David

  Walters, Sir Dennis

  Summerson, Hugo

  Ward, John

  Tapsell, Sir Peter

  Wardle, Charles (Bexhill)

  Taylor, Ian (Esher)

  Warren, Kenneth

  Taylor, John M (Solihull)

  Watts, John

  Taylor, Teddy (S'end E)

  Wheeler, John

  Tebbit, Rt Hon Norman

  Whitney, Ray

  Temple-Morris, Peter

  Widdecombe, Ann

  Thatcher, Rt Hon Margaret

  Wiggin, Jerry

  Thompson, D. (Calder Valley)

  Wilkinson, John

  Thompson, Patrick (Norwich N)

  Winterton, Mrs Ann

  Thorne, Neil

  Winterton, Nicholas

  Thornton, Malcolm

  Wolfson, Mark

  Thurnham, Peter

  Wood, Timothy

  Townend, John (Bridlington)

  Yeo, Tim

  Townsend, Cyril D. (B'heath)

  Young, Sir George (Acton)

  Tracey, Richard

  Younger, Rt Hon George

  Tredinnick, David

  Trippier, David

  Tellers for the Noes:

  Trotter, Neville

  Mr. Alastair Goodlad and Mr. Tony Durant.

  Twinn, Dr Ian

  Question accordingly negatived.
  Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 30 (Question on amendments):—
  The House divided: Ayes 339, Noes 234.

  Division No. 364]

  [10.14 pm

  AYES

  Aitken, Jonathan

  Browne, John (Winchester)

  Alexander, Richard

  Bruce, Ian (Dorset South)

  Alison, Rt Hon Michael

  Buck, Sir Antony

  Allason, Rupert

  Budgen, Nicholas

  Amery, Rt Hon Julian

  Burns, Simon

  Amess, David

  Burt, Alistair

  Amos, Alan

  Butcher, John

  Arbuthnot, James

  Butler, Chris

  Arnold, Jacques (Gravesham)

  Butterfill, John

  Arnold, Tom (Hazel Grove)

  Carlisle, John, (Luton N)

  Ashby, David

  Carlisle, Kenneth (Lincoln)

  Aspinwall, Jack

  Carrington, Matthew

  Atkins, Robert

  Carttiss, Michael

  Baker, Rt Hon K. (Mole Valley)

  Cash, William

  Baker, Nicholas (Dorset N)

  Chalker, Rt Hon Mrs Lynda

  Baldry, Tony

  Channon, Rt Hon Paul

  Banks, Robert (Harrogate)

  Chapman, Sydney

  Batiste, Spencer

  Chope, Christopher

  Beaumont-Dark, Anthony

  Churchill, Mr

  Bellingham, Henry

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

  Bendall, Vivian

  Clark, Dr Michael (Rochford)

  Bennett, Nicholas (Pembroke)

  Clark, Sir W. (Croydon S)

  Benyon, W.

  Clarke, Rt Hon K. (Rushcliffe)

  Bevan, David Gilroy

  Colvin, Michael

  Biffen, Rt Hon John

  Conway, Derek

  Blackburn, Dr John G.

  Coombs, Anthony (Wyre F'rest)

  Blaker, Rt Hon Sir Peter

  Cope, Rt Hon John

  Body, Sir Richard

  Cormack, Patrick

  Bonsor, Sir Nicholas

  Couchman, James

  Boscawen, Hon Robert

  Cran, James

  Bottomley, Peter

  Critchley, Julian

  Bottomley, Mrs Virginia

  Currie, Mrs Edwina

  Bowden, A (Brighton K'pto'n)

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

  Bowden, Gerald (Dulwich)

  Davis, David (Boothferry)

  Bowis, John

  Day, Stephen

  Boyson, Rt Hon Dr Sir Rhodes

  Devlin, Tim

  Braine, Rt Hon Sir Bernard

  Dicks, Terry

  Brandon-Bravo, Martin

  Dorrell, Stephen

  Brazier, Julian

  Douglas-Hamilton, Lord James

  Bright, Graham

  Dover, Den

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

  Dunn, Bob

  278

  Eggar, Tim

  Kellett-Bowman, Dame Elaine

  Emery, Sir Peter

  Key, Robert

  Evans, David (Welwyn Hatf'd)

  Kilfedder, James

  Evennett, David

  King, Roger (B'ham N'thfield)

  Fairbairn, Sir Nicholas

  Kirkhope, Timothy

  Fallon, Michael

  Knapman, Roger

  Favell, Tony

  Knight, Greg (Derby North)

  Fenner, Dame Peggy

  Knight, Dame Jill (Edgbaston)

  Field, Barry (Isle of Wight)

  Knowles, Michael

  Finsberg, Sir Geoffrey

  Knox, David

  Fishburn, John Dudley

  Lamont, Rt Hon Norman

  Fookes, Dame Janet

  Lang, Ian

  Forman, Nigel

  Latham, Michael

  Forsyth, Michael (Stirling)

  Lawrence, Ivan

  Forth, Eric

  Lawson, Rt Hon Nigel

  Fowler, Rt Hon Norman

  Lee, John (Pendle)

  Fox, Sir Marcus

  Leigh, Edward (Gainsbor'gh)

  Franks, Cecil

  Lennox-Boyd, Hon Mark

  Freeman, Roger

  Lester, Jim (Broxtowe)

  French, Douglas

  Lightbown, David

  Gale, Roger

  Lilley, Peter

  Garel-Jones, Tristan

  Lloyd, Sir Ian (Havant)

  Gill, Christopher

  Lloyd, Peter (Fareham)

  Gilmour, Rt Hon Sir Ian

  Lord, Michael

  Glyn, Dr Alan

  Lyell, Sir Nicholas

  Goodhart, Sir Philip

  Macfarlane, Sir Neil

  Goodson-Wickes, Dr Charles

  MacGregor, Rt Hon John

  Gorman, Mrs Teresa

  MacKay, Andrew (E Berkshire)

  Gorst, John

  Maclean, David

  Gow, Ian

  McNair-Wilson, Sir Michael

  Grant, Sir Anthony (CambsSW)

  McNair-Wilson, Sir Patrick

  Greenway, Harry (Ealing N)

  Madel, David

  Greenway, John (Ryedale)

  Major, Rt Hon John

  Gregory, Conal

  Malins, Humfrey

  Griffiths, Peter (Portsmouth N)

  Mans, Keith

  Grist, Ian

  Maples, John

  Ground, Patrick

  Marland, Paul

  Grylls, Michael

  Marlow, Tony

  Hague, William

  Marshall, John (Hendon S)

  Hamilton, Neil (Tatton)

  Marshall, Michael (Arundel)

  Hampson, Dr Keith

  Martin, David (Portsmouth S)

  Hanley, Jeremy

  Maude, Hon Francis

  Hannam, John

  Maxwell-Hyslop, Robin

  Hargreaves, Ken (Hyndburn)

  Mayhew, Rt Hon Sir Patrick

  Harris, David

  Mellor, David

  Haselhurst, Alan

  Meyer, Sir Anthony

  Hawkins, Christopher

  Miller, Sir Hal

  Hayes, Jerry

  Mills, Iain

  Hayhoe, Rt Hon Sir Barney

  Miscampbell, Norman

  Hayward, Robert

  Mitchell, Andrew (Gedling)

  Heath, Rt Hon Edward

  Mitchell, Sir David

  Heathcoat-Amory, David

  Moate, Roger

  Heddle, John

  Monro, Sir Hector

  Heseltine, Rt Hon Michael

  Montgomery, Sir Fergus

  Hicks, Mrs Maureen (Wolv' NE)

  Moore, Rt Hon John

  Higgins, Rt Hon Terence L.

  Morris, M (N'hampton S)

  Hill, James

  Morrison, Sir Charles

  Hind, Kenneth

  Morrison, Rt Hon P (Chester)

  Hogg, Hon Douglas (Gr'th'm)

  Moss, Malcolm

  Holt, Richard

  Moynihan, Hon Colin

  Hordern, Sir Peter

  Mudd, David

  Howard, Michael

  Neale, Gerrard

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

  Needham, Richard

  Howarth, G. (Cannock & B'wd)

  Nelson, Anthony

  Howe, Rt Hon Sir Geoffrey

  Neubert, Michael

  Howell, Rt Hon David (G'dford)

  Newton, Rt Hon Tony

  Howell, Ralph (North Norfolk)

  Nicholls, Patrick

  Hughes, Robert G. (Harrow W)

  Nicholson, David (Taunton)

  Hunt, David (Wirral W)

  Nicholson, Emma (Devon West)

  Hunter, Andrew

  Norris, Steve

  Hurd, Rt Hon Douglas

  Onslow, Rt Hon Cranley

  Irvine, Michael

  Oppenheim, Phillip

  Irving, Charles

  Page, Richard

  Jack, Michael

  Parkinson, Rt Hon Cecil

  Jackson, Robert

  Patnick, Irvine

  Jessel, Toby

  Patten, Rt Hon Chris (Bath)

  Johnson Smith, Sir Geoffrey

  Patten, John (Oxford W)

  Jones, Gwilym (Cardiff N)

  Pattie, Rt Hon Sir Geoffrey

  Jones, Robert B (Herts W)

  Pawsey, James

  Jopling, Rt Hon Michael

  Peacock, Mrs Elizabeth

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  Porter, Barry (Wirral S)

  Stradling Thomas, Sir John

  Porter, David (Waveney)

  Sumberg, David

  Portillo, Michael

  Summerson, Hugo

  Powell, William (Corby)

  Tapsell, Sir Peter

  Price, Sir David

  Taylor, Ian (Esher)

  Raison, Rt Hon Timothy

  Taylor, John M (Solihull)

  Rathbone, Tim

  Taylor, Teddy (S'end E)

  Redwood, John

  Tebbit, Rt Hon Norman

  Renton, Tim

  Temple-Morris, Peter

  Rhodes James, Robert

  Thatcher, Rt Hon Margaret

  Riddick, Graham

  Thompson, D. (Calder Valley)

  Ridley, Rt Hon Nicholas

  Thompson, Patrick (Norwich N)

  Ridsdale, Sir Julian

  Thorne, Neil

  Rifkind, Rt Hon Malcolm

  Thornton, Malcolm

  Roberts, Wyn (Conwy)

  Thurnham, Peter

  Roe, Mrs Marion

  Townend, John (Bridlington)

  Rossi, Sir Hugh

  Townsend, Cyril D. (B'heath)

  Rost, Peter

  Tracey, Richard

  Rowe, Andrew

  Tredinnick, David

  Rumbold, Mrs Angela

  Trippier, David

  Ryder, Richard

  Trotter, Neville

  Sackville, Hon Tom

  Twinn, Dr Ian

  Sainsbury, Hon Tim

  Vaughan, Sir Gerard

  Sayeed, Jonathan

  Viggers, Peter

  Shaw, David (Dover)

  Waddington, Rt Hon David

  Shaw, Sir Giles (Pudsey)

  Wakeham, Rt Hon John

  Shaw, Sir Michael (Scarb')

  Walden, George

  Shelton, Sir William

  Walker, Bill (T'side North)

  Shephard, Mrs G. (Norfolk SW)

  Walker, Rt Hon P. (W'cester)

  Shepherd, Colin (Hereford)

  Waller, Gary

  Shepherd, Richard (Aldridge)

  Walters, Sir Dennis

  Shersby, Michael

  Ward, John

  Sims, Roger

  Wardle, Charles (Bexhill)

  Skeet, Sir Trevor

  Warren, Kenneth

  Smith, Sir Dudley (Warwick)

  Watts, John

  Smith, Tim (Beaconsfield)

  Wheeler, John

  Soames, Hon Nicholas

  Whitney, Ray

  Speed, Keith

  Widdecombe, Ann

  Speller, Tony

  Wiggin, Jerry

  Spicer, Sir Jim (Dorset W)

  Wilkinson, John

  Spicer, Michael (S Worcs)

  Winterton, Mrs Ann

  Squire, Robin

  Winterton, Nicholas

  Stanbrook, Ivor

  Wolfson, Mark

  Stanley, Rt Hon Sir John

  Wood, Timothy

  Steen, Anthony

  Yeo, Tim

  Stern, Michael

  Young, Sir George (Acton)

  Stevens, Lewis

  Stewart, Allan (Eastwood)

  Tellers for the Ayes:

  Stewart, Andy (Sherwood)

  Mr. Tony Durant and Mr. Alistair Goodlad.

  Stewart, Rt Hon Ian (Herts N)

  Stokes, Sir John

  NOES

  Adams, Allen (Paisley N)

  Brown, Nicholas (Newcastle E)

  Allen, Graham

  Brown, Ron (Edinburgh Leith)

  Alton, David

  Bruce, Malcolm (Gordon)

  Archer, Rt Hon Peter

  Buchan, Norman

  Armstrong, Hilary

  Buckley, George J.

  Ashdown, Rt Hon Paddy

  Caborn, Richard

  Ashley, Rt Hon Jack

  Callaghan, Jim

  Ashton, Joe

  Campbell, Menzies (Fife NE)

  Banks, Tony (Newham NW)

  Campbell, Ron (Blyth Valley)

  Barnes, Harry (Derbyshire NE)

  Campbell-Savours, D. N.

  Barnes, Mrs Rosie (Greenwich)

  Canavan, Dennis

  Barron, Kevin

  Carlile, Alex (Mont'g)

  Battle, John

  Cartwright, John

  Beckett, Margaret

  Clark, Dr David (S Shields)

  Beith, A. J.

  Clarke, Tom (Monklands W)

  Bell, Stuart

  Clay, Bob

  Benn, Rt Hon Tony

  Clelland, David

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

  Clwyd, Mrs Ann

  Bermingham, Gerald

  Cohen, Harry

  Bidwell, Sydney

  Coleman, Donald

  Blair, Tony

  Cook, Frank (Stockton N)

  Blunkett, David

  Cook, Robin (Livingston)

  Boateng, Paul

  Corbett, Robin

  Boyes, Roland

  Corbyn, Jeremy

  Bradley, Keith

  Cousins, Jim

  Bray, Dr Jeremy

  Cox, Tom

  Brown, Gordon (D'mline E)

  Crowther, Stan

  280

  Cryer, Bob

  Livsey, Richard

  Cummings, John

  Lloyd, Tony (Stretford)

  Cunliffe, Lawrence

  Lofthouse, Geoffrey

  Cunningham, Dr John

  Loyden, Eddie

  Dalyell, Tam

  McAllion, John

  Darling, Alistair

  McAvoy, Thomas

  Davies, Rt Hon Denzil (Llanelli)

  McCartney, Ian

  Davies, Ron (Caerphilly)

  Macdonald, Calum A.

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

  McFall, John

  Dewar, Donald

  McKay, Allen (Barnsley West)

  Dixon, Don

  McKelvey, William

  Dobson, Frank

  McLeish, Henry

  Doran, Frank

  McNamara, Kevin

  Douglas, Dick

  McWilliam, John

  Duffy, A. E. P.

  Madden, Max

  Dunwoody, Hon Mrs Gwyneth

  Mahon, Mrs Alice

  Eadie, Alexander

  Marek, Dr John

  Eastham, Ken

  Marshall, David (Shettleston)

  Evans, John (St Helens N)

  Marshall, Jim (Leicester S)

  Ewing, Harry (Falkirk E)

  Martin, Michael J. (Springburn)

  Ewing, Mrs Margaret (Moray)

  Martlew, Eric

  Fatchett, Derek

  Maxton, John

  Faulds, Andrew

  Meacher, Michael

  Field, Frank (Birkenhead)

  Meale, Alan

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

  Michael, Alun

  Fisher, Mark

  Michie, Bill (Sheffield Heeley)

  Flannery, Martin

  Michie, Mrs Ray (Arg'l & Bute)

  Flynn, Paul

  Mitchell, Austin (G't Grimsby)

  Foster, Derek

  Moonie, Dr Lewis

  Foulkes, George

  Morgan, Rhodri

  Fraser, John

  Morley, Elliot

  Fyfe, Maria

  Morris, Rt Hon A. (W'shawe)

  Garrett, John (Norwich South)

  Morris, Rt Hon J. (Aberavon)

  Garrett, Ted (Wallsend)

  Mowlam, Marjorie

  George, Bruce

  Mullin, Chris

  Gilbert, Rt Hon Dr John

  Murphy, Paul

  Godman, Dr Norman A.

  Oakes, Rt Hon Gordon

  Golding, Mrs Llin

  O'Brien, William

  Gordon, Mildred

  O'Neill, Martin

  Gould, Bryan

  Orme, Rt Hon Stanley

  Graham, Thomas

  Owen, Rt Hon Dr David

  Grant, Bernie (Tottenham)

  Parry, Robert

  Griffiths, Nigel (Edinburgh S)

  Patchett, Terry

  Griffiths, Win (Bridgend)

  Pendry, Tom

  Grocott, Bruce

  Pike, Peter L.

  Hardy, Peter

  Powell, Ray (Ogmore)

  Harman, Ms Harriet

  Prescott, John

  Hattersley, Rt Hon Roy

  Primarolo, Dawn

  Healey, Rt Hon Denis

  Quin, Ms Joyce

  Heffer, Eric S.

  Radice, Giles

  Henderson, Doug

  Randall, Stuart

  Hoey, Ms Kate (Vauxhall)

  Redmond, Martin

  Hogg, N. (C'nauld & Kilsyth)

  Rees, Rt Hon Merlyn

  Home Robertson, John

  Richardson, Jo

  Hood, Jimmy

  Roberts, Allan (Bootle)

  Howarth, George (Knowsley N)

  Robertson, George

  Howell, Rt Hon D. (S'heath)

  Rogers, Allan

  Howells, Geraint

  Rooker, Jeff

  Howells, Dr. Kim (Pontypridd)

  Rowlands, Ted

  Hoyle, Doug

  Ruddock, Joan

  Hughes, John (Coventry NE)

  Salmond, Alex

  Hughes, Robert (Aberdeen N)

  Sedgemore, Brian

  Hughes, Roy (Newport E)

  Sheerman, Barry

  Hughes, Simon (Southwark)

  Sheldon, Rt Hon Robert

  Illsley, Eric

  Shore, Rt Hon Peter

  Ingram, Adam

  Short, Clare

  Janner, Greville

  Sillars, Jim

  Jones, Barry (Alyn & Deeside)

  Skinner, Dennis

  Jones, Ieuan (Ynys Môn)

  Smith, Andrew (Oxford E)

  Jones, Martyn (Clwyd S W)

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

  Kaufman, Rt Hon Gerald

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

  Kennedy, Charles

  Snape, Peter

  Kinnock, Rt Hon Neil

  Soley, Clive

  Lambie, David

  Spearing, Nigel

  Lamond, James

  Steinberg, Gerry

  Leadbitter, Ted

  Stott, Roger

  Lestor, Joan (Eccles)

  Strang, Gavin

  Lewis, Terry

  Straw, Jack

  Litherland, Robert

  Taylor, Mrs Ann (Dewsbury)

  Livingstone, Ken

  Taylor, Matthew (Truro)

  281

  Thomas, Dr Dafydd Elis

  Williams, Rt Hon Alan

  Thompson, Jack (Wansbeck)

  Williams, Alan W. (Carm'then)

  Turner, Dennis

  Wilson, Brian

  Vaz, Keith

  Winnick, David

  Wall, Pat

  Wise, Mrs Audrey

  Wallace, James

  Worthington, Tony

  Walley, Joan

  Wray, Jimmy

  Wardell, Gareth (Gower)

  Young, David (Bolton SE)

  Wareing, Robert N.

  Watson, Mike (Glasgow, C)

  Tellers for the Noes:

  Welsh, Andrew (Angus E)

  Mr. Frank Haynes and Mr. Jimmy Dunnachie.

  Welsh, Michael (Doncaster N)

  Question accordingly agreed to.
  MR. SPEAKER forthwith declared the main Question, as amended, to be agreed to.
  Resolved,
  That this House congratulates Her Majesty's Government on the determination with which it has pursued policies to bear down on inflation and improve the supply side of the economy; welcomes the sustained growth of output, productivity, investment, employment and living standards which the United Kingdom has enjoyed as a result; and endorses the Government's resolve to continue with the policies which are in the long-term interest of the British economy.

  Licensing and Clubs (Northern Ireland)
  10.27 pm
  The Parliamentary Under-Secretary of State for Northern Ireland (Mr. Richard Needham): I beg to move,
  That the draft Licensing and Clubs (Amendment) (Northern Ireland) Order 1989, which was laid before this House on 25th July, be approved.
  The order is short, containing only nine articles. In 1987, the Government made significant changes to the licensing law in Northern Ireland. These were contained in the Licensing (Northern Ireland) Order 1987. The present order is intended to complement those earlier reforms. Articles 1 and 2 are introductory. Article 3 deals with the products that can be sold on licensed premises. The present law restricts public houses and off-licences to the business authorised by the licence, which by and large is the sale of alcohol. However, it makes exceptions for certain other goods, such as selling cigarettes, crisps, and the like, which go naturally with the sale of alcohol.
  As the law stands, even the most modest change could be achieved only by primary legislation. It seems unnecessary to have an order every time a new bottle opener comes on the market. In future, therefore, we are proposing that any change should be through regulation.
  Article 4 provides for the granting of extension licences and special authorisations when new year's eve falls on a Sunday. This is on average once every seven years, and it so happens that next new year's eve will be one of those occasions. As the law stands, alcohol cannot be sold in licensed premises or registered clubs after 10 pm on Sunday. I have been persuaded by arguments from the licensed trade, registered clubs and golfers at the 19th hole that, should I not act, there will be hardly a new year's party to which I will be invited in December. The provision will enable hotels, restaurants and pubs on application to a court and registered clubs on application to the police, to sell drink after 10 pm on 31 December until I am on Monday 1 January. I was addressing my remarks to the hon. Member for Belfast, South (Rev. Martin Smyth) in particular.
  Article 5 introduces a ban on all the off-sales of alcohol after 9 pm. This is the most significant change in the order, so I shall explain how it has come about.
  Before 1 October 1987, the standard hours for alcohol off-sales from pubs and off-licences were 11.30 am to 11.00 pm., but not off-sales from pubs or the off-sales outlets attached to them.
  The measure was aimed primarily at lager louts. I had received many complaints about thuggish behaviour in Northern Ireland. It was clear that the main source of drink involved was off-licensed shops. Since then there has been a decline in the problem, but there remains a widespread clamour for stronger action to be taken against drinking in public.
  It was also clear that, following the 1987 ban, some of the off-sales shops were struggling because, as I have said, the 1987 ban did not extend to pubs or their attached off-sales outlets. Northern Ireland Members and others pointed out to me the detrimental effect that the new hours were having on existing free-standing off-licences.
  The Government, therefore, must try to square the circle. The choice is plain: either we return to 11 pm closing for all off-licence outlets, or we require all of them to close at 9 pm. To take the former course would be to sweep aside
  284
  the complaints of those who are rightly concerned about the serious problems associated with late-night drinking. That would be both unreasonable and unacceptable. The sensible answer, and the one that we have chosen, is to impose a ban on all off-sales after 9 pm, including those from pubs and off-sales outlets attached to them. That is the effect of article 5.
  I now refer to article 6. I am sure that all hon. Members share my concern about the increasing problem of underage drinking. I know that all sections of the licensed trade are equally concerned, and they do not want to have under-18s among their customers. In passing I would like to praise what are known as no-alcohol pubs. I am pleased to say that in Armagh, Ballymena and, more recently, Dungannon there have been successful ventures to entice youngsters towards alcohol-free drinking. But we must keep a tight grip on the licensing side, and especially on offences involving minors. This article will create a new ground of defence for a person charged with selling alcohol to a minor, requiring him to prove that he had used all due diligence to prevent the offence. This defence will also be available to a person charged with allowing a minor in the bar area of a pub or in an off-licence.
  This change stems from a recommendation made by Baroness Masham's group in its report on young people and alcohol, that the onus for avoiding the sale of alcohol to minors should be placed firmly on the licensee. I am sure that that is the right approach, but it is important to strike a balance. On the one hand, licensees must be left in no doubt about their responsibilities, and, on the other hand, it is important to have a defence for the conscientious licensee who makes a genuine mistake or could not foresee the intentions of his customer. I believe that the new defences strike that balance. They are, of course, identical to comparable defences now applying to the rest of the United Kingdom.
  Hon. Members may like to know that the Federation of the Retail Licensed Trade, Northern Ireland has introduced a voluntary over-18 identity card scheme, similar to those operating in England and, I am glad to say, in my constituency. That is very much the sort of action which article 6 is designed to encourage, and many hon. Members are supporting it.
  The remaining articles are mainly technical. Article 7 inserts a new arm into the definition of "intoxicating liquor" in the Licensing Act (Northern Ireland) 1971. Article 8 makes minor amendments to the Act. Article 9 contains repeal provisions.
  I believe that what we are suggesting in this order is sensible, and that is borne out by the wide measure of support that it has received in Northern Ireland during consultation. I commend the order to the House.
  10.34 pm
  Mr. Kevin McNamara: I now understand why the order is being rushed through—so that the Under-Secretary's social life will not be interfered with too greatly over Christmas. In the context of his remarks about the 19th hole, I can also understand what the right hon. Member for Old Bexley and Sidcup (Mr. Heath) meant about a one-club policy.
  The Minister has covered most of the ground, which is not a matter of controversy between the parties. The proposals in the order—particularly those dealing with under-age drinking, the new defence for licensees who

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  properly show that they are pursuing their duties, and the various other measures—are to be welcomed. I commend the order to the House.
  10.35 pm
  Mr. James Kilfedder: When the Government introduced the draft Licensing (Northern Ireland) Order 1987, to which the Minister has just referred, which banned sales from off-licence shops after 9 pm, complaints were made that the order discriminated in favour of public houses, which could continue to sell alcohol for consumption outside until 11 pm. Not only did the order financially hurt off-licences but it meant that customers could still buy quantities of drink for consumption off the premises from public houses. The 1987 order thus defeated the purpose of closing off-licences at 9 pm, which was to restrict the amount of alcohol available to persons, especially young persons, who drank, often in public, where they behaved disgracefully and offensively to people living in or walking about the area.
  So I welcome article 5, which introduces a ban on the sale of alcohol from all off-sales outlets after 9 pm, as well as forbidding the sale of alcohol for consumption off the premises on Sundays and Christmas day.
  However, I question whether article 5(1)(a) will be readily effective with its present wording, which, if I may precis it, states that the licensee shall not sell intoxicating liquor to any person for consumption off the premises on weekdays after 9 pm. I want to emphasise that the wording of article 5 does not prevent the customer from buying alcohol after 9 pm and keeping it until the premises close, thus defeating the original purpose of a time limit on off-sales of alcohol.
  Once the public house shuts at 11 pm—or later; sad to say, there are too man late night extensions—the customer can continue drinking outside in the street or in other public places, where his conduct can be extremely offensive to peace-loving and law-abiding citizens. Unfortunately, the situation is made much worse by the fact that the persons with the parcels of drink who are let loose on to the streets from the public houses will already have spent part or all of the evening drinking in a public house until closing time. They will be in a bad condition, therefore, and will behave much more badly.
  Another aspect must not be overlooked, and I hope that the Minister will not overlook it. Anyone in a public house with parcels of alcohol after 9 pm can say that he bought the drink before 9 pm, thus providing the licensee with a defence to a summons under article 5—even though the items were sold after 9 pm. That will happen on occasions.
  The police are already overstretched in Northern Ireland—they certainly are in my constituency. We need more police officers about the area. They cannot stand guard in every licensed premises in Northern Ireland to ensure that drink is not sold after 9 in the evening for consumption off the premises.
  Article 6 deals with offences involving minors—the sale of alcohol to people under the age of 18. Under the existing law, whereby the prosecution has to establish that the licensee has "knowingly" sold alcohol to a minor, the police have been frustrated in their attempts to stop under-age drinking in public houses. The order shifts the
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  burden of proof by removing the word "knowingly", but it provides a defence for the licensee if he can prove that he exercised all due diligence, or that he had no reason to suspect that the customer was under 18 years of age.
  I hope that the Minister will take my next point on board, and have the matter looked into. Under article 6, the licensee can easily avoid the penalty that should fall on someone selling alcohol to persons aged under 18. I know that the article is in line with the changes made in the Licensing Act 1988 for England and Wales, following the recommendations of the working group to which the Minister referred, on young people and alcohol, which was chaired by Baroness Masham. It is interesting to note that the working party considered whether the sale or supply of alcohol to or for an under-age customer should be an absolute offence. It said that it
  "would undoubtedly be an effective way of strengthening licensees' resolve to establish the age of doubtful young customers … Indeed, some of us considered it the only really effective way."
  On balance, it was decided against recommending that it should be an absolute offence.
  We must recognise that there is a considerable amount of under-age drinking throughout not only Northern Ireland and the United Kingdom, but elsewhere in the world. The recent survey conducted by the Department of Health and Social Services in Northern Ireland confirmed that there is a serious problem in the Province, and that two thirds of all 16 and 17-year-olds in the survey drink alcohol. Of these, 80 per cent. claim to drink in discos or clubs—some of the discos are held in public houses—51 per cent. in pubs and bars, with 52 per cent. buying alcohol from off-licences, which were also the major source of supply for drinkers under 16. The survey also revealed that, among 15-year-olds, 19 per cent. of boys and 11 per cent of girls drink at least once a week.
  That confirms that there is a serious under-age drinking problem in Northern Ireland, and it must be dealt with. I hope that the Minister will come forward with other proposals. They may not be in line with the law in England and Wales, but they should make it easier for the police to stop under-age drinking in Northern Ireland, in public houses and on the streets.
  10.43 pm
  Mr. A. Cecil Walker: We shall soon be entering a new parliamentary Session and, once again, hon. Members who have the honour to represent the Province of Northern Ireland will be expected to suffer the humiliation of participating in a charade, a pointless exercise in which Ministers pontificate on matters affecting our welfare—Ministers who are not answerable to the Northern Ireland electorate for what they do or do not do, to justify their existence. We are expected to join this annual merry-go-round with iniquitous Orders in Council and to deliberate on their contents with no oportunity to amend them. We are asked at the proposal stage for our views, but in my experience that is just a cosmetic exercise—an attempt to introduce a modicum of democracy into the process. It is the faceless civil servants who are calling the tune in Northern Ireland and the Minister, whatever his views, is powerless to alter one iota of an order of this kind.
  If my right hon. and hon. Friends were allowed to contribute in a meaningful way to these impositions, or orders, we could honestly and sincerely advance the views

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  which are representative of our electorate. We could reflect the situation in the Province. But we are not allowed to do that. That is why such orders are anathema to the people of Northern Ireland. Ministers are not considered representative of the people. That is why the present system of government will never be accepted. It will always be a bone of contention, thus precluding meaningful relations between the Government and Unionist Members.
  If I were to be treated democratically, like all those hon. Members who represent mainland constituencies, I should welcome the order as an attempt to cover something which was not dealt with in previous legislation. It is unfortunate, however, that it has not gone far enough in certain directions. The Minister is aware of my feelings on free-standing off-licences, for example. I believe that they should be subject to planning permission and not treated merely as trading shops. Such off-licences are springing up throughout my constituency and causing great offence to the community. They invariably become meeting places for lager louts, who practise what is described in the order as "anti-social behaviour".
  I welcome the provision which will restrict the sales of intoxicating liquor at off-licences to no later than 9 pm, but that will not affect the consumption of liquor in public places by young people, who drink at street corners and get up to all kinds of mischief as a consequence. The Government should take a strong line on drinking in public places. They should legislate to place a complete ban on such an anti-social activity. It is unfair to expect local councillors to take responsibility, as their powers are often limited.
  When dealing with under-age drinking, it is virtually impossible to place the onus of proof on the holder of the licence. Much of the drink consumed by minors is purchased by adults. I have witnessed this in north Belfast. Unless measures are taken to prohibit the consumption of liquor in public places, the new measures will not work.
  The rest of the order is not contentious and will not present any problems, but it falls down in its approach to under-age drinking. That defect must be overcome if it is to give full effect to the intentions which lie behind it.
  10.49 pm
  Mr. Michael Colvin: I acknowledge the experience that the hon. Member for Belfast, North (Mr. Walker) must have with lawbreakers. As a justice of the peace, he sees in court the results of some of the happenings on the streets of Belfast that he has so vividly described. I do not think he can expect us to believe, however, that the order is being dragooned through the House by faceless civil servants. I know that my hon. Friend the Minister has taken considerable soundings from everyone involved in the licensed trade, including the Federation of the Licensed Trade, Northern Ireland, which has had many discussions with the hon. Member for Belfast, North on the order.
  This is probably not the week for advisers, but it is necessary for me to declare an interest as an adviser to the federation. The Government are introducing the order because of alcohol abuse among young people, and very necessary it is, too.
  The hon. Member for North Down (Mr. Kilfedder) has already referred to the survey carried out by the DHSS published in April this year entitled "Drinking amongst
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  school children in Northern Ireland". He said something about the results of that survey, which show that most young people obtain alcohol from off-licences, clubs and discos rather than from public houses. The survey says:
  "Off-licences were the major source of supply of alcohol to adolescent drinkers between the ages of 12 and 16."
  The figures show that nearly half buy in an off-licence., a third in a club or disco, a quarter in a pub or bar and 5 per cent. elsewhere.
  When the Minister replies, will he explain why it is necessary in this order to help the off-licence at the expense of the public house? I submit that the public house is an extremely responsible place in which to drink. The publican risks losing not just his licence but his livelihood and his home should he contravene the law on, for example, under-age drinking.
  Reducing off-sales in public houses is unlikely to have any practical effect on reducing under-age drinking. Regulations to close off-licences at 9 pm were introduced in October 1987, but the fieldwork for the survey to which I have just referred was done well after that date and the results still show that adolescents obtain most of their alcohol from off-licences.
  We do not want a rather sterile debate about hours this evening. There has already been much discussion about this, and the publicans' views have been made clear through their federation at meetings with the Minister and through the paper that it submitted on the draft order. They welcome the extra time allowed at the new year but they feel that the playing field is still a little uneven and tipped in favour of the off-licence.
  I hasten to add that I am not the federation's spokesman, but it has come up with an idea that makes a lot of sense. The House will no doubt recall that, during a debate in this place on the reform of the licensing laws in England and Wales, there was considerable debate on what should be done about Sundays. As a result of what has been described in the Official Report as a cock-up in the other place, it so happened that publicans were granted additional time on Sundays.
  A feature of the licensed trade today, and Northern Ireland is no different, is that more and more families are going to public houses at weekends. Public houses are offering more facilities than ever before. Many more meals are being served, but Sunday hours, from 12.30 pm to 2.30 pm and from 7 pm to 10 pm mean that one must gallop through lunch in considerable discomfort in order to finish in the time available.
  I hope that the Minister will say whether, in order to achieve more balance in the trade, he will consider extending the hours on Sundays so that families can eat their meals and drink their drinks in just a little more comfort.
  The hon. Member for North Down mentioned the Royal Ulster Constabulary and its views. What has the RUC had to say about the draft order? Enforcement of this cut-off deadline of 9 pm on off-licence sales will be extremely difficult. Anyone who happens to be seen leaving a public house after that time with drink bought in an off-licence only has to say that he bought it before 9 pm. I do not see how anyone could ever prove otherwise, how those who break the law are to be brought to court or how a prosecution can be made to stick, unless we are to have a system of spies.
  Ideally, we should like uniformity throughout the United Kingdom. It took long enough to bring England

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  and Wales more into line with Scotland; perhaps we should now start a campaign to bring Northern Ireland into line with the rest.
  I should like the Minister to give an undertaking that the matter will be kept under careful review. The DHSS survey is interesting, because it has provided a datum point. Perhaps some mechanism can be found for an update of those findings: I should like to think that some of the questions that have been asked could be asked again at the end of the year to establish the position, and to find out whether there is any trend in adolescent drinking.
  I am glad that the Minister acknowledged the over-18 card initiative by the federation, because it shows that responsible licensees are doing their bit to ensure that under-age drinking is kept under control.
  The licensed trade in Northern Ireland is, in a sense, unique. Those of us who represent English constituencies, but often visit Northern Ireland, are struck—as it is impossible not to be—by what might best be described as "sectarian problems". Public houses in Northern Ireland have two main characteristics: first, most are free houses—the landlord-and-tenant system does not exist to the same extent as in England—and, secondly, they are non-sectarian drinking places. They are responsibly owned and run, and people across the sectarian divide can meet and enjoy themselves there. In that sense, the Northern Ireland licensed trade has a unique part to play in bringing the people together more happily than has been the case hitherto.
  10.57 pm
  Mr. Clifford Forsythe: Perhaps I may take a little of the House's time to support my hon. Friend the Member for Belfast, North (Mr. Walker). If the order were proceeding as legislation normally does, we might even congratulate the Minister on its content. Unfortunately, however, we have to point out time and again the unfairness of treating such measures as Orders in Council.
  It is true that the order brings public houses into line with off-licences, in that both establishments must now stop trading in off-sales from 9 pm. I consider it fair that two establishments engaged in the same trade should have the same hours—that is an improvement on the previous arrangement—but there is no doubt that the sale of liquor to minors is a big problem in Northern Ireland, and a disgrace to those who run the off-licences.
  I hope that the Minister will consider introducing legislation to prevent adults from buying alcohol in off-licences and then selling it to minors outside. The explanatory note in the order says that it is an offence knowingly to sell alcohol to minors. An even greater problem is that adults are buying alcohol in off-licences and then selling it to minors outside the premises. Unfortunately, no one seems to be greatly concerned about this. Many hon. Members have said that it is a disgrace that on some occasions minors can be found lying in the street not far from where they purchased alcohol. It seems to be in no one's power to prevent that. It may not be possible to prevent minors from drinking, but it ought to be possible for the police to find out precisely how minors were able to obtain alcohol. The matter may lie outside the scope of the order, but it ought to be examined.
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  I welcome the fact that a licensee must now prove that he or she made every effort to prevent the sale of alcohol to under-age drinkers, by notices or other methods. That provision ought to be strictly enforced. It is not the case, as the hon. Member for Romsey and Waterside (Mr. Colvin) said, that on Sundays families spend a lot of time drinking in public houses. That is not the tradition in Northern Ireland. Public houses can open now in Northern Ireland on Sundays, but many of them do not do so because it is not the tradition there.
  Mr. Colvin: It is not the tradition in England and Wales either, but times are changing. Because pubs are now offering a facility, people are starting to do something that traditionally they have not done in the past. That may happen in Northern Ireland, too.
  Mr. Forsythe: That is a matter for the people concerned, not for the people who decide to open on Sundays. I assure the hon. Member for Romsey and Waterside that that is not the tradition in Northern Ireland and I do not believe that it will ever entirely become the tradition.
  I welcome the order, even though I should have preferred to welcome it in a different form. The House ought to change the procedure.
  11.3 pm
  Mr. Needham: The hon. Member for North Down (Mr. Kilfedder) said that he believes that the regulations do not do enough to prevent young people drinking, either outside licensed clubs or in them. The 1987 order that we are amending introduced new rules about the opening time of free-standing off-licences and limited it to 9 o'clock. The police believe that that has made a difference. Surely they are best to judge that. They believe that there has been a decline in the problems associated with late-night drinking since the off-sales hours were reduced for free-standing off-licences. In those circumstances, it would have been irresponsible of me not to take into account off-sales outlets attached to pubs.
  The hon. Gentleman then asked how the police would enforce that. The police always have an enforcement problem in matters related to drinking. How do they enforce the drinking-up provisions in pubs? Sometimes they do it with difficulty. I have to tell the hon. Gentleman that I have a different view of the honesty of his constituents. I do not believe for one minute that they will cheat and think that they can get away with cheating. I am referring not only to the drinkers but to the licensees. I am glad to see the hon. Member for Redcar (Ms. Mowlem) nodding her head in agreement. It would cost a licensee a great deal of money and possibly the loss of his livelihood if he were to breach this order and sell drink through his off-licence or over the bar after the permitted hours. I do not think that it is a question of putting in spies, as one or two prosecutions would serve as a timely reminder to anybody who tried to do that.
  The hon. Member for North Down then questioned the Government's proposed wording on the sale of alcohol to young people. I can only repeat that that wording now applies throughout the United Kingdom. I appreciate that the hon. Gentleman is a distinguished lawyer. I am not a distinguished lawyer, but although I listened most carefully to what he said, I have to accept the advice of the Government's lawyers and Lady Masham's lawyers. I

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  hope that the wording will have the impact that the Government and Lady Masham hope for throughout the United Kingdom.
  Mr. Kilfedder: I am sure that if the Minister has read Lady Masham's report, he will have noted that the working group was divided on the issue of an absolute offence. The group had the greatest difficulty in making a recommendation and only with reluctance did it decide not to recommend an absolute offence. As for the police, the Minister should talk to the police in Bangor, who have told me that there is a tremendous problem of under-age drinking and they cannot stop some licensees selling drink to under-age people.
  Mr. Needham: I can assure the hon. Gentleman that I spoke to the police in Bangor recently. I spoke to the new superintendent in the hon. Gentleman's constituency only a week ago and he told me that the police experience difficulties with outside drinking rather than problems in dealing with licensees who break the law.
  The hon. Gentleman, whom I listened to most diligently, stressed the need to introduce byelaws on these matters. That is exactly what we have done. We have extended the byelaws because we have listened to what is said in Northern Ireland. I think that we should go down that route and see how it works. I am sure that we shall continue to make progress, as we have so far. I am sure that the hon. Gentleman is grateful to the police and to all those responsible that the situation has improved.
  Unfortunately, we are not debating constitutional matters, and I am fully aware of the views of the hon. Member for Belfast, North (Mr. Walker) about the Order in Council procedure. I am not sure what the views of his party are on a replacement for Orders in Council. As I understand it, it would like orders to be dealt with by a Northern Ireland Assembly, which would gain some support among hon. Members. The Order in Council procedure is the method by which we consider legislation, and as the Minister responsible I must do the best that I can to take everybody's views into account. As the hon. Member for Belfast, North knows, I listen to his views with the greatest possible care, and whenever I can I act on his advice.
  Rev. Martin Smyth: Will the Minister acknowledge that the Conservative party was returned to power in 1979 on a manifesto to legislate in the House in the absence of a devolved Parliament? For far too long, we have not had a devolved Parliament in Northern Ireland. If we are not to have a devolved Parliament, is it not time that we legislated in this House?
  Mr. Needham: The Government's policy is that there should be a devolved Parliament, and I shall welcome the day when the hon. Gentleman comes round to that view. Until he does so, in agreement with the other parties in Northern Ireland and in the House, we must use the best method that we can.
  I use the Order in Council procedure to try to consult hon. Members, and I notice that in this instance hon. Members welcome the order. I do not believe that during the consultation period—I have just consulted the faceless officials—there was any noise, chirrup or note from hon. Members against the proposals. They should either agree with the order or shut up about it. It is obvious that this is a reasonable and sensible order with which they agree.
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  It is not good enough for the hon. Member for Belfast, North to criticise my civil servants. I am perfectly capable of making up my own mind, but as the hon. Gentleman knows only too well, I have changed my mind about the order, which is why I brought it back before the House. One of the reasons why I changed my mind was that I listened to Official Unionist Members. As a result of listening to the hon. Member, we decided to amend the order, and I am grateful for the support that I am now being given. The hon. Gentleman must not criticise civil servants, who have done everything in their power to bring the order before the House as quickly as possible to ensure that minor errors are corrected and to provide for Sunday opening.
  I must say to my hon. Friend the Member for Romsey and Waterside (Mr. Colvin) that the order certainly does not help off-licences at the expense of public houses. It brings them into line, and all the evidence that I had showed that what was happening was affecting the free-standing off-licence and not the public house, which was not fair. A pub's off-licence business is ancillary to its usual business. I have done as much as I can to assist the competitive position of pubs in Northern Ireland, not least by allowing them to open on Sundays and to have gaming machines that offer small prizes. It is important to promote the pub in Northern Ireland, which I am doing, but competition must be fair and balanced. [Interruption.] I am grateful for the comments of the hon. Member for Falkirk, West (Mr. Canavan).
  We are talking not about under-age drinking resulting from off-licence sales but about reducing the amount of drink that is bought by young people after nine o'clock for taking outside. That does not mean that people buying drink are under age—often, they are not. The move to reduce the amount of drink bought by young people has begun and will continue when the order comes into force.
  I listened carefully to what was said about Sunday opening and I have some sympathy with the views expressed about the present hours. I am sure that we will look at that. I have covered the subject of enforcement and I do not need to go over that again.
  The hon. Member for Antrim, South (Mr. Forsythe) raised the problem of minors—I assume he did not mean miners—and due diligence. It is an offence to sell to minors and the police are aware of that offence. If the hon. Gentleman has any evidence of where it occurs, he should let the police know.
  Mr. Roy Beggs: One of the major problems is not selling alcohol to minors but supplying them. We need to get at the adults, such as winos, who purchase liquor and supply it to young people in exchange for a few cans or a small tip to enable them to buy food or drink. Does the Minister agree also that there are many irresponsible parents who allow their minors to have access to liquor in their own homes?
  Mr. Needham: I agree with the hon. Gentleman but we are not discussing that now. The provision of alcohol to minors is an offence. I can remember it happening in the constituency of the hon. Member for Belfast, North. Where it has happened we have been diligent in taking the cases to the police so that they can be investigated. Some of the instances were dealt with strongly and I assure the hon. Gentleman that that will continue because I agree

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  that it is wrong. We should do everything we can to deal with the problems of under-age drinking and supplying alcohol to minors.
  This is a sensible, minor change to the original order. I am sure that it will be welcomed throughout Northern Ireland for what it tries to do. It places a better balance on competition and I am sure that it will be another step towards sensible licensing arrangements which we will continue to keep under review. I assure hon. Members that we will continue to consult them about what we propose as long as they will talk to us.
  Question put and agreed to.
  Resolved,
  That the draft Licensing and Clubs (Amendment) (Northern Ireland) Order 1989, which was laid before this House on 25th July, be approved.

  Pipeline (Grangemouth)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Dorrell.]
  11.17 pm
  Mr. Harry Ewing: From discussing one highly volatile substance, alcohol, we now move to discuss other highly volatile substances—chemicals. I make no apology for telling the Minister of State, Department of Energy that my purpose is to try to persuade his right hon. Friend the Secretary of State, through him, not to grant the planning application lodged by Shell Chemicals UK Ltd. to construct a pipeline from Grangemouth in my constituency to Carrington near Manchester and on to Stanlow at Ellesmere Port. The purpose of such a pipeline would be to pipe from Grangemouth the total ethylene output from the Mossmorran chemical plant in Fife.
  I thank the Minister of State, Scottish Office for being present, as he recognises that such a pipeline would have serious job implications for Central and Fife regions and beyond. My hon. Friend the Member for Falkirk, West (Mr. Canavan) has a constituency interest, as many of his constituents work in the petrochemical industry at Grangemouth. Also, part of the Mossmorran plant is in the constituency of my hon. Friend the Member for Kirkcaldy (Dr. Moonie). I thank both Ministers and my hon. Friends for their courtesy in attending.
  First, I will relate the history of the application. In 1977, when the chemical plant at Mossmorran was first mooted, there was a public inquiry in Dunfermline. That inquiry went on for day after day and the advocate representing the companies involved was Mr. James Mackay, now Lord Chancellor.
  Day after day, promises were extracted from Shell UK Ltd. and another company, which is not involved in the pipeline application, that in exchange for permission to construct the chemical plant at Mossmorran in Fife, downstream chemical industries would be established. To date, those industries have not materialised, for good reasons which I understand. That change has come about because, according to Shell UK Ltd.—I accept its view—there has been a tremendous upturn in the demand for products which use ethylene as their chemical feedstock. Those products include low-density polyethylene, which is a base material in the manufacture of the carrier bags used by Marks and Spencer and by other companies in the manufacture of plastic containers. Lubricants and other such by-products are also produced.
  Against that background, Shell UK Ltd. lodged a planning application with Fife regional council to double output of ethylene at the Mossmorran site, and permission was granted earlier this year. The company then submitted to the Secretary of State for Energy the application to construct a pipeline.
  I say in all friendliness to the Minister of State that if that permission is granted, gone for ever will be the possibility of establishing downstream chemical industries—for instance, factories manufacturing clingfilm and lubricants—in the Fife or Central regions, especially in my constituency at Grangemouth. A promise that was made in 1977 is in danger of not being honoured.
  In an exchange of views with Sir George Sharp, the former regional convenor in Fife, Mr. Donald McQuaker, personnel manager of Shell UK Ltd., went on record in the Sunday newspapers as saying that it was true that the

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  company had made those promises to the people of Fife but it had discovered that retired or redundant miners were not capable of the high-skill technology jobs to which I am referring. That is an insult to Fife miners who had to give up their jobs because the pits closed and who gave all that they had to ensure that the chemical plant was constructed at Mossmorran. I therefore criticise Mr. McQuaker's comments about the Fife miners.
  There is another piece of the history to the application in which the Minister will he interested. In 1977, when the plant was constructed at Mossmorran, the original application to construct a pipeline to pipe ethylene from Mossmorran was submitted by Shell UK Ltd. on the basis that the pipeline would run from Mossmorran with a landfall in north Berwick, continuing down to Carrington and on to Stanlow at Ellesmere Port, where it is now proposed to construct a pipeline.
  Objection was made to the application by the Fife and Central regional councils and those of us who in those days were the parliamentary representatives of the constituencies involved. We took our objections to the then Secretary of State for Energy, now my right hon. Friend the Member for Chesterfield (Mr. Benn), who then represented Bristol, East. He refused that planning application and would not allow the company to construct the pipeline along the proposed route.
  As a result of that refusal, the pipeline constructed at that time runs from Mossmorran in Fife across the river Forth and follows the same corridor as the oil pipeline to my constituency and the BP refinery and chemical plant in Grangemouth. That is why the ethylene is piped from Mossmorran to Grangemouth. When Shell wants to pipe some of that ethylene south, it rents space in an existing pipeline owned by BP. I understand that, because Shell now has permission to double the output capacity at Mossmorran, the rented pipeline does not have a large enough capacity to permit the company to pipe the whole of the output south. That is a dangerous state of affairs, because if the company is given permission to construct the pipeline, the chances of any downstream industry being established in Fife, in my constituency or in the Central region will have gone forever.
  My constituents and those of my hon. Friends the Members for Falkirk, West and for Kirkcaldy have to put up with the environmental inconvenience of chemical plants. We are prepared to do that, and I do not make that comment by way of complaint. In return, however, we want the downstream industries established in our area when there is an increase in demand for the derivatives of ethylene, but we are not getting them.
  I sometimes think that, apart from my two hon. Friends who are here, I stand alone on this issue, although my hon. Friend the Member for Dunfermline, West (Mr. Douglas), who spent many days at the public inquiry, has authorised me to say tonight that he supports the stand that I am making.
  I do not understand the attitude of Fife regional council. The Fife director of planning produced a document in which that authority said that it would not object to the application. It said that the maximum number of downstream jobs that would be created was "only 200". We in Fife and Central region are not so well off for jobs that we can afford to turn our backs on 200 jobs. Indeed, if the Minister managed to secure 200 jobs in
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  the area, he would be organising a press conference, complete with television cameras, to make the announcement, and I would congratulate him on his achievement.
  The Government must examine the position objectively and the Secretary of State for Energy must turn the application down. The whole future of Fife and central Scotland is at stake from the point of view of downstream chemical industries. I do not see why the people there should tolerate the environmental inconvenience, only to find that when downstream industry jobs become available they are not established there. Shell is cheating the people whom I represent. Although that view may not be held generally and may seem a harsh criticism, I profoundly believe it to be true. If Shell had been true to its word, as given to the public inquiry in 1977, the application for the pipeline would not have been made.
  The Scottish Office has a part to play in trying to persuade the Secretary of State for Energy not to grant the application. I am talking not just of Fife and Central region, but of the interests of Scotland generally, and I ask that the application be refused because our downstream future is at stake.
  I want to give the Minister time to reply to my submission, so I will finish by saying that Grangemouth is a difficult area to which to attract jobs. The Minister of State, Scottish Office knows of our difficulties in attracting alternative industry. Our industry is petrochemical-based and my experience has been that, unless we can attract petrochemical jobs, we have little or no chance of attracting any jobs.
  I pay tribute to Asda, which has built a massive warehouse, not in Grangemouth but on the outskirts of the town. However, that is the exception rather than the rule. If we do not get the downstream industries into Grangemouth or Fife, the chances of getting alternative industry are extemely remote. When the Minister reports the matter to his right hon. Friend the Secretary of State who will make the decision, I hope that he will persuade him to throw the application out and to make Shell UK honour the promise that it made at the public inquiry. My constituents will be grateful to him, and that attitude will go well beyond my constituency. It will continue for years to come among the families who will enjoy employment in those downstream industries.
  11.30 pm
  Mr. Dennis Canavan rose—
  Mr. Deputy Speaker (Sir Paul Dean): Order. Does the hon. Gentleman have the agreement of the hon. Member for Falkirk, East (Mr. Ewing) and of the Minister to speak?
  Mr. Harry Ewing: Yes.
  The Minister of State, Department of Energy (Mr. Peter Morrison): Yes.
  Mr. Canavan: I want to support my hon. Friend the Member for Falkirk, East (Mr. Ewing) briefly and to remind the Minister of State that not long ago, there was a Minister of State, Department of Energy called Hamish Gray. He opposed the building of a pipeline that would have brought many jobs for the people of Scotland. Ironically, we now have a Minister of State who is proposing the building of a pipeline that will export many jobs from Scotland. I advise the Minister to beware. What

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  happened to Hamish Gray? He has disappeared into political oblivion, and perhaps the same will happen to the Minister of State.
  If the remarks of my hon. Friend the Member for Falkirk, East on the building of the pipeline come true, it will mean the disappearance of many jobs and potential jobs. I hope that the Minister will bear in mind not only the job and economic implications, but the political implications for his own party, especially in the light of recent events. On behalf of the people of Falkirk district, I urge him to bear these matters in mind and to abandon the ridiculous proposal to build an expensive pipeline which will pipe jobs out of Scotland and especially out of Falkirk district.
  11.33 pm
  The Minister of State, Department of Energy (Mr. Peter Morrison): I am delighted that the hon. Member for Falkirk, East (Mr. Ewing) has had the opportunity to raise this matter, which very much concerns him and his hon. Friend the Member for Falkirk, West (Mr. Canavan). It is a serious matter, but on a slightly lighter note, I must tell the hon. Member for Falkirk, West that I have no plans to go into political oblivion just now. However, I have plans to look at every issue carefully and to make a decision having heard everything.
  We have an important subject to discuss and I am sorry that the hon. Member for Kirkcaldy (Dr. Moonie) has departed, because I know that it is a matter that he takes seriously, which is why he was here earlier.
  The hon. Member for Falkirk, East has taken a personal interest for a long time in the industrial developments in his constituency. Certainly, the proposed ethylene pipeline is of particular interest to the hon. Member, as he pointed out in such a cogent and articulate fashion. As he said, the pipeline will carry ethylene from his constituency to what used to be my constituency before a boundary reorganisation.
  Ethylene is a very valuable North sea by-product and the pipeline will carry it, according to the proposals that have so far been put before me, in a safe and economical manner. We have high levels of unemployment in my area and I understand why the hon. Member for Falkirk, East explained that there are potential employment consequences for his constituency if the proposal goes ahead. If I was the hon. Gentleman I would have raised the matter in exactly the way that he raised it. The hon. Gentleman is concerned about the employment prospects in his constituency and I understand, given the potential that may arise as a result of the building of the pipeline, why he has raised the subject tonight.
  It is fair to put it on the record that, in the past year alone, the number of unemployed in the constituency of the hon. Member for Falkirk, East has dropped by about 650—about 18 per cent. While we always wish for the number to drop even further, the number of unfilled vacancies at jobcentres in his constituency has increased by almost 40 per cent.—much more than in Scotland as a whole. In the context of the whole of his constituency, I hope that the hon. Member for Falkirk, East will welcome the improvement in employment prospects over the past year.
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  The hon. Member for Falkirk, East specifically asked me to make a recommendation to my right hon. Friend the Secretary of State for Energy about the proposed pipeline. Perhaps it will be helpful if I go over the background to the project.
  As both the hon. Member for Falkirk, East and the hon. Member for Falkirk, West will be aware, Shell Chemicals UK Limited submitted its application under the Pipe-lines Act 1962, on 1 March 1989 for authorisation to construct a cross-country pipeline from Grangemouth to Stanlow for the conveyance of ethylene. It wishes to start construction in the spring of 1991, finishing in autumn of the same year.
  The pipeline would be 406 km, or 254 miles, long and 273 mm, or 10 in, in diameter and it would operate at a pressure of 1,435 lb per square inch. It would be designed to convey 610,000 tonnes per year.
  Shell has to date received no objections to its proposals from local planning authorities. However, it does not follow that there will be none, because in a number of cases Shell's proposals have not yet been placed before the full planning committee.
  As hon. Members will know, ethylene is a major feedstock for the petrochemical industry and is used in the manufacture of plastics, detergents, paints, anti-freeze, man-made fibres and many other products in everyday use. Ethylene is manufactured at the Fife ethylene plant from North sea oil and gas feedstocks. It is a highly flammable gas at normal temperatures and pressures.
  Shell has plans to carry out a major expansion of its polyethylene plant at Stanlow and it sees the pipeline as providing the most economical method of transporting the ethylene feedstock from the Scottish refineries to Cheshire. Shell has considered alternative means of transportation, but they have been rejected on safety or economic grounds. Transport by sea appears uneconomical and less safe, since specialist dockside unloading and storage facilities would be required in addition to the ethylene tankers.
  Except at the northern and southern extremities, the route passes through essentially rural, sparsely populated land. Known areas of potential development have been avoided. Remotely operated buried valves for isolation purposes to limit any potential leakage would be installed at approximately 16 km intervals. Two intermediate pigging stations and one pumping station would be installed—the latter approximately 11·5 km south-east of Carlisle.
  Shell has indicated that agreement in principle has been reached with 95 per cent. of the owners and occupiers along the route. Shell was required to carry out an environmental assessment and to submit an environmental statement in accordance with the electricity and Pipe-Line Works (Assessment of Environmental Effects) Regulations 1989. This has been discussed with interested parties such as the Nature Conservancy Council and its requirements incorporated.
  The environmental statement, a copy of which the hon. Gentleman will have, and which will be available to the public, describes in detail the manner in which Shell proposes to construct the pipeline and the steps it would take to mitigate its effect on the environment. Once constructed, the pipeline would not restrict normal agricultural activities.
  Shell was required to consider the overall safety of the proposed pipeline in a safety evaluation which was

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  reviewed for us by the major hazards assessment unit of the Health and Safety Executive. Due to the hazardous nature of ethylene, the pipeline has potential for harm. However, on the basis of the safety evaluation, the Health and Safety Executive sees no reason for refusal of the application on safety grounds. As it is entirely without prejudice to the Secretary of State's right subsequently to refuse the application, we decided that Shell's application should be allowed to proceed to the next stage, which involves public notices.
  As required by the Pipe-lines Act 1962, Shell has been instructed, first, to place notices regarding its application in the London and Edinburgh gazettes, the major national newspapers, and 30 local newspapers; secondly to serve notice on the 28 local planning authorities along the route; thirdly, to serve notice on every landowner and occupier through whose property the pipeline would run; and, fourthly, to serve notice on a number of utilities and other authorities as directed by the Department of Energy.
  Copies of maps showing the pipeline route and of the environmental statement will be available for inspection by the public at the Department of Energy and at local planning authority offices. Objections—this will be important to the hon. Gentleman—may be made to the Secretary of State for a period of 28 days after the notices are published. All representations received by the Secretary of State during the 28-day period will be carefully considered. The notices are to be published commencing with the national press today, as it happens, with final notices on 3 November in local papers.
  Shell has identified a growing need for ethylene-based products into the 1990s. It operates in a highly competitive market and it must therefore seek to achieve the most economic solution to the increasing demand in order to meet the challenges of the open European market.
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  Construction of the pipeline would involve a work force of up to 2,000 for six months or so—of course, not all in the hon. Members' constituencies. Up to 500 might be recruited locally. Although temporary, that would result in a significant injection of capital into the local economy. The number of personnel permanently involved with the maintenance of the pipeline after construction would be approximately six. Shell's existing plants at Stanlow and Carrington currently have spare capacity and are capable of expansion to meet demand. We understand that the number of additional employees required would be approximately 20.
  At a time when the Scottish CBI is foreseeing a small downturn in investment and job prospects, it gives me great pleasure to see a major local employer—in this case Esso—planning a £200 million investment for its Fife ethylene plant. The two-year construction of the plant extension will provide work for up to 2,000 people. The development will increase employment at the plant by 10 per cent.—all of whom are being recruited in Scotland—and also lead to a 10 per cent. rise in the number of long-term contractors on the site.
  It is clear that the increased capacity planned for the Mossmorran plant, which has led indirectly to Shell's need for a new pipeline, will bring more jobs to Scotland. [Interruption.] That is so. It is not realistic to expect the relocation of a major petrochemical complex from the north-west of England, but there is a very positive message for Scotland in Shell's planned investment in the new pipeline. It offers the best possible long-term assurance for the future of the ethylene plant at Mossmorran.
  Question put and agreed to.
  Adjourned accordingly at sixteen minutes to Twelve o'clock.

