Sitting of 12 December 1990

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRAYERS
  PRIVATE BUSINESS
    MIDLAND METRO (PENALTY FARES) BILL [Lords]
    Read a Second time, and committed.
    FRASERBURGH HARBOUR ORDER CONFIRMATION BILL
    Read the Third time, and passed.
Oral Answers to Questions
  ENVIRONMENT

    Local Government Finance
    Mr. Buckley: To ask the Secretary of State for the Environment if he will review the poll tax-capping rules announced on 31 October; and if he will make a statement.
    The Minister for Local Government and Inner Cities (Mr. Michael Portillo): As I told the House last week, my right hon. Friend sticks firmly by the intentions announced by my right hon. Friend the Member for Bath (Mr. Patten).
    Mr. Buckley: I welcome the point made by the Minister. When considering a review of poll tax-capping, will he consider poll tax-capping high-spending Conservative councils which are levying a rate well beyond that levied by some Labour councils that have already been capped? Will he also consider the consequences of poll tax-capping on the police and fire services? I understand that if the capping system is upheld the number of police personnel in West Yorkshire will be reduced by 500 by 1992. Does the Minister appreciate—[HON. MEMBERS: "Too long."] It may be too long, Mr. Speaker, but you will appreciate its importance.
    Given the increase in crime, it would be detrimental to preventing further increases if police personnel were cut in West Yorkshire.
    Mr. Portillo: West Yorkshire police authority made representations and had a meeting with the Parliamentary Under-Secretary, my hon. Friend the Member for Salisbury (Mr. Key).
    Of course we shall apply the criteria for capping equally to authorities of different political persuasions.
    As for why charges can be higher in one place than in another, yet capping applies to some authorities and not to others, I remind the hon. Gentleman that the charge payers in his authority benefit from a payment of £111
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    from the safety net and payers in next-door Barnsley benefit from a payment of £150 from the safety net. That makes a big difference.
    Mr. Butler: If the size of the charge is partly responsible for its unpopularity, why not set a low maximum cap of, say, £200, with a more generous settlement from the centre, so that we penalise councils that try banditry on their citizens and let more efficient authorities deliver even lower charges?
    Mr. Portillo: I am grateful to my hon. Friend for what his question implied: his support for the policy of capping authorities and ensuring that the benefits are passed on to community charge payers. The detail of his proposal takes us wider than Question 1—possibly into the territory of Question 2 with which my right hon. Friend will deal shortly.
    Mr. Steinberg: To ask the Secretary of State for the Environment how many suggestions he has received for alternatives to the community charge; and if he will make a statement.
    The Secretary of State for the Environment (Mr. Michael Heseltine): With permission, Mr. Speaker, I shall answer this question and Questions 3, 6, 10, 11, 12, 14 and 15 together.
    Mr. Ian Bruce: To ask the Secretary of State for the Environment if he will make a statement on the review of the community charge.
    Mr. Matthew Taylor: To ask the Secretary of State for the Environment if he has any plans to amend further the community charge.
    Mr. Nellist: To ask the Secretary of State for the Environment what is the progress of his latest review of the poll tax; and if he will make a statement.
    Mr. Bill Michie: To ask the Secretary of State for the Environment how many representations he has received from hon. Members to make changes to the community charge; and if he will make a statement.
    Mr. Harry Barnes: To ask the Secretary of State for the Environment what proposals he has for changes to the community charge; and if he will make a statement.
    Mr. Haynes: To ask the Secretary of State for the Environment what are the number of suggestions made to him for alternatives to the community charge; and if he will make a statement.
    Mr. McAllion: To ask the Secretary of State for the Environment if he will make a statement on the review of the poll tax.
    Several Hon. Members: On a point of order, Mr. Speaker.
    Mr. Speaker: Order. I call the Opposition Front-Bench spokesman.
    Mr. Gould: On a point of order, Mr. Speaker. If the Secretary of State groups all these questions together, he distorts the pattern of interests represented on the Order Paper. That will mean that we have a much shorter time in which to deal with these questions than we would if proper supplementaries were asked in respect of each question. I ask you, Mr. Speaker—[Interruption.]
    Mr. Speaker: Order. How can I possibly hear when this shindig is going on?
    Mr. Gould: I ask you, Mr. Speaker, to prevail on the Secretary of State to group these questions in a more sensible manner—perhaps three or four in a group—so that we can properly debate each question on the Order Paper.
    Mr. Speaker: It is not for me to group questions; it is a matter for the Secretary of State. If he wants to group them in a certain way, that is up to him.
    Mr. Heseltine: If it is not a matter for you, Mr. Speaker, I find it difficult to reply to a point of order. However, I shall follow the thrust of what you said and tell the House that the questions are substantially the same and, therefore, my answers are unlikely to be different. In the space of the half hour or so that separates the questions I would be saying the same thing at the end of the half hour as at the beginning.
    Several Hon. Members: On a point of order, Mr. Speaker.
    Mr. Speaker: Order. This takes up a great deal of time. There is some help when questions are grouped because it enables us to get further down the Order Paper and gives more hon. Members a chance. It is a matter for the Secretary of State. It is not for me to say, of course, but he might perhaps consider grouping Questions 3, 6 and 10 and taking the others separately.
    Mr. Heseltine: May I add one further point? There is another group of questions further down the Order Paper, all of which again repeat the point that is addressed in Question 2. I should like to answer the substance of the question by saying that I have started a careful and fundamental review of the community charge.
    Mr. Steinberg: I am sorry that my question has caused so much disarray. I did not realise that it was so controversial. I should be grateful to the Secretary of State if he would inform the House whether he agrees with his right hon. Friend the hon. Member for Blaby (Mr. Lawson) who suggests that the poll tax should be scrapped and replaced by a property tax, which is what the Labour party has been saying for the past three years.
    Mr. Heseltine: My right hon. Friend the Member for Blaby (Mr. Lawson) has made a most interesting and constructive suggestion for the review that I am carrying out. I am sure that the hon. Gentleman will recognise that at no stage during all the discussions on these matters have Conservative Members been able to provide 57 different suggestions about how to deal with this matter, which is the number provided by the Labour party.
    Mr. Ian Bruce: If my right hon. Friend has had a chance to read the Labour party document on fair rates, he will know that it is not a fully worked-out scheme but a wishy-washy set of wishes which does not take us any further forward. Will he assure his hon. Friends that in his review he will make sure—as the Labour party does not make sure—that whatever system is devised bears down on local government profligacy and ensures additional Government funding for local authorities, which the Labour party does not call for in its review?
    Mr. Heseltine: The whole House will feel that my hon. Friend has been characteristically generous in the way in which he describes the Labour party policy document. We have made it clear that in our review we rule nothing out and rule nothing in. The review will look at all the issues, including those raised by my hon. Friend.
    Mr. Matthew Taylor: In previous looks at alternatives to the poll tax, and specifically at local income tax, the Department has used its own version of what a local income tax might be and has never looked in detail at our proposals. It has certainly never published any response to them. Will the Secretary of State now ask his officials to look at our scheme of local income tax and let us know their conclusions? We should be happy to talk to the Secretary of State about that.
    Mr. Heseltine: I appreciate the constructive approach of the Liberal Democrats. They obviously have sufficient confidence in their ideas to be prepared to discuss them with me, which is not exactly what one would say about the parliamentary Labour party, although I should add, in fairness, that the Labour party, as represented by the Association of Metropolitan Authorities, has the courage to talk to me about its ideas. In that, it is at marked odds with the Labour party in the House. On the substance of the hon. Gentleman's question, I can tell him that I have received a letter on this matter and I have asked officials to give me advice on it. I am aware of the point made by the Liberal Democrats and I shall try to meet it.
    Mr. Nellist: Is the Secretary of State aware that I spent yesterday afternoon in Lincoln prison with Bryan Wright, a 20-year-old unemployed man, who last Friday became the Government's first poll tax prisoner? When the Secretary of State conducts the review will he consider that if Bryan had been born in Glasgow and not in Grantham he would not be in prison, because Scottish law abolished prison for debt 25 months ago? When Bryan is released on or, as is hoped, before Christmas eve, his spirits will be as high then as they were yesterday and, therefore, the vital element of fear which prison is supposed to engender among the 344,000 people who his Department told me on Monday have had liability orders served against them will diminish. Finally, will the right hon. Gentleman confirm that, even if he is not prepared to talk about outright abolition, he will instruct——
    Mr. Speaker: Order. This is not a debate. This is Question Time and questions should be about reform of the poll tax not about one of the hon. Gentleman's constituents who is in gaol.
    Mr. Nellist: Will the Secretary of State instruct local authorities, during the period of his review, not to take any court action that could send anyone to prison for something that is not a crime and may not even be an offence any longer?
    Mr. Heseltine: I had not known that the hon. Gentleman spent yesterday afternoon in prison. I only hope that he does not know something that I do not know and that this does not anticipate events of which I can have no knowledge. What the hon. Gentleman chooses to do with his spare time has nothing to do with reform of the community charge.
    Mr. Nellist: Don't be so bloody stupid. That was a serious question about the review of the poll tax.
    Mr. Speaker: Order. The hon. Gentleman knows that many things are said across the Floor of the Chamber with which hon. Gentlemen disagree, but he must not use words like that. That is not the way we carry on. [HON. MEMBERS: "Withdraw."] The word was not unparliamentary. It was just offensive, like quite a lot of other things that are said here.
    Mr. Michie: As the Secretary of State has not answered my question about the number of representations that have been made, because he lumped together several questions as being on the same subject—although they are not—I have to assume that he has had some representations about the poll tax from hon. Gentlemen. In view of that, will he make it public that the poll tax has been a shambles and has affected hundreds of thousands of our electors and that no amount of fiddling or meddling with it will make it anything better than a bureaucratic disaster? Therefore, will he make it public that a mistake has been made and that it is time that the Government axed the lot?
    Mr. Heseltine: If the Labour party had listened to what I had to say last week, rather than shouting so much that nobody else could listen, it would have understood that I am conducting a fundamental review arid, even at this late stage, I hope that the Labour party will contribute to that review.
    Mr. Harry Barnes: When conducting a review, those who suggest the review should present some ideas. I should like an answer to the question that I tabled, which is:
    "what proposals he has for change to the community charge".
    For instance, will the right hon. Gentleman take into account the lessons of the history of the poll tax in this country? In 1367, when it was first introduced, it was at a flat rate that the poor did not pay. In 1369, a new banded system was introduced. On that occasion, the rich did not pay. In 1371, they went back to a flat rate which no one——
    Mr. Speaker: Order. We do not want a history lesson.
    Mr. Heseltine: Before the hon. Gentleman places too much reliance on his interpretation of history, he should understand that we have a certain pride in having one of the oldest and most sophisticated parliamentary democracies, based on universal suffrage. His claim to be above and beyond the law is incompatible with that tradition.
    Mr. Haynes: Is the Secretary of State aware that I do not come from or represent Henley? I come from a constituency where they know what work is and they know how they are being dealt with by this wicked Government. Will he do something in his review about the poor beggars having to pay 20 per cent. who cannot afford it and who—unlike him—have to go without a hot meal on the table? When he makes his review, will he get rid of this rubbish and put in its place a system that is fair to all?
    Mr. Heseltine: I can only say that if the hon. Gentleman wants to represent the good citizens of Henley, he must stand and I shall dismiss him as I dismissed the Labour candidate at the last election.
    Mr. McAllion: Is the Secretary of State aware that all-party consensus on local government finance can be achieved only on the basis of two fundamental principles? The first is that any tax must be related to the ability to pay
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    and the second is that the poll tax must be abolished. The right hon. Gentleman must try to understand that, until he concedes those two principles in advance, all his talk of consensus will be exposed for exactly what it is—a cynical and calculating attempt to ensnare the minority parties and save the Tories' necks at the next election. It will not work.
    Mr. Heseltine: I should be more impressed by that suggestion had not the hon. Member for Dagenham (Mr. Gould), in answer to a question from my hon. Friend the Member for Christchurch (Mr. Adley), anticipated, about five minutes before I proposed it, that such a constructive dialogue could take place.
    Mr. Terry Fields: On a point of order, Mr. Speaker. A number of questions have been grouped together. Could not Question 18 also have been included, given that it deals with exactly the same subject?
    Mr. Speaker: With any luck, we shall reach Question 18.
    Mr. Pawsey: Is my right hon. Friend aware that the review that he has announced will be widely welcomed by the British people? Is he aware, however, that levels of community charge depend on levels of Government funding, which in turn depend on the formula surrounding standard spending assessments? Is he further aware that Warwickshire has been substantially disadvantaged over a number of years by the way in which the SSA system works? Will he undertake to examine the formula used for Warwickshire and provide assistance to that county?
    Mr. Heseltine: I know that my hon. Friend has had a dialogue with the Minister responsible and, of course, we shall bear in mind all the points that he has put to us. It is worth adding that, following the announcement of our review, we have managed to secure a substantial victory in a local county by-election in Warwickshire.
    Mr. Butcher: Does my right hon. Friend agree that the time has come for free state school education to be a directly funded by the state via the grant-maintained schools formula? As a believer in supply-side economics, does he agree that the additional revenue for that should come not out of income tax but from VAT?
    Mr. Heseltine: I assure my hon. Friend that his suggestions today, and any further suggestions that he wishes to put to us, will be carefully taken into account in our review.
    Mr. Tracey: Will my right hon. Friend keep constantly in mind in his review the principle that seems to be widely accepted that every adult over the age of 18 should pay some share of the cost of local government? That seems to be one of the best guarantees of true accountability in local councils.
    Mr. Heseltine: I understand the importance that many of my right hon. and hon. Friends attach to that principle. We have made it clear that in our review we shall look into all these matters. That is implicit in our initial stance and in the comprehensive nature of the review.
    Mr. Cormack: Will my right hon. Friend ensure that the fundamental criterion for any new or amended system is ability to pay?
    Mr. Heseltine: My hon. Friend will understand that that is one of the arguments that will have to stand alongside the point put to me by my hon. Friend the Member for Surbiton (Mr. Tracey). All those issues will be on the table.
    Mr. Speaker: I call Mr. Adley. [HON. MEMBERS: "Not another one."] Order. If hon. Members look at the Order Paper, they will see that I am being absolutely even-handed.
    Mr. Adley: Does my right hon. Friend agree that, as a matter of principle, the more that is spent on raising local taxes and administering them, the less there is to spend at the sharp end? As many erstwhile functions of local government, such as education, the police and the fire service, are heavily overladen with national implications, will my right hon. Friend, during his review, present to the House the actual costs of increases in VAT, income tax or whatever if all the costs of local government were to be funded out of national taxation?
    Mr. Heseltine: I am considering how best I can involve the House at large in our review. Certainly, we shall have to have in front of us the calculations to which my hon. Friend referred.
    Mr. Marlow: My right hon. Friend made a sensible and generous offer to the Opposition parties to join in discussions with him about the nature, organisation and financing of local government. To date, the Labour party appears to have had some difficulty in responding to his offer. Does he have any helpful suggestions for ways in which the Labour party could involve itself in such an important debate and discussion?
    Mr. Heseltine: I am most grateful to my hon. Friend. The Labour party's position is not as depressing as its behaviour in the House suggests. Senior figures in the Labour party in local government have already welcomed and accepted my offer.
    Mr. Gould: What has just happened is an abuse of the House. It should be a matter of regret to the whole House that the Secretary of State should have distorted the pattern of questions on the Order Paper and cut short a debate on a subject which is clearly of great interest to all hon. Members and to many millions of people outside the House.
    Is not the reason why the right hon. Gentleman took that step perfectly clear? Is not the truth about his review almost as depressing for his hon. Friends as it is for millions of poll taxpayers in general? It is that the poll tax, in all its essentials, will still be with us for at least two years and that, even after his review has been concluded, the poll tax may still survive.
    Why will not the right hon. Gentleman admit now what he appeared to be so keen to imply during the Tory leadership contest—that the poll tax is unfair and unworkable and that, as a necessary precondition to any sensible reform, it must be abolished?
    Mr. Heseltine: The hon. Gentleman is fully aware that, when I sought last week to explain our views at great length, his party tried to shout down my speech. That was the most flagrant abuse of the House that I can remember for a significant period. Labour Members did that because they are not prepared to enter into the sort of constructive
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    dialogue that I offered. In that respect, it is not that the country is concerned; it is that the Labour party is isolated.
    Mr. Speaker: I call Mr. Strang.
    Mr. Campbell-Savours: On a point of order, Mr. Speaker.
    Mr. Speaker: Order. If the hon. Gentleman looks at the Order Paper, he will realise that he is disadvantaging a number of his hon. Friends.
    Mr. Campbell-Savours: Usually, Mr. Speaker, you call two supplementary questions for each question tabled by a Back Bencher. If the Opposition Front-Bench were included, 24 supplementary questions would have been asked on Question 2. In fact, there were seven supplementaries, so we are owed 17. Can we please have them on this important matter?
    Mr. Speaker: Order. The hon. Gentleman's arithmetic may be at fault. I am trying to reach the questions tabled by his hon. Friends the Members for Liverpool, Broadgreen (Mr. Fields) and for Wentworth (Mr. Hardy) and other hon. Members who have questions on the Order Paper. We shall not achieve that at this rate.

    Montreal Protocol
    Mr. Strang: To ask the Secretary of State for the Environment what progress has been made since the 1990 Montreal protocol review conference in implementing the agreement; and if he will make a statement.
    The Minister for the Environment and Countryside (Mr. David Trippier): The Government have been arguing strongly for tighter controls on ozone-depleting substances within the Community than those agreed at the London meeting. We expect to agree a European regulation next week which will achieve that.
    Mr. Strang: Is the Minister satisfied with the progress that is being made in Britain? As some of the alternatives that are being promoted are themselves damaging greenhouse gases, may I ask whether the Government have ruled out a levy on CFCs? Some of that money could be used to finance research and development into alternatives.
    Mr. Trippier: I am very satisfied with the progress that is being made in Britain, and shortly after the London ozone conference on the Montreal protocol the hon. Member for Dagenham (Mr. Gould) was kind and generous enough to congratulate my right hon. Friend the Member for Bath (Mr. Patten) on the week's achievements. At that time we, with all other countries that attended that conference, had committed ourselves to a removal of CFCs by the year 2000. I am now saying that the British Government believe that that pace can be accelerated. I will be representing the Government in Brussels next week. We have the foremost position and the most ambitious targets and I shall be looking for support from all the other member states at that meeting. I think that we shall get it.
    Mr. Squire: Will my hon. Friend confirm that it was only after the Government announced that we were beating the targets of the Montreal protocol that they were criticised by various green parties as being inadequate?

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    Will my hon. Friend underline his determination to beat targets for carbon dioxide emissions on the same basis —that once we show that it can be done, it is bound to be criticised as inadequate?
    Mr. Trippier: A number of what I call dark green lobby groups act irresponsibly, preparing their press notices before looking at any statements from Ministers or even before the introduction of a White Paper.
    Mr. Gould: Name one.
    Mr. Trippier: Greenpeace is a superb example. It is not the first time that I have made that comment and I am happy to repeat it on any occasion.
    My hon. Friend the Member for Hornchurch (Mr. Squire) is right. We are in the lead on the issue and I am proud of that. I am proud of the fact that it was British scientists who discovered the hole in the ozone layer and that we were the first to sign the Vienna convention. On two separate occasions in London we have hosted the ozone layer conference, and it is recognised, nationally and internationally, that the British Government are in the lead.
    Mr. Simon Hughes: Does the Minister accept that the importance that environmental issues should have will never be accorded them by the British Government as long as his Department is distracted by subjects such as local government finance, as we have seen today, and housing, both of which are entirely unrelated to environmental policy and should be the responsibility of a separate Department? Is not the reality that we would do far better on subjects such as the ozone layer and reducing CFCs if his Department concentrated on environmental issues instead of regularly distracting Secretaries of State with other matters?
    Mr. Trippier: Ministers in the Department of the Environment afford to the environment, internationally and nationally, the attention that that important subject deserves. No fewer than three Ministers are concentrating on the issues—my right hon. Friend the Secretary of State, myself and an Under-Secretary of State. There is a close link between the subjects that come under the aegis of the Department of the Environment. In fact, I heard the hon. Gentleman refer to that himself in a recent speech.
    Mr. Summerson: Will my hon. Friend ensure not only that CFCs and other ozone-depleting subjects are not used in Britain or throughout the European Community, but that they are not manufactured in Britain for use elsewhere in the world?
    Mr. Trippier: Those are the terms and conditions of the agreement to which we are signatories. That is the commitment that I shall be seeking to honour and develop at the European Council of Environment Ministers in Brussels next week. We want the end of their manufacture by 1997. The signatories of the third world or developing countries to the Montreal protocol have already agreed to such phasing out by the year 2010 because of technology transfer and also because of overseas aid, to which we are prepared to contribute.
    Mr. Win Griffiths: Does the Minister agree that the original Montreal agreement, and the improvements made to it in London, were based on excellent scientific research that had no obvious marketplace benefit? As Britain
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    spends less than a third of what is spent by, for instance, Germany on environmental research, what is the Department doing to encourage the expansion of such research, which clearly has major implications and potential benefits for the planet?
    Mr. Trippier: The Department's record on expenditure for research is excellent and far outweighs the amount spent by Labour when it was in office. Last year, the Department's research budget was increased by 20 per cent.—a real-terms increase whose significance the hon. Gentleman should be kind enough to acknowledge.
    Research on chlorofluorocarbons is also carried out by the industry, which has achieved success: that is why ICI is now leading other companies in finding substitutes for CFCs.

    Telford City Technology College
    Mr. Grocott: To ask the Secretary of State for the Environment whether he has any plans to meet the chairman of Telford development corporation to discuss assistance that the corporation is giving towards the planned Telford city technology college.
    The Parliamentary Under-Secretary of State for the Environment (Mr. Tim Yeo): I have no such plans.
    Mr. Grocott: Will the Minister make it his business to find out the precise details of the red-carpet treatment that Telford development coporation, which he appoints, is giving to this totally unwanted and unnecessary city technology college? Will he find out the precise cost of all the preparatory work done by the corporation, the cost of all the access and infrastructure, the knockdown price at which the corporation has sold the land to the college and the price that the land would have fetched on the open market? When he has found out all those details—if he does not already know them—will he make them available to the House and then send them to the corporation's auditors for their inspection?
    Mr. Yeo: The hon. Gentleman has already tried to block the establishment of Telford city technology college by objecting to the relevant planning applications. I am interested to note that he now wishes to advertise still further his hostility to our policy of giving his constituents more educational opportunities and choice.
    The role of Telford development corporation has been confined to encouraging this excellent project. There has been no "red-carpet" treatment; a site has been provided at a price that was negotiated having regard to the ground conditions of the land concerned and the educational usage—a price of £420,000.
    Several Hon. Members rose——
    Mr. Speaker: Order. This question is about Telford.
    Mr. Devlin: Does my hon. Friend agree that the role of a development corporation is to redevelop rundown inner-city centres and to create new opportunities and lifestyles in them? Is not that role fully compatible with that of CTCs, and should not Telford development corporation do all that it can to assit the city technology college, as our development corporation in Teesside is doing?
    Mr. Yeo: My hon. Friend is right. The development corporation should have regard to the interests of everyone living in the area and I am entirely satisfied that that is what Telford development corporation has done in this case.
    Mr. O'Brien: In view of the Minister's absymal reply to my hon. Friend the Member for The Wrekin (Mr. Grocott) and the fact that he is not prepared to meet the chairman of Telford development corporation, will he prevail on the Secretary of State to introduce some democracy into the corporation? Let us see some of the money that the Secretary of State is pushing on to the poll tax being spent on development corporations.
    Mr. Yeo: We are entirely satisfied that Telford development corporation has done an excellent job and I have already had an opportunity of meeting the chairman.