TRADE AND INDUSTRY

  Industrial Location
  Mr. McAllion
  To ask the Secretary of State for Trade and Industry if he has any plans to change the current arrangements for encouraging the location of industry across the whole of the United Kingdom.

  Mr. Douglas Hogg
  Where industry locates in the United Kingdom is a matter for commercial decision. Regional industrial policy provides incentives to encourage industry to invest in the assisted areas of the country. There are at present no plans to change this policy.

  I am however considering the possibilities for realising the property assets of the English Industrial Estates Corporation. Jointly with the board of the corporation, I have commissioned a study to advise on this and also to report on the most effective mechanisms for promoting private sector investment in speculative industrial and commercial space in the assisted areas. This is consistent with our policy that English Estates' first priority is to encourage and facilitate greater private sector activity while focusing its own direct provision in areas where, for the time being, that cannot be achieved.

  Barlow Clowes
  Mr. Harry Greenway
  To ask the Secretary of State for Trade and Industry what information he has on payments made to those affected by the collapse of Barlow Clowes; and if he will make a statement.

  Mr. Redwood
  I refer my hon. Friend to my letters of 16 August and 30 October to all Members, copies of which are placed in the Library.

  Chemical Exports
  Dr. Thomas
  To ask the Secretary of State for Trade and Industry what volumes of(a) chloroethanol, (b) dimethylamine, (c) potassium fluoride and (d) dymethylamine hydrochloride have been exported, and to which respective countries, since May 1979; when exports of each respective chemical were halted; and for what reasons.

  Mr. Redwood
  Statistics on the export of these chemicals are not available.

  A licence has been required to export chloroethanol, dimethylamine and potassium fluoride to Iran and Iraq since 12 April 1984 when these items became subject to control under the Export of Goods (Control) Order. The Export of Goods (Control) (Amendment No. 4) Order 1989 which came into force on 31 July 1989 extended the control on exports of these chemicals to Libya and Syria. It also brought the export of dimethylamine hydrochloride under control to Iran, Iraq, Libya and Syria.
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  Controls on the exports of these chemicals have been introduced because of the Government's concerns about the proliferation of the capability for producing chemical weapons. Applications for a licence to export these chemicals to the destinations for which they are controlled are considered on a case-by-case basis in the light of stringent criteria.

  Marine Licensing
  Mr. Barry Field
  To ask the Secretary of State for Trade and Industry which EEC countries charge a fee for a VHF marine licence for private pleasure craft.

  Mr. Forth
  Details of EEC countries' radio licence fees are not collected centrally. Inquiries made to a number of administrations indicate that fees are charged for the use of maritime radio by private pleasure craft.

  Measurement Accreditation
  Mr. Barry Field
  To ask the Secretary of State for Trade and Industry what steps he is taking to ensure that other EEC countries are complying with the Euro-norm agreement on measurement accreditation.

  Mr. Forth
  The United Kingdom's national measurement accreditation service (NAMAS) is co-operating with other Community member states to ensure the implementation of the European standards, the EN 45000 series, which define the criteria for laboratories, the accreditation of laboratories and for the accreditation bodies. These standards are expected to be increasingly used by the Commission in new approach directives and each member state will be responsible to ensure that the requirements of the directives are fully met.

  Mr. Barry Field
  To ask the Secretary of State for Trade and Industry which EEC countries have a national measurement accreditation service to the same standard as the United Kingdom.

  Mr. Forth
  The EEC Commission has placed a contract with the French Reseau National d'Essais (RNE) to carry out a study of accreditation systems operated by member states with the aim of establishing their compliances with international codes of practice and in particular the European standards for accreditation based on the EN 45000 series standards. It is expected that this report will be available in December 1989 and the national measurement accreditation service (NAMAS) will examine the report in detail.

  Mr. Barry Field
  To ask the Secretary of State for Trade and Industry which EEC countries have sought the advice of his Department on measurement accreditation.

  Mr. Forth
  Many of the EEC countries have discussed with the Department's national measurement accreditation service (NAMAS) the development of their own accreditation systems. Additionally representatives of seven member states have attended the NAMAS assessor training course to gain experience of assessment techniques and to assist in setting up their own training courses.

  Consumer Goods (Imports)
  Mr. David Nicholson
  To ask the Secretary of State for Trade and Industry if he will provide a detailed breakdown of the principal categories of consumer goods imported into the United Kingdom, by value, for the years 1986, 1987, 1988 and the first half of 1989.

  United Kingdom Imports (£ million)

  January—June

  SITC Description

  1986

  1987

  1988

  1989

  122 Tobacco, Manufactured

  120

  115

  109

  50

  553 Perfumes, Cosmetics and Toiletries

  233

  258

  282

  145

  554 Soap, Detergents and Polishes

  143

  181

  210

  98

  642 Paper and Board Products

  449

  519

  590

  341

  658 Made-up Textiles

  196

  211

  238

  132

  659 Floorcoverings

  337

  393

  432

  222

  665 Glassware

  185

  173

  206

  101

  666 Pottery

  96

  105

  117

  63

  696 Cutlery

  61

  76

  83

  43

  697 Household Equipment of Metal

  196

  189

  201

  106

  76 TV, Radio, Hi-Fi and Telecom Equipment

  2,402

  2,801

  3,177

  1,680

  775 Domestic Appliances

  905

  917

  989

  430

  781 Motor Cars

  4,809

  5,024

  6,752

  3,871

  785 Motorcycles and cycles

  150

  181

  226

  133

  82 Furniture and Bedding

  776

  878

  989

  577

  83 Travel Goods, Handbags

  200

  231

  251

  135

  84 Clothing

  2,386

  2,778

  3,108

  1,643

  85 Footwear

  734

  799

  908

  489

  885 Watches and Clocks

  268

  286

  340

  155

  892 Printed Matter

  585

  659

  795

  400

  894 Toys, Games and Sporting Goods

  536

  662

  686

  359

  897 Jewellery

  414

  421

  506

  279

  898 Musical Instruments

  625

  729

  823

  434

  Source: Overseas Trade Statistics

  Notes:

  1. Full descriptions of the SITC trade classification headings are contained in Business Monitor MA21: Guide to the classifications for Overseas Trade Statistics.

  2. Figures for food and drink are not included as they are the responsibility of MAFF.

  Takeover Bids
  Mr. Haselhurst
  To ask the Secretary of State for Trade and Industry what procedure is followed by the Office of Fair Trading in its examination of takeover bids.

  Mr. Redwood
  The procedures are conveniently set out in a booklet produced by the Office of Fair Trading entitled "MERGERS—a guide to the procedures under the Fair Trading Act 1973". I have arranged for a copy to be placed in the Library of the House.

  Beer
  Mr. Baldry
  To ask the Secretary of State for Trade and Industry what decisions he has reached in the light of representations on the draft orders on the supply of beer.

  Mr. Ridley
  I have received representations from a wide range of parties including large and small brewers, tenants' associations, and wholesale and consumer organisations. All representations have been given careful consideration.

  I have now reached final decisions on the orders. The main changes I have decided to make are as follows. First, I have decided that national brewers who are required to free a proportion of their properties from product ties should be able to sell such properties without disadvantage provided they are sold free of ties. This amendment will encourage a more diverse pattern of ownership. I have also decided that in view of the substantial changes brewers will be required to make to a large number of tenancy agreements to free part of their estates the period for such adjustment will run to November 1992.
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  Mr. Redwood
  The figures are as follows:

  Secondly, many representations have emphasised the importance of ensuring that tenants of the national brewers should not be subject to pressures to discourage them from exercising their freedom to choose to supply a guest beer. Accordingly, I have amended the guest beer provisions to block a number of possible loopholes that brewers might have used to deter tenants from exercising their choice, and to make it clearer that tenants should be entirely free to choose their supplier.

  Thirdly, the position in respect of those companies, mainly small brewers, who are not subsidiaries but nevertheless fell to be regarded as parts of large brewery groups by virtue of minority shareholdings in them is amended. It will now be provided that no obligations will fall on a company solely because a member of a large brewery group has a minority interest in it. The tied estates of such companies will, however, still count towards the brewery group's limit on tied houses if more than 15 per cent. of the voting rights of the company are held, though account is now due to be taken of the extent to which control of shares is diluted through intermediary companies, if the group owns less than 50 per cent. of the voting rights. The 15 per cent. rule remains, as I believe that a group can exercise a substantial influence at this level of shareholding. The rule will act as some deterrent to further concentration in the industry.

  Finally, the definition of licensed premises has been changed so that the limits on the numbers of tied houses held by national brewers will no longer bite on premises with restricted licences, such as restaurants, where the supply of beer is not a significant part of the business.
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  The Office of Fair Trading will be making arrangements to monitor compliance with the orders. The director general will need to collect information for this purpose, and a further order will he made shortly to cover this.

  As was made clear in my right hon. and noble Friend's statement of 10 July the director general will be assessing the effectiveness of the measures in addressing the market detriments found by the MMC once the orders have had time to take effect. The Government will consider the need for further measures in the light of the director general's conclusions. If in the meantime, however, it becomes clear that further steps are necessary either to ensure compliance with the intentions behind the order, or to deal with other anti-competitive or undesirable practices, I will not hesitate to act as necessary.

  In this connection, I shall be keeping under review the position of tenants in advance of enactment of legislation to put their security of tenure on the same basis as that of other business tenants. If necessary, I will consider making an interim order to protect their position. I have also asked the director general to keep under review any anti-competitive moves to limit access to the market by independent manufacturers of beer or other drinks who are without tied estates, or by wholesalers. The Government intend separately to legislate to give tenants protection under the landlord and tenant legislation as soon as parliamentary time permits.

  The changes I have outlined, and other technical points raised in representations, have required a significant number of changes to the orders. Copies of the orders have today been placed in the Libraries of both House and sent to the principal interested parties.

  Any representations on technical drafting points that arise from the revised texts should be submitted to my Department by 10 November. The Loan Ties, Licensed Premises and Wholesale Prices Order will then be made, and the draft Tied Estate Order, which requires resolutions of both Houses, will be laid shortly afterwards.

  Mr. David Nicholson
  To ask the Secretary of State for Trade and Industry what information he has on proposals by certain breweries to permit tenants to sell a guest beer but to replace any sales lost to the landlord brewery by higher rent.

  Mr. Redwood
  I have received representations from the National Licensed Victuallers Association and others that this might occur. It is being made clear in a separate statement made today that the brewer cannot discriminate against a tenant exercising this right.

  Mr. David Nicholson
  To ask the Secretary of State for Trade and Industry how many representations he has had since the publication of the Monopolies and Mergers Commission Report on the supply of beer specifically supporting the introduction of a sliding scale of duty; whether he now favours such a proposal; and if he will make a statement.

  Mr. Redwood
  Well over 2,000 written representations have been received. An analysis of each one to determine whether a particular point had been made would be possible only at disproportionate cost. Officials of Customs and Excise are in the process of informally consulting with the trade on the possibility of changing to a method of charging duty based on the beer that is actually produced. The final decision is a matter for my right hon. Friend the Chancellor of the Exchequer.
  106
  Mr. David Nicholson
  To ask the Secretary of State for Trade and Industry how many representations he has had since the publication of the Monopolies and Mergers Commission report on the supply of beer which regret the absence from its report of recommendations to reduce regional and subregional monopolies; whether he will extend the guest ale provision to public houses owned by regional brewers; and if he will make a statement.

  Mr. Redwood
  Well over 2,000 written representations have been received. An analysis of each one to determine whether a particular point had been made would be possible only at disproportionate cost. It has been made clear that the requirement to allow tied tenants to choose a guest beer will apply only to the national brewers.

  House of Fraser
  Mr. Teddy Taylor
  To ask the Secretary of State for Trade and Industry if the serious fraud squad has completed its inquiries into the issues raised in the report of inspectors into the acquisition of House of Fraser; and when he now expects to publish the report.

  Mr. Redwood
  [holding answer 30 October 1989]: I cannot comment on the state of the inquiries to which my hon. Friend refers. Questions relating to the operation of the serious fraud office are for my right hon. and learned Friend the Attorney-General. It remains the intention of my right hon. Friend the Secretary of State to publish the report at the earliest possible moment consistent with the even-handed administration of justice.

  CFCs
  Mr. Malcolm Bruce
  To ask the Secretary of State for Trade and Industry what facilities exist for the recycling of chlorofluorocarbons from the foam in refrigerators; what percentage is currently recycled; and what steps he is taking to increase this percentage.

  Mr. Forth
  [holding answer 30 October 1989]: Recovery of chlorofluorocarbons from the insulating foam in refrigerators is technically very difficult, and I know of no facilities operating successfully at the moment in the United Kingdom. My right hon. Friend has commissioned a wide-ranging study into the recovery, recycling and destruction of CFCs; the Government will take its finding into account when considering if any action is called for on this issue. The results of the study are expected early next year.

  Jaguar plc
  Mr. Roger King
  To ask the Secretary of State for Trade and Industry whether he will make a statement on Jaguar plc.

  Mr. Ridley
  I refer my hon. Friend to the statement that I made in the House earlier today.

  Professional Liability
  Mr. Baldry
  To ask the Secretary of State for Trade and Industry when he will publish the report of the studies on professional liability; and if he will make a statement.

  Mr. Redwood
  The report of the three study teams on professional liability under the overall chairmanship of Professor Andrew Likierman is published today. I have arranged for copies to be placed in the Library.
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  The Government set up these studies last year because of the concern expressed by many professionals about the extent of claims for professional negligence and the cost and availability of professional indemnity insurance. This is an area in which there was a wealth of anecdote, but little hard fact. The studies acknowledge that there are difficulties in obtaining comprehensive information, but have none the less brought together much useful material.

  The report finds that the same underlying changes in insurance and law have affected all three groups of professions, but that the effects of the changes on these groups have been different. The study teams have therefore recommended a different package of proposals for each profession.

  We accept the broad conclusions of the report, that professionals have been faced with an increasing exposure to negligence claims, and that the cyclical nature of the insurance market means that at times costs of insurance increase sharply. The report finds that so far the changing position of professionals is having only limited effects on the quality or cost of the service they are providing to consumers. We are conscious of the need to balance the potential adverse effects on consumers against the right of consumers who are victims of negligence to recover damages to the extent possible.

  The construction professionals and the surveyors study teams recommend steps which professionals, their institutions and the associations representing all parties could take to improve standards, practice and collaboration. The Government welcome these recommendations.

  Several of the recommendations addressed to Government are very wide-ranging, including proposals for reform relating to joint and several liability, legal aid and time limitation periods for claims. It is recommended for example that the Law Commission should be asked to consider the case for changes in the law of joint and several liability in commercial cases. While the Government recognise the strongly held feelings that the current arrangements in these areas can in some circumstances operate unfairly against the professions, the changes suggested would have important effects well beyond the immediate context of professional liability. They will require fuller consideration before the Government can form a view.

  Other proposals will be looked at as legislative opportunities become available. The current Companies Bill has already provided an opportunity to pursue two of the recommendations of the auditors study team. We accepted the proposal that the law on directors' insurance should be clarified so that a company can reimburse a director for his liability insurance. We decided against the proposal that an auditor should be able to limit his liability by agreement with the company. Consultation revealed that non-auditors were generally opposed to the idea because it could limit legal redress in the rare cases of poor audits. Some recommendations, however, can already be seen to raise practical difficulties which are such as to preclude further investigation.

  My right hon. and noble Friend the Lord Chancellor, my right hon. Friends the Secretaries of State for the Environment and for Trade and Industry and other colleagues as appropriate will be considering the outstanding points.

  We are very grateful to Professor Likierman, to the chairmen of the three study teams, William Morrison, Professor Donald Bishop and Ian Oddy, and to the study
  108
  team members, all of whom have voluntarily put so much work into this review. We are also grateful to all those who provided evidence for the studies.

WALES

  Forestry
  Dr. Thomas
  To ask the Secretary of State for Wales whether he has considered establishing a separate forestry body for Wales, in line with his proposals to create a unified Nature Conservancy Council and Countryside Commission for Wales; and if he will make a statement.

  Mr. Peter Walker
  I have seen no need to consider such a change.

  Swansea Downs (Nuclear Submarines)
  Dr. Thomas
  To ask the Secretary of State for Wales if he will commission a study on the effects on tourism in Swansea bay and the Gower peninsula of plans to create a reserve Z berth for nuclear-powered submarines at Swansea downs; and what communications he has received from Swansea leisure centre over the Z berth plans.

  Mr. Wyn Roberts
  The Department has no plans to commission such a study and I have received no communication from Swansea leisure centre about the proposal.

  Nature Conservancy Council and Countryside Commission
  Dr. Thomas
  To ask the Secretary of State for Wales if he will issue a detailed consultation paper setting out the structure of the proposed merged body of the Nature Conservancy Council and Countryside Commission for Wales.

  Mr. Wyn Roberts
  The Department has no plans to do so. Full consultation is already taking place between Government Departments and the statutory agencies on this and other pertinent issues.

  Welsh Language
  Mr. Nicholas Bennett
  To ask the Secretary of State for Wales how many requests for exemptions from the requirement to teach Welsh as part of the core curriculum have been received from schools in(a) Wales, (b) each local education authority and (c) Pembrokeshire.

  Mr. Wyn Roberts
  I have received requests for exemption from teaching Welsh in the national curriculum from 11 schools in Wales. These include four in Gwent; three in Clwyd; two each in West Glamorgan and Dyfed, both in Pembrokeshire.

  National Health Service
  Mr. Barry Jones
  To ask the Secretary of State for Wales by what date the current maintenance backlog on National Health Service properties will be cleared on current and planned capital spending for the National Health Service in Wales.

  Mr. Grist
  Backlog maintenance is a term generally used to describe the work necessary to bring National
  109
  Health Service property up to a standard of full life expectancy where no expenditure except for routine maintenance is required. District health authorities' programmes to achieve this include investment in the maintenance of buildings which are to be retained, the rationalisation of services to release accommodation which is no longer practicably suitable and the construction of new facilities. They are encouraged to give a high priority to these activities and their performance is monitored by the Department as part of its annual review process. However, in view of progressive improvements in the standards of accommodation required, the continuing need for maintenance investment and the long-term nature of some of the measures to improve the conditions of the estate, it is not possible to estimate when the current maintenance backlog will be substantially eliminated.

  NHS White Paper
  Mr. Barry Jones
  To ask the Secretary of State for Wales how much money he has currently allocated for the implementation of the White Paper; what proportion of the sums allocated will be used to fund(a) information technology, (b) medical audit, (c) the Welsh Office value for money unit, (d) training, (e) family practitioner committees, (f) health authority costs, and (g) treatment centres; and if he will make a statement.

  Mr. Grist
  The Department has provided an additional £5 million toward the cost of implementing the White Paper proposals in the current financial year. This has been allocated as follows:

  £ million

  (a) information technology (including the resource management initiative)

  2·34

  (b) medical audit

  0·11

  (c) Value for Money Unit

  0·18

  (d) training

  0·14

  (e) family practitioner committees

  0·11

  (f) health authorities's discretionary use

  1·62

  (g) treatment centres

  0·50

  5·00

  The provision of these additional resources reflect the importance that the Government give to the major programme of improvement now being undertaken within the NHS and their recognition of the need for adequate investment. Provision for 1990–91 and subsequent years is currently under consideration as part of the annual review of public expenditure and will be announced in due course.

  Mr. Barry Jones
  To ask the Secretary of State for Wales what assessment he has made of(a) the total cost of implementation of the proposals contained within the National Health Service White Paper in Wales, (b) the manpower implications for nurse staffing and (c) the manpower implications for financial, management, administrative and clerical staffs; and if he will make a statement.

  Mr. Grist
  The Government's broad estimates of the financial and manpower implications of implementing the White Paper will be given in the financial and explanatory memorandum of the NHS reform Bill. These estimates will relate to the NHS generally and will apply equally to Wales as to other parts of the United Kingdom. The more 110
  detailed manpower implications of the proposals are being addressed as part of the ongoing manpower planning activities being undertaken within the NHS in Wales.

  Teachers
  Mr. Barry Jones
  To ask the Secretary of State for Wales what assessment he has made of the extent of local education authority schools using(a) changes to school timetables to cover vacancies and (b) non-specialists to teach subjects for which they have minimal qualifications; and if he will make a statement.

  Mr. Wyn Roberts
  Information concerning the extent to which changes to school timetables are made to cover staff vacancies or other unforeseen circumstances is not held by the Department. The results of the secondary school staffing survey undertaken this year will provide information on the teaching staff employed, their qualifications and the teaching they undertook. The results will be available towards the end of the year.

  Mr. Barry Jones
  To ask the Secretary of State for Wales what studies he has undertaken on the size and characteristics of the pool of inactive teachers in Wales; and if he will make a statement.

  Mr. Wyn Roberts
  There have been no recent surveys on out-of-service teachers in England and Wales although we are currently considering whether a survey would be beneficial and how best it should be undertaken. In the meantime the education support grant programme for 1990–91 provides funding for LEA pilot projects designed to encourage LEAs to maintain contact with teachers who leave the service and to attract back into the service people in their areas who left the profession some years ago.

  Welsh-medium Teachers
  Mr. Barry Jones
  To ask the Secretary of State for Wales what assessment he has made of the number of Welsh-medium teachers needed to staff the national curriculum; what is the current number of Welsh language teachers employed by local education authorities in Wales; and what is the number of students currently training as Welsh-medium teachers.

  Mr. Wyn Roberts
  The national curriculum is not expected to create a need for more Welsh-medium teachers overall in the short term. However its introduction will increase the number of secondary Welsh-medium teachers required for some subjects while decreasing the number required for others. Some retraining of secondary teachers may therefore be necessary to provide for the change in subject mix.

  The numbers of teachers required to teach Welsh as a language will increase as a result of the introduction of the national curriculum. The future numbers are currently being discussed with LEAs. The results of these discussions will enable us to judge the scale and shape of the retraining and recruitment programmes for the years ahead.

  Welsh language specialists tend to be concentrated in the secondary sector. Current information on the number of Welsh language teachers employed by LEAs in Wales will not be available until the results of the 1989 secondary school staffing survey are to hand later this year. There are 358 students currently training as Welsh-medium teachers at initial teacher training institutions in Wales.

  Teacher Training
  Mr. Barry Jones
  To ask the Secretary of State for Wales what is the number of students who have received bursaries for initial teacher training in Wales; what is the total value of those bursaries; and what is the numbers of students by teaching speciality.

  Mr. Wyn Roberts
  Between 1986–87 and 1988–89 a total of 379 students have received £526,000 from the bursary scheme as shown in the following table:

  Subject

  Total students

  Mathematics

  153

  Physics

  119

  CDT1

  107

  379

  1 An additional equipment allowance of £200 is paid to CDT students.

  1974

  1979

  1st quarter 1989

  Per cent change per annum

  Average daily available beds:

  1974–79

  1979–89

  Acute1

  12,190·8

  11,302·7

  10,350·4

  -1·5

  -0·9

  Long stay

  12,516·7

  12,153·4

  9,938·0

  -0·6

  2·0

  Percentage Occupancy:

  Acute

  68·4

  68·3

  70·4

  Long stay

  89·9

  86·7

  84·2

  1 Excludes geriatrics, younger disabled, mental illness and mental handicap.

  My hon. Friend will wish to note that the rate of change of bed numbers in the long-stay sector has increased since 1979 in line with the policy of caring for such patients in the community where possible. Over the same period the increase in percentage occupancy of acute beds had been accompanied by an increase in the number of acute in-patients treated of 85,193 or 26·9 per cent., which represents an increase of 2·6 per cent. a year. The equivalent figures for 1974 to 1979 were an increase of 14,458, representing 4·8 per cent. or 0·9 per cent. a year.

EDUCATION AND SCIENCE

  GCSE
  Mr. Riddick
  To ask the Secretary of State for Education and Science what level of failure to complete the GCSE examination is expected now that GCSE has been introduced; and if he will make a statement.

  Mrs. Rumbold
  The most recent figures show that of the 5·23 million entries for the 1988 summer GCSE examinations, 4·6 per cent. were recorded as absent. A further 3·4 per cent. were ungraded.

  National Curriculum
  Mr. Atkinson
  To ask the Secretary of State for Education and Science what guidance has been issued on the national curriculum in relation to special schools for children with learning difficulties.

  NHS Capital Expenditure
  Mr. Barry Jones
  To ask the Secretary of State for Wales (1) what will be the capital expenditure at each National Health Service treatment centre site, on(a) new buildings and (b) alterations to existing buildings; and if he will make a statement;

  (2) whether he intends to make any financial provision for the travel costs of patients using the new National Health Service treatment centres; and if he will make a statement.

  Mr. Grist
  I refer the hon. Gentleman to the reply I gave him on Monday 30 October 1989.

  Mr. Nicholas Bennett
  To ask the Secretary of State for Wales (1) if he will list the number of beds in Welsh hospitals in(a) 1974, (b) 1979 and (c) the current year with the annual rate of decline in the periods 1974 to 1979 and 1979 to 1989;

  (2) what was the average bed occupancy in National Health Service hospitals in Wales in (a) 1974, (b) 1979 and (c) the current year.

  Mr. Grist
  [holding answer 24 October 1989]: The information requested is shown in the following table:

  Mrs. Rumbold
  The National Curriculum Council has recently published a booklet entitled "A Curriculum For All" which gives guidance on ensuring access to the national curriculum for all pupils with special educational needs, whether in maintained special schools or mainstream schools. I have placed a copy in the Library. The Department has also recently issued a joint circular with the Department of Health on assessments and statements of special educational needs which also includes guidance on the national curriculum. Departmental circulars on various other aspects of the national curriculum also include guidance on their application to pupils with special educational needs.

  Leicester Polytechnic
  Mr. Latham
  To ask the Secretary of State for Education and Science whether he will make a statement of the finance available from public funds for Leicester polytechnic; and what special provision will be made(a) to re-open a building which has had to be closed on grounds of safety; (b) to prevent further closures on such grounds; to bring the general stock of buildings into a reasonable state of repair.

  Mr. Jackson
  The allocation of public funds to Leicester polytechnic is the responsibility of the Polytechnics and Colleges Funding Council (PCFC). I understand that the Cumberland street annexe building, which was closed on safety grounds in June 1989, has been replaced by accommodation in a larger and more suitable
  113
  building with the aid of a specific allocation of £700,000 from the PCFC's contingency fund. The safety and state of repair of the buildings is essentially the responsibility of the polytechnic itself.

  Teachers' Pay
  Mr. Evennett
  To ask the Secretary of State for Education and Science if he will express the additional sum of £600 million for teachers' pay 1990–91, stated in his remit to the interim advisory committee, in terms of percentage increases in the inter-quartile range of private sector pay settlements for the latest available 12-month period; and if he will make a statement.

  Mrs. Rumbold
  The interim advisory committee's remit represents an increase of some 7·6 per cent. on the 1990–91 teachers' pay bill. the inter-quartile range of private sector non-manual basic pay movements for the 12 months ending in June 1989 was 6·3 per cent. to 8·5 per cent, with a median of 7·3 per cent.

  Statemented Children
  Mr. Maxwell-Hyslop
  To ask the Secretary of State for Education and Science whether he will publish a table showing, for local education authorities in England in each of the last three years for which records exist(a) how many children and what proportion of children of school age have been statemented as having special educational needs and (b) what extra resources in terms of teacher-hours per statemented pupil per year have been made available by each local education authority in England, respectively.

  Mr. Alan Howarth
  Information on teacher resources in special education is not available centrally. Information on numbers of pupils with statements will be provided as soon as possible.

HOME DEPARTMENT

  Remand
  Mr. Chris Smith
  To ask the Secretary of State for the Home Department if he intends to take steps to bring remand limits in line with the Scottish limit of 110 days.

  Mr. John Patten
  No. Custody time limits are now in force in England and Wales, except in London and the south-east, where we plan to introduce them in 1990. The limits in England and Wales are 56 days to summary trial or 70 days to committal in magistrates' courts; and 112 days from committal to arraignment in the Crown court. In Scotland, the limits are 40 days to trial for summary offences and 110 days from commitment to trial for indictment cases. The different limits in England and Wales reflect the diferences in pre-trial procedures and the amount of business.

  Trials
  Mr. Chris Smith
  To ask the Secretary of State for the Home Department what steps he intends to take to bring the United Kingdom in line with the prompt trial requirement of the European convention on human rights; and if he will make a statement.
  114
  Mr. John Patten
  The United Kingdom complies with the European convention on human rights requirements for trial for any criminal charge against a person within a reasonable time.

  Crime (Investigations)
  Mr. Cohen
  To ask the Secretary of State for the Home Department what consideration he has given to setting up a national criminal intelligence unit along the lines of the Federal Bureau of Investigation in the United States and as to what purposes it would have which are not adequately covered by existing policing; and if he will make a statement.

  Mr. Peter Lloyd
  The developing challenge of serious criminal activity across local, regional and national borders requires effective enforcement counter-measures, based on the best intelligence. As my right hon. Friend the Member for Witney (Mr. Hurd) said in his speech to the Police Superintendents Association annual conference on 26 September, we need to make sure that these new needs are met. We have therefore initiated consultations with the Association of Chief Police Officers who have accordingly set up a working party on our criminal intelligence arrangements to assess the case for a national criminal intelligence unit, as part of the strengthening of police co-operation at home and internationally to deal with serious cross-border crime.

  Any such unit will be necessarily different from that of the Federal Bureau of Investigation in the United States of America, and will need to take account both of existing national intelligence arrangements for specific kinds of crime, notably drugs, and our system of locally based police forces and regional crime squads.

  Immigration
  Mr. Ward
  To ask the Secretary of State for the Home Department what information he has on the scale of the abuse of immigration laws by people obtaining false birth certificates; and what action he proposes to take.

  Mr. Peter Lloyd
  Detailed information is not available, but there is some evidence of abuse in individual cases, which are under consideration. My right hon. and learned Friend the Secretary of State for Health published a Green Paper entitled "Registration: a modern service" (Cm. 531) in December 1988. The Green Paper contained proposals to limit the issue of certificates from the more recent records of the registration of births, marriages and deaths to those who have a legitimate interest in them. My right hon. Friend is considering possible restrictions on the issue of certificates in the light of responses received.

  Trial by Jury
  Mr. Ward
  To ask the Secretary of State for the Home Department if he has any plans to restrict the right of an accused person to opt for trial by jury.

  Mr. John Patten
  We have no present plans to do so.

  Hunt Saboteurs
  Mr. Amos
  To ask the Secretary of State for the Home Department if he will undertake a review of the law with a view to extending the criminal law to cover trespass on land in cases involving the activities of hunt saboteurs; and if he will make a statement.
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  Mr. John Patten
  We have no plans to undertake such a review. Trespass on land is in general a matter for the civil law. There are powers to deal with those who commit criminal acts such as criminal damage, assault or causing harassment, alarm or distress while trespassing.

  Guildford Four
  Mr. Madden
  To ask the Secretary of State for the Home Department if he will make it his policy to write to Patrick Armstrong, Gerard Conlon, Carole Richardson and Paul Hill expressing apologies on behalf of Her Majesty's Government for the injustice they suffered; and if he will make a statement.

  Mr. John Patten
  My right hon. Friend the Member for Witney (Mr. Hurd) expressed regret at this serious miscarriage of justice in his statement to the House on 19 October at columns 271–73.

  Football (Arrests)
  Mr. Tony Banks
  To ask the Secretary of State for the Home Department if he will take steps to analyse the arrests made at Football League matches in London(a) outside the ground, (b) inside the ground and (c) by the nature of the alleged offence in each case.

  Mr. Peter Lloyd
  During the 1988–89 season at Football League matches in London there were 649 arrests inside grounds and 724 outside directly related to the matches. Figures showing the nature of the alleged offences or the outcome of these arrests are not collated centrally by the Metropolitan police or the Association of Chief Police Officers, and we have no plans to ask that this work should be undertaken.

  Television Licence Fees
  Mr. Bowis
  To ask the Secretary of State for the Home Department whether he is yet able to announce the level of the television licence fees to take effect from 1 April 1990; and if he will make a statement.

  Mr. Waddington
  On 27 October 1987, at column 204, my right hon. Friend the Member for Witney (Mr. Hurd) announced that the licence fees for the three years starting from 1 April 1988 would be calculated in accordance with changes in the retail prices index, which determines the rate of increase of pensions and other state benefits. The RPI figure for September published on 13 October showed a year-on-year increase of 7·6 per cent. I have accordingly decided that from 1 April 1990 the colour licence fee should be £71 and the monochrome fee £24. The necessary regulations will be laid before the House in due course.

  As was made clear in last year's White Paper on "Broadcasting in the '90s" (Cm 517), fee increases from 1 April 1991 onwards may be set at less than RPI in a way which takes account of the BBC's capacity to generate income from subscription.

  Vulnerable Prisoners (Report)
  Mr. Bowis
  To ask the Secretary of State for the Home Department whether he has yet received the report of the working group on the management of vulnerable prisoners; and if he will make a statement.

  Mr. Waddington
  I have received this helpful and thorough report, copies of which are being placed in the 116
  Library. The study focused particularly on the arrangements concerning prisoners segregated for their own protection. The main improvements recommended, all of which I have accepted, with a procedural modification in respect of one, are:

  (a) Rule 43 of the prison rules to be amended (i) to allow authoritative directions on its interpretation to be given by the Secretary of State; (ii) to allow governors to authorise segregation for up to three days; and (iii) to remove an anomaly affecting young persons under 21 held in prisons and remand centres Young offender institution rule 46 also to be amended as at (i) and (ii). The aim of (i) is to be achieved by administrative guidance rather than by amendment of the rules;

  (b) a board of visitors, on a proposal of the governor, to be able to decide, in the light of facilities available, to dispense with rule 43 controls for a particular group of vulnerable prisoners;

  (c) present guidance on the personal legal liability of individual officers to be revised in supportive terms;

  (d) certain training prisons to be re-organised to take rule 43—own protection—prisoners, so that they can be allocated from local prisons in the normal way;

  (e) creation of a further vulnerable prisoner unit for about 100 category B prisoners;

  (f) improvements in regimes and implementation of proposed guidelines on best practice to be carried forward through governors' annual contracts for 1990–91 (earlier wherever possible), under the functional responsibility of a senior member of the management.

  While certain recommendations requiring resources may take some time to implement fully, most of the 35 recommendations are resource-neutral and work on bringing them into effect has been put in hand.

  Metropolitan Police Operations
  Mr. Tony Banks
  To ask the Secretary of State for the Home Department what information he has regarding the number of occasions in the past 12 months when the Metropolitan police have invited representatives of the media to accompany police officers on major operations; at what command level decisions are taken to invite a media presence; and what criteria are used in such cases.

  Mr. Peter Lloyd
  [holding answer 18 October 1989]: I understand from the Commissioner that the position is as follows. Media representatives accompany police officers on a wide variety of operations about which it is not possible to generalise. Arrangements are made centrally or locally by invitation from the police or on request from the media. Figures are not collated centrally, but the number of such arrangements exceeds 750 a year.

  Decisions to invite media representatives to witness raids are made by officers of chief superintendent rank or above, in consultation with the Metropolitan police directorate of public affairs.

  Invitations to the media are an important part of the Commissioner's policy of encouraging greater public understanding of police operations; are part of his policy of openness; and are an example of the accountability of the police to the public, on whose behalf they operate. The resulting news coverage may act as a deterrent to criminals, and provides independent reporting of events which might, otherwise, attract false and malicious allegations.

ENVIRONMENT

  Rural Development Commission
  Mr. Quentin Davies
  To ask the Secretary of State for the Environment how many marketing consultancy grants have been made by the Rural Development Commission in the past year.

  Mr. Heathcoat-Amory
  The Rural Development Commission made 71 marketing consultancy grants in the year ended 31 March 1989, the latest period for which figures are readily available.

  Housing Expenditure (Lambeth)
  Mr. Fraser
  To ask the Secretary of State for the Environment what estimate he has made of the housing capital expenditure which Lambeth council is permitted to undertake from capital receipts in addition to the approved housing investment programme of £30·6 million.

  Mr. Chope
  No such estimate has been made. It would be possible to construct a theoretical estimate based on information reported by Lambeth council, but as authorities are free to vire receipts and borrowing between services in 1988–89, and to use receipts for non-prescribed capital expenditure, such a theoretical estimate would be of limited value.

  Sites of Special Scientific Interest
  Mr. Peter Robinson
  To ask the Secretary of State for the Environment if the Nature Conservancy Council takes non-scientific criteria into account when declaring, confirming or revoking sites of special scientific interest under the terms of the Wildlife and Countryside Act 1981.

  Mr. Heathcoat-Amory
  The Nature Conservancy Council's "Guidelines for Selection of Biological SSSIs" gives details of the scientific guidelines currently in use. The NCC proposes also to publish guidelines in respect of geological and physiographical SSSIs in the context of its geological conservation review. In the exercise of its duty, under section 28 of the Wildlife and Countryside Act 1981, the council has a duty under section 37 of the Countryside Act 1968 to have regard to the needs of agriculture, forestry and the economic and social interests of rural areas.

  Greenhouse Effect
  Dr. Thomas
  To ask the Secretary of State for the Environment (1) if he will make a statement on initiatives he plans to promote in response to the conclusions of the Commonwealth expert group on climate change and sea level rise, in respect of Her Majesty's Government's policies on mitigation of the greenhouse effect;

  (2) if he, or any other Minister or official of his Department, was present at, or presented a paper to, the seminar on the greenhouse effect at the Institution of Mechanical Engineers on 29 September;

  (3) what departmental representation there was, and what departmental papers were presented, at the global conference on the greenhouse effect, co-sponsored by the United Nations environment programme, held in Japan in September.

  Mr. Heathcoat-Amory
  We welcome the contribution that the report of the Commonwealth expert group makes 118
  to the debate on climate change, and we recognise the particular concern of some Commonwealth countries about a potential rise in sea-levels. The Langkawi declaration on the environment which followed the recent Commonwealth Heads of Government meeting supported the work of the intergovernmental panel on climate change and endorsed the United Kingdom's call for an international convention on climate change. We are fully committed to the work of the IPCC, in which the United Kingdom is playing a leading role, and we will continue to press the case for a framework convention on climate change.

  There was no ministerial representation at the IME seminar on 29 September. An official from the Building Research Establishment presented a paper entitled "Energy Efficiency in Buildings and the Greenhouse Effect."

  There was no departmental representation at the conference on the global environment and human response held in Tokyo on 11 to 13 September 1989.

  Mr. Barry Field
  To ask the Secretary of State for the Environment how his Department differentiates between global warming caused by(a) natural and (b) man-made changes; what information he has on the reasons for global temperature rises before chlorofluorocarbons; and if his Department has made an appraisal of the thesis on global warming of Doctor Bruce Denness of the Bureau of Applied Sciences.

  Mr. Heathcoat-Amory
  There is a "natural" greenhouse effect caused by the earth's atmosphere without which the earth would not be habitable. Current concerns arise from the increase in the concentration of anthropogenic greenhouse gases including carbon dioxide and the chlorofluorocarbons. The impact of those increases, and the effects which will flow from them, are the subject of intensive scientific review within the intergovernmental panel on climate change which is due to report next summer. I understand that report is unlikely to endorse the views of Dr. Denness.

  Trades Union Congress (Charter for the Environment)
  Dr. Thomas
  To ask the Secretary of State for the Environment what recent meetings he has had with representatives of the Trades Union Congress over its charter for the environment, adopted in September.

  Mr. Heathcoat-Amory
  My right hon. Friend the Secretary of State has not met representatives of the Trades Union Congress to discuss its charter, but he has recently accepted an invitation from the general secretary to do so.

  Pesticides
  Dr. Thomas
  To ask the Secretary of State for the Environment what response he has made to the report on pesticide use in the United Kingdom, sent to him on 7 August by the Green Alliance and the British Agrochemicals Association.

  Mr. Heathcoat-Amory
  My right hon. Friend the Minister of Agriculture, Fisheries and Food has replied to these organisations on behalf of all the Ministers responsible for the control of pesticides in a letter dated 26 September. A copy of the letter has been deposited today in the Library of the House.

  Radioactive Waste
  Dr. Thomas
  To ask the Secretary of State for the Environment if he will make a statement on the performance assessment of geological isolation systems for radioactive waste programmes sponsored by the Commission of the European Communities; and what are the implications of the PAGIS programme for future nuclear waste disposal in the United Kingdom.

  Mr. Heathcoat-Amory
  PAGIS (Performance Assessment of Geological Isolation Systems), a six-year multinational research project on the safety assessment of high-level waste (HLW) disposal, was launched in 1982 as part of the Community plan of action in the field of radioactive waste management. Reports of the PAGIS project have been published by the European Commission. PAGIS reinforces the Government view that all categories of radioactive waste can in principle be safely disposed of in the United Kingdom.

  Dr. Thomas
  To ask the Secretary of State for the Environment when he received a copy of the report from the European Commission on the evaluation of the third Community programme on radioactive waste management and storage, 1985–1989, published in July as document EUR 12264 EN; and what are the implications for the United Kingdom of this programme for the United Kingdom's radioactive waste inventory.

  Mr. Heathcoat-Amory
  My Department received a copy of the executive summary of document EUR 12264 EN in July. The programme has no implications for the United Kingdom's radioactive waste inventory.

  Milton Keynes Year of the Environment
  Dr. Thomas
  To ask the Secretary of State for the Environment what support he has given to the Milton Keynes Year of the Environment project launched on 19 September; and when he plans to visit Milton Keynes to promote environmental initiatives in the city.

  Mr. Heathcoat-Amory
  My hon. Friend the Member for Surrey, South-West (Mrs. Bottomley) sent a message of support to the organisers of the Milton Keynes Year of the Environment. I endorse that message, and will follow the year's progress with interest.

  Air Pollution
  Ms. Walley
  To ask the Secretary of State for the Environment what steps are to be taken to ensure that local authority environmental health departments have sufficient resources and information available to implement effectively the proposed changes to controls over air pollution from industrial sources.

  Mr. Heathcoat-Amory
  A joint committee to provide a forum for discussion between Her Majesty's inspectorate of pollution and local authority environmental health departments was set up at the end of 1988. The secretariat is provided by HMIP's local authority unit which has already begun to consider draft guidance notes on some 20 of the processes to be scheduled for local authority air pollution control. Information exchange on such matters as training is also being developed in the same forum.
  120
  As the new system represents a rationalisation and streamlining of local authorities' existing air pollution controls the Government estimated that it would add only £0·5 million to their current expenditure.

  Ivory
  Mr. Vaz
  To ask the Secretary of State for the Environment what agreements were made regarding the release of the ivory stockpile in Hong Kong with the European Environment Council during October; and if he will make a statement.

  Mr. Trippier
  None; the last meeting of the European Environment Council was held on 19 September. The issue of the stockpile of ivory in Hong Kong was not discussed.

  Homelessness
  Mr. John Evans
  To ask the Secretary of State for the Environment whether he will arrange a meeting with building societies to discuss additional measures to reduce homelessness.

  Mr. Chope
  Regular meetings are held with representatives of building societies. These cover a wide range of housing issues including homelessness.

  Rivers
  Mr. Amos
  To ask the Secretary of State for the Environment what percentages of United Kingdom rivers are classed as being of good or fair quality by the European Community; and what is the European Community average.

  Mr. Howard
  There is no river quality classification scheme laid down by the European Community. Each member state uses different systems, criteria and class boundaries for categorising rivers which makes assessments at Community level difficult. However, a review of classification schemes across member states published in 1988 by the Water Research Centre showed that on the basis of comparisons with the river classification scheme used in this country, an average of 83 per cent. of EC rivers were of good or fair quality compared with 95 per cent. in the United Kingdom. No other member state had a higher proportion of good or fair quality rivers than the United Kingdom, although our position was equalled by the Netherlands.

  Local Government Bill
  Mr. Pawsey
  To ask the Secretary of State for the Environment if it is intended that the new ceiling in the Local Government Bill for involvement in political activity be index-linked.

  Mr. Heathcoat-Amory
  The salary level of £19,500 specified in the Bill is not a "ceiling on political activity". It is simply a dividing line in the machinery for determining which posts in local government service should be politically restricted. Above that level posts are restricted unless specifically exempted. Below that level they are free unless they are specifically restricted.

  My noble Friend the Parliamentary Under-Secretary of State has indicated that the Government propose to use the regulation-making power in the Bill to replace the reference to £19,500 with a reference to point 44 on the

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  national joint council's recommended pay scale, as it is for the time being. The specified salary will thus change in accordance with national pay agreements.

  Residuary Bodies
  Mrs. Peacock
  To ask the Secretary of State for the Environment when he expects to lay before Parliament the 1988–89 annual reports and accounts of the London and metropolitan residuary bodies; and if he will make a statement.

  Mr. Heathcoat-Amory
  The 1988–89 annual reports and statements of accounts of the London and metropolitan residuary bodies were laid before Parliament today. A copy of the Secretary of State's direction under section 78(2) of the Local Government Act 1985 as to the content and structure of the accounts has been placed in the Library of the House.

  The residuary bodies' reports provide continuing evidence of the considerable progress which they have made in discharging the responsibilities they inherited from the Greater London council and the metropolitan county councils. Among other achievements in 1988–89, over £314 million in capital receipts were realised from sales of surplus property, the benefits of which are being distributed to the local authorities.

  Mr. Favell
  To ask the Secretary of State for the Environment when the Greater Manchester residuary body will complete its work and be wound up; and if he will make a statement.

  Mr. Heathcoat-Amory
  The Greater Manchester residuary body was formally dissolved today. During the three and a half years since abolition the record of the residuary body has been impressive. It has sold or transferred to the successor dstrict authorities 10,650 former county council property interests and distributed £12·25 million of capital receipts to the local authorities.

  There will be further amounts to come from sales which have not yet reached completion. This is in addition to the distribution of some £55 million in revenue balances.

  The Greater Manchester residuary body is the third of the seven residuary bodies to wind up. The RB inherited a very considerable number of property interests, rights and liabilities from the former Greater Manchester county council, not least those in respect of the Greater Manchester exhibition centre (GMEX). That these have been disposed of with the full co-operation of all the successor authorities is a credit to all concerned.

  The order under section 67 of the Local Government Act 1985 transferred the remainder of the residuary body's property functions, rights and liabilities to the city of Manchester and the metropolitan boroughs and districts of Bolton, Bury, Oldham, Rochdale, Salford, Stockport, Tameside, Trafford, and Wigan on 31 August 1989.

  The Greater Manchester residuary body inherited a particularly wide and complex range of tasks. I am grateful to the chairman, board and staff for discharging this task of winding up the affairs of the former Greater Manchester metropolitan county council with such efficiency and dispatch. Their final report is being laid before Parliament today.

  Unified Business Rate
  Mr. Maxwell-Hyslop
  To ask the Secretary of State for the Environment whether any special provisions are to he made to mitigate the impact of the unified business rate on small businesses initially.

  Mr. Chope
  Yes. There will be transitional protection for businesses facing large increases as a result of the combined effects of the 1990 revaluation and the introduction on 1 April 1990 of a uniform national business rate. There will be a ceiling of 20 per cent. on the amount by which any rate bill can rise in any one year in real terms for properties with a rateable value of £10,000 in the new rating list (£15,000 in London) or more. But for properties with a rateable value between £500 and £10,000 (£15,000 in London)—which will include 75 per cent. of all business premises—the annual ceiling will be 15 per cent. in real. terms.

  Sites of Special Scientific Interest
  Mr. Allan Roberts
  To ask the Secretary of State for the Environment if he will list for each year since 1981(a) the applications received by his Department from the Nature Conservancy Council for orders under section 29 of the Wildlife and Countryside Act 1981 and (b) those applications which resulted in such an order being made.

  Mr. Heathcoat-Amory
  [holding answer 17 October 1989]: The number of orders made or rejected in England is as follows:

  Made

  Rejected

  1981

  —

  —

  1982

  2

  —

  1983

  3

  1

  1984

  4

  1

  1985

  5

  2

  1986

  1

  —

  1987

  2

  —

  1988

  —

  —

  1989

  5

  —

  In addition it has been unnecessary for the Secretary of State to make an order on around six occasions because agreement was reached with the owner/occupier of the land concerned or the threat to the land did not materialise.

  The responsibility for making orders in Wales and Scotland rests with the respective Secretaries of State.

  Photochemical Smog
  Mr. Bermingham
  To ask the Secretary of State for the Environment if he will list the total number of photochemical smog events which have occurred during the last year in England and Wales; and if he will make a statement.

  Mr. Heathcoat-Amory
  [holding answer 30 October 1989]: Photochemical smog, consisting of ozone and other ingredients, is a result of the reaction between oxides of nitrogen and gaseous hydrocarbons in the presence of sunlight. In the United Kingdom a network of 17 sites monitors ozone levels. There is always some ozone in the lower atmosphere, and the definition of an "event" is inevitably arbitary. However, in August my Department announced that it would issue daily summaries of ozone

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  concentrations for periods when several network sites recorded an hourly average of 60 parts per billion or more. Since then there have been three such periods. The record for the period before August shows a further five periods during the last year.

  Nuclear Accidents (Water Contamination)
  Mr. Bermingham
  To ask the Secretary of State for the Environment if any comprehensive studies have been made to ensure the effectiveness of treatment methods for removing radionuclides typically released from accidents involving nuclear reactors into the water supply; and if he will make a statement.

  Mr. Heathcoat-Amory
  [holding answer 30 October 1989]: A report that the Department commissioned last year concluded that most forms of water treatment would remove the major part of radioactivity from water supplies in the event of an accidental release of radioactivity. However, it is most unlikely that emergency reference levels would be reached in such circumstances even before water supplies are treated, except possibly in the immediate locality of a catastrophic release of radioactivity.

  Local Government Finance
  Mr. Pawsey
  To ask the Secretary of State for the Environment how it is intended that the community charge will be collected from itinerants.

  Mr. David Hunt
  People with no fixed abode are exempt from the community charge, and the question of collection does not, therefore, arise. Travellers who are solely resident in caravans or boats will be liable to pay a personal charge in the area where they last become subject to a community charge on a particular day. It is for registration officers and charging authorities to make suitable arrangements for registration for, and collection of, the community charge in the light of local circumstances.

  Mr. Cohen
  To ask the Secretary of State for the Environment if he will introduce legislation to prevent community charge registration officers disclosing anonymous personal information to credit companies, mail order companies or police forces.

  Mr. Chope
  No such legislation is necessary. Community charges registration oficers have no power to provide personal information to any of the bodies referred to by the hon. Gentleman. Recent changes to the Local Government Finance Act specifically preclude the provision of any information from which any individual can be identified.

  Mr. Maples
  To ask the Secretary of State for the Environment if he proposes to provide further public information on the community charge.

  Mr. David Hunt
  In order to provide further information on individuals' rights and duties under the community charge, my right hon. Friend has decided to make additional resources available to ensure that those who are eligible for community charge rebates and transitional relief are aware of their entitlement.