    Rural Housing
    Mr. Pike: To ask the Secretary of State for the Environment whether he proposes to take any new initiatives to increase the provision of affordable housing in rural areas.
    The Minister for Housing and Planning (Sir George Young): Yes. Since 1988, the Government have introduced a number of initiatives to increase the supply of low-cost housing in those rural areas where it is needed. Most recently, we have decided that £50 million of the total of nearly £2 billion of local authority credit approvals in 1991–92 should be set aside for a new programme for low-cost rural housing, mainly through local authority sponsorship of housing association schemes. I have now decided that these resources should be allocated as supplementary credit approvals, to ensure that they are targeted on authorities where they will have the greatest impact, and we shall shortly be inviting eligible authorities to make bids for a share of them.
    Mr. Pike: I accept that this may be at least a small step in the right direction. Do not the Government recognise, however, that "Faith in the Countryside" identified a strong feeling that the Government had failed to appreciate that councils provide a major source of housing to meet the needs of the less well-off who want to rent property in rural areas? Does the Minister now intend to make it possible for local authorities to provide the extra housing that is needed, at affordable rents?
    Sir George Young: I am grateful for the hon. Gentleman's small tribute at the beginning of his question. This initiative is the responsibility of my predecessor, my hon. Friend the Member for Worcestershire, South (Mr. Spicer), to whose work on housing I pay tribute. As for the hon. Gentleman's substantive question, we have made it clear that we see housing associations rather than local authorities as the main providers of affordable accommodation. Within the Housing Corporation's growing budget, a greater percentage of its resources will go to rural areas.
    Mr. Colin Shepherd: I congratulate my hon. Friend on his welcome return to the Dispatch Box. Is he aware that there is considerable concern in South Herefordshire district council that it is being frustrated in discharging its responsibilities as the facilitator and enabler of low-cost
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    housing for its people? Is he also aware that last year about 97 per cent. of the Housing Corporation's resources for the west midlands area went into the west midlands conurbation, leaving only a small amount for rural areas? Will he tackle the Housing Corporation? We feel very strongly about the matter.
    Sir George Young: I am grateful to my hon. Friend. He is right. In a number of villages there is resentment towards second home owners or long-distance commuters who buy up homes, to the disadvantage of those who live locally. I am in touch with the Housing Corporation. It has a special rural programme targeted on the smallest villages, such as the ones referred to by my hon. Friend. By 1992–93 we hope that that programme will rise to 1,850 approvals. Housing associations in rural areas will be able to bid for resources and I hope that my hon. Friend's local authority will be successful.
    Mr. Alton: Does the Minister agree that the drift to the cities and the pressure on existing houses in city areas is partly because of the lack of housing for rent in rural areas?
    Mr. Nicholas Winterton: Since when has the hon. Gentleman represented a rural area?
    Mr. Speaker: Order.
    Mr. Alton: Does the Minister therefore agree that yesterday's statement by the bishops of England and Wales about homelessness in Britain could not have come at a more timely moment? What further action does he intend to take to tackle the problem of homelessness?
    Sir George Young: A separate question about homelessness appears later on the Order Paper. This question is mainly about rural areas. I have already explained that the Housing Corporation will devote increased resources to the provision of affordable homes in rural areas.

    Right to Buy
    Mr. Dunn: To ask the Secretary of State for the Environment how many council and new town commission homes have been sold to sitting tenants since 1 January 1980.
    Mr. Yeo: It is estimated that between January 1980 and September 1990 almost 1·2 million council and new town commission homes have been sold to sitting tenants in England.
    Mr. Dunn: First, may I congratulate my hon. Friend on his appointment. As Conservative Members believe in giving village people a stake in society through the extension of home ownership, will he confirm as soon as possible when he intends to introduce legislation to extend the rents-to-mortgages scheme throughout the length and breadth of the United Kingdom?
    Mr. Yeo: I am grateful to my hon. Friend for his kind remarks. His question demonstrates that he, like my other hon. Friends, has the interests and aspirations of tenants at heart. We intend to monitor carefully the progress of the rents-to-mortgages pilot scheme in Basildon which, during the short time that it has been available, has aroused considerable interest. My hon. Friend's encouragement to us will be an important factor to be taken into account

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    when we decide whether to extend the experiment, although, as he acknowledged, to extend it to all local authority tenants would require primary legislation.
    Mr. Clelland: Is the Minister aware that his reply demonstrates that, despite recent events, nothing has changed and that we are being subjected to the same old claptrap from the Dispatch Box? Is he further aware that, contrary to the recently expressed opinions of the Minister for Housing and Planning, local authorities' ability to use the receipts from council house sales to provide additional council housing has been severely restricted, which has led to a complete standstill in the provision of council housing, in Newcastle and Gateshead in particular and in other local authority areas? What will the Government do about the growing army of homeless and inadequately housed people that they have created?
    Mr. Yeo: When it comes to claptrap, the Labour party has a monopoly. The new system that we have introduced this year for dealing with capital receipts is designed to ensure that they are recycled so that they can be used in the areas of greatest housing need. There is no particular reason why those areas should be the same ones as where the receipts arise.
    Mr. Thurnham: Now that the Labour party has changed its policy in favour of the right to buy, will my hon. Friend, whom I very much welcome to the Dispatch Box, make it his first priority to ensure that more council houses are sold? Will he have a word with Bolton council —which, in 10 years, has succeeded in reducing its stock of houses only from some 26,000 to some 24,000?
    Mr. Yeo: We know that hostility to the right to buy is never far below the surface in any Labour local authority. If my hon. Friend knows of any cases of difficulty in his constituency involving people being obstructed in their right to buy, I shall be happy to look into them.
    Mr. Soley: In welcoming both new Housing Ministers to their posts, may I first remind them that the average life expectancy of a Housing Minister is only six months, so perhaps they should first negotiate a secure tenancy? Having done that, will they give some hope to the people of this country and recognise that since 1980, 1·5 million homes have been lost from the rented sector, half because of the right to buy and the other half because of the collapse in the private rented sector? Will the Minister now give people some hope by allowing local authorities to replace the homes that are sold, because a right to buy without a duty to replace equals cardboard city? That is the problem.
    Mr. Yeo: I am grateful for the hon. Gentleman's welcome to me and my hon. Friend the Minister for Housing and Planning. I remind him that local authority lettings to new tenants, which are running at 228,000 in the latest year, are very close to the average for the past decade. There is no clear evidence that the effect of council house sales is to reduce the availability of accommodation to tenants. The fastest and the cheapest way for the hon. Gentleman to increase the supply of public sector housing would be to ensure that some of the 100,000 properties in local authority control which are currently empty are put back into use.
    946
    On the private rented sector, if the hon. Gentleman is really interested in helping us, he should stop most of his hon. Friends undermining that sector.

    Charitable Housing Associations
    Mr. Robert B. Jones: To ask the Secretary of State for the Environment whether he has any plans to improve the opportunities for home ownership enjoyed by the tenants of charitable housing associations.
    Sir George Young: The Housing Corporation introduced in the summer the tenants' incentive scheme, under which registered housing associations, including charities, may give grants to help their tenants move out and buy homes of their own.
    Mr. Jones: I am grateful to my hon. Friend for that reply and welcome him back to the Dispatch Box to answer what I believe is exactly the same question as I asked him that last time he was answering on this subject. Is he aware that the tenants' incentive scheme will not provide a single opportunity for tenants in my constituency to purchase their homes this year? Is that satisfactory? Would not it be much better to go back to basics and to give the right to buy to those tenants?
    Sir George Young: My hon. Friend will remember that in a previous incarnation I tried to do exactly that. We tabled amendments to the Housing and Building Control Bill in 1983 to extend the right to buy to tenants of charitable housing associations, but were unable to persuade the other place to include those provisions in the Bill and the proposals were abandoned. In their place, we came up with the scheme for tenants of charitable housing associations. The Housing Corporation plans to spend over £40 million on grants, which gives it the potential to assist 2,500 tenants. I very much hope that some of my hon. Friend's constituents will be among those who succeed.
    Mr. Frank Field: Will the Minister change the scheme so that tenants can opt into it? Currently, the scheme runs only if a housing association becomes part of the scheme. Is the Minister aware that the disadvantages of council house sales, which my colleagues identified in the previous question, do not apply to this scheme under which people are paid a certain sum to leave a tenancy and the tenancy can then be re-let to other people? Will he now change the nature of the scheme and allow tenants to opt in, rather than allow the housing associations to be the gamekeepers, who are preventing the scheme from working?
    Sir George Young: I have no evidence that charitable housing associations are not willing to operate the scheme. it is a substantial benefit to them in that they get a re-let which they can let to someone on their list—something which they would not have done without the scheme. The housing associations are fully compensated for their management costs and there is no disadvantage to them in operating the scheme. I have no evidence that they are unhelpful in administering it.
    Mr. Butterfill: Will my hon. Friend confirm that, when considering extensions to the right-to-buy scheme, he will not permit any new commonhold scheme to be extended to include leaseholders, on the basis that it would be no part

    947
    of any Government's remit to extend to one group of private citizens the right compulsorily to acquire the property of another?
    Sir George Young: The Lord Chancellor recently issued a consultative document on commonhold and the Government are awaiting views on the proposals to introduce it. I shall make sure that my hon. Friend's suggestions are brought to my noble and learned Friend's attention.

    Homelessness
    Mr. O'Hara: To ask the Secretary of State for the Environment how many people are currently listed as being homeless.
    Sir George Young: Accommodation was found for 37,460 households accepted as homeless by local authorities in England in the third quarter of this year.
    Mr. O'Hara: Is the Minister aware that, under the Government, the number of homeless people has more than doubled and is well on the way to being trebled, that nearly 3 million people have suffered the tragedy of homelessness and that this can be attributed to factors that are directly influenced by the Government's policies, such as the decline in the number of units in the public and private sectors, the inadequate number of new builds for purchase in the private sector and a tragic increase in mortgage defaults which, at 120,000, have nearly quintupled under the Government and are accelerating?
    Does the hon. Gentleman agree with the Roman Catholic Archbishop of Liverpool that the provision of adequate housing is not only a duty of Government but a moral imperative? Does he agree with the Catholic bishops' conference that the crisis of homelessness under the Government is not only a fact but a scandal?
    Sir George Young: I have read the report produced yesterday by the Catholic bishops. They recognise that the problems of homelessness date from some time before the Conservative party came to Government. They pay tribute to a number of initiatives that the Government have introduced to tackle homelessness. Of course, they recognise, as I do, that more needs to be done.
    As the hon. Gentleman probably knows, a £300 million initiative is under way to get people out of bed-and-breakfast accommodation. Some £96 million is being spent in London to deal with the problems of those sleeping rough. I suspect that the 3 million people to whom the hon. Gentleman referred are those who have been rehoused by local authorities. Most would never have been homeless but would have moved directly from where they were living, often in satisfactory conditions, straight into local authority accommodation. Although they score as homeless households, at no stage were the vast majority of them homeless.
    Mr. Robert G. Hughes: Does my hon. Friend agree that one tragedy for the homeless is that there are more empty units of accommodation than there are people seeking homes? There are more than 10,000 empty council houses in five Labour London boroughs and there is much empty property in the private sector. Some empty property—not a great deal—is owned by the Government. Will my hon.
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    Friend look at this problem sector by sector so that we can bring these valuable units of accommodation back into use?
    Sir George Young: My hon. Friend makes some constructive suggestions. The Audit Commission published a study showing that three quarters of authorities using bed-and-breakfast accommodation could end its use altogether simply by using better alternatives locally and by having better management of their housing stock. About 600,000 units in the private sector are empty and it would be helpful if there was a consensus on the recently introduced regime for assured tenancies so that private landlords had confidence that the rules would not be changed in the short term. The Treasury has issued fresh instructions to all Government Departments to reduce to a minimum the volume of empty stock. Much of that stock is owned by the Ministry of Defence and, when our troops return from the middle east, they may need the accommodation.
    Mr. George Howarth: I, too, welcome the Minister to his new responsibilities. Has he had the opportunity today, and if not, will he take it, to read the front and inside pages of the Daily Mirror? The headline is,
    "Shame on the Tories' Doorstep"
    and refers precisely to our crisis of homelessness. Is the Minister aware of the growing body of concern among sources as diverse as the Prince of Wales, charities and local authority associations about our homelessness crisis, particularly at this time of year? Does he agree that the one simple, direct step that would eliminate the problem quickly and effectively would be to agree with local authorities that they can enter into private sector leasing agreements? That would take many thousands of people off the streets and resolve some of the problems that have been created by his Government.
    Sir George Young: I am grateful to the hon. Gentleman for his warm welcome. In addition to recycling disused material, my Department is now recycling Ministers. The hon. Gentleman described the housing situation in emotive terms, but I draw his attention to the report by Professor Maclennan to Rowntree. It states:
    "Britain is a well housed country and it is misleading to suggest that there is a general housing crisis in Britain."
    Consultation on private sector leasing ended on 3 December and I hope to announce my conclusions soon.
    Mr. Jacques Arnold: Is not one of the causes of homelessness the tying-up of housing resources to the tune of £75 million in uncollected rents by five Labour London boroughs?
    Sir George Young: If local authorities could collect more in rents, they would have more resources to apply to the maintenance and management of their estate and to bring back into use some of the properties that are unlettable.
    Mr. O'Hara: On a point of order, Mr. Speaker. I asked a specific question——
    Mr. Speaker: Order. I thought that the hon. Gentleman was going to ask leave to raise the matter on the Adjournment. Did he wish to do that?
    Mr. O'Hara: Yes.

    Local Government Finance
    Mr. Terry Fields: To ask the Secretary of State for the Environment what is the progress of his latest review of the poll tax; and if he will make a statement.
    Mr. Heseltine: I refer the hon. Gentleman to the answer that I gave earlier today.
    Mr. Fields: During his review will the Secretary of State acknowledge the disgraceful circumstances in which the poorest members of society who cannot afford to pay the poll tax are daily facing the intimidation of the bosses' court and now gaol? Is not it ironic that a former Prime Minister, presumably as a reward for impoverishing the poor, should be given the Order of Merit and her husband a baronetcy?
    Mr. Speaker: Order. I must remind the hon. Gentleman that we never discuss the honours list in the Chamber.
    Mr. Fields: Is not it ironic that a former Prime Minister should be rewarded for impoverishing the poor while old-age pensioners are selling their war medals to prevent their receiving the draconian and immoral treatment of the courts? When will the Secretary of State live up to his leadership election pledge and scrap the poll tax?
    Mr. Heseltine: The only irony is that the hon. Gentleman, who can well afford to pay the poll tax, is content to see the very poor people on behalf of whom he speaks forced to pay the bills that he will not pay.
    Mr. Oppenheim: Does my right hon. Friend agree that, whatever changes to local government finance are made by whichever Government, they are still likely to have lo face
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    the fundamental problem of profligate, wasteful county councils, such as Derbyshire, which prefers to keep in with its National Union of Public Employees paymasters than to offer value for money and which recently rejected a low-cost tender because it was in the wrong-coloured envelope?
    Mr. Heseltine: My hon. Friend is right to draw those matters to our attention and I wish that the problems were restricted only to county councils.
    Mr. Blunkett: Does the Secretary of State agree that one of the most important measures that he could take in the short term to relieve the pain of the poll tax would be to increase central Government funding for local authorities next year? Given that on 10 May he called for a more realistic settlement based, as he said, on realistic economic assumptions, is he prepared to increase by 50 per cent. the settlement announced on 31 October, thus bringing it to the real level of inflation, and also to increase the revenue support grant element above the 1·9 per cent. announced on that date? Does he further agree that he should bring that forward immediately to allow people to understand that the Government are serious when they say that they are intent on doing something about the poll tax?
    Mr. Heseltine: May I say how much I welcome the changed stance of the Labour party? A week ago the Opposition were saying that the only thing to do was to get rid of the poll tax at once, but now they are making suggestions on how we could modify its effect. In view of the hon. Gentleman's question, I cannot understand why he will not come and talk to me constructively about what we can do.

Points of Order
3.31 pm
Mr. Nicholas Winterton: On a point of order, Mr. Speaker. I hesitate very much to raise this point of order, but I should like to know whether you have any difficulty in seeing people below the Gangway on the Conservative Benches. I know how many times I have caught your eye this parliamentary Session and I know how many times a number of hon. Members who have been called by you today have also caught your eye this Session. How do you actually judge whom you should call for supplementary questions? I have been in the Chamber from Prayers to this moment. Others whom you have called came in and moved out. I do not question your right to call whom you wish, but, on behalf of all hon. Members, I seek justice in the calling of hon. Members to ask supplementary questions.
Mr. Speaker: The hon. Gentleman is a distinguished member of the Chairmen's Panel. If an hon. Member in one of his Committees misbehaved in any way, would he call him?
Mr. Winterton: I have not misbehaved—[Interruption.] I am grateful for your reference to my service on the Chairmen's Panel which I consider a great and serious responsibility. I hope that in this place I have always acceded to the requests and the authority of the Chair. At no time has anyone said that I have misbehaved in this place. If I have, I apologise, but I expect justice from the Chair.
Mr. Speaker: I accept the hon. Gentleman's apology.
Mr. Max Madden: On a point of order, Mr. Speaker. Like many hon. Members. I have considerable sympathy with the difficulty in which you have been placed by the efforts of the Secretary of State for the Environment to rig Question Time to stifle discussion on the poll tax, a matter which the Government find most embarrassing. To avoid your being placed in unacceptable difficulty in future, may I suggest that you have a quiet word in the Prime Minister's ear and suggest that at the next Cabinet meeting he makes it clear to his colleagues that any attempt to rig Question Time by linking large numbers of questions together is unacceptable to you and to Back Benchers on both sides of the House?
Mr. Speaker: It is not my function to have a quiet word in anybody's ear. [Interruption.] It was a rather large number of questions to link today. Such matters are frequently best sorted out through the usual channels.
Mr. Dave Nellist: Further to that point of order, Mr. Speaker.
Mr. Speaker: The hon. Member is raising a point of order. He has already asked a long question. Hon. Members will debate the Opposition's motion today. This takes time out of it.
Mr. Nellist: I am grateful that at least the Secretary of State changed the practice that was prevalent a few days ago and actually notified hon. Members that he intended to make a linkage. You, Mr. Speaker, will recognise that 16 questions were reached today, eight of which were on the poll tax, and on which seven supplementaries were
952
asked. The other eight—half of them were reached—raised 19 supplementaries. Could you consider whether advice should be given to Ministries that, by such a linkage, they skew the distribution of supplementaries so that a false picture is given of the importance that hon. Members attach to a subject? What is the point of hon. Members putting questions on matters relating to the poll tax if, by that linkage, the Secretary of State can halve or reduce to one third the amount of time that the House spends on the subject?
Mr. Andrew MacKay: Further to that point of order, Mr. Speaker. Is not it right to point out that the reason why so many questions were linked is that so many questions were packed on the Order Paper the previous day? Is not it also worth pointing out that the best part of half an hour was devoted to answering questions on the community charge? Surely that was quite long enough.
Several Hon. Members rose——
Mr. Speaker: Order. Allow me to deal with these matters. I cannot accept that there is packing on the Order Paper. In this Session we have the new arrangement of the shuffle and only the first 40 questions are printed on the Order. Paper. A few months ago, more than 100 were printed, so it is a matter of luck. I repeat that the best way to sort out the matter is through the usual channels. Linking is not my responsibility.
Mrs. Margaret Ewing: On a different but very serious point of order of which I have given you prior notice, Mr. Speaker. I wonder whether you could advise the House whether any approaches have been made to your office about the possibility of a statement regarding the loss earlier today of the fishing vessel Premier and its six crewmen, all of whom were from my constituency and three of whom were from the one family. You will appreciate the grief that now engulfs the communities of Lossiemouth, Hopeman and Burghead in my constitu-ency, as will all hon. Members who represent fishing constituencies. I therefore think that the matter requires an early statement to the House about the facts of the case so that the families know exactly what happened.
Mr. Alick Buchanan-Smith: Further to that point of order, Mr. Speaker. Am I correct in recalling that similar tragic circumstances in the past have led to a private notice question being allowed? Am I also correct in saying that the House traditionally has shown particular concern about and interest in those who occupy themselves in dangerous activities such as fishing and that, therefore, the House likes to have the opportunity to let its feelings be known on such a tragic occasion as this?
Dr. Norman A. Godman: Further to that point of order, Mr. Speaker. In just two tragic incidents in three weeks, Scotland has lost more fishermen than we lost in the whole of last year. The House should demonstrate its sympathy for the families concerned. In that regard, it should also be in a position to ask questions of the appropriate Minister. I therefore ask that a statement be made by the relevant Minister some time this evening.
Mr. Alex Salmond: Further to that point of order, Mr. Speaker.
Mr. Speaker: Order. I think that we have had enough.
Mr. Salmond: Very briefly.
Mr. Speaker: If I call the hon. Member today, I may not be able to call him tomorrow.
Mr. Salmond: Very briefly.
Mr. Speaker: Mr. Salmond.
Mr. Salmond: May I say, briefly, that Members from all constituencies that represent the fishing industry would have liked a private notice question to be discussed today?
Mr. Speaker: We do not discuss my discretion on private notice questions in the Chamber. I remind the House that there is a debate on fisheries tomorrow when that matter can be explored and, during the debate, perhaps the Minister responsible will be able to give us——
Several Hon. Members: On a point of order, Mr. Speaker.
Mr. Speaker: Sit down, please. The Minister may be able to give a response to that tragic accident with which I know that the whole House has sympathy.
Mr. Dick Douglas: Further to that point of order, Mr. Speaker.
Mr. Speaker: No, I am not calling any more members of the Scottish Nationalist party.
Mr. Douglas: Why not?
Mr. Speaker: Because it is an abuse. Sit down, please.
Mr. Brian Wilson: Further to the point of order, Mr. Speaker. The comments you have made about the debate on fisheries tomorrow night are sensible. If the tragic events of today are referred to, however, would it be possible to separate that matter from the general debate so that a brief statement could be made on it at the outset?
Mr. Speaker: I am sure that that request has been heard by those on the Front Bench.

BILLS PRESENTED

  DEAF PERSONS (ACCESS TO FURTHER AND HIGHER EDUCATION AND TRAINING)
  Mr. Malcolm Bruce, supported by Mr. Alistair Burt, Mr. John Hannam, Miss Emma Nicholson, Mr. Ieuan
  954
  Wyn Jones, Mrs. Margaret Ewing, Mr. Jack Ashley, Mr. Lawrence Cunliffe, Mr. Alfred Morris, Mrs. Rosie Barnes, Rev. Martin Smyth and Mr. Matthew Taylor, presented a Bill to provide for the establishment of an Education and Training Council for deaf people; to secure preparation for, and access to, further and higher education and training for deaf persons; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 18 January and to be printed. [Bill 43.]

  BRITISH RACING COMMISSION
  Mr. Alan Meale presented a Bill to establish a single national commission of control for the whole of the horse and dog racing industries, with overall responsibility for the bloodstock, thoroughbred breeding and betting industries, incorporating the control of the financial arrangements, rules and aims of current bodies, their other responsibilities and, where applicable, the assets of all publicly supported organisations concerned or connected with these sports: And the same was read the First time; and ordered to be read a Second time upon Friday 18 January and to be printed. [Bill 44.]
  FOOTBALL SPECTATORS
  Mr. Alan Meale presented a Bill to establish a statutory liaison body for the sport of football, to include in its membership the various footballing authorities and their agencies, Football League clubs, the Sports Council, football supporters' organisations and other necessary bodies; to make provision for changes in the organisation and function of the sport; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 1 February and to be printed. [Bill 45.]
  GREYHOUND BETTING LEVY
  Mr. Alan Meale presented a Bill to extend the function of the Horserace Betting Levy Board to include the sport of greyhound racing; and to make consequential amendments to the Betting, Gaming and Lotteries Act 1963: And the same was read the First time; and ordered to be read a Second time upon Friday 25 January and to be printed. [Bill 46.]

  EUROPEAN COMMUNITY DOCUMENTS
  Ordered,
  That European Community Document No. 9898/90 relating to guide prices for fishery products for 1991 shall not stand referred to European Standing Committee A.—[Mr. Boswell.]

Opposition Day
[2ND ALLOTTED DAY]
Opposition Day

  The Economy
  Mr. Speaker: I must announce to the House that I have selected the amendment in the name of the Prime Minister.
  I do not think I would be wholly justified in putting a limit on speeches today, but if all the hon. Members who are called could limit their speeches to about 15 minutes, every hon. Member who wants to participate will be called.
  3.41 pm
  Mr. John Smith: I beg to move,
  That this House deplores Government policies which have caused the deepening economic recession, resulting in rising unemployment and increasing numbers of business failures; regrets the fall in investment in the manufacturing sector and the continuing neglect of education and training which undermine Britain's preparations for the Single Market after 1992; and calls upon the Government to lower the crippling level of interest rates, to reverse the cuts in public investment in training and support for industry, and to promote the modernisation of British industry through the application of new technologies, the adoption of a sustained programme of regional industrial development, and a long-term commit-ment to a major increase in the provision of education and training.
  The Prime Minister, when he was Chancellor of the Exchequer, sought more than once to deny that the British economy was in recession. That was no doubt because he remembered the prediction he had made almost precisely a year ago, on 6 December 1989, to the Association of British Chambers of Commerce, when he said:
  "I do not myself think that a recession is either likely or necessary."
  Not for the first time, a Government prediction about the course of the economy has been found to be plainly wrong.
  A serious recession is spreading throughout our economy, bringing in its wake business failures and rising unemployment. Businesses that borrowed at much lower rates of interest are finding it impossible to meet obligations at the present crippling high rates and they are having to give up. Companies large and small are experiencing a downturn in activity, a fall of sales and a loss in profit. Regrettably, they are cutting back on investment, training, and research and development.
  Unemployment has now risen for seven consecutive months, with a rise of 32,200 in October. Last month, the official figure given by the Government for unemployment was 1·703 million. That figure was seasonally adjusted and it represents 6 per cent. of the work force.
  We all know about the 30 changes that have been made to the way in which unemployment statistics have been calculated since 1979. If we apply the new basis of assessment—the Government's own basis—to 1979, unemployment then would have been 1·075 million, or 4 per cent. of the work force. Let there be no argument—unemployment has increased significantly in the 11 years for which the Government seek congratulation in their amendment to the motion. We await with some trepidation the unemployment figures to be announced tomorrow, as we view with foreboding the likely outcome for the whole of 1991.
  Like other right hon. and hon. Members representing industrial constituencies, I have noticed the ominous signs
  956
  in my area, as more and more redundancies are announced. The difference, as many have noticed, between the present recession and that of the early 1980s, which did so much to damage our industrial capacity, is that this one started in the south-east and has spread from there to other parts of the nation. Conservative Members often used to think that the earlier recession affected only constituencies represented by Labour Members. Now I hope that they understand clearly that the present downturn affects all parts of our country.
  What do the Government say about all this? We know that the Prime Minister was very coy about conceding the reality of recession. In the autumn statement forecast that he brought to this House, recession was not mentioned, even if an examination of the statistics showed a fall in gross domestic product for four successive quarters. More recently, the new Chancellor of the Exchequer has been forced to recognise reality a little more. I understand that he said in evidence to the Select Committee on the Treasury and Civil Service:
  "Business is pretty rough for people at the moment."
  He went on to claim that the recession would be "shallow and short-lived." The right hon. Gentleman may become closely associated with those words—[Interruption.] I am not making a personal remark about him. If I did make one, it would be that he was short and short-lived. I am not in the business of name calling. I am about to suggest that "shallow and short-lived" is a far better description of Government economic forecasts than it is of the course of the economy.
  Why on earth should we believe those who denied the possibility of a recession a year ago, when they tell us that it will be shallow and short-lived now? Why should we believe them when, at the beginning of the decade, they so grievously underestimated the extent of a recession that wiped out 20 per cent. of British manufacturing industry?
  The Government have two distinct characteristics. No set of Ministers has ever been so free with bland assurances that all was well; and no set of Ministers has ever made so many wholly false predictions about the future of the economy. In 1988, the Treasury was notoriously wrong by 288 per cent. about the balance of payments. Inflation, that "temporary blip"—a good example of the bland and easy assurance—went on blipping and blipping to its present high level. The 1988 inflation prediction was 62 per cent. wrong. Last year, it was 40 per cent. wrong and this year's autumn statement forecast was 100 per cent. wrong compared with that of exactly a year before.
  We remember the former Prime Minister's reaction when a monthly balance of payments deficit appeared for the first time at more than £1 billion. It was, she said, "a freak". As we know, it has become a depressing feature of almost every month since then.
  The Chancellor of the Exchequer (Mr. Norman Lamont): How often was the forecast right for the public sector borrowing requirement under the right hon. Member for Leeds, East (Mr. Healey)?
  Mr. Smith: I am sure that those forecasts were more accurate than the Government's The right hon. Gentleman appears to be saying that the Labour Government were consistently 288 per cent. wrong—a bold claim to have to substantiate. I am anxious that the right hon. Gentleman should answer some of my charges. If there is anything wrong with any of my criticisms of

  957
  Government economic forecasts, he can spring to his feet and tell me so. But he cannot. He knows that I am telling him simple facts.
  Is not it deplorable that we have a Government who display a total incapacity to make even elementary correct predictions about the future of the economy? The new Chancellor has adopted the same techniques as his predecessor. I am sure that the phrase "shallow and short-lived" will take its place in the litany of complacent assurances—the world of blips, freaks and economic miracles—with which the Government are associated.
  I suspect that the new Chancellor may seek to distance himself, especially as the recession deepens, from past boasts about economic miracles. Like the new Prime Minister, he has been closely involved in the Government's economic policy all along, and has been willing to go along with the absurd hypes that have accompanied the inaccurate predictions. In the public expenditure debate in 1988, he spoke about a
  "complete and dramatic … transformation of our economy".—[Official Report, 24 February 1988; Vol. 128, c. 382.]
  Even in January this year, when there was more evidence to the contrary, the right hon. Gentleman was peddling the same nonsense. In the debate on the autumn statement on 23 January he again claimed that the economy had transformed itself and was doing better than ever. If the economy was doing better than ever in January, what on earth are we doing with a recession in December?
  Mr. Phillip Oppenheim: Is the right hon. and learned Gentleman aware that the Opposition's arts spokesman made a pledge at the Edinburgh festival to give free television licences to all pensioners? Is he prepared to confirm or deny that pledge?
  Mr. Smith: I cannot congratulate the hon. Gentleman on his sense of relevance, because we are discussing unemployment and recession. However, he totally misrepresents my hon. Friend. [HON. MEMBERS: "Answer."] If I wasted my time seeking to correct the misapprehensions of Conservative Members, the debate would get nowhere. [Interruption.] It is plain that Conservative Members do not like to be told the facts about their mishandling of the economy. They do not like to be told about unemployment, recession and their own inaccurate forecasts. It is the duty of the Opposition to remind them of their incompetence, because we were sent to the House to represent people who are suffering as a result of their policies.
  Mr. Julian Brazier: The right hon. and learned Gentleman stresses unemployment. How many countries in the Economic Community have a lower rate of unemployment than the United Kingdom as measured by the independent labour force survey?
  Mr. Smith: As the hon. Gentleman knows, one of the great difficulties in Britain is the bogus system used for assessing unemployment. To my knowledge, no other country in the EC or even the OECD calculates part-time jobs as full-time employment. When Conservatives abandon the practice of misusing every statistic that comes to their hands, we will be prepared to take statistical comparisons from them.
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  I shall return to the subject of the debate, which is the recession, a topic that Conservative Members want to avoid. If we cannot accept the Government's figures, let us look elsewhere for a more realistic appreciation of Britain's economic situation. The latest CBI forecast for the economy shows a decline of 1 per cent. in GDP next year and a drop of more than 6 per cent. in investment. That forecast is in line with the latest business survey, which has often been quoted with approval by Conservative Members. That assessment does not show that the difficulties ahead will be either shallow or short-lived. All the evidence points to the risk of a recession more serious and more prolonged than the Government are ever prepared to admit. Many economists admit that predicting the future course of the economy is not always easy and that changing the direction of the economy has its difficulties.
  Dame Elaine Kellett-Bowman: The right hon. and learned Gentleman should ask his right hon. Friend the Member for Leeds, East (Mr. Healey).
  Mr. Smith: The hon. Lady should listen.
  It has been pointed out that it takes time to alter course, and that a modern economy is as difficult to manoeuvre as a large oil tanker. Such an analogy may have been lurking in the mind of the Prime Minister and former Chancellor when he gave an interview to the Financial Times on 27 October. He told Peter Norman:
  "It will take some time, it always does, to change the economy. It's like turning the Titanic round, as you know."
  There must have been some subliminal force at work, or perhaps there was an internal and unpublished Treasury forecast, disordering the right hon. Gentleman's pattern of thought. The fact was that the Titanic did not turn round —if it had, it would not have collided with the iceberg. I shudder to think in what direction our economy would move if we were to adopt, as apparently the Government are, the navigational principles practised by those in charge of the Titanic. Such revealing analogies fail to provide a sense of confidence that the Government, their head or their members, have much of a clue about steering the economy in any direction.
  The unavoidable truth is that we are in our present difficulties with a massive balance of payments deficit, the highest levels of inflation and of interest rates among the leading industrial nations, and with high and rising unemployment because of major errors by the Government in the handling of our economic affairs. What is happening now, in an interesting development, is that responsibility is becoming much more clear as our problems increase.
  Let us take the balance of payments deficit. We were told in earlier years that we should not concern ourselves about the deficit in the current account because it was a problem of success. It was principally the result of an investment boom and the consequence of excessive demand. We were assured that it would correct itself as demand subsided. Now demand has emphatically subsided, but, I regret to say, investment is in substantial decline, while the balance of payments has not corrected itself. Despite the recession and despite what lies ahead of us, the autumn statement forecast a deficit of £l1 billion next year.
  The only conclusion that can be reached on the basis of that evidence is that, once again, the Government's assurances flowed from flawed analysis. The balance of

  959
  payments deficit in the United Kingdom is a structural problem, arising to a large extent from neglect of the manufacturing sector. The most dramatic evidence of that neglect is that investment in manufacturing, which plummeted in the recession of the early 1980s, only caught up with 1979 levels in 1988, and is once again in sharp decline. I despair of the Government's ever understanding that manufacturing industry is the basic wealth creator for this nation. It is the crucial international tradeable part of our economy. A cursory examination of the success of Germany and Japan shows the consistent priority that these more successful economies have given to manufacturing. They declined to indulge in the fantasy that we had moved into a post-manufacturing world.
  Mr. Jonathan Sayeed: If the Labour party is so expert on manufacturing industry, why did manufacturing output decline so substantially between 1974 and 1979, when the Labour party was in power?
  Mr. Smith: Our record stands in good comparison with that of the Government. I am happy with every aspect of our economic performance, particularly in industry, and including our share of world trade in that period. I hope that the hon. Member will recognise, when he makes these comparisons, the important effect of North sea oil on our balance of payments. As we have constantly pointed out, it generated huge amounts of public revenues and, more importantly, the balance of payments was covered by North sea oil for many years. Only when it declined in value was the failure of the manufacturing sector revealed. Let me remind Conservative Members that it was only under this Conservative Government that we went into deficit.
  Mr. Patrick Nicholls: Will the right hon. and learned Gentleman give way?
  Mr. Smith: I can hardly give way to the hon. Gentleman when I am answering the question put to me by his hon. Friend the Member for Bristol, East (Mr. Sayeed).
  What the hon. Gentleman does not understand—he is probably reluctant to face it—is the simple fact that we only went into deficit in the balance of trade in manufactured goods during this Government's lifetime. This Government have a bad record compared not only with that of previous Labour Governments but with that of every other Government who have handled these matters.
  Mr. Nicholls: Will the right hon. and learned Gentleman give way?
  Mr. Smith: No.
  I despair of the Conservative party's ever realising the importance of manufacturing industry for our economy. Our economy will not be put on sound foundations—it will not become as productive and competitive as it needs to be—if that simple lesson is not learnt.
  Mr. Richard Holt: Will the right hon. and learned Gentleman give way?
  Mr. Smith: I am not giving way to the hon. Gentleman. I have given way frequently, and I must proceed with my speech.
  Mr. Holt: Will the right hon. and learned Gentleman give way?
  Mr. Smith: No.
  Manufacturing industry needs sustained investment. That is why cripplingly high interest rates, well above those of our competitors, are such a deadly threat to our future.
  Mr. Holt: Will the right hon. and learned Gentleman give way.?
  Mr. Smith: I have told the hon. Gentleman that I do not propose to give way to him. If he continues to rise——
  Mr. Holt rose——
  Mr. Smith: Certainly not. Let me make it absolutely clear to the hon. Gentleman that I do not intend to give way to him.
  Mr. Holt: I shall remember that.
  Mr. Smith: I hope that the hon. Gentleman will.
  Mr. Holt: The right hon. and learned Gentleman will regret that.
  Mr. Smith: I shall not complain about what the hon. Gentleman has said, Mr. Deputy Speaker, because, like most hon. Members, I take him seriously on almost nothing.
  We shall face the single market after 1992 with poor levels of investment and, just as bad, with wholly inadequate provision for education and training and a major problem in research and development capacity. Let us compare the levels of Government funding for research and development in the United Kingdom and in Germany. In 1988, the last year for which figures are available, the Cabinet Office annual review of research and development revealed that Germany—then West Germany—spent 66 per cent. more on industrial research and development than the United Kingdom and 109 per cent. more on pure science. What is the result of that disparity of effort and priority?
  One highly significant measure of success is the number of patents that are taken out. Between the mid-1970s and the mid-1980s, the number of patents taken out in the United Kingdom fell by 15 per cent. In Germany, there was an increase of 18 per cent. in the same period and in Japan—ominously—there was a massive 102 per cent. increase. If that process continues, the United Kingdom will not be able to maintain a world-class presence in the front line of innovation and technological development. That will have consequences for our industry and our economy that are almost too painful to contemplate.
  Industrial training in this country is simply a national disaster. Survey after survey shows that we trail badly behind our competitors and that even in recession, skill shortages frustrate our economic potential. Despite the overwhelming evidence, the Government refuse to recognise that national problem and persist in cutting the training budget. Incredibly, the Department of Employment has cut expenditure on its training and education programmes every year since 1987–88 and plans to continue to cut its budgets as far into the future as 1992–93. Next year alone—a year of recession—it is to cut its budget by £300 million, or 10 per cent. It passes comprehension that such folly can be perpetrated.
  In industry, as the recession deepens——
  Mr. Tony Favell (Stockport): Will the right hon. and learned Gentleman give way?
  Mr. Smith: No. I have given way frequently.
  Training budgets will come under pressure as the recession deepens and training carried out by existing companies will be cut in too many instances. The Independent's labour correspondent gave an alarming account last Friday, 7 December;
  "The first sign that the recession is having a considerable impact on the provision of training in the manufacturing industry emerged yesterday. In some areas of the North expenditure on training has dropped by 20 per cent., and even firms in the M4 high-tech corridor are cutting back, according to evidence supplied by the Engineering Industry Training Board."
  Mr. Nicholls rose——
  Mr. Smith: No.
  Mr. Nicholls rose——
  Mr. Deputy Speaker (Sir Paul Dean): Order. The right hon. and learned Member for Monklands, East (Mr. Smith) has made it quite clear that he does not intend to give way.
  Mr. Smith: Not only will I not give way, but I will not be deflected by the organised tactics of Conservative Members.
  Mr. Nicholls: Give way.
  Mr. Smith: The fact that the hon. Gentleman rises repeatedly shows that he has only one purpose, and that is to disrupt my speech.
  Mr. Nicholls rose——
  Mr. Smith: The hon. Gentleman is doing it again. It would be for his good and that of his hon. Friends to hear what the engineering industry training board says about what is happening to training in industry. That is relevant, because the Government are winding up that board and replacing it with a wholly voluntary body. The article continued:
  "Pennant Jones, secretary of the board, said that it was 'a crime' that in areas of chronic skill shortages traineeships were being cut."
  If anything, that is an underestimate of the training problem in this country. As with research and development, so with industrial training—we are heading downhill.
  With the evidence of the recession so clearly before us, and with some of the major deficiencies in our economy so painfully apparent, the Government must change the course of economic policy if the country is to avoid a deep and damaging recession. Interest rates need to be cut to bring relief to our hard-pressed industrial companies—as well as, of course, to the long-suffering and hard-pressed home owners. In contrast with the chronic Conservative habit of promoting unsustainable booms, followed by deeply damaging slumps—as in the Maudling push for growth, the Barber boom and the Lawson "spend now, pay later" credit spree—we need macroeconomic policies that will promote steady and sustainable growth.
  For an economy with the structural weakness from which our economy regrettably suffers, we need a positive strategy for industrial recovery and investment. We need a Government who are keen to work in partnership with industry and with others to rebuild our technological base,
  962
  to revive our neglected regional economies and, above all, to create the world-class work force without which we have no chance of success.
  Sir Hal Miller: I have been carefully following the right hon. and learned Gentleman's remarks about investment, the balance of trade, training and employment, and also his continued emphasis on recession. Representing an industrial seat as I do, and having some knowledge of the motor industry, I must tell him that I simply do not recognise the picture that he is painting. Does he recognise the sustained and continuing investment taking place even now in our motor manufacturing industry? Does he recognise the investment in that industry from Japan, Germany, America, France and every other country that knows that Britain is the logical place to manufacture—[Interruption.] Does he recognise that our balance of payments deficit is being remedied by the motor industry—[Interruption.] Does he recognise—[Interruption.] Training and enterprise coun-cils are what the customer wants and what the boards want.
  Mr. Smith: The hon. Gentleman illustrates one of the difficulties of giving way too frequently. If everyone intervened at such length, no speeches would ever be finished. I heard only part of what he said, but he appeared to deny, on the basis of his experience, that there was a recession. I fully welcome any investment in the motor industry, but I am sure that the hon. Gentleman will agree that many people in that industry are severely disturbed at the effects of the recession on their sales. The hon. Gentleman cannot pontificate on the basis that he uniquely represents an industrial area. I represent an industrial area. Many of my right hon. and hon. Friends represent industrial areas. They can see what is happening —redundancy after redundancy, job loss after job loss—as the recession deepens. I am sure that many of the private sector businesses that are toiling under the results of the present economic policy tell the hon. Gentleman that privately, only he does not pass on those confidences to us in public in the House of Commons.
  We started this Conservative decade with a major recession and we end it in similar difficulties. The blip, the freak, the painfully short-lived episode was the unsustainable boom in between. It is a pattern which simply must not be repeated in the 1990s.
  Despite the changes in the Government's personnel, there is no sign that they have learnt from the errors of the past decade, or even comprehend the perils for the United Kingdom if we do not make a breakthrough to a competitive and productive economy. Rather than the Government's constantly seeking to maintain the illusion of success in the 1980s, they should confront the reality of modern Europe, which is that, in economic terms, Germany has raced well ahead, France is significantly in front and we are now being overtaken by Italy.
  That reality is increasingly understood by our people. It needs urgently to be comprehended by their Government, but I fear that there is no sign that there will be any alteration in the policies which have inexorably led us once again into recession, for which, with all its painful consequences, we will hold the Government responsible.
  4.11 pm
  The Chancellor of the Exchequer (Mr. Norman Lamont): 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 improve-ment in economic performance over the last 11 years and on its maintenance of tight monetary and fiscal policies necessary to reduce inflation which have been reinforced by membership to the ERM; and notes that inflationary pressures are now easing as a prelude to falling inflation and the resumption of sustainable growth.".
  Over the years, I have enjoyed many of the speeches of the right hon. and learned Member for Monklands, East (Mr. Smith). He has banked up an unparalleled depth of experience as an Opposition spokesman—a post for which he remains eminently qualified.
  Having listened to the right hon. and learned Gentleman's speech, I felt that there was something else to come. I was rather surprised that he sat down when he did. I thought that he was just about to get to the point when, perhaps for the first time, he might get over the coyness and shyness that seem to come over him.
  I have had the pleasure of being a Treasury Minister for some years and listening to the right hon. and learned Gentleman, but in all those years there has not been one occasion when the right hon. and learned Gentleman has ever made it clear to the House what are his policies to tackle inflation. I do not understand what his policy is, and the truth is, neither does he.
  The right hon. and learned Gentleman's speeches are always enjoyable, but they always remind me of what was once said about the speeches of a candidate for the American presidency which were described as being like a Chinese meal—delicious with a bit of contrast here and a bit of spice and ginger there, but at the end of the clay one does not know whether one has eaten anything at all.
  The fact is that Britain's central problem remains the control of inflation. Sometimes the right hon. and learned Gentleman makes out that he, too, is concerned about inflation. At other times, as in an interview in The Daily Telegraph recently, he says that inflation is just one of many problems to be considered. In recent months, he has been telling us that inflation is the top priority. But now the right hon. and learned Gentleman cannot wait to change the subject and talk about recession. That shows how much stomach he has for the fight against inflation.
  The contrast with the Government's position could not be more clear. We are clear about the prime task, which, overwhelmingly, is the defeat of inflation. That is why interest rates have had to be so high and why we have joined the exchange rate mechanism.
  In the past 10 years, we have had some success. Inflation has been, on average, just under 8 per cent. Inflation tends to go in cycles and it is instructive to compare this cycle with previous ones. The current peak is likely to be less than half that of the 1970s; but our record is not yet good enough and inflation is once again too high.
  I noticed that the right hon. and learned Member for Monklands, East did not for a minute volunteer to tell us why he thought that inflation had increased—and we all know why he did not. It is clear that, in 1987, the United Kingdom's monetary policy was not tight enough. Most other countries made the same mistake, but the effects were more serious for us in Britain, because we had already been enjoying strong growth for several years and were nearer to full capacity. For that reason, the impact on our
  964
  inflation rate was greater, although since 1987 there has been a general increase in inflation throughout the developed world. On average, inflation in EC countries has almost doubled and in Germany it has more than doubled, although it is still running at a very low rate.
  Our response to that increased inflation was straightforward and clear. In 1988 and 1989, my right hon. Friend the Member for Blaby (Mr. Lawson) raised interest rates. As he himself said, it was time to introduce more restrictive measures, and that was done. My right hon. Friend the Prime Minister continued that tight policy when he was Chancellor, but he also made the historic decision to join the ERM.
  That marked a decisive change in the Government's counter-inflationary strategy. No decisions could have been discussed more exhaustively in advance: all the angles were considered. We knew that we were then joining the tough division of the European league. We have always know that the discipline imposed on us would be considerable. My right hon. Friend the Prime Minister said so repeatedly and so have I. I have made it clear beyond question that we have entered this new commitment knowingly and we shall do whatever is necessary to maintain our position in the ERM.
  In spite of that, however, and despite the welcome given to the decision, some people—including the right hon. and learned Member for Monklands, East—have not woken up and recognised that the rules have changed. If they do not listen to our words, they will learn from our actions. There can be no question of a reduction in interest rates that is not fully justified by our position in the ERM. That will be the case however strong is the pressure for lower interest rates based on other indicators. The discipline of the ERM is tough, but, because it increases the certainty of lower inflation, it also means that when interest rate reductions do take place, they are securely based.
  Mr. Giles Radice: The right hon. Gentleman told the Treasury Select Committee that business was rough. Is not his problem, however, the fact that within the ERM sterling is now very weak and he is therefore not able to reduce interest rates—which is precisely what he ought to be doing if he is to ease the recession?
  Mr. Lamont: I have just made it crystal clear that our overriding priority is to maintain our position in the ERM. That is part of our counter-inflationary policy. Presumably when Opposition Members urged us to join the ERM, they, too, appreciated the obligations that it would place on us.
  Our tight monetary policy will be supported by a tight fiscal policy. We have established an enviable record of debt repayment by keeping a tight grip on public spending, and, with ex-Chief Secretaries at both No. 10 and No. 11, I can assure the House that we will not relax that grip now.
  Inevitably, we hear siren voices suggesting that the exchange rate is too high. Unfortunately, that seems to be a fundamental part of the British psyche, especially in the Labour party: whatever the exchange rate, it is always too high. Devaluation, however, is merely self-defeating. Far from producing the continued stimulus to output that they desire, countries that adopt that course usually end up with only one result—increased inflation. We turned our back on that sort of thinking when we joined the ERM; we accepted the discipline and will act accordingly.