HEALTH

  Germanium
  Mr. Key
  To ask the Secretary of State for Health what advice he can give to AIDS sufferers and others on the use of dietary supplements containing germanium.

  Mr. Freeman
  Dietary supplements containing germanium have been sold in health stores, pharmacies and by mail order. Product literature and articles sponsored by manufacturers claimed or implied potential health benefits, including an improved immune response. However, the Department of Health has no evidence that germanium is beneficial to health, and a report from Japan suggests that, taken as a dietary supplement, it may actually be harmful. The Department of Health has therefore advised that sales and consumption of dietary supplements containing germanium should cease.

  "Working for Patients"
  Mr. Harry Greenway
  To ask the Secretary of State for Health when he will announce the allocation of the 100 new consultant posts promised in the White Paper, "Working for Patients."

  Mrs. Virginia Bottomley
  I have approved 35 new posts for the first year of the scheme in 1989–90. Officials have today written to health authorities advising them of successful bids for posts in their area. The new posts we have created are over and above existing plans for new consultants. They are targeted on districts and specialties where there are long waiting times for treatment. They will enable many extra cases to be treated from waiting lists and will make a significant impact on the increasing demand which leads to long waits.

  We will meet the full costs of the new posts up to a maximum of £500,000, which will cover the cost of the new consultants, plus additional staff and running costs, and essential equipment in support of the posts.

  The annual running cost of posts approved in the first year of the scheme averages £360,000 with an additional average cost of £40,000 to cover one-off capital expenditure. The new posts are in general surgery (10 posts); trauma and orthopaedics (7 posts); obstetrics and gynaecology (5); ophthalmology (5); urology (3); ear nose and throat surgery (2); and (one post each in) medicine, oral surgery and plastic surgery. These new posts will be supported by additional medical and non-medical staff. A total of 13·5 whole-time equivalent consultants in anaesthetics; a small number of extra consultant sessions in radiology, audiology and histopathology; 16 whole-time equivalent junior medical staff; 377 nurses; 68 professional and technical staff and 113 other non-medical staff will be provided as a result of the scheme in its first year. We are seeking further information from health authorities on a number of the other bids, and I expect to announce the allocation of the remaining 65 new posts early next year.

  Mr. Vaz
  To ask the Secretary of State for Health what response he has received from the Royal College of Psychiatrists on the National Health Service White Paper "Working for Patients"; and if he will make a statement.

  Mr. Freeman
  The response we have received from the Royal College of Psychiatrists endorses the Government's
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  aims for the Health Service. It raises a number of concerns regarding the implication of our proposed reforms for mental health services. Many of these concerns will be addressed in the White Paper on the future development of community care which we hope to publish very shortly.

  Correspondence
  Mr. Pawsey
  To ask the Secretary of State for Health (1) 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;

  (2) what information his Department has on the length of time taken to respond to letters from hon. Members.

  Mr. Freeman
  Information is not available on the time taken to reply to correspondence before November 1988. Since then 51 per cent. of letters from hon. and right hon. Members have received a reply within four weeks. I regret that information on delays in replying beyond four weeks is not available in the detail requested. Following a very large increase in the amount of correspondence received earlier this year the Department has taken steps to improve the speed of reply.

  Wheelchairs and Artificial Limbs
  Mr. Hannam
  To ask the Secretary of State for Health whether all regional health authorities have submitted to his Department their detailed proposals for the integration of the wheelchair and artificial limb services in 1991; how far advanced the preparations for the integration are; and if he will make a statement.

  Mr. Freeman
  Proposals for the integration of the Disablement Services Authority's services have now been received from all regional health authorities. We shall be assessing the progress made with preparations for integration at the Disablement Services Authority's annual review meeting on 9 November.

  Students (Free Prescriptions and Dental Treatment)
  Mr. Vaz
  To ask the Secretary of State for Health what representations he has received regarding free prescriptions and free dental treatment for all students; and if he will make a statement.

  Mr. Freeman
  During the last 12 months we have received six letters from hon. Members and four letters from members of the public about free prescriptions for students. We have also had a small number of representations about free dental treatment for students.

  Students up to the age of 18 are entitled to free prescriptions and free dental treatment. Students aged 19 and over can apply for help under the NHS low income scheme. We believe it is right that students of that age who can afford to pay for their prescriptions and dental treatment should do so.

  Central Nottingham DHA
  Mr. Alexander
  To ask the Secretary of State for Health if he will list the present 10-year capital programme of Trent regional health authority for Central Nottingham district health authority.
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  Mr. Freeman
  Responsibility for capital programmes lies with regional health authorities which maintain records. I have asked the regional chairman to write to the hon. Member.

  Babies
  Mr. Skinner
  To ask the Secretary of State for Health (1) how many babies born in England and Wales, in 1987 and 1988 at 25, 26 or 27 weeks gestation who have been handicapped from oxygen starvation or other causes will need special care for the rest of their lives; and what is the estimated cost to the National Health Service of this special care over the estimated lifetime of these children;

  (2) how many babies were born in England and Wales, in 1987 and 1988 at 25, 26, and 27 weeks gestation and survived one year.

  Mr. Freeman
  The information requested is not available; information on gestation is not collected at live birth registration.

  Tranquillisers
  Mr. Ward
  To ask the Secretary of State for Health if he will respond to the statement made by the Pharmaceutical Society setting out its concerns about the quantity of tranquillisers still being prescribed.

  Mr. Freeman
  I welcome the concern shown by the Royal Phamaceutical Society of Great Britain about the need to avoid incorrect prescribing of benzodiazepines. As its statement makes clear, the Committee on Safety of Medicines has already given guidelines on the use of benzodiazepines.

  Tobacco Advertising
  Mr. Andrew Smith
  To ask the Secretary of State for Health how many breaches of the voluntary agreement on tobacco advertising between his Department and the tobacco industry there have been in the past 12 months.

  Mr. Freeman
  During the past 12 months, the committee for monitoring agreements on tobacco advertising and sponsorship has recorded nine instances in which the voluntary agreements that it monitors were breached. The agreements monitored by the committee are the 1987 agreement on the sponsorship of sport, and the 1986 agreement on tobacco products advertising and promotion, and health warnings. On one of these occasions—a televised sporting event—a number of breaches of the same agreement occurred. In addition to this, the committee referred one complaint to the Advertising Standards Authority, which decided that it was in breach of the cigarette code.

  Mr. Andrew Smith
  To ask the Secretary of State for Health if he will list the members of the Department of Health and Tobacco Industry Committee monitoring the voluntary agreement on tobacco advertising and their occupations; and whether he has any plans to reconstitute the committee to include fewer representatives from the tobacco industry.

  Mr. Freeman
  The committee for monitoring agreements on tobacco advertising and sponsorship was set up as part of the 1986 voluntary agreement on tobacco products advertising and promotion, and health warnings,
  127
  and the terms of that agreement stated that the Committee should have equal representation from interested Government departments and from the tobacco industry. The Government cannot decide unilaterally to reconstitute the committee; this would have to be discussed with and agreed by the tobacco industry. The independent chairman of the committee is Sir Peter Lazarus. The Government members are Mr. T. S. Heppell, Mr. N. M. Hale and Mr. W. Burroughs, all from the Department of Health, Mr. A. King, Scottish Office, Mr. D. MacDonald, Department of the Environment, Mr. D. Adams, Welsh Office and Mr. J. Scott, from the Department of Health and Social Security (Northern Ireland). The industry members are Mr. W. C. Owen and Mr. D. R. Hare from the Tobacco Advisory Council, Dr. R. R. Boxall, Gallaher Limited, Mr. Haynes, Imperial Tobacco Company, Mr. E. D. Oxberry, Rothmans (UK) Limited, and Mr. B. C. W. Heard from the Imported Tobacco Products Advisory Council. The seventh industry member has just resigned from the committee and has not yet been replaced.

  Mr. Andrew Smith
  To ask the Secretary of State for Health what proposals he has to make the voluntary agreement on tobacco advertising binding on the tobacco industry.

  Percentage speech therapy staff by grade as at 30 September 1987

  Regional Health Authority

  Snr II

  Snr I

  Ch IV

  Ch III

  Dist II

  Ch Dist I

  Ch Dist Snr chief

  Northern

  39·43

  40·89

  3·99

  6·33

  8·73

  0·00

  0·63

  Yorkshire

  35·69

  49·78

  1·12

  3·60

  6·08

  2·48

  1·24

  Trent

  47·94

  32·38

  4·55

  10·37

  2·38

  0·40

  1·98

  East Anglian

  47·05

  36·27

  2·22

  7·87

  5·73

  0·86

  0·00

  North West Thames

  40·70

  41·08

  4·40

  8·67

  3·75

  0·47

  0·94

  North East Thames

  36·13

  39·18

  3·18

  15·59

  4·66

  0·85

  0·42

  South East Thames

  39·38

  39·94

  3·60

  10·62

  5·08

  0·92

  0·46

  South West Thames

  28·83

  51·20

  0·42

  13·82

  5·14

  0·60

  0·00

  Wessex

  46·47

  27·99

  4·90

  13·21

  4·45

  2·97

  0·00

  Oxford

  31·87

  44·40

  3·48

  15·38

  2·09

  2·78

  0·00

  South Western

  34·47

  49·26

  2·75

  8·03

  2·20

  2·20

  1·10

  West Midlands

  45·07

  36·03

  6·17

  6·05

  5·11

  0·79

  0·79

  Mersey

  41·53

  34·48

  0·88

  13·58

  6·88

  2·65

  0·00

  North Western

  44·98

  37·75

  4·05

  6·76

  5·60

  0·43

  0·43

  Percentage speech therapy staff by grade as at 30 September 1988

  Regional Health Authority

  Grade A

  Grade B

  Grade C

  Grade D

  Grade E

  Northern

  13·37

  47·96

  25·13

  11·17

  2·38

  Yorkshire

  7·11

  49·83

  33·68

  5·98

  3·40

  Trent

  10·72

  56·83

  26·79

  2·38

  3·28

  East Anglian

  9·40

  59·77

  21·78

  6·49

  2·56

  North West Thames1

  10·93

  63·80

  16·37

  5·32

  3·58

  North East Thames

  12·55

  32·01

  36·06

  14·67

  4·72

  South East Thames

  15·03

  52·02

  22·14

  8·43

  2·38

  South West Thames

  10·28

  54·30

  27·56

  5·24

  2·62

  Wessex

  5·23

  61·72

  24·10

  5·23

  3·73

  Oxford

  6·85

  53·45

  28·51

  7·19

  3·99

  South Western2

  —

  —

  —

  —

  —

  West Midlands

  10·59

  59·21

  20·43

  7·58

  2·20

  Mersey

  13·30

  48·23

  29·79

  6·03

  2·66

  North Western

  14·81

  39·98

  36·60

  4·30

  4·30

  1 North Western figures as at 31 March 1989.

  2 South Western figures not available in comparable form.

  128
  Mr. Freeman
  The tobacco industry has undertaken to honour the current agreement and its operation is monitored by the independent committee for monitoring agreements on tobacco advertising and sponsorship (COMATAS). The chairman of COMATAS, Sir Peter Lazarus, concluded in the second annual report of the committee, published in April this year, that the industry tries hard to keep to the agreement.

  Speech Therapists
  The Rev. Martin Smyth
  To ask the Secretary of State for Health if he will publish the grades of speech therapists in England, Wales and Scotland following the regrading under HSS(TC7)3188 broken down by area board, showing the percentage in each grade before regrading and the percentage after.

  Mrs. Virginia Bottomley
  [Pursuant to the reply, 6 July 1989, cols. 238–40]: My hon. and learned Friend gave information for the "percentage of speech therapists in each grade in England at 30 September 1989". This was incorrect and should have read, "We do not have the information in the form requested, but the tables show the percentage of speech therapists in each grade in regional health authorities in England on the dates shown."

AGRICULTURE, FISHERIES AND FOOD

  Radioactivity Research and Environmental Monitoring Committee
  Dr. Thomas
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on his Department's role in the radioactivity research and environmental monitoring committee since its inception.

  Mr. Maclean
  The function of the radioactivity research and environmental monitoring committee (RADREM) is to review research and monitoring requirements and activities relating to radioactive waste management. In addition to contributing to the joint scientific secretariat for this committee, my Department has been represented on and played a full and active part in the work of the committee since its inception in 1986. Officials in my Department also chair two RADREM sub-committees, set up in 1988, dealing with research on radioactivity in the terrestrial environment and the aquatic environment respectively.

  Correspondence
  Mr. Pawsey
  To ask the Minister of Agriculture, Fisheries and Food 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. Maclean
  The information is not readily available in the form requested. However, in the financial year 1988–89, a total of 88 per cent. of letters receiving a ministerial reply, including those from hon. Members, were answered within three weeks.

  Radioactive Fallout
  Dr. Thomas
  To ask the Minister of Agriculture, Fisheries and Food if he will make it his policy to seek information from the Ukrainian and Byelorussian agriculture departments on the emergence of unpredicted mutations in vegetations in pine, oak and acacia trees, and in rodents and waterfowl in areas contaminated by radioactive fallout from Chernobyl.

  Mr. Maclean
  Scientists from my own and other Departments keep fully abreast of scientific developments through contact with their Soviet counterparts and others in various international fora. Migratory waterfowl that might have been in the vicinity of Chernobyl at the time of the accident were examined as part of my Department's extensive post-Chernobyl monitoring programme to ensure the safety of United Kingdom food supplies. The wider environmental implications of the accident are the concern of my right hon. Friend the Secretary of State for the Environment.

  Goats
  Mr. Steel
  To ask the Minister of Agriculture, Fisheries and Food if the Government proposes to revise the set-aside scheme so as to accommodate fibre-producing animals such as cashmere and angora goats.

  Mr. Curry
  The Government have decided not to take up the option under the Community set-aside scheme to 130
  introduce grazed fallow because of problems of control and possible adverse effects upon existing livestock producers, particularly in the hills. The Community rules do not permit restriction of the option to particular types of animals such as fibre-producing goats.

SCOTLAND

  Piper Alpha
  Mr. Dewar
  To ask the Secretary of State for Scotland what estimate he can make of the total cost of the inquiry into the Piper Alpha disaster chaired by Ford Cullen; and what will be the costs met by the Scottish Office.

  Mr. Rikind
  The public inquiry into the Piper Alpha disaster was established by my right hon. Friend the Secretary of State for Energy, whose Department spent £1·05 million in 1988–89 on setting up and running the inquiry. In 1989–90 the best estimate of the costs of the inquiry is £2·7 million, although the precise figure will depend on how long it lasts. It is not yet possible to estimate any further costs which may be involved in the completion of the report.

  The only costs being met by my Department are those associated with providing legal advice and counsel to the Department of Energy. In 1988–89 these amounted to approximately £0·1 million and the best estimate for 1989–90 is £0·3 million.

  Gaelic Television Services
  Mr. Macdonald
  To ask the Secretary of State for Scotland what representations he has received from organisations supporting the expansion of Gaelic television services.

  Mr. Lang
  The Secretary of State has received a wide range of representations about the future of Gaelic broadcasting. All call for a substantial increase in Gaelic television programming, although many differ as to how this might be best achieved. The Government are currently considering the future of Gaelic broadcasting and an announcement of their conclusion will be made shortly.

  Environmental Research
  Mr. Ieuan Wyn Jones
  To ask the Secretary of State for Scotland if he will make a statement on his Department's role in the radioactivity research and environment monitoring committee since its inception.

  Lord James Douglas-Hamilton
  The Scottish Office has been represented on the radioactivity research and environmental monitoring committee since it was established in 1986 and has taken a full part in the committee's work. This has included reviewing and collating the programmes of research and monitoring undertaken both by Government and industry. It has ensured that appropriate work is in hand to cover both the United Kingdom and Scottish interests.

  Self-governing Hospitals
  Mr. Kirkwood
  To ask the Secretary of State for Scotland how a large mental health hospital will compete for patients if accorded self-governing status.

  Mr. Michael Forsyth
  All self-governing NHS trusts will be required to enter into contracts with health boards
  131
  and other purchasers of health services. Their ability to win contracts will depend on the quality of the services they are able to provide and the prices they wish to charge.

  Mr. Kirkwood
  To ask the Secretary of State for Scotland whether he will accord self-governing status to hospitals or other medical units other than major acute hospitals as part of the two hospitals he envisages awarding such status.

  Mr. Michael Forsyth
  My right hon. and learned Friend will give careful consideration to all applications for self-governing status.

  National Health Service Reform
  Mr. Kirkwood
  To ask the Secretary of State for Scotland whether separate legislation will be required to implement "Working for Patients" in Scotland.

  Mr. Michael Forsyth
  No.

  Cash Limits
  Sir Hector Monro
  To ask the Secretary of State for Scotland if he proposes to make any further changes to the cash limits for 1989–90 within his responsibility.

  Mr. Rifkind
  Yes. I intend to make changes to nine of the cash limits within my responsibility.

  As a result of reduced requirements the cash limit for class XVI, vote 3—regional and general industrial support—has been decreased by £4,000,000 from £148,249,000 to £144,249,000. This reduction will partially offset increases in other votes.

  Subject to parliamentary approval of the necessary supplementary estimate, the cash limit for class XVI, vote 6—roads, transport and environmental services—will be increased by £1,881,000 from £211,061,000 to £212,942,000 reflecting the take-up of entitlement to carry forward underspends in 1988–89 under the end year flexibility arrangements as announced by the Chief Secretary to the Treasury on 20 July 1989. The full entitlement of £1,673,000 on capital expenditure and £208,000 in respect of running costs for historic buildings and monuments are taken up.

  The cash limit on class XVI, vote 14—prisons, hospitals and community health services, etc.—is being reduced by £4,630,000 from £2,003,389,000 to £1,998,759,000. The supplementary estimate includes take-up of the entitlement to carry forward £388,000 under the end year flexibility scheme for running costs.

  There is a new cash-limited vote, class XVI, vote 27—hospital and community health services—covering from 1 January 1990 the hospital and community health services formerly carried on vote 14.

  The cash limit has been set at £8,697,000, reflecting gross expenditure of £542,199,000 and appropriations in aid of £533,502,000. This comprises transfers from vote 14 for the final quarter of the financial year, together with additional resources, originally agreed for vote 14, of £4,747,000 on capital expenditure for the take-up of the full entitlement to carry forward underspending in 1988–89 under the end year flexibility scheme and £3,950,000 for NHS review implementation costs, partly offset by savings of £200,000 on class XVI, vote 14.

  Subject to parliamentary approval of the necessary supplementary estimate, the cash limit for class XVI, vote
  132
  15—education, arts, libraries and social work—will be increased by £162,000 from £215,649,000 to £215,811,000 to take account of the changes in payment of income support for hostel dwellers.

  Subject to parliamentary approval of the necessary supplementary estimate, the cash limit for class XVI, vote 19—General Register Office for Scotland—will be increased by £50,000 from £5,318,000 to £5,368,000 reflecting the take-up of the full entitlement to carry forward underspends in 1988–89 under the end year flexibility scheme for running costs. In addition, the running costs limits for the General Register Office for Scotland will be increased by £50,000 from £5,815,000 to £5,865,000.

  Subject to parliamentary approval of the necessary supplementary estimate, the cash limit for class XVI, vote 21—Scottish Office administration—will be increased by £1,014,000 from £120,358,000 to £121,372,000. The increase includes take-up under the end year flexibility scheme for running costs of £379,000 and legal expenses of other departments for which legal advice is provided. As a result of these changes and the full take-up of carry forward under the end year flexibility scheme by historic buildings and monuments within class XVI, vote 6 and by prisons within class XVI, vote 14, the running costs limit for the Scottish Office will be increased by £1,057,000 from £205,865,000 to £206,922,000.

  Cash block SO/LA1, which covers non-housing capital expenditure by local authorities, is to be increased by £12,000,000 from £501,035,000 to £513,035,000 reflecting the take-up of the full entitlement to carry forward underspending under the end year flexibility scheme for capital expenditure.

  Cash block SO/LA2, which covers housing capital expenditure by local authorities and capital expenditure by new towns, is to be increased by £18,524,000 from £326,900,000 to £345,424,000. Within this total, £24,900,000 reflects the take-up of the full entitlement to carry forward underspending under the end year flexibility scheme for capital expenditure.

  The net effect of these changes will be met from the Reserve and will not therefore add to the planned total of public expenditure.

  Lead Water Pipes
  Mr. Sillars
  To ask the Secretary of State for Scotland what is the total of central Government grant in each of the past 10 financial years for the replacement of lead piping.

  Lord James Douglas-Hamilton
  [holding answer 26 October 1989]: Information is not held centrally on the element of grants for house improvements relating to the replacement of lead piping. However about 58,000 grants which included lead plumbing replacement were made in the period 1982–88 inclusive.

  House Repossessions
  Mr. Wray
  To ask the Secretary of State for Scotland, pursuant to his reply of 18 October,Official Report, column 170, to the hon. Member for Glasgow, Provan, if he will make it his policy to collect information about house repossessions in Scotland.
  133
  Lord James Douglas-Hamilton
  [holding answer 26 October 1989]: The possibility of obtaining such information is being pursued.

  Dyslexia
  Dr. Godman
  To ask the Secretary of State for Scotland (1) what guidelines the Scottish Education Department has issued to local education authorities concerning the testing for dyslexia among young schoolchildren; and if he will make a statement;

  (2) what recent consultations have been conducted between officials of the Scottish Education Department and local education authorities concerning the detection of dyslexia among schoolchildren; and if he will make a statement.

  Mr. Lang
  [holding answer 23 October 1989]: Responsibility for identifying children who have difficulty with reading or writing rests with education authorities, whose teaching staff are becoming increasingly well-equipped, through improved training, to recognise and to help such children. While the Scottish Education Department has not issued guidance or held consultations with authorities, its inspectorate has, in approving teacher training courses, ensured that these now contain a special educational needs component. Special educational needs diploma courses include specific instruction in recognising dyslexia.

ATTORNEY-GENERAL

  Correspondence
  Mr. Pawsey
  To ask the Attorney-General 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.

  The Attorney-General
  Letters from hon. Members are treated as a matter of priority within my Department, and are answered as soon as the necessary information is available. The legal secretariat does not have the facilities to produce the information requested at other than disproportionate cost. Nevertheless I can safely say that the vast majority of letters from hon. Members receive a substantive reply within two weeks.

  Guildford Four
  Mr. Madden
  To ask the Attorney-General if the Lord Chancellor will make it his policy to express apologies on behalf of the legal profession to Patrick Armstrong, Gerard Conlon, Carole Richardson, and Paul Hill for the miscarriage of justice they have suffered; and if he will make a statement.

  The Attorney-General
  No. The outcome of Sir John May's inquiry may be expected to provide a reliable foundation for any comment on these cases.

  Petty Officer John Black
  Mr. Latham
  To ask the Attorney-General whether he will make a statement on the current position regarding his proposed application to the courts to hold a fresh inquest in respect of the death of the late Petty Officer John Black, RN, at Sabinillas, Spain, in December 1983.
  134
  The Attorney-General
  The application and supporting documents were lodged in the Crown Office at the High Court of Justice on 16 August. The Crown Office has not yet fixed a date for the hearing of the application.

  Treasury Solicitor's Department
  Mr. Lawrence
  To ask the Attorney-General whether any changes have been made to his class XX, vote 16, cash limit and running costs limit for the Treasury Solicitor's Department's estimate.

  The Attorney-General
  Subject to parliamentary approval of the necessary supplementary estimate the cash limit has been increased by £293,000 from £12,784,000 to £13,077,000 and the Department's running costs limit by £243,000 from £14,127,000 to £14,370,000. This increase has been charged to the Reserve and will not increase the planned total of public expenditure.

  Agreement on the early implementation of the recommendations contained in Sir Robert Andrew's review of the Government legal service, which resulted in the setting up of the lawyers management unit and the early acquisition of a computerised system for repayment billing, was reached too late for provision to be taken in the main estimate, and is therefore reflected in this additional provision.

  Legal Aid
  Mr. Nicholas Bennett
  To ask the Attorney-General what evaluation is made by his and the Lord Chancellor's Department as to the progress of civil cases which are legally aided to ensure that public money is not wasted as a result of inefficiency or unnecessary delay by solicitors and counsel.

  The Attorney-General
  Neither my office nor the Lord Chancellor's Department evaluates the progress of civil cases which are legally aided.

  It is the responsibility of the Legal Aid Board to establish controls to ensure that legally aided cases are not unjustifiably prolonged, and that expenses are not wasted or unnecessarily incurred. The board is in the process of preparing a case control procedure and will be reporting to the Lord Chancellor when this is settled.

TRANSPORT

  Marine Rescue Services
  Mr. Barry Field
  To ask the Secretary of State for Transport if he will list those coastguard stations equipped with MF radio.

  Mr. McLoughlin
  Every coastguard rescue centre except Belfast and Oban is fitted with an MF transceiver.

  Mr. Barry Field
  To ask the Secretary of State for Transport if he will list those coastguard stations which have not maintained a 24-hour watch on the MF frequencies together with the dates when they were off the air, in the last 12 months.

  Mr. McLoughlin
  There is no requirement for Her Majesty's coastguard to maintain a 24-hour watch on MF distress frequencies. The MF transceivers are provided at rescue centres for the conduct of search and rescue
  135
  operations outwith VHF range. Her Majesty's coastguard contracts British Telecom International to maintain a continuous watch on the MF distress frequencies.

  Mr. Barry Field
  To ask the Secretary of State for Transport if he will take steps to ensure that Her Majesty's coastguard do not answer routine calls from unlicensed VHF installations.

  Mr. McLoughlin
  The majority of VHF transmissions to Her Majesty's coastguard are of a distress or safety nature. Much congestion on VHF already exists in some areas and attempts to verify that the installation is licensed would aggravate the congestion. Routine calls should be directed via British Telecom coast radio stations which are obliged to verify the installations licence for billing purposes.

  InterCity Routes
  Mr. Vaz
  To ask the Secretary of State for Transport what discussions he has had with British Rail about improvements to the main InterCity South Yorkshire to London line, and when they could be scheduled for implementation.

  Mr. Portillo
  InterCity services are a commercial matter for British Rail. Any new investment would need to earn a proper return. British Rail introduced improved services on the midland main line, with faster and more frequent trains, on 2 October.

  Ilfracombe (Incident)
  Mrs. Ann Winterton
  To ask the Secretary of State for Transport how many minutes elapsed between the first reporting of an incident involving a child or children in difficulties in the sea at Ilfracombe on 16 August before the coastguard(a) was dispatched to the scene and (b) arrived at the scene.

  Mr. McLoughlin
  The first notification to Swansea MRCC of an incident at Ilfracombe on 16 August was by 999 telephone call at 1620 local time. The auxiliary coastguard at Ilfracombe was tasked at 1624, and arrived on scene at 1641. This first notification, from two sources, was of a person "on the rocks, cut off by tide". Swansea MRCC was subsequently advised at 1635 that a person was in the water, the helicopter was tasked, and was on scene within 10 minutes.

  Mrs. Ann Winterton
  To ask the Secretary of State for Transport if he will make a statement explaining the reasons for any delay on the part of the coastguard in responding to the incident at Ilfracombe on 16 August in which Mark Woodward was drowned.

  Mr. McLoughlin
  It is not considered that there was any delay on the part of Her Majesty's coastguard at Swansea in acting on the information received regarding this tragic incident.

  Mrs. Ann Winterton
  To ask the Secretary of State for Transport how many personnel were scheduled to be on duty at Swansea coastguard station on 16 August.

  Mr. McLoughlin
  There were five persons detailed to be on watch on 16 August, comprising three regular coastguard officers, and two auxiliary coastguards.
  136
  Mrs. Ann Winterton
  To ask the Secretary of State for Transport what is the normal establishment of Swansea coastguard station.

  Mr. McLoughlin
  Swansea coastguard has a complement of 18 watchkeeping officers and a three-man district management team.

  Emergency 999 Service
  Mrs. Ann Winterton
  To ask the Secretary of State for Transport whether he has had any discussions with British Telecom about ways of improving the emergency 999 service since 16 August.

  Mr. McLoughlin
  There is a continuing programme of discussions between Her Majesty's coastguard and BTI in South Wales, on the 999 emergency service. Any problems encountered are the subject of an immediate reporting procedure, with follow-up discussion at subsequent meetings between BTI and senior members of the coastguard staff from Swansea coastguard region.

  A69
  Mr. Amos
  To ask the Secretary of State for Transport if he will undertake a new survey of traffic flows on the A69 west of Hexham; and if he will make a statement.

  Mr. Atkins
  At present the Department has two permanent traffic counters west of Hexham on the A69 trunk road. One of these is east of Haltwhistle where regular counting takes place. The other is close to Greenhead village, and operates on alternate months.

  A further two sites are proposed, one is to be located close to the Cumbria border, the other to the east of Haydon Bridge. The intention is to monitor and count these sites every alternate month.

  The length of the A69 west of Hexham to the Cumbria border is approximately 20 miles and the Department considers that with all these counters in operation sufficient information will be available to keep a close check on the use of this section of the trunk road.

  Merchant Navy Reserve
  Mr. Barry Field
  To ask the Secretary of State for Transport what is the current strength of the Merchant Navy Reserve.

  Mr. McLoughlin
  On 25 October 1989, membership of the Merchant Navy Reserve stood at 188.

NORTHERN IRELAND

  Areas of Special Scientific Interest
  Mr. Peter Robinson
  To ask the Secretary of State for Northern Ireland how many areas of special scientific interest have been declared under the terms of article 24 of the Nature Conservation and Amenity Lands (Northern Ireland) Order 1985.

  Mr. Peter Bottomley
  Twenty four.

  Mr. Peter Robinson
  To ask the Secretary of State for Northern Ireland if the Department of the Environment for Northern Ireland intends to declare the freshwater lagoon within the Belfast harbour estate known as BP1 (or D1) an area of special scientific interest.
  137
  Mr. Peter Bottomley
  No.

  Lagoons
  Mr. Peter Robinson
  To ask the Secretary of State for Northern Ireland on what date the Department of the Environment for Northern Ireland issued the written consent for the infilling of the two lagoons known as BP1 and BP2.

  Mr. Peter Bottomley
  Written consent under article 25 of the Nature Conservation and Amenity Lands (Northern Ireland) Order 1985 to the infilling of the two lagoons known as BP2 and BP3 (not BP1 and BP2) was issued by the Department of the Environment for Northern Ireland on 16 March 1988. It was a condition of the consent that such infilling should not commence before 1 March 1993.

  Mr. Peter Robinson
  To ask the Secretary of State for Northern Ireland on what date the Department of the Environment for Northern Ireland received an application to infill the two lagoons in the Belfast harbour estate known as BP2 and BP3.

  Mr. Peter Bottomley
  Following lengthy discussions, formal written application was received on 16 March 1988.

  Mr. Charles Haughey (Security)
  Mr. William Ross
  To ask the Secretary of State for Northern Ireland (1) how many(a) soldiers of the regular Army, (b) members of the Royal Ulster Constabulary, and (c) members of the Ulster Defence Regiment were deployed to provide security for the visit of Mr. Charles Haughey to Eglinton airport on 19 October;

  (2) how many man hours were required in respect of (a) the regular Army, (b) the Ulster Defence Regiment and (c) the Royal Ulster Constabulary to provide security for the visit of Mr. Charles Haughey to Eglinton airport on 19 October;

  (3) if he will publish a table in the Official Report to show the roads closed off by the security forces in the provision of security cover for the visit of Mr. Charles Haughey to Eglinton airport on 19 October, showing the periods for which each such road was closed off.

  Mr. Cope
  [holding answer 30 October 1989]: No; it is not considered appropriate in the interests of security to give this information.

  Mr. William Ross
  To ask the Secretary of State for Northern Ireland how may people live in the area covered by the security measures taken during the visit of Mr. Charles Haughey to Eglinton airport on 19 October.

  Mr. Cope
  [holding answer 30 October 1989]: This information is not available.

  Mr. William Ross
  To ask the Secretary of State for Northern Ireland if any members of the civic guards were at Eglinton airport on 19 October.

  Mr. Cope
  [holding answer 30 October 1989]: It is not considered appropriate in the interests of security to give this information.

  Mr. William Ross
  To ask the Secretary of State for Northern Ireland what restrictions were placed on the free 138
  movement of people in the Eglinton area due to the security measures taken during the visit of Mr. Charles Haughey to Eglinton airport on 19 October.

  Mr. Cope
  [holding answer 30 October 1989]: There were no restrictions on the movement of people in the Eglinton area; however, some traffic disruption may have been experienced in the area as a result of the security operation which was mounted.

  Mr. William Ross
  To ask the Secretary of State for Northern Ireland what was the total cost of the security measures taken on 19 October to cover the visit of Mr. Charles Haughey to Eglinton airport, broken down as far as is possible, into costs for(a) the regular Army, (b) the Ulster Defence Regiment and (c) the Royal Ulster Constabulary.

  Mr. Cope
  [holding answer 30 October 1989]: For security reasons, it is not considered appropriate to provide this information.

  Mr. William Ross
  To ask the Secretary of State for Northern Ireland (1) what was the total cost to(a) the Government of the United Kingdom and (b) the Londonderry council in relation to the visit of Mr. Charles Haughey to Eglinton airport on 19 October;

  (2) whether any council employees were given advance notice of the visit of Mr. Charles Haughey to Eglinton airport on 19 October;

  (3) whether councillors known to be members of Sinn Fein were given advance notice of the visit of Mr. Charles Haughey to Eglinton airport.

  Mr. Cope
  [holding answer 30 October 1989]: The arrangements for the event were made by the company which funded and organised it. Therefore, apart from the cost of the security operation, no other public moneys were involved.

  Gerard Conlon
  Mr. Corbyn
  To ask the Secretary of State for Northern Ireland if he will call for a report from the chief constable of the Royal Ulster Constabulary on the questioning and holding of Gerard Conlon in Belfast on Tuesday 24 October.

  Mr. Cope
  [holding answer 30 October 1989]: No. This is a matter for the chief constable of the Royal Ulster Constabulary; if a complaint is made to him, it will be investigated.

THE ARTS

  Exports Review
  Mr. Cormack
  To ask the Minister for the Arts whether he is able to announce the publication date of the report of the reviewing committee on the export of works of art for the year ended 30 June.

  Mr. Luce
  I have today presented the 35th report of the reviewing committee on the export of works of art for 1988–89. Copies have been placed in the Libraries of the House. I am particularly pleased such a prompt publication date has been achieved and I draw the attention of the House to the concise treatment given in the report to the role of the reviewing committee in the issue of export licences.

Prime MINISTER

  Public Holidays
  Mr. Boswell
  To ask the Prime Minister what recent representations she has received concerning the pattern of public holidays.

  The Prime Minister
  A number of differing views have been expressed about the pattern of public holidays, including the position of the first Monday in May, which are under consideration.

  Local Government Finance
  Dr. Godman
  To ask the Prime Minister if Her Majesty's Government have any proposals to deduct poll tax payments directly from payments of income support; and if she will make a statement.

  The Prime Minister
  The Abolition of Domestic Rates Etc (Scotland) Act 1987 was amended by the Local Government Finance Act 1988 to provide this additional power for the enforcement of community charge debts. The Community Charges (Deductions from Income Support) (Scotland) Reglations 1989 (SI 1989 No. 507) made under this power enable the social security adjudicating authorities to authorise deductions to be made from income support in Scotland to pay community charge debts. Deductions can only be made at the request of a charging authority which must first obtain a warrant from a court to prove the debt. Parallel regulations will apply in England and Wales from April 1990.

  British Telecom
  Mr. Hayes
  To ask the Prime Minister what representations she has received requesting that British Telecom be renationalised; and if she will make a statement.

  The Prime Minister
  None. The public generally and British Telecom's 1·2 million private shareholders have benefited substantially from the 60 per cent. increase in investment, the 2,000 digital exchanges which have been installed and the increase in profitability and efficiency since British Telecom was privatised.

  Law and Order
  Mr. David Davis
  To ask the Prime Minister what has been the real term increase in Government expenditure on law and order since 1979.

  The Prime Minister
  In the current financial year spending on law and order services in England and Wales was increased in real terms by 73·5 per cent. over expenditure in 1978–79.

  GATT
  Mr. Teddy Taylor
  To ask the Prime Minister if she will raise at the next meeting of the European Council the use of the general agreement on tariffs and trade as an arbitration in resolving disputes between the EEC and other trading groups.

  The Prime Minister
  The British Government, like our Community partners, strongly believe that the general 140
  agreement on tariffs and trade provides the best route for the resolution of trade disputes. We have pressed for improvements to its dispute settlement procedures in the Uruguay round of multilateral trade negotiations and an initial package of such measures is now in force following the December 1988 ministerial meeting in Montreal. We take all appropriate opportunities for reminding our Community partners of the importance we attach to GATT dispute settlement procedures, and the need to improve them still further.

  Metropolitan Police
  Mr. Jessel
  To ask the Prime Minister what representations she has received requesting that responsibility for the Metropolitan police be removed from the Home Secretary and placed in the hands of an elected authority.

  The Prime Minister
  I have received no such representations. I have every confidence in the present system. The Home Secretary, as police authority, is answerable to Parliament.

  Prevention of Terrorism Act
  Mr. Hayward
  To ask the Prime Minister whether she has received any recent representations requesting the repeal of the Prevention of Terrorism Act.

  The Prime Minister
  I have received no such representations. We need to have firm measures to combat terrorism and the Prevention of Terrorism Act will remain in force for as long as necessary.

  Labour Statistics
  Mr. Brazier
  To ask the Prime Minister whether she will make a statement about the levels of unemployment since 1979.

  The Prime Minister
  In September 1989 the number of unemployed claimants, seasonally adjusted, in the United Kingdom was 1,695,000. Unemployment has been falling for 38 consecutive months. It is now at its lowest level for nearly nine years, and well below the European Community average.

  Corporate Taxation
  Mr. Nicholas Bennett
  To ask the Prime Minister what estimates she has made about the likely consequences for British industry and commerce of a rise or fall in the level of corporate taxation.

  The Prime Minister
  A change of one percentage point in the full rate of corporation tax from 1 April 1989 is estimated to have a full-year effect on tax payments of £580 million. An equivalent change in the small companies' rate is estimated to have a full-year effect of £50 million.

  National Health Service
  Mr. Robert G. Hughes
  To ask the Prime Minister what representations she has received about the National Health Service.

  The Prime Minister
  Since the publication of the White Paper, "Working for Patients", my right hon. and learned
  141
  Friend the Secretary of State for Health has received some 12,000 representations making suggestions or seeking further information about our proposals.

  House of Lords
  Mrs. Roe
  To ask the Prime Minister what representations she has received seeking the abolition of the House of Lords.

  The Prime Minister
  The Government receive representations from time to time advocating abolition or reform of the House of Lords.

  Independent Schools
  Sir Michael Shaw
  To ask the Prime Minister what representations she has received in the past year seeking to abolish the assisted places scheme and withdraw charitable status from independent schools.

  The Prime Minister
  I have received no recent representations on these matters. This year the assisted places scheme will make available up to 33,000 places at 278 independent schools throughout England. The scheme continues to provide an important means by which parents who would not otherwise be able to afford to do so can receive financial help towards sending their children to independent schools.

  Import Controls
  Mr. Ken Hargreaves
  To ask the Prime Minister whether she has received any requests for import controls to be imposed.

  The Prime Minister
  I have received very few requests to impose import controls. It is the Government's policy to promote free and fair trade and it is not generally to the United Kingdom's advantage to impose import restrictions.

  Steel Industry
  Mr. Nelson
  Q.120 To ask the Prime Minister if she will make a statement on progress made in rationalising the steel industry since 1979.

  The Prime Minister
  During the period since 1979 the Government promoted the Phoenix joint ventures involving private sector steel companies and the then nationalised British Steel Corporation and also a private sector steel scheme. These initiatives have now ceased, but they reduced product overlap between the private and public sectors and contributed towards rationalisation within the industry as a whole. British Steel itself was then returned to the private sector in December 1988 and recently announced record profits of £593 million compared with substantial losses while nationalised. Productivity in the United Kingdom steel industry rose by 151 per cent. between 1979 and 1988.

  Further mergers and acquisitions have taken place within the industry as it adjusts and responds to the challenge of a competitive market.

  Immigration
  Sir William Clark
  To ask the Prime Minister what representations she has received seeking repeal of the primary purpose rule and the immigration Acts of 1971, 1981 and 1988.
  142
  The Prime Minister
  The Home Secretary and I receive many representations from Members of Parliament and others about the operation of immigration and nationality legislation, including the primary purpose rule. The Government have no plans to remove the primary purpose test which is an important safeguard against abuse of the immigration rules.

  Ethiopia
  Mr. Cryer
  To ask the Prime Minister when she next expects to pay an official visit to Ethiopia.

  The Prime Minister
  I have no plans to do so.

  Correspondence
  Mr. Pawsey
  To ask the Prime Minister what information she has on the length of time taken to respond to letters from hon. Members.

  The Prime Minister
  I receive an enormous number of letters each week from Members of Parliament and others. It is not possible for me to deal with all these letters personally and I must accordingly refer most of them to the Minister and the Department with the responsibility for the policy in question. All correspondence is dealt with as quickly as possible.

  Local Government Finance
  Mr. Jack
  To ask the Prime Minister if she will make a statement on the implementation of the community charge and the uniform business rate.

  The Prime Minister
  Following the successful introduction of these arrangements in Scotland, I understand that most local authorities in England and Wales are making excellent progress in preparing for the new community charge and uniform business rating arrangements. Registration for the charge is proceeding smoothly and on time. I have every confidence that all authorities will wish to ensure that bills, with any necessary adjustment for transitional relief and rebates, will be issued to chargepayers on time next April.

  Engagements
  Mr. Knapman
  To ask the Prime Minister if she will list her official engagements for Tuesday 31 October.

  Mr. Harry Greenway
  To ask the Prime Minister if she will list her official engagements for Tuesday 31 October.

  Mr. Pike
  To ask the Prime Minister if she will list her official engagements for Tuesday 31 October.

  Mr. Stern
  To ask the Prime Minister if she will list her official engagements for Tuesday 31 October.

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

FOREIGN AND COMMONWEALTH AFFAIRS

  Chernobyl
  Dr. Thomas
  To ask the Secretary of State for Foreign and Commonwealth Affairs what compensation has been sought from the Soviet Union to offset payments made to
  143
  United Kingdom farmers for losses resulting from radioactive fallout contaminating land and animals after the Chernobyl accident in 1986.

  Mr. Sainsbury
  The position remains as stated in the reply given to the hon. Member on 21 July 1986.

  Paris Conference
  Mr. Corbyn
  To ask the Secretary of State for Foreign and Commonwealth Affairs who were the United Kingdom's representatives at the recent Paris conference on the future of the Antarctic; what papers were presented by the delegation; and if he will make a statement.

  Mr. Sainsbury
  The United Kingdom delegation at Paris consisted of Dr. J. A. Heap, Foreign and Commonwealth Office; Mr. N. Bonner, one time deputy director and head of life sciences division of the British Antarctic Survey; Mr. R. Cummins, Foreign and Commonwealth Office, Mr. P. Hancock, Hydrographic Department, Ministry of Defence, and Mr. I. Hendry, Foreign and Commonwealth Office. Of about 89 working papers submitted to the meeting, the United Kingdom delegation was sole or joint author of 26. The papers dealt with aspects of environmental protection, encouragement of scientific research and operational safety in the Antarctic.

  Human Rights
  Mr. Molyneaux
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list those Commonwealth Governments which have not yet acceded to or ratified international covenants on human rights.

  Mr. Sainsbury
  Thirty Commonwealth countries have not yet acceded to or ratified the international covenant on civil and political rights or the international covenant on economic, social and cultural rights: Antigua and Barbuda, Bahamas, Bangladesh, Belize, Botswana, Brunei, Dominica, Ghana, Grenada, Kiribati, Lesotho,144
  Malawi, Malaysia, Maldives, Malta, Nauru, Nigeria, Pakistan, Papua New Guinea, St. Kitts and Nevis, St. Lucia, Seychelles, Sierra Leone, Singapore, Swaziland, Tonga, Tuvalu, Vanuatu, Western Samoa and Zimbabwe.

  The Solomon Islands and Uganda have ratified the international covenant on economic, social and cultural rights but not the international covenant on civil and political rights.

  Cambodia
  Mr. Tony Banks
  To ask the Secretary of State for Foreign and Commonwealth Affairs what assistance has been provided by Her Majesty's Government to Cambodian resistance groups; and if he will make a statement.

  Mr. Sainsbury
  Since 1979 we have provided over £13 million of assistance to Cambodians living along the Thai border in camps administered by the non-Communist resistance groups. So far this year we have donated £350,000 through the United Nations border relief operation. We have commited a further £120,000 to the non-Communist resistance for English language training and humanitarian assistance.

  Mr. Fiassel Abdel Waheb Salem
  Mr. Tony Banks
  To ask the Secretary of State for Foreign and Commonwealth Affairs when Mr. Fiassel Abdel Waheb Salem applied at Her Majesty's embassy in Cairo for a re-entry stamp in his passport to enable him to return to the United Kingdom; and what has been the cause of the delay in issuing it.

  Mr. Sainsbury
  In accordance with the guidelines on the handling of representations by Members of Parliament in immigration cases, issued to Members on 14 December 1988, I have referred the question to the correspondence unit of the migration and visa department of the Foreign and Commonwealth Office. The hon. Member will receive a reply from the unit in due course.

OVERSEAS DEVELOPMENT

  International Fund for Agricultural Development
  Mr. Nicholas Bennett
  To ask the Secretary of State for Foreign and Commonwealth Affairs what was the outcome of the negotiations to replenish the International Fund for Agricultural Development; and what will be the United Kingdom's contribution.

  Mrs. Chalker
  I am glad to say that for its third replenishment IFAD will receive $566·3 million to cover its operations up to 30 June 1992. This compares with only $487 million pledged for the full three years' second replenishment. There will be two main components, "core funding" and "supplementary funding". The first consists of OPEC (category 2) pledges totalling $124·4 million and matching pledges by OECD donors (category 1) in the ratio 60:40 totalling $186·8 million. The second is made up of pledges from non-oil exporting developing countries (category 3) totalling $63·8 million and OECD matching contributions in the ratio 3:1 totalling $191·5 million. This second element is seen by both category 3 and category 1 as wholly exceptional and confined to this replenishment.

  Britain's contribution to the replenishment will be £11·305 million ($19·8 million), comprising core funding of £5·098 million ($8·9 million), and a supplementary matching contribution of £6·217 million ($10·9 million). Parliamentary approval for this contribution will be sought in due course.

SOCIAL SECURITY

  Unemployed People (Part-time Study)
  Mr. Jack Thompson
  To ask the Secretary of State for Social Security if he will make a statement on the position of unemployed people who undertake part-time study.

  Mrs. Gillian Shephard
  It is the prime responsibility of unemployed people claiming benefit to make every effort to secure paid employment. So long as they remain available for and actively seeking employment, they are free to spend their spare time usefully by pursuing a course of part-time study. They must, though, organise their studies so that they can make adequate arrangements to seek work and must be prepared to break off their studies if a job opportunity arises.

  21-hour Rule
  Mr. Fearn
  To ask the Secretary of State for Social Security if he will make a statement about the continuance of the 21-hour rule.

  Mrs. Gillian Shephard
  We have no plans to change the 21-hour rule.

  Local Expenditure and Benefits
  Mr. Redmond
  To ask the Secretary of State for Social Security if he will publish tables on spending power using the assumptions in the answer to the hon. Member for Bradford, West (Mr. Madden) on 22 June 1988,Official Report, columns 571–76, but using expenditure and benefit figures appropriate for families in (a) Doncaster and (b) Wath-on-Dearne together with a column showing the extent of the differences resulting from the changes in April and October 1989.
  146
  Mrs. Gillian Shephard
  There were no prescribed procedures for uprating supplementary benefit, housing benefit or family income supplement—different elements of these schemes were uprated in different ways and by different indices at different times. It is impossible to say what the rates of these benefits would have been in April 1989 it' the reform of social security had not been introduced in April 1988. A simple mechanistic uprating of the April 1987 system of benefits would be unrealistic. The tax benefit model tables for 1989 will be published shortly.

  Correspondence
  Mr. Wigley
  To ask the Secretary of State for Social Security whether the contents of the letter dated 7 June sent by Mrs. P. Henry of the class 4 group of the social security central office at Newcasle-upon-Tyne, relating to correspondence with people in Wales, represents his Department's policy on such matters.

  Mrs. Gillian Shephard
  The Department's policy is that local offices in Wales will reply in Welsh to any letters received in that language. However some social security matters are administered centrally from outside Wales. When correspondence from Wales, in Welsh, is received by any of these central offices it is normally answered in Welsh, provided the reply is one of substance and not, for example, a routine acknowledgment. Following the hon. Member's question, staff at Newcastle central office have been reminded to comply with this policy.

  Mr. Pawsey
  To ask the Secretary of State for Social Security 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.

  Mrs. Gillian Shephard
  No information is available on the time taken to reply to correspondence before November 1988. Since then, 41 per cent. of letters from hon. and right hon. Members have received a reply within four weeks.

  Housing Benefit
  Mr. Pike
  To ask the Secretary of State for Social Security if he will publish in the Official Report (a) the numbers in receipt of housing benefit and (b) the average amount of benefit payment in constant terms for (i) Burnley and (ii) each region in England for the last 10 years for which figures are available.

  Mrs. Gillian Shephard
  The estimated number of housing benefit recipients in Burnley is given in the table. Similar estimates are not available on a regional basis. The average amount of housing benefit in payment is not available at local authority or regional level.

  Estimated recipients of Housing Benefit in Burnley

  Year

  Number

  1983–84

  13,206

  1984–85

  11,356

  1985–86

  11,274

  1986–87

  11,346

  1987–88

  10,924

  1988–89

  8,436

  Note: 1983–84 to 1987–88—estimates for caseload during the year.

  1988–89—caseload count, 31 May 1988.

  Child Support
  Mr. Ward
  To ask the Secretary of State for Social Security whether he has any plans to amend existing legislation to ensure that non-custodial parents do more to meet their responsibilities to support their children; and if he will make a statement.

  Mrs. Gillian Shephard
  When income support is claimed by a lone parent, existing legislation places a duty on the non-custodial parent to meet their responsibilities wherever they can afford to do so. However, for over three quarters of lone parent families receiving income support the absent parent pays no maintenance at all. We are naturally concerned by this and will continue to look for ways to ensure that our efforts to obtain a contribution from non-custodial parents are even more effective.

  Means Testing and Targeting
  Mr. Alfred Morris
  To ask the Secretary of State for Social Security what definition his Department uses of the terms(a) means testing and (b) targeting; and what is his policy towards the use of each.

  Mrs. Gillian Shephard
  Income-related or means-tested benefits are paid to people whose resources are below levels laid down by Parliament and who meet other tests of eligibility. Means testing is, therefore, one of the mechanisms which can be used to establish entitlement. Targeting, which means the effective and responsive provision of extra financial help to groups of people needing particular priority, is an important objective of social security policy. Thus, my right hon. Friend's uprating statement for April 1990,Official Report, 25 October, columns 841–54, continues the policy of targeting worthwhile extra help to groups like the less-well-off among families with children, elderly and disabled pensioners and the long-term sick and disabled.

  Local Offices
  Mr. Cartwright
  To ask the Secretary of State for Social Security how many of his Department's local offices in Greater London he now plans to close; and what steps he is taking to ensure that income support claimants in the affected areas will still be able to have personal access to officers dealing with their cases.

  Mrs. Gillian Shephard
  The Department announced on 16 January that in order to improve service to customers in London it was moving backroom work not requiring face-to-face contact with the public out of 21 London local offices. Such work will be processed in three social security centres (SSCs) in Glasgow, Belfast and Ashton-in-Makerfield near Wigan.

  I must stress that the Department has no plans to close any of its offices in London as a result of this relocation of work. A full network of branch offices will be retained in London to carry out that work which does need face-to-face contact with our customers. Indeed, we are planning to open wholly new branch offices in two localities—Wembley and Dulwich—where we do not have any provision at the moment.

  Social security claimants in the areas affected by the relocation of work will be able to call at any branch office
  148
  in their district to conduct their business. Alternatively, by using a special telephone number, they will be able to talk directly to the person dealing with their claim in the social security centre. All calls to the SSC will be charged at the London local call rate.

  Housing Benefit
  Mr. McAllion
  To ask the Secretary of State for Social Security if he will publish in the Official Report the numbers in receipt of housing benefit and the average level of housing benefit payments in (a) Dundee district and (b) Scotland in each of the past 10 years for which figures are available.

  Mrs. Gillian Shephard
  [holding answer 19 October 1989]: The estimated numbers receiving rent rebates or rent allowance are given in the table. The average amount of housing benefit in payment is not available at local authority level.

  Housing Benefit

  Estimated recipients of rent rebate/allowance

  Dundee district council

  Scotland

  1983–84

  25,046

  563,038

  1984–85

  30,395

  563,692

  1985–86

  26,480

  583,671

  1986–87

  26,964

  591,694

  1987–88

  26,953

  598,151

  1988–89

  24,523

  572,181

  Note:

  1983–84 to 1987–88—estimates for caseload during the year.

  1988–89—caseload count, 31 May 1988.

  Average amount of Housing Benefit in payment: Scotland

  Claims where Supplementary Benefit/ Income Support also in payment

  Claims where Housing Benefit only in payment

  Rent rebate £ weekly

  Rent allowance £ weekly

  Rent rebate £ weekly

  Rent allowance £ weekly

  1983

  9·50

  13·20

  n.a.

  n.a.

  1984

  9·90

  14·10

  n.a.

  n.a.

  1985

  11·00

  18·50

  n.a.

  n.a.

  1986

  12·70

  21·50

  n.a.

  n.a.

  1987

  14·20

  23·90

  n.a.

  n.a.

  1988

  15·73

  24·77

  11·22

  13·77

  Notes:

  1. Rate rebate information is not collected for Scottish District Councils.

  2. 1983–87 based on sample information about recipients of Supplementary Benefit from local authorities in November or December.

  3. 1988 based on sample of all HB recipients on 31 May 1988.

NATIONAL FINANCE

  Banking Services Review
  Mr. Vaz
  To ask the Chancellor of the Exchequer if the Government has completed its consideration of the findings of the review committee of banking services law, published in February; and if he will make a statement on how these considerations will affect the banking ombudsman system.

  Mr. Ryder
  The Government are still considering a number of detailed comments on the review committee's
  149
  recommendations. The report was widely welcomed as presenting an extremely clear and comprehensive critique of the present law on banking services, but reservations were expressed about some of the recommendations. The Government are considering these comments very carefully in formulating their response.

  Currency Reserves
  Mr. Cohen
  To ask the Chancellor of the Exchequer if he will make it his practice to publish a report of major movements in the total and composition of the United Kingdom currency reserves; and if he will make a statement.

  Mr. Ryder
  The change in the level of the United Kingdom official reserves is published each month. I see no reason to change the practice of successive Governments regarding disclosure of details of the composition of the reserves.

  Cash Limits
  Mr. Nicholas Bennett
  To ask the Chancellor of the Exchequer whether there will be any changes to the Treasury's cash and running costs limits in 1989–90.

  Mr. Major
  Subject to parliamentary approval of the necessary supplementary estimate, the cash limit for class XIX, vote 11 will be increased by £1,004,000 from £55,779.000 to £56,783,000.

  This increase reflects the take-up of entitlement to carry forward underspending in 1988–89 under the end of year flexibility arrangements, as I announced on 20 July 1989 at columns 258–62. The full entitlement of £661,000 on capital expenditure is taken up together with £223,000 of the £302,000 entitlement on running costs. Additionally, it reflects an increase in expenditure of £35,000 by the History of Parliament Trust to meet the costs of additional research staff. These increases will be charged to the Reserve and will not therefore add to the planned total of public expenditure.

  There is also an increase in provision of £85,000 to meet the setting-up costs at Chessington computer centre prior to the take-on of new payroll work, which will be offset by corresponding decreases in running costs limits of other Departments, as well as an increase to meet the increased costs of services provided by the Government Actuary's Department, which will be offset by a corresponding payment from the Government Actuary's Department vote (class XIX, vote 4).