  965
  I have heard it said that we are already looking for a covert reduction in the exchange rate by moving to narrower margins at a lower central rate. That is not the case. There is no question of an early move to narrow margins and certainly no intention of seeking this or any other device to escape from the exchange rate discipline.
  Mr. A. J. Beith (Berwick-upon-Tweed): Even with high interest rates and membership of the exchange rate mechanism, the Chancellor cannot hope for underlying inflation of below 5·5 per cent. by the middle of next year. Surely he cannot be satisfied with that. Does not it mean that he must look to further measures, such as the narrow band and some of the measures taken by our competitors, if he is ever to tackle inflation properly?
  Mr. Lamont: I have just made it clear that I do not anticipate moving to the narrow band in the very near future. We have given our forecast for inflation. I shall say a word about that. We have published that forecast and it is a little less ambitious than what the hon. Gentleman said.
  Mr. Neil Kinnock: The Chancellor of the Exchequer puts emphasis on the discipline of the exchange rate mechanism. That is widely understood, of course. Is he aware that he has acknowledged that his Government have got the economy into such a state that they cannot afford to risk any movement of the pound downward, even within the exchange rate mechanism and even at the cost of plunging our economy, with its high burden of interest rates, deeper into recession?
  Mr. Lamont: Not surprisingly, the right hon. Gentleman illustrates only too clearly that he does not understand one word about the exchange rate mechanism. He says that he accepts the discipline of the ERM, but at the same time he seeks to find a way out of the discipline that he himself urges upon us.—[interruption.] If the right hon. Gentleman understood the exchange rate mechanism, he would realise that I had answered his question.
  The fact is that the central rate of DM2·95 strikes the right balance between the need to maintain a firm anchor against inflation and the importance of preserving the competitiveness of British goods in world markets. Above all, the rate at which we joined was the rate in the market not only on the date of entry but for some time before. Indeed, it was very close to the average real rate over the last 10 years.
  I would add just two further points. We have heard a great deal recently—sometimes we hear it from the right hon. and learned Member for Monklands, East—about the need to close the inflation gap with Europe. It is an aim which I share. We have made considerable progress—better progress than the Opposition give us credit for—in achieving that aim. However, adherence to the discipline of the exchange rate mechanism is the best way to guarantee that we shall narrow our inflation gap with Europe.
  I also hear arguments—not least from some of my hon. Friends—about the potential benefits that could come from an independent central bank or an independent monetary policy. Whatever the pros and cons of that argument, it has to be recognised that we have already in some measure achieved the benefits of that by joining an
  966
  anti-inflationary club that has a track record, credibility and clear rules. It is important that we should stick to the rules.
  It always takes time for the effects of tightening policy to show through in the inflation figures. On this occasion the delay has been particularly long. However, headline inflation has now almost certainly peaked. The Treasury's forecast that it will fall to 5½ per cent. by the fourth quarter of 1991 is by no means optimistic, compared with the majority of outside forecasts. The majority of outside forecasts are for both lower inflation than we are forecasting and for higher growth than we are forecasting. There can, therefore, be no accusation that the Government take a rosy and optimistic view of the future.
  The right hon. and learned Member for Monklands, East made great play of the fact that the Government's forecasts have not always been right. He described these things as "elementary", as if he could write them down on the back of an envelope and tell us what inflation and the balance of payments would be next year. The House will recall that I intervened to ask him how often the forecasts of the public sector borrowing requirement had been proved correct when his right hon. Friend the Member for Leeds, East (Mr. Healey) was Chancellor of the Exchequer. Perhaps the right hon. and learned Gentleman has not had the pleasure, as I have, of being given for Christmas the memoirs of the right hon. Member for Leeds, East. There is a long passage complaining about the inadequacy of the forecasts that he was given and about how they were never right, including those on the PSBR. The right hon. and learned Gentleman may remember that his right hon. Friend said about economic forecasts:
  "Like long-term weather forecasts they are better than nothing. But their origin lies in the extrapolation from a partially known past, through an unknown present, to an unknowable future".
  Forecasting is an uncertain business, but there is every reason to be confident that our forecasts on inflation can be fulfilled. Why do I say that? First, all the monetary indicators point to a slowdown. Both broad and narrow monetary growth have decelerated rapidly in response to high interest rates. The narrow definition of money is within its target range, having fallen every month since April. Bank lending has moderated dramatically. Secondly, it is clear from the real economy that inflationary pressures have eased substantially. The housing market, retail sales and a whole range of other indicators show that demand is tight and the economy is slowing.
  The Labour party has never understood either the ERM or the need to conquer inflation. It has never wanted to understand. For Opposition Members, the ERM was two things. It was a soft option; and it was a cloak. No need to work hard to produce an economic policy—just parrot "ERM" on every occasion. How will we stimulate economic growth? "Join the ERM", was Labour's answer. How will we maintain confidence? "Join the ERM." How will we increase productivity? "Join the ERM." How will the Labour party avoid having to spell out any policies? Just keep parroting, "Join the ERM". The truth is that when we joined the ERM, at a stroke we completely removed Labour's economic policy. The truth is that now that Britain has joined the ERM the Labour party stands revealed as having no anti-inflationary policy and no economic policy of any kind.
  Mr. John Smith: Before the right hon. Gentleman leaves the question of inflation, as he was in the Treasury when the former Chancellor, the right hon. Member for Blaby (Mr. Lawson), made a prediction, can the right hon. Gentleman tell us what his right hon. Friend meant when he said that inflation was merely "a blip"?
  Mr. Lamont: My right hon. Friend expected that inflation obviously would decelerate more rapidly than it has. However, as the right hon. and learned Gentleman knows, the strong growth and resilience of the economy have made it much more resistant to tightening monetary policy and tightening interest rates than many people predicted at the time. That is a tribute to the resilience of the economy.
  Mr. John Smith rose——
  Mr. Lamont: No, I shall not give way.
  Hon. Members: Give way.
  Mr. Smith: As the right hon. Gentleman knows perfectly well that the word "blip" was intended to mean that inflation would be very temporary and passing, what was the former Chancellor, with the assistance of the right hon. Gentleman, thinking when he gave such misguided advice to the British public?
  Mr. Lamont: I have just answered that question—and the right hon. and learned Gentleman knows that I have answered it.
  The right hon. and learned Gentleman talks about misjudgments and mistakes that have been made by the Government, but let us look back to what he and his colleagues were saying about the economy. They talk now about our current inflation and about the fact that it has been much higher than the Government expected; but what was happening when the economy was growing strongly—too strongly? The right hon. and learned Gentleman pressed us to give it more and more stimulus. When it was growing faster than for many years, Opposition Members continually urged us to stoke up demand even further. When investment was booming they constantly claimed that it was slumping.
  In November 1987, the right hon. and learned Member for Monklands, East said:
  "now is the time for cuts in interest rates to stimulate the economy".
  We have been over this ground before. The right hon. and learned Member and Conservative Members know of the numerous quotes of comments by the right hon. and learned Member and the Leader of the Opposition. I shall not weary the House by going over them repeatedly, but when the Leader of the Opposition said on "Panorama" that in 1987 he had been saying, "Steady, steady" about the economy, it was the most extravagant and enjoyable piece of fantasy since George IV claimed to have commanded the troops at Waterloo.
  It says much about the reality of the Labour party's public spending plans that Labour Members constantly boasted that those plans would be paid for out of faster growth when the country was already enjoying one of the longest periods of fast growth since the war. As the economy grew and living standards rose, all the Labour party could do was to describe Britain in language more appropriate to Ethiopia and to prescribe ever more irresponsible economic policies. When the economy was booming, and indeed growing too fast, Labour Members
  968
  described it as stagnant. Now, because the only language they know is that of hyperbole, the moment we get a downturn they talk in language more appropriate to the great depression of the 1930s.
  Mr. John Smith: The right hon. Gentleman has repeated the assertion that the only mistake in economic policy was to cut interest rates after the stock market crash. As he knows, most countries cut interest rates, and I think that that was highly desirable. The mistake that the right hon. Gentleman should recognise was for the Government to go on a credit spree and make tax cuts. In January 1988, I said:
  "tax cuts would feed straight through into increased consumer expenditure, particularly in the prosperous areas, and increase overheating of parts of the economy, exaggerating regional imbalances and, above all, adding a further twist to the increasing balance of payments deficit." —[Official Report, 14 January 1988; Vol. 125, c. 485.]
  Let the Government not say that they were not told about the results of tax cuts.
  Mr. Lamont: If that is the right hon. and learned Gentleman's analysis, it is the wrong one. The truth is that £2 billion, £3 billion or £4 billion in tax cuts is as nothing compared with the impact of the monetary position. Cutting interest rates has a far greater effect on demand than some marginal tax cuts.
  The right hon. and learned Member for Monklands, East hinted in his intervention that he has one policy—to return to credit controls. No one believes in a policy of credit controls. The Government, the Confederation of British Industry and the City do not believe in that policy, and I do not believe that the right hon. and learned Gentleman does either. The rest of the world is abandoning credit controls, but, as always with the right hon. and learned Gentleman, if he can find a phrase he thinks that he has a substitute for a policy.
  The right hon. and learned Gentleman spent a large part of his speech talking about recession. It is clear that the economy is now experiencing a marked slowdown—[HON. MEMBERS: "Ah."] The right hon. and learned Gentleman talked about when I appeared before the Treasury and Civil Service Select Committee and said that we were going through a recession and that there was a common-sense definition of recession: business is having a rough time. I said that business was having a rough time. However, I slightly object to the right hon. and learned Gentleman misrepresenting my remarks when he said that I had made a firm prediction that the recession would be short and shallow.
  I have the transcript, which shows that I said:
  "It is very difficult to be absolutely certain about what will be the extent of the downturn but I think there are reasons why one could believe that it will be relatively short lived and relatively shallow."
  I made it crystal clear that the length and depth of any recession are subject to considerable uncertainty.
  The present slowdown is having an effect both on output and employment. We will see unemployment rise further in the coming months. There are always costs involved in reducing inflation, but the costs of continuing to live with inflation are far higher. Moreover, the costs today are nothing like those that the British economy had to endure in 1981 when we had to squeeze a far higher rate of inflation, which we inherited from the previous Government, out of the system.

  969
  There are also significant differences from the situation in 1981. The rate of inflation that we are combating is much lower. The core rate of inflation is less than half of the peak in 1980. Interest rates, although high today, are not as high as they were in 1980. In contrast to what happened in 1980, we have had a gradual tightening of policy. A likely consequence of that is that the downturn will be less markedly sharp.
  I have already told the House how the Treasury's forecasts are more pessimistic than those of outsiders. Not just the Treasury but many outside forecasters have predicted a relatively short recession. There can be no guarantee of that. There are uncertainties in the Gulf and consequently for oil prices.
  More fundamentally, at home much will depend on the labour market and whether decisions are taken to control labour costs or to reduce investment. That is the challenge for British management. Over the past 10 years, it has been given the opportunity to manage. The choice is simple: if traditional pay bargaining habits do not change, profitability and investment will be sacrificed and the slowdown in the economy will be deeper than it needs to be.
  All experience suggests that once inflation is under control there will be a resumption of growth. That was the lesson of 1981 and the 364 economists.
  Mr. John Garrett: If the recession proves to be longer and deeper than the Chancellor of the Exchequer expects, what instruments of Treasury policy will he bring to bear to end it?
  Mr. Lamont: The hon. Gentleman asked me that question on a previous occasion and I made it clear that I did not believe that we should use fiscal policies to give a short-lived stimulus to demand. We must maintain a tight fiscal policy. The best way to bring about an upturn in activity is to stick strongly to the policy of getting inflation down. That is most likely to bring a resumption of growth again, as our experience in the 1980s bears out.
  Mr. Anthony Nelson: Does my right hon. Friend agree that one certain means of ensuring that the recession is deeper and more severe than anyone hopes is for the exchange value of sterling to depreciate? That would significantly increase the costs of imports and raw materials for many industries. That is why my right hon. Friend is right; it is absolutely essential to maintain a level of interest that ensures that the value of our currency is stable and secure.
  Mr. Lamont: I am grateful to my hon. Friend. My opening remarks make it clear that I am wholly in accord with what he has said.
  The Opposition profess to believe, or to have us believe, to judge from the intervention of the Leader of the Opposition, that nothing has changed in the past 11 years and that nothing has improved. I find it sad that the Labour party does itself and the country such a disservice. It is now, as the economy slows down for the first time in eight years, that the effectiveness of our supply side reforms will be fully tested. We shall discover how much more flexible the economy has become.
  There are three areas in which we can see that the economy is much more flexible and adaptable. First, we
  970
  now have a much larger small businesses sector than we had in 1980. There are nearly 30 per cent. more firms than in 1980. Secondly, we have a vastly improved climate in industrial relations, thanks to the reforms that the Government introduced. Our measures on the closed shop again make firms much more flexible. They free up the labour market and make wage rates more competitive. We received very little help from the Opposition when we introduced those important reforms. Thirdly, by common consent, British management in the past decade, particularly after the testing times of the early 1980s, has been immensely strengthened and is equal in many respects to the best in the world.
  While British business is about to enter a testing time, the House should not forget that it has enjoyed eight very good years in which the United Kingdom moved from the bottom of the European league for growth, investment and productivity to a position at or near the top.
  In no economy, not even the German economy to which the right hon. and learned Member for Monklands, East referred, have Governments abolished the business cycle. Different countries are always at different stages in that cycle. Today the German economy is growing more strongly than the British economy, but three or four years ago the German economy was growing less quickly than the British economy. Did we hear about the German economy from the right hon. and learned Gentleman then?
  Taking a slightly longer perspective, it is a remarkable fact that during the 1980s the British economy grew faster than the German economy. The 1980s are probably the first post-war decade when that has happened. Our business investment and our manufacturing productivity have also grown faster than those in Germany.
  Mr. Rhodri Morgan: Will the right hon. Gentleman give way?
  Mr. Lamont: No. As the right hon. and learned Member for Monklands, East said, "I am not giving way and it is clear that I am not giving way". I have already given way several times.
  The right hon. and learned Member for Monklands, East from a sedentary position asked about the balance of payments. I expect to see our balance of payments deficit narrow over the year ahead. The trade balance, particularly in manufactured goods, has already improved markedly. The right hon. and learned Gentleman said that demand had slowed, but he did not think that the current account deficit had vanished. It has not vanished, but it seems to have escaped his notice that it has considerably improved. As demand has eased, so has the growth of manufacturing imports, while our share of world exports has actually increased. As a result, our manufacturing deficit narrowed from £4·4 billion in 1989 to £1·6 billion in the latest three months. There has been a distinct narrowing.
  Mr. Holt: I am grateful to my right hon. Friend for giving way, in contrast to the Opposition Front-Bench spokesman, the right hon. and learned Member for Monklands, East (Mr. Smith); but the Opposition have never liked to hear good news. With regard to the balance of payments, would my right hon. Friend like to compliment the British furniture industry, which this year increased exports from £475 million to £565 million—an

  971
  increase of 16 per cent. against an increase in imports of 2 per cent? That is the kind of good news that the Labour party does not like to hear.
  Mr. Lamont: What my hon. Friend says about exports in the furniture industry is true of manufacturing exports generally. Manufacturing exports in this country have been growing very strongly. I was surprised that the right hon. and learned Member for Monklands, East was happy to have his record on world trade contrasted with what is happening today. The United Kingdom's share of world trade under the Labour Government declined, while it has stabilised for the first time in decades under this Government. It has stabilised as a result of the strong performance of manufacturing exports.
  Mr. Morgan: Will the right hon. Gentleman give way?
  Mr. Lamont: No, I will not give way to the hon. Gentleman.
  Looking further ahead, the prospects for British manufacturing in the 1990s remain good. A recent report from Salomon Brothers argued that several factors would combine
  "to make the UK an extremely competitive offshore manufacturing base from which to tap the booming European market in the 1990s."
  The report lists a number of factors that will contribute to Britain's success over the next decade, and it states:
  "while a description of the UK economy as the Hong Kong of Europe may raise eyebrows, the comparison is increasingly realistic."
  That is particularly true of the motor industry. It went steadily downhill in the 1960s and 1970s. It was plagued by poor productivity and a history of industrial disputes.
  Over the past few years the story could not have changed more dramatically. There has been a marked improvement in industrial relations. The number of days lost through strikes in the second half of the 1980s was running at one tenth of what it was in the latter half of the 1970s. Market shares and imports have stabilised. Although motor car manufacturers are not immune from the downturn or the effect of a slowdown, substantial investment is taking place in the industry and we expect to see a sharp rise in United Kingdom production over the next few years. New plant capacity for at least 500,000 cars a year will be up and running by the middle of the decade.
  Over the next few years the Government's task will be to keep inflation on a downward trend and to build on the achievements of the past decade. We have set ourselves high standards. A couple of years ago it was virtually taken for granted that the Government could go on cutting taxes indefinitely, reducing public sector debt and spending more on public services. Those days will come again. Our achievements over the last 11 years have not crumbled away in the face of inflation. They are lasting improvements and they will be the basis of our policies in the 1990s.
  When my right hon. Friend became Prime Minister, he expressed his determination to create an opportunity society in which everyone at every level, regardless of background, would have the opportunity to develop their talents to the full. By holding up that vision, my right hon. Friend was not signalling a new departure. Instead, he was emphasising his intention to build on the achievements of the past decade. The opportunity society and Thatcherite supply side reforms are one and the same thing.
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  Wider capital ownership; the reduction of union monopoly power; the rise of self-employment; the growth of personal pensions; the break-up of the industrial public sector; the growth of small businesses: all mean greater opportunities for our citizens. For others, increased resources for public services are also part of the opportunity society.
  However, it is also important to reform public services so that decision making is taken from bureaucrats and handed back to the people they serve. That is the objective of our reforms in education and health.
  My right hon. Friend the Member for Finchley (Mrs. Thatcher), when talking about supply side reforms, said:
  "the more we foster these things, the more we break down barriers—barriers between workers and bosses, skilled and unskilled, tenants and owners, barriers between private and public. That's the kind of open classless Britain I want to see."
  Those words of my right hon. Friend are exactly in tune with those of my right hon. Friend the Prime Minister.
  Cuts in taxation are part of the same philosophy because they give the signal that the rewards of hard work can be kept and that people can make their own way by effort and enterprise. All that is anathema to the Labour party. Opposition Members cannot understand that tax cuts and the encouragement of initiative mean opportunities for all. To revive an old distinction: they believe in equality; we believe in the equal right of everyone to become unequal.
  Over the next 10 years we will widen further the frontiers of opportunity. It is our aim to ensure that no one shall be excluded, and that is bad news for the Opposition. They know that wider opportunities for the British people mean no hope for them. The Opposition did not transform British industry. The Opposition never could have taken or backed the tough decisions necessary to fight inflation. They failed in the past and they would fail in the future. The Opposition will not be given the chance to fail again. The British people have seen through their sham policies and bogus prospectuses. The Government have had 10 years of challenge and we have a record of which we can be proud. The challenges of the next decade will fall to us and we are more than ready and eager for that task.
  4.49 pm
  Mrs. Irene Adams: Thank you for calling me so early to make my maiden speech, Mr. Speaker. I understand that the tradition of the House is for a new hon. Member to pay tribute to his or her predecessor. In my case, my predecessor was not only my predecessor but my husband. For that reason, I find it particularly difficult to pay that tribute. I have been in the position of many wives of Members of Parliament—and husbands, for that matter—who know the kind of commitment that is needed to be a Member of the House. I should like to pay tribute to everyone who has been a Member of the House and to their wives and husbands for the long-suffering hours with which they, too, have had to put up.
  In my constituency, which was my husband's constituency, over the past 11 years we have watched as our industrial base has continually deteriorated. It was a once-proud industrial base. We manufactured cotton, built ships, and carried out light engineering. All those industries have suffered grossly over the past 11 years. The

  973
  cotton industry is now just a skeleton of its former self. The once-proud mills stand empty and are falling apart. The people who worked in them lie idle in their homes.
  In my constituency there are pockets in which there is 40 per cent. male unemployment. I listen to Conservative Members telling us that industry in their towns is improving. It certainly is not improving in our town. The latest casualty is Howdens in Renfrew. It was a good industry. It had no reason to go downhill, but, because of the policies that the Government have pursued, it has done so. Once more we shall watch the town of Renfrew go into a downward spiral that not only loses jobs at Howdens but loses related jobs—jobs in shops and in other industries that supported Howdens, again adding to the recession of the economy.
  For a long time Scottish people have protested. My own grandfather took part in the hunger marches south. That road south has become a boulevard of broken dreams. When they come south, young people, middle-aged people and elderly people are forced to languish on the streets of this city. We do not need to walk half a mile from here to see cardboard cities and young people who are genuinely looking for work and roofs over their heads. What do they find? They find a shop doorway in the Strand with no chance of finding employment and no chance of finding a home.
  Before coming to the House last week, I visited Miss Peggy Herbison, who was a Member of the House in 1945. I am sure that many hon. Members will remember her. Peggy told me that she made her maiden speech on housing. I read her maiden speech. She spoke after the war when we would expect housing to have been in a bad condition. What do I find 45 years later? We are in no better position. In this city alone, 9,000 children will spend Christmas morning in bed-and-breakfast accommodation. Things are not much better, despite the efforts of Peggy and many people like her. Still, working people have no roofs over their heads. All they want is a decent home and a decent chance to earn a living. That is not too much to ask.
  The Government have presided over a situation that was equalled only by the second world war. Today we still do not have enough housing. It is reckoned that we need 100,000 low-cost rented properties each year even to start to meet the problem. We have no hope of that. If the Government do not intend to change course—from what I heard today, that certainly does not seem to be the case —they should do the honourable thing and move over and let someone who can change course do so.
  4.53 pm
  Mr. Ian Stewart: I have the privilege of following the hon. Member for Paisley, North (Mrs. Adams), so I am the first to be able to congratulate her on her maiden speech. To our pleasure at hearing her I add our sadness at the reason why she has entered the House. She spoke touchingly of the former hon. Member for Paisley, North. Hon. Members respected him, and, no doubt, judging from what we have heard today, we shall equally respect the hon. Lady.
  I cannot, I am afraid, say the same about the speech of the right hon. and learned Member for Monklands, East (Mr. Smith). Last week, the Opposition chose to table a
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  motion on the economy, to be debated in the last week but one before Christmas, because they were not happy about the Government's conduct of the economy and wanted the opportunity to put forward some ideas of their own about how they thought that they would do the job better. As inflation and the level of economic activity are at the heart of the debate, one would have expected to hear from the right hon. and learned Gentleman something new about the way in which his party, if it were elected to government, would tackle inflation. However, all we find on the Order Paper is a recommendation for what I presume must be a dramatic reduction in interest rates —otherwise the Opposition would not refer to the current level of interest rates as crippling—and a great increase in the range of public expenditure.
  There is not much that is new in the motion. Labour's policies in government and in opposition have been consistent throughout the time in which I have taken any interest in politics, which goes back quite a long time. All Labour Governments and all Labour Oppositions have founded their policies on substantial increases in taxation and public expenditure. Everything that we have heard from the Opposition demonstrates that that remains their policy.
  On monetary policy, which surely should be at the heart of inflation, in the past hon. Members have heard that Labour Members would quite like to introduce credit controls. They have not been saying that so much lately. I do not know whether it is because they realise that credit controls would be a most ineffective way of curbing excess demand in the economy, because they have now decided that the problems of introducing credit controls would be greater than any potential benefits in the short term or because they now recognise that the orthodox policy that has been pursued by the Government of reducing interest rates to curb monetary growth when it gets too high is the right policy. I remember many comments from Opposition Members and from others outside the House over the past year or two that, on their own, interest rates were not a suitable means of countering inflationary pressures. However, in the past they have always done what they were meant to do, for the simple reason that they go to the heart of tackling excess monetary growth. If one raises interest rates, one makes spending more expensive and saving more rewarding. If one wants to act on both ends of the problem by encouraging people to save and discouraging people to spend, a rise in interest rates is not only the best way but virtually the only way of satisfactorily doing so.
  The right hon. and learned Gentleman talked about Budgets of recent years. In particular, he drew our attention to what he said in 1988. Over the past few years, the Government and successive Conservative Chancellors have achieved substantial surpluses on the fiscal balance. They have not only eliminated the public sector borrowing requirement, which, in the days of the Labour Government, used to be the great bogey of economic management, but have achieved a series of surpluses in the Budget each year so that monetary policy was fortified by fiscal policy. That has had the advantage not only of encouraging a sound base for the economy but of creating a major achievement in the repayment of public debt, which is valuable. It enables money to be spent on more deserving areas of public expenditure and it also relieves a burden from future generations that should never have been placed upon them.

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  The Labour party criticises recent Government Budgets, but that criticism is economically wrong and demonstrates that it has a strange sense of priorities. Such criticism is even more amiss when one considers the Labour party's record. It has always been anxious to increase public expenditure. Every time an election is on the horizon, Opposition Members go around trying to find new ways in which to increase public expenditure, because they believe that their party will be popular if they intend to spend money on this and that. They never explain how they would pay for such expenditure, but we know. They would do so partly through higher borrowing, which forces interest rates up and encourages inflation, and by increasing taxation. We know that, because that is what they did in the past.
  I remember well my first election campaign when I was returned to the House. Then, the right hon. Member for Leeds, East (Mr. Healey) was going around the country saying that he wanted to squeeze the rich until the pips squeaked. He sought to pay for the extravagant Labour programme of increased public expenditure by imposing taxes on higher earnings. However, in the second half of the 1970s, when the right hon. Gentleman was Chancellor, the rich became everyone other than those on supplementary benefit. The tax burden was increased not only for those on higher rates of income tax but for all on the basic rate. The squeeze that the right hon. Gentleman imposed on taxpayers then should be a warning to anyone who now believes that a Labour Government would not increase taxes for those on ordinary levels of income.
  The Government's current economic strategy is just about correct. I say "just about", because I do not believe anyone could say with precision when the necessary steps in monetary and fiscal policy to manage the economy out of a period of slower growth back to the sustainable level of growth of the 1980s should be taken.
  The House should recall that, in 1981, a Conservative Chancellor was heavily criticised by 364 economists—my right hon. Friend the present Chancellor referred to them —and by many others in this House and outside for maintaining a tight fiscal policy and tight monetary conditions at a time when the economy had slowed down rapidly. We were told that if we maintained that posture the only possible outcome would be a deeper and longer recession from which the economy would never be able to recover. I remember those circumstances especially well because I happened to be the Parliamentary Private Secretary to the then Chancellor. I also remember that it was not long after that 1981 Budget that the economic recovery began. That confused all the great pundits who said that that could never happen. My right hon. Friend and his successor, now our Prime Minister, were right to be cautious about being hurried into reducing interest rates or easing the fiscal policy to give the economy an artificial boost. That is the last thing that is suited to our current economic circumstances, as it would be the quickest way to renew the inflationary pressures that have caused our present difficulties.
  Since August there has been increasing evidence that the economy has been slowing down in the way the Government intended. Figures for monetary growth now suggest that inflationary pressures have significantly abated. The latest figures for MO suggest that it is hardly growing and, on an annual basis, it is well within its band. The figures for M4 are also falling. The figures relating to retail sales, especially pre-Christmas sales in the high
  976
  streets, and the message from industry suggest that the excessive growth in the economy in the past two years is now being corrected. From here on, my right hon. Friend the Chancellor will have the task to manage the economy in such a way as to return us to sustainable growth within the framework of the exchange rate mechanism.
  The ERM, however, imposes disciplines that are not always understood. In the past, interest rate policy could be determined almost solely in terms of domestic considerations, but now the exchange rate will also act as a guide and constraint. It is perfectly correct that that should be so. I noted the important passage in the Chancellor of the Exchequer's speech today when he said that we had no early plans to change from the wider 6 per cent. band to the narrow 2¼ per cent. band. That is a wise decision, because if we move to the narrow band in the near future it would constrain my right hon. Friend's ability to deal with changing economic conditions and monetary policy needs at a time when we are moving from a period of disequilibrium to one of sustainable growth. If we move to that narrow band now, during that period of transition, constraints could be placed on my right hon. Friend that might be against the interests of our domestic economy.
  The main danger against which my right hon. Friend must guard is increasing recessionary pressures more than inflationary ones. Until three months ago there was a danger that inflationary pressures would revive quickly. I now believe, however, that that is no longer the case. In the next few months it will be possible to reduce interest rates as the inflation rate comes down. My right hon. Friend, as Chancellor, cannot make immediate forecasts about such matters, but when the retail prices index is published at the end of this week I expect it to show a significant reduction and to be down to single figures. I also expect the figures for the underlying rate of inflation to show that it has also passed its peak. Those circumstances, coupled with the evidence concerning the money supply, suggest that a reduction in inflation and a reduction in interest rates are appropriate.
  My right hon. Friend should be cautious, however, not to follow the advice of the Opposition who want a dramatic reduction in interest rates from what they describe as their present crippling levels. Such a sudden change would be counter productive, as it would risk setting off the type of inflationary pressures with which we have grappled in the past two years. That would not be in the economic and political interests of the country.
  Much of the comment that one reads these days suggests that my right hon. Friend and other Treasury Ministers are motivated purely by the political calendar when taking economic decisions. I am absolutely sure that that is not so. That charge was levelled against my right hon. Friend the Prime Minister when, as Chancellor, he reduced interest rates by 1 per cent. in October. I have no doubt that the economic conditions justified that reduction from the high level of 15 per cent. As and when my right hon. Friend the present Chancellor judges it right, I am confident that he will reduce interest rates. He. will do so, however, only when he judges it to be consistent with managing the economy back to sustained growth without rousing the inflationary pressures that have caused us so many difficulties in the past.
  The great lesson to be drawn is that inflationary pressures will revive unless we are constantly vigilant to ensure that they do not. If there is one lesson to be learnt

  977
  from the episode of 1988 it is that we must watch at all times for all the economic indicators—not only money supply but asset values and many other signs from which to judge the level of activity in the economy. If there are signs of overheating, the sooner a response is made through interest rates, even though that may be unpopular in the short run, the better it will be for the economy. And what is best for the economy is no doubt the best for the party of Government in due course. So I encourage my right hon. Friend to stay on that course.
  It is essential for the future prosperity of this country that we do not have another Labour Government. I thought that we might perhaps have heard some more this afternoon about the Opposition's approach to economic management, but I suspect that I was not the only Conservative Member who was not surprised when nothing was forthcoming. If the Opposition spell out their economic policies in great detail between now and the next election, I hope that they will be candid about them. When promising to spend £ billion on certain areas of public expenditure—education, training, schools, roads or housing—they must explain how they will finance them. Unless they spell out how they will finance the extra expenditure that they tend to promise at this time in a Parliament and in election campaigns, they will be no more credible than they were in the past three general elections.
  There has been some speculation that the right hon. and learned Member for Monklands, East would be a more credible Leader of the Opposition than the present leader. In some respects that is a sensible view. Although his speech was devoid of content, at least it showed a vigour of presentation and an amusing turn of phrase here and there. The difference between the shadow Chancellor and the Leader of the Opposition is that the latter does not know what he is talking about but is very willing to talk about it, while the former knows quite a lot—enough not to talk about it at all.
  Under these circumstances, the country is fortunate not to have a Labour Government, with their high taxes and high spending policies, to deal with inflationary pressures now and for a long time to come. We are fortunate to have my right hon. Friend, with whom I had the privilege of working in the Treasury, for whom I have a high personal regard and whom the country can count itself lucky to have as Chancellor of the Exchequer.
  5.13 pm
  Mr. Alan Williams: I congratulate my hon. Friend the Member for Paisley, North (Mrs. Adams) on a most moving and eloquent maiden speech, in the course of which she probably made many friends on both sides of the House and made friends with their families because of her understanding of what the families of Members of Parliament have to endure due to the peculiar ways in which the House operates. Her constituency must be proud that one family has produced two such able. representatives.
  The Chancellor of the Exchequer and I are old sparring partners. He shadowed me when I was at the Department of Industry; I shadowed him when he was at the Department of Trade and Industry. We rarely agreed but
  978
  we remained friends. I have bad news for my hon. Friends: what we heard today was one of the right hon. Gentleman's more scintillating performances.
  I was somewhat concerned to hear the Chancellor repeat the Prime Minister's phrase that we want an opportunity society. I well remember sitting in this Chamber 11 years ago listening to the then Chancellor presenting the first Budget of the incoming Thatcher Government. In his speech he declared that he had just given his opportunity Budget. That opportunity cost us 23 per cent. inflation, 3 million unemployed, the destruction of 20 per cent. of our manufacturing industry and the loss of 30 per cent. of manufacturing investment. So I am not sure whether the country can stand too many Conservative opportunities.
  The fact that we are holding this debate is a demostration of this. We are discussing, according to the motion, a recession. I wish I were convinced of that. I suspect that we are beginning a return to a syndrome—to the stop-go cycles of the 1950s, 1960s and 1970s under both Administrations——
  Mr. Robert Hughes: I am sorry to interrupt my right hon. Friend, but I should like to advise the House that the monitor shows a Mr. Robert Hughes speaking. Neither I nor the hon. Member for Harrow, West (Mr. Hughes) is speaking, so perhaps the monitor could be corrected.
  Mr. Williams: As the hon. Member who has been credited with my speech—my hon. Friend the Member for East Lothian (Mr. Home Robertson)—is the only other Member sponsored by the Transport Salaried Staffs Association, I am delighted. I am happy that what I have to say should be credited to him——
  Mr. Robert Hughes: The monitor has my name on it.
  Mr. Williams: My Friend is to be congratulated on his eyesight, and I apologise to him if anything that I am about to say causes him embarrassment.
  Members on both sides of the House know, even if they will not admit it for political reasons, that we should not be discussing a recession. After £130 billion worth of production from the North sea, we should not find ourselves fearing a return to recession and to a cycle of recession. We should be entering a period of continuous golden growth, high investment and high earnings. If someone came to a surgery of a Conservative Member —that is, if Conservative Members hold surgeries—and said that he had won the football pools 10 years before, sold his business, remortgaged his house, lived it up and had a great time for 10 years but was now down on his uppers, I wonder how much sympathy he would receive from a Conservative Member. None at all, I suspect. Yet that is exactly what the Government have done. They picked up the £130 billion output, sold off the family business and spent the money, remortgaged—and they are still in trouble, as is the country.
  If the seven—or eight, as the Chancellor would claim —fat oil years are over, the stores are empty for the seven lean years to come. But the Government have squandered more than just money—which, admittedly, they have squandered on a profligate scale. They have also squandered the one and only opportunity that we have had in the post-war period to break away from the inexorable stop-go cycle and to break into a virtuous spiral

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  of continuous growth and high investment. The only chance that we have had, a chance given us by oil, has been wasted: hence today's debate.
  Sad to say, we are not talking about one downturn in isolation. The pattern is all too familiar. I see that the hon. Member for Horsham (Sir P. Hordern) is in his place. He and I debated economic issues on many occasions in the 1960s and 1970s. We both entered the House in 1964. We recognise that what is happening now is a similar downturn in investment and in research and training. All the symptoms were described by my right hon. and learned Friend the Member for Monklands, East (Mr. Smith). It is a familiar pattern of returning to stop—the stop that has haunted each post-war Government.
  When the Chancellor shadowed the Department of Industry in which I was a Minister, he used to despise what we called the industrial strategy, My hon. Friends who were in the House at the time will remember what it was. It had to do with preparing to take finite resources from the North sea and turning them into investment in our manufacturing industry. The right hon. Gentleman used to bleat about the appalling burden that that placed on business. For the equivalent of 1p on the standard rate of tax, under section 8 of the Industry Act 1979 alone when we left office there was £2·5 billion of manufacturing investment in the pipeline. That was a record level for the post-war period. Unfortunately, it was thrown away.
  The abandonment of the industrial strategy led to the waste of Britain's finite resource. None of it was invested where it was needed for the long-term benefit of the country. Instead of using those resources for investment, the Government cut manufacturing investment to a level that was the equivalent of having stopped all manufacturing investment for three of the last 10 years. The well-established shortfall for failing to maintain the 1979 level of investment is £20 billion, and that would have created a new Nissan plant every other year. That illustrates the scale of investment if the Government had maintained the level that they inherited.
  When the Chancellor and I switched places and I was shadowing him, we were in a Committee which sought to abolish the regional development grants. At that time the Chancellor said that the trouble with the Opposition was that they were "dewy-eyed" about manufacturing. I have never forgotten that phrase. He saw the future in services, but it is a pity that at that stage in his career he did not shed a few tears for manufacturing industry. If he had, perhaps he would not have destroyed one fifth of our manufacturing base.
  The nonsense of the comparison between services and manufacturing is revealed by the balance of payments mess. A chain of takeaway restaurants may be very successful, but it in no way contributes to easing the balance of payments problem. However, workshops producing goods that would otherwise be imported or producing goods for export do make a contribution to solving that problem. That is the fallacy of the Government's argument.
  The Chancellor boasted about our manufacturing trade balance having improved somewhat. He boasts about turning what the Government called an inefficient manufacturing industry which earned a surplus of £6 billion on international trade into an efficient manufacturing industry which contributes to a deficit of £6 billion.
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  That is a peculiar triumph. We cannot afford the Government's successes; they are too costly. If we have many more such successes, the country will be bankrupted.
  The Chancellor makes great play of the discipline of the ERM and says that the Opposition do not understand it. The right hon. Gentleman does not understand that there would be more discipline if the industry that the Government have destroyed had remained, because discipline is concentrated on industries that are affected by international trade through overseas competition and the need to export. Because the Government destroyed so much of our manufacturing base, the discipline that the Chancellor talks about, the screwing down of the economy as a result of our membership of the ERM, impinges on only one fifth of Britain's employment. If that is the discipline that the right hon. Gentleman thinks will on its own inevitably produce the turnaround that he wants, I have news for him: it will take rather a long time.
  The Sunday Times said that entering the ERM was the Government's golden scenario. It spoke about the protection offered by the ERM, the fall of inflation and interest rates, GATT and the timing of an election. I see the same sequence of events, and I shall shortly deal with them, but I see them not as a golden scenario but as the Government's desperate and only scenario. They have no other ace to play. Membership of the ERM was the only economic option left to them and they had to gamble on it. They have to hope that the play-off between what I shall call the political economy and the real economy will work in their favour in the middle of next year.
  The real economy shows soaring bankruptcies, unemployment increasing by more than 500,000, falling investment and lower expenditure on research. The indicators are plummeting. They are all on red alert. However, the political economic indicators will for a while be favourable to the Government. Inflation will fall, not because the Government have done anything right but because they have not repeated last year's mistakes. As last year's mistakes fall out of the index, which shows just the rate of increase and not an improvement in inflation, merely a change in the rate of growth in inflation, it will seem to move in the Government's favour. The Government hope, and the Chancellor has made clear, that as a result of that they will be able to reduce interest rates. By so doing they hope to be able to reduce mortgage rates.
  In a previous speech in the House I said that a cut in the mortgage interest rate of 3 percentage points is equivalent to an income tax cut of 3 percentage points because it releases £6 billion of purchasing power. For the Government, that has the great advantage of efficiency because, instead of costing them that amount in lost tax revenue, it costs them only £1·5 billion under MIRAS that they lose on mortgages. However, that is a tangent. If the Government achieve what they want, which is what most commentators accept as the possibility of a change in interest rates, then for a limited period they will inject back into the economy £6 billion of purchasing power which they hope will see them through the next election.
  The Chancellor referred to the £3 billion by which the Government hope to reduce overseas loans this year. They do not need to pay that and, if necessary, that money is available to the Chancellor in the Budget. My hon. Friends should be aware that that money may be available as a political ploy. The Government advance strange argu-ments. They see it as a virtue to pay back money that they

  981
  borrowed at stable low-interest rates, but they do not seem to understand that that leaves us increasingly dependent on hot money, the £30 billion to £40 billion at volatile interest rates which plays the market and which has flooded into the country. It is not the ERM that has trapped us with high interest rates but that hot money which the Government must keep in Britain. If it were not for the volatility and the fear that private investment in Britain would rush out, the Government could have the interest rates that they need. They talk about paying off debt, but the only way in which they can finance their deficit on overseas trade is by massive private debt.
  The Government hope that they will have the chance of an election before the situation turns grim. Money will go into the mortgage holders' pockets and then into the shops, creating a temporary uplift in demand. But one third of it will go overseas and an extra £2 billion worth of imports will flood in. Towards the end of next year, the balance of payments position, the interest rate position and the rate of inflation will all worsen.
  We have to ask the Government what will happen if the so-called golden scenario does not work out. The pound is perilously low within the allowable thresholds. If the interest rates that they are assuming in their autumn statement do not turn out as they have predicted, we shall be discussing a movement not into recession but into a full-scale slump. There is a danger that we shall move from the oil-plentiful 1980s into the dismal 1990s.
  I do not care what Ministers have said: we moved into the ERM at the wrong rate. The Chancellor of the Exchequer told the Treasury Select Committee, if I understood the newspaper reports—my hon. Friend the Member for Durham, North (Mr. Radice) was there—that the rate was right because we had gone in at about the average in relation to the exchange rate with the deutschmark over the past 10 years. On what does he base that as evidence of it being right? Over the past 10 years, we have ended up with a trade deficit of £20 billion, despite the fact that we had £130 billion worth of North sea oil to replace imports or to sell abroad. Therefore, what he calls the right level in relation to the deutschmark means that, far from being able to pay our way, we have been living above our long-term means at the rate of £150 billion over 10 years. That is the gap that needs to be made up. What nonsensical assessment leads the Chancellor to think that the level against the deutschmark that led to a deficit of £150 billion can lead to the breakout into the growth economy that he claims that he wants?
  Mr. Tim Smith: If the right hon. Gentleman feels that we went in at the wrong rate, what does he think would be the appropriate rate?
  Mr. Williams: Approximately 10 per cent. lower would have been right. As hon. Gentlemen will know, the assessments made by industry of the uncompetitiveness of British manufacturing when compared to our competitors overseas led the CBI to believe that approximately 10 per cent. below the present level would be the right one.
  We are talking about, and making points against each other about, a single rate. If we were to adopt as a single rate the level of exchange established as a central position of the ERM, we should condemn ourselves to a return to an immediate post-war trend. When the war ended, for
  982
  prestige reasons, because the pound was the international medium of exchange, we tied ourselves to an historical rate against the dollar that was unrelated to the economic realities of the trading positions of the United States and Britain. Hon. Members will remember that every Thursday everyone would go to read the tapes at midday to see whether the bank rate had gone up or gone down and to see what the latest jump or change in the interest rates was as we tried to sustain our sterling level against the presssure of international speculators. That happened under Governments of both parties.
  There are limited hopes of short-term recovery. Last week, I discussed with an ex-official of mine—we had together dealt with inward investment and spent a lot of time working abroad talking to overseas business men—investment in Britain. I found salutary and saddening a comment that he made about the future of investment. He is now with one of the major heavy industrial companies. He said that, if there were an upturn, his company would want to sustain the quality of existing plant but that if it were to expand and invest more, it was not sure about investing in Britain.
  The logic of what has happened in eastern Europe is that Japanese and American capital, know-how and technology will move there because of low wage levels. Britain will not be able to compete in domestic manufacturing. His fear was that heavy industry, engineering and so on, would have to look to investment overseas. In the 1970s, the Benelux triangle was the black hole that drew in most of the petrochemical investment in Europe, and my friend predicted that what is happening in eastern Europe, as German and Japanese capital goes in, will lead to a similar situation with manufacturing capability moving eastwards across Europe, particularly if eastern European countries become members of the EEC, as many of us hope they will.
  The Chancellor—to mix my metaphors somewhat oddly—as an ex-Minister in the Department of Trade and Industry, has found some of his dead ducks coming home to roost. He is now finding that what he helped to kill while in the Department of Trade and Industry is coming back to haunt him, particularly the industry that he destroyed. The country must mourn the fact that what we have lost is our one opportunity—[Interruption.] The hon. Member for Beaconsfield (Mr. Smith) may find this funny, but I have served in four Departments, and the hon. Gentleman and I have followed economic issues for many years. No one has been able to break the stop-go pattern, and the eventual historical assessment of the past 10 years will be that an opportunity existed but was wasted.
  5.37 pm
  Sir Peter Hordern: I congratulate the hon. Member for Paisley, North (Mrs. Adams) on her admirable maiden speech. It used to be said that a maiden speech should be uncontroversial, but I detected some controversial words and phrases in her speech, and I thought all the more of it for that. However, I greatly regret that there were not more hon. Gentlemen here to listen to her speech. I am sure that it will read well. I regret that the length of the speech made by the right hon. Member for Swansea, West (Mr. Williams) probably had something to do with the fact that there are not enough