  As a result, the running costs limit of Her Majesty's Treasury will be increased by £308,000 from £74,944,000 to £75,252,000.

  Mr. Devlin
  To ask the Chancellor of the Exchequer whether any changes are proposed in the cash limit and running cost limit for 1989–90 for the Inland Revenue.

  Mr. Lilley
  Subject to parliamentary approval of the necessary supplementary estimate, the cash limit for class XIX vote 7 will be increased from £1,209,573,000 to £1,234,973,000 and the running cost limit from £1,174,692,000 to £1,202,092,000. The changes in running costs reflect the amount agreed for the Department under the running costs end-year flexibility scheme, and to enable the Department to meet its forecast work loads including 150
  setting up independent taxation. The increase will be charged to the Reserve and will not therefore add to the planning total of public expenditure.

  Civil Service Pay
  Mr. Evennett
  To ask the Chancellor of the Exchequer (1) if he will publish a list of the pay agreements in the Civil Service and in the public services sector which make reference to inter-quartile settlement levels in the private sector; if he will state the annual period of time used as the base period for such inter-quartile settlement figures and the gap of time before the effective date of pay increases under each agreement; and if he will state the approximate number of employees and the total annual pay bill under each agreement;

  (2) what is the longest period of time in any Civil Service or public services sector pay agreement between the relevant period of data collection, such as inter-quartile settlement levels in the private sector and the effective date of pay increases under the agreement; and if he will make a statement.

  Mr. Ryder
  There are now six long-term flexible pay agreements covering separate groups of staff in the Civil Service which take the inter-quartile range of settlements in the private sector as a negotiating constraint. There are no similar arrangements in the rest of the public services sector. The relevant inter-quartile range of pay settlements is available to the parties to the pay agreements approximately one month before the settlement date and takes account of pay settlements in the private sector over the previous 12 months.

  The six pay agreements in the Civil Service together with the number of employees on the basic pay bill covered by each is as follows:

  Main grades covered

  Number of employees

  1989–90 paybill £ million1

  1. Scientific and technical grades

  55,000

  755

  2. Departmental grades in the Inland Revenue

  60,000

  570

  3. Grades 5 to 7

  23,000

  585

  4. Executive and office support grades

  130,000

  1,625

  5. Clerical, typing and secretarial grades

  195,000

  1,350

  6. Industrial grades

  68,000

  590

  1 Estimate.

  Privatisation
  Mr. Meacher
  To ask the Chancellor of the Exchequer (1) what have been the total sums in debt and financial liabilities written off in each case of privatisation since 1979, both at current prices and at 1989 prices; and in each case how capital reconstruction altered the balance sheet in relation with the profit or loss position beforehand;

  (2) how much in write-offs was granted to each company and industry privatised since 1979; and how much is planned over the next three years.

  Mr. Peter Lilley
  [holding answers 18 and 19 October 1989]: The normal practice on privatization—of a nationalised industry or company wholly or majority owned by Government—is to repay, rather than write off debt. This repayment may be financed from the company's existing resources, the injection of new equity, or new debt

  151
  finance. In some cases, the Government provide the finance to repay debts, for example, by an equity injection. Such finance is shown in the relevant departmental

  National loan fund debt has been formally written off only in the following privatisation cases:

  Year

  Company

  Amount £

  1980–81

  National Freight Corporation (under Section 45 of the Transport Act 1980)

  100,000,000

  1982–83

  British Transport Docks Board (under Section 6(1) of the Transport Act 1981)

  81,293,616

  1984–85

  British Telecom (BT (Extinguishment of Loans) Order 1982)

  2,789,865,772

  1986–87

  BAA (under section 3 of the Airports Act 1986)

  43,503,340

  Details of the debt write-offs proposed for the 10 water plcs are set out in the reply by my hon. and learned Friend the Minister for Housing and Planning to my hon. Friend the Member for Cardiff, North (Mr. Jones) on 26 October 1989.

  These write-offs had no direct effect on public expenditure in as much as they represented a reconstruction of the balance sheets of the industries concerned. In each case, having had NLF debt written off, the successor company issued new securities to be held by the Secretary of State as assets of the Consolidated Fund pending realisation.

  Public dividend capital has been reduced in three privatisation cases:

  Year

  Company

  Amount £

  1980–81

  British Airways Board (under the Civil Aviation Act 1980 S1(1))

  160,000,000

  1980–81

  British Aerospace (under the British Aerospace Act 1980)

  60,000,000

  1988–89

  British Steel (under the British Steel Act 1988)

  500,000,000

  A further £3,480,000,000 of borrowing by British Steel under the Iron and Steel Act 1982 (S18(1)) was written off on privatisation.

  Details of the capital reconstruction of the companies concerned can be found in the individual prospectuses.

  Any further write-offs over the next three years will be announced at the time of a specific privatisation.

  Charity Shops
  Mr. Nicholas Winterton
  To ask the Chancellor of the Exchequer if he will make it his policy to oppose the proposed extension of value added tax to goods donated to charity shops.

  Mr. Ryder
  [holding answer 24 October 1989]: The Government have no plans to alter the VAT relief for donated goods sold by charity shops and will not accept any proposals from the EC Commission which affect the United Kingdom's ability to apply zero rates. Changes to EC tax law require unanimity, and there is no question of any unwelcome proposals being forced upon us.

  Interest Rates
  Mr. McLeish
  To ask the Chancellor of the Exchequer what were(a) the ratio of inflation and (b) the levels of interest rates in each of the EEC countries, Japan and the United States of America for the most recent dates for which figures are available.

  Mr. Ryder
  [holding answer 26 October 1989]: Following is the information requested:

  Inflation and short-term interest rates. in the EC, United States and Japan

  Short-term interest rates1

  12 month inflation rates excluding estimates of home-owners costs2

  United Kingdom

  15·1

  5·8

  United States

  8·5

  4·7

  Japan

  6·4

  3·0

  Germany

  8·2

  2·8

  France

  10·1

  3·4

  Italy

  13·0

  6·6

  Spain

  15·0

  7·4

  Netherlands

  8·2

  0·8

  Belgium

  9·7

  3·2

  Portugal

  12·9

  13·7

  Greece

  20·0

  13·6

  Denmark

  11·4

  3·2

  Ireland

  11·6

  3·7

  Luxembourg

  9·7

  3·4

  1 Figures refer to close 24 October, except for Portugal (September), Spain, Greece, Denmark, Ireland, Luxembourg (open 25 October).

  2 Figures refer to August, except for Italy and the United Kingdom (September), Netherlands and Spain (July) and Ireland (Q2).

  Source inflation rates estimated from OECD and national sources, interest rates from national sources.

  Manufacturing Output (East Midlands)
  Mr. Oppenheim
  To ask the Chancellor of the Exchequer by how much manufacturing output in the east midlands has changed since 1979.

  Mr. Norman Lamont
  [holding answer 26 October 1989]: Gross value added in manufacturing industry in the east midlands rose by 90 per cent. between 1979 and 1987, the latest year for which figures are available. The corresponding figure for the United Kingdom was 66 per cent.

  These figures measure changes in the value of output; changes in volume would be smaller.

  VAT
  Mr. Haselhurst
  To ask the Chancellor of the Exchequer what was the number of value added tax refund claims under Customs and Excise notice 719 processed during 1988–89.

  Mr. Ryder
  [holding answer 27 October 1989]: The number of claims under Customs and Excise notice 719 (Refund of VAT to Do-It-Yourself Builders) processed in 1988–89 was 9,052.

  Charities (Scotland)
  Mr. Home Robertson
  To ask the Chancellor of the Exchequer what changes will be required to the administrative arrangements and the requirements for
  153
  confidentiality in the Inland Revenue in order to implement the Government's proposals for the improved regulation of charities in Scotland.

  Mr. Lilley
  [holding answer 30 October 1989]: As my right hon. Friend the Secretary of State for Scotland announced on 23 October, legislation will be introduced to enable the Inland Revenue to disclose the names and addresses of bodies in Scotland which it has recognised as charitable for tax purposes. The rules of confidentiality under which the Inland Revenue normally operates will be modified for this specific purpose.

  When the legislation is enacted, arrangements will be made for members of the public to find out from the Inland Revenue claims branch in Edinburgh whether a body has been recognised by it as charitable for tax purposes.

  Statistics (Report)
  Mr. Flynn
  To ask the Chancellor of the Exchequer (1) if he will place in the Library a copy of the report, "Accessibility and Other Problems Relating to Statistics Used by Social Sciences" prepared by Professor Bernard Benjamin for the Economic and Social Research Council;

  (2) what are the conclusions of the report, "Accessibility and Other Problems Relating to Statistics Used by Social Sciences" prepared by Professor Bernard Benjamin for the Economic and Social Research Council on the quality of Government statistics collected by the Government statistical service since the Rayner review;

  (3) what are the principal conclusions on the education statistics made in the report, "Accessibility and Other Problems Relating to Statistics Used by Social Sciences" prepared by Professor Bernard Benjamin for the Economic and Social Research Council;

  (4) what are the principal conclusions on unemployment statistics made in the report, "Accessibility and Other Problems Relating to Statistics Used by Social Sciences" prepared by Professor Bernard Benjamin for the Economic and Social Research Council;

  (5) what is the reason for the delay in the publication of the report, "Accessibility and Other Problems Relating to Statistics Used by Social Sciences" prepared by Professor Bernard Benjamin for the Economic and Social Research Council;

  (6) what were the principal conclusions on the objectivity of Government statistical presentation made in the report, "Accessibility and Other Problems Relating to Statistics Used by Social Sciences" prepared by Professor Bernard Benjamin for the Economic and Social Research Council;

  (7) when he will authorise the publication of the report, "Accessibility and Other Problems Relating to Statistics Used by Social Sciences" prepared by Professor Bernard Benjamin for the Economic and Social Research Council;

  (8) when the report, "Accessibility and Other Problems Relating to Statistics Used by Social Sciences", prepared by Professor Bernard Benjamin for the Economic and Social Research Council was completed and presented for consideration.

  Mr. Lilley
  [holding answer 30 October 1989]: Professor Benjamin was commissioned by the Economic and Social Research Council (ESRC) to prepare a report for the ESRC and the Royal Statistical Society on the accessibility
  154
  and availability of official statistics for social science researchers. Questions on the conclusions and publication of the report are matters for these two bodies.

EMPLOYMENT

  Wages Councils
  Mr. Caborn
  To ask the Secretary of State for Employment if he has come to a decision on the future of wages councils.

  Mr. Nicholls
  No.

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

  Mr. Nicholls
  My right hon. Friend hopes to make an announcement shortly.

  Workplace Nurseries
  Miss Lestor
  To ask the Secretary for Employment what recent discussions he has had concerning workplace nurseries.

  Mr. Nicholls
  I have had discussions on child care, including the provision of workplace nurseries, with my advisory committee on women's employment. This committee includes the EOC chair, my hon. Friend the Member for Broxbourne (Mrs. Roe), the hon. Member for Barking (Ms. Richardson), representatives of the CBI, TUC and the Women's National Commission.

  I am also a member of the ministerial group on women's issues which has been looking at the whole question of child care.

  I have also had discussions on child care, including workplace nurseries, with the National Council for One Parent Families, the Working Mothers Association, the National Out of School Alliance, the Pre-School Playgroups Association and the National Childminding Association and have attended and spoken at a number of conferences dealing with these and related matters.

  Construction Workers (Safety)
  Mr. Blunkett
  To ask the Secretary of State for Employment what plans he has for improving the safety of workers on construction sites.

  Mr. Nicholls
  I shortly expect to bring before the House legislation to make the wearing of safety helmets on site compulsory. The HSC has recently published a consultative document setting out proposals for strengthening the management of health and safety on sites and HSE inspectors will be paying more attention to site management. The HSE has increased the number of inspectors dedicated to the construction industry and aims to have 100 by 1990.

  Training and Enterprise Councils
  Mr. Boyes
  To ask the Secretary of State for Employment what provision his Department has made for the provision of employment training and YTS under the training and enterprise councils.

  Mr. Eggar
  The Training Agency will contract with training and enterprise councils to deliver employment training and YTS in their areas.

  Mr. Gerald Bowden
  To ask the Secretary of State for Employment how many areas have now made applications to set up training and enterprise councils.

  Mr. Fowler
  To date, 40 applications for development funding from prospective training and enterprise councils have been received by the national training task force. A table that lists the areas from which applications have been received has been placed in the House of Commons Library.

  Mr. Brazier
  To ask the Secretary of State for Employment what progress is being made in establishing training and enterprise councils in the south-east; and if he will make a statement.

  Mr. Nicholls
  I have been very encouraged by the excellent response from employers in the south-east and throughout the country to our invitation to form training and enterprise councils. Some 40 groups of senior employers from around the country have applied for development funding of which six are from employer groups in the south-east.

  Mr. Tony Lloyd
  To ask the Secretary of State for Employment how his Department will monitor the spending of public funds by the training and enterprise councils.

  Mr. Nicholls
  Training and enterprise councils will be required to submit an income and expenditure account for each programme funded by my Department at the end of every four-week accounting period. In addition, TECs will be required to submit a balance sheet showing their financial position at the end of each accounting period.

  Dame Janet Fookes
  To ask the Secretary of State for Employment what progress is being made in establishing training and enterprise councils in the west country; and if he will make a statement.

  Mr. Nicholls
  My right hon. Friend has been very encouraged by the excellent response from employers in the west country and throughout the country to our invitation to form training and enterprise councils.

  Some 40 groups of senior employers from around the country have applied for development funding, of which four are from employer groups in the Training Agency's south-west region.

  Mr. Tom Clarke
  To ask the Secretary of State for Employment how he intends to ensure that training and enterprise councils provide a uniform quality of training provision throughout the United Kingdom.

  Mr. Nicholls
  In England and Wales, training and enterprise councils will arrange training provision within a broad national framework, to suit local circumstances. The TECs will be required to set out their strategy for 156
  delivering quality training in their corporate and business plans. In Scotland, local enterprise companies will have similar arrangements for ensuring quality training.

  Mr. Brandon-Bravo
  To ask the Secretary of State for Employment what progress is being made in establishing training and enterprise councils in the east midlands; and if he will make a statement.

  Mr. Nicholls
  My right hon. Friend has been very encouraged by the excellent response from employers in the east midlands and throughout the country to our invitation to form training and enterprise councils.

  Some 40 groups of senior employers from around the country have applied for development funding, of which three are from employer groups in the Training Agency's east midlands and eastern region.

  Mr. Soames
  To ask the Secretary of State for Employment what progress has been made in establishing training and enterprise councils; and if he will make a statement.

  Mr. Haselhurst
  To ask the Secretary of State for Employment what progress is being made in establishing training and enterprise councils; and if he will make a statement.

  Mr. Nicholls
  My right hon. Friend has been very encouraged by the excellent response from employers throughout the country to our invitation to form training and enterprise councils.

  A total of 40 groups of senior employers in England and Wales have applied for development funding, of which 31 have been approved; the table lists the areas from which we have had applications and indicates their status.

  List of training and enterprise councils that have applied for development funding at 23 October

  Status

  South East

  Milton Keynes

  Approved

  Hertfordshire

  Approved

  Essex

  Approved

  Hampshire

  Approved

  Isle of Wight

  Approved

  Thames Valley

  Approved

  London

  Kingston/Merton

  Approved

  London East

  Under consideration

  South West

  Devon/Cornwall

  Approved

  Dorset

  Approved

  Somerset

  Approved

  Avon

  Under consideration

  West Midlands

  Birmingham

  Approved

  Walsall

  Approved

  Staffordshire

  Approved

  Coventry/Warwickshire

  Under consideration

  Dudley

  Under consideration

  East Midlands and Eastern

  North Nottinghamshire

  Approved

  Norfolk/Waveney

  Approved

  Suffolk

  Under consideration

  Yorkshire and Humberside

  Sheffield

  Approved

  Calderdale/Kirklees

  Approved

  North Yorkshire

  Approved

  157

  Status

  Rotherham

  Approved

  North West

  Cumbria

  Approved

  East Lancashire

  Approved

  Rochdale

  Approved

  Oldham

  Approved

  South and East Cheshire

  Approved

  Wigan

  Approved

  Manchester

  Under consideration

  Stockport/High Peak

  Under consideration

  Northern

  Teeside

  Approved

  Tyneside

  Approved

  Wearside

  Approved

  County Durham

  Under consideration

  Northumberland

  Under consideration

  Wales

  Mid Glamorgan

  Approved

  North East Wales

  Approved

  West Wales

  Approved

  Ms. Mowlam
  To ask the Secretary of State for Employment how training and enterprise councils will respond to the interests of small firms and voluntary organisations within the local community.

  Mr. Nicholls
  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 range of organisations and individuals, including employers of all sizes and voluntary organisations, will be vital to this assessment.

  Mr. Lord
  To ask the Secretary of State for Employment what progress is being made in establishing training and enterprise councils in East Anglia; and if he will make a statement.

  Mr. Nicholls
  My right hon. Friend has been very encouraged by the excellent response from employers in East Anglia and throughout the country to our invitation to form training and enterprise councils. A total of 40 groups of senior employers in England and Wales have applied for development funding, of which three are from the East Anglia area.

  Mr. Waller
  To ask the Secretary of State for Employment if he will make a statement on the small business support programmes of the training and enterprise councils.

  Mr. Nicholls
  Training and enterprise councils will be directly responsible for the major current programmes which help small firms and promote self-employment. These include the enterprise allowance scheme, business growth training, enterprise in employment training and counselling for small firms in England. Some training and enterprise councils are also being invited to run elements of the Department of Trade and Industry's enterprise initiative. The councils will also be able to use their local initiative fund to strengthen and expand existing programmes and services or to finance new initiatives to support business growth and enterprise.

  EC Social Charter
  Mr. David Martin
  To ask the Secretary of State for Employment if he will make a statement on the latest position concerning the European social charter.

  Mr. Ian Taylor
  To ask the Secretary of State for Employment what response his Department has made to the European Commission's draft social charter.

  Mr. Richard Shepherd
  To ask the Secretary of State for Employment whether he has received any representations about the effect on employment of the European Commission's proposed social charter.

  Dr. Goodson-Wickes
  To ask the Secretary of State for Employment whether he has received any further representation on the social charter; and if he will make a statement.

  Mr. Hind
  To ask the Secretary of State for Employment if he will make a statement on the progress on the negotiations between European Community Employment Ministers on the social charter.

  Mr. Fowler
  I refer my hon. Friends to the reply I gave to my hon. Friend the Member for Romsey and Waterside (Mr. Colvin) earlier today.

  Mr. Irvine
  To ask the Secretary of State for Employment whether he plans to have further discussions with his European counterparts concerning the proposed European social charter; and if he will make a statement.

  Mr. Eggar
  I will next meet my counterparts in the European Community at the meeting of Labour and Social Affairs Ministers on 30 November. The European Commission's proposal for a social charter is not presently on the agenda of that meeting.

  Mr. Teddy Taylor
  To ask the Secretary of State for Employment if the Commission of the EEC has yet notified member states as to whether it intends to present social charter directives to be determined by majority vote; and if he will make a statement.

  Mr. Eggar
  The European Commission has indicated its intention to present an action programme of social measures to the Council of Ministers before the end of the year. The Commission has not yet notified member states of the voting arrangements of any directives which they may bring forward.

  Public Sector Strikes
  Mr. Ralph Howell
  To ask the Secretary of State for Employment whether he has received any recent representations about strikes in the public sector; and if he will make a statement.

  Mr. Eggar
  Representations have been received from a variety of organisations. The Government are reviewing the law on industrial action. Proposals made in the Green Paper "Unofficial Action and the Law" aim to discourage "wildcat" action in public and private sectors alike.

  Mr. Patrick Thompson
  To ask the Secretary of State for Employment what steps he is taking to combat strikes in the public sector; and if he will make a statement.

  Mr. Nicholls
  The Government are reviewing the law on industrial action. Proposals made in the Green Paper "Unofficial Action and the Law" aim to discourage "wildcat" action in public and private sectors alike.

  Training
  Mr. Day
  To ask the Secretary of State for Employment how many people have completed the new entrants training scheme to date.

  Mr. Nicholls
  It is estimated that 239,000 people had left employment training by the end of September 1989, the latest date for which information is available. We cannot say at present how many of these people had completed their planned training.

  Mr. Eastham
  To ask the Secretary of State for Employment how his Department intends to encourage training provision for those aged 16 to 19 years in employment.

  Mr. Nicholls
  Training and enterprise councils will pursue the Government's aim that all young people in the labour market participate in vocational training leading to recognised qualifications.

  The opportunity to undertake training is already available to all young people eligible for YTS. As the number of school leavers diminishes those seeking jobs will be looking for jobs with training. Now is the right time for all employers recruiting young people to take advantage of YTS and give a real commitment to training.

  Mr. Lofthouse
  To ask the Secretary of State for Employment how his Department intends to encourage the numbers of trainees and apprentices in manufacturing industry.

  Mr. Nicholls
  Many employers in manufacturing participate in YTS for training young people, including apprentices. The Government will continue to encourage employers to make quality, vocational training available to all young people as the best way of meeting the skill needs of the modern economy.

  Dr. Reid
  To ask the Secretary of State for Employment how his Department will encourage the provision of training to those persons aged 25 years and over.

  Mr. Nicholls
  Responsibility for training for employed people rests primarily with employers and individuals. Training and enterprise councils will have a key role to play in encouraging employers to train the whole of their work force throughout working life. The business growth training programme and other measures taken by my Department to raise employers' awareness of the importance of training will help in this. My Department will continue to develop employment training as a quality training programme which is available to people aged 25 and over who are eligible.

  Mr. Clelland
  To ask the Secretary of State for Employment what steps he is taking to encourage private employers to provide more extensive training opportunities.

  Mr. Dunnachie
  To ask the Secretary of State for Employment how he intends to encourage the provision of training by employers.

  Mr. Nicholls
  Training and enterprise councils in England and Wales and local enterprise companies in Scotland will ensure that private sector employers lead 160
  Britain's training effort into the 1990s. They will increase employer commitment to training and will use private and public resources. In particular they will support employers through business growth training.

  Labour Statistics>
  Mr. Dickens
  To ask the Secretary of State for Employment if he will make a statement on the number of people in full-time employment.

  Mr. Fowler
  In June 1989 the number of people in full-time employment in Great Britain was 19,482,000, an increase of over a quarter of a million since June 1988.

  Mr. Ken Hargreaves
  To ask the Secretary of State for Employment in which regions of the United Kingdom the unemployment rate has fallen most rapidly over the last 12 months; and if he will make a statement.

  Mr. Nicholls
  In the 12 months to September 1989 the region which experienced the largest fall in the seasonally adjusted unemployment rate was west midlands which fell by 2·5 percentage points to 6 per cent. followed by the north and Wales which both fell by 2·4 percentage points to 9·3 and 7·2 per cent. respectively. This compares with a fall of 1·8 percentage points in the United Kingdom in the last 12 months to 6 per cent.

  Mr. Hardy
  To ask the Secretary of State for Employment if he will consider introducing arrangements to allow independent scrutiny of unemployment statistics.

  Mr. Nicholls
  Details of the methodologies used to compile this Department's unemployment statistics are well documented and in the public domain.

  Mr. Speller
  To ask the Secretary of State for Employment if he will detail the unemployment figures for the Barnstaple and Ilfracombe travel-to-work area for August 1979, August 1984 and August 1989, respectively.

  Mr. Nicholls
  The table shows the number of unemployed claimants in the Barnstaple and Ilfracombe travel-to-work area in August 1989 and August 1984, along with the number of unemployed registrants in the Barnstaple and Ilfracombe jobcentre-based travel-to-work areas in August 1979. The figures are affected by the changes in the boundaries of travel-to-work areas as well as the changes in the coverage of the unemployment count.

  Barnstaple and Ilfracombe Travel to Work Area Unemployed Claimants

  Total

  Rate1

  August 1984

  2,906

  12·4

  August 1989

  1,517

  6·0

  Barnstaple and Ilfracombe Jobcentre Travel-to-work Areas Unemployed Registrants—August 1979

  Total

  Rate1

  Barnstaple

  1,178

  5·3

  Ilfracombe

  242

  5·6

  And for these areas together

  1,420

  5·3

  1 Unemployed expressed as a percentage of employees-in-employment and the unemployed. Workforce based unemployment rates for small areas are not available prior to 1983.

  Mr. Burt
  To ask the Secretary of State for Employment what has been the average monthly fall in the number of long-term unemployed aged under 25 in the last five years; and if he will make a statement.
  161
  Mr. Nicholls
  Unemployment figures by age and duration are calculated on a quarterly basis. Between July 1984 and July 1989, the number of unemployed claimants aged 18 to 24 years in the United Kingdom who had been unemployed for one year or more fell by an average of 11,142 per quarter. This comparison is affected by the change in compilation of the count in March 1986 to reduce over-recording and by the change in benefit regulations for under 18-year-olds in September 1988.

  Mr. Devlin
  To ask the Secretary of State for Employment if he will make a statement about the fall in unemployment in the northern region.

  Mr. Nicholls
  In the 12 months to September 1989 the level of unemployment, seasonally adjusted, in the north fell by 35,000 or 28·9 per cent., on a consistent basis. Unemployment in the north is now at its lowest level for nearly nine years, as it is in the country as a whole.

  Mr. Roger King
  To ask the Secretary of State for Employment what is the level of job vacancies currently notified to his Department in the Birmingham travel-to-work area; and what was the figure 12 months ago.

  Mr. Nicholls
  In September 1989 the number of notified vacancies at jobcentres in the Birmingham travel-to-work area was 6,021 compared to 4,689 12 months ago. Vacancies at jobcentres do not represent the total number of vacancies in the economy. Research shows that nationally only about one third of vacancies are notified to jobcentres; however a recent survey covering part of the west midlands region shows that the stock of vacancies held at jobcentres in this area is about one quarter of the total.

  Mr. Pawsey
  To ask the Secretary of State for Employment what is the level of unemployment in the Rugby and Daventry travel-to-work area.

  Mr. Nicholls
  In September 1989 in the Rugby and Daventry travel-to-work area there were 1,935 unemployed claimants or 3·3 per cent. of the estimated total work force.

  Mr. Knox
  To ask the Secretary of State for Employment how many days were lost in industrial disputes(a) in the most recent 12-month period for which figures are available and (b) in 1978.

  Mr. Nicholls
  A total of 4,568,000 working days were lost through stoppages of work due to industrial disputes in the most recent 12-month period ending in August 1989. In 1978, a total of 9,405,000 working days were lost.

  Mr. Oppenheim
  To ask the Secretary of State for Employment how many people in Derbyshire are currently unemployed; and by what percentage this figure has changed in the last year.

  Mr. Nicholls
  [holding answer 26 October 1989]: In September 1989 the number of unemployed claimants in Derbyshire was 25,859. This compares to a total of 38,275 in September 1988, a fall of 32·4 per cent.

  These unadjusted unemployment figures are slightly affected by the change in benefit regulations for under 18-year-olds in September 1988.

  Health and Safety Executive
  Mr. Dalyell
  To ask the Secretary of State for Employment what representations he has had from trade unions about the understaffing of the Health and Safety Executive.

  Mr. Nicholls
  Since the beginning of 1989, my right hon. Friend has had representations about the staffing of the Health and Safety Executive from the Scottish Trades Union Congress (STUC), the Union of Construction, Allied Trades and Technicians (UCATT), and the Confederation of Shipbuilding and Engineering Unions (CSEU).

  Mr Cryer
  To ask the Secretary of State for Employment if he will make a statement on the number of inspectors employed by the Health and Safety Executive.

  Mr. Nicholls
  On 1 October 1989, a total of 1,204·5 inspectors were in post in the Health and Safety Executive. The executive plans to increase the total number of inspectors employed to 1,277 by 1 April 1990.

  Mr. Andrew F. Bennett
  To ask the Secretary of State for Employment how many members of the Health and Safety Executive's management board possess(a) professional management or (b) professional accounting qualifications.

  Mr. Nicholls
  One member of the Health and Safety Executive management board holds a professional management qualification. None of the members holds a professional accounting qualification.

  Mr. Andrew F. Bennett
  To ask the Secretary of State for Employment how many staff, and of which grades, are employed in the Health and Safety Executive's press department.

  Mr. Nicholls
  The number of staff and their grades employed in the Health and Safety Executive press department as at 1 October 1989 is as follows:

  1 Grade 7

  5 Senior Press Officers (SIO Grade)

  2 Press Officers (IO Grade)

  1 Executive Officer

  1 Administrative Officer

  1 Administrative Assistant

  1 Personal Secretary

  1 Part-time Personal Secretary

  Health and Safety Commission
  Mr. Andrew F. Bennett
  To ask the Secretary of State for Employment when he expects to appoint the ninth Health and Safety Commission commissioner.

  Mr. Nicholls
  On 29 September my right hon. Friend announced his intention to replace a member of the commission, who had indicated that he was unable to continue as a commissioner, and reappoint the remaining seven commissioners for a further period of six months. In the interim, my right hon. Friend will consider reconstituting the commission, and bearing in mind the increasingly important role played by the commission, he is giving consideration to the appointment of a ninth member. My right hon. Friend will announce the new appointments early next year.

  YTS
  Mr. Squire
  To ask the Secretary of State for Employment whether all persons aged 16 years who seek a YTS place are now offered one.

  Mr. Nicholls
  Under the Government's guarantee over 500,000 places are available to YTS eligible young people aged 16 and 17. Young people should consult the careers service to see which particular training place is suitable for them. If there are particular difficulties in individual cases careers officers have been asked to approach the Training Agency for assistance as necessary.

  Mr. Strang
  To ask the Secretary of State for Employment what steps he is taking to reduce the accident rate among peope while participating in YTS.

  Mr. Nicholls
  I am introducing a more vigorous description of health and safety arrangements as part of the YTS contract, and also an improved approach to monitoring which reflects assessment of the degree of risk. I have also set up two exercises to assist with further policy development. An independent study of the YTS accident statistics has been set up which will be published in the spring of next year, and a review of general YTS health and safety arrangements by the Training Agency and HSE is now in progress.

  Mr. McAllion
  To ask the Secretary of State for Employment what steps he is taking to ensure that sufficient YTS places exist throughout the United Kingdom for those aged 16 and 17 years seeking such a place.

  Mr. Nicholls
  Particular care is taken to ensure that there are enough YTS places to meet demand throughout the year. There are currently close to 400,000 young people in YTS. My Department has in total contracted with managing agents for over 500,000 places to be available.

  Employment Training
  Mr. Wallace
  To ask the Secretary of State for Employment how many local authorities have withdrawn from employment training; and if he will make a statement.

  Mr. Nicholls
  Seven local authorities have withdrawn from employment training. These are: Barrow borough council; Rochdale metropolitan borough council; Wolverhampton metropolitan borough council; Nottinghamshire county council and Cleveland county council, which withdrew because of political decisions; and London borough of Merton and London borough of Barnet, which withdrew because of operational difficulties.

  Mr. Ron Davies
  To ask the Secretary of State for Employment when he expects to grant approved training organisation status to employment training agents and managers.

  Table 1

  Referrals to employment training from restart interviews: May 1989 to August 1989

  Employment service region

  May

  June

  July

  August

  London and South East

  5,700

  7,200

  5,300

  5,900

  South West

  1,200

  1,100

  1,000

  1,000

  West Midlands

  3,800

  3,900

  3,300

  3,500

  East Midlands and Eastern

  2,400

  3,000

  2,200

  2,200

  Yorkshire and Humberside

  2,800

  3,200

  2,600

  2,800

  North West

  4,100

  5,000

  4,300

  4,100

  Northern

  2,600

  3,200

  2,300

  2,700

  164
  Mr. Nicholls
  Approved status will be granted to the first groups of employment training agents and managers during April and May 1990.

  Mr. O'Brien
  To ask the Secretary of State for Employment what representations he has received from individuals or organisations over participants in the Government's employment training scheme leaving the scheme before completing their training programme; and if he will make a statement.

  Mr. Nicholls
  My Department has received various representations about employment training. These all receive careful consideration. Many people leave employment training in order to take jobs, though it is possible to continue the training while being employed.

  Mr. Flynn
  To ask the Secretary of State for Employment how many employment training trainees have received the full or part of the training bonus.

  Mr. Nicholls
  Information is not yet available on the number of trainees receiving training bonuses.

  Mr. Parry
  To ask the Secretary of State for Employment if he will list the names of those employment training training agents that have been given approved status since the inception of employment training.

  Mr. Nicholls
  No employment training training agents have yet been granted approved status. All organisations that have applied to become training agents have until September 1990 to satisfy the rigorous criteria for gaining approved status.

  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 the latest available four months for employment training showing(a) the number of referrals to employment training from Restart interviews, (b) the number of employment training action plans completed, (c) the number of starts with employment training training managers, (d) the number of employment training filled places and (e) the number of profiled or contracted employment training places.

  Mr. Nicholls
  Information on the numbers of referrals to employment training from restart interviews are given in table 1. The numbers of action plans agreed at training agents are given in table 2. The numbers of starts and filled places are given in tables 3 and 4. The numbers of contracted places as at 30 September, the only date for which information is available, are given in table 5.
  165

  Employment service region

  May

  June

  July

  August

  Wales

  1,900

  2,100

  1,700

  1,500

  Scotland

  5,000

  6,500

  4,000

  4,600

  Great Britain

  29,500

  35,200

  26,900

  28,300

  Table 2

  Employment training action plans agreed at training agents: June 1988 to September 1989

  Training agency region

  June

  July

  August

  September

  South East

  3,200

  3,500

  2,900

  3,600

  London

  4,700

  4,200

  4,400

  5,000

  South West

  2,200

  1,800

  1,800

  2,800

  West Midlands

  4,500

  4,300

  3,900

  5,200

  East Midlands and Eastern

  3,400

  3,100

  3,100

  3,000

  Yorkshire and Humberside

  4,800

  4,700

  4,600

  6,300

  North West

  6,400

  6,000

  5,600

  6,600

  Northern

  4,700

  4,000

  3,900

  5,100

  Wales

  2,700

  2,300

  2,200

  3,200

  Scotland

  6,200

  4,500

  5,500

  6,400

  Great Britain

  42,800

  38,200

  37,900

  47,700

  Table 3

  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

  Table 4

  Employment training filled places: June 1988 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

  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

  204,000

  208,000

  Table 5

  Employment training contracted places: 30 September 1989

  Training agency region

  September

  South East

  16,700

  London

  22,800

  South West

  13,500

  West Midlands

  28,500

  East Midlands and Eastern

  17,800

  Yorkshire and Humberside

  29,100

  North West

  36,800

  Northern

  27,000

  Wales

  20,900

  Scotland

  31,200

  Great Britain

  244,000

  166
  Mr. McFall
  To ask the Secretary of State for Employment what is the nature of the relationship between employment training training managers and local education authorities.

  Mr. Nicholls
  Local education authorities, like any other organizations, may apply to become either training agents or training managers within employment training. They may also choose to act as subcontractors to training managers.

  Mr. Jack
  To ask the Secretary of State for Employment how many people are currently undertaking employment training in the north-west of England.
  167
  Mr. Nicholls
  On 13 October, the latest date for which information is available, there were 28,800 people on employment training in the north-west of England.

  Cooling-off Periods
  Mr. Menzies Campbell
  To ask the Secretary of State for Employment if he will make a statement about his proposals for statutory cooling-off periods in industrial disputes.

  Mr. Nicholls
  The Government are reviewing the law on industrial action.

  Manufacturing Productivity
  Mr. Jacques Arnold
  To ask the Secretary of State for Employment what has been the average annual growth in manufacturing productivity since 1980 in(a) the United Kingdom and (b) and other Organisation for Economic Co-operation and Development countries.

  Mr. Eggar
  The information requested is as follows:

  Manufacturing output per person employed1 1980–1988

  Country

  Annual average percentage change

  Ireland

  9·8

  Luxembourg

  6·1

  Portugal

  5·6

  United Kingdom

  5·3

  Austria

  4·4

  Finland

  4·4

  Belgium

  4·2

  United States

  4·1

  Italy

  3·8

  Canada

  3·6

  Spain

  3·3

  France

  3·1

  Japan

  3·1

  Netherlands

  3·0

  Norway

  2·8

  Sweden

  2·7

  Switzerland

  2·6

  Germany

  2·2

  Australia

  2·1

  Denmark

  0·6

  Greece

  0·5

  1 Exact coverage differs between countries.

  Source: OECD; IMF; CSO.

  Unofficial Strikes
  Mr. Tracey
  To ask the Secretary of State for Employment whether he has received any representations about unofficial strikes; and if he will make a statement.

  Mr. Nicholls
  My right hon. Friend has received a number of representations on unofficial industrial action from a wide variety of sources. Proposals for reform of industrial relations law to limit the scope for such action have been made in the Green Paper "Unofficial Action and the Law" (Cm. 821).

  Mr. Nicholas Bennett
  To ask the Secretary of State for Employment what plans he has to introduce legislation to enable employers to dismiss employees who have taken part in unofficial industrial action; and if he will make a statement.

  Mr. Nicholls
  The Green Paper "Unofficial Action and the Law" (Cm. 821) proposes changes to industrial 168
  relations and trade union law to discourage wildcat industrial action. It includes proposals which would allow greater freedom for employers to dismiss those who choose to take unofficial industrial action.

  Mr. David Evans
  To ask the Secretary of State for Employment when he intends to introduce his proposals to reform the law covering unofficial strike action.

  Mr. Nicholls
  These proposals were published for public consultation in the Green Paper "Unofficial Action and the Law" (Cm. 821), which invites comments by 1 December.

  Mr. Madel
  To ask the Secretary of State for Employment whether he plans to meet representatives of the Trades Union Congress to discuss forthcoming legislation on unofficial strikes; and if he will make a statement.

  Mr. Nicholls
  My right hon. Friend regularly meets representatives of the Trades Union Congress to discuss a wide range of employment issues. He has no current plans for such a meeting.

  Mr. Irving
  To ask the Secretary of State for Employment if he has any plans to make unofficial strikes illegal; and if he will make a statement.

  Mr. Eggar
  Unofficial, "wildcat" industrial action is a deep-rooted and long-standing industrial relations problem. It can cause disproportionate damage to businesses and to jobs because of its unpredictable and disruptive nature. It can also cause serious inconvenience to the general public, as in the industrial action affecting the London Underground and British Rail last summer.

  The Green Paper "Unofficial Action and the Law" proposes a number of changes in the law to discourage wildcat industrial action, by extending union responsibility and giving employers greater freedom to dismiss those taking unofficial action.

  Skills Training
  Mrs. Margaret Ewing
  To ask the Secretary of State for Employment what further measures he is considering to upgrade the skills of young people.

  Mr. Andrew Welsh
  To ask the Secretary of State for Employment what further measures he is considering to upgrade the skills of young persons.

  Mr. Sillars
  To ask the Secretary of State for Employment what further measures he is considering to upgrade the skills of young persons.

  Mr. Salmond
  To ask the Secretary of State for Employment what further measures he is considering to upgrade the skills of young persons.

  Mr. Nicholls
  The White Paper "Employment for the 1990s" (Cm. 540) announced the formation of local enterprise companies in Scotland and training and enterprise councils in England and Wales. These are being given the task of assessing the key skill needs, prospects for expanded job growth and the adequacy of existing training arrangements in their local labour market. It will be for the councils to develop strategies and measures that will meet the higher skill needs of the economy.
  169
  The White Paper also stated that YTS would be reviewed in the light of the changing labour market. I shall announce shortly the results of this review.

  Enterprise Allowance Scheme
  Mrs. Peacock
  To ask the Secretary of State for Employment what assessment he has made of whether the enterprise allowance scheme provides value for money in creating new jobs; and if he will make a statement.

  Mr. Eggar
  The efficiency unit and the National Audit Office have both endorsed the scheme as a value-for-money employment measure. Survey evidence shows that 65 per cent. of those people who complete their year in the scheme are still operating their business three years after start-up. These same surveys also show that for every 100 businesses still trading at this stage 114 additional jobs have been created.

  Mr. Rowe
  To ask the Secretary of State for Employment how many people have participated in the enterprise allowance scheme since its launch in 1983.

  Mr. Eggar
  Over 470,000 people have participated in the enterprise allowance scheme since it began in 1982.

  Benefit Fraud
  Mr. Harris
  To ask the Secretary of State for Employment how many people have been found to be signing for benefit while working during each of the last five years; and if he will make a statement.

  Mr. Eggar
  The number of people who have withdrawn their claims to benefit as a result of investigations by this Department's fraud investigators over the last five years is as follows:

  Number

  1984–85

  22,500

  1985–86

  37,500

  1986–87

  59,500

  1987–88

  80,000

  1988–89

  86,895

  Mr. David Nicholson
  To ask the Secretary of State for Employment if he will make a statement on his Department's exercise on the south coast of England to detect benefit fraud among seasonal workers in the tourism industry.

  Mr. Eggar
  The south coast exercise, which was carried out between May and September 1989 and covered the area from Worthing to the New Forest, investigated possible benefit fraud amongst seasonal workers in the tourism industry. A total of 2,380 investigations were undertaken with 634 people withdrawing their claims to benefit. This resulted in net benefit savings of £487,750 and 31 prosecution cases, two of which are collusive employers.

  Electrical Engineering (Skill Shortages)
  Mr. Corbett
  To ask the Secretary of State for Employment if he will make a statement on skill shortages in electrical engineering.

  Mr. Nicholls
  The growth in the economy during recent years, along with new technological developments, has 170
  created a strong demand for staff in the electrical engineering industry, especially those at technician and professional levels. The Government's response to meeting skill needs is set out in the White Paper "Employment in the 1990's" (Cm. 540).

  Unemployment Benefit (Merseyside)
  Mr. Loyden
  To ask the Secretary of State for Employment if he will give the number of persons whose entitlement to unemployment benefit was disallowed because they were considered not to be available for work in the adjudication area covering Merseyside for each quarter since June 1988.

  Mr. Eggar
  The table shows the number of persons whose entitlement to unemployment benefit was disallowed because they were considered not to be available for work for the period and area requested.

  Quarter ending

  Number disallowed

  30 June 1988

  160

  30 September 1988

  118

  31 December 1988

  142

  31 March 1989

  146

  30 June 1989

  106

  30 September 1989

  136

  Unemployment Surveys
  Mr. Carrington
  To ask the Secretary of State for Employment whether he will be commissioning any further surveys into long-term unemployment in certain areas of the United Kingdom; and if he will make a statement.

  Mr. Nicholls
  Surveys of both longer-term unemployed people and employers in the Bristol area have been commissioned in partnership with the Bristol urban development corporation and interviews are currently taking place. There are no plans at present for further surveys in other areas.

  Secondary Industrial Action
  Dr. Michael Clark
  To ask the Secretary of Stale for Employment if he has any plans to legalise secondary action.

  Mr. Nicholls
  No. The March 1989 Green Paper "Removing Barriers to Employment" (Cm. 655) proposes changes to the present law to make it unlawful to induce industrial action by workers of an employer not party to a trade dispute except in the case of lawful picketing.

  Unemployed Benefit Claimants
  Mr. Orme
  To ask the Secretary of State for Employment if he will make a statement regarding the new test that unemployment benefit claimants have to satisfy proving they are actively seeking work.

  Mr. Eggar
  The "actively seeking employment" condition applies to all claimants and will normally be satisfied by a simple declaration when a person claims benefit—usually fortnightly. It is too early to provide any figures for the number of those interviewed about their job search by employment service counsellors. This change is a timely and appropriate modernisation of unemployment benefit law.

  Aberdeen Journals Limited
  Mr. Kennedy
  To ask the Secretary of State for Employment if he has considered the implications for his legislative programme arising from the developments in the industrial dispute between Aberdeen Journals Ltd. and the National Union of Journalists; and if he will make a statement.

  Mr. Nicholls
  There are no such implications.

  Job Clubs
  Mr. David Davis
  To ask the Secretary of State for Employment what plans he has to introduce specialist job clubs for specific industries; and if he will make a statement.

  Mr. Eggar
  I have no plans to introduce further job clubs for specific industries. In general job clubs work best by having members from different backgrounds working together to find jobs.

  There are currently three job clubs, in London, Birmingham and Manchester, which specialise in helping people seeking work in the hotel and catering industry. It is too early to assess the results they are achieving.

  I am pleased with the continuing success of the job club programme, with over 54,000 people being helped so far this financial year; 54 per cent. have gone into jobs and 14 per cent. into other positive outcomes, including training, further education and self-employment.

  Pensioners (Employment)
  Mr. Andrew Mitchell
  To ask the Secretary of State for Employment what advice his Department is issuing to employers about employing those drawing retirement pension.

  Mr. Nicholls
  The Government believe that employers should see older workers as a valuable resource. Demographic trends mean it is more important than ever that employers use the talents which older workers can contribute to the economy. Although recruitment decisions must be left to employers, in making them they should not discriminate unfairly on age grounds. They should also be considering how best to use workers who want to continue beyond retirement pension age. We are putting these messages across to employers through various media, thus creating opportunities for workers over retirement pension age to remain in or return to employment if they so wish.

  Vocational Qualifications
  Mr. Nigel Griffiths
  To ask the Secretary of State for Employment if he will make a statement on those achieving vocational qualifications in retail business in the United Kingdom.

  Mr. Nicholls
  The number achieving full retail vocational qualifications in the United Kingdom during the academic year 1988–89 was 11,536. In addition, the Scottish Vocational Education Council awarded 7,332 modules for retail distribution.

  Mrs. Mahon
  To ask the Secretary of State for Employment how his Department intends to increase the numbers of those achieving vocational qualifications in clothing in Britain.
  172
  Mr. Nicholls
  Work on national vocational qualifications (NVQs) for the clothing industry is being co-ordinated by the clothing and allied products industry training board (CAPITB).

  With encouragement from the then Manpower Services Commission, the CAPITB was among the first industry training boards to develop NVQs based on occupational standards. There are already considerable numbers of young people training towards NVQs as machinists, an occupation in which previously few employees were qualified. The Training Agency of the Employment Department has required that those on YTS for machining occupations within the clothing industry are given the opportunity of working towards the NVQ or credit towards it.

  In addition, the CAPITB is receiving specialist advice and a substantial amount of money via the Training Agency's standards programme to assist it to develop high-quality NVQs which reflect the competences employees need to work in other areas of the industry such as cutting and pressing.

  Skills Training Agency
  Ms. Armstrong
  To ask the Secretary of State for Employment what progress his Department is making towards the privatisation of the Skills Training Agency.

  Mr. Nicholls
  An advertisement about the offer of the Skills Training Agency (STA) for sale appeared in the press in September. The response to the advertisement has been encouraging. My sale advisers, Deloitte Corporate Finance, have issued over 100 copies of an information memorandum about STA to potential bidders who have signed a confidentiality undertaking. The next stage of the sale process will be to draw up a shortlist of bidders whose intentions are to run a training business.

  Disabled People (Employment)
  Mr. Ashley
  To ask the Secretary of State for Employment if he is planning any new initiatives to increase employment opportunities for disabled people.

  Mr. Eggar
  The Department's general employment and training programmes are designed to help meet the needs of as many people with disabilities as possible. They are supplemented as necessary by a range of provision specifically for people with disabilities including sheltered employment for those with severe disabilities. These programmes are the subject of a review, the results of which will be made available as soon as possible.

  Industrial Action (Ballots)
  Mr. Knowles
  To ask the Secretary of State for Employment what responses he has received on the draft statutory code of practice on industrial action balloting; and if he will make a statement.

  Mr. Nicholls
  Various representations were received on the draft code of practice on industrial action balloting during the public consultation period. A modified draft was laid before Parliament on 7 September, and approval for its issue will be sought.

  Trade Unions (Sequestration of Assets)
  Mr. Andy Stewart
  To ask the Secretary of State for Employment what representations he has received seeking repeal of the legislation on sequestration of union assets; and if he will make a statement.

  Mr. Nicholls
  The Government receive representations on various aspects of industrial relations law from a variety of sources. Sequestration is a penalty that may be imposed by courts, where appropriate, for contempt of court. There is no specific employment law for the sequestration of union assets

  Staff Dispersal
  Mr. Hague
  To ask the Secretary of State for Employment what progress his Department has made in relocating its staff from London to the regions.

  Mr. Eggar
  On 3 August 1989 I announced that 1,100 jobs from my Department's headquarters in London and Watford would be moved to Runcorn and Sheffield over the next two to three years. I can report to this House that good progress is being made and the first phase of the move will begin, on schedule, in spring 1990.

  Industrial Disputes (Legal Action)
  Miss Emma Nicholson
  To ask the Secretary of State for Employment what representations he has received seeking the transfer from the High Court to tribunals of consideration of industrial disputes; and if he will make a statement.

  Mr. Nicholls
  Various representations about industrial relations law are received from a variety of sources. Industrial tribunals currently have jurisdiction to determine complaints about certain individual employment protection rights and other matters which may relate to industrial disputes.

  Strikes
  Mr. Tim Smith
  To ask the Secretary of State for Employment how many strikes there have been(a) in the public sector and (b) in the private sector on average over the last 10 years; and if he will make a statement.

  Mr. Nicholls
  In the 10 years to 1988 the annual average of recorded stoppages of work due to industrial disputes in the public sector was 541 while in the private sector the average was 720. These statistics exclude stoppages of work involving fewer than 10 workers or lasting less than one day unless the total number of working days lost in the stoppage is greater than 100. This exclusion will have a smaller effect on the public sector figures where the negotiating groups tend to be larger.

  Women Workers
  Mrs. Maureen Hicks
  To ask the Secretary of State for Employment what steps are being considered to attract women back to work.

  Mr. Nicholls
  The Government are already taking many steps to help women who choose to work to do so while continuing to recognise that women who choose not to do so are doing an equally valuable job in looking after the family at home.
  174
  All Government schemes to help the unemployed, to help the inner cities and to help people set up their own businesses are open equally to women and men. These include Restart courses, job clubs, employment training, inner cities, the enterprise allowance scheme and job share—which is particularly attractive to women returning to work after a career break.

  Job clubs are open to all who have been out of work for six months whether or not in receipt of benefit, and attendance times can be varied to suit domestic requirements.

  My Department's employment service has also produced a special leaflet to tell women interested in returning to work about available opportunities and schemes.

  We are also helping to develop to the full the skills of women by increasing the availability of training to them. All women aged 18 to 59 unemployed for six months or more are eligible to take advantage of employment training. In addition, women returning to the labour market and certain single parents on order books can also enter the programme, full or part-time, without fulfilling the six-month unemployment eligibility condition. All lone parents on employment training can qualify for a child care allowance.

  In the period up to the year 2000, women are expected to account for over 90 per cent. of the new jobs. It is therefore important that employers do what they can to encourage women back to work. The Government are encouraging employers to adapt traditional working practices to accommodate the needs of women. This means more flexibility in hours of work and in holidays, job sharing, career breaks, part-time working and where possible help with child care costs.

  Engineers
  Mr. Allen McKay
  To ask the Secretary of State for Employment if he will make a statement on the number of engineers qualifying in the United Kingdom.

  Mr. Nicholls
  The continuing supply of engineers is important to the strength of the economy. The number of students graduating in engineering has increased in the last three years. Despite these increases in supply, some employers do find it difficult to meet some of their recruitment needs.

  The Government, under the engineering science and technology initiative, have made more resources available to increase relevant higher education opportunities. My Department, through the Training Agency, is also committing resources to encourage retraining and conversion training for adults wishing to pursue engineering careers. In addition, the agency is providing specific support to institutions that promote increases in the number of women and other under-represented groups studying engineering, and to increase general access to engineering and other high-level training opportunities.

  Industrial Action (Essential Services)
  Mr. Stern
  To ask the Secretary of State for Employment if he has any plans to limit the disruption of essential services by industrial action.

  Mr. Eggar
  The Government are reviewing the law as it affects industrial action in essential services. The proposals in the Green Paper "Unofficial Action and the Law" are
  175
  designed to tackle the problem of wildcat strikes and other forms of unofficial industrial action which have been particularly damaging in such essential services as the London Underground and British Rail.

  Earnings
  Mr. Austin Mitchell
  To ask the Secretary of State for Employment whether he will publish in the Official Report a table showing (a) the average earnings of full-time adult male manual workers in the railway industry and (b) the average of full-time adult male non-manual workers at the latest available date together with the corresponding figures for the United Kingdom for 1959 and 1972 and the information he has on comparable figures for 1972 and the latest available date in France and West Germany.

  Mr. Nicholls
  The available information is provided in the table. Comparable figures for France and West Germany are not readily available.

  Average gross hourly earnings of full-time adult male employees in the United Kingdom; pay not affected by absence, April of each year

  1972 £

  1988 £

  (a) Manual employees in the railway industry

  0·67

  4·25

  (b) All non-manual employees

  1·10

  7·40

  Sources: New Earnings Surveys in Great Britain and Northern Ireland.

  Air Conditioning (Contamination)
  Dr. Thomas
  To ask the Secretary of State for Employment what studies have been conducted by his Department, or consultants to his Department, into mitigation of the effects of contaminated cooling towers and air conditioning systems in high-rise buildings.

  Mr. Nicholls
  The Health and Safety Commission (HSC) is to publish in November a consultative document seeking views on courses of statutory action for the control of legionella. This follows a detailed review of policy undertaken by the Health and Safety Executive (HSE). In addition, a joint Department of Health/HSE working group is examining all aspects of legionella, including its control. It will be making recommendations to the chief medical officer and the HSE on any specific areas of study that are seen to be appropriate.

  Training Schemes
  Mr. Malcolm Bruce
  To ask the Secretary of State for Employment what has been the financial support from the Government for(a) the community programme per annum since its inception and (b) employment training since its inception until the last available year.

  Quarter ending June 1989

  White

  Black

  Asian

  Other

  Non-respondents

  Total

  Secretariat

  25

  4

  3

  0

  7

  39

  HSD

  67

  2

  9

  1

  15

  94

  SPD

  60

  4

  5

  2

  8

  79

  RPD

  514

  16

  8

  2

  52

  592

  TD

  278

  2

  2

  2

  23

  307

  MQI

  107

  0

  1

  0

  6

  114

  MD

  236

  7

  5

  1

  22

  271

  FAID

  1,332

  17

  11

  7

  136

  1,503

  NII

  181

  6

  3

  1

  29

  220

  176
  Mr. Nicholls
  The community programme was started in 1982, and was replaced by employment training in September 1988. The table shows the expenditure on each programme by the Government in each year since 1982.

  Expenditure £ million

  Community Programme

  1982–83

  1 2177

  1983–84

  1400

  1984–85

  524

  1985–86

  667

  1986–87

  1,043

  1987–88

  1,085

  1988–89

  664

  Employment Training

  September 1988 to September 1989

  977

  1 Includes administrative costs.

  1 Includes some residue of the Community Enterprise Programmes.

  Health and Safety (Ethnic Minorities)
  Mr. Bill Michie
  To ask the Secretary of State for Employment, for each Health and Safety Executive area, on how many occasions in the last three years Health and Safety Executive inspectors have been accompanied on work place visits by an interpreter.

  Mr. Nicholls
  The information requested is not available.

  Mr. Bill Michie
  To ask the Secretary of State for Employment if the ethnic origin of persons suffering workplace accidents and diseases reported under RIDDOR is recorded by the Health and Safety Executive.

  Mr. Nicholls
  Information about the ethnic origin of people suffering workplace accidents and diseases is not recorded by the Health and Safety Executive. Neither the Reporting of Injuries, Diseases and Dangerous Occurrences regulations 1985 nor the approved form of report require notification of the ethnic origin of the injured person.

  Mr. Bill Michie
  To ask the Secretary of State for Employment, in relation to the categories used in the Civil Service ethnic monitoring system, how many people in each category have been employed in each division of the Health and Safety Executive, in each of the last five years.