  983
  hon. Gentlemen present to keep the debate going. I wish that there had been, to hear the admirable speech of the hon. Lady.
  I am surprised that there are not more hon. Gentlemen here to listen to and take part in this important debate on the recession. I should have thought that both sides of the House would be crowded, especially as the terms of the motion are savage in their condemnation of the Government's policy. For example, it
  "calls upon the Government to lower the crippling level of interest rates".
  As we heard from the right hon. and learned Member for Monklands, East (Mr. Smith), it has long been the Opposition's policy that Britain should be a member of the exchange rate mechanism. Knowing that the right hon. and learned Gentleman understands a good deal about the ERM and knowing our place in the ERM at the moment, I cannot understand why he has been willing to put his name to a motion that calls for lower interest rates. Perhaps the hon. Member for Derby, South (Mrs. Beckett) can help the House, as she, too, knows where sterling stands in the ERM. It is almost at the bottom of the range, yet the motion calls on the Government to lower the "crippling" level of interest rates.
  I can only assume that what is envisaged is a substantial reduction. I see that the right hon. and learned Member for Monklands, East is in his place once more, so let me ask him what effect a reduction in interest rates would have on our position in the ERM.
  Mr. Graham Allen rose——
  Sir Peter Hordern: I am not asking the hon. Gentleman.
  Mr. Allen: I would love to help the hon. Gentleman.
  Sir Peter Hordern: The hon. Gentleman does not speak on this subject with the same expertise as the right hon. and learned Member for Monklands, East. I have enormous admiration for him, but not on economic matters. But I should be quite happy to defer to the right hon. and learned Member for Monklands, East should he wish to intervene. [HON. MEMBERS: "Unfair."] Hon. Members say that the question is unfair, and I understand that, but I still do not see how Opposition Members can justify lowering interest rates, given our position in the ERM at the moment. The truth is that it cannot be done, and it is perfectly phoney to suggest that it can.
  I do not think that any of my hon. Friends would deny that we are in a recession, whether shallow or deep. But we have started from a very high level after eight years of uninterrupted growth. The right hon. Member for Swansea, West said that he and I could recall many instances of stop-go, and we can. But I do not ever recollect an eight-year period of go, and it is therefore not surprising that there should be some slowdown.
  Mr. Alan Williams: What about North sea oil?
  Sir Peter Hordern: The right hon. Gentleman reminds me that he said during his speech that we had had the benefit of £130 billion-worth of North sea oil.
  Dame Elaine Kellett-Bowman: And a lot more debts.
  Sir Peter Hordern: I shall come to the question of debt a little later. First, let me concentrate on the question of the £130 billion-worth of revenue from North sea oil. I often wonder why the Opposition do not recognise, and speak proudly about, the purchase and acquisition of
  984
  overseas assets by British companies during the past 10 years. In case hon. Members are not immediately aware of the figures, I remind them that we have invested £1·50 billion all over the world—a good deal of it in the United States—from which we are deriving a substantial benefit. We have more per capita invested overseas than any other country, not excluding Japan, and certainly not excluding the United States. So, from the point of view of assets, we are substantially better off than we have ever been.
  Dame Elaine Kellett-Bowman: Does my hon. Friend agree that the fact that we have repaid Labour's debts has been immeasurably beneficial, given the present high level of interest rates? If we had not done that, the outflow of funds would be enormous.
  Sir Peter Hordern: As always, my hon. Friend makes a perspicacious observation. She is absolutely right, and I shall be returning to the question of debt a little later.
  Mr. Alan Williams: The hon. Gentleman made a point about investment overseas. Asset value is meaningless, because the assets are not realisable. They are of value to Britain only if companies refund and repatriate the profit. Most companies are using the money in the host countries or re-investing there. That means that we have exported not only our capital but our jobs.
  Sir Peter Hordern: The right hon. Gentleman does not appear to appreciate what happens when one invests abroad: one receives dividends and a return on those investments. That is the position today, and we are reaping enormous rewards from our investments which will last us and our successors for generations to come. We are in art extremely strong position.
  Our capital investment during the past few years has not been confined to overseas investments alone. To hear Opposition Members speak, one would think that there had been no capital investment in this country for the past few years. In 1983, the total fixed capital formation in Britain was £53 billion; last year, it was £81 billion. It is only marginally down on that figure this year, so we are talking about a high level of domestic fixed capital formation.
  Mr. Robert Hughes: The hon. Gentleman cannot have listened to what the right hon. Member for Henley (Mr. Heseltine) said during his brave but failed bid for the premiership. The right hon. Gentleman made it plain that one of his great concerns was the substantial fall in manufacturing investment in Britain. He said that we could not depend on service industries for our wealth and that the Government had to intervene in industry. What has changed? Or perhaps that is why the right hon. Gentleman has been made Secretary of State for the Environment.
  Sir Peter Hordern: During his election campaign and long before it, my right hon. Friend spoke of the marriage of private and public sector investment in the inner cities, and in Liverpool in particular. My right hon. Friend has a very good policy which he advanced extremely well.
  Capital investment in Britain has increased substantially during the past few years. Moreover, Britain has acted as a strong magnet to overseas investment, not least in the motor industry but in many other industries too. I understand that, in the past few years, we have attracted

  985
  more investment than any other European country. That being so, the Labour party is in no position to criticise us for our lack of capital investment.
  It is perfectly true that, in terms of unemployment, the outlook is not good, but, given that there are now 2 million more people at work than there were in 1979, it is rather short-sighted of Labour Members to criticise us.
  As my right hon. Friend the Chancellor admitted, if anything, growth in Britain has been a bit too quick. It could not have been sustained. For a long time, monetary aggregates had shown that demand was increasing too fast, and that credit, especially, was being advanced far too far. In 1985, for example, bank lending amounted to £20 billion. It rose to £60 billion in the four years to 1989. That progression was far too fast for comfort.
  I confess that I do not see an easy time ahead. In terms of disposable income, there is no question but that young people—especially those with large mortgages—are feeling the effect of high interest rates acutely. There are no exemptions. We are not talking about a north-south divide; young people with large mortgages in my constituency are being squeezed hard. It is perfectly true that, on top of that, they have to put up with the community charge. One of the difficulties of the charge is its unpredictability. No one can say what it will be from one year to the next, and it is very difficult for people to manage.
  Having said all that, I believe that, unlike other recessions that I have known, this is a perfectly manageable recession, because it is a private sector phenomenon and has not been brought about by an imbalance in the public sector. Matters were very different in 1979, as my hon. Friends will well remember. In 1979, the public sector borrowing requirement accounted for 15 per cent. of all revenue from tax and national insurance contributions. That is an enormous proportion. Because of that large public sector borrowing requirement, the private sector was badly squeezed.
  I looked carefully at the Opposition's motion, as the House would expect. It calls not only for a reduction in the
  "crippling level of interest rates"—
  it does not say how the Opposition would achieve that —but calls upon the Government
  "to reverse the cuts in public investment in training and support for industry, and to promote the modernisation of British industry through the application of new technologies, the adoption of a sustained programme of regional industrial development".
  All those items would involve a substantial increase in public expenditure, and we have every right to ask how that money would be raised. Would it be through higher taxes or through more extensive borrowing? How can a programme of higher borrowing be sustained at a time of high interest rates?
  Perhaps the most difficult thing of all to understand —although by no means unique—is the Opposition's programme to renationalise water and electricity, which are two firm commitments. How will that programme be financed? The Opposition do not say at what price the shares in electricity and water companies will be renationalised. It may be a low price—we simply do not know. If it is, it would be an absolute disgrace.
  Mr. John McAllion: A great deal of money is involved.
  Sir Peter Hordern: The hon. Gentleman is right. How would the Opposition raise such a large sum of money? They would have to add that borrowing to the already large public sector borrowing. That would be inevitable, given the Opposition's large public sector programme. It is an incredible programme. The private sector would not give the Opposition any credibility, either now or during a general election, because the Opposition's programme is incredible——
  Dr. Norman A. Godman: Wait and see.
  Sir Peter Hordern: We will indeed see.
  The Government must control total public expenditure or there will be too high a burden on the private sector. I include local authority expenditure within the total of public expenditure, because that is how it is treated in the public sector accounts—and it is right that it should be. However hard we try, it is extraordinarily difficult to control local authority expenditure by any rational means without bludgeoning and capping local authorities. It is clear that the increase in local government expenditure during the past few years is unsustainable.
  Part of the Opposition's programme is a commitment to increase expenditure on education. It is clear that, if we allow more money to go to the schools, and if additional funding must be raised through the community charge, the penalty through the community charge will be far too high. There is a strong case for transferring the cost of education from local government to the state. That should be carefully considered during the current review of the community charge. There is an excellent case for doing so, because there is now a national curriculum. Local education authorities can manage such a system, but the Government should be responsible for paying for the programme. I agree with the Opposition that education is a priority, and that we cannot ignore it.
  Mr. Patrick Thompson: I agree with my hon. Friend about education. Will he say more about the implications for income tax?
  Sir Peter Hordern: I have seen some estimates for that. My understanding is that, if education were immediately transferred to the central budget, that would cost 3p or 4p in the pound. However, much more important, if we take into account how much money will be taken out of people's pockets—that is, if we combine the cost of the community charge with income tax—the position is nowhere near as bad. It would halve the cost of the community charge. It is a serious national priority which should be carefully considered.
  There are a number of supply side matters to which we should pay careful attention, and in particular the importance of the GATT negotiations that have been imperilled by the negotiations about the common agricultural policy. I am beginning to think that the negotiations on the CAP are too important to be dealt with by Agriculture Ministers. They should be confined to Trade Ministers. I do not even believe that the CAP really helps farmers, which is what it is supposed to do. The GATT negotiations are more important than the preservation of the CAP, and I hope that, by one means or another, we get rid of it.
  I want to say a word about the role of interest rates. Some people say not only that they are far too high but

  987
  that we are far too dependent upon them. It is likely that, compared with the rate of inflation, interest rates will remain somewhat higher than we have been accustomed to since the war. We may be entering a period of conditions that we have not experienced for 50 years, with the rentier coming into his own. In other words, the real rate of return on interest will be higher than the rate of inflation—something that has not occurred for a long time.
  Because of our position in the exchange rate mechanism, it is important that the retail prices index should be properly compared with that of other countries. Investors outside this country look to the real rate of return, which is the difference between the rate of inflation and the rate of interest offered. Our RPI should be on a basis comparable to that of other European countries. That would result in a significant reduction, which would help our position within the European Community and within the ERM.
  As my right hon. Friend the Chancellor said, there is a certain prospect of lower inflation followed, in due course, by lower interest rates. Reports of an economic collapse, which have been suggested by the Opposition, are rather like the reported death of Mark Twain—greatly exaggerated. We have every reason to look forward to a better period, with lower interest rates and lower inflation. Nevertheless, I think that the recession may be rather longer than has been our experience with previous recessions, but I am confident that my right hon. Friend's handling of the economy, and the courage that he and his predecessor brought to the task by keeping interest rates uncomfortably high, is the right approach to the central priority of reducing inflation.
  5.58 pm
  Mr. Gordon McMaster: I am delighted to have caught your eye so soon after my arrival in the House, Mr. Deputy Speaker. It is fitting that I should have an opportunity to make my maiden speech during a debate about the recession, because it has hit my constituents very hard.
  I thank those hon. Members who worked so hard to ensure my election to the House and those hon. Members, on both sides of the House who welcomed me here and offered me advice about my maiden speech. The most common piece of advice was that I should ignore all advice and that is what I have chosen to do.
  I know that it is the convention of the House for a new Member to pay tribute to his predecessor. Even if that had not been the convention, I would have chosen to do so. I know that I speak for all hon. Members when I pay tribute to Norman Buchan, a man who was loved by many and respected by all. During his 26 years in the House, he touched the lives of many people here, in his constituency and elsewhere. He was a man of great principle, warmth and intellect and, as many hon. Members will know, before he entered the House he was a teacher. He used his great skills of communication to inspire and encourage others and I think that it is fair to say that he was always the teacher.
  Many hon. Members will also know that Norman Buchan had a passion for the arts, especially Scottish folk music. The most fitting tribute that I can pay him is to quote from a song about him. It is in characteristic dialect, but that enriches it rather than detracts from it.

  "He's a fighter, he's a dancer

  He's freedom's greatest fan

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  When the chips are doon

  Yon Buchan loon

  Wee Norman is your man."

  That is how many of us remember him.
  The constituency of Paisley, South, which I have inherited from Norman Buchan, needed and needs the kind of representation that he provided, because it is a microcosm of industrial Scotland and the problems that beset it. I have lived in the constituency all my life and I started work there too. I remember the bus journey that I used to take from my home town of Johnstone to my work in Paisley early every morning. It was quite a job to get on a bus 15 years ago. The streets were throbbing and bustling with people all going to work in the mills and the large factories. A school leaver taking that same bus journey today would see decay, dereliction and despondency.
  Paisley is famous for the Paisley pattern. It is known throughout the world and it was at the forefront of the textile industry which employed many thousands of people from the town and surrounding areas. Now it employs no more than a few hundred. The massive mills that once housed those thousands of workers now stand as idle and rotting monuments of the industrial decline that we have seen during the past decade.
  It is sad and shameful that there is no large-scale manufacture of any Paisley pattern goods in the town of Paisley. My right hon. and learned Friend the Member for Monklands, East (Mr. Smith) referred to the need for partnership; the need to explore new markets, to invest in research and development and in export drives. There is great potential there for that.
  There is also in the constituency the village of Elderslie, the birthplace of the Scottish patriot, William Wallace. It is also the home of Stoddards, the carpet manufacturer which produces some of the highest quality carpets in the world. I am sure that those carpets grace some of the corridors of this place.
  Johnstone, my home town, also has a rich industrial heritage. It was the home of the first machine tool foundry in the world. It trained men who could twist and turn metal at will into useful components. Unfortunately, that is no longer the case, because no major factory does such work any longer.
  When I was considering material for my maiden speech I referred to the maiden speech made by my predecessor in 1964. In that speech, Norman Buchan referred to the new industrial complex of Rootes and Pressed Steel, which is now in the constituency of my hon. Friend the Member for Renfrew, West and Inverclyde (Mr. Graham). That, too, has now closed and many people who lost their jobs there have never worked since. Those people have been stripped of the dignity of being able to make their full contribution to society and to the economy.
  Male unemployment in the constituency was 11·7 per cent. in October. That meant that 2,754 people competed for 420 jobs, many of which were low-paid and part-time. As my hon. Friend the Member for Paisley, North (Mrs. Adams) said, in the past few weeks we have seen the closure of the Howdens factory in Renfrew, once a market leader in the production of equipment for renewable energy—something which is taking off all over the world in these days when environmentally friendly products are all the rage. That factory closed, making 500 people redundant, because there was none of the investment in research and development and export drives which Howdens' competitors received from their Governments.

  989
  However, I must pay tribute to the regeneration of the economy by the local authorities, the Scottish Development Agency and some of the business community in Renfrew district. We see the lunar landscape of the Talbot factory being regenerated to breathe new life into the area. It has been turned into a retail industrial and residential development and that is welcome. Renfrew district, and Paisley in particular, is bidding to make our area the home of Scotland's national stadium. If any Conservative Member would like some advice on how to stay out of Europe, I am sure that such advice could be obtained from the supporters of St. Mirren. It would be only natural for that national stadium to come to the home of St. Mirren.
  In conclusion, I want to make a suggestion that would have a major social and economic impact in my constituency. In 1979, when the Government took office, 34 per cent. of Renfrew district's housing budget was paid by the Exchequer in the form of a housing support grant. We have not had a housing support grant for many years. If that grant were restored to its former level of 34 per cent., £11 million would be put into the local economy which would improve homes, reduce homelessness, create jobs and stimulate the local economy.
  6.6 pm
  Mr. Tim Smith: I congratulate the hon. Member for Paisley, South (Mr. McMaster) on an outstanding maiden speech. Like him, I was elected to the House at a by-election and I recall the apprehension with which I made my maiden speech. I congratulate the hon. Gentleman on the confidence with which he made his.
  I remember Norman Buchan well because he was one of the first Labour Members of Parliament whom I met after I came into the House in April 1977. We appeared together on "Panorama". One of the issues during my by-election —this demonstrates that times do not change greatly—was rising prices and inflation. It was thought that I must be some sort of expert on the subject and I was drafted on to "Panorama" as a young and rather green Tory Member. Needless to say, Norman Buchan outpointed me completely.
  The electors of Paisley, North and Paisley, South are fortunate in the representatives whom they have sent to the House. We look forward to listening to the hon. Members for Paisley, North (Mrs. Adams) and for Paisley, South with the greatest respect. I congratulate them both.
  If it is the Opposition's duty to criticise the Government's economic policy, Conservative Members are equally entitled to examine carefully the Opposition's motion to try to establish precisely what the Opposition would do to rectify the current situation. There is not a great deal of dispute about the fact that the economy has slowed down substantially. We all have businesses in our constituency and talk to local business men. We all know what the situation is. I was talking to my local chamber of commerce only last night. We all know that there has been a substantial slowdown in the economy since the summer. The question that the House must consider is what is the right way to tackle the problems that we now face.
  The Opposition argue that we should have a substantial cut in interest rates. That is the implication of their use of the word "crippling" in their motion. They also argue that
  990
  we should increase spending on training and support for industry, apply new technologies, adopt a programme of regional industrial development and increase the provision of education and training—all involving more public spending. Yet the hon. Member for Derby, South (Mrs. Beckett) tells us that Labour's only firm public spending commitments at present are to increase child benefit and retirement pensions, which, she explains, would be paid for by higher taxation. We understand that, but, if higher economic growth is not possible without an increase in public spending, how can it be secured by a Labour Government who have made a commitment not to spend in that way initially, but only to increase child benefit and retirement pensions? There is a conundrum here——
  Mr. Allen rose——
  Mr. Smith: —which the hon. Member for Nottingham, North (Mr. Allen) is about to explain.
  Mr. Allen: Is the hon. Gentleman admitting that, when we win the general election—perhaps early in the new year we shall be taking over an economy that is not growing?
  Mr. Smith: The hon. Gentleman has obviously not listened to what I have been saying. I have already said that we all know, from talking to business men in our constituencies, that the economy has slowed right down. I doubt whether it is growing at present; it is impossible to tell for certain, but, according to my local chamber of commerce, the position has changed radically since the summer. There is no doubt about that.
  I represent a prosperous area with a high employment level. I am told that the Gerrards Cross post office is now fully staffed: that is the bellwether test in my constituency, and shows that the economy has slowed down. There is normally a shortage of labour in my area, and the post office finds it difficult to recruit. But I do not think that that is the point at issue; the point at issue, surely, is what is the right way to tackle the problems. There are only two ways in which we can establish what a Labour Government—if we have the misfortune to have another —would do: one is to examine current statements and the motion that we are discussing, and the other is to examine the record of Labour Governments.
  The right hon. Member for Swansea, West (Mr. Williams) was a Minister in the Labour Government who produced the highest inflation and the highest public sector borrowing requirement that the country has ever experienced and also presided over a fall of 2·5 per cent. in manufacturing output.
  Mr. Richard Page: I do not like to hear my hon. Friend criticising the previous Labour Administration in that way. We know that he would not have won Ashfield and I would not have won Workington if that Administration had been a success.
  Mr. Smith: I suppose that every cloud has a silver lining: I concede that my hon. Friend and I were both beneficiaries of the Labour Government's inability to manage the economy. It would not have been possible to overturn a Labour majority of 23,000 in my case, and, in my hon. Friend's case——
  Mr. Page: A mere 10,000.
  Mr. Smith: —had the Government of the day not been deeply unpopular.

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  Let me return to the present day. Some have suggested that nothing has been achieved over the past 11 years and that the current recession is in some way similar to that of the early 1980s. I believe that anyone who knows anything about the real economy will understand that the underlying economy has been transformed—that it is far stronger than it was 11 years ago. Over that period, average growth has been 30 per cent. faster than the OECD average. Manufacturing productivity has increased substantially: the gap per worker between the United Kingdom and Germany was 37 per cent. in 1980, and is now down to 8 per cent. The growth of the smaller businesses is also very significant. The past decade has seen a substantial shift in employment patterns.
  Dr. Lewis Moonie: What about large businesses?
  Mr. Smith: That is exactly the point that I am about to make. Large businesses used to be the principal employers —[Interruption.] Let me explain the position to hon. Members who seem to be having some difficulty in understanding. In 1979, companies employing fewer than 200 people employed 27 per cent. of the work force. By 1986, the figure had risen to 36 per cent. Companies employing more than 500 people were employing 43 per cent. of the work force in 1979, but by 1986 the figure had fallen to 29 per cent. That shows the way in which the economy has diversified and demonstrates the vibrant growth of small businesses. More evidence is provided by the VAT registration figures, which show a constant growth over the past decade in the number of businesses registered for VAT. Even in 1989, the number of registered businesses grew by 5 per cent.
  Mr. Allen: I thought that the theory was that the small businesses would proliferate and that some would be so successful that they would become big businesses. In that case, surely the figures for big business should be higher.
  Mr. Smith: Oh dear, oh dear, oh dear. There are many more small businesses than there were 10 years ago. Of course some will eventually become large businesses; many were formed relatively recently. The point is that, while in many constituencies—sadly—a large proportion of the work force used to be dependent on a single employer, there are now many employers. That must surely be more satisfactory from everyone's point of view.
  Mr. George J. Buckley: That is because some of the large companies have undertaken massive redundancy programmes owing to the current high interest rates.
  Mr. Smith: I accept that there were many redundancies in the early 1980s, because there was substantial overmanning in many large businesses. Since then, however, manufacturing industry has become much more productive and profitable. That is one of the reasons for the substantial growth in inward investment over the past 10 years. The United Kingdom is now an attractive investment target, because it offers a low-tax regime, a deregulated economy and good labour relations, which was not the case 11 years ago. As my hon. Friend the Member for Horsham (Sir P. Hordern) pointed out, overseas investment has also increased. After 30 or 40
  992
  years, the decline in Britain's share of world trade has finally been arrested. It has yet to begin to increase, but at least the decline has stopped.
  There are many reasons for all these changes. One is the improved quality and professionalism of management in British industry. That is partly due to investment in the universities in the 1960s. The fact that that investment resulted in economic fruition only in the 1980s, when managers in their late 30s and early 40s were starting to take over companies and run them much more professionally, is an indication of how long it takes for changes in education and training to feed through. [AN HON. MEMBER: "We had a Labour Government then."] It may have been Labour; it may have been Conservative. My point is that it takes a long time for us to benefit from investment in education. As a result of that investment, however, we now have much better marketing services, financial control and manufacturing systems.
  Another example of the success of the policies of the past 11 years is the growth in the venture capital industry, which barely existed 11 years ago. We have also seen the development of the unlisted securities market and the third market, and the encouragement of small companies on the stock exchange. In all those different respects, the economy is far stronger today than it was 11 years ago.
  The underlying strength of the economy meant that the measures that we introduced two years ago, including higher interest rates, took longer to work through than anyone forecast. It is true that the Treasury got its inflation forecast wrong, but so did all other economic forecasters. We had high interest rates for two years, but the economy refused to slow down. I believe that it took longer this time because the economy was so much stronger than it was before.
  We must not repeat the mistake of returning to a monetary policy that is too lax. We must continue with a firm monetary policy. The evidence is that it is now working. M0 is down and is within its target range. When the retail prices index falls, as it will on Friday, I hope that it will soon be possible to cut interest rates. I hope, too, that next year it will be possible for us to move to the narrow band within the exchange rate mechanism. I listened to what my right hon. Friend the Chancellor of the Exchequer said about the timing. He may be right. If, however, we are genuinely committed to the ERM, we should move to the narrow band at an early opportunity, to provide industry with the stability that it needs to plan ahead. It wants stable exchange rates. We should, therefore, move into the narrow band as soon as it makes sense to do so.
  Dr. Moonie: What evidence does the hon. Gentleman have that the narrow measure of money is an accurate reflection of what is going on in the economy?
  Mr. Smith: I should have thought that the amount of notes and coins was a primary indication of the amount of money that is available. I accept, however, that it is not the only one. I am not an economics expert; I am just a poor accountant. The hon. Gentleman ought to ask an economist, but I understand that M0 is the amount of notes and coins in the economy. That seems to me to be a good primary indication of the amount of money in circulation. I accept that we must also look at wider definitions, including the amount of credit. M0 is only one indicator, but it is one of the more credible indicators.
  Mr. Allenrose——
  Mr. Smith: I have not yet finished my speech. I sat down because I thought that the hon. Gentleman wanted to intervene.
  Mr. Allen: The hon. Gentleman has already had 10 minutes.
  Mr. Smith: The right hon. Member for Swansea, West took 26 minutes. The hon. Gentleman must be patient.
  As for our fiscal policy as we approach the Budget, the autumn statement suggests that there will be a public sector debt repayment this year of £3 billion. The Treasury's medium-term objective is to have a balanced Budget. As we are in a recession, it would be reasonable to aim for a balanced Budget next year. When it proves possible, I want income tax cuts to be made, but what is even more important is to find ways to encourage savings. The Prime Minister has placed great emphasis on the need to encourage savings in the 1990s if we are to fund the investment that is needed from domestic sources. I agree with him that we should endeavour to do that, if at all possible.
  The problem at present is that we do not have a level fiscal playing field; it is tilted sharply in favour of owner-occupied housing. Sooner or later, the House will have to address that problem. It is not an easy one to solve. We understand the political sensitivities of mortgage interest tax relief. The hon. Member for Nottingham, North has made his views clear on that subject. He believes that it should be abolished. We need to look at it again. It costs £7 billion a year. Capital gains tax relief amounts to another £7 billion a year. We must reconsider the way in which we tax housing and compare it with the way in which we tax production investment. We must encourage people to save more and try to encourage a savings culture. I hope that my right hon. Friend the Chancellor of the Exchequer will address that issue in his Budget.
  6.23 pm
  Mr. A. J. Beith: I congratulate the hon. Member for Paisley, South (Mr. McMaster) on his excellent maiden speech. I echo his words about his predecessor. He was a formidable fighter and a notable orator whose memory in the House will live for a very long time.
  I congratulate also the hon. Member for Paisley, North (Mrs. Adams) on her effective maiden speech. Apart from being a good speech, it was a courageous one. As she made it, it must have brought back many memories of her husband, whose loss we also lament. It cannot have been an easy speech for her to make. I congratulate her. Her speech suggested that she will be a worthy successor to her much-lamented husband. When she spoke of people leaving Paisley in search of work, she reminded me of my great-grandfather, who was a hand loom weaver in Paisley. He moved to Glasgow to find work when major industrial change put all the hand loom weavers out of business in the 19th century. Paisley has been losing people ever since, and it still happens.
  In his speech, the Chancellor of the Exchequer uttered some memorable phrases. One of them will join others in the annals of political slogans that people wish they had never invented. He referred to the "equal right to become unequal". I think that it will join "On your bike" as a phrase that Conservative strategists will wish they had not
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  been landed with. For most people, it is just the equal right to stay unequal. That is the experience of many of my constituents. The phrase will come back to haunt the Chancellor and other Conservative Ministers.
  I was also struck by the Chancellor's reference to people making their own way and breaking down the barriers between the workers and the bosses. He quoted the former Prime Minister, the right hon. Member for Finchley (Mrs. Thatcher). Her last wish was granted under the new Administration. The former Prime Minister's son, grandson and descendants for ever after will enter the social stakes with the advantage of a title to their name. The achievement of a classless society by a party that still sets great store by hereditary titles seems to me to be impossible. If one believes that people should have additional advantages at birth, through an hereditary title system, one cannot be committed to a classless society.
  One of the features of the Chancellor's speech and of the debate as a whole—which is, perhaps, a surprise—is that argument across the Chamber has ceased about whether there is a recession. It is now accepted in all parts of the House that there is a recession. The only argument is about how long it will last, how deep it will be and what is its cause. The recession may not last all that long, but I suspect that it will be a deeper recession than the Government believe. It could become very much worse if events in the Gulf take a serious turn for the worse. They could have a disastrous effect on both the world economy and the economy of this country.
  I believe that the recession will be quite deep. Companies now respond more quickly to recession than they did in the early 1980s. After the experience of the 1980s, they have shed labour quickly. We are therefore likely to see unemployment, even with the much-altered figures, rising rapidly as companies shed labour. I doubt whether they will ever again take on much of that labour. Employment replacement will depend almost entirely on the smaller business sector. That has important implications for Government policy, which they must begin to recognise.
  The most striking feature of this recession is that it need never have happened, at least on this scale. There is always a business cycle, with its tendency to go down as well as up, but I do not believe that we should be facing a recession of the scale now expected but for the Government's failure to control inflation.
  Why is there a recession? The immediate cause is high interest rates. The reason for high interest rates is the Government's failure to conquer inflation. They greatly worsened inflation by combining tax cuts with hasty credit liberalisation and general economic mismanagement. The Government greatly fuelled the inflationary fires and we are paying the price. They still have no long-term policy to drive inflation out of the system. Ministers even seem to be pleased at the prospect that both the headline and the underlying rate of inflation will be in the 5·5 to 6·5 per cent. range some time next year—perhaps towards the end of next year. I emphasise that the underlying rate of inflation will be at about that level. The two rates are likely more or less to converge.
  With rates of inflation at that level, I do not know how Ministers can speak with pleasure and satisfaction about them. If the Conservative party were in opposition, it would be deeply and bitterly critical of such levels of inflation.

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  The policies that the Labour party advocates in its motion are, in many respects, useful policies that will assist industry in seeking to get out of the recession. However, they all have an inflationary downside. It is not safe to put such policies into operation unless one also has long-term measures to tackle inflation. We need a firm anti-inflationary framework.
  I agree that it is desirable to stimulate investment in research and to increase spending on education and training. Indeed, I believe that spending on education and training cannot wait until we have the economic improvements to pay for it. That expenditure is the seedcorn which is necessary if we are to secure economic improvement. Therefore, if necessary, taxation might have to be increased so that we can make that education expenditure. The Labour party has tried to dodge that by saying that the majority of taxpayers will not face any increase at all and that only high-rate taxpayers and people on high incomes will face an increase in income tax.
  I am not sure that Labour would be able to deliver the increases in education and training expenditure that may prove necessary without tax increases. I hope that it will be possible to do so, but there is no certainty of that.
  Dr. Jeremy Bray: It is interesting to hear the hon. Gentleman speak on these matters. How quickly would he expect the effects of increased educational expenditure to come through in increased growth?
  Mr. Beith: They come through quite slowly. The hon. Member for Beaconsfield (Mr. Smith) pointed out earlier that the university expansion in the 1960s is only now beginning to work through our system. That strengthens the argument for increasing education expenditure early and for not saying that that is one of the many desirable things that will be done once we have sufficient economic growth to pay for it. Many improvements in social welfare and public service provision will probably have to wait for the economic improvements that will pay for them.
  My contention is that we must move ahead with the education and training improvements and with some of the transport improvements, including those relating to the channel tunnel link, if we are to bring about the economic growth we seek. As I have said, some of those policies have an inflationary downside, which is why we insist that they must be backed by an effective long-term anti-inflationary policy. We have set out our view in our amendment.
  The Prime Minister has claimed that he will make the battle against inflation his top priority. One of this first utterances on becoming Prime Minister was:
  "First and foremost, I loathe inflation".
  That phrase is similar to those that were used by his predecessor. The right hon. Member for Finchley was just as strong in her belief that inflation was evil and should be driven out of the system, but she failed miserably to conquer it. She went out of office with headline inflation at over 10 per cent. and with a high rate of underlying inflation. The Prime Minister will fail if he continues his opposition to the anti-inflationary policies that our competitors have used so successfully.
  We argue that, in order to have an anti-inflationary framework, we should seek membership of the narrow. band of the exchange rate mechanism so that there can be no doubt about our intentions towards our currency. Today, by saying that we would not join the narrow band,
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  the Chancellor sought to state that we are quite secure in our currency and that there is no danger of any revaluation. However, it takes more than a statement at the Dispatch Box to achieve that. The clear placing of the currency within the narrow band is a much more convincing statement about its future than anything that is said at the Dispatch Box, which can subsequently be overtaken by events.
  We also argue that progress towards a single currency is an important component of an anti-inflationary policy, as is central bank autonomy in respect of monetary policy, and the prudent use of fiscal policy, including levels of taxation, in order to regulate demand. Taxation increases may well become necessary at some point, not for public expenditure reasons, but to regulate demand. The Chancellor's failure to recognise the importance of tax policy in demand management is a mistake that he should not make, having observed what happened during the tenure of his right hon. Friend the Member for Blaby (Mr. Lawson), when tax reductions had a considerable effect on demand. They created expectations that people were free to borrow substantial amounts of money, and demand was greatly increased.
  I believe that the new Prime Minister intends to change the tone and style of the Government's approach on European matters. There is a reasonable prospect that he will have a successful visit to the Rome conference. It seems possible that the Prime Minister could achieve a new fudge—a new statement based on the hard ecu plan, which might be accepted as a basis for further discussion by our partners in the Community, and one which suggested that the plan could lead to a single currency. Our partners would then accept that our Prime Minister was acting in good faith in subscribing to a plan with that possible destination. There is a prospect of the right hon. Gentleman returning from Rome with an agreement between ourselves and our European partners that will make the conference look like a success.
  However, that is only the beginning. The Prime Minister must then face the Bruges group and his right hon. Friend the Chancellor, who appears to be in sympathy with the Bruges group. He will also have to face attacks from Conservative Members who do not want to have anything to do with a single currency or central bank independence. They want none of it. The issue of Europe will come back to haunt the Conservative party again and again.
  As I have said, I expect the Prime Minister to make some progress at the Rome conference, but why does he not take the opportunity to build in the anti-inflationary mechanisms that have been so successful in our partners' countries, which have a better inflation record than our own, and with whom we compete in trading terms?
  Mr. Tim Smith: Does the hon. Gentleman agree that the principal merit of the hard ecu proposal is that it is strongly anti-inflationary?
  Mr. Beith: Yes, but its principal demerit is that it is regarded by many people in most other countries as a confused and unlikely way to arrive at a single currency, which is their objective. They will want to see a plan that provides a clearer route to a single currency. The hard ecu plan has many other complications. It is not yet clear to me at what stage the hard ecu will be legal tender and when my

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  constituents can demand to be paid in it instead of in depreciating sterling pounds. That crucial issue needs to be resolved.
  However, because our partners in Europe are so keen to secure our participation, there is some prospect that a new fudged scheme will emerge from the Rome conference. What interests me, however, is whether we shall get the real advantages of a single currency and of an anti-inflationary mechanism within a reasonable period. I do not believe that the Prime Minister is in any position to do that. Many of those who helped to make him the leader of the Conservative party are determined that he will not do any of those things. I believe that that determination will become clearer and that the back-seat driver and others will make it clearer in the coming weeks. This is not an issue of a simple difference of view; it is an issue on which some Conservative Members obviously feel deeply. The former Prime Minister is one of them, and I do not believe that she will abandon those convictions for a moment.
  Mr. Martin M. Brandon-Bravo: Before the hon. Gentleman moves from the European part of his speech, will he explain how the phrase "central bank autonomy" in his party's amendment, which I assume means separate from Government, sits alongside the rest of the amendment, which refers to things that are clearly the responsibility of Government? How can those two things sit together?
  Mr. Beith: In just the same way as they sit together now in the Federal Republic of Germany, where the central bank has autonomous responsibility to maintain price stability and its monetary responsibilities are related to that maintenance of price stability. It still rests with Chancellor Kohl to make the decisions, which he has taken, about German unification and about progress towards a single currency. Sooner, or later, the Germans —and others in the Community—will want to make clear their view that they are not prepared to be part of any single currency scheme that does not have the principal attribute of the deutschmark at the moment—that of a non-inflationary currency, protected by a central bank, the prime responsibility of which is price stability.
  Our economic prospects will be a great deal better once we have sound money. Conservative Members' unwillingness to back sound money is one reason for their failure to sort out the problems of our economy. What worries me is that, by the middle of next year, the Government will want to claim, with some satisfaction, that they have achieved an underlying inflation rate of 5 or 6 per cent. —to refer to 5 per cent. is to be over-generous to the Government—and a place for Britain in the slow lane of Europe, with some possibility that we might eventually join the single currency. That is not a reasonable proposition to offer this country. The country deserves and can achieve much better than that, but it will require more radical policies than the Conservative and Labour parties are prepared to undertake.
  6.39 pm
  Mr. Peter Viggers: I am grateful for the opportunity to contribute to the debate because the speeches have been interesting and of high quality. Some
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  of my colleagues, although not trained as economists, have demonstrated the truth of a saying that sometimes comforts me: there are no good economists. Anyone who is sensible and understands money becomes a banker. However, I enjoyed my hon. Friends' contributions very much.
  I should like to single out three speeches, including the maiden speeches of the hon. Members for Paisley, North (Mrs. Adams) and for Paisley, South (Mr. McMaster), which were exceptionally good. They caught the ear of the House and we all look forward to hearing those Members again. If only, when I make my speeches, I could gather the sangfroid that they appeared to have, I should be grateful. I very much admired their speeches. The third speech which I should like to single out is that of the right hon. and learned Member for Monklands, East (Mr. Smith). It was interesting and amusing, as his speeches always are, but it could be characterised for its lack of content. It was extremely thin. I hope that the hon. Member for Derby, South (Mrs. Beckett) will answer some of the questions that were put to the Opposition. We want to know the Labour party's thoughts on matters such as credit controls which it has espoused in the past but upon which there has recently been deafening silence.
  Economics is more of an art than a science. Some commentators speak as though it is easy to handle the economy, but it is not. It is complicated and uncertain. Our market economy has served us exceptionally well. It is easy to compare it with the centralised, socialistic economies of eastern Europe and the bureaucratic economy of the Soviet Union. Even Albania is moving away from a centralised economy. I, for one, think that China cannot stand aside from this indefinitely.
  The market economy means that the Government's role is limited to ensuring that the market can operate freely and without hindrance. The Government's role is to promote free choice, to lessen controls and to ensure that any inhibitions on the market economy are diminished as much as possible. Of course, some elements of control are necessary, in exactly the same way as there is a need for a highway code and other regulations to explain and to control driving on roads. We cannot have people deciding where they want to drive on the road any more than we can have people deciding how to operate in the economy. Nevertheless, it is the job of the Government to lessen the effect of inhibitions on the economy if they can. That is why, as one of our first operations in government, Sir John Nott, the then Secretary of State for Trade, abolished exchange controls. We cannot have a market economy and total centralised control. Any commentator who thinks that the economy can be readily controlled, as if this were a centralised economy, is wrong.
  It follows that the weapons of control are necessarily blunt. That is why the Government's role should be to provide a framework within which the economy can operate successfully and then exercise that most difficult of all qualities of Ministers—reticence. That is what we have done since 1979, and the benefits have come in abundance. We have had extraordinary growth, with a growth average of rather more than 3 per cent. a year between 1981 and 1989. Productivity is well up. The profitability of companies is up. Last year, business start-ups were running at about 1,700 a week——s
  Dr. Moonie: Closures.
  Mr. Viggers: I heard the word "closures". This year, there will be a net increase in business start-ups. Some 67 per cent. of people now own their own home and prosperity has been widely shared. One reason why it has been possible for businesses to operate in such a successful environment is that the Government did not shrink from grasping the nettle of the problem of the overpowerful unions. One significant factor in the economy's success over the past 11 years has been the curtailment of union power.
  What would the Labour party do at present? I, too, studied the Labour party's motion. It calls on the Government
  "to lower the crippling level of interest rates".
  If there were a large reduction, it would be as inevitable as night follows day that the value of the pound would fall, the cost of imported component parts for industry would increase and inflation would be fuelled.
  The Labour party urges the Government
  "to reverse the cuts in public investment in training and support for industry".
  I support that call in respect of training but not in respect of support for industry. I submit, with deference, that if anyone in the House can claim to have some small knowledge of Government money being used to support industry, it is me, because for three years I was responsible for the economy of Northern Ireland. In 1986, I inherited an economy where the amount of money going into industry, especially to state-owned operations—Short's aircraft company and Harland and Wolff—was so great that latterly it seemed that we were subsidising those companies to the tune of about £15,000 per man per year simply so that they could stay in business. The more I saw of the business of those two companies, the more I realised that it was crucial that they should move from the public to the private sector, allowing normal private sector decisions to operate.
  Those transitions to the private sector have worked well. The quality of the management and men belied the lack of success of those companies. Of course there were bright, capable, hard-working people in the companies, but Government decision making and Government funding led to bad decisions all along the line and to senior management coming to my Department at the end of each year to explain how much extra money was needed to keep their companies in business.
  Mr. Stuart Randall: Is not the hon. Gentleman's line a little absolutist? I could quote a number of examples from my 25 years in business and industry showing where Government and public money was used effectively. The Scottish Development Agency has had terrific success in stimulating manufacturing industry, particularly high technology.
  Mr. Viggers: Of course I recognise that public money can be extremely useful in promoting industry, but it is available for support in industry in appropriate cases and in appropriate ways, particularly training—one aspect which I singled out and exempted from my criticism of the Labour party's motion.
  Labour's proposal is to put more money into support for industry and
  "to promote the modernisation of British industry through the application of new technologies".
  Surely that is what industry should be doing and exactly what the Government should not be doing. In my
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  experience, the Government are not well suited to making decisions about the modernisation of industry; I prefer to leave that to industry.
  Mr. Randall: The hon. Gentleman suggests that the two cannot operate together. Surely if this is done carefully and sensibly and the private and public sectors work together in certain parts of the economy, that can bring terrific results. By taking an absolutist view, the hon. Gentleman is brushing away one important area where the economy could be stimulated.
  Mr. Viggers: Of course, everything is not exactly black or white—there are shades of grey. Nevertheless, I would maintain the main thrust of my comments: when the Government approach industry and say, "We want to help you", that is when industry should worry. Industry should be the motor of development. I have been consistently disturbed to see the extent to which industry is quite good at reshaping itself to take advantage of Government grants and loans, ending up in a distortion of the judgments that should be made by industrial leaders. They should be taking decisions to make profits for their companies so that they can employ more people, produce more profits and export more. They should not always be looking over their shoulders to see how much Government grant they can get. I believe from my hands-on experience that Government funding can distort the fount of industry. That is why I oppose the Labour party's motion.
  Apart from the motion, we do not know what the Labour party has in mind. We do not know whether it supports credit controls. The hon. Member for Islington, South and Finsbury (Mr. Smith), who I believe is a Labour Front-Bench spokesman on Treasury matters, says that they "can be circumvented". The right hon. Member for Llanelli (Mr. Davies), who is a former Labour Treasury Minister, described credit controls as rubbish. The right hon. and learned Member for Monklands, East says that imposing credit controls will not be easy to achieve without exchange controls. I agree with that. Credit controls would be difficult to impose. They work only at the margins.
  Most people who wish to control credit home in on credit cards. According to the Central Statistical Office figures, credit card lending in 1989 was £7 billion whereas the amount of lending on property and property-related purchases was £255 billion. Credit cards are at the margins. Property and property-related financing is at the root of our present overheating.
  Economists talk about monetary aggregates. I prefer to think in terms of the property market and property borrowing getting out of hand. Clearly the right instrument to take to such frothy expansion in the property market is the weapon of high interest rates. There are signs that that weapon is working.
  Dr. Moonie: Does the hon. Gentleman believe in correcting the market distortion caused by tax relief on interest payments for house purchase?
  Mr. Viggers: My hon. Friend the Member for Beaconsfield (Mr. Smith) commented on that, and I do riot wholly demur from what he said. The amount of mortgage lending which is tax relieved is comparatively small and would not have much effect on the property market. We need a weapon which works on prices and the right weapon is interest rates.