  Mr. Nicholls
  Information on the ethnic monitoring of staff in each division of the Health and Safety Executive has been collated only since 1987. The tables show the numbers of staff in each category at the end of June 1987, 1988 and 1989.
  177

  White

  Black

  Asian

  Other

  Non-respondents

  Total

  RLSD

  428

  8

  12

  1

  31

  480

  Total

  3,228

  66

  59

  17

  329

  3,699

  Quarter ending June 1988

  White

  Black

  Asian

  Other

  Non-respondents

  Total

  Secretariat

  23

  5

  3

  0

  5

  36

  HSD

  59

  3

  7

  0

  16

  85

  SPD

  139

  5

  5

  1

  25

  175

  RPD

  379

  12

  11

  4

  63

  469

  TD

  267

  1

  0

  2

  37

  307

  MQI

  98

  0

  1

  0

  15

  114

  MD

  220

  6

  6

  0

  29

  261

  FAID

  1,240

  17

  8

  5

  190

  1,460

  NII

  150

  4

  2

  1

  35

  192

  RLSD

  392

  6

  9

  1

  46

  454

  Total

  2,968

  60

  52

  14

  461

  3,555

  Quarter ending June 1987

  White

  Black

  Asian

  Other

  Non-respondents

  Total

  Secretariat

  24

  5

  0

  0

  3

  32

  HSD

  67

  3

  6

  0

  12

  88

  SPD

  52

  3

  3

  0

  13

  71

  RPD

  375

  12

  11

  4

  66

  468

  TD

  365

  4

  1

  3

  52

  425

  MQI

  107

  0

  3

  0

  19

  129

  MD

  236

  5

  6

  0

  34

  281

  FAID

  1,287

  18

  9

  5

  190

  1,509

  NII

  130

  4

  2

  1

  31

  168

  RLSD

  405

  6

  11

  1

  47

  470

  Total

  3,048

  60

  52

  14

  467

  3,641

  Redundancies
  Mr. Andrew Smith
  To ask the Secretary of State for Employment how many employees have been made redundant by their employers in the past year, having 178
  worked for (a) up to six months, (b) seven to 12 months, (c) 13 to 18 months, (d) 19 to 24 months, (e) 25 to 30 months, (f) 31 to 36 months and (g) more than 36 months respectively.

  Mr. Nicholls
  This information is not available.

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

Sunday Postal Collections
Lord Boyd-Carpenter Lord Boyd-Carpenter asked Her Majesty's Government:
Whether they have had discussions with the Post Office about the proposed introduction of Sunday collections of mail; and when it is intended that these should begin.
The Minister of State, Department of Trade and Industry (Lord Trefgarne): My Lords, Ministers meet the Post Office regularly and discuss a wide range of subjects. The introduction of Sunday collections is an operational matter for the Post Office. I understand that it intends to introduce Sunday collections in the first five districts very shortly.
Lord Boyd-Carpenter: My Lords, I thank my noble friend for that reply. Does he recall that the Post Office prefaced its introduction of higher charges a few weeks ago with an indication that one of the purposes of those higher charges was to enable Sunday collections to be started on a large scale? If, as my noble friend suggests, it applies those collections only in a few places, ought it not to reconsider those increased charges?
Lord Trefgarne: My Lords, the Post Office management is determined to press ahead with the service improvements to which it referred at the time mentioned by my noble friend. It would like to move ahead with a Sunday collection programme, but so far it has had difficulty in persuading the unions that that would be the right way in which to proceed. It is continuing to endeavour to persuade the unions to agree, and, as I have said, it hopes to introduce the first few collections soon.
Lord Williams of Elvel: My Lords, does the Minister accept that the recent talks between the Post Office and the Union of Communication Workers on Sunday collections, as part of the overall package of service improvements, broke down because the Post Office insisted that union members should not be consulted on the proposed agreement in an individual secret ballot? If that is so, why will it not agree?
Lord Trefgarne: My Lords, I understand that the union management agreed to the introduction of Sunday collections but that at a subsequent conference the union members decided that they were not prepared to take part. It is not for me to interfere with the arrangements made within the trade union to arrive at its decision on the matter. Union members have said that for the moment they are not prepared to take part.
Lord Williams of Elvel: My Lords, perhaps I may correct the Minister on one matter. There was indeed initial resistance at the August union conference. The union leadership then negotiated with the Post office management. Is the Minister aware that the Post Office refused to allow the union leadership to submit any subsequent agreement to its members in an individual secret ballot?
Lord Trefgarne: My Lords, if the noble Lord is saying that I am mistaken and that the union members are indeed now willing to take part in those collections, there will be widespread appreciation of that point.
Lord Wiliams of Elvel: My Lords, I am sorry to press the Minister. Does he accept that union members are not allowed to be consulted on the agreement and therefore no one knows whether or not they are in agreement?
Lord Trefgarne: My Lords, Ministers are not responsible for the conduct of industrial relations discussions in the Post Office. That is a matter for the management and the unions to sort out for themselves.
Lord Carr of Hadley: My Lords, is my noble friend aware that all of us, including myself, want to see more collections, but that some of us believe that it is even more important that the accuracy of delivery should be improved? In the post collected in my flat over the weekend, no fewer than 13 letters should not have been delivered to me at all.
Lord Trefgarne: My Lords, I am afraid that there are some areas where the service provided by the Post Office is less good than it should be. The Government are reassured by the management's determination to improve the service provided by the Post Office. We hope that the unions will be able to participate in that process.
Lord Molloy: My Lords, does the Minister agree that when there is industrial action involving a strike it is the result of the failure of joint negotiations? Could it not be indicated to the Post Office officials that they should perhaps be prepared to agree that union members should be allowed to ballot on that issue?
Lord Trefgarne: My Lords, it is not for the Post Office management to dictate in the way suggested by the noble Lord. The Post Office management is determined to secure a range of improvements in the service which the Post Office provides. Everyone agrees that those improvements are desirable. We now look to the trade unions to co-operate in that process, including, I hope, participation in Sunday collections.
Lord Campbell of Alloway: My Lords, in all fairness, would it not have been preferable for the Post Office to have consulted the unions before increasing the charges? As I understand it, that is the substance of my noble friend's Question.
Lord Trefgarne: My Lords, it is the job of the Post Office management to manage the Post Office, if my noble friend will allow me to say so. I am sure that the trade unions are as determined as the management to secure the necessary improvements in service. I hope that they will now see that it is in their interests to co-operate fully with the management in achieving that end.
Lord Glenamara: My Lords, is the noble Lord aware that a letter which was sent to me by my Chief Whip the Friday before last reached me, a mile away in Pimlico, at nine o'clock last Wednesday? Had I received it on time, the Government's defeat would have been by a margin one vote greater than it was. Is this a plot by the Government and the Post Office to maintain the Government's majority?
Lord Trefgarne: My Lords, we all have our stories about problems with the Post Office. Sometimes it does a very good job indeed. It is said that our Post Office is among the best in the world, but it still suffers from some shortcomings which I hope and believe will be put right.
Lord Boyd-Carpenter: My Lords, can my noble friend explain how it is that if the unions are not co-operating, the Post Office nonetheless proposes to introduce Sunday collections in, I think the Minister said, five areas? Can he also tell your Lordships which are those five areas?
Lord Trefgarne: My Lords, I understand that the five areas will be centred around Folkestone and will involve the use of volunteers.
Lord Hunt: My Lords, does the noble Lord agree that none of these exchanges should be allowed to give the totally false impression that there is criticism of Post Office workers? By and large those workers deliver and collect the mail and do a magnificent job.
Lord Trefgarne: My Lords, certainly many people in the Post Office work hard and carry out a first-class job. However, the fact is that the unions have prevented the introduction of the Sunday collection which has been long awaited and much sought in recent times. I hope that the unions will now review their position.
Lord Peston: My Lords, is the noble Lord able to explain a point which I have not been able to follow in the discussion? I refer to the connection between Sunday collections and increased mail charges. Is the implication that Sunday collections will be highly unprofitable; therefore one has to raise the cost of postage for the rest of the week? Why should there be any connection between Sunday collections and the price of a postage stamp?
Lord Trefgarne: My Lords, Sunday collections are rather expensive for the Post Office to operate. By and large staff have to be paid overtime rates to carry out the necessary work. When the postage rates were increased at the end of last year, the Post Office indicated that among the improvements planned was the restoration of the Sunday collection.
Baroness Seear: My Lords, I do not wish to prolong this already overlong discussion, but did the Minister say that the Post Office would use volunteers? Who on earth are these volunteers and what will the unions say about their introduction for the delivery of Sunday mail?
Lord Trefgarne: My Lords, the reason why the resumption of Sunday collections can only for the moment be contemplated in a very small number of places is that volunteers will conduct the service. However, it would not be possible to restore Sunday collections completely on the basis of volunteers only.

European Year of Tourism
2.46 p.m.
Lord Campbell of Croy Lord Campbell of Croy asked Her Majesty's Government:
Whether a programme of special events is being prepared to mark the European Year of Tourism in 1990.
The Parliamentary Under-Secretary of State, Department of Employment (Lord Strathclyde): My Lords, many special events and activities marking the European Year of Tourism will be taking place up and down the country, organised by all sectors of the UK tourism industry. The responsibility for co-ordinating events in the UK rests with the British Tourist Authority.
Lord Campbell of Croy: My Lords, I am grateful to my noble friend for his reply. Is a special effort to be made within the EC to attract visitors from the other side of the Atlantic? We should bear in mind their special interest in European history and heritage as a background to their own and their interest too in ancestors and roots.
Lord Strathclyde: My Lords, my noble friend has hit on an important point. He is quite correct. The Commission is planning special promotions in the United States, Canada and Japan, aimed at promoting travel to Europe for a whole variety of reasons.
Lord Ponsonby of Shulbrede: My Lords, this is, I believe, the first time that the noble Lord, Lord Strathclyde, has spoken in the House in his substantive position as Minister responsible for tourism. Therefore we welcome him in that role as opposed to the many other roles which he performs here. I wish to know whether the Government are committed to supporting fully all the projects being put forward as part of the European Year of Tourism.
Lord Strathclyde: My Lords, I thank the noble Lord, Lord Ponsonby, for those words. What some noble Lords do not realise is that the noble Lord himself is well involved in the tourist industry, particularly in London. As for government support for the European Year of Tourism, that is implicit in the fact that the programme is sponsored by the British Tourist Authority and will continue to be so.
Baroness Elles: My Lords, can my noble friend say whether any measures are being taken in the Commission to improve the lot of tourists from this country who go on package tours throughout the European Community? Despite the efforts which were made last year, so far nothing has happened. Can he inform the House whether our own tourists will have better treatment in the future?
Lord Strathclyde: My Lords, discussions are still continuing on the proposed EC directive.
Lord Peston: My Lords, I join in the congratulations to the Minister. Has his department considered that tourism, like other forms of international trade, especially in this country, would be enhanced if Britain were fully to join the exchange rate mechanism?
Lord Strathclyde: My Lords, I admire the noble Lord's ability to raise an entirely different question when dealing with the European Year of Tourism. I suspect that he will have plenty of other opportunities on which to put down such a Question on the Order Paper, when one of my colleagues or I will be delighted to answer.
Lord Beloff: My Lords, can the Minister assure the House that, in looking at the proposed growth of tourism, Her Majesty's Government will bend themselves to protecting the amenities of the ordinary citizens of this country? For instance, we suffer from the parking of coaches, the scattering of litter and the cackling of French schoolchildren.
Lord Strathclyde: My Lords, my noble friend is quite right. There is a certain amount of controversy about the role of tourists in this country. However, I should point out that most people in this country receive a tremendous benefit from the influx of tourists. It was worth over £6 billion in 1988.
Lord Parry: My Lords, does the noble Lord accept that the tourist industry will be grateful to him for that answer? However, I respect the problem that was raised from a personal point of view by the noble Lord opposite. Does the Minister further accept that, coincidentally with the European Year of Tourism, it is also the Tidy Britain Year and the beginning of the decade for Britain of the clean nineties? The amenities of the country will benefit from a general effort which is largely paid for out of revenues received from tourism. Those revenues augment Britain's income.
Lord Strathclyde: My Lords, the noble Lord is quite correct. I know he is a great supporter of the industry also.
Lord Campbell of Croy: My Lords, will the British Government encourage entries from this country to the competitions which have already been arranged for the year in Brussels, in particular entries for the tidiest European city competition and for the best facilities for disabled visitors?
Lord Strathclyde: My Lords, my noble friend is quite right in pointing out that there are a number of competitions throughout the country to impress on people the importance of tourism and of exchanging cultural differences. The competition for Europe's tidiest city and the best facilities for the handicapped will be uppermost in our minds during 1990.

Royal Parks
2.53 p.m.
Lord St. John of Fawsley Lord St. John of Fawsley asked Her Majesty's Government:
Whether they will designate the royal parks as conservation areas.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Hesketh): My Lords, the designation of conservation areas is primarily the responsibility of the local planning authorities. Greenwich Park and Regent's Park have already been designated.
Lord St. John of Fawsley: My Lords, I thank my noble friend for what I take to be an eirenic reply. Does he agree that these royal parks constitute a most important part of our national heritage? Is it not right to protect them from the proposed disruptions arising from ventilation shafts for a new underground railway, earthworks for power lines and commercial encroachments from the suggested equestrian centre? Would not conservation status help the parks to resist such depredations?
Lord Hesketh: My Lords, the noble Lord raises a number of points in his supplementary question. The basic position is that the royal parks are there for the enjoyment of the public. We, along with the management of the parks, will resist proposals for developments which are incompatible with the parks' historic status or value. As regards a restaurant, the Serpentine Restaurant has proved to be expensive and will be replaced. However, I can assure your Lordships' House that the department will look to the assistance of the Royal Fine Art Commission for advice on this great redevelopment when it occurs.
Lord Strabolgi: My Lords, will the Government do something about St. James's Park? That is surely one of the most beautiful parks in the world. The lake is much polluted, and particularly at the Whitehall end it is very smelly. Will the Government ensure that the lake is cleaned out more often?
Lord Hesketh: My Lords, I shall certainly draw the point that has been made to the attention of the superintendent.
Baroness Llewelyn-Davies of Hastoe: My Lords, will the noble Lord tell us how his noble friend spells the word "eirenic", and what it means?
Lord Hesketh: My Lords, I was hoping that I, too, might receive illumination on that point.
Lord Hailsham of St. Marylebone: My Lords, is it not well known that eirenic means friendly and peaceful?
Lord Hesketh: My Lords, yet again I pay the price for not having a classical education.
Lord McIntosh of Haringey: My Lords, does the protection afforded by the declaration of an area as a conservation area extend to protection at Christmastime from parliamentary Questions about pelicans?
Lord Hesketh: My Lords, I am sure the noble Lord is well aware that, much as the department may wish to control Questions concerning pelicans, they are completely outside our control.

Regional Policy
2.57 p.m.
Lord Dormand of Easington Lord Dormand of Easington asked Her Majesty's Government:
Whether they intend to make any changes in their regional policies.
Lord Trefgarne: My Lords, changes in the focus of the DTI's policies, including regional policy, were made early last year. Regional policy now operates within a framework of measures designed to promote enterprise and business development throughout the country. There are no plans for further changes.
Lord Dormand of Easington: My Lords, is the Minister aware that there has been a cut in the regional aid budget of no less than 72 per cent. in real terms since this Government came to power in 1979? Is he further aware that the economic growth rate in the South over that period has been 35·6 per cent. compared with the North, where it has been 16·6 per cent.? As the Government's present policy is to slow down growth, what special measures—I emphasise the word "special"—are the Government prepared to take to see that the northern regions do not suffer in order to make up the leeway which they have lost over that 10-year period?
Lord Trefgarne: My Lords, I do not agree with the noble Lord about the decline in the amount of regional aid generally to which he referred. However, I make no apology for the fact that our regional assistance arrangements are now much more selectively focused than they once were and are not provided in the rather general way that used to be the case. Regional selective assistance is now very much in place. There are the regional enterprise grants, the activities of the English Industrial Estates Corporation and, more recently, the consultancy grants too. It is true that the regional development grants, as they used to be called, are being phased out. However, they were very unselective and the money that was spent on them was not always directed in the right way.
Lord Elliott of Morpeth: My Lords, is my noble friend aware that the September figure for unemployment in the northern region showed yet a further very satisfactory fall? Is he further aware that in the past six years unemployment in the northern region has halved? Does he agree that this suggests that regional policy is working rather well?
Lord Trefgarne: My Lords, I entirely agree with my noble friend. Unemployment is coming down nationwide, but especially so in those areas where it was a particular problem in times past. I believe this is the result of the more selective targeting of our regional policy that we have introduced recently.
Lord Taylor of Gryfe: My Lords, is the Minister aware that the total amount of regional assistance in Scotland last year was £115 million, and that two-thirds of that sum was accounted for by the regional development grants which are now being phased out under the new scheme? Will the Minister tell us exactly how that will be replaced and whether the total target of regional aid of £120 million which the Government have in mind for Scotland will be maintained? Finally, is the Minister aware that the total amount spent on the Enterprise Initiative is only £1 million?
Lord Trefgarne: My Lords, the way it will not be spent, if the noble Lord will allow me to say so, is on indiscriminate support for projects of less than satisfactory viability. That does not represent proper value for money for the taxpayer, nor does it provide the kind of support that people are entitled to in the regions to which the noble Lord has referred, most especially Scotland. We shall target the support we can give in those areas, as elsewhere, to viable programmes when they are brought forward for our consideration and our support. When they are, they will certainly receive every encouragement.
Lord Williams of Elvel: My Lords, is the noble Lord aware that nothing that has happened since the abolition of regional development grants gives us any encouragement at all that the Government understand the problem? Is he not aware that regional development grants, being automatic, could be taken into account in investment calculations by firms, whereas regional assistance, being discretionary, cannot? That impedes investment in the regions, in Wales and in Scotland. Do the Government realise, as it is staring them in the face, that differentials between regions are widening and will continue to widen as we go into 1992 and the opening of the Channel Tunnel, unless they take some form of positive action? Will the noble Lord tell us what that action is?
Lord Trefgarne: My Lords, the regional policy that we now have in place is not designed to encourage noble Lords opposite. It is designed to encourage the new enterprises emerging in the regions, like those to which my noble friend Lord Elliott referred. In those regions industrial and commercial activity is improving and unemployment is coming down. That is the purpose of our policy.
Lord Dormand of Easington: My Lords, the Minister questioned my figures. Perhaps he should know that I took my figures from the public expenditure White Papers of 1985 and 1988. Will he check the figures? He will find that the statement that he made to me is incorrect.
Is the Minister aware that, despite what the noble Lord, Lord Elliott of Morpeth, said, since 1979 the reduction in unemployment in the four northern regions has been 1·7 per cent? Is that part of the Government's economic miracle?
Lord Trefgarne: My Lords, I do not claim that unemployment has declined uniformly in all areas of the United Kingdom. However, it has certainly come down very satisfactorily in a number of areas. We are determined to ensure that in the areas where unemployment remains a problem the support that we are able to give is targeted so that unemployment comes down even faster. I believe that the policy that we have in place will achieve that, and I hope that on reflection the noble Lord will agree with me.
Lord Sefton of Garston: My Lords, will the Minister tell the House whether the figures for regional aid include moneys paid to the Merseyside Dockland Development Corporation? If so, will he say what the amount was, how much each job has cost the Government and why the Government have not yet responded to the auditors' report that they received more than two years ago regarding that corporation?
Lord Trefgarne: My Lords, the figures that I have before me do not include the amounts to which the noble Lord referred. I shall certainly see whether I can find those figures and write to the noble Lord.
Lord Glenamara: My Lords, does the noble Lord agree that the Government's reliance on interest rates as the major economic regulator does untold harm to the regions? Does he not agree that overheating of the economy is a problem of the South-East and the South, not of the North, Wales or industrial Scotland? One region has influenza and we all have to take the medicine. Can the Government not be more selective in finding another economic regulator?
Lord Trefgarne: My Lords, I am afraid that inflation, the evil to which interest rates are addressed, affects all parts of the economy, not just the South-East. It is of paramount importance to ensure that inflation is kept under control and reduced. That is the purpose of the interest rate policy to which the noble Lord referred. I do not agree that interest rate policy can be applied selectively in different parts of the country.

Nitrate in Water: ECC Report
3.3 p.m.
Lord Middleton Lord Middleton rose to move, That this House takes note of the report of the European Communities Committe on Nitrate in Water (16th Report, HL Paper 73).
The noble Lord said: My Lords, as we say at the very beginning of our report, in modern Europe the ready supply of wholesome drinking water from public supplies is taken for granted. So is the plentiful supply of food. The report is largely about the problems which can arise when those two basic needs conflict.
The quality of drinking water is a subject of concern to us all. However, the issues involved are complex and solutions by no means easy to find. When Sub-Committee D of the European Communities Committee decided to inquire into the question of nitrate pollution of water we therefore placed a great deal of emphasis on obtaining the best objective information that we could. The bulk of the evidence is printed in our report and, irrespective of the merits of the report, repays, I suggest, careful reading.
In evaluating the evidence we were most fortunate in having with us the noble Lord, Lord Bridges, from Sub-Committee F, and in being able to call on Professor Keith Syers, head of agricultural and environmental sciences at the University of Newcastle upon Tyne, who was a most conscientious and expert adviser to the sub-committee.
By now we have probably all been made aware of the fact of nitrate pollution, particularly of drinking water. We may, however, have only a hazy comprehension of wherein lie the dangers or indeed of what nitrate is. In our report we have attempted to place the issues in perspective. In doing so we drew upon previous reports on the nitrogen cycle and nitrate in water from the Royal Commission on Environmental Pollution, the Royal Society, and the Nitrate Co-ordination Group of the Department of the Environment which reported in 1986. We also took evidence from the Agricultural and Food Research Council, the Natural Environment Research Council and the Water Research Centre, the bodies which have carried out most research into the area in the United Kingdom.
So far as concerns the Community, the starting point of efforts to maintain the cleanliness of water supplies is the drinking water directive of 1980. The directive established 66 separate criteria for drinking water which cover taste and appearance as well as safety. It established absolute maximum levels both of toxic substances such as lead and pesticides and also for substances which are not necessarily toxic but which are undesirable in excessive amounts, including nitrate, ammonium and fluoride. On nitrate the directive laid down a maximum level of 50 mg per litre. The new Commission proposal is directed towards achieving that level in practice.
The draft directive on which our report is based is summarised in paragraphs 5 to 11. It addresses two problems simultaneously, that of nitrate in drinking water and that of nitrate which might cause eutrophication of inland, coastal and marine waters.
In our inquiry we first considered the risks from nitrate pollution. Nitrogen is essential for plant and animal growth. Air consists of about 78 per cent. nitrogen which is naturally present in soil and in water. Plants generally obtain nitrogen from the soil

143
in the inorganic form of nitrate, and humans obtain nitrate by eating plants and animals. However, it has long been recognised that excessive amounts of nitrate taken in by humans can give rise to health risks.
Although a certain amount of nitrate is contained in everyday diet the bodily concentration can become dangerous when nitrate is present in high levels in drinking water. High levels of nitrate can lead to the development of methaemoglobinaemia or blue baby syndrome, particularly in bottle fed infants. As we point out in our report, that disease is now virtually non-existent in western Europe. In the United Kingdom there have been 14 confirmed reports of methaemoglobinaemia since the last war, the last of which was in 1972.
A further concern is the theoretical link between high levels of nitrate and the development of stomach cancer, although in that case the epidemiological evidence from elsewhere in the world has never been confirmed in this country.
The health risk is a small one—but that is not to say that it should be disregarded. The Community and the UK Government—who have already set up a framework in the Water Act to cope with nitrate—are right to take it seriously. The limit of 50 mg per litre for drinking water is, according to the evidence we had, playing safe by a generous margin. As we say, it is prudent. Obviously one cannot take risks with human health, but it raised the question in the minds of many witnesses whether the high cost of implementing the directive as drafted might justify a further review of the 1980 50 mg per litre limit. However, the Committee declined to question the 1980 drinking water directive which is now in force in the EC and we proceeded on the basis that the limit would not be changed.
The second main danger of nitrate in water is environmental pollution. Nitrate can be one of the causes of an excessive and undesirable expansion of plant life in salt waters and, in some circumstances, in freshwaters too. That process, called eutrophication, is most commonly seen in the growth of algae in stagnant or enclosed waters. Eutrophication is undoubtedly a serious problem. Algal blooms near the surface of water restrict light to other organisms and cause oxygen depletion at night, sometimes at such a rate that the water becomes deoxygenated and the fish are killed, as in the 1988 bloom which spread from the Skaggerak to the coast of Norway. This year's blooms in the Adriatic defaced many of Italy's most prosperous tourist resorts.
However, the link between nitrate and eutrophication is as yet unclear. If we dismiss the problem of eutrophication rather briefly in our report, it is because in the United Kingdom and in most of Europe the problem in freshwaters appears to be caused by phosphates rather than by nitrates and one cannot tackle it by looking at nitrates alone. In the sea, the effects of eutrophication are mainly evident on the other side of the North Sea. That is not to say that the nitrates may not find their way from UK rivers round to Holland and Denmark, but
144
we had no evidence that they did. We thought that there was need for further research into those matters and suggest in our report that the North Sea Task Force might be the most appropriate body to do it.
We therefore concentrated on nitrate in drinking water supplies. Nitrate levels in water have been rising steadily over the last 30 years in many areas in the Community and are likely to continue to do so in places where acquifers have long response times. Action is therefore needed now to prevent the problem of nitrate pollution becoming unmanageable.
Although nitrate reaches water both from the atmosphere and from sewage effluent, it is generally accepted that the main cause of post-war increases in nitrate levels is the increased level of nitrate leaching or run-off from agricultural land. The Commission has now decided to tackle the problem of nitrate pollution at source by putting forward this draft directive with the target of reducing nitrate concentrations in sources of drinking water where the level is likely to exceed 50 mg per litre of nitrate, or already does so, and in waters which are or may become eutrophic.
The Commission's proposal is intended to provide a framework of action to reduce nitrate levels in affected areas largely through curbs on intensive agricultural activity in the catchments of rivers and groundwater sources. In effect, therefore, the draft directive would, if adopted, extend the limit of 50 parts per million on nitrate from the tap back to the ultimate source of drinking water; namely, the well, river or reservoir.
The main assumption behind the Commission's proposal is that nitrogen fertiliser—whether in the organic form of animal manure or in the inorganic form of chemical fertiliser—is used excessively and that its application needs to be reduced. In tandem with such reductions, the Commission wants to see other measures to encourage farming practices which result in less nitrate being lost from agricultural land. Our inquiry was therefore chiefly directed at a detailed examination of the merits and efficacy of that approach in a UK context.
The UK is peculiar in the European Community in that 70 per cent. of its drinking water comes from surface waters and only 30 per cent. from groundwater sources. The relevant catchment areas, therefore, which, in the rather vague words of the directive produce water which
"could contain more than 50 parts per million of nitrate"
are extensive. They occur in the drier parts of England. In parenthesis, I should perhaps say that there are few problems in public supplies in Scotland, Northern Ireland and Wales due to the higher rainfall. Those drier parts are likely to comprise most of East Anglia and Lincolnshire. Those areas produce 39 per cent. of our wheat, 29 per cent. of our potatoes, 61 per cent. of our vegetables and 73 per cent. of the UK's sugar beet.
From the evidence that we received from the scientists, it is quite clear that the idea that one can reduce the leaching of nitrate from farm land by a blanket reduction of the quantity of chemical

145
fertilisers applied is a delusion. The nitrogen cycle is fiendishly complicated and there is no direct relationship between nitrogen fertilisers correctly applied and the amount of nitrate leached out into the groundwaters. The Commission appears not to have taken that important point on board. There is nevertheless a long-term effect by reason of the nitrogen enrichment of the soil bio-mass with intensive cropping or grazing, so that there is likely to be a long-term upward trend in nitrate levels in sources of drinking water.
Restrictions on fertiliser are not likely to be effective in controlling nitrate leaching. Even quite modest reductions in nitrogen fertiliser applications could make arable farming unprofitable. In the drier parts of the U.K. there is already a deposition of nitrogen from the atmosphere and from the rain. In those drier parts, if one adds to the nitrate leached from that source the nitrate leached from any crop at all except ungrazed grass or woodlands, one is likely to get a concentration in the water of more than 50 mg per litre. If therefore, one attempts to control nitrate pollution by agricultural means alone, substantial areas in the vulnerable zones that are to be designated will have to come out of production altogether.
The size and extent of those zones is therefore crucial. Where, how and when one tests for nitrate in surface waters will largely determine which are the vulnerable zones and what is to be their extent. The Commission's proposals are too inflexible in that respect and we say so. As an example, if we interpret the 50 milligramme per litre limit as an average in surface water rather than an absolute standard, because of the natural variability in such waters, one would reduce the amount of land to be designated by 30 times in some areas.
The Commission insists that control should be by prevention at source; hence its recommendation for changes in agricultural practice and land use. We argue that the curative measures, already being undertaken by the water authorities, such as blending and the natural reduction of nitrate that occurs in reservoirs, should continue to play a full part in nitrate control. We conclude that in some areas these may perhaps not be enough and some agricultural controls may be required, even though the effect on food production might be very severe. We agree with the Commission that in such cases farmers should be compensated.
The time-scale demands continuation of curative controls in any case. There are some geological formations where it takes over 40 years for water to percolate down to the aquifer. More importantly, the cost of agricultural measures alone would be enormous. Curative measures or a combination of prevention and cure may well provide the most economical means of controlling nitrates in many areas.
We therefore recommend a co-ordinated use of prevention and cure options and that the member states should be given the maximum flexibility to develop such programmes. I appreciate the Commission's reluctance to go down that road. For
146
some years now it has advocated preventive measures to reduce pollution at source. However, we felt that an insistence on that approach was not the most realistic option, particularly where the curative approach has no adverse environmental consequences, as in the blending of supplies which the UK water authorities have been using with great success for some time.
We sum up in paragraph 183 and 184 by saying that the restrictions on agriculture which the Commission seems to have in mind to reduce nitrate levels in drinking water sources below 50 mg per litre would have a drastic effect on output and would bring extensive social and economic change to rural society in the most intensively farmed areas in the United Kingdom and probably in other states as well.
We say that such changes may well be inevitable if the problem of nitrate pollution is to be effectively addressed at source, as proposed by the Commission. However, the committee does not consider that the present state of knowledge about the processes involved in nitrate pollution, and in particular how such pollution can be prevented, is sufficient to justify the adoption of a policy that would have such consequences.
We believe that the draft directive was not intended to have such an effect. While we support the Commission's objectives, we are not convinced that its proposals fully take into account the scientific evidence available and we believe that the Government should use their best endeavours to urge the Commission to re-examine its proposals. I beg to move.
Moved, That this House takes note of the report of the European Communities Committee on Nitrate in Water (16th Report, HL Paper 73).—(Lord Middleton.)
3.23 p.m.
Lord Crickhowell: My Lords, I do not think that during my time in Parliament I have ever read a Select Committee report that impressed me more. In this report we have what is almost certainly the most complete compendium of information, practical experience and scientific knowledge on the subject of nitrates in water that exists anywhere. The Select Committee report is likely to be the standard work for some time to come. My noble friend Lord Middleton, his colleagues on the committee and their advisers all deserve the warmest congratulation.
I take part in this debate as chairman of the National Rivers Authority. I emphasise that in doing so I put the provisional view of the authority, because the board has not yet had an opportunity to discuss the subject fully, or formally adopt its policy on nitrates, although my colleagues are aware of the principal points that I intend to make this afternoon. I thought that I might have to apologise to the House because I feared that the debate might run for longer than I expected and I should have to do something which I always try strenuously to avoid; namely, be absent from the concluding moments. I think that it would be better if I still made that apology although

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I must say that the debate would have to continue for longer than most of us no doubt hope it will for me to be placed in that position.
I believe that there are two concerns that we must address in this debate. The first is the well justified concern about rising nitrate levels and their possible damaging consequences. The second concerns the proper use of resources and a choice of priorities for action.
The Select Committee report makes very clear, in paragraphs 165, 166 and 183 in particular, the immense and damaging consequences for agriculture and the rural economy in a large part of Britain that could arise as a consequence of the implementation of the draft directive. It is very important that before measures which produce such consequences are introduced we are confident that they are necessary and that the results justify what is being done; otherwise we should be diverting resources from areas of perhaps higher priority and could undermine the work of environmental improvement by discrediting policies and destroying public confidence. If measures that produce fundamental and uncomfortable changes are introduced, they must have a high degree of public acceptability. I am not qualified to comment on the medical evidence given to the committee but, again, it is true that before committing vast resources in order to tackle the problem we shall want to consider if there are other ways of avoiding any hazards that may exist.
The draft EC directive is of importance in general terms because it is the first European measure to deal specifically with diffuse pollution rather than point source pollution. Diffuse pollution is the more insidious and is harder to control. It is particularly difficult to identify the diffuse polluters and to avoid sweeping controls which affect innocent parties. I have to warn the House that this is a problem that we shall have to face time and again in dealing with legislation to control other diffuse pollutants.
As my noble friend Lord Middleton told the House, the EC directive proposal deals with two distinct issues: the protection of water resources, both surface and ground waters, intended for the abstraction of drinking water; and the protection of waters from eutrophication. Those issues require quite separate consideration.
Nitrate levels are at or close to EC drinking water standards in many ground waters and water supply rivers in the South-East and Midlands of England. Continuing rising trends are evident in many ground waters used for public supply. Nitrate levels in surface waters are more stable, although rising trends are still observed in many parts of East Anglia. Nitrate levels in surface waters depend significantly on the timing and intensity of the run-off from agricultural land. In many water supply rivers the levels only exceed 50mg per litre for one or two months and not necessarily every year.
The EC drinking water directive requires absolute compliance, but water companies are often able to overcome the problem of seasonal fluctuation by the use of blending and storage and still maintain the
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required quality of water in the supply. As presently drafted the proposed directive does not take into account this situation. It applies the same absolute nitrate standard to the water abstracted from the resource as it does to the water in one's taps. As Dr. Skinner, who is now an employee of the National Rivers Authority, pointed out in his evidence in paragraph 507, it would require the designation of very large areas of East Anglia and the Midlands as vulnerable areas, subject to land use restrictions, in order to control nitrate use and meet that requirement.
That designation would apply regardless of the frequency or extent of high nitrate problems and regardless of the ability of the water company to meet its water supply obligations by the use of blending and storage. The NRA feels very strongly that this would not be a sensible use of resources. As I have already observed, the impact on the agriculture of these areas would be massive. My noble friend spelt out some of the figures.
We agree with the Select Committee's view as set out in paragraphs 129 and 130, strongly arguing against the rigid definition of vulnerable zones for surface waters used for water supply. Like the committee, we want a system based on an average rather than an absolute standard. I was very relieved to see that Mr. Henningsen on behalf of the Commission, stated that "it has an open mind" on this issue. I understand that the Commission has recently presented a somewhat complicated technical alternative.
However, there are some water supply rivers where either peak nitrate levels are very high or where the nitrate minimum acceptable concentration is regularly exceeded. In those cases modification of land use practice to control nitrate levels in run off would be desirable. Two such catchments, the Cradle Brook in Anglian Region and the Bourne Brook in the Severn Trent Region are included in the advisory nitrate sensitive area scheme, and the authority will be monitoring their effectiveness with a good deal of interest.
As we have heard, entirely different issues arise in relation to the protection of ground waters. Ground waters are extensively used for public supply often without the benefit of blending and the leaching of nitrate ground water is cumulative year on year without the seasonal flushing found in surface waters. For those reasons the NRA believes that it is realistic that for ground waters the water supply standard of 50mg per litre should also be the standard that should apply to protect the resource.
In areas of intensive agriculture, nitrate leaching is often too high to ensure that ground water levels will stay below the drinking water standard indefinitely. There is a conflict between present methods of agriculture and the protection of water resources. It is the view of the authority that the modification of land use in vulnerable zones in order to reduce leaching must play a significant part in solving the nitrate problem. However, we consider it quite impracticable to proceed on the basis that this is the only method which should be used. Apart from the immense consequences for agriculture and the economy, there are some very practical

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immediate objections. Initial estimates are that there are significantly in excess of 100 locations where zones around ground water supply sources might be designated. The designation of these zones is a very considerable technical task and in our view it would be neither desirable nor practicable to designate all these within the two-year period allowed by the draft directive. It is also an unavoidable fact that protection by changing the land management takes a long time to have the desired effect and in many cases other solutions will have to be sought by the water companies in order for them to comply with the drinking water directive.
The authority would regret having to deploy its resources in the way envisaged in the directive by spreading its effort over all ground water sources potentially at risk from rising nitrates, regardless of urgency or the availability of other solutions. It would much prefer to act as it is currently acting in the context of nitrate sensitive areas by identifying in consultation with the water supply companies those sources where protection by changing land use management could make the greatest contribution. I have to warn that the authority would expect that this would include a good many sources currently below the standard of 50mg per litre where protection now could prevent nitrate problems occurring at a later date.
While the NRA wants to target radical changes in land use management to those areas where the effect will be greatest, it nonetheless believes that more could be done to ensure that farmers follow the best practice to reduce the leaching in their existing agricultural activities. Dr. Skinner in his evidence in paragraph 542 summarised our position on this very well. What we are arguing for is a two tier approach to the nitrate problem with "recommended nitrate practice" in use over large areas and with intensive change very carefully targeted and restricted to water supply sources within specified nitrate sensitive areas.
I turn to the problem of eutrophication. As we have heard, eutrophic waters are those which have received high levels of nutrients such as nitrogen or phosphorous which results in high biological activity and reduced water quality. Eutrophication can be a natural process, but it is greatly influenced by man's activities. The proposed directive defines eutrophic waters as those where nitrogen is the factor limiting eutrophication. In the United Kingdom inland waters, phosphorous and not nitrate is almost invariably the limiting nutrient because there is sufficient nitrate to support eutrophication even where there is no intensive agricultural practice. In contrast, nitrogen is thought to be the limiting nutrient in the eutrophication problems of the Baltic and eastern North Sea. So far as we know, there are very few nitrate limited eutrophication problems in the United Kingdom estuarial or coastal waters, and the NRA would not expect there to be an impact for these waters as a result of the directive as drafted.
The NRA therefore shares the view of the House of Lords Select Committee summarised in paragraphs 120 to 122 and questions whether the problems of marine eutrophication are best dealt with in a
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directive largely aimed at protecting the quality of drinking water supplies. The causes of incipient eutrophication in waters are not at all well understood. Research undertaken by appropriate organisations will be required before the significance of nitrates discharge from inland waters can be evaluated in the context of the North Sea as a whole.
The proposed directive places considerable emphasis on agricultural measures involving restrictions on the use of artificial fertilisers. The authority has noted the evidence given to the House of Lords Select Committee from many agricultural experts who question the validity of these techniques in the United Kingdom situation. We broadly agree with what the Select Committee has to say on this subject. Its conclusions are summarised in paragraph 195 and were put to the House very clearly by my noble friend. A particular objection that we have to measures based on reduced fertiliser use is the extent to which they can be effectively monitored. One clear advantage of nitrate protection based on land use change is that it can be monitored and controlled much more easily and with greater certainty.
It will be clear from what I have said that I and my authority are in broad agreement with the conclusions of the Select Committee. The National Rivers Authority shares the concern of the European Commission on the problem of diffuse pollution from nitrate, and welcomes the principle of the directive. It considers that the vulnerable zone concept provides a practical means of diffuse pollution control but it is very concerned that the criteria to be adopted in defining zones are too inflexible both in their scope and timescale.
The authority can see no justification for using the absolute nitrate standard in the criteria for vulnerable zones for surface waters. It also considers that the complexity of the task of defining vulnerable zones for ground waters means that there is a risk of a serious misuse of resources unless there is flexibility that reflects the urgency or need and the availability of other solutions.
Eutrofication in which nitrate is the primary limitation is not, in our view, a significant issue in this country and the authority questions the use of this directive in order to deal with marine eutrofication which should be studied as a separate issue.
I hope that now the Commission will recognise and welcome the support that it has for the principle of the policy but will respond to the impressive weight of evidence showing that there are serious flaws in its approach. I hope that it will consider most carefully the largely agreed views of the Select Committee and the National Rivers Authority. I trust that the Government will press for the changes that have been recommended.
3.40 p.m.
Lord Carter: My Lords, I thank the noble Lord, Lord Middleton, for introducing the report. As the first member of Sub-Comittee D tO speak in the debate, I thank him for his skilful chairmanship in steering us through a complex subject.

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The report shows that the draft directive tends to over-simplify a complex problem. If applied as proposed its economic and social effects on the countryside could be draconian. It is interesting to note that the opinion of the report is borne out by the comments of the European Parliament's Committee on Environment, Public Health and Consumer Protection. It reported in April of this year and in paragraph 10 stated:
"In view of the significance and undoubted controversiality of this proposal the Commission would have been well-advised to justify the proposal at greater length. … Brevity, which can otherwise usually be congratulated, could in this case result in the charge that the Commission has failed to make its case and to consult sufficiently widely".
It can be seen that the comments of that committee tend to echo the criticisms in the report.
The noble Lord, Lord Middleton, has given an excellent summary of the report and its conclusions. I should like to deal briefly with the agricultural aspects of the problem. The report points out what would happen to large parts of East Anglia, the Midlands and Kent if the proposals were adopted in full; it would tend to mean the end of modern arable farming in those areas. The report contains some figures. It would be interesting to know whether the Government have attempted to produce a detailed cost-benefit analysis and to calculate the economic effects of the proposal in the draft directive.
Assuming that the directive is not implemented so as virtually to wipe out large tracts of UK arable farming it is important to examine what could be done to minimise the economic effects of the directive on farming and to maximise the environmental benefits. It is clear that farmers must alter many of their farming practices. But careful reading of the evidence suggests that, provided there is available the weight of scientific research and advice, that may not be as difficult as it appears.
The report of the same committee of the European Parliament stated:
"When properly timed and applied in amounts recommended for optional harvest, it is possible that there will be little or no increased nitrate leakage above levels which would occur naturally. … It has also been suggested that a large proportion (up to 80–90 per cent.) of the inorganic nitrogen found in the soil and at risk of subsequent leaching derives not from artificial fertilizers application but from the mineralisation of organic nitrogen".
I should like to refer to what I consider to be significant evidence. It appears on page 50, at paragraph 212 of the report, in the comments of Dr. Greenwood. He said:
"The first thing I want to make clear is that in this system, if it is an optimum level of nitrogen fertiliser, you will find that the fertiliser is much the most effective way of getting the nitrogen into the crop. There is going to be less leaching for a given yield with fertiliser-N than with any other source of nitrogen".
I thought it important to press the scientist and to ask whether we could get the soil sampling right, and even the tissue analysis of the crop, so that we were applying in the most environmentally friendly way only the amount of the bag fertiliser and inorganic nitrogen which would be taken up in the crop. I asked whether that would be more environmentally friendly in terms of nitrate leaching than any system based on organics. Dr. Greenwood said:
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"Yes, correct. Organics are very inefficient at conserving nitrate. If you have organic manures you lose much more nitrate for a given yield of crop or a given production of cereals in this country".
We must consider the point most carefully because an idea exists that in order to solve the problem all we need to do is to stop using the bag fertiliser and begin applying the organic fertiliser. The problem is by no means solved; it is in fact made much worse. The AFRC stated that per unit of production there would be an increase in the amount of nitrate leached from organic sources compared with inorganic nitrogen.
All that ties in with the recommendations in the report as regards the role of ADAS and the provision of advice to farmers. I have spent more than 30 years advising farmers. I must admit that the necessity of changing the habits of a lifetime is a culture shock to us all, including ADAS. For example, a few years ago I attempted to arrange a seminar involving ADAS on the subject of low input farming. ADAS refused to attend unless the title was altered to "lower" input farming. It is a connoisseur's distinction, but it was extremely important to ADAS at that time. Only last week we learnt that ADAS has appointed 12 advisers on organic farming. It is only a few years since ADAS and the Ministry refused to have anything to do with organic farming. They certainly refused to apply research funds to the subject. If they had we should now be benefiting from that research.
This is not intended to be an argument for organic versus inorganic nitrogen. However, only yesterday I was sent figures from Mr. Barry Wookey which are most interesting. Many noble Lords will know that he is the leading organic farmer in this country. After a rotation period of eight years he shows the nitrate loss from his system of farming. He farms three years of grass and clover, two years of arable, one year of grass and clover and two years of arable. During the first three years the nitrate loss is minimal—virtually nil. In the fourth year—that is, into the arable crop—the loss reaches the level of 100 kg of nitrogen per hectare. That is a very high loss. It then tends to fall away for the rest of the rotation. That confirms that even under the organic systems the loss of nitrate can be very high.
Over the whole rotation period on his farm the average loss of nitrate was 20 kg per hectare. Continuous corn farming would average twice that amount; that is a loss of 40 kg per hectare. Intensive grass farming would be twice as much again; that is a loss of 80 kg of nitrogen.
It is interesting that the average loss in his rotation—and it is important to note that it is an average as opposed to an absolute standard—is approximately 20 kg of nitrogen per hectare as borne out in the report. It states that the annual rate of leaching from the soil must be kept below 20 kg of nitrogen per hectare if the concentration of nitrate is not to exceed an average of 50 mg per litre during the year. Therefore, the evidence from his farm is not entirely on all fours with that which we received from the AFRC. That tends to point out the need for increased research and advice to farmers.

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In discussing the need for advice I cannot resist pointing out, as I have on previous occasions, the absurdity of treating the crop response to nitrogen as near market research which is suitable for industry funding whereas research into the leaching of nitrates is regarded as being for the public good. It is quite clear that in order for farmers to have the advice that they need to minimise the economic damage of the directive and maximise the environmental benefits there must be a great deal more publicly-funded research and advice. That is borne out in the report at paragraph 177.
The report states:
"While the Committee recognise the theoretical differences between the agricultural and environmental aspects of nitrogen use there is a clear danger of public good research going unfunded because of its commercial implications for the farming industry. This would be most unfortunate. The public benefit of research into the agricultural use of nitrogen is great and demands continued government funding".
In case anyone wonders why farmers should not be expected to pay for this research, it is worth pointing out that since the war a large amount of public money has been used to fund advice to encourage the use of inorganic fertilisers. Indeed, it is not so many years ago that farmers received a fertiliser subsidy to increase the use of fertiliser.
If it came to a discussion on the subject of who is the polluter and who should pay, we could have an interesting debate on where the responsibility for nitrate pollution actually lies. We also have the ideas of the Government to designate areas as nitrate sensitive areas and to have surrounding advisory areas. An interesting aspect of that was reported to me only last week by a tenant farmer who has a farm in a NSA. His family has farmed that farm for many generations. Each generation has asked the landlord for permission to buy the farm but that was always resisted. With the advent of the NSA in which this farm exists, the landlord's agent has visited the tenant farmer and asked him if he would like to buy the farm. There is a knock-on effect on land values which has not been discussed.
In conclusion, the report is perhaps the most authoritative and objective study yet reduced on the subject of nitrate in water. We must hope that the Government and the European Commission will take full account of its evidence, conclusions and recommendations before the directive is given the force of Community law.
3.52 p.m.
Baroness Robson of Kiddington: My Lords, I should like to echo the sentiments of the noble Lord, Lord Crickhowell, about this excellent report produced by the noble Lord, Lord Middleton, and his committee. In my view it gives a very balanced view between the dangers of nitrate pollution and possible damage to the agricultural community. It deals with the alternatives of blending and treatment and with the difference between preventive and curative measures, as I say, in a completely balanced manner.
It is a problem which all of us realise will be very difficult to solve in this country. One of the most
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difficult problems is the long-term outlook for nitrates in water due to the slow percolation of rainwater through unbroken rock. There will be continuous problems for the future unless we concentrate on that area. We will perpetuate the problem even further into the future because we are really now suffering from what happened 20 to 30 years ago.
I believe that the report's recommendation that ADAS should provide free advice to farmers on reducing nitrate pollution in the same way as it now gives free advice on the evidence of pollution by slurry and manure is to be welcomed. We all know that over the years farming methods have at times misused nitrate application. The report gives various examples about the benefits of nitrate. It mentions autumn application of nitrate to winter wheat. That has been proved to be of little benefit to the farmer and therefore not really economically viable had he been given proper advice. It is also probably the most dangerous application.
I am not a scientist but I am a farmer, so I am aware of the enormous economic problems which could be caused to the agricultural industry if the interpretations of the directive were taken at face value. Therefore, as a farmer, I am very grateful to the committee for its recommendations and its balanced view on what should be done.
One of the most important suggestions which the report makes relates to research. In this country we have two research councils: the AFRC and the NERC. They are working in different but basically the same fields when we are looking at the problem of pollution, agriculture and the environment. It must be a mistake to have two research councils working in isolation. It would undoubtedly be helpful to have an integrated programme to integrate those two research councils as suggested by the Science and Technology Committee in its 1987–88 report. However, of overriding importance in this field is that such an integrated research council should be given adequate funding to fulfil its responsibilities. That funding must come from the Government. I cannot help interjecting that today the Government expect too much research funding to come from the industry itself. That is sometimes right but in this case I do not believe it to be right. Also, we cannot expect the voluntary, charitable research funding agencies to provide the money for this research. It must come from the Government and it must be adequate.
Another problem is mentioned in the report but the noble Lord, Lord Middleton, spent slightly less time on this problem; that is, the eutrophication of both fresh and salt water. There appears, from the evidence given to the committee, to be ample proof that nitrate on its own is not responsible unless phosphorus is equally to blame. The Commission stated that it is aware of that problem and intends to introduce proposals for the reduction of phosphate pollution in a forthcoming directive. I should have thought that in view of the interrelationship of those two pollutants an integrated approach would be more likely to achieve success and avoid unnecessary duplication.

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The Commission explained that it was not possible to include action on phosphate in the present proposals because phosphate pollution derives from point sources, which was mentioned by one noble Lord, whereas this directive deals with the much more difficult problem of diffuse sources. The Commission also stated that it was under pressure of time. I should have thought it would be easier to deal with the phosphorus problem than to deal with the diffuse sources of pollution. It would be in the interests of the pollution question and of help, I believe, to the agricultural community if directives dealing with both those pollutants were taken together.
I cannot help but mention at this point that I am a little concerned that the Government have given permission for the water authorities—it is a blanket permission, according to The Sunday Times of 22nd October—to dump dangerous substances into rivers from up to 12,000 storm sewers. If we are to take this problem seriously that sort of thing should not happen. We are taking this problem seriously because it will not go away. We have to take concerted action. The Government must look in every way to see what effect their actions are having, because one cannot help feeling that they have something to do with the privatisation of the water authorities.
This report will greatly add to the sum of knowledge available in this difficult field. I sincerely hope that great notice will be taken of it—in fact, I know that it will—in the European Commission.
4.1 p.m.
Lord Northbourne: My Lords, I join with the noble Lord, Lord Carter, in congratulating the noble Lord, Lord Middleton, on the admirable way in which he chaired this interesting inquiry. I also congratulate him on the great clarity with which he presented the case this afternoon. It has been one of the most interesting of the many inquiries in which I have participated with Sub-committee D.
One of the disappointing aspects which came out of the inquiry is the curiously superficial approach of the Commission in putting forward proposals of this importance. It is clear from the evidence we received that it did not take adequate care in considering the evidence before framing the proposals put forward to the Community. It emphasises, I suppose, the importance of the work of your Lordships' Select Committee in sifting the evidence.
This afternoon I should like to introduce one slight minority view and to question the conclusions which we reached in paragraph 185, in the summary, which state that nitrate levels in drinking water which exceed 50 mg per litre may represent a health risk and that the existing limit is a prudent one. There is considerable evidence to suggest that the 50 mg limit is excessively cautious. I should like to consider that evidence for a moment. If we look at methaemoglobinaemia—in spite of listening through the entire inquiry I am still unable to pronounce it—the Royal Commission, for example, states:
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"The disease is extremely rare in the UK where only 10 cases have been recorded in the past 30 years, one of them fatal. It appears that whenever methaemoglobinaemia and the factors contributing to it have become widely known, the condition has become rare and fatalities reduced to vanishing point".
The report continues:
"In the great majority of those cases of methaemoglobinaemia where the nitrate concentration of the water was known, the levels greatly exceeded 100 mg of nitrate/1".
The evidence taken together suggests that possibly 100 mg per litre would be an extremely cautious level to take. The evidence in relation to bowel cancer is similar.
If I were a bureaucrat sitting in Brussels I am sure that I would say, "Well, if 100 mg is safe let us take 50 mg and be doubly safe". However, from an agricultural point of view there is a vast difference in whether one settles on 100, 50 or even 70 or 80 mg. I suggest that it would be a great deal better if we accept a figure somewhere between 50 and 100 mg—perhaps 75 mg—for the following reasons.
The effect on agriculture of a limit of 50 mg is absolutely dramatic. That point has been made by the noble Lords, Lord Middleton and Lord Carter. A fairly simple piece of arithmetic is involved. Most crops release approximately 50 kg per hectare of nitrate during the course of their cycle. Using a map of the rainfall of the eastern and south-eastern parts of England and the Paris basin, calculate the amount of rain that falls on a hectare and divide that into 50 kg per hectare of nitrate. One arrives at a figure which is in excess of 50 mg per litre. Therefore, mathematically it is an unavoidable conclusion that if crop agriculture is to continue in those areas we either have to accept a limit at source in excess of 50 mg per litre or we have to accept some measure of blending or treatment of the water.
The other consideration which comes from the report is the proposal that water should be tested at source. The point has been made, but I should like to repeat it, that there are serious seasonal fluctuations in the concentration of nitrogen in water, particularly surface water. This arises because nitrogen is released, as has been said, mainly from the organic biomass in the soil. The organic biomass in the soil is warmed up during the summer. The late summer and autumn rains come along, resulting in a warm and wet biological situation in which there is activity and a considerable amount of mineralisation of nitrate takes place. Along come the winter rains and that is leached out of the soil. Therefore, in the early winter one tends to have a high concentration of nitrates in the rivers and the surface aquifers.
If we are to be told that we cannot have one day in the year when the level of nitrate exceeds 50 mg per litre in any of our water sources we shall be greatly restricted, and unnecessarily restricted, because if that water is put into reservoirs or into storage in lakes two things happen: first, it becomes blended with other rainfall which falls later and has less nitrate in it; and, secondly, there is a natural process of denitrification. Incidently, one of the areas of research which would be extremely interesting to pursue is the possibility of developing bacteria which are more efficient at speeding up that

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process of denitrification in stored water. That is by no means beyond the bounds of scientific possibility.
Finally, I should like to say a few words on the problem of good agricultural practice. The Government and the Commission may be running into what might prove to be a hornets' nest with the phrase "good agricultural practice". I do not know entirely what the Government and the Commission mean. Clearly the recommended practice in regard to the application of chemical nitrogen where you put a little on the plant when it is growing fast to enable it to take it up and then put a little more on so that as much as possible is absorbed by the plant must be good agricultural practice. The nitrogen is not wasted and it is not leached out of the soil.
However, I was brought up to believe that good farming is keeping up the fertility of the land. I was brought up a little after Sir George Stapleton in the days when ley farming was fashionable. Ley farming is a big no-no as regards nitrate because I understand that every time you plough up your lea 280 kg per hectare of nitrogen is released from the soil in the first year, and more in the second year. Therefore, we must look at low fertility farming.
The noble Lord, Lord Carter, was talking about organic farming, which need not be low farming though it usually is. In my view, the only kinds of farming which will be effective in terms of controlling the nitrogen released into the aquifer are low farming and what I consider to be low farming plus hydroponics. In other words, you keep your land infertile and then feed it like one does a house plant with a little nitrogen—as much as it is prepared to take up. That does not coincide with my concept of good agricultural practice and I believe that the Government probably have a job in hand in seeking to work out with the industry what they mean by good agricultural practice; otherwise the misunderstandings which could arise will cause considerable unhappiness.
4.10 p.m.
Lord Walston: My Lords, I share the views already expressed that this is a most valuable report. It deals with an important matter and marshals a whole array of facts which are presented in a very clear fashion. The report makes it relatively easy for those who were not involved in the actual discussions and who did not hear the evidence to obtain a very comprehensive view of the problem.
I have only one criticism to make of the report. Having marshalled and presented the facts, the committee puts forward conclusions which, if I may say so without offence, are too gentle and too mild. The criticism is implicit but I believe that the report would have carried even more weight if it had been absolutely explicit and forthright.
I begin by asking: what is the justification for a Community approach? I hope there is no need for me to remind your Lordships that I am a very strong supporter of the EC. I do not want to say anything that is going to weaken its development. I cannot see that this particular directive is in any way going to affect fair competition between member states; it is not in any way going to impede our advance
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towards 1992. I cannot see why this matter should not be left to individual member states to take what steps they see fit as regards the health of their own people, the environment in which they live and the enforceability of whatever regulations may be made.
One outstanding feature of the report is its finding that the recommendations are largely unenforceable even in the United Kingdom let alone in other countries. Paragraph 163 of the report makes that very clear where it states:
"At a local level compulsory restrictions on farming practice will be difficult to enforce and the difficulties of implementation might delay action on the scale or of the type necessary".
That is a polite way of saying that they are completely useless.
A second point that struck me—as it has other noble Lords who have spoken—is: what is the risk to health? As noble Lords have been reminded, there have been no cases of blue babies since 1972. In the previous 27 years there were only 14 reported cases. That cannot be considered a major health hazard. As regards the carcinogenic possibilities it is significant to me that in East Anglia where the level of nitrates in the water is the highest in the whole country, the level of intestinal cancers is among the lowest. That point is dealt with in paragraphs 31 to 33.
Paragraph 33 states:
"The Institute of Cancer Research considered the evidence from epidemiological studies that dietary nitrate is involved in the aetiology of stomach cancer in developed countries to be 'very weak"'.
So the two diseases which could stem from nitrates are dismissed as being either unproven or scarcely existent at all. Here I go along very much with the noble Lord, Lord Crickhowell. If so much money is to be spent, might it not be used in saving more lives and doing more good than would be the case if it were spent on this particular form of water purification? Paragraphs 106 to 108 give some very interesting information on that subject. No specific figure is given but the committee suggests that if the directive were fully implemented there might be a fall of one-third in the value of arable production. The total arable production is worth £4 billion. If that figure were reduced by one-third it would mean that the reduction and therefore the cost to the country and its economy would be £1.3 billion. I am referring to paragraph 165.
I wish to give your Lordships an indication of the scale of deaths caused by other forms of accidents. I asked the Royal Society for the Prevention of Accidents for some figures. It spends just under £5 million a year; slightly less than £1 million comes from government sources. It is not a question of unproven cancers of the stomach and of no blue babies in the past 17 years: it is question of 14,000 people killed annually, largely through motor accidents. There are many other causes as well. In addition, 7 million people are hospitalised.
If one is considering spending anything like £1 billion in reducing some risk to health, surely at least some of that money should go towards the reduction of these other accidents which account for so many deaths and so much suffering. I know that cost benefit is a fashionable term now. However, when

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we are contemplating the expenditure of large amounts of money we must make certain that such sums are wisely spent and that they will do good. Here the case is very far from proven.
The third point that comes to mind in reading the report is: who should pay for the pollution which undoubtedly takes place? Pollution is undesirable and should be minimised. I go along entirely with the thesis that it should be the polluter who pays. But who is the polluter? Am I the polluter because 40 to 50 years ago I ploughed up grassland and the results of that are now still dripping through into the aquifers below the chalk? Am I the polluter because since then I have practised what the noble Lords, Lord Northbourne and Lord Carter, have described as good farming practices, namely, rotational farming, the farming of manure and all the rest of it, with results that are now adding to the nitrate concentration in our drinking water?
Paragraph 127 of the report states:
"Past agricultural practice will continue to affect nitrate levels in slow-response aquifers for 40 years or more. The DoE desk study concluded that for three such aquifers in Norfolk and Kent a reduction in groundwater nitrate concentration to 45 mg/1 would not be achieved by 2040 even if the entire catchment areas were put down to unfertilised grassland now".
So the principle that the polluter pays is, to put it mildly, a somewhat complex one and is difficult to enforce.
I have a suggestion. In future there should be a levy on all nitrogenous fertilizers. The levy should be earmarked specifically in the first instance for further research into the methods of purifying water supplies and removing the nitrates by technological means. The nitrates will continue to come into our water supplies regardless of what is done in farming practices. And having developed that research the levy should be used to pay for the actual processes, which are expensive according to the report—and I am sure that is true—so that indirectly the polluter generally will pay.
My fourth point concerns research, which was dealt with in particular by the noble Baroness, Lady Robson. There is undoubtedly a lack of knowledge about all these problems. There is a lack of research. In some ways more serious than that—and it has been brought out clearly in the report—is the lack of co-operation between the soil scientists and the hydrologists and the people who have already done a good deal of work and know much about this problem. Paragraph 174 makes the point very clearly. It says:
"The major inhibition to the development of accurate models has been the absence of an integrated approach; while hydrologists, soil scientists and agronomists have developed a considerable understanding of particular aspects of leaching there has been no attempt to bring experts from all fields together in one team. This has led to the absurd situation whereby the validity of the model primarily relied upon by the Government, the Water Research Centre model, has been the subject of open disagreement between soil scientists and hydrologists … This is no basis for sound policy-making. An integrated team should be established.
That point is of vital importance and it is one of the areas where action can be taken at very small cost.
In summary, I would say quite forthrightly that
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the proposal should be rejected. Secondly, there should be a levy on nitrogen sales forthwith with the proceeds of the levy being devoted to research and treatment. Thirdly, it is perfectly right to encourage lower nitrogen use, especially in winter. It is also correct to discourage for that and for other reasons too intensive livestock farming.
Finally, there should be more research especially into purification treatment. We owe a great debt of gratitude to the noble Lord, Lord Middleton, and to his colleagues for giving us this report.
4.24 p.m.
Lord Nugent of Guildford: My Lords, I wish to join other noble Lords in thanking the noble Lord, Lord Middleton, and the members of the Select Committee for their careful and penetrating report on a complex and important subject. The analysis of the agricultural consequences of the directive, if pursued with 100 per cent. rigour, is both authoritative and alarming. I hope that it will be studied by the Commission and acted upon.
A plentiful supply of pure water is a blessing which most people in this country feel is God-given, and which we in Britain believed we had, until in 1980 the Commission introduced a directive setting the nitrate standard at an absolute level of 50 mg per litre. Previous to that date we in Britain had adhered to the World Health Organisation standard of 50 mg per litre with an acceptable range of 50 to 100 mg per litre. In that respect I am coming around to the point of the noble Lord, Lord Northbourne. Perhaps we should be at 75 mg per litre. Other than one fatality of blue baby syndrome in 1972, there is no medical evidence of anyone in Britain suffering harm from drinking our water.
During the many years that I was active in the water industry it was managed satisfactorily for the health of our nation without this new stringent standard. In particular I would claim that the water supply in our country has been bacteriologically safe at a standard achieved by few other European countries. In my opinion attention needs to be given to bacteriological standards in member countries at least as urgently as to nitrate standards. We have only to look at tourist experience on holidays in Europe and sufferings from Damp;V to see the need for it.
I recognise of course that the inevitable growth of the nitrate problem needs to be dealt with. But I would have more confidence in the Commission's directive if it published the evidence on which it was based. It has not done so. Furthermore, as the evidence to the Select Committee discloses, scientific bodies in this country such as the Natural Environment Research Council, the Water Research Council and the Agriculture and Food Research Council were not consulted in framing the directive although it is well known that more work has been done in Britain on nitrates than in any other European country.
I turn now to the agricultural implications with which the noble Lord, Lord Middleton, dealt so well in his speech. The directive requires vulnerable areas to be defined in member states. In Britain these

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would be East Anglia and the Midlands, where farming practice would be closely restricted as to cropping, fertiliser application (both organic and inorganic), and livestock population. This has been referred to by many noble Lords. In paragraph 165 the Select Committee estimates that there would be a reduction of one-third in the output of arable crops if the directive were strictly interpreted and, as the noble Lord, Lord Walston, said, an annual loss in crop value of the order of 1.3 billion. That would bankrupt many farmers and would seriously reduce the nation's food supply. Strict application throughout the EC would presumably have similar dire consequences. The ultimate result would be the highest standard of nitrate-free water with the lowest standard of food supply. I just do not believe that the Commission intends any such folly.
There is a ray of hope. The report observes that Annex 3 of the directive appears to modify the mandatory form of Article 4 with regard to fertilizer applications and land use options. In addition, the Commission's witness, as my noble friend Lord Crickhowell pointed out, was willing to consider the United Kingdom's contention that the standard of 50 mg per litre should be observed as an average rather than as an absolute, particularly with regard to surface waters, which are inevitably so variable. That more common sense approach seems to give hope.
In the meantime Her Majesty's Government have agreed to work towards full compliance with the directive but have set the target date as 1995, two years after 1993 as proposed by the directive. It is on that account that I understand the Commission intends to arraign Britain before the European Court of Justice. Just what that will achieve is difficult to understand. If the Commission wished to make an example of a spectacular breach of this directive, it can consider—much nearer to home for the Commissioner—the eutrophication of hundreds of miles of the Adriatic Sea this summer, with disastrous consequences for the golden bathing beaches of Rimini and other resorts.
Returning to the Government's proposals for compliance with the agricultural aspects of the directive, these are defined to operate on a voluntary basis with emphasis on good farming practice, rather than on precise restrictions on fertiliser application. The report reviews the complexities and uncertainties of the relationship between farming practice and nitrate build-up and concludes that this is a sound practical approach. I certainly do so myself. But its success will depend on full co-operation from the many farmers concerned. I am confident that my old friends in the National Farmers' Union will give full support. I must say that I found the Select Committee's expert analysis on the whole of this subject brilliant and I am most grateful to it.
I conclude with a further reference to the non-publication of the scientific evidence on which the directive is based. This is a point which was strongly emphasised two years ago when we were debating the Commission's Fourth Action Programme. We went further—the noble Baroness,
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Lady Serota, supported me—and asked that the scientific evidence should be placed before the Council of Ministers when the Commission is seeking their approval for a directive. Without that safeguard, defective directives—and I suspect that this may be one of them—may be placed before Ministers for approval.
For instance, a directive on the dumping of waste in the North Sea was drafted, ignoring completely the pollution from the Rhine effluent, which discharges many times more pollution than any other source in the North Sea. However, in the case of the nitrate directive, no medical or other scientific authority can advise against a directive aimed at making drinking water safer.
There are obvious doubts about the cost-effectiveness—and the noble Lord, Lord Walston, emphasised this—of a measure which, if strictly applied, could make such a drastic reduction in food production. But without the scientific evidence published, an intelligent discussion of the merits of the proposal is impossible. So it really is in the interests of the Commission itself, if its reputation and of all member states that it should accept this practice. I hope that one of the consequences of this admirable report will be that it will do so.
4.33 p.m.
Lord John-Mackie: My Lords, like other noble Lords I think that the noble Lord, Lord Middleton, is to be congratulated on his report. Of course, he did not do it all himself. His committee helped a bit, as did the officials. The report is reasonably short compared to some of the reports we get. However, it might have been better to have a glossary of pronunciation to deal with 19-letter words which appear here and there and to which my dictionary did not rise although they were explained in a later paragraph. The report gives a tremendous amount of information which should be useful in countering the recommendations which have been made, and I hope that it will be used by the Government in due course.
Four farmers have spoken ahead of me and it will be rather difficult for me to say anything new from the agricultural and farming point of view. But one sees in paragraph 41 that in 1985 only 1 per cent. of the population were affected by water containing more than the prescribed amount of nitrate and in 1987 the figure was something less than 3 per cent. So it seems that the recommendations are a very large hammer to crack a not very big nut.
What we are really talking about is the result of an agricultural revolution that has taken place over the last 50 or 60 years. I started farming 63 years ago next month and I have seen it all. There has been a huge reduction in manpower to the detriment of the countryside. There has been the demise of the horse. The engineer and the mechanic have superseded the blacksmith. There have been fantastic developments in mechanisation—sometimes overdone. I remember the late Peter Smith, a very well-known farmer in the West Country giving a talk at Oxford emphasising that

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farmers were using power too much and wishing that they would stop using a JCB to bury a dead cat.
But, above all, there are the plants that the plant breeders have given us and which have allowed us to use to the full what the chemical industry produces in the way of fertilisers, pesticides and so on. I always put the plant breeders at the top of my list, because of the advantages that they have given to agriculture, with the enormous improvement in the plants produced in the last 30 or 40 years. As a result, the production of temperate foods has risen from just over 30 per cent. in the late 1920s and early 1930s to over 80 per cent. today. One of the tables in the report shows an over-production of wheat, but that is not quite true. There is over-production of feed wheat, but we still buy an enormous amount of hard wheat from Canada and elsewhere. Some of those points should be mentioned.
The committee states—and the noble Lord, Lord Walston, mentioned that it was not as firm as he would have liked it to be in its statements—that it is very tentative, "about the reduction in production" that a drastic cut in nitrogen and phosphate use would make. It is pretty obvious from the figures we have that one-third is not an overstatement.
To give an example, I started farming in the centre of Aberdeenshire on a farm of about 240 acres. We though we were doing very well in producing 30 to 35 cwt. of cereal. It is more than likely that the noble Lord, Lord Stodart of Leaston, will agree with me there. Last year, my nephew who now farms that farm grew 50 tonnes of wheat in a 12 acre field. If he is restricted in his nitrogen and goes back to even two tonnes, we are talking about a very high figure indeed. We might have to purchase anything up to £1,000 million to £1,500 million-worth of wheat and other cereals as well. Not only that, but there is the compensation that farmers would have to receive as well.
I understand that the installation of a denitrification plant is a fleabite compared to the annual cost that I have just mentioned. I also know the argument that this will satisfy people who are worried about the overproduction of food, that it will reduce the surplus and save money there. I think we should look carefully at any suggestion of reducing food production in a world where there are 800 million people on what is almost a starvation diet. An important point for the future is that population control has obviously failed. If your Lordships do not believe me, you should ask Mr. Gandhi. It is rising at a rate which means that there will be 7,500 million people by 2025–2030. It would be wrong to do anything which would reduce food production.
If we were forced into extensive farming and adopted the rotation of our fathers and grandfathers, they would turn in their graves to think of being restricted as to the amount of muck—I am sorry, farmyard manure—they would be allowed to plough in. They could never get enough of it. I shall again tell a story of one of the best farmers I knew—I am sure that the noble Lord, Lord Stodart, will agree with me—in West Lothian. He was known all over
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the country as a first-class arable farmer and stockman. Every time he passed a farm manure heap, he lifted his cap.
When we look at the question of rotation in organic or extensive farming, whichever way one wants to look at it, we must be careful, as the noble Lord, Lord Northbourne, emphasised, about how much nitrogen is released when one ploughs up pasture, especially pasture that is well endowed with wild white clover. All those matters must be taken into consideration. Like the noble Lord, Lord Northbourne, I followed George Stapleton's plans to a tremendous degree, as did many farmers in areas where rotational farming took place.
On the question of the eutrophication of water—I believe that is the word—the chairman again said that the matter was unclear. That was emphasised by the noble Lord, Lord Crickhowell. I gather that there is a feeling that growth in streams is becoming an environmental problem. It can be well conrolled. I had a curious experience. I had a pond not far from my house about the size of this Chamber. We drew water from it for spraying when high volume spraying was the fashion. One day a vandal poured a five-gallon drum of gramoxone into the pond. I have never seen such a clearance of pond weeds in my life. The extraordinary thing was that about six weeks later fish came into the pond which had never been here before. My problem then was to keep away young boys who left litter when they came to fish. It should not be a problem if the growth is controlled.
With that, I believe that I have said enough to suggest that I am not too keen on the ECC's recommendations, although, like the noble Lord, Lord Walston, I am a strong believer in the European Community.
4.44 p.m.
Lord Bridges: My Lords, I should like to intervene briefly in the debate to support the Motion introduced by the noble Lord, Lord Middleton. As he explained, I was not formally a Member of his sub-committee, although I was invited to take part in its deliberations as a member of the Sub-Committee on the Environment. I fully share the conclusions reached in his committee's report which I believe to be a thorough examination on the best evidence available and a fair appraisal of the Commission's proposals. I also thank the noble Lord for his kind remarks about my participation in his work and for his lucid introduction to the debate.
The committee was right to welcome the Commission's proposals. The problems of nitrate pollution and eutrophication are growing and the consequences could be considerable. There is a manifest connection between the large growth in agricultural production which has taken place in the last generation and the increase in nitrate pollution. One fact brought to our notice and mentioned in the report is that the increase in the use of nitrogen fertiliser in this country has grown by a factor of eight since 1945. That is a considerable growth.
The European Community has a clear responsibility in that area as it gave birth to the common agricultural policy, which provided so

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much of the stimulus to the growth of production and the finance necessary to sustain that growth. The report also mentions the fact that the European Community has responsibilities for the environment as a result of the adoption of the Single European Act. It is a serious matter for the Community as a whole, and the Commission is to be commended for its action in addressing it.
It was also most helpful for our committee that Mr. Jorgen Hennigsen, the director concerned in DGXI of the Commission, was able to attend one of our meetings. That enabled us to have a better understanding of the rationale behind the Commission's proposals. It also enabled us to explain some of the difficulties that we found in them. Noble Lords who have read the report may agree that the account of that meeting, which begins on page 196 of the report, is one of the more valuable features of that document.
Mr. Hennigsen made it clear that the guiding thought behind the Commission's proposals was that of the precautionary principle; that is to say, the avoidance of pollution in the first instance rather than its treatment and reduction to a safe level after the event.
The sub-committee was in general sympathetic to such an approach, although I note the pertinent remarks made by the noble Lord, Lord Northbourne, about the 50 mg per litre limit. It is perhaps relevant to draw your Lordships' attention to the passage in the report on that question which concluded with the words, "They"—that is to say, the members of the committee—
"considered that it is for the proposed regulatory Committee to determine whether the limit should be re-assessed";
in other words, whether the limit of 50 mg per litre was correct, something that we examined but upon which we made no recommendation other than that which I have mentioned.
We were able to point out to the Commission a number of practical matters where we believe the draft directive to require some further consideration; for example, our belief that the sampling of drinking water should be undertaken at the point of abstraction for use rather than at points in the aquifers from which it might be taken. That was a point mentioned by the noble Lord, Lord Crickhowell.
One of the difficulties which emerged from our consideration of that problem was that of scientific uncertainty. Although the general way in which leaching takes place is understood, the precise measurement of the circumstances (the rate, the place, the time and so on) cannot at present be made with confidence. That was one of the reasons why members of the sub-committee felt that they were unable to endorse the contents of the Commission's proposals in their present form. The driving force in Brussels seems to have been concern about the eutrophication of the coastal waters of Holland and Germany rather than the issue which is of greatest concern to this country; namely, the concentration of nitrates in drinking water.
Here lies one of the reasons for that divergence of opinion between the analysis made by the
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sub-committee and the proposals put forward in the draft directive. In other words, the directive has been put forward to deal primarily with a Continental problem. It has also relied on a method of analysing the nitrogen content of the soil, a German method called Nitromin. We are told that that has worked well in the north German plain but does not seem so well suited to the different soil conditions in this country.
The issue of scientific uncertainty has been underlined by events which have taken place since our report was written. The recent appearance, I believe for the first time, of algal bloom, some of it toxic, in fresh water reservoirs in eastern England should make us realise how quickly the situation could deteriorate. Of course, we have had an exceptional summer but those of us who believed that algal bloom was a rare event in our fresh waters will need to think again.
There have been other events this summer to remind us how rapidly the situation can change. As the noble Lord, Lord Middleton, has mentioned, the deterioration of the waters in the upper Adriatic and the problems of algal bloom off the coast of Norway are very real elements of the problem. We also mention another area which has not arisen so far in this debate and which I believe to be of great importance; namely, the contamination of the upper Baltic where for some years now serious damage has been done to the water purity and the fish population. So we need to get to grips with the problem on an international scale, both in the Community and more widely. I strongly encourage the Government to pursue their present international activity as a matter of priority. The North Sea task force evidently has an important role to play in such an international approach.
I have one further comment to make which is intended not so much as a criticism but rather as encouragement. Those who read this report will notice that there has been some lack of contact between the agricultural and scientific, experts in this country and those who are responsible for studying these issues in Brussels. I do not seek to blame anybody for what has occurred, but I suggest it is of importance that the best scientific knowledge available to our experts should be communicated to those in the Commission who are preparing proposals on an issue of this kind. It is very important to understand what is happening in terms of scientific evidence. This needs scrupulous attention.
It seems to me to be particularly unfortunate that the Rothamsted research centre, which has unrivalled knowledge and experience of the effects of nitrogen fertiliser, will not be able to contribute more in this case. In saying that, I recognise the problems of the Commission, which is often without extensive scientific resources of its own and has very compressed deadlines for its work. However, knowing that—as I am sure the Government do—increases the need for us in this country to do all that we can to provide the information and evidence available to us.
The noble Lord, Lord Walston, felt that we should have been more explicit in our remarks and more

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forthright in our recommendations. The sub-committee did not seek to give vent to its feelings on the subject. There were reasons for our moderation. The report was written in a manner calculated to be persuasive, both of Her Majesty's Government and of the Commission. I hope that its contents and the comments made in your Lordships' House this afternoon will enable the Government to press ahead with their work on this very important subject.
4.54 p.m.
Lord Stodart of Leaston: My Lords, I wish to open by complimenting my noble friend. His lucidity in presenting the report today has put a seal on his wholly admirable steering of the committee towards a report which many have been most generous about this afternoon.
I must confess that when the subject was first broached as a matter for investigation, I felt slightly cynical. After all, I remember saying to myself: think of the many foods we used to enjoy eating and against which we are now warned—no fat on meat; beware of eggs; beware of pâté; watch out for potato skins. It is not only food. Earlier this year one of the quality Sunday newspapers contrived to imply that the most moderate drinker of wine is at risk. I am glad to say that it did not have the audacity to make such a reference to those who drink Scotland's most noble drink! From biblical days wine has had a fairly strong association with water. But the anxiety shown by the World Health Organisation dispelled such heresies as these.
I am quite certain that it was right to hold this inquiry. However, it is not in the least unreasonable to point out several inconsistencies thrown up as regards the United Kingdom, when examining a directive designed to apply to the whole Community. Much has already been said about the blue baby syndrome and I do not propose to touch on it again. Then there was cancer. A study of one town in the United Kingdom prompted some concern, but a subsequent review did not confirm it. Fertiliser workers exposed to high doses of nitrogen have suffered no increase at all in susceptibility to cancer. As nitrate levels in water have risen in the United Kingdom, the incidence of stomach cancer has fallen. In East Anglia in particular, where the nitrate level is highest, the level of cancer is at its lowest.
The greatest inconsistency, to my mind, and perhaps the most elementary inconsistency of all is that I myself hardly ever drink water on its own, yet if I go to many countries in the Community the one thing I would never dream of doing is drink water straight from a tap. However, I would without hesitation turn on any tap in this country if I were desperate for a drink of water. And why not? As the Department of the Environment told us in its evidence, 97 per cent. of our people drink water uncontaminated by too much nitrate. Therefore, I am bound to feel that my old friend, the noble Lord, Lord John-Mackie, had a point when he mentioned sledgehammers and nuts.
However, the limit has been laid down with the backing of the World Health Organisation. So one must accept from all the evidence we heard that, as
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the fertiliser nitrogen is a major cause of nitrate pollution, unless its application is restricted nitrate levels in sources of drinking water will continue to rise. How does one apply these restrictions? One certainly does not do so by using a blanket, as suggested by the Commission. One rather interesting answer was given to us when we asked, as we did fairly persistently, why there was no nitrate problem in Scotland. I believe my noble friend Lord Middleton touched on this today. He said that the greater amount of rainfall up there was probably responsible. However, the rainfall on the east coast of Scotland differs very little from that in East Anglia.
The answer given to us by a representative of the Fertiliser Manufacturers' Association Limited at paragraph 458 of the report stated:
"I cannot offer a direct solution. The nitrate problem in Scotland is negligible to non-existent, and let us be grateful for that. Quite seriously it may well be—we do not know the detail of this—that the details of farming practice in Scotland are sufficiently different from those in East Anglia to have made all the difference".
This causes me to wonder whether a little investigation along these lines might not be a good plan.
Further, the one thing I am quite certain we must not do by way of restriction is to make spot checks of the nitrate content in streams or rivers. My noble friend Lord Crickhowell referred to this. I think it is worth quoting from the answer given on this subject by, this time, the Agricultural and Food Research Council. It makes such interesting reading. The evidence stated at paragraph 242 of the report:
"One great difficulty would seem to come out of a paper we had from the East Scotland college about sampling of water supplies in the East. They say there are enormous fluctuations in the same spring between one month almost and another.
(Dr. Greenwood) Yes.
(Professor Stewart) Yes, that is absolutely true: from one week to the next, often from one day to the next. Spot testing on one particular day makes no sense".
Therefore, averaging is absolutely essential. If the evidence given on behalf of the Commission means what it says, it should be fairly easily obtainable.
There is the possibility of blending as much as possible. However, I am told that that is limited in its scope. I remember making what I thought was a helpful suggestion to the committee. I pointed out that there were high nitrate levels in the South but no nitrate problem in Scotland. I further pointed out that the Kielder reservoir in Northumberland was underused. I asked whether it was possible to transfer, as is the case with gas, water from one area of the country to another. I was quickly disillusioned. I was told that the idea of pumping water from Northumberland up over the Yorkshire Moors and then having it run down again into East Anglia was a little far-fetched.
All the evidence on farming practice showed—again this has been touched on by several noble Lords—that if the restrictions were rigorously applied farm incomes would suffer catastrophically. Therefore, the Government's ideas on the setting up and monitoring of pilot sensitive areas are to be welcomed and a realistic package of measures and payments must result.

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On a recent wet day I pulled out from one of my bookshelves a book by one who was undoubtedly the greatest advocate of agriculture in the 1930s. I refer of course to Mr. A. G. Street whose general theme then was that we were all crazy because we were trying to grow grain in this country when we grew the best grass in the northern hemisphere. How strange that seems today. Mr. Street wrote:
"This island is noted for its rich old pastures which have not been ploughed up within living memory—and which are, generally speaking, the most valuable farming land in the country".
I wonder whether there was a nitrate problem in those days of the 'twenties and 'thirties. We are told, and have been told throughout the inquiry, that it is only when one ploughs up grass that nitrate leaches. We know that 8 million acres of grassland were ploughed up during the war. We have heard of the leaching that that has caused and is still causing. However, ploughing up was what the nation required, just as governments up until recently have required maximum food production. When I say recently, I mean recently in farming terms. That is why it is my submission that compensation for damage done by high nitrates caused by national demands must be generous.
5.7 p.m.
Lord Raglan: My Lords, I have been on Sub-Committee D for a long time now. I am bound to say that this was perhaps the most interesting inquiry I have sat on. The sub-committee needed to find a careful way through a lot of evidence and some rather ill done research and present its opinions in a balanced way. I think that with the help particularly of our specialist adviser and the guidance of the noble Lord, Lord Middleton, we managed to do so. Certainly the noble Lord, Lord Crickhowell, thought so, as did the noble Baroness, Lady Robson. My noble friend Lord Walston thought we were not tough enough. I hope that the mildness of our language gave emphasis to the gravity of our conclusions.
There is no doubt in my mind that the Government have only recently woken up to the fact that they signed the drinking water directive back in 1980. They were not adequately prepared for the good Mr. Henningsen's onslaught when it came. The Government have not committed enough money or urgency to the necessary research.
I suspect that the Commission has scented an issue in which to cast itself as the good fairy as a relief from being an Aunt Sally. In my opinion and in the opinion of several noble Lords who have spoken, it too has not done its research. In this regard one needs to remember that it is not amply staffed and has habitually got round that situation by firing off draft legislation at member states and studying the feedback. It can thereby tap the expertise which is at the disposal of the governments of member states. In this case, because there has been a lack of research on the part of those governments, the Commission has had difficulty in knowing where to go for that expertise. It is clear from the evidence that Mr.
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Henningsen and DGXI are committed to further study of the problem.
Sub-Committee D encountered an instance some years ago of the Commission becoming so carried away in pursuit of a goal that it pre-empted the results of sound scientific research a then had to back down. It is tremendously important that both the Commission and the Government should address this understandably emotive subject in as clear-eyed and objective a fashion as possible. That means not going along with either of the two extremes of thinking that I have encountered on this issue. One extreme is the view that there is no need to control nitrate application because the world is short of food. The other is, in essence, that bag nitrogen should not be applied at all because it is artificial and therefore harmful.
As regards the first view, although there is a general food shortage in the world, there is—as there needs to be if we are to be sure of being fed—a surplus in world food trade. That is why governments have to continue to support agricultural supply. Otherwise the fall in prices occasioned by the trading surplus would soon lead to shortage. While it is the Government's duty to maintain that trading surplus, and at reasonable cost—which is why intensive farming is necessary—they also have a duty to ensure that farming practices thus encouraged do not have harmful effects.
We saw no reason why the 50 mg limit should be raised. However, it must be emphasised that there is no magic in that figure. Nor is there any firm evidence that twice as much would be harmful. Yet, as the noble Lord, Lord Stodart, has said, 50 mg is 5 mg above the World Health Organisation recommendation. I do not know whet her to believe the WHO or the noble Lord, Lord Northbourne. The World Health Organisation has set a limit of 45 mg. In the present state of knowledge and in the absence of contrary evidence it seems wise to aim for that figure.
There are ways of reducing the present rate of leaching in certain areas which have now been declared nitrogen sensitive. Greater care can be taken in the application of nitrogen; over-application in the form of "insurance" dressings can be firmly discouraged; slurry disposal can be controlled; and perhaps even the age-old practice of clover ley farming should be questioned.
At the other extreme, the call to stop applying artificial nitrate is made in ignorance of a basic knowledge of chemistry and on the priciple that anything which is called "organic" is natural and good and anything artificial is unnatural and bad. However, there is no such thing as organic nitrate; it is by definition an inorganic compound. A plant must have it to grow at all and cannot get it directly from compost, humus, or other organic matter. That has first to be degraded by soil bacteria to produce inorganic nitrate, which is chemically indistinguishable from the nitrate which comes out of a bag. One needs to face the fact that applying compost, as is done in organic farming, is just another way of artificially conveying nitrate to a plant.

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There is another aspect of organic farming which needs to be borne in mind when considering leaching. The noble Lord, Lord Carter, touched on the issue. In theory at least, the application of bag nitrate can be controlled to give only the optimum amount to the plant. It is not possible, however, to control the decay of organic matter, whether it consists of compost, turf, dung or the roots of a harvested crop. It is the decay of that organic matter which leads to the autumn nitrate flush. That is the main cause of nitrate pollution. Only the complete cessation of arable farming, of whichever sort, would prevent that happening. Even then the effects would not be felt in underground water supplies for decades.
On the evidence we received, the problem is not nearly so serious as to require such a measure. Fifty mg is not a panic figure but a prudent one. Even though you may be careful to bring your water below that limit, a fondness for vegetables, whether organically grown or otherwise, will inescapably deliver into your stomach large quantities of nitrates in another way. That is the kind of fact of which people should be made aware.
The issue does not require sweeping changes, dramatic gestures or the laying waste of whole tracts of countryside. It should be tackled thoughtfully and bit by bit over the next decade.
I was impressed by the water authorities' calm evidence. They believe that by spending about £90 million over the next five or six years they can bring all water supplies within the 50 milligramme limit. It therefore appears that the Government, if rather belatedly, are going the right way about tackling the problem.
However, I enjoin them to take people along with them. That means explaining what the problems are and the ways in which they can be tackled. People are understandably very poorly informed about the subject, but I have found them to be most interested in such facts as I have been able to bring to their notice. For example, nitrogen is not some strange and fearsome element but makes up 79 per cent. of the atmosphere; not only is nitrogen necessary to plants but it is an essential constituent of protein; large amounts of nitrogen come down in the rain anyway, and so on.
The Government need to clue themselves up on the issues and then impart the knowledge in clear, plain language to the public at large, because unnecessary alarm has been created. They then need to persuade the Commission to modify its approach because the draft directive is not a practical document at present.
5.18 p.m.
The Earl of Radnor: My Lords, perhaps I too may say how much I appreciated sitting under the chairmanship of my noble friend and having him lead us through a scientific labyrinth of great interest and considerable complexity. I agree entirely with my noble friend Lord Crickhowell that the report is a book which many of us will keep by us for reference for a very long time to come.
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Having said that, there are two matters upon which I am not entirely in agreement with the report, and they are precisely those mentioned by the noble Lord, Lord Northbourne.
At this stage in the debate it would be sensible for me to simplify the whole question as much as possible. The way to do that would be to start with the objectives of the directive. They were dual objectives. The first concerned public health and the second the eutrophication of waters—the enrichment of either fresh waters or sea waters. I make no apology for repeating what other speakers have said.
Regarding the first of the objectives, the two diseases which are thought to result from nitrates in water are methaemoglobinaemia (it would perhaps be easier if I referred to it as the blue baby syndrome) and cancer of the stomach, which is a highly emotive subject. There are few people who are not aware of the dangers of that disease.
Perhaps I may take the blue baby syndrome first and repeat what has been said with one small addition which comes out in the evidence and which has not been mentioned. There have been 14 cases since the war and one death in 1972. But even that death was slightly suspect because of the confusing factor of bacterial contamination. That is one health hazard. In this country—I cannot say with certainty what is the case in other countries, but I think the figures are comparable or even better—there is a minimal risk.
Our evidence told us that animals subjected to experiments involving nitrates—the ingestion of nitrates—suffered from stomach cancer, but this, I believe the medical research association said, was not reflected in humans. I have two close relations who are doctors of some importance. Whatever the BMA evidence—it used the word "prudent", as we did ourselves—those two doctors and their friends believe that there is extraordinarily little danger to health from nitrates.
So far, so good—or so bad, according to how one likes to look at the matter. Let us then look at the 50 mg per litre limit which must be attained by the mid-1990s, failing which we shall be taken to court. Again, it comes out clearly from the evidence in the report that the eastern counties—the eastern Midlands, Kent and possibly other parts of the country—would have to radically alter their agriculture. Agriculture as we know it in those places today would be totally destroyed. I am sure that the figures that my noble friend gave were entirely accurate, but they do not describe in human terms what is involved. It means the whole of the eastern counties, or very large tracts of them, going down to unfertilised grass or trees.
Trees do not grow so well in the eastern counties; they prefer the rainier districts. There would surely be a knock-on effect for other parts of the country if those areas were no longer allowed to be the granary of England and to produce our potatoes and sugar beet. Nature abhors a vacuum, but farmers in other parts of the country would soon see an opportunity and, even if their land was not suitable, would be liable to plough it up and try to make some

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money. That would have a dramatic effect on the appearance of this country and on the general environment. We would find that, rather than coming down the hill, the sheep would go up the hill. The arable land would follow as the best lands—the dry lands of the eastern counties—were put out of action.
As something worse always lies behind the figures, one must then think of the unemployment that would result. There would be massive rural unemployment. There would probably be fewer people working in the country than since before the war, and that would again have a dramatic effect. There would be unemployment among farmers with all the difficulties that have been mentioned—for example, whether they should be compensated. It is not at all fanciful to suggest that the number of suicides among the farming community would compare unfavourably with the danger of blue baby deaths. There would be nervous breakdowns and suicides. I am prepared to bet that that would be worse than what would happen if we maintained our proper top limit of 100 mg.
I believe that the limit is completely wrong. We described it as a prudent limit. "Prudent" is a strange word. It does not mean that it is the right limit; it means that it is safe. I should have preferred that we said an over-prudent limit.
We also said in our conclusions that we hoped that the EC would reassess the limit. I hope that by being aware of the situation—one does not deny the existence of nitrate pollution—it will be contained. Our previous limit, which appeared to be completely safe, should not be reassessed but reinstated. That would give us plenty of time to watch carefully to see whether we were in a deteriorating situation. The evidence is that we are not in a deteriorating situation at the moment and that things are stabilising reasonably well. But it would give us time to watch the situation and, if necessary, take action over a longer span.
Most people know that eutrophication can be limited by either phosphates or nitrogen. They would say that it was ridiculous to talk about it in depth unless one considered those two elements together, which the directive has chosen not to do. I would therefore dismiss that until such time as it does just that. Like all noble Lords, I am aware that eutrophication takes place in the North Sea, the Adriatic and possibly in some inland waters here. But it is no good pontificating about nitrates in relation to eutrophication without considering the phosphate input which may be equally important and is very often more important.
In conclusion, the report seems to lead us on to a more fundamental question; namely, what is the genesis of the reports? Who produces the idea, a perfectly good idea in this case? Who decides? Who advises about it? What scientific advice is taken? Do our Government have the opportunity at an early stage to suggest who should be our advisers? It appeared from the extremely learned people to whom we spoke that they had not on the whole been asked their opinion. When we asked Mr. Hennigsen
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how the 50 mg limit had been arrived at, he said that the decision had been taken before he came into the picture. He did not seem to be absolutely sure. Yet there had been a meeting in Berlin of experts from various countries. He thought that there had been another meeting before that. That seems inadequate. I felt that it was an inaccurate answer.
I should like to ask whether there is a chance that in future we might be able to put in more information before the directives are produced, rather than discussing them as we are doing now when the matter seems to have got a little out of hand. To reverse it will take a great deal of trouble. It should perhaps never have been put into quite such a violent forward gear.
5.30 p.m.
Lord McIntosh of Haringey: My Lords, I first enter this fascinating debate by confessing a disability which is shared only by the noble Lords, Lord Crickhowell and Lord Bridges, and no others: I am not a farmer and know nothing about farming other than what I read. However, I have caught up a certain amount as a result of this excellent report. I must congratulate the noble Lord, Lord Middleton, the members of his sub-committee, their specialist adviser and clerk and everybody who submitted evidence.
As I said, the report is a work of great profundity and extension. It covers a serious subject in a depth and with a catholicity of evidence which is quite remarkable to a layman such as myself. Let me start with the common ground on which everyone who has spoken this afternoon has agreed. First, there is a 1980 directive signed by the British Government which requires compliance by 1985 with a number of standards, of which nitrate levels is only one. Some noble Lords, and particularly those on the Government Front Bench, will perhaps recall that this summer the House took the view that further indefinite delay in complying with the 1980 directive was not acceptable and that there should be compliance by 1993. That was not the view taken by another place and we have no legislation at the moment that requires compliance by any particular date.
However, the directive is there. It has been signed and it places an obligation on the British Government. That was the starting point for the sub-committee's deliberations, as indeed is explicitly stated. Certainly I am not qualified to go into any of the medical or agricultural technicalities—indeed they are far more than technicalities because they are essential to the discussion—into which the sub-committee entered. I should simply like to say with regard to the medical point that the World Health Organisation in 1984 confirmed the figure. Indeed it gave a slightly more rigorous figure of 45 mg per litre. It is not just Europe which sets standards of that kind; standards of the 45 mg level exist in the United States, Canada, Switzerland, Finland and so on.
So if there is error in the limit, and some noble Lords have suggested that there is error, it is worldwide and it is not one that is confined to the

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United Kingdom. Of course there is a great deal of scope for discussion and even disagreement about the way in which the maximum acceptable limit is calculated on an average or an absolute basis and whether it is measured at source or at the point of entry into the drinking water supply are matters which are perhaps of much greater significance than whether the level itself should be 50mg, 45mg, 75mg or 100mg.
I am bound to say that I agree with those noble Lords who said that, when considering drinking water quality, it seems more relevant to measure it at the point where it enters the drinking water supply than to take the measurement at source. That seems to me to be common sense. Whether that deals with the environmental eutrophication problem is an issue that I certainly am not qualified to judge. As I said, the starting point of the sub-committee's deliberations was that the 50mg per litre measure was a prudent measure and that the only criticism or way in which it should be questioned was not on medical or environmental grounds but on grounds of cost effectiveness.
A number of noble Lords made very interesting comparisons of the cost effectiveness of expenditure on reducing nitrate levels with other forms of public expenditure. I was interested to hear that the noble Lord, Lord Walston, preferred to spend public money on reducing road accidents rather than on dealing with nitrates in water.
The other common ground which I think we have in this discussion is the fact that nitrate levels, perhaps not in surface water but in ground water at any rate, are increasing not only in this country but in all countries, particularly the countries of Northern Europe where intensive agriculture itself has been increasing. When I read the supplementary submission from the European Commission which precedes the evidence given by the members of the Commission who attended the sub-committee, I note that that is certainly true for France, Germany, the Netherlands and possibly for Belgium although not for Portugal; I leave Luxembourg on one side and there is no evidence for Greece. But certainly in the large agricultural countries where intensive farming, and intensive arable farming in particular, has been encouraged, levels of nitrogen are increasing, have been increasing and appear to be likely to continue to increase. If nothing else that gives some support to the Commission in drawing attention to this problem and seeking to control it.
Undoubtedly it is illogical that over the past nine years attention has been concentrated only on nitrates rather than on phosphates when we know, as a number of noble Lords have pointed out, that phosphates are a major cause of algal bloom and eutrophication. Certainly it seems urgent that the Commission should complement its work on nitrates by producing a draft directive on phosphates.
I sympathise with noble Lords who suggest that one cannot deal with the eutrophication issue as a whole unless both issues are considered. However, nitrate as a cause of eutrophication is not insignificant. In the report I read that nitrate-caused eutrophication in the Norfolk Broads, although it
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may not be the only cause of the dramatic decline in the environmental quality of the Broads, has led to the destruction of the reeds there with the result that we now import reed from Hungary. I should have thought that that commodity was low on the priorities for imports.
Next we have to look at the actual proposals in the draft directive, which have been widely attacked. I do not find those proposals as overwhelming or as hard as some noble Lords have suggested. The draft directive states that each member state should declare vulnerable zones. That is only one step further in compulsion than the nitrate sensitive areas that the Government are proposing to designate on a voluntary basis. But even within those vulnerable zones the restrictions are only to be imposed within a period of four years. There is no more urgent deadline. Moreover, although the restrictions are to be compulsory on manure—I must not enter the debate on "organic" and "inorganic" about which the noble Lord, Lord Raglan, knows far more than I do—they are only to be compulsory on animal-based nitrates. Where they are concerned with bagged fertiliser, the standards are to be national rather than Commission imposed. So the proposals are not quite as extreme as some noble Lords, perhaps not intentionally, seemed to me to suggest. All the other measures that are proposed in the draft directive are measures which the British Government and other member states would only have to consider. It is expressed no more firmly than that.
In considering the terrible increases that have been observed, one thinks of the eutrophication of the Skagerrak and the Adriatic coast. It is confined in this country, I understand, to a few harbours and to a number of our smaller streams which are certainly not as attractive as they used to be. When we consider that, I do not think that we can blame the European Commission for starting this process even if we can say justifiably that it ought to have examined other causes of environmental damage or of impurities in our water supply.
The sub-committee gives the impression that it is common ground that the causes of high nitrate levels in our drinking water are virtually entirely leaching from arable land. Indeed, that is expressly stated in the report of the Select Committee. The concentration on this leaching as a problem is clearly the right focus of attention in the Select Committee's report. However, the question then arises—a number of noble Lords referred to it—as to whether it is right to concentrate on dealing with the problem at source, through curbs on agriculture or through treatment. I hope I am not alone in thinking that perhaps neither is sufficient by itself. If we are to achieve the requisite reduction in nitrate levels in our drinking water, certainly there will have to be substantial expenditure in denitrification plant. There is no doubt that whatever else we do we shall have to engage in treatment. It may be by denitrification plant or by improvement in our blending systems in our fresh water reservoirs. I do not know the details. However, it is not inconsistent with that to say that in the light of increasing nitrate levels in ground water we ought to be making a start to deal with the problem at source.

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In its report the sub-committee points out that there is an argument that restriction on agricultural production and on intensive agriculture would be nothing but beneficial. To be fair, I immediately say that the Select Committee rejects that argument. Paragraph 181 of its report states:
"Over production of agricultural commodities in the Community remains a major problem, despite the recent reforms of the Common Agricultural Policy. Expenditure on agricultural support still accounts for two-thirds of the Community's budget, and has led to destabilisation of world markets, artificially high prices and widespread opportunities for fraud. Solving the problem of agricultural surpluses at a stroke through restrictions in land use would be an attractive side effect of environmental pollution".
That is not the view of the committee. At paragraph 182 the committee does not agree with that approach. It considers that the right method is systematically to attack some of the market support mechanisms that have led to the distortions of the common agricultural policy. I do not deny that that is a proper approach. But we cannot entirely neglect the possibility that there could be significant environmental benefits, as well as the disadvantages to agriculture which have been referred to by many noble Lords, in adopting a rather firmer treatment at source by reduction.
That should not necessarily be ruled out just because the treatment of the finished product is essential. After all, interventionism in our farming is not new. Much of this grassland was ploughed up as part of the war effort. It has been ploughed up because of the financial benefits arising from the common agricultural policy. As recently as 15 years ago—as I am reminded by my noble friend Lord Carter—government were giving specific subsidies for the use of nitrogen fertiliser. Therefore, to reverse that policy in the light of newly available facts is not necessarily dangerous.
I think that we can all be agreed on one point. A number of noble Lords have stated this. It is essential that when the Commission publishes such directives it should produce the scientific evidence for its conclusions. I believe that there has been some justification for complaints that this has not been done in this case. The British Government also have a responsibility for providing their own research evidence. I was disturbed to hear that some of our research establishments, notably Rothamsted, are not able to provide the scientific background that is necessary. For a long time I have been disturbed at the distinction between near market research, to which reference was made by my noble friend Lord Carter and other noble Lords, and public policy research.
It appears that where issues of agricultural efficiency, public health and the environment arise we are too ready to describe research as near market and to deprive it of government funds. When we consider the budgets for the research councils, notably the Natural Environment Research Council and perhaps rather less the Agricultural Research Council, there is evidence that a change of heart by government in the funding of that research is a necessary precursor of a firm view of the scientific and research issues that are involved in this debate.
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It is a serious and valuable report. I am not qualified to agree or disagree with the many detailed conclusions in it. However, I join with other noble Lords in thanking all those who produced it.
5.47 p.m.
Lord Hesketh: My Lords, I should like to pay tribute to the quality of the speeches today in your Lordships' House and to emphasise the value that the Government place on debates such as these. I can assure noble Lords that the Government will carefully consider the points that have been made about this proposed directive.
I pay tribute to the excellent report that my noble friend Lord Middleton and his colleagues have produced. They have successfully brought together the key factors that must be considered in any policy to control nitrate pollution. We have studied the text of the report with interest. It has made a valuable contribution to the debate on nitrate control policy both in this House and elsewhere by identifying the significant issues.
Before dealing with the Government's response to the scrutiny committee's report, and to points raised in this debate, it may be helpful if I say a few words about the current stage of negotiations on this proposal. The debate is well timed to provide the views of the House in advance of the first substantive consideration of the Commission's proposal by environment Ministers at the Council in November. We do not expect there to be a final agreement on the detailed terms of the directive at this Council; rather that Ministers will give guidance for the coming negotiations.
The committee's report highlighted a number of points about the directive. I should like to deal first with the question of nitrate in sources that may be used for the supply of drinking water. As the committee has pointed out, there is an upward trend in nitrate levels in many ground water sources, and this trend will probably continue unless action is taken to prevent nitrate pollution at source. We need to ensure that there is appropriate protection for water sources in this country.
It is for this reason that the Government are currently taking action to designate a number of pilot nitrate sensitive areas. A range of agriculture measures, involving voluntary but substantial agricultural restrictions, will be tested in these areas. In other areas we shall be undertaking an intensive advisory campaign. I am pleased that the committee has welcomed our approach and our decision that payments should be made where farmers undertake substantial agricultural restrictions. Independently of progress in negotiations on the directive, the UK will continue to take action to reduce nitrate levels in this country. This national scheme could be subsumed into measures to comply with the nitrate directive if this directive is adopted.
The committee drew a number of conclusions about the effectiveness of various ways of controlling nitrate levels and has given detailed consideration to the role of nitrogen fertilisers. Although we do not have evidence of widespread, excessive or ill-timed use of nitrogen fertiliser, continuing ADAS

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advice is important in ensuring an intelligent use of fertilisers. Farmers now receive increasingly sophisticated advice from ADAS and we believe that this has played a part in the 60 per cent. reduction in autumn nitrogen applications since 1979.
We agree that it is questionable whether restrictions on fertiliser use below a level in line with the best farming practice will generally produce commensurate reductions in nitrate leaching. However, there are a number of circumstances, such as late applications of nitrogen to milling wheat, where restrictions may have a valuable effect on nitrate leaching. In its latest textual clarifications the Commission has confirmed its intention that the restrictions on chemical fertiliser applications in vulnerable zones should be in line with good agricultural practice. The Commission's proposal would, however, allow member states to place more severe restrictions on fertiliser use where appropriate.
With regard to farmyard manure, the committee has stated that member states should be able to determine maximum rates of application nationally. During negotiations on this point the Commission has suggested a 170 kg of nitrogen per hectare limit as an alternative to the original limits proposed in terms of number of livestock. We shall need to consider whether this approach is satisfactory.
So far I have concentrated on nitrate in drinking water sources. However, the Commission's proposal also tackles the problem of nitrate limited eutrophication. In the UK this is not a major problem. However, as the committee has rightly pointed out, the causes of eutrophication are complex and other factors, such as phosphate, may also be limiting agents. We understand that the Commission is likely to bring forward separate proposals to control discharges of waste water and these may involve controls on phosphate.
Turning to the problem of research, we recognise the need for sound research into this complex problem. Both the Department of the Environment and the Ministry of Agriculture, Fisheries and Food are funding a large number of research projects into various aspects of nitrate leaching. Our primary objective is to quantify the amount of nitrate leached under different cropping and land management practices.
Taking a broad view on the problem confronting governments in all member states in respect of nitrate, which this directive is intended to address, the position is summed up extremely well in the first paragraph of the report Nitrate in Water. My noble friend Lord Middleton read the contents of the first paragraph. I shall not repeat it but believe that it is a balanced view of the way in which the problem must be faced.
The report recognises that the problem of controlling nitrate pollution of water sources is a complex issue. Of course farmers should follow good practice in respect of nitrate. But the problem goes deeper and also depends on local factors, such as the rainfall and hydrogeology, and on the existing balance of land use. However, as most nitrate found in water comes from agriculture it is essential that
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agriculture contributes, where appropriate, action to reduce high nitrate concentrations in water sources. In some cases this may require measures that go beyond good agricultural practice, including changes in land use.
The EC nitrate directive is unusual in a number of respects. As my noble friend Lord Crickhowell pointed out, it is the first proposal from the Commission that proposes controls on diffuse sources of pollution; that is, pollution from large numbers of very small sources of pollution. This is a welcome development but it means that in these negotiations we are breaking new ground, and this directive may come to be seen as a precedent. The directive raises potential difficulties for member states in establishing the programmes necessary for implementation. A further complication is the time that it may take in some areas to determine whether measures are indeed having the desired effect. In some cases the water quality in the underlying aquifer may not be affected until up to 50 years after measures were introduced on the land.
The Government have welcomed the Commission's initiative in proposing a directive to control nitrate pollution. However, we see the need for a number of changes to be made to the detailed proposals.
The development of Community-wide action to control nitrate is to be welcomed. Most member states have a nitrate problem and need to take action to protect water. In the UK and in several other member states action is being taken domestically to control nitrate reaching water sources. The new directive will ensure a commonality of approach to preventive measures.
This directive is concerned wholly with preventive measures to control nitrate pollution. However, from the research already undertaken in this country, the Government recognise that there is no single, best solution for reducing nitrate concentrations that can be used in all circumstances. It is important to select solutions, or combinations of solutions, that are appropriate to local conditions. In some cases blending before supply with another source low in nitrate or treatment of the water to remove nitrate will be the most cost-effective option. This approach is used already and will have a continuing role to play in ensuring that water supplies contain no more than the permitted level of nitrate.
The directive must strike an appropriate balance between the environmental benefits of measures to protect sources and the economic effect of the measures on the area in question. The Treaty of Rome requires all environmental proposals to take account of the economic effect of proposed measures. We are concerned that this point is not addressed in the Commission's proposals and we have suggested ways in which it could be included.
The requirements of the directive must also be clear. It would be quite wrong for the UK or any other member state to agree to a Community directive without being fully aware of the responsibilities it places on them and the steps necessary to implement the proposal. The

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Commission proposals are very far reaching and the requirements in the initial draft were not wholly clear. We are pressing in the negotiations to remove ambiguities from the text of the directive. That is particularly important in relation to the circumstances in which far-reaching land use measures should be introduced. It is also important to establish our responsibilities under the trans-boundary pollution provisions in respect of the North Sea.
The effect of the directive will to a large extent depend on the areas of the country that will be designated as vulnerable zones under the proposals. The size of the zones will depend on the way in which any numerical limits in the criteria are interpreted. The initial proposal from the Commission for surface water zones was for these to be required whenever the nitrate concentraion of water in a river exceeded 50 mg per litre. This is a very strict test, particularly in view of the natural variability of nitrate in river water. It would require that at all times river water is maintained at the same quality as drinking water regardless of whether or not a water undertaker intends to use that river source.
In its memorandum to the scrutiny committee the Government indicated that they would prefer an average level of 50 mg per litre to be used for designation of a surface water source rather than an absolute level. We have represented to the Commission that the effect of an absolute level would be disproportionate provided that drinking water is maintained at the appropriate quality. I believe that the Commission accepts our arguments on this point. It has proposed an alternative, if rather technical, approach which is set out in the updating memorandum that my honourable friend the Parliamentary Under-Secretary of State recently presented to Parliament. We are still studying the Commission's new proposals.
I now move to some of the points raised in the debate in your Lordships' House this afternoon. I very much agree with the comments made by my noble friend Lord Crickhowell who, as the chairman of the National Rivers Authority, will have the major responsibility for implementing the proposals in the draft directive. The NRA's role is to tackle pollution from all sources, including agricultural practices, to safeguard our water resources and to ensure that quality standards are met. The NRA has already advised the Government on the selection of the pilot nitrate-sensitive areas which were the subject of announcement by my honourable friend the Minister for agriculture at the end of July. I know that we can continue to look to the NRA for constructive and measured advice in considering the possible impact of proposals contained in the draft directive.
The noble Lords, Lord Nugent, Lord Bridges and Lord Northbourne, referred to the 50 mg per litre limit and the question of the validity of the 50 mg limit standard for nitrate in water and whether the health risks justify such a stringent measure. We told the committee that that is an issue on which we would consult the Chief Medical Officer. He has
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confirmed that that is the level, at the present standard, which he feels is correct for drinking water. However, he points out that an average rather than an absolute standard would be preferable but subject to an absolute limit of 100 milligrammes.
The noble Lord, Lord Walston, suggested a levy on all nitrogenous fertiliser. We have already looked at that proposal but we do not believe that such a levy, unless very large, would reduce the amount of fertiliser used, nor would it necessarily be fair to existing farmers because if it was not implemented on a Community-wide basis, British farmers would be at a substantial disadvantage.
The noble Lord, Lord Carter, drew your Lordships' attention to organic farming, as did many other noble Lords. I assure the noble Lord that the Government are in no way opposed to the development of organic farming. On the contrary, they are keen that consumers should be able to purchase food produced by organic methods. With respect to nitrate leaching, the Government are funding research into nitrate leaching under the organic farming regimes. However, the evidence to date is that organic farming in itself does not necessarily cause less leaching than conventional farming, a point brought to the attention of your Lordships' House by many noble Lords, including the noble Lord, Lord Northbourne.
The noble Lord, Lord Carter, asked me about cost benefit and whether any research had been done. We believe that we cannot undertake a full cost benefit assessment of the proposed directive at this stage when we do not know which areas will need to be designated as vulnerable zones nor do we know the detailed measures required to apply to those areas. Without that information, it would be difficult to provide the information required by the noble Lord.
We fully endorse the proposition that full account of the costs and benefits of the measures proposed should be taken when the directive is produced. That was a point brought to the attention of your Lordships' House by my noble friend Lord Crickhowell and the noble Lord, Lord Walston.
The noble Lord, Lord Northbourne, made a very useful and important point about the need for a clear definition of what is meant by good agricultural practice. Of course, one could ask: how long is a piece of string? I assure your Lordships that we shall discuss with the Commission how that is to be defined, because we agree that it is essential that there should be a clear definition within the directive.
My noble friend Lord Radnor asked whether the Government have had an opportunity to advise the Commission on suitable sources of information before the directive is prepared. The short answer is that the Commission does not seek such advice. However, when we become aware that the Commission is proposing a directive we normally try to draw its attention to major bodies available to provide advice in this country.
I was not surprised that the noble Lord, Lord McIntosh, referred to the Government's position on the introduction of the drinking water directive.

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The Government are wholeheartedly committed to complying with the provisions of the directive as quickly as possible having regard to the practicalities. However, I remind the noble Lord, Lord McIntosh, that that compliance is part of a £17·3 billion programme over the next 10 years and the proof that deeds speak louder than words is that we know of no other member state within the European Community which has prepared comparable proposals for improving water services or for raising the quality of drinking water.
Perhaps I may return briefly to organic farming, manure and bag fertiliser, which the noble Lord, Lord Carter, and other Members of your Lordships' House drew to our attention. The noble Lord, Lord Carter, quite rightly pointed out that natural manure could be just as destructive as bag fertiliser. Of course, if one goes to Holland one can see the reverse of the problem we are talking about with bag fertiliser. Referring to Holland, the noble Lord, Lord Bridges, rightly pointed out that the differences in Holland and Denmark result in a perception of the problem which is very different from our perception in this country.
The noble Lord, Lord Carter, also drew your Lordships' attention to the great endeavours of Mr. Barry Wookey, the well-known organic farmer, and the figures and data which he has produced. Again, those figures do not provide instant salvation for the organic route. The noble Lord, Lord Carter, also produced the interesting example of the tenant farmer who had finally been approached by the agent who was willing to offer to sell him the farm once the farm was in an NSA.
Finally, the noble Lord, Lord John-Mackie, drew attention to his friend in West Lothian who tips his cap every time he passes a muck heap. I am an old-fashioned country man and I tend to tip my cap when I go past an old-fashioned muck heap.
I hope that I have answered most of the questions and points raised during the debate this afternoon. I felt, in a way, that I was rather superfluous to it, such was its quality. However, if I have not answered any questions or missed a point, I shall of course write to noble Lords.
The control of nitrate is a difficult and complex problem and this Community directive makes a contribution to finding solutions. We recognise that the directive would have a very extensive effect and we shall need to be sure that it allows us to strike the appropriate balance between land used for agriculture and the use of the land as water catchments.
6.7 p.m.
Lord Middleton: My Lords, all noble Lords who have spoken have been most kind in the reception which they have given this report. If it has merit, then it is in great part due to the extremely able and conscientious work of our clerk and to the invaluable help of our specialist adviser, Professor Syers.
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I am grateful to those noble Lords who have so ably contributed to the debate on this Motion. I listened with much interest to the speech of the chairman of the National Rivers Authority. I felt that the noble Lord, Lord McIntosh of Haringey, showed a very fair appreciation of the issues. I thought he might refer to paragraph 181 and he did. He drew attention to what might be a very easy, facile reaction to our recommendation in the report by someone who simply was not thinking and had not read it properly. He quoted from the passage which states:
"Solving the problem of agricultural surpluses at a stroke through restrictions in land use would be an attractive side-effect of environmental protection".
The noble Lord, Lord McIntosh, is not a simple person but a very fair person. He quite rightly referred to the following paragraph, 182.
The committee feels very strongly that the superficial approach is wrong. Perhaps I may be allowed, even at this late hour, to quote this because we feel it is so important. The report states:
"The disadvantages of the Common Agricultural Policy result from the excessive use of protectionist and sometimes ill-thought out mechanisms for market support rather than from the inherent undesirability of food production per se. The most practical means of reforming the agricultural sector is by dismantling these mechanisms in an orderly fashion. Any other policy would run the risk of endangering the security of food supplies and would have severe consequences on rural economy and society".
I thank the Government also for replying in so painstaking and informative a manner to this Motion. Many governments, keenly aware of growing public concern about the wholesomeness of their food and drink, and of a wider concern about the natural environment, are beginning to formulate plans of action. Our own Government are no exception. The policy-making body of the European Community is likewise engaged.
However, sound policy-making depends on good information. My own sub-committee—I believe I speak for many members of your Lordships' Select Committee—are beginning to feel uneasy that some of the proposals that emanate from Brussels—the draft directive we are debating is certainly one of them—fail to some respects to be soundly based in science. If we did not say so forcefully enough in this instance to please the noble Lord, Lord Walston, that is not to say that we are not very worried because a directive, once adopted, affects all our lives for better or worse. I am in full agreement with my noble friend Lord Nugent and his strictures on the Commission in that respect. The noble Lord, Lord Bridges, too, deplored the fact that our own UK experts in this field were not consulted by the Commission. My noble friend Lord Radnor had similar doubts.
I believe that this debate has indicated to the House that this is one example of a proposal whose objectives are excellent but whose effects, if they were to be agreed, could have an impact on our own UK economy and, no doubt, on that of many other member states such as was never intended when it was written.
On Question, Motion agreed to.

Trade Union Act 1984 (Amendment) Bill [H.L.]
6.12 p.m.
Lord Campbell of Alloway: My Lords, I beg to move that this Bill be now read a second time.
The prime objective of the Bill is to remedy an unforeseen and unintended injustice on trades unions which arises under Part II of the Trade Union Act 1984. This part of the Act is concerned with secret ballots before industrial action. This unforeseen injustice has now become manifest in the light of the case between the port employers and the Transport and General Workers Union; an injustice which inevitably will arise again whenever the legality of proposed industrial action sanctioned by ballot is called in question in legal proceedings.
In seeking to inform myself, I had a word this morning with the Master of the Rolls. The noble and learned Lord informed me that, in his view, a substantial number of cases which would be affected by the provisions of the Bill is to be expected. This is not just a one-off job to deal with the proceedings that arose over the dock labour scheme. That is his view.
The injustice arises because Section 10(3) of the 1984 Act imposes a mandatory period of four weeks within which, after ballot, the industrial action must be authorised by the trade union if it is to qualify for such statutory immunity as is afforded. If the legality of that action is challenged after the ballot, in legal proceedings, it is all but inevitable that the difficult and complex questions of fact and law that are involved cannot be resolved judicially within the four-week period without, at all events, imposing an all but intolerable burden upon the judiciary at the expense of other litigants whose cases have to be taken out of the list. If the case should reach the House of Lords there is not the proverbial snowball's chance in a very hot furnace of having the matter resolved within the period.
Furthermore, by the institution of these proceedings the union is hobbled from taking the proposed action by the spectre of contempt and sequestration. In the result, the union which has observed the due process of law is put at a substantial and serious disadvantage in having to hold a further ballot to authorise conduct which has already been adjudged to be lawful and to retain the statutory immunity. Herein lies the simple injustice which the Bill proposes to end—an injustice affecting in all probability only the major industrial disputes where resort is to be had to the courts. However, the view expressed to me by the Master of the Rolls, which I have relayed to your Lordships, surely should be taken into account.
The means of resolution proposed involve no derogation from any principle enshrined in extant trade union law. They are left to the discretion of the court which upholds the legality of the proposed industrial action, be it the court of first instance, the Court of Appeal, or the Appellate Committee of your Lordships' House. In the ordinary way an extension would be granted when judgment is handed down near to or after the expiry of the four-week period
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to ensure that the proposed industrial action would qualify for immunity without the need for a further ballot.
That extension would not be granted when, by reason of changed circumstances, lapse of time since the ballot or some other compelling reason it was appropriate that another ballot should be held. Here the views of the rank and file trade union membership submitted to the judge or court by counsel would no doubt—and should—be taken into account. The exercise of judicial discretion to grant or refuse an extension would always be subject to the usual appellate process and has the advantage of flexibility. If, for example, it were the wish of government to limit to four weeks the period of the extension proposed by this Bill, so be it. It is simply done by inserting in line 7 after the word "period" the words "not to exceed four weeks". However, your Lordships may well think that there is no need to hamstring judicial discretion and that once the judiciary is seized of the matter the question of extension or no extension is best left within the remit of the judicial process.
I conclude by suggesting to your Lordships that this Bill will not only avoid a manifest injustice to trades unions, but will remove an intolerable burden on the judiciary. It will also ensure that other litigants who have their cases in the lists will not be put to delay, inconvenience and expense as now obtains. Having sought to explain the objective of the Bill and the means of implementation, I hope that it may commend itself to noble Lords on all sides of the House. I beg to move.
Moved, That the Bill be now read a second time.—(Lord Campbell of Alloway.)
6.20 p.m.
Lord Brightman: My Lords, I support this Bill. The ground has been very fully covered by the noble Lord, Lord Campbell of Alloway, and there is little that I can usefully add. I summarise the problem. As the law now stands a trade union which calls its members out on strike in furtherance of a trade dispute affecting that union is protected from an action for damages by the employer provided that the strike has been authorised by a ballot of the members concerned. That protection is lost unless the strike begins within 28 days of the voting.
If the legality of the strike is called into question in judicial proceedings which go to appeal, the legality may not be established within the requisite 28-day period. The trade union is then put to the trouble and expense of a second ballot despite the fact that the first ballot turns out to have been lawful. That is a highly unsatisfactory situation. The Bill would remedy that injustice by giving the court a discretionary power to extend the 28-day period.
I was not privy to the discussions which took place between the noble Lord, Lord Campbell of Alloway, and my noble and learned friend the Master of the Rolls. But I am able to tell your Lordships that in a letter that the learned Master of the Rolls sent me a fortnight ago he authorised me to tell your Lordships—if he could not himself be present tonight—that he supports the principle of the Bill. I

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respectfully ask your Lordships to give the Bill a Second Reading.
6.23 p.m.
Lord McCarthy: My Lords, I must apologise for the fact that I am unable to stay until the end of the debate. I have told the noble Lord, Lord Campbell, of that, and he has graciously excused me. I wish to begin by thanking him for a short and well-directed Bill to remedy what he rightly calls an unforeseen and unintended injustice. That is precisely what it is.
I wish to focus on two matters. I agree with the noble Lord and also with the noble and learned Lord, the Master of the Rolls,—we are in very distinguished company this evening—that the restrictions on the access of the unions to lawful action are very extensive as a result of the decisions taken in the dockworkers' case. The restrictions are very extensive and do not apply just to this case. That is the first point that I wish to develop.
The second point is one that I do not normally make in this House. It is that the Government are to be completely exonerated from the consequences of what has happened. As the noble Lord said, the consequences were not intended. This matter is a kind of legal time-bomb or a procedural accident. It was certainly outside the intentions of anyone; it was not foreseen by anyone. It was not foreseen by the Opposition when we criticised the Trade Union Act 1984. No one foresaw that this situation would arise.
In order to show the extent of the restrictions one has to retrace some of the ground of the ABP and the TGWU case. The House will remember that on 6th April the Government announced that they were intending to abolish the national dock labour scheme. On 11th April the Transport and General Workers' Union decided that it wished to negotiate a voluntary alternative with the national port employers and, if that could not be done, wished to have a strike ballot to resist the imposition of the dismantling of the national dock labour scheme.
A week later, on 18th April, the employers made it clear to the Transport and General Workers' Union that they refused to entertain a negotiated alternative. And they also refused to guarantee the existing terms and conditions. Therefore, the union felt that it was in no position to do anything else than to move to a lawful ballot and industrial action. Before that ballot could be undertaken, the employers—as they were perfectly entitled to do—served a writ on the union on the basis that the dispute was not a trades dispute.
On 10th or 11th May, when the union was ready and undertook a ballot according to Section 10(3)(c) of the 1984 Act, it was already engaged in litigation over the employers' writ. As we know, the result of the ballot was a substantial majority in favour of the strike. What is important is that the result was declared on 19th May.
From that point on the union believed that it had four weeks—28 days—until 16th June when the immunity ran out. As I have said, the union was already involved in the legal process. There followed
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a 10-day hearing as a result of which, on 29th May, the union felt that it had been successful in the sense that the application for an injunction was not granted. By this time the union had lost 10 days. There were still 18 days left to start, organise and begin the strike. In that sense that was good news. From its point of view the union could prepare for a lawful strike.
The bad news was that the employers were given leave to appeal, as was perfectly understandable. Therefore, from the union's point of view, there was not a result until 7th June when the Court of Appeal decided to grant the injunction on slightly different grounds. The result was that the union had lost another nine days. But the issue was still barely within the 28 days because there were nine days left.
The problem was that this time the decision went against the union. It had no alternative—if it wanted to have a lawful strike—but to take the case to the next level of jurisdiction; namely, the House of Lords. The House of Lords considered the case and, for it, very speedily. The bad news came on 21st June. At that point the House of Lords decided against the Court of Appeal and did not agree with the latter's decision, stating that it was a perfectly lawful strike which the union had believed all along. From the union's point of view the decision came five days too late.
It might be said that this is a unique, unusual or untypical story. I suggest to the House that it is far from untypical as the Master of the Rolls appears to suggest. It could be followed by many similar cases. Let us suppose that the union had lost at the court of first instance. It would have to go on to the Court of Appeal. If the union had won at the Court of Appeal the chances are that the employers would have sought to go on to the House of Lords. In those circumstances the union would have been out of time anyway and it would have to have held a second ballot. It is even arguable that if the union had won all the way and the Court of Appeal and the House of Lords had in substance agreed with the decision at first instance, it could still have been out of time if in fact an appeal had been granted through to the House of Lords.
We may be told that there is nothing wrong with a second ballot. We may be told that if unions have their members' support they will get an affirmative answer at the second ballot stage. I have several comments about that. Most people involved in industrial relations would say that the effect of setting aside an industrial action is disastrous from the union's point of view. Industrial disputes and circumstances change. Members faced with these hesitations and uncertainties lose heart in the fight. Some may say that that is a good thing but I suggest that that is not what the Government intended.
Moreover, one cannot guarantee that even a second ballot is unassailable. The union might have to have a second ballot—in this case it had a second ballot—and in principle that ballot could be challenged. There might have been an alleged irregularity in the ballot. Something might have happened on the picket lines or something might be alleged to be wrong with the ballot process, which is now a very complicated one. Such is the nature of

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the degree of proof that has to be shown in the injunction process that it is perfectly possible for an injunction to be quite reasonably granted but for the court to say at the hearing that it was a perfectly lawful act. Nevertheless, the union would be out of time and the second ballot might be set aside. This issue has come out of the woodwork. Nobody expected it and yet it can have far-reaching results.
I turn to my second question. What were the Government trying to do when they introduced the four-week rule? They did not originally intend the four-week rule to operate against the basis of an affirmative ballot. The House will remember that the injection of an affirmative ballot as a prescription for legality came about in this House. It was moved by the Government. The four-week qualification was not necessarily intended to apply. The argument both in another place and in this House at Second Reading was that the Government only wanted to force unions to have ballots. We were told that the unions took decisions to strike without ballots on the basis of decisions by executives or shop floor meetings. They had to be made to engage in a ballot process. Whether they won or lost the ballot would be influential if not coercive. That is the context in which the four-week qualification was first introduced.
However, as the Bill went through the House the Government decided to introduce an affirmative qualification into the ballot. An amendment was moved by the Opposition first in another place and then in this Chamber that the period should not be four but 16 weeks. Mr. Gummer, speaking for the Government, said in Committee in another place:
"The Government's intention is that the ballot and the strike if there is one should be closely connected. We do not intend that a strike unconnected with the ballot held in different circumstances and long afterwards could be held to be covered by that ballot. That would not be sensible. We start from the assumption that the period between the ballot and the strike if it is to be held should be short".
Four weeks was short. But the union was supposed to expect that it would have that time at its disposal.
In another place the Government would not accept the Opposition's amendment and so it was put forward again in this Chamber on 25th June 1984. We sought once again to get the Government to extend the period because we said that from our point of view four weeks was too short. The noble Lord, Lord Gray of Contin, said:
"The effect of the amendment tabled by the noble Lord, Lord McCarthy, and his noble friends, which is similar to an amendment considered and rejected at Committee stage in another place, would be to allow unions to provide themselves with immunity far in advance of the likely climax of negotiations by holding a ballot at a time when the prospect of industrial action was so far off as to be unreal to the members being asked to vote".
I suggest that the House should reflect on that. That was the Government's intention at the time. They wanted to have sufficient time, but not too much time, so that the vote was not unreal to the members. Yet as a result of questions raised in the House, the noble Lord, Lord Gray of Contin, in talking about the four weeks as a reasonably minimum period, went on to say:
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"The Government of course accept that the counting and announcement of ballot results cannot be done in a day, and clearly it would be undesirable to precipitate union strikes because immunity was going to 'run out'. Some time may be needed for further negotiations".—[Official Report, 25/6/84; cols. 723–41.]
I suggest that that was a wise remark. Our argument at the time was that the whole period of four weeks was not long enough, that it would precipitate strike action, that the union would discover that it had only four weeks and would not have time to negotiate. Whether or not one accepts that argument, it has much more coercive force if the union is left with less than four weeks—with two weeks, with one week or with eight days. That puts the union in a difficult position, in which it feels forced, as it were, to cash in its immunity from liability. The Government never intended that. Nobody intended that. This affects not just one dispute and it places the judiciary in a difficult and awkward position in which nobody wishes it to be placed. Fortunately it can be remedied. All we have to do is pass the Bill.
6.28 p.m.
Lord Rochester: My Lords, it is a privilege to take part in this debate in company with such distinguished speakers. From these Benches I am delighted to support the Bill which was so ably introduced by the noble Lord, Lord Campbell of Alloway. I hope to help in providing him with the all-party agreement which he said he is seeking in this House.
I was particularly impressed and heartened to learn from the noble and learned Lord, Lord Brightman, that the principle of the Bill has the support of the Master of the Rolls. I have looked back to see what I said at the Second Reading of the Trade Union Bill 1984 in regard to the clause of the Bill which sought to remove from trade unions immunity from legal action if a ballot was held more than four weeks before the beginning of industrial action. I see that, having first endorsed wholeheartedly the principle underlying the relevant part of the Bill, I expressed a fear that the effect of the four-week rule might be that ballots would be held prematurely and that attitudes would thus be struck which would increase the likelihood of industrial action taking place. I added that other practical problems might arise, but I certainly did not foresee what actually occurred prior to the dock strike earlier this year.
Your Lordships may recall that at that time we on these Benches gave the Government our support in their intention to abolish the dock labour scheme, although we thought that rather than introducing the Bill as precipitately as they did the Government should have given other interested parties an opportunity to express their view before arrangements were finalised. At the Second Reading of the Dock Work Bill, however, I felt bound as a Liberal and a Democrat to voice my disquiet about the extent to which, under current legislation, employers were able to obtain injunctions, sometimes ex parte, restraining strike action not covered by trade union immunity. As I saw it, people were thus increasingly being denied the collective right to withdraw their labour within the law.

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If my recollection is correct, that was what happened during the period leading up to the dock strike when, prior to the reversal of the initial judgment, it became plain that many registered dock workers in a number of the larger ports were unwilling to await the outcome of what became a protracted legal process before taking unofficial industrial action.
I should like to emphasise that what I have just said should in no way be construed as a criticism of the judiciary. I am suggesting only that the law which it is their duty independently to administer may, in the light of the differing verdicts of the courts to which I have referred, be in need of a more general review than we are able to give it this evening. Your Lordships will see that I still feel some concern on this point, but I readily acknowledge that it raises issues that are distinct from the approach to the overall problem that the noble Lord, Lord Campbell of Alloway, is making in introducing this Bill.
I do not for a moment believe that in legislating as they did in 1984 the Government then foresaw the kind of situation that arose during the recent docks dispute. There the leader of the Transport and General Workers' Union had the good sense and the courage to insist that the actions of his union and its members should remain within the law, even though it meant that a second ballot had to be held before a strike could take place lawfully. In my view, it was unfair and unreasonable that the union's freedom of action was thus impeded and I am glad that the noble Lord, Lord Campbell of Alloway, is seeking through this Bill to remedy the injustice that can be done in such cases.
His Bill will not of course be enacted in the current parliamentary Session, but I sincerely hope that in the legislation we are promised in the forthcoming Session the Government will themselves take the opportunity, with general support, to deal with the matter. On behalf of my noble friends I welcome this Bill.
6.44 p.m.
Lord Renton: My Lords, I too am glad to support my noble friend's Bill. One thing about it which attracts me, apart from the merit of substance of it, is that it gives a discretion to the courts to do what is right, or appears to be right, in circumstances which may vary considerably. We should, I suggest, do this more often instead of trying to cover every hypothetical contingency. We never do that successfully because we nearly always omit some contingencies which actually arise in practice when the Bill comes into operation.
As to the substance of the matter, as has been explained, by enacting in Section 10 of the 1984 Act that authorisation or endorsement of the result of a ballot to strike should be given in four weeks we took too restrictive a view of the matter. It is therefore in the interests of trade union members that we should give the courts the power to make it a longer period.
I am speaking very briefly because, like the noble Lord, Lord McCarthy, I may have to leave before the end of the debate. To my regret, I must leave at seven o'clock.
6.46 p.m.
Lord Carr of Hadley: My Lords, I fear that I have to add a similar rider to my speech, because of an engagement that I made long before I knew that this debate would take place. I hope that I do not have to leave as early as seven o'clock. I may not have to leave before the end, though that is a possibility. I too wish to speak only briefly, but I wish to record most strongly my support for this Bill. I can be brief because the arguments for it have already been made. They do not need repeating or indeed supplementing.
As I said, I wish to record my support strongly, both because of my past experience as a Secretary of State for Employment and before that as a parliamentary secretary in the old Ministry of Labour, and also because of my long-held personal belief in the need for industrial relations in this country to be conducted within a framework of industrial relations law. Both that experience and my belief make me feel very jealous to see that the law in its operations should achieve its truly intended purpose and that it should do so in a way which is fair to the parties involved.
There can be no doubt that in the recent dock dispute it did not achieve its original intended purpose and was not fair to the parties, particularly in that case to the union involved. For that reason the law needs changing and I welcome this Bill very much and warmly thank and congratulate my noble friend Lord Campbell of Alloway for taking the initiative so early in bringing about this change.
Finally, I add a word in support of the flexibility of this proposed Bill. I hope the Government will not only support it but will not wish to take up the option which my noble friend Lord Campbell added towards the end of his speech—that they might insert a particular period. I do not know how many noble Peers remember the short story by Cornelia Otis-Skinner called, "Please Don't Eat the Daisies". If I remember correctly, she left enormous instructions that somebody should look after the child, but one thing she forgot was to say, "Make sure that this child does not eat the daisies"; and of course it did.
When my noble friend Lord Renton was speaking he said a very important thing, as he often does. The more we try to cover every detail in a Bill the more certain it is that we will fail to account for the detail which will arise at some time and we will merely limit the flexibility of government and of the courts in interpreting our actions. So I welcome this measure. I welcome its flexibility and I strongly urge the Government to make sure that in the next Session of Parliament this provision becomes law.
6.50 p.m.
Lord Irvine of Lairg: My Lords, the Bill, coming as it does from a lawyer—one of great experience in this field and other fields—is doubly admirable. It admits the law's delays and tries to alleviate the consequences. To be lawful, industrial action requires the support of a ballot of all the workers likely to be involved. The ballot in favour of action then becomes a ticket of admission to the immunities

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which industrial action, in contemplation or furtherance of a trade dispute, enjoys. There is no positive right to strike in this country. Since 1906, industrial action has taken place under the protection of immunities. Without those immunities, strike action would be unlawful because it would involve the commission of civil wrongs (torts) such as inducing breaches of contracts of employment or interference with the performance of an employer's commercial contracts by unlawful means.
Industrial action, in contemplation or furtherance of a trade dispute, is made immune from such liability. But, since the Trade Union Act 1984, a ballot in favour of the action has been a necessary ticket of admission to the immunity. Without it, the industrial action can be stopped by injunction because it is unlawful. However, the ballot does not guarantee immunity. The industrial action could still be unlawful, although supported by a majority in the ballot, because it is not in contemplation or furtherance of a trade dispute or because the action involves a civil wrong not covered by the immunities.
It is the scope for legal argument on those two subjects—whether the action is covered by the immunities, combined with the fact that the ballot sanctions a strike only for four weeks after the ballot—that causes the problem that the Bill addresses.
Essentially, the length of time that the legal argument in the courts can take, all through the appellate system, ending up in your Lordships' House in its judicial capacity, means that four weeks can be run up before the courts have finally decided. So the ballot result is defunct and the union is put to the cost of holding a ballot all over again. Sensibly, the Bill says that the solution is to allow the judges, after they have finally had their say, and if they have ruled that the industrial action is lawful, to extend the four-week period before the period covered by the law's inevitable delays.
That is a sensible proposal which has my support, so far as it goes. But many of your Lordships, at any rate those who are not lawyers, may be thinking that it is all very puzzling. Why is it necessary to legislate for the law's delay? Why do we not have a clear and straightforward system of law which tells us the boundaries of lawful industrial action? Apart from the ballot, there are essentially two things about which an employer and union can differ. First, is the industrial action in contemplation or furtherance of a trade dispute? If not, no immunity. Secondly, are the civil wrongs (torts) caused by the industrial action covered by the immunities?
In the late 1970s, the first of those points caused great problems, leading to trade union disillusion with the courts which, it must be said, lasts to this day. However, the immediate grievance of the trade unions was removed by decisions of your Lordships' House in its judicial capacity in 1980. Lord Diplock, in the leading case,Express Newspapers v. McShane in 1980, emphasised the need for the courts to implement the will of Parliament because,
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"the manifest policy of the Act was to strengthen the role of recognised trade unions in collective bargaining … and to exclude trade disputes from judicial review by the courts".
Later that year, in Duport v. Sirs, the steel strike case, Lord Diplock, reversing the Court of Appeal, said:
"If judges were to grant injunctions notwithstanding that they know"—
and I emphasise those words
'that it is highly probable that the acts that they are enjoining are perfectly lawful, it is unlikely that voluntary respect for the law as laid down and applied by courts of justice will continue to have any influence in controlling industrial action".
That judgment can be read as judicial code language for the proposition that the decisions of the courts in the late 1970s, which had artificially restricted the concept of industrial action in furtherance of a trade dispute, had to stop and Parliament's will had to be heeded. So it was. The subsequent decisions of the courts on that subject have been fair and unobjectionable, but a residue of a distrust of the judiciary has inevitably remained from those days.
The contemporary problem which causes trade union distrust of the judiciary arises differently. The dock strike case illustrates the point vividly. Before I say what the problem is, perhaps I may make an observation that I believe will meet with assent in all quarters of your Lordships' House. Confidence in the fairness and even-handedness of the judiciary, in interpreting and developing the law, is an indispensable part of a system governed by the rule of law, because ultimately the law depends upon consent.
The new problem, which the dock case illustrates vividly, is the judges' propensity to invent new torts (new forms of civil wrong) and so, for example, to hold, "This industrial action may involve a new kind of civil wrong not expressly covered by the immunities. To be sure it also involves the forms of civil wrongs that are covered by the immunities. But, never mind, we can think of a new kind of civil wrong that may in law exist and is not covered by the immunity; so we are going to grant an injunction".
One would have to be a lawyer to understand all that, and I doubt whether even that would be sufficient. This is what happened in the dock case, which has been referred to by a number of your Lordships. The judge at first instance refused an injunction; the Court of Appeal imposed one; and then your Lordships' House in its judicial capacity said, "No, the trial judge was right".
The Court of Appeal had ruled that this was a case for an injunction because it was arguable that the law recognised the existence of a new tort of injuring an employer's business by inducing a breach of a statutory duty, whether or not actionable in itself. Here, the breach of statutory duty alleged was breach of a duty, which the dockers were said to be under, to work under the national dock labour scheme. If—and I emphasise "if"—there was such a tort, then that tort was not covered by the immunity.
Any reasonable person would ask: why are those Lords Justices saying that it is arguable that there may be this tort? This is judge-made law. It is their

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job to make it. That indeed is what we pay them for. Why did they not make up their minds as to whether that tort existed? After all, they had five whole days of legal argument with four Queen's Counsel and six junior barristers, representing all the parties, to assist them. Still, they said in the leading judgment:
"The precise limits and characteristics of this tort are uncertain, and the argument, though full, has not been comprehensive. Counsel for the employers raised the possibility that some further research might be necessary. I see the force of this submission".
Apparently the suggestion was that more time could be spent examining Commonwealth authorities on that debatable point of law.
Meanwhile, because it was arguable that the strike was unalwful, the union was liable to an injunction on the grounds of the damage that the strike would cause. Most reasonable people who are not lawyers would say that all of that is utterly bizarre. Let me say right away that it is the judges' job to develop the common law, and no one would take that right away from them. The trade unions are bound to think—and so confidence in the system is diminished—"Just as the judges put strained interpretations on 'acting in furtherance of a trade dispute' in the late 1970s, they are now inventing new torts to deprive us of our immunities".
Perhaps I may emphasise that throughout the Transport and General Workers' Union was obedient to the law and abstained from strike action, although its confidence in the system must have been sorely tested.
The true remedy for all that, which the next Labour government—on recent events that cannot be far away—will introduce, is plain. The judges can get on with inventing new torts to their hearts' content. But it will not make a scrap of difference to the immunity. The immunities will apply to any civil liability, regardless of the label that the judges put upon it, which otherwise would result from primary industrial action in furtherance of a trade dispute, though obviously not to any breaches of the criminal law or trespass to land or the person.
I support the noble Lord's Bill, but the note of caution I enter is this. I hope that the Bill does not signify acquiescence in an endless vista of expensive litigation, ameliorated only by the judges saying at the end of it all, "There shouldn't have been an injunction after all. Now you can go on and act on your ballot".
This is a sensible Bill which deserves support from all quarters of the House. It proposes a wise and modest change. But it will not be long before a new government will have the opportunity to address these questions more fundamentally. Meanwhile the limited measure proposed by the Bill merits support.
7 P.m.
Lord Hayter: My Lords, in speaking to your Lordships I hope that perhaps I am also speaking to parliamentary draftsmen. Yesterday I suffered having to listen to parts of the Employment Bill, a big Bill in itself, but it devoted two clauses and 87 lines to whether Sikhs could wear turbans or whether they should wear steel helmets. On the other hand, here we have a complete Bill drawn up in only seven
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lines. It is short, concise and, as I understand it, very sensibly drawn up.
Another point which commends itself to me—and this is an old chestnut in this House—is that the word "may" is used in the Bill and not "shall":
"the period … shall be extended for such period as the court may direct".
I also like the idea that it is the court which will decide the time factor which should be involved. It is not the Minister, it is not the department, it is the court which hears the issue involved.
I bring up my children on the adage with which I hope noble Lords agree, that there is no such thing as a bad short speech. Here we have a short Bill and so far as I am concerned as a layman it deserves a short speech. I commend it to the House.
7.2 p.m.
Baroness Turner of Camden: My Lords, I rise to give support to the Bill. I am sure that the House is grateful, and we should all be grateful, to the noble Lord, Lord Campbell of Alloway, for introducing it and giving us the opportunity to debate this quite important issue. There have been a number of distinguished speakers to date. I am not a lawyer and I speak from my experience as a former trade union official. I believe that the Bill is a modest attempt to rectify an injustice.
As has been explained, under present legislation in order to qualify for immunity a union must ballot its members in advance of industrial action. If it receives a mandate from its members in the shape of a majority vote, it has four weeks from that date in which to implement that mandate and to embark upon industrial action. If it fails to do so within the time limit of four weeks, it has lost its mandate for action and must ballot its members all over again.
Normally, once a union has achieved a majority vote, it proceeds with its action. There would be little point in delay. It is fair to assume that all possible action to resolve the dispute through negotiation and conciliation will have been attempted before the ballot is undertaken. This is the normal situation, although the Government seem to believe that unions have a predilection for striking first and talking afterwards. That is absolutely not so and I speak from some experience in these matters. Most union officials wish to resolve issues at the negotiating table. Failure to do so is costly both for the union and for the individual members.
However, there is an implicit acceptance of the view, and it is in the legislation introduced by the Government, that once all the necessary hurdles have been surmounted— and they have become much greater in recent years— there still exists the right to withdraw labour collectively and to do so lawfully. At least that was the assumption until this summer. This year we had the dispute following the Government's abolition of the dock labour scheme. In that instance, as we have heard, the union was extremely careful to ensure that its activities stayed within the law. Members were balloted about industrial action. The ballot took place between 10th and 17th May. The result was announced on 19th May, and there was a large majority in favour of a strike.

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However, on 8th May Associated British Ports and the Port of London Authority issued writs in the Chancery Division claiming injunctions and damages against the union. The motions came before Mr. Justice Millett on 18th May. The hearing extended over eight days. On 27th May he gave judgment against the employers' applications. He granted an injunction, however, to restrain the calling of a strike until Thursday, 1st June, when the appeal of the employers came before the Appeal Court.
The Appeal Court was well aware that the issue should be dealt with as one of emergency. Indeed, to quote from the judgment of Lord Justice Neill:
"By reason of the provisions of Section 10 of the Trade Union Act 1984 any protection afforded to the union or any other person by Section 13 of the Trade Union and Labour Relations Act of 1974 will not be effective in respect of any industrial action which starts after the expiry of four weeks from the date when voting ended in the recent ballot. The last day of voting was 17th May. The period of four weeks will expire on 14th June".
As we know, the Appeal Court found in substance against the union and for the employers. The reasons that it did so are not particularly relevant to the arguments for this Bill, except that it introduced another apparently new concept in relying upon possible damage to the public interest as one of the reasons for finding in the employers' favour. This undoubtedly gave rise to a great deal of concern. To quote, for example, from an article in the Guardian at that time,
"One may ask why the Appeal Court judges felt it necessary to bring in such a politically charged concept as the 'public interest' when even under the highly restrictive framework established in the last decade, there is no provision directing the courts to consider such a notion".
The Financial Times commented:
"for the courts to invoke the public interest in aid of outlawing official strike action is, apart from questions of principle, to diminish seriously the valuable right of the individual in a democratic society to withdraw his or her labour. And the more important the industry the greater would be the diminution in the weapon of strike action".
I cite that because all this added to the general confusion existing as to what was ultimately permissible for unions that believed that they were following the law and the requirements of current legislation.
The feelings of many were summed up by Jimmy Knapp, the general secretary of the NUR, when he said:
"We are living a legal nightmare. We are rapidly reaching the position in this country today where it is not possible to call a strike and remain within the law".
Well, as we know, in the dock dispute the Transport and General Workers' Union appealed against the Appeal Court decision to the ultimate appeal court—your Lordships' House. The decision given was in favour of the union. But by that time, 21st June, the four weeks had elapsed. It became necessary for the union to ballot all over again and valuable time had been lost.
It was understood in the Appeal Court that this was an important issue, since Lord Justice Neill said:
"that it is in the nature of industrial action that it can be promoted effectively only so long as it is possible to strike while the iron is hot; once action is postponed it is unlikely that it can be revived".
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That is really the essence of the argument. A situation in which the four weeks' period allowed to the union in which to organise a dispute can be whittled away by employer actions in the courts is not one in which it can be maintained that the union and its members are being treated fairly.
If it appears to members that official disputes are becoming increasingly difficult to organise, despite the justice of the case and the support of members, then it seems to me that we are bound to see an increase in unofficial action. The Secretary of State has recently announced proposals for dealing with unofficial action. In his statement accompanying the Green Paper, he is reported as saying:
"Unofficial industrial action, that is industrial action not organised by a trade union, costs jobs and undermines our international competitiveness. Such action tends to be sudden, unpredictable and disruptive. It is often taken without notice and without regard to the normal channels for settling problems peacefully".
That is precisely the case, but in situations where official action becomes increasingly difficult and where the legal situation becomes increasingly confused a growth of unofficial action is almost inevitable. It really is not possible to keep the lid on situations where there is a great deal of membership discontent.
Instead of attempting to legislate against unofficial strikers the Government should do more to ensure that the legislation they already have in place is amended to provide for greater equity. This small Bill gives an opportunity for that to be done. I therefore commend it to your Lordships.
7.10 p.m.
Lord Strathclyde: My Lords, I have listened with great interest to what has been said in this debate on an important aspect of industrial relations and trade union law. We have heard from Members of this House whose experience and expertise in industrial relations law and practice has been reflected in the tremendous quality of this debate. I too am sorry that the noble and learned Lord the Master of the Rolls could not be here. However, if I may say so with respect, we have heard from him through the noble and learned Lord, Lord Brightman.
The explanation given by the noble Lord, Lord Campbell of Alloway, of the reasons which led him to introduce this Bill was most helpful. I understand his purpose and his quite proper concern that the law on union industrial action ballots should work properly. I entirely agree that it would be quite wrong to tolerate what I believe the noble Lord called a manifest injustice.
The Government welcome the chance to debate these matters. We are sincerely grateful to the noble Lord for raising this issue. It is perhaps a pity that the noble Lord's Bill has been introduced so late in the current Session. However, I have little doubt that noble Lords will hear more about these matters in the months ahead.
The noble Lord's Bill seeks to give the courts unfettered discretion to extend the 28-day period following the date of a union industrial action ballot during which the first authorisation or endorsement

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of an act of inducement must take place if the union is to have immunity for organising the action.
What is the essential purpose of the law which makes union immunity for organising industrial action subject to the balloting requirements? In requiring the union to hold such a ballot, the law simply ensures that union members can expect to have a vote in a proper secret ballot before being induced to take industrial action by their union. This principle has been widely welcomed by employers, the public and union members alike. It follows that to allow an unlimited or unduly lengthy period of time between such a ballot and the union's authorisation or endorsement of the action would be inappropriate in any circumstances. If this could happen, the views expressed by voters in the ballot might no longer be an accurate guide to whether they were content for their union to authorise or endorse the action at the time it actually did so. Where there has been such a delay, a union should re-ballot.
The 1984 Act fixed the limit at 28 days from the date of the ballot. If it had become apparent that the wrong limit had been adopted, the Government would certainly be prepared to come forward with proposals to make whatever adjustments were necessary. But it is surely right to reflect on whether there is real and significant evidence that this was an inappropriate approach.
My noble friend Lord Campbell of Alloway and many noble Lords have referred in the debate this evening to the one instance where this limit has in practice caused a significant problem. It has been pointed out that the grant, and subsequent extension, of interim injunctions against the Transport and General Workers' Union this summer meant that by the time the Law Lords lifted the injunction on 20th June more than 28 days had elapsed since the relevant date of the ballot; that is, 17th May. The union was therefore obliged to re-ballot its members in the docks in order to secure immunity for authorising industrial action. But the circumstances surrounding these proceedings and the nature of the issues which the courts had to address were unusually complicated, and I venture to suggest, quite unique.
Up to the point where the judgment of the Law Lords was given, there were reasonable grounds for believing that calling for a strike, and hence the union's authorisation of industrial action, might have been unlawful, whether or not there had been a proper union ballot. The Court of Appeal addressed itself to the issue of whether it could ever be lawful to induce workers whose terms of employment were regulated by a particular statutory scheme to go on strike.
The statutory dock labour scheme was—I am glad to be able to use the past tense now that it has been abolished—a very unusual and highly anomalous arrangement applying to a particular class of workers. It was introduced to regulate dock work more than 50 yeas ago. Features of the scheme—for example, making employers liable to criminal penalties if they refused to employ certain individuals—were anachronistic and unique. It is hardly surprising that the issues raised before the courts during May and June this year were not
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capable of quick resolution and that the proceedings had to run a full course through appeals up to this House.
The Government believe that it is at least equally unlikely that such proceedings, which relate to the question of inducing strike action by those whose employment is regulated by a special statutory scheme, could occur again. Even if they did, it is by no means certain that the courts would need as much time to deal with the proceedings as happened with respect to the issues raised last summer.
I suspect that the principle of giving the courts some sort of discretionary power to alter the 28-day limit is a more important aspect of this Bill than the detail of what it proposes. It would, nonetheless, be appropriate to make one or two comments on the nature of the arrangements it proposes.
First, it would give the courts complete discretion to extend the 28-day limit, but does not provide any guidelines or principles by which they could determine just what length of time would be appropriate in any given circumstances. While I am sure that the courts could be relied upon not to misuse such wide discretion, it would be important, as I explained earlier, not to allow too long a period between the date of a ballot and the time when a union authorised or endorsed the relevant act of inducement.
My noble friend Lord Campbell of Alloway and indeed my noble friend Lord Carr of Hadley made a passing reference to imposing a maximum limit on an extension, but of course that is not a feature of the Bill before your Lordships' House.
Secondly, the Bill proposes that this wide discretion should be available,
"if any relevant act is called into question in any legal proceedings".
It seems to the Government that this approach fails to address the fact that it is extremely unlikely that the issue of the 28-day limit, and its effects or potential effects, will be relevant in all but the most exceptional circumstances. The Government— I hope noble Lords will share our concern about this point—would not want to risk creating a situation in which unions might welcome proceedings because they might afford the opportunity to extend the relevant limit that would otherwise apply.
The noble Lord, Lord Irvine of Lairg, referred to the potential difficulties of knowing whether an act of inducement is or is not in contemplation or furtherance of a trade dispute. With the exception of the docks case, there have been very few proceedings relating to torts other than those covered by the statutory immunities.
The reform of industrial relations and trade union law since 1979 has been among the Government's major achievements. These reforms have contributed significantly to the important changes of attitude which have made the improvement in our economic performance and prospects possible. The Government believe that the relevant law should be subject to periodic review. I can assure the House that the Secretary of State has given careful consideration to the various matters which arose in the course of the proceedings brought against the

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TGWU. He will of course give equally careful consideration to the very important opinions and views that have been expressed in this debate from all sides of the House.
However, as I have said, the Government believe that it would be wrong in principle to allow an undue period of time to elapse between a ballot and the union action to which it relates. It would also risk undermining the fundamental purpose of the ballot—to enable members' views to be taken into account in determining what their union may do. It must at least be arguable that to allow a union immunity for acting in a way which may not accord with its members' wishes at the time of the action could be manifestly unjust.
In addition, the kind of changes to the law which the Bill proposes should not be adopted simply to take account of what happened in what I have already said was one very special case. The 28-day limit has operated for five years and only in one instance, which arose out of unique circumstances, has a union run out of time because of the need to resolve court proceedings.
We must not lose sight of how peculiar the provisions of the dock labour scheme were. We must guard against making changes to important general legislation which has worked well because of events relating to such a special case.
I hope that it will be apparent from what I have said that the Government fully recognise the concerns that have been expressed in the debate. We shall certainly continue to keep the matters under review. I can assure my noble friend Lord Campbell of Alloway and all other noble Lords who have spoken in the debate that we shall study closely the record of the debate, which will be an important part of our overall exercise.
Lord Brightman: My Lords, before the noble Lord sits down perhaps I may ask him whether the Government would be prepared to consider the addition at the end of Clause 1 of such words as:
"to enable such legal proceedings to be concluded".
Lord Strathclyde: My Lords, I am obviously not a legal expert or able to comment immediately on the type of wording that the noble and learned Lord has proposed. As I have said, we shall study what has been said in the debate and we shall no doubt look very closely at that phrase.
7.22 p.m.
Lord Campbell of Alloway: My Lords, I wish to thank all noble Lords who have spoken in favour of the Bill to provide the requisite all-party support. I acknowledge with gratitude the support of the noble and learned Lord, Lord Donaldson. Time does not allow me to make adequate expressions of gratitude to each of the noble Lords who have made crucial contributions to the debate, but they are assuredly not taken for granted.
I should like to thank my noble friend the Minister for his contribution. I understand his position, and I suppose that I understand the kind of brief from
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which he spoke and why he had to say what he said. However, it is a little wide of the true mark.
Perhaps my noble friend would take on board that his concept of the problem as a one-off event which is unlikely to arise again is, with the greatest respect to him, a misconceived, optimistic, departmental folly. It has no substance in truth, in fact or in practice. If he really wants to know the true position— and I know that my noble friend does want to know— perhaps he will kindly consider asking his right honourable friend the Secretary of State to write a letter to the noble and learned Lord the Master of the Rolls to ask him whether what I have said, as recorded in Hansard, is true or false in his opinion.
If what I have said is true, the substance of the departmental objection and the reasoning behind the speech of my noble friend are assuredly misconceived. The Government start from the basis of a misconception as to the substance of the problem which has no bearing on the view of the Master of the Rolls that the present situation is playing havoc in increasing the burden on the judiciary and playing havoc with litigants having their cases taken out of court. This is not just a one-off job. In the view of the Master of the Rolls, as I stated, it is a serious problem that is likely to arise in many cases in the future.
The crucial issue is that if that is right the Government must think again. If it is wrong and the Government are satisfied that the Master of the Rolls does not know what he is talking about or they reject his opinion, well and good. It will then no doubt be a matter for this House on some future occasion to decide how to deal with the question. I understand my noble friend's position and I am grateful for the care and trouble that he has taken to deal with the matter.
The record speaks for itself. My noble friend the Minister has been extremely kind to say that he will draw it to the attention of his right honourable friend the Secretary of State. The hope must be that as no amendments are envisaged and no marker has been put down we may move to dispense with Committee stage so that the Bill may pass your Lordships' House before the end of the Session.
We have had a most constructive and good humoured debate. Nothing that I have said to my noble friend the Minister—or the manner in which I have said it—was intended to evince any hint of ill humour. It is merely that here is an issue which has to be resolved, fairly and objectively, by the department and, if it comes to that, by Cabinet.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Companies (Northern Ireland) Order 1989
7.27 p.m.
The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Skelmersdale)The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Skelmersdale) rose to move, That the draft order laid before t he House on 17th October be approved.
The noble Lord said: My Lords, with the leave of the House I shall speak also to the draft Insolvency (Northern Ireland) Order 1989. Both orders were laid before your Lordships' House on 17th October.
The Government's policy in this area, as in many others, is that company law should be the same in Northern Ireland as in Great Britain. That policy of parity in the area of corporate affairs is based on the principle that any inconsistency between the two jurisdictions of Great Britain and Northern Ireland would be damaging to the business and commercial life of the Province and thus detrimental to its economic development.
Your Lordships will therefore not be surprised to note that the draft insolvency order broadly mirrors the provisions of the Insolvency Act 1986 and that the draft companies order replicates the provisions of the Company Directors Disqualification Act 1986, which is, as your Lordships are aware, an integral part of insolvency law.
The opportunity has also been taken to use the companies order to amend the provisions in Northern Ireland company law relating to takeovers and insider dealing in the light of changes introduced in Great Britain by the Financial Services Act 1986. As Bills the two Acts occupied many days of your Lordships' time but I do not propose to go into detail on them now, although as usual I shall be delighted to answer any questions, whether of detail or more general, when I wind up.
Suffice it to say that the insolvency law will reduce the unnecessary involvement of the court and the insolvency service and enable the insolvency service to concentrate on its protective and investigative work. It will provide a statutory framework to encourage directors to take a close interest in the affairs of their companies and to take prompt action when financial difficulties loom. It will deter and penalise irresponsible behaviour and malpractice by those who manage company affairs. It will clarify the law on receivership and create a new insolvency mechanism known as company administration specifically designed to facilitate company rescue and reorganisation, thereby minimising unnecessary losses to creditors and the economy as a whole when insolvency occurs. It will also ensure that those who act as insolvency practitioners are fit to do so.
Finally, it will completely revise bankruptcy law which has operated without fundamental change in Northern Ireland for more than 130 years and bring the procedures into line with those in the field of corporate insolvency. In so doing, it takes account of the Deeds of Arrangement Act 1914. It seemed to my right honourable friend to be quite inappropriate for solicitors and co-directors to have to turn to two pieces of legislation covering insolvency. The Government are therefore taking the opportunity to include a slice of amalgamation and consolidation in this case.
A deed of arrangement is a simple procedure whereby a debtor may make a legally binding contract with his creditors by which he transfers his property to a trustee who will ensure that the property is used to meet the claims of the creditors without incurring the disabilities associated with
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bankruptcy. The new provisions are designed to provide a humane but efficient system for dealing with those who cannot pay their debts, with the emphasis on allowing the debtor the opportunity of continuing to make a living so as to provide for himself and his family and to make a contribution from future income towards the payment of his creditors.
As with corporate insolvency, the draft insolvency order provides for alternatives to bankruptcy. First, the order includes legislative provisions relating to deeds of arrangement. Those provisions are based on the Deeds of Arrangement Act and have been incorporated within the insolvency order to enable practitioners in Northern Ireland to have in one enactment all the relevant provisions relating to bankruptcy and alternatives to bankruptcy. Wherever possible, the procedures for dealing with bankruptcies will be similar to those used when winding up a company. For example, a bankruptcy petition will normally be based on an unsatisfied demand for payment of an outstanding debt rather than a formal court judgment and will be followed by a bankruptcy order, assuming that payment is not made.
Even before the order was laid, there was one noteworthy difference from the law in England and Wales. That will continue and is a procedure whereby the Law Society of Northern Ireland acting as attorney of a solicitor under an order of the court may petition for the bankruptcy of a solicitor even though the society does not allege or prove that the solicitor owes any debts to the society. There is no equivalent to that procedure in England and Wales unless the Law Society itself is a creditor.
In the course of this necessarily brief synopsis of the provisions of the legislation, I have drawn noble Lords' attention to two areas where the Northern Ireland legislation differs slightly from the Insolvency Act 1986. However, there is a third difference. The Insolvency Act provides for the continuation of the insolvency practitioners tribunal in Great Britain to investigate, if requested, cases where the competent authority has refused to grant or has withdrawn an authorisation to act as an insolvency practitioner and to report its opinion to the authority. It is anticipated that the need for such a tribunal in Northern Ireland would be minimal and an appeal against the decision by the department or other competent authority will be dealt with by judicial review.
I particularly direct noble Lords' attention to Article 16 of the companies order which is a unique provision for Northern Ireland and provides that a person disqualified under the Company Directors Disqualification Act in Great Britain is not, except with the leave of the court, able to act in Northern Ireland in any capacity in relation to that company. Perhaps I may pre-empt a point which I suspect will arise in the course of the debate. I accept that we are in advance of Great Britain in this matter, but I have no doubt that the reciprocal arrangements will be made there in due course.
The final broad area of difference between the legislation before the House and that which already

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exists in Great Britain relates to the existence of a separate scheme for the enforcement of judgments in Northern Ireland. That has required the omission of certain provisions of the 1986 Act and substantial amendments to the Judgments Enforcement (Northern Ireland) Order 1981 which are detailed in Schedule 9 of the insolvency order.
I could dilate upon this subject for many minutes, but I judge that it would be inappropriate at this late hour. However, I trust that there will be general agreement as to the need for the reform of the insolvency legislation in Northern Ireland and that noble Lords will recognise from the provisions that I have highlighted the parity nature of the orders. The Government believe that the range of measures put forward will ensure that the insolvency legislation in Northern Ireland is brought into line with the contemporary requirements of trade, industry and commerce as well as those of the community as a whole. I have great pleasure in commending the orders to the House. I beg to move.
Moved, That the draft order laid before the House on 17th October be approved.—(Lord Skelmersdale.)
Lord Prys-Davies: My Lords, we are grateful to the noble Lord, Lord Skelmersdale, for explaining the provisions of both orders, indicating the disparities that will remain between the jurisdiction in Northern Ireland and the jurisdiction in England and Wales and pointing out that the relevant part of the Companies Bill is still being discussed in another place. I have consulted my colleagues who have responsibility for this specialised branch of the law and on their advice and in the light of the advice and information given to the House by the Minister, I am pleased, on behalf of this side of the House, to welcome both orders.
On Question, Motion agreed to.

Insolvency (Northern Ireland) Order 1989
7.36 p.m.
Lord Skelmersdale Lord Skelmersdale rose to move, That the draft order laid before the House on 17th October be approved.
The noble Lord said: My Lords, I beg to move the second Motion standing in my name.
Moved, That the draft order laid before the House on 17th October be approved.—(Lord Skelmersdale.)
On Question, Motion agreed to.

Hospice Care
7.37 p.m.
The Earl of Longford The Earl of Longford rose to ask Her Majesty's Government what steps they have in mind to strengthen the hospice movement and hospice care in the community.
The noble Earl said: My Lords, I rise to ask the Government about their attitude and intentions towards the hospice movement. A debate in this House on hospices is long overdue. There are those speaking after me whose knowledge of the movement and whose association with it is much greater than mine. I note that the noble Duke, the Duke of Norfolk, is to follow me. He speaks with much authority of his own and suitable authority derived from one very near and dear to him who has done so much for the movement. I shall contribute not only my own thoughts. I shall hope also to distil the wisdom of those very much better qualified. I assure the House that if I follow my notes more closely than usual, it is only because I would take much longer otherwise and might ramble over a much wider field.
I am told that out of 140,000 patients who die each year of cancer, some 40,000, or their families, have contact with a hospice or the hospice care service. We are aware that many patients who do not suffer from cancer are ministered to by hospices. We must not only think of hospices in this country, although the initiative in modern times has come from this country. We must look upon it as a worldwide development.
The major developments have occurred in the last 20 years in this country. It was in 1967 that Dame Cicely Saunders inaugurated St. Christopher's Hospice which has had so much influence on the creation of hospices here and abroad. Dame Cicely has rightly been described as the founder of the modern hospice movement. That is a perfectly correct description. However, she would be the first to say that the spiritual foundations of the hospice movement were laid before her time. She worked as a doctor in St. Joseph's Hospice for seven years from 1958. St. Joseph's had been founded by Irish nuns in 1905. Dame Cicely was already qualified as a medical specialist in terminal care. She learnt a tremendous amount and gained a great deal from St. Joseph's. She helped St. Joseph's enormously and then made full use of her knowledge in establishing St. Christopher's with far-reaching results.
During the Summer Recess I visited four hospices. I have already referred to St. Christopher's and St. Joseph's. I look upon St. Michael's Hospice, which is in Hastings, as my local hospice. I suppose that the time may be drawing near when I shall be a candidate for hospice membership and it may well be that I shall seek admission there. I also visited St. Luke's Hospice in Plymouth, which these days is presided over by Dr. Sheila Cassidy. She is a remarkable woman—and still young, but then, by my standards, so is everybody. She was tortured in Chile and is well known also for some remarkable books, among which her book on prayer is my favourite. Although we are talking tonight about hospices, I hope that no one will neglect to read her book on prayer. However, that is not in fact our topic this evening.
I believe that there are about 140 hospices in the United Kingdom at the present time. Each of them has its own way of working and its own financial relationships with the public authorities. So

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variegated are those relationships that it is impossible to generalise. Nevertheless, I must speak in general terms.
Hospices are often spoken of as homes for the dying. In fact I had always thought of them in that way. Today the hospices themselves lay more stress on living than on dying. The message that comes from all of them speaks of their determination to provide a quality to life while life remains. In many cases they provide a vital service to those who are not dying but who seem to be beyond cure. They also cater in non-residential ways for many of the terminally ill: in out-patient services and care for those who prefer to die at home. The House may hear something on that subject from another noble Lord this evening.
The hospices maintain friendship with the relatives when the terminally ill patients have died. Nevertheless originally, and in a sense it is still true, the special achievement of the hospices lay in their residential care for the dying.
What are the distinctive features of a hospice? I must be careful to say nothing to disparage the care provided in hospitals or by the medical profession generally. Thousands of health service staff show very great care for the dying. They cope with dying patients almost every day and with the grief of relatives and friends. I should point out that many of the staff in the hospitals today have been much influenced by the initiative, training and teaching inspired by Dame Cicely Saunders and others in the hospices. So even in the hospitals care for the dying is not by any means in the state that it was when the work of the hospices began.
There are particular characteristics of hospices which provide the foundation of the care that they give and which are incorporated in their educational programmes. One is the control of symptoms. Dame Cicely specialised in that from the very beginning and others have carried on and developed her work. It sounds obvious but it is true that if the root cause of an illness cannot be eradicated, a patient who has pain, nausea or breathlessness may be overlooked or their symptoms be regarded as untreatable. I have been told time and again—and I am sure it is true—that one will never hear a member of staff in a hospice or a community based team giving hospice care say, "I'm sorry but there's nothing more that can be done". In their eyes that is a sin against the Holy Ghost when faced with a patient in pain or discomfort in his last illness.
Another feature of hospice care is that the staff listen as well as talk. I have seen that in the hospices and many more examples are known to other noble Lords. The staff encourage patients and families to talk about their grief and fear both with them and with each other. They offer bereaved relatives the opportunity to share their sadness and encourage them not to bottle it up. That openness—the word was said to me very often—in the face of death and dying does not give rise to miserable staff or gloomy places in which the patients are looked after. It may be misunderstood when I say that I found the atmosphere of the hospice was cheerful but I cannot help myself using the word.
Hospices are places where staff, through their training and experience, tackle issues which all of us may face at some time—the physical and mental distress of an incurable illness, the financial and social problems of the death of the breadwinner, the devastating loss of their mother to small children and the spiritual pain of those who in their illness experience isolation or lose control of their surroundings; these are all desolating. The staff show an awareness. They live with such issues and yet refuse to be discouraged.
In one of the hospices I asked a doctor, "How do you bear it? How can you stand looking after people in that condition day after day, month after month, year after year?" She replied, "There are three answers. In the first place I am part of a team. In the second place I have regular breaks, and I could not do without them. Thirdly, at the end of the day I lay it all before God. I say, 'That is all I have been able to do and I now leave it up to you' ". So said one doctor, but in a sense I believe that she speaks for them all.
It is still true that, if one talks to patients in a hospice who are dying, they will tell you—indeed a number of them have told me—that they are happy in a way that they never could have been happy in a hospital. They feel the difference. I do not think that anybody who has visited a number of hospices will question my statement.
I come back therefore to the question of the distinctive virtues of a hospice. Yet again I must pause because in the cases that I have examined and probably in most or all of the other cases the hospices enjoy an all-important advantage in one vital respect: by and large the ratio of nurses to patients is much higher than elsewhere. One must take note of that as a fact.
I said just now that the staff in a hospice listen. Or they will just sit in silence for a long time possibly holding the hand of a dying patient. I have been told that again and again. That is obviously beyond the capacity of an ordinary hospital. It is something that we have to bear in mind when we begin to try to work out the cost. The essence of the hospice approach is loving care. The patients are enabled to feel that they are not only accepted but valued as they are. Again that phrase kept cropping up during my visits to hospices: we value the patients as they are, not as we think they ought to be. Within the inevitable limits they are given freedom of choice.
I should not be believed if I were to say that everyone who dies in a hospice dies happily and comfortably. But I do believe that that is true in the great majority of cases. Those who work in hospices appear to have very strong motivation for the work. It is not just the doctors and nurses but also the social workers, chaplains, therapists and others. For some staff the origin of their inspiration is the love of God; for others it is more their feeling for their fellow men. Of course there is no contradiction between the two.
Some of the hospices that I visited have developed from religious communities; others have a Christian as well as a medical foundation. In none is there any kind of requirement which would act as a ban on

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the admission of patients or the employment of staff who belong to a different faith or who do not profess any faith. Again and again I was told that no religious doctrine is pushed down anybody's throat. Nevertheless it is inconceivable that the hospice movement would have developed as it has done in this country and ultimately abroad if it had not been for the Christian inspiration of such people as Dame Cicely Saunders and others. The spiritual foundations of the hospice movement were already laid down when she appeared on the scene. She was a doctor who already specialised in pain control. One cannot think therefore of the hospice movement without its Christian inspiration. One cannot think of it today without its unyielding insistence on the highest medical standards of training, care and research.
The hospices are splendid places with splendid teams. They have proved their worth and their staying power. But how are they managing to keep going as more demands are made on them, such as the need for the treatment and care of patients with diagnoses other than cancer, the addition of day centre facilities and out-patient care, the teaching of staff with many different specialities and other factors which keep raising their heads? The fact that they have managed until now is a great credit to their fund-raising efforts and to the public who have supported them. But some are not the recipients of any funding from the NHS and some have seen their original funding whittled away by recent developments. There is an extraordinary variety of financial situations. But one way or another all hospices are in need of funds. It may arise because of their success. The fact that there are more hospices in an area means that each hospice is having to work harder to find a source of funds.
We now come to a crucial point that is bound to be in the minds of all who take part in this debate. The Scottish Office has recently announced that it will match pound for pound the support being given by the public to Scottish hospices. This is indeed welcome news for Scotland. We are waiting anxiously to know whether this country will do equally well. The Minister—whose personal sympathy on such a matter I take for granted— had the opportunity in reply to a Question by the noble Baroness, Lady Cox, last Thursday to announce that similar support would be forthcoming in England. That opportunity was not taken. I cannot help fearing that it will not be taken this evening.
However, on Thursday the Minister raised our hopes. I know that she would not do so unless she thought that there was something good in the pipeline. It was indicated that an important announcement would be made before very long. We had to conclude that it would be an announcement favourable to the hospices. I am sure that everyone speaking in this debate will urge the Government to announce as soon as possible that they are following at least the Scottish example. Even if such an announcement were made, I would not like to imply that the hospices will feel that they are now being satisfactorily looked after. The 50–50 level of support would by no means take away all the anxieties carried
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by relatives with patients at home or hospital staff responsible for in-patient units.
I am glad that one grievance often referred to by the noble Lord, Lord Ennals, and others in this House is now being apparently rectified. It is most obviously unfair in the case of hospices, and it has been grossly unfair in general, that patients being cared for at home for the last few weeks of life should fail to qualify for the attendance allowance because they do not live long enough. But better late than never, my Lords. It is indeed good news that the situation is at last being rectified.
I have time to give only two other examples of the anxieties that would remain, although a number of examples could be provided. Even if the 50–50 grant were accorded—and we have not reached that position yet—it is very unfair that supplementary benefit, which should cover board and lodging costs, is often delayed or not paid by local offices. It is very unfair that hospice staff often have much difficulty in obtaining drugs for their patients under NHS arrangements. No doubt as noble Lords speak they will deal with other matters.
I have stressed the way in which the Government can help, primarily by funding, but in other ways upon which I have touched. They will be touched on by other speakers. Looking to the future, the health authorities should ensure that NHS staff who would benefit are indeed able to take advantage of the training opportunities that are provided in the hospices where there is so much knowledge and experience of these matters. Insurance agencies such as BUPA should recognise that patients in hospices are receiving care for which payment should be made and that it is distinguishable from long-term nursing care which is excluded from most policies.
Those are two issues. Other noble Lords will speak of other matters. So much remains to be done to help the hospice movement to take its proper place in care for people nearing death. I need hardly say that this does not mean that I believe that everyone should die in a hospice or that general practitioners cannot look after any patients at home. We have an overwhelming need for the services provided by hospices and the domiciliary teams working with patients in their own homes. There is also the need to be sure that the staff looking after patients within the NHS have a full knowledge of what can be achieved through the philosophy of the hospice. There is a great deal to be learned.
Even if I had longer in which to speak I am not capable of doing full justice—I hope that others will do more justice—to the inspiration provided by the hospice movement. To me it is a supreme example of spiritual endeavour and professional efficiency working hand in hand. I realise that the Minister will not be in a position today to make concrete promises. But I hope that she will share with us our conviction, as I believe she will, that every support should be given to such a demonstration of practical wisdom, indomitable courage and tender love.
7.58 p.m.
The Duke of Norfolk: My Lords, I should like to thank the noble Earl, Lord Longford, for introducing

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the debate on this very vital subject which has come to light only in the past 20 or 30 years. Until recently hospices were hardly known. They were departments of hospitals. Now they are thriving parts of our medical care. It is true to say that not only do we lead Europe with the hospice movement but the world.
I last spoke in this Chamber on the hospice movement when we were talking about the attendance allowance. It had been pointed out that the Government were not willing to give the attendance allowance to a patient who needed it until after six months had elapsed. When the Government knew of this situation they gave the allowance at once. I am very grateful to them for agreeing that a hospice patient can have an attendance allowance paid to dependants at once. He does not have to wait six months.
I became acquainted with the great movement when my wife and I visited St. Joseph's Hospice in Hackney where we knew a patient. We found an amazing convent where the nuns had been caring for the dying since 1905. They were one of the first groups to do so. We were so impressed by what was happening that my wife founded a charitable movement called Help the Hospices. It does everything that it can to further the progress of the hospice movement and to raise funds and beaver away on its behalf.
I realise that the night is moving on, so I shall not speak for too long. The main problem is that more government funding is required. Of the 100-odd voluntary hospices, approximately one-third receive no government funding. I hope that in his reply the Minister will give the House some information about that.
Roughly speaking, the cost of running a 10-bed or 15-bed hospice is £600,000 a year. That is a large sum of money for a local community to raise by charitable applications. I am confident that the Government see the need to match that figure from their resources. My wife and I have visited Richmond Terrace. I believe that things are going well and that the Government will help towards its funding. I hope that perhaps not tonight but eventually we shall hear that the Government have taken the matter on board and they will tell us that they will help the charities of the kingdom to receive money towards their efforts for the hospice movement.
8.2 p.m.
Lord Dunleath: My Lords, we are grateful to the noble Earl for introducing this topic. It is gaining greater currency as time passes and it is appropriate that he should have raised it tonight. He has fully covered the subject of hospices and I hesitate to repeat his comments. The main point arising from his comments and from the research that has been carried out is that our hospitals are already overstretched as a result of attempting to deal with all the patients who have a reasonable chance of recovery. Hospital beds are at a premium and ideally they should not be occupied by those who are terminally ill. Hospital beds are for one purpose;
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hospice places are for another. Apart from that, a hospital is not the best place in which to die.
I am fairly new to the subject. When I visited the Northern Ireland Hospice in Somerton Road, Belfast, I was astonished to discover such a congenial atmosphere compared with that in a hospital. Indeed, when the time comes—and I am sure that it will be in advance of that for the noble Earl, Lord Longford—and I am admitted to a hospice I shall look forward to the thought that reveille will not be at 0600 hours; that visiting times will be flexible and that there will be no clanking trollies going up and down the passage during the night to keep me awake. Indeed, the atmosphere in a hospice is a great deal more congenial than that in a hospital because the mood and the purpose are different.
Inevitably, our population is ageing. As a result of modern medical science people are living longer and therefore there will be a greater need for this type of terminal care. Not only must we look to the future, but when we look at the present we see that the need already exists for more places in hospices. At the Northern Ireland Hospice there is an urgent need for an extension providing 10 extra beds, but owing to lack of finance that has been postponed. Finance is the crux of the matter. The running costs are the crippling factor. The noble Duke mentioned a figure of £600,000 per year needed to run a hospice. The Northern Ireland Hospice costs £950,000 per year. Therefore, reserves cannot be accumulated to provide for extensions which are urgently needed.
The health and social services boards are doing their best within their limited budgets. Between them the Eastern Health and Social Services Board and the Northern Health and Social Services Board are granting £80,000 per year. The Department of Health and Social Services has set a most helpful attitude. However, the regular grant is only £52,000 per year, leaving a great deal to be found from voluntary fund raising sources.
I am pleased to see the noble Lord, Lord Skelmersdale, in his place tonight because he has taken a most constructive attitude towards the subject. Recently we were delighted to welcome him at the hospice and I know that he assimilated the information he was given. I hope that I am not too presumptuous in saying that he must realise that the department's contribution does not make a significant impact on the shortfall considering the total cost of £950,000 per year.
Admittedly, one-off payments have been made. For example, £100,000 was given to help the hospice in an emergency and £150,000 in capital grant was given towards the extension. Even so, the trouble is that the general running costs are such that instead of the hospice being able to indulge in orderly budgeting it is a matter of crisis management. When one is trying to market something to the public, crisis management is not the best profile that one can project. When staggering from one emergency to another one tends to lose credibility and confidence.
The noble Lord, Lord Blease, will speak later in the debate. He will be able to throw more light on the subject than I can. We have been involved in a number of fund-raising activities of one kind or

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another. I am sure he will agree that if one puts a definite project before the people of Northern Ireland they are astonishingly generous. In just under two years over £1 million was raised for the children's cancer unit. That was a defined project and people knew that when that amount of money was raised that was the end and they would be able to see the result. However, continuing to go back to people again and again asking them to help with running costs is much more difficult. That is why I appeal this evening to the noble Lord and to Her Majesty's Government to try to work out some way in which the running costs of the hospice could be put on a firm financial basis.
We were much encouraged recently to learn that Mr. Michael Forsyth, the Minister responsible for health at the Scottish Office, had arrived at a pound for pound arrangement for the 10 hospices in Scotland amounting to some £4 million per year. I respectfully ask that Her Majesty's Government should consider doing something similar for the hospices in Northern Ireland, because that is cost effective. The Eastern Health and Social Services Board said that last year or the year before—and I cannot remember which—the hospice was actually saving it £200,000 per year because the terminally ill did not have to be accommodated in geriatric wards in hospitals, taking up the time of medical staff and district nurses. Therefore, that is cost effective and is something which I respectfully suggest Her Majesty's Government should address as a matter of urgency.
Another point on the periphery of the matter is that the Northern Ireland hospice is planning to carry out an extension of a further 10 beds. However, value added tax will be a considerable adverse factor to those plans. Once again, it is rather a question of the Lord has given and the Lord has taken away. Would it not be possible to zero-rate the conversion of buildings like that? Otherwise, whatever capital grants are given by Her Majesty's Government will be very substantially eroded by VAT.
Therefore, in thanking the noble Lord for his interest and his constructive attitude towards the hospice in Northern Ireland— and we were very glad to see him there recently—with every respect, I ask him to take note of the requests which we have put before him this evening.
8.11 p.m.
Baroness Blackstone: My Lords, I make a short contribution to this debate this evening not as a social scientist, not as someone who has expertise in the area of social policy nor even as someone with a long-standing interest in health care but as someone who has personally benefited and whose family has personally benefited from the hospice movement.
Almost exactly five years ago I received the devastating news that my former husband had terminal cancer. He was 43 years old. A week earlier cancer of the stomach had been diagnosed but we all hoped that surgery would solve the problem. We were living on our optimism and of course we were clutching at straws. A major operation, a partial
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gastrectomy and extensive exploration revealed that cancer had invaded his lymph system and he was doomed.
All the same, he made an amazing recovery from that surgery and eventually returned to work. However, six months later he was back in hospital for major surgery. He was then sent home and died less than eight weeks later. Throughout his last six months he made it clear that he wanted to die at home when the end eventually came, and it was possible for him to do that because of the support of the home care branch of the hospice movement. Without that, we could not have coped.
I submit that many of us would prefer to die at home surrounded by our family and visited by close friends in a familiar environment where a favourite poem can be read from a much-loved volume or where music which we particularly enjoy can be played. That is as true, in my experience, for those who are struck down in the prime of life as it is true of those who are old and especially attached to their homes.
However, the care of the dying—and again I speak from personal experience—is an enormous physical and emotional drain, especially where the patient is young and dying before his time. There are physical demands of lifting the patient, laundry, medication and turning the patient during the night. Above all, there is the awful fear of failing to relieve the suffering and pain and the anguish of watching someone one loves dying.
In our case, the North London Hospice Group, which helps some 300 terminally ill patients each year, provided the support which we needed, the quality of which I do not believe could have been provided by anyone else. Without that, my former husband would have had to go back to hospital and we should all have felt everlastingly sad that we had failed to respond to his last wish to die at home and that we had let him down.
It is the great expertise based on depth of experience in caring for the dying which is the special and unique characteristic of the hospice movement. However caring a hospital ward or a GP may be, they are dedicated to curing people and to the care of the living, of those who will get better. Success is largely measured by the speed and completeness of the cure. A death is a failure. The care of the dying in that sense requires the suspension of many normal medical objectives; for example, the use of drugs in the control of pain must be geared to the fact that the patient will not get better. Therefore the relief of pain, rather than anything else, is paramount.
The care of the dying also involves the support of those close to the patient to make it easier for them to cope. Again, the hospice movement has established a justified reputation for great skill and humanity in helping people to cope with bereavement. Again, I can testify to that personally.
I hope that I have said enough to convince your Lordships' House about the enormously positive nature of hospice treatment, especially home care, which has the added advantage of being cheaper, although I recognise that some will need institutional care and others a combination of home and

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institutional care. Indeed home care must have back-up beds so that, when families need respite or cannot cope, there is provision available, which involves staff skilled in the care of the terminally ill. There is nothing more demoralising for a home care team than to see a patient admitted to a hospital where the necessary skills are lacking and where all the good work which they have done is undone. Of course, that is also terribly traumatic for the patient.
So far, unfortunately, it looks as though the Government have not recognised the need to support the hospice movement and expand it. There are a small number of NHS hospices, as has already been mentioned. The rest receive varying degrees of support from regional and district health authorities. However, on average, it amounts to only about 30 per cent. of their costs and, as the noble Duke said, some receive absolutely nothing. That leaves many scrabbling for funds and leading a scrimping and saving existence. Each hospice on its own must try to make ends meet and I think that doing so often diverts energy from service provision to fund raising. That is not a satisfactory state of affairs. I ask the noble Baroness to give an assurance that that will be changed.
One solution would be to provide central funding for all bona fide hospices established through some kind of registration scheme. I think that that funding should cover at least two-thirds of their costs, perhaps leaving them to raise the remaining one-third.
A condition of central funding which I believe many hospices would be pleased to meet is the provision of training for medical students in the care of the terminally ill. At present students have little training in what ought to be an extremely important part of their job. If it were provided, the principles of hospice care could then begin to be disseminated into the medical profession more generally. Pursuing the same theme a little further, will the Minister consider establishing a number of hospices around the country attached to teaching hospitals which could extend knowledge about appropriate care for the dying to an even higher proportion of our future doctors?
While the provision of funds from health authorities is so uncertain it seems that there is little alternative to a central allocation direct to the voluntary sector, but perhaps the Minister can say something about the results of her department's request, made I believe some time ago to health authorities, to submit plans for terminal care and to fund hospices providing support services. After all, they are providing a substantial back-up for the NHS.
Many hospices want to retain their voluntary status and some independence. However, they do not wish to be so short of funds that they have to turn away many people, as happens at present. It is vitally important that the Government take action, and take action soon, to provide resources by whatever mechanism to allow this great, inspiring and humane movement to do its work and, above all, to expand so that others can benefit from it as my family and I did.
8.21 p.m.
Baroness Cox: My Lords, I join other noble Lords in thanking the noble Earl, Lord Longford, for initiating this debate on a subject of such importance and timeliness. As has become clear, the hospice movement represents one of the most significant developments in health care in recent years, radically transforming attitudes and practices in the care of the terminally ill and their families.
I must at the outset declare an interest as a member of the council of management of St. Christopher's, Britain's first modern hospice. It opened its doors just 22 years ago, in July 1967. Since then many other hospices have been established in Britain and throughout the world, extending their care from within the hospices themselves to people in their own homes, enabling them to spend as much as possible of their last weeks and days in familiar surroundings with those closest to them—a development of hospice care which was so movingly described by the noble Baroness, Lady Blackstone.
Before I address some of the problems faced by hospices and the ways in which they might be helped to develop their distinctive ministry, it might be helpful to highlight some of those key aspects of their work in order to identify ways in which it can be facilitated and why they deserve support. Research, endorsed by the experience of those who work with people who know they are going to die, has shown that among those things which they fear most are pain, other symptoms such as nausea or breathlessness and loneliness. They are also often deeply distressed about the impact of their impending death on their families. Some express concern about spiritual values and others experience an existential crisis of faith and worry whether it will sustain them throughout the experience of dying.
Of course, as the noble Earl, Lord Longford, and others indicated, many hospitals and community care services provide high quality terminal care; but it is often extremely difficult for them to focus on and ensure time for the problems of the dying and the needs of their families. Hospitals are inevitably committed primarily to trying to cure the ill, to heal the injured and to improve the quality of life for those who are not dying but who cannot be cured or healed. As a nurse I know how hard it is—indeed, sometimes impossible—in busy wards to give to those who are dying the intimate and sustained attention which they and their families need. That is nobody's fault. It is a problem of competing and conflicting priorities and pressures, but it highlights the need for the distinctive kind of care which hospices provide.
Hospices are committed to the concept of trying to make death as positive an experience as possible. If we recognise that the one sure fact of life is death, there is a commitment to try to ensure that each person has as good a death as possible in their own terms and that their family receives the support needed both during the death of their loved one and during the subsequent bereavement.
Therefore, with all their experience hospices have been in the forefront of research and development in palliative care and have made major contributions

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to methods of pain control and symptom relief to the extent that they can now offer genuine reassurance to the great majority of their patients on this aspect of their fear of dying. Their opportunity to specialise in palliative care means that they can also perform a valuable and a valued teaching function for colleagues working in hospitals and in the community, helping them to benefit from the hospice experience.
Hospices are committed to what is called "whole person" or "whole medicine" care. They are therefore committed to offering patients and their families the assurance of psychological support, with great attention being paid to emotional needs both in the preparation for death and for families with follow-up care. For those who express a wish for spiritual support there is an assurance of help for those of Christian and other faiths, and there is always a readiness to listen to any non-religious approach and seekings. As I have already indicated and as has been emphasised by other speakers, there is this important and rapidly growing development of hospice care in people's homes with the provision of medical, nursing, psychological, social and spiritual resources to enable those who choose to do so to stay in their own homes for as long as possible, often to the end of their lives.
In a book celebrating the 21st birthday of St. Christopher's Hospice, Dame Cicely Saunders, its founder and, as the noble Earl, Lord Longford, said, to a great extent the founder of the modern hospice movement, presents the stories of 21 of the many thousands of patients cared for at St. Christopher's. In introducing their stories she writes:
"Their needs and achievements have been the centre and the stimulus for all the developments of these years. But they would not have been free to find and express their true selves and to remain close to their families for the last part of their lives had it not been for the awareness and skills of the various members of staff; so we celebrate them also".
It is appropriate in this debate to celebrate all who have made the hospice movement possible and enabled it to develop its unique ministry of compassionate, sensitive, appropriate and effective care. It is also appropriate to consider ways in which that work can be supported so that it can go from strength to strength to meet an ever increasing demand.
I should therefore like to ask my noble friend the Minister to consider the following issues and questions. First, while hospices value their voluntary status and greatly appreciate the support they receive from many different sources, it would be very beneficial if their staffs could be relieved of some of the burdens of fund raising. I am sure my noble friend realises that the work undertaken by staff in hospices and by the home care teams is immensely demanding physically, emotionally and spiritually. I ask my noble friend please to note how heartened so many people were by the recent announcement of pound for pound financial assistance in Scotland and to convey the urgent request expressed last week, repeated here again this evening, that similar initiatives be taken for the rest of the United Kingdom.
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Secondly, while hospices appreciated the speed of the response by the Government to the financial implications of the 1988 nurses' pay awards (which were warmly welcomed) there is a real problem for many hospices. Is my noble friend aware that many hospices have had to shoulder two-thirds of the costs of those awards, adding a further burden to their funding? It does not seem that that was the government's intention. Therefore could my noble friend take steps to remedy this unintended consequence of the increase in nurses' salaries?
Thirdly, as I have indicated, many hospices regard teaching as a vital part of their work and particularly the dissemination of their knowledge and experience to others working with the terminally ill in the National Health Service and in other places, especially abroad. In addition to providing courses for external staff, many hospices also take on a strong commitment to training their own staff. For example, St. Christopher's employs three registrars in training posts, all of whom intend to remain in the specialty of terminal care. Over a three-year period 54 St. Christopher's nurses have returned to the NHS after completing the hospice's staff development programme. Could my noble friend bear this time-consuming aspect of the work of hospices in mind when considering their funding?
Fourthly, could my noble friend take note of the financial implications of the importance of the care of the families of the terminally ill, many of whom are young and in need of support from hospice staff in rebuilding their lives after their tragic loss?
Fifthly, and finally—at least for this debate—will my noble friend give an undertaking that, in the formulation of policies concerning hospices, there will be consultation with all who have direct experience of their work? For example, I refer to senior staff in established hospices, the Association for Palliative Medicine, the Royal College of Nursing Symptom Control and Care of the Dying Forum, the Association of Hospice Social Workers, the Association of Hospice Administrators and the Association of Hospice Chaplains. These and other professional associations clearly have much of great value to offer. I believe it is a matter of some concern that their views should be taken into account in discussing the criteria for designation as a hospice and professional standards of care, training and education.
In conclusion, perhaps I may pay a final tribute to all who work in hospices, for their vision, dedication and commitment, which alleviates so much suffering and brings hope to so many in the face of fear and despair. As Dame Cicely Saunders concludes the introduction to her book from which I quoted earlier:
"We celebrate a place where 'the new life rising within us' has had an opportunity to grow".
I hope that as a Government and as a nation we will help all hospices to continue to foster the new life rising within them.
8.33 p.m.
Lord Stallard: My Lords, I too wish to add my thanks and congratulations to my noble friend Lord

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Longford for putting down this Question and giving us this opportunity this evening. I almost feel that enough has been said and that nearly all that can be said has been put forward by people who are much more experienced than I. However, I should feel guilty if I did not continue if only to repeat what has already been said. It is important that those of us who have feelings and views on this subject should state them whatever the circumstances.
My own involvement was as chairman of a local authority health committee for many years. I was privileged to visit some hospices and some units for long stay and terminally ill elderly people. I was able to view at first hand the treatment that was given to those people and what it meant to their relatives. I consider that there is a growing need for these facilities, as mentioned by the noble Lord, Lord Dunleath, if for no other reason than that they are much more efficient in the management of this particular traumatic event.
It has been generally accepted— I accept it too—that in this country we have been loth to talk about terminal illness or death. It is something we fight shy of. We have never faced up to it until now. I believe that is due to the growth of the hospice movement and the knowledge of the work that it has done as regards pain control, the treatment of patients and the bereavement counselling for relatives which is an essential part of the process. These factors have broadened the discussion to a much wider population.
Training courses are run for nurses and other staff who work in hospices. The home care service that has been referred to involves more and more people in the work of hospices and other special units. So we are slowly coming to terms with the problems surrounding terminal illness and death. It has to be said also that the publicity surrounding the tragic onset of new diseases such as AIDS and motor neurone disease, besides the broader spread of age groups affected by cancer, have played a part in raising our awareness of the issues, the problems and the necessity for the services provided by hospices.
Television and radio have also made a very valuable contribution in recent programmes in raising the awareness of people as to the benefits that these services can bring. It is true, as my noble friend said, that most people have always looked on hospices as somewhere to go to die. I believe it was a patient at the Strathcarron Hospice near Stirling who said in one of the programmes that I heard that he had always thought a hospice was just a place to go and die. He explained:
"But it is a place for peace and dignity and caring. If you have to go, you go without pain; it makes you less fearful of death".
I believe that that is quite a tribute to the management of pain control and the counselling to which I and others have referred.
The noble Duke and others have given some very impressive statistics and I do not intend to repeat all of them. However, I believe that some need underlining. The noble Duke said that, since 1967 when the modern hospice movement was founded, there has been a steady increase in its development which has occurred even more rapidly in the past 10
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years. Now I understand that there are 2,432 beds in about 133 units. Together with care teams, they care for 40,000 patients a year. Of these 133 units, 100 are in the voluntary sector and are registered as nursing homes. The remaining 33 are run by the National Health Service.
I understand that one-third of the money to run these hospices comes from the NHS and the rest comes from grants and donations together with fundraising. Other speakers have mentioned the need to try to reduce that commitment. The tremendous burden is now much larger and will continue to increase as the demand grows for these kinds of services. The Government should recognise that it is a more efficient way of dealing with these cases. It will be money well spent.
I am the first to admit that the Government have made some positive responses in recent months in reply to the demands for extra funding. For example, I refer to the extra funding for the nurses' pay award. The Government responded constructively, as they did in response to the setting up of the London Lighthouse and Mildmay Mission Hospices. Both are in the London area and I know them. They are both urgently needed and benefited very much from the assistance that the Government were able to give.
However, the service needs much more than that. It has to be extended even further. In a Written Answer in another place on 10th February 1988, the then Minister listed 103 district health authority areas where there was no in-patient hospice unit within their boundaries. That gap will have to be filled. And, as more people become aware of the benefits of the service, there will be demands for the gap to be filled. More resources are needed to develop what is now a necessary service.
Age Concern, with which I am closely connected, has made a number of suggestions. It believes that we should encourage the introduction of the hospice concept in all care settings; in hospices, long-stay hospital care, nursing homes and in the home. Previous speakers in this short debate have pointed out that this is not a question of hospice versus hospital. It is a recognition of the problems faced by hospitals at the moment. The need for this specialised service is becoming more and more apparent as demand grows. We need both services, but we need the hospice concept for the chronically ill and the terminally ill.
There should be national guidelines for the care of the terminally ill, with sufficient resources made available for this highly intensive system of care to be put into practice. Many elderly people who are not terminally ill require and receive in long-stay hospitals, in nursing homes, in residential homes and in their own homes long-term care for chronic conditions. That is where we should try to improve the standard of care (where it needs improving) and that is where the hospice concept could be introduced.
We also believe that different levels of care are necessary to give older people a greater choice. There should be a choice at that stage and in those circumstances. Long-stay hospital care should be

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provided in local hospitals which serve the needs of the whole community. The quality of life for all chronically ill elderly people must be improved with a greater respect for their individual needs and choices. As old mental and geriatric hospitals are closed all over the country, we must replace them with smaller, more localised units. The move from institutional care to care in the community must consider their needs and the needs of future generations. There must also be recognition of the continuing need for some long-stay hospitals. We have talked about domiciliary care where possible. My noble friend Lady Blackstone gave an emotional description of how domiciliary care is absolutely necessary. However, we need long-stay hospitals as well for a number of reasons.
The Government have expressed their commitment through Ministers both here and in another place to the voluntary hospice movement. I should like to ask the Minister one or two questions. Those of us who scan the papers and the agendas for anything that is helpful have noticed the not unexpected initiative in Scotland, from where so many initiatives come. The Scottish Office has offered pound for pound for the financing of hospices. Is the noble Baroness able to give a timetable for when that can be introduced in the rest of the United Kingdom. The Government have committed themselves to the principle, or something similar. I should like to know the timetable. One or two other points have troubled me in my recent reading. I understand that in 1987 the Department of Health issued a circular, HC(87)4, requiring health authorities to consider their plans for terminal care and to make an appropriate financial contribution to hospices providing support services. Is the noble Baroness able to tell us what progress has been made since that circular was issued? Has there been any response from the health authorities involved?
Earlier this year the department wrote to the Royal College of Nursing's hospice care forum stating that there seemed to be considerable variance between the resources the DHAs said they allocated to hospices and the amount the hospices said they received from the DHAs. If there is a discrepancy, has it been investigated? How far have the investigations gone? Can the noble Baroness give us any information about the present position?
I should be grateful for replies to those questions. In the meantime I hope that the Government will underpin their commitment by ensuring that adequate financial resources are made available to plan and build the hopices that must be opened if we are to meet the new demands that will be made on them.
8.46 p.m.
Lord Blease: My Lords, I join other noble Lords in thanking my noble friend Lord Longford for initiating this timely, informative and challenging debate. I consider the debate timely because of widespread public concern about the Government's reforms of the National Health Service and the current political controversy over the future of patient care. The timing is particularly important
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because of the concern about the major financial crisis in the hospice movement.
The typically sensitive and frank speech of the noble Earl and the succeeding practical and emotional points made by other noble Lords should help to heighten public awareness of, and stimulate government action in response to, the urgency for reasoned expansion and development of the hospice movement. This debate challenges us all earnestly to seek to promote reasoned co-operation and partnership between the statutory health authorities and the independent voluntary hospice organisations, a partnership encouraged by government which will fulfil the need for wider availability of hospice type care for the terminally ill.
The historical development of the hospice movement can be traced to the fourth century. We know that most of the medieval hospices in Britain were founded by religious orders. Even today some of the existing hospice and palliative care services are staffed and managed by religious foundations and trusts. I understand that the modern hospice movement has been developed in its present charitable, registered form during the past 40 years.
I have received today an excellent paper prepared by the Royal College of Nursing's hospice care unit which sets out approximate figures for the number of hospices in the United Kingdom. There exist about 136 independent hospitals having in-patient units. These units are widely dispersed throughout England and Wales, with 13 in Scotland and four in Northern Ireland. In addition, there are in England 26 hospices under the direct control of the National Health Service. I state those figures because they are approximations and we find different aspects of the service being promoted as hospice services. Some of the care is in-bed hospital care, while a lot of the work is done at home or by out-patient activities which have already been mentioned. These have to be related to the total costs of the central organising hospice unit.
Notwithstanding the growth of the hospice movement, there are deplorable gaps in the range of in-bed unit facilities. My noble friend Lord Stallard mentioned some of these. If we are a really genuine caring society, surely these hospice services should be readily available to all terminally ill patients and their families in both urban and rural areas. I believe that this is a great challenge to both the Government and the hospice movement. There are many areas which are totally neglected in this connection. After all, it is not large buildings which are requested in connection with hospice services. Smaller units, such as cottage hospital care, would meet the need in much more effective terms than the large buildings which are being planned.
My views are mainly conditioned by my experiences in Northern Ireland and my contacts with individual personnel working directly in hospices in Scotland and in England. I have been privileged to be associated with the provision of hospice facilities in Northern Ireland for over 30 years. I was a member of the working party appointed in 1979 by the then Lord Mayor of Belfast, Alderman David Cooke, which founded the

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Northern Ireland Hospice, and I had the honour to be its first president for a period of five years. I state that because I feel that I have some detached knowledge of the general work that is required and the general needs of the present situation.
There are four hospice-type facilities in Northern Ireland. There is the Northern Ireland Hospice. There is the Foyle Hospice, which is only a room where three nurses meet, take telephone calls and go out to provide a service, but it is an excellent organisation which has been set up pending the acquisition of an in-bed unit. Then there is the St. John of God Hospice which has been established for a long time and is now proposing to set up an eight-bed unit. Then the Beaconfield-Marie Curie Home was established in, I think, 1963 in Belfast. These four hospice units have had very generous community financial aid and voluntary support. All fund-raising and voluntary work is given wholeheartedly by all sections of a divided community.
It is important that I should say that the people at all levels who work at and are involved in the four hospices in Northern Ireland are of differing religious faiths and of no faith. They all join in sharing the work and in caring for patients, who are admitted and treated with the same respect and dignity, irespective of their religious outlook. My noble friend Lord Longford spoke in this connection and I felt that it would be useful in the Northern Ireland context to say that these four hospices are oases of human compassion, light and hope in a bleak wilderness, where often the sense of human dignity and values seems to be lost. They are indeed an inspiration to us all. However, the problems of these Northern Ireland hospice units are largely the same as elsewhere in the United Kingdom. The problems are of increased demands for their services and the increasing difficulty of obtaining funds for revenue costs.
It might be helpful if I quote from a briefing I had from the Beaconfield Hospice in Northern Ireland. It states:
"There is a great deficit between the cost of Beaconfield and the income … This has to be met by voluntary contributions, fund-raising events and legacies. Relatives of patients will send donations in lieu of flowers following a death and staff and friends of the Home are constantly pursuing ideas for fund-raising.
The work of Beaconfield complements the National Health Service in the following ways:

1. By providing care for patients when treatment is no longer appropriate—beds in the NHS wards are not blocked by terminally ill or convalescent patients.

2. By providing care for patients admitted from home who would otherwise be needing hospitalisation.

3. The cost of nursing a patient at Beaconfield costs much less than in any area of NHS care. The cost of care for a patient for one week in Beaconfield was £344.55 last year. Figures for NHS are not available but previous years were very much in excess of this amount".

That puts the matter in perspective in relation to what was said earlier. They render a service to the community and they ought to be compensated in some way. While the quality of care and the treatment differ little, quoted bed unit costs vary by as much as £300 per week between the lowest and the highest currently stated figures.
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Another aspect of the overall general development of the hospice movement is the absence of any apparent effective central voice for the movement. Except for the Royal College of Nursing Hospice Nurse Managers' Forum and the recently formed "Help the Hospices" group, there appears to be little attempt to present hospices in a professional and effective way and as a movement with all its ideals, objectives, functions, problems and financial difficulties.
If I may cite a problem that I foresee, some hospices are pleading for and supporting the pound for pound scheme. They are asking for it to be extended to them and are supporting it in general terms. The pound for pound scheme was announced by Mr. Michael Forsyth, the Health Minister at the Scottish Office. After giving the scheme due consideration, I think that it would be financially disastrous for many hospices. Voluntary fund-raising is now more difficult than ever and is not returning anything like the amounts required to balance the books. Indeed, many hospices are running a two or three-year deficit and certainly the books have not been balanced.
When voluntary appeals fail, what does the pound for pound scheme yield for any hospice? The answer is nothing. This is an issue which should be examined very carefully by those putting it forward. Even if hospices are not in deficit this year, there are difficulties about expanding the service and obtaining funds for capital development, as well as not having the revenue to meet the ordinary administrative and running costs. My belief is that a partnership with the health authorities should be established and there should be sound contractual arrangements made for hospice services.
I should like to quote from the excellent paper which I have mentioned. It shows the concern of the Royal College of Nursing Hospice Nurse Managers' Forum and should be read by many who are giving their services to the hospice movement. It states that it would like to see:
"1. That hospice service be regarded as a core service.
2. That GP budgets be realistic enough to allow for the proper subscribing of terminally ill patients so that they can have all the medication they require, regardless of cost.
3. That drugs for hospice in-patients be provided free and prescriptions for out-patients and for day-care patients also be free".
They are practical things which should be quantified in some way and met out of existing health service funds.
All those interested in the hospice movement should seek to have appointed an independent working party urgently to undertake a study and to issue a report on the present internal structure and needs of hospices in the United Kingdom with a view to meeting the future developments in the best interests of the terminally ill.
I realise that it might be some time before such a study could be accomplished. Perhaps it could be set up independently by some of the trusts that have done such valuable work in that connection. In the meantime I urge the Government to try to meet the running costs of existing hospices.
9 p.m.
Lord Hylton: My Lords, I apologise for speaking without having put down my name. I do so only because I have listened to the whole debate and have a number of friends currently working in the hospice movement. I should like to make just one financial point. In doing so, I support strongly what the noble Lord, Lord Blease, has just said. Pound for pound is no doubt a big step forward in Scotland. I am sure that the Scottish hospices are grateful for the scheme, but something a little better and a little more thought through is called for for England and Wales.
We should note that the population of England and Wales is much larger and the problems are rather more complicated than those in Scotland. We need a definite co-ordination of approach among a number of government departments; there is the Department of Education and Science in which the noble Baroness, Lady Hooper, has served for a number of years. That department could perhaps take on 100 per cent. of the costs of education and training within hospices. After all, it is entirely an educational and training service for adults. Secondly, there is the Department of Social Services. Is it not possible for that department to look after the counselling requirements and bereavement care of families? One would imagine that that would fall within its terms of reference.
Finally, one comes to the Department of Health. My noble friend Lord Dunleath rightly made the point that the higher the proportion of support that can be given to the running costs of hospices, the easier it will be to raise additional capital from the general public, which is, I am glad to say, extremely generously minded on this theme and subject. With that, at this last moment perhaps I may beg the noble Baroness to respond generously to my plea for a co-ordinated across-the-board government approach.
9.3 p.m.
Lord Ennals: My Lords, the whole House will be grateful to my noble friend Lord Longford for opening, in a moving way, a debate which, as he said, is long overdue and which has been of great value. The debate has been well informed because so many of those in your Lordships' House—I am thinking of the noble Baroness, Lady Cox, the noble Lord, Lord Dunleath, and my noble friend Lord Blease—have worked in the hospice movement in their own parts of the country.
I have visited several of the hospices referred to—St. Joseph's and St. Christopher's—and many others during the past 20 years, and I agree with all that has been said about the remarkable atmosphere which exists among those who know that they are dying. I should like to echo the tributes which have been movingly paid by my noble friend Lady Blackstone and all who have spoken to all the people who work in the hospice movement. I include those who work in home care for the terminally ill, because increasingly we see that as a broad spectrum of services to the terminally ill.
It must be, as the noble Baroness, Lady Cox, said, tremendously challenging work. I do not believe that
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I could maintain it. It requires great qualities to cope with the physical, emotional and spiritual needs of the terminally ill and their families. Some of us may be more aware of what has been done for families than for the patients themselves. I should like to echo the plea made by my noble friend Lord Stallard and Age Concern that the lessons which have been learnt in the past 25 to 30 years, since the remarkable work done by Dame Cicely Saunders, should be extended to all parts of the care setting: to hospitals, hospices, long-stay hospitals, care nursing homes and home care. We are not today talking about a luxury; we are talking about an essential core part of our National Health Service. We must look at the service as an essential one which more and more people will look to and hope for in their terminal years.
I wish to emphasise the importance, which was touched upon by my noble friend Lord Stallard, of preparing national guidelines for the care of the terminally ill, because we must plan for expansion. Inevitably of course expansion, as always, will need more money.
There has been no reference to the needs of children. Perhaps the Minister can say something about that and, if not, perhaps she will write to me. A recent National Association of Health Authorities report said that there were about 5,000 children at any one time with terminal illness, and yet there are only three hospices for children. I do not suggest that people would want children to die in hospices, although it may be the best thing for some in view of their home circumstances. There is a call for something to be done for children as well as adults.
Several noble Lords referred to the legal status of hospices. Hospices outside the National Health Service are registered nursing homes. They are registered and inspected by district health authorities under the Registered Homes Act 1984 and the equivalent legislation for Scotland, Wales and Northern Ireland. They are registered charities and as such their management is governed by articles of association. The voluntary hospice movement, as I understand it, would like a simple registration system for hospices to be established in order to ensure that a distinction is clearly made between the services offered by nursing homes and those offered by hospices. This again may be something on which the noble Baroness will be able to comment.
My noble friend Lady Blackstone referred to the circular HC(87)4 issued in February 1987. I hope that the Minister will say something about what has been the result of the circular. It called upon health authorities,
"to examine their current provision of services for all terminally ill patients … to plan …to rectify any deficiencies, where possible in collaboration with the voluntary sector".
Paragraph 5 of the circular states:
"Where a voluntary group provides a service that represents an essential element in a health authority's overall plans for terminal care, the health authority should agree with them a contribution to the costs of that service".
Health authorities were due to submit their plans to the Department of Health by summer 1988. I wish to know how many health authorities have done so and how many have not. The health

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authority support has remained static in many cases. As I understand it, in one or two cases the provision of hospice care has been reduced. The health authorities argue that, in the tight financial climate in which they operate, it is very difficult for them to increase funding for voluntary hospices. As I said, in some cases there has been a reduction.
Perhaps I may repeat my request for a comment by the Minister on the Scottish situation. I agree strongly with the view of the noble Lord, Lord Hylton, that it may not be the best way forward. But for those who desperately need money it is a way forward. I think that in Scotland there has been an enormous welcome for this initiative of the Scottish Office. Perhaps it can be improved, maybe there are better ways of doing it. I am certain that when the Minister comes to reply she will tell us what the situation would be likely to be in England, Wales and Northern Ireland. It would be very unsatisfactory if we were to have one system operating generously in Scotland and no equivalent in other parts of the United Kingdom.
As has been shown, there is clear and widespread concern about the funding problem. I am certain that the noble Baroness will bring some clarity to bear on the matter. I have asked her to do so. As I understand it, in 1988 it was estimated that an extra £6 million would be required to enable hospice nurses—most of them employed by voluntary organisations—to be brought up to NHS pay levels. Essentially, if the best nurses are to be attracted, they should get the rate for the job. It would be quite wrong if there were a lower standard of pay for those working in the voluntary hospices than for those working in the NHS.
At the Conservative Party Conference in October 1988, the figures seemed to come down to £4·5 million. As I understand it, that was promised. There then seemed to be a cut to £1·3 million, and in March this year Mr. Mellor referred to £400,000,
"for distribution to local projects in short-term financial difficulty".
I am quoting what was said. That was a very welcome payment, but was it enough? Perhaps it was in addition to another sum that had been paid. I hope that the Minister can clarify the situation when she comes to reply.
I am sure that she would agree that, as was mentioned by my noble friend Lady Blackstone, it is unsatisfactory that some hospices receive nothing at all; some receive as little as 1·5 per cent. of their total costs; and others receive upwards of 50 per cent. I am certain that all their needs are equally great. As my noble friend Lord Blease stated, what is needed is that these should be brought together. There has been a tremendous improvement in the situation which is very welcome but it lands us in some confusion. The Royal College of Nursing referred in their description to "arbitrary and variable" situations. That seems to be a fair criticism. The same view is held by Help the Hospices, to which reference has already been made.
We need to see a national picture. The Minister told us last week, in answer to a Question from the noble Baroness, Lady Cox:
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arrangements for … independent hospices have been under careful consideration for some time".—[Official Report, 26/10.89; col. 1549.]
She said that she hoped to bring forward plans, "in due course". With great respect, that sounds a rather leisurely timetable for those hospices that are desperately in need of help. I have spoken to several hospices since then and there is a great need not only for funds but for clarity about where the department stands on this. I know, of course, that health authorities are now under great financial pressure and in many cases are once again planning cuts in their own services. I am certainly not asking that health authorities should be required to cut their services in order to give the assistance that is needed for the hospices. Some extra money must be made available, but, when one looks at that as extra money, one must realise that the hospice provision means a saving for the National Health Service as a whole. I hope that the Minister can give us, or give to the voluntary hospice movement, a hope that it will be brought in in a rather more co-ordinated way, that there will be rather more effective assistance from the department, and that the movement will be able to plan for its future.
It would be quite wrong for me to sit down without positively welcoming the decision of the department as regards attendance allowance. Many of us had raised this issue in your Lordships' House on a number of occasions. It was very good news to hear that the little battering that had come from all sides of the House had produced a response from the Minister. I hope that some of the pressures that have come from today's debate will also make an impact on the department, and that the Minister can give us some encouraging news.
9.14 p.m.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Hooper): My Lords, I too am grateful to the noble Earl, Lord Longford, for introducing this short debate, and to all those who have contributed their views, which were nearly all based on personal experience, and who have raised questions on this important aspect of health care.
The Government are deeply appreciative of the high standard of continuing care that has been developed and provided by the independent hospice movement, and welcome its growing partnership with the National Health Service in caring for people who are terminally ill and for their families. We expect health authorities to take the lead in planning and co-ordinating a full range of facilities for the terminally ill, covering home, day and in-patient care.
In Circular No. HC(87)4, to which the noble Lords, Lord Stallard and Lord Ennals, referred, we have asked health authorities to do this, to work closely with voluntary bodies in carrying out this task, and to agree contributions towards the cost of any essential services that they provide. I am pleased to be able to say that regional health authorities in England have already appointed, or are in the process of appointing, co-ordinators to advise on the implementation of strategies for this important service.

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Some statistics have been quoted and I should perhaps try to set the record straight. In the United Kingdom there are already, within the NHS, 28 specialist in-patient units, over 140 home care teams and 38 hospital support teams, working alongside front line staff. The latter include general practitioners and community nurses who come into contact with a wide range of patients in their own homes. They are supported by a cadre of 600 specialist Macmillan nurses and some 4,600 Marie Curie nurses who are jointly funded by health authorities and charities.
The number of independent hospices providing specialist in-patient care for people with a terminal illness is considerably larger—113 in the United Kingdom, providing some 2,600 beds. Information from the hospice movement indicates that there are plans for a further 37 units, providing 277 additional beds. Three-quarters of those projects have been started in the past 10 years, and there is a wide variation in the geographical distribution of hospice beds and in the level of financial support that health authorities have been able to provide.
The running costs of independent hospices in England last year are estimated to have been just under £54 million, to which health authorities contributed just over £11 million or, on average, 21 per cent. In the same year, the Government also contributed £1·3 million towards the cost of pay increases for hospice nurses and distributed £400,000 via the charity Help the Hospices specifically to voluntary projects in short-term financial difficulty.
As has been said, the average NHS contribution conceals wide variations in support, from, I am sorry to have to say, in some cases nil, up to 80 per cent. of running costs. The bulk of the remaining costs is found from charitable giving, and some hospices welcome the independence of operation that such public support allows them. Nevertheless, the Government accept in principle the desirability of a more balanced, stable and equitable pattern of NHS support.
As I have already said, that matter is under careful consideration at the moment. Therefore at this stage I cannot give noble Lords a timetable. However, I am grateful to those who pointed out that although the pound for pound concept sounds simple it is a complicated principle to put into practice. In saying that, I realise that in Scotland the Minister responsible for health has announced his intention to introduce from 1st April next year a scheme which would provide financial assistance for hospices up to a level of 50 per cent. of their running costs. It remains to be seen what we shall be able to do in England once our consideration has been completed. However, I can assure your Lordships that the points that have been raised in the debate will not be lost in that process and will certainly not delay it.
The same applies to arrangements for Wales and Northern Ireland. In that respect I noted what the noble Lords, Lord Dunleath and Lord Blease, said about Northern Ireland, as indeed—as they will recognise—did my noble friend Lord Skelmersdale.
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Whatever the outcome of those deliberations, it is worth emphasising that the hospice movement is already strong. As my noble friend the Duke of Norfolk reminded us, the United Kingdom has developed a leading international role in the field and much of its strength has been built on substantial voluntary efforts. We have no wish to supplant that activity, rather to complement it by encouraging the growing partnership between the National Health Service and the voluntary sector.
Many of your Lordships have referred to individual hospices and to the outstanding work that they do. It would be invidious of me to refer to any particular hospice. Suffice it to say that I have visited a hospice and recognise fully the devotion of the people who work there and the amazing cheerfulness, as the noble Earl mentioned, of the patients.
The hospice movement is not primarily about buildings or beds but about quality of care regardless of the physical setting. It means a team approach, involving specialist and generalist staff in a range of disciplines, often supported by volunteers, aimed at ensuring that the dying person achieves the best possible quality of life. Meeting that aim depends on the availability of a high standard of pain relief and symptom control and also of sufficient time to provide emotional and social support for patients and their families. That sort of time is not always available on a busy hospital ward where the emphasis will be on active treatment and cure.
It is at the same time thanks to improvements in active treatment that many diseases which were formerly fatal, particularly cancers, can now be cured. Where complete cure is not possible, patients can still survive and remain active for longer periods than in the past.
The hospice movement is adapting to that. In-patient admissions need to be more carefully planned. Patients are not necessarily admitted in a crisis or in their last few days of life. They may increasingly attend as day patients or receive at home treatment that was previously available only in hospital or in a hospice. They may be admitted to a hospice for a brief respite—to give them or their families a break or to have symptoms brought under control—before returning home. There is a developing and changing pattern.
As has been said, many people want to die in their own homes and it is in any event unlikely that more than a minority will die in a specialised in-patient hospice. About 62 per cent. of deaths occur in hospital and 26 per cent. at home. Of the remainder it is estimated that up to 10 per cent. may occur in hospices (although hospices providing home and day care will naturally be in contact with a wider population).
The noble Lord, Lord Ennals, asked me specifically about children. I am afraid that I must take up his suggestion that I should write to him on that subject because I do not have the information with me.
There has been and still is an enormous fund of enthusiasm for local in-patient hospices. But it is clearly important for all concerned at that level to plan and work together to determine how existing

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and proposed units can best meet local needs and how they fit in with other services for the terminally ill. A co-ordinated approach at local as well as government level is necessary. It also underlines the value of disseminating the best practice that has been developed in such units far beyond their walls to the staff in the community and hospital services who come into contact with a wide range of patients and their families, through training, staff exchanges and the deployment of the specialist advisory teams that I have mentioned alongside frontline staff throughout the health service. In our view these are the key factors which underpin the partnership between the National Health Service and the independent hospice movement which we so very much value.
Turning to other specific points that have been raised, I am pleased at the welcome that has been given to the Government's intention to make attendance allowances available to people with a terminal illness without the normal six months' qualifying period. I know that this is an improvement to which the hospice movement attaches great importance and I hope that it will particularly help to ease the burdens of people caring for a very sick relative at home.
As for delays in the payment of income support for people with a terminal illness, that benefit is of course payable to individuals to help them to meet the charges that they incur for residential care and not to the institutions providing it. Many independent hospices do not wish to raise charges for admission. However, where a hospice has no contractual arrangements with the health authority and wishes to raise charges for an in-patient's board and care, the individual may claim income support up to a maximum of £235 a week or £258 in Greater London, plus a personal expenses allowance of £10.05 a week. Managers of local social security offices will always be pleased to discuss general procedural requirements with organisations which advise claimants. While those claims may take a little longer to process, I understand that income support claims nationally are now being dealt with on average in just five days.
As for drugs, the majority of hospices already receive the supplies that they need at National Health Service expense. GPs are entitled to prescribe drugs for their patients who have been admitted to hospices. That entitlement applies equally to hospice medical staff who are also general medical practitioners. In addition, health authorities have discretion to supply drugs to hospices without charge, at reduced rates or to make contributions to the cost of the services that they provide. The Government are aware that some hospices find current arrangements insufficiently flexible and we are in the process of considering the scope for simplifying them.
We are in no doubt about the importance of training. We have already asked health authorities to assess their training needs in this field and to consider how local facilities, including hospices, can be used to best advantage in meeting them. Both NHS units and voluntary organisations are active in
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providing specialist nurse training courses and some less formal facilities such as study days, conferences and publications for professionals and the public. The Royal Marsden Hospital and St. Christopher's Hospice have built up international reputations in that field.
Furthermore, palliative medicine has now achieved recognition as a medical specialty in its own right and a number of training schemes have been or are in the process of being established involving the NHS, the universities and independent hospices. The Cancer Relief Macmillan Fund has been instrumental in launching, in partnership with the universities and health authorities, a series of medical and nursing posts both for teachers and trainees. Cancer Relief and Marie Curie Cancer Care have also launched a number of educational initiatives to coincide with the European Year of Information on Cancer 1989, including video packs for general practitioners on the care of patients with advanced disease. The Department of Health has for its part contributed £100,000 to support charities' efforts to disseminate information on care and prevention for the public and for professionals in connection with the European initiative against cancer.
On the question of nurses' pay, hospices provide a local service and their funding is therefore essentially a local matter. The impact of pay awards for nurses is a factor that we should expect health authorities to take into account in determining the support that they can give.
With regard to the question of consultation which was raised, we do our best to keep in touch with the relevant professional bodies and associations for consultation purposes. However, I must say that it would be helpful in this respect if there were a single national co-ordinating body which represented all groups within the hospice movement.
Finally, I have been asked why there is no mention of services for the terminally ill in the White Paper Working for Patients. The White Paper is essentially a strategic document about changes in the management of services. It emphasises the important task that health authorities will have of ensuring that all the health needs of the population for which they are responsible are met and that people have access to a comprehensive range of high quality and value for money services. The specific form that those services take and the way in which they are provided will be for local management to determine in order to meet local needs and circumstances.
As I said at the outset, so far as concerns services for people with a terminal illness, we have already asked health authorities to take the lead in planning and co-ordinating a full range of facilities. They are doing so. That policy remains unchanged but I think that it may well have been reinforced by this debate.

Greater Manchester (Light Rapid Transit System) Bill [H.L.]
Committed to an Unopposed Bill Committee.
Great Yarmouth Port Authority Bill [H.L.] formerly Great Yarmouth Port and Haven Bill [H.L.]
The Queen's consent signified and Bill reported from the Unopposed Bill Committee with amendments.
Brunei (Appeals) Bill [H.L.]
Returned from the Commons agreed to.

Football Spectators Bill [H.L.]
Returned from the Commons with amendments and with a privilege amendment; the amendments ordered to be printed.
House adjourned at twenty-nine minutes before ten o'clock.

  DIPLOMATIC REPRESENTATION, KABUL
  DIPLOMATIC REPRESENTATION, KABUL
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  STRATEGIC DEFENCE; PREDICTABILITY IN RESEARCH AND TESTING
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  ORDNANCE SURVEY PLAN 1990–93
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  INTERNATIONAL COMPUTER-AIDED FRAUD: PROSECUTION
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  TV LICENCE FEES FOR 1990
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  MANAGEMENT OF VULNERABLE PRISONERS: REPORT
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