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  Initially there was a shock as vendors ceased to put their properties on the market. Gradually prices came down and now we have a much sounder base. I know that business and industry are in great pain, but the fundamental underpinning of the market, which involves property values, is on a much sounder basis. Property prices are edging gradually upwards and the position is now sound. I expect the recession to bottom out in 1991 and growth to resume thereafter.
  I want to make sure that, as growth returns, more people can share in it by being shareholders. Privatisation has improved the position. I proudly declare an interest as the owner of 100 shares in London Electricity and 100 in Southern Electricity. Despite the criticisms, the price was right. It should be gauged on the full price of 240p per share. Anyone with any knowledge of funding and new issues knows that the line between success and massive oversubscription and failure is a narrow one. The issue has been a considerable success, which is nothing less than I would have expected from my right hon. Friend the Secretary of State for Energy whose skill in this and other matters is exceptional.
  We have attracted 5·7 million new shareholders through electricity privatisation, 4·5 million through gas privatisation, 5 million through the flotation of the Trustee Savings bank and 2·3 million through the privatisation of British Telecom. We now have 11 million shareholders. However, shareholdings run wide, but not deep. Of those 11 million shareholders, 6·5 million have shares in only one company and only a third of a million people have anything that could be described as a share portfolio. The result is that, whereas in 1975 40 per cent. of shares by value on the stock exchange were held by private shareholders, now only 20 per cent. are. That has an impact on the Treasury's approach to savings.
  Our savings ratio of gross domestic product is only 3 per cent. compared with 8 per cent. in France, Germany and the United States and 15 per cent. in Japan. I hope that the Treasury will do something to improve our savings ratio by improving the number of private shareholdings.
  I understand that there is a working party on savings within the Treasury. I hope that it will look at the cost of share transactions and the taxation of share profits. I should like to signal the idea that shares which have been held for more than one year should perhaps be exempt from capital gains tax. The amount yielded in that way is not much. I urge greater simplicity. Even personal equity plans and tax-exempt special savings accounts have their complications. I urge more use of the investment trust and unit trust vehicles and ask the Treasury to exempt them so that they, too, can be used within the PEP and TESSA structures. That is important because if more people can be encouraged to be shareholders, more would have a stake in the country. They would parallel the 67 per cent. who now own their own house. Stock exchange shares are a good investment. A £1,000 investment in 1980 would have increased to £4,000 by 1990, whereas the same sum invested in a building society would have increased to £2,200. I hope that the Treasury will encourage more people to become shareholders so that they can share in the prosperity which I am certain lies ahead with the Conservative Government.
  6.55 pm
  Mr. Jimmy Wray: I congratulate my hon. Friends the Members for Paisley, North (Mrs. Adams) and for Paisley, South (Mr. McMaster) on their eloquent speeches. I know how difficult it must have been for my hon. Friend the Member for Paisley, North, who has replaced her husband who had many friends here. The quality of their speeches will undoubtedly continue in the new year, and I thank them for that.
  Today we have heard the Conservative Government's jumble-sale economics. It is sad for me and my constituents that the Government believe that they are on the right road. They are on the road to ruin, and the nation knows it. They do not understand economics. Now that they have picked the new Errol Flynn of the Conservative party, the crown prince brings a new dawn. He does not understand. Before we are finished with him, he may not be too pleased that he accepted the job of Prime Minister; he will probably be happy to have his application for a job as a bus driver accepted.
  The Treasury record of this great man who has been appointed in the past two or three weeks is appalling. Since April, during his term there, 100,000 people have lost their jobs and some 22,500 businesses have gone down the drain. For three years he agreed to freeze family allowance to the poorest and most vulnerable people. That from the man who says that he believes in a classless society. If he does, he must understand about classlessness. He must possibly have read the dialectics of Karl Marx and Hegel. They might give him a wee bit more education on socialism and classlessness. He must also have read "Wages, Price and Profit". Yet it is obvious that neither he nor his party is aware of the seriousness of following their present course.
  Some 22,000 homes have been repossessed because the Government have brought the economy to the sorry state that it is in today. Think of the thousands of people who have suffered because of the Government's mistakes. This year, 95,000 people are more than six months in arrears with their mortgage payments. The rest have had their houses repossessed. That is the kind of caring compassionate Government we have. It would be better for this country if we got rid of them. They have brought, and will continue to bring, nothing but disaster.
  The Government say that we are in recession, while some say that we are moving on. How can we move on with a trade deficit of £16·9 billion? How can we move on when inflation, which was 5·3 per cent. when the Prime Minister was at the Treasury, has risen now to 11 per cent.? Do the Government realise that people have no jobs and no future while they are sitting in wine bars and opera houses? That is the kind of society they want. There is nothing in Pandora's box for the poor. We want to change all that. We want to rid this country of the kind of policies that the Government have produced.
  The Chancellor of the Exchequer said nothing about the reality of the economics. He said that manufacturing industry is booming. When the Government took over in 1979, there were 7·2 million employees in manufacturing. There are now 5·2 million. If manufacturing industry is booming, as the Government claim, what happened to the other 2 million employees? What happened to the investment? Investment in manufacturing industry has

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  dropped by 7·5 per cent. this year. Textile workers have been hit hardest. There were 450,000 textile workers in 1979, but 25,000 jobs have been lost.
  The trade unionists know what the Government are up to. They know that you have sold off the country's assets. They know that you are getting ready to do a deal in the GATT negotiations in July to clear up the problem. If the Government break the multi-fibre arrangement, another 100,000 people in the textile industry will be forced on to the dole. You do not realise what you are doing.
  You sit there and talk about——
  Madam Deputy Speaker (Miss Betty Boothroyd): Order. I know that the hon. Gentleman respects the Chair, and I am sure that he will make his remarks through it.
  Mr. Wray: Thank you very much for reminding me.
  Madam Deputy Speaker: I know that the hon. Gentleman gets carried away, but he must respect the Chair and make his remarks through the Chair.
  Mr. Wray: The Government said that there was no slump and that things are booming. The construction industry training board had to fork out £1·25 million from its reserves to provide training opportunities for young school leavers who could not get sponsors. The industry is short of 2,000 trained skilled workers. If we have to build an economy, we obviously have to train the men and women to build it.
  We are on a downward slope. We have heard all kinds of promises from the Government. They promised that interest rates would come down, but they have risen from 8 per cent. to 15 per cent. They have gone through the roof. The property market has slumped after people had to pay £70,000 or £80,000 for a property. That is the reality of this Conservative Government and their policies. That is what we must change.
  The Government want to know what the Labour Government will do. We will take back the assets that this Government took from the working class people of this country. We will show the Government what compassion is. We will give the poor some of the coppers that the Government put in their own chalices.
  My constituency has one of the worst unemployment rates in Britain. Some 18·6 per cent. of my constituents claim unemployment benefit. We have to understand what unemployment means to the four or five people in a family who are on the dole. It means poverty and sickness. Not very long ago, soup kitchens were being opened in my constituency because the social security office closed down.
  People in work today should help those who have no jobs. They are only a job away from social security, and the people on social security are only a Giro away from starvation. More than 5,000 people are unemployed in my constituency. There has always been a recession in my constituency. There has been no change. We know all the ins and outs of social security.
  It is bad enough to have to live and work in a constituency that is rife with poverty, but this gang brought out the Social Security Act 1989, which was intended to jackboot the working class and the unemployed. As a result of that Act, when people go to collect their dole money, they act like beggars. They have to prove that they are looking for jobs when there are no real jobs to be found. However, there are plenty of cheap
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  jobs with low pay. Claimants have to satisfy the adjudication officer, and that has led to a drop of 40 per cent. in the number of claimants.
  We should not be kidded by the Prime Minister's compassion. He has condoned the nation's poverty. He will not bring prosperity to the people of Britain; he will bring doom. They might have changed the jockey, but they have not changed the horse, and the horse is running in the same direction. It is time that we exposed the Vincent Price of politics. He will be feasting like a vulture on the weakness of working men and women. That is the kind of politics espoused by the Prime Minister and his gang of thieves.
  Several Hon. Members rose——
  Mr. Wray: No, I have not finished. I was simply pausing. I have sat here for five hours, and I sat in the Chamber for eight and a half hours one day last week without being called to speak. Mr. Speaker patted me on the back yesterday and told me that I would be called today. He knows that his eye has not been in my favour for some time and I hope to catch his eye again after Christmas.
  A Conservative Member referred earlier to the community charge. The Government know that that is their death knell. We may be witnessing the last ever Conservative Government. Every elector in the country knows that the poll tax is unjust and unfair. Is it not sad that the Government have allowed £3 billion for the review of the community charge? Do they know what is happening in Scotland?
  Mr. McAllion: No.
  Mr. Wray: Well, perhaps I can give them some of the statistics. In 1989, 14·7 per cent. of the community charge in Scotland remained uncollected. In Strathclyde, one of the biggest regions in Scotland, the figure was 17·4 per cent. Scottish authorities have had to find £47 million to keep services going. In December 1990, 59·2 per cent. of the community charge bills has still to be collected. That is not the result of a massive non-payment campaign. It stems from the fact that people are finding things difficult. The Government introduced the community charge and they have broken up families throughout Britain.
  The Government are not going to change their policies. Of the £623 million that presently remains to be collected in Scotland, £289 million is owed in Strathclyde and that represents 63 per cent. of the total. That is the economics as far as local authorities are concerned. We must not forget that, in the 1970s, we were paying 75 per cent. to central Government.
  Conservative Members talk about democracy and accountability. There is no accountability or democracy, because, almost pound for pound, the burden has been transferred back from central Government to local authorities. The Government are finding it very difficult. They are cutting housing grants and everything else they can cut to make life hard for the poor and luxurious for themselves. That is what they believe in. Today, the Chancellor said that there is an equal right to become unequal. That was a poor statement. The former Chancellor did a better job.
  The Government are now asking us for advice. They have been in government for 11 years and they are asking us to get them out of the poll tax mess. What happened in

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  1801 will happen again—the people marched in, dragged the Government out, and strung them up by the neck for implementing the poll tax. The Government will certainly need to abolish the poll tax. They know that it is unjust. The Layfield committee, which was set up to inquire into local government finances, told the Government that it would be difficult to implement the poll tax.
  Hon. Members are waiting to speak. They have been sitting here for five hours, just as I had to. The Government and the Prime Minister are not kidding the poor. We will jackboot them, just as they jackboot us. It is time that the Government called a general election so that we can find out who is right and who is wrong.
  7.11 pm
  Mr. Richard Page: I shall certainly not try to join the hon. Member for Glasgow, Provan (Mr. Wray) in his vehement style and uproar against the inflation rate of 11 per cent. If I were to do so, I would have to become hysterical about the 26 per cent. inflation rate that the Labour Government inflicted on the country when I originally came to the House. I shall start my remarks with a much more pleasurable task, which is to add my thanks and appreciation to the hon. Members for Paisley, North (Mrs. Adams) and for Paisley, South (Mr. McMaster). All hon. Members remember their maiden speeches, and the hon. Members for Paisley, North and for Paisley, South will remember theirs with pride, in particular the hon. Member for Paisley, North, who made an excellent speech in what must have been difficult personal circumstances. They are both to be congratulated.
  If we had the procedure that applies in the United States Congress, I would read into the record a speech that I made in July last year which expressed some concern about our manufacturing base and our balance of trade. I would repeat the conversation that I had with the then Chancellor in 1988, which in turn would repeat the conversations that I had with the then Chancellor back in 1987 which covered my concern about the size of our manufacturing base and its effect on our balance of trade. In 1987, I was reassured by my right hon. Friend the Member for Blaby (Mr. Lawson), in his individual style, that I had very little to worry about. As the years went by, I found that his reassurances were becoming a little more hesitant. I share the view of the right hon. Member for Swansea, West (Mr. Williams) that we could be entering a stop-go cycle. That would be particularly damaging.
  Undoubtedly, interest rates will come down as inflation comes down, but I want to make sure that our manufacturing base is able to take advantage of the upturn and not again start seeing foreign goods being sucked into our economy and once more back on the merry-go-round of stop-go. As a percentage of gross national product, our manufacturing investment is the lowest of the G7 countries. Is it a coincidence that the Japanese figure is 50 per cent. above the average of the other G7 members, bearing in mind Japan's balance of trade surplus and low inflation and interest rates? Manufacturing investment in this country has increased over the years, and that is to be welcomed, but it is now starting to tail off. In real terms, we have managed to reach the levels that were achieved in 1979.
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  On research and development, there is a somewhat similar picture. Those who are putting effort into research and development are doing quite well, especially the chemical and pharmaceutical industries. As a percentage of gross national product, our Government's research and development matches that of our major competitors. However, of the 0·7 per cent. of our gross national product, the majority is targeted at one aspect—defence activities. Again we must ask whether it is a coincidence that we have done so well in defence exports. The reason for it is that effort and expertise have been utilised.
  Reductions in manufacturing investment and research and development lead me to the one point that worries me most, and that is the short-term attitude that seems to exist in many of our companies. We hear much talk about creating a level playing field. Japan and Germany have low interest rates, low inflation and low balance of trade surpluses. We would have difficulty in saying to them, "We want a level playing field. We want you to follow what we are doing." We do not have a level playing field. It is a battle field. If we can get it tilted in our favour, so much the better.
  Japanese and German companies are able to take long-term investment decisions without fearing that a predator will take them over. They can accept PE ratios that just cannot be accepted in our market today. Who can recall the takeover of a Japanese company or a hostile takeover of a German company? If we examine the way in which their financial institutions invest in companies, we can see why they can offer security for the future. It is because there is close involvement. The continual pressure for higher and higher dividends to make sure that the pension funds or financial institutions keep away predators makes it exceedingly difficult for companies to adopt a long-term strategy for survival.
  It was interesting that, during Back-Bench committee hearings earlier this year, two captains of industry, both duly dubbed for their services, spoke to us within a week of each other. The first agreed with the scenario that I am painting, but the second disagreed. I noted with a degree of irony that within two weeks of the meeting the second captain of industry was fighting like mad to hold back a predator who felt that, unbundled, the company in question would be more profitable.
  We have a peculiar habit of treating the matter as though it were a game, whereas it should be recognised for what it is—a battle. I learnt a long time ago that a JCB could dig a trench quicker than a man with a shovel. We need manufacturing investment and research and development if we are stay ahead. Investment must take place if we are to increase the 22 or 23 per cent. GNP from our manufacturing base to 30 per cent. Again—coincidence or not—Germany and Japan manufacturing are giving greater percentages to their gross national product than ours. Is it a coincidence that the figure in Germany is about 30 per cent. and that in Japan it is 29 per cent.?
  Let us see what practical things we can do. I do not want the Government to start trying to pick winners. My hon. Friend the Member for Gosport (Mr. Viggers) spoke eloquently about money going into industries. That is just the same as pouring it down the drain. I can remember the National Enterprise Board. The Government went out to pick winners, and that cost us millions of pounds.
  We should try to ring-fence manufacturing investment and research and development so that it is not squeezed

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  out by dividends. In Germany the financial institutions hold so much equity that companies must be persuaded to pay dividends. If they do not pay them, they must pay corporation tax in excess of 50 per cent., but if they do the corporation tax drops down to about 35 per cent. We must encourage greater investment on the part of companies in manufacturing and research and development if we are to compete with our foreign competitors.
  Our foreign competitors give much more support to aid and trade provisions. When Treasury Ministers consider such provisions, they should ignore the applications before them and ask to see the details relating to additionality. Revealing studies by some of our companies have shown the number of further contracts and follow-up work that has resulted from initial orders to justify the initial support. It is important to consider such additional business.
  How has Germany achieved its economic miracle? It is largely due to the establishment of a series of business organisations—in particular, the German association of chambers of industry and commerce, known as DIHT. There are about 69 chambers in western Germany and they are responsible for the firms that produce about two thirds of Germany's gross national product. They work with 53 overseas chambers and together they represent 35,000 firms that account for two thirds of the German GNP. Membership of the chambers is compulsory, but that organisation is independent and gives a clear direction to the German Government on future policy. When we realise how well Germany is going in comparison to us, we would be stupid if we did not learn something from its practices.
  Germany is a successful competitor because those chambers also provide counsel on training and skills. We are starting to learn from Germany in that respect, and I congratulate the Government on their efforts in training. The Government have done a marvellous job by setting up the training and enterprise council system. I am pleased to note that all 82 of the employer-led training councils will be up and running next year and that they will receive as much as 50 per cent. of the Department of Employment's budget. That money will give those councils greater flexibility and freedom to produce a supply of trained, skilled people.
  Mention has already been made about how long it takes for someone to receive training. We must get away from the clockwork mouse syndrome. When a person leaves school, he is wound up with one piece of training for life and off he goes. We must recognise that that person might have three or four careers before retiring. We must ensure that flexible training is available to enable people to adapt to new careers as circumstances change.
  I hope that TECs do not lose sight of small firms that are unable to spare management to become involved in the councils' activities. We must ensure that those small firms are not swept aside in the general programme.
  The Government are absolutely right to drive down inflation, for if we do not conquer that we have nothing. I am worried, however, that once that is achieved British industry will be unable to take advantage. The Government must address that problem, otherwise we might end up with a stop-go cycle that will benefit no one.
  7.23 pm
  Mr. William McKelvey: In common with all hon. Members who heard my hon. Friends the Members for Paisley, North (Mrs. Adams) and for Paisley, South (Mr. McMaster), I could not fail but to be moved by the sincerity and passion of their speeches. I hope that they retain that passion over the years. Sad to say, some of us have lost it, though not, of course, my hon. Friend the Member for Glasgow, Provan (Mr. Wray) who made a most passionate speech.
  The Labour Benches are well attended by those of us who represent Scotland. I hope that the House will not mind if I refer to the transformation in the Scottish economy that has taken place, rather than macro-economic conditions as they affect Great Britain.
  I always like to remind people that I came to the House in 1979—the year that the right hon. Member for Finchley (Mrs. Thatcher) was elected as Prime Minister. The decline that has been suffered in Kilmarnock since then has had more to do with the former Prime Minister than with the fact that I was elected to represent that constituency. So far, my constituents have believed that, and I do not believe that anything that has been said tonight will cause them to change their minds.
  In the past 10 years the Scottish economy has transformed dramatically. No one would deny that, in the past, Scotland relied far too heavily on heavy, primary manufacturing industries. The changeover from those industries, however, has been dramatic and almost unbelievable.
  Today, we are down to our last deep coal mine—I do not mean just in Ayrshire and the Kilmarnock district, but in the whole of Scotland. Ayrshire used to be famous for its mines and miners, but I do not believe that there is one working miner left in that county. I would not weep over the demise of the mining industry—that would keep men from digging in the bowels of the earth—if there had been alternative industrial employment. Sadly, because of their age, the vast majority of miners are unemployable. Now that they no longer even appear as part of the unemployment statistics, they have simply disappeared.
  We are down to our last two shipyards in Scotland. Scotland was once the pride of the world for shipbuilding. Recently I visited Yarrows and I was extremely impressed at the skill and modernisation that has taken place there. Without doubt it is the most modern yard of its type in Europe, but, because of a lack of orders, 600 redundancies are imminent. If some of the orders in the pipeline do not materialise within the next 12 months, upwards of 1,200 redundancies will be issued from that ultra-modern shipyard.
  My hon. Friend the Member for Paisley, South referred to the closure of Howdens, which was considered the creme de la creme of machine shops. It was opened with great pride and ceremony by the former Prime Minister to prove that Scotland had reasserted its competitiveness in world markets. That company has now gone. In a week it vanished off the face of the earth. We cannot help wondering what is in it for us in this new industrial era when the finest machine shop in Europe, if not the world, has closed. Its closure was not due to any lack of skill or ingenuity on the part of the work force or the local management. Unfortunately, that company was part of a multinational enterprise which does not consider the morality of its decision to dispose of a plant on site. It does

  1009
  not consider what will happen to those people who have served that industry so well. There is not another steelworks in the world that has shown as much capacity to increase productivity as Ravenscraig. Unfortunately, it is to be disposed of.
  The hon. Member for Hertfordshire, South-West (Mr. Page) asked whether there had ever been an example of a British industry taking over a foreign one. British Steel has taken over a German steel plant instead of investing adequately in plant in Scotland so that we could produce steel there. That can be put down to the malevolence of only one man—the chairman of British Steel, Bob Scholey, who warned the Select Committee six years ago that the Government had intervened against his wishes and that he would overturn their intervention at the first opportunity. So British Steel's decision had nothing to do with markets or profitability. It had to do with one man destroying an industry in Scotland. Scotland will not forgive him for that; neither will it forgive the Scottish Ministers who stood by wringing their hands and allowing it to happen.
  Mr. Page: I do not want to disagree with the hon. Gentleman, but just for the record I referred to a takeover of a Japanese company and a hostile takeover of a German one. I fully accept that British Steel took over the German company, but that was with the willing support of the Germans.
  Mr. McKelvey: It may have been with the agreement of the German Government, but I doubt whether the German workers willingly agreed to it. If British Steel pays the same wages in Germany as it pays here, the Germans may not be so happy about being taken over in the end.
  The economy of Scotland, which was heavily dependent on industry, has been turned over. Like many hon. Members, I can offer a catalogue of disasters in my constituency. They are well documented, but it is perhaps worth repeating that we have lost major industries. The problem began with the decline and demise of Massey Ferguson, not because we could not produce the goods but because it was part of a multinational firm that believed that it could strike a better deal with France, so 1,800 jobs were wiped out in a week. It has already been said that small areas that depend on large firms can be devastated when those firms are removed. My constituency was certainly devastated by losing 1,800 jobs in three months.
  The catalogue does not end there. Shanks and Company, which manufactured domestic sinks and baths, was bought out by Blue Circle. The Monopolies and Mergers Commission cleared the deal and said that it would be great for everyone, but one year later Blue Circle closed the company with the loss of 280 workers, who were thrown on the dole heap. Many of them were over 45 and are no longer recorded on the unemployment register, although they certainly do not have jobs in the Kilmarnock area.
  BMK, a world-famous name in carpet manufacture, once employed 1,600 workers. It now employs about 230. I am grateful that we managed to save that industry. Mr. Logue, the man who bought it and who is now successfully finding overseas markets, demanded that the workers pay a price in return for saving their jobs. They were all sacked and brought back on new contracts, with smaller wages and worse working conditions. The pensions and holidays
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  that they once enjoyed were demolished. Their company was bought for a song on the backs of the workers and we should never forget that.
  Despite this catalogue of industrial disasters, the extraordinary thing is that the economy in Kilmarnock picked up and was turned around. Even old-established firms such as the world famous Andrew Barclay locomotive manufacturing firm managed to turn around its economy because it invested in new machinery and training to produce the new locomotives needed for today. I was glad to hear the recent announcement that the firm —now part of Hunslett Barclay—won the Birmingham order for £82 million worth of new trains. The part of the order that will come to Kilmarnock will double the work force there in a matter of a year. All credit for that goes to Hunslett Barclay in Kilmarnock because it invested £4 million in new equipment and factory space to take on the order.
  My constituency also boasts one of the safest industries in Scotland—the whisky bottling plant at Johnnie Walker, to which I am eternally grateful. The name Kilmarnock is printed on every bottle that goes out. Travelling the world I have found that no one has ever heard of Kilmarnock but every one has heard of Johnnie Walker, so I can make myself understood. The company has gone from strength to strength in an industry of which Scotland should be proud, because we have given the Chancellor countless millions of pounds in excise duties and billions of pounds in export revenues. We should all be glad that the new exclusive brands are bringing in much more money to Kilmarnock.
  The depression is already starting to be felt in the south-east. I take no joy in telling Conservative Members that they have never known what unemployment might be like in their constituencies, or that their constituents have never known it. It is starting to bite now. I do not sympathise with Conservative Members, because the Conservative Government brought about the problem about which they are now complaining, but I have the greatest sympathy for workers who may find themselves without jobs in these difficult times. I do not know whether they will finish up in the same state as workers in the north, whom my hon. Friend the Member for Provan described. He said that many of our workers in Scotland have had to accept much lower wages than are paid in the south. Whereas in 1980 Scottish workers earned almost 99 per cent. of average pay in the south—this may be a reason why we have reversed the trend in the Scottish economy —male Scottish earnings are now below 93 per cent. of average United Kingdom earnings. Being prepared to accept lower wages perhaps means that we can still attract companies to invest in Scotland. It might even be argued that if we worked for nothing we would get all the investment that we needed—although British Steel would probably still not invest in Scotland.
  Unemployment in Scotland is lower than it has been for some years. It reached its peak in 1987 and then started to fall. We are all glad of that, even though the figures have been doctored.
  The textiles industry continues to decline, although it is extremely important to the Scottish economy. Textiles are usually produced in small firms spread among small villages and towns. Often, as in Kilmarnock and Loudoun and especially in the Irvine Valley, these firms are the only source of employment. If we cannot keep the multi-fibre arrangement going for a long time to come, we shall at a

  1011
  stroke destroy the only livelihood of the people who work in these areas. Surprisingly, about 27 per cent. of workers in the Ayrshire area now depend on textiles for their employment. If we cannot extend the operation of the multi-fibre arrangement, we will wipe out not only those jobs but the whole economy of these extremely small but important areas.
  Also important to the Scottish economy is the small farmer and especially the small hill farmer. I read with dismay that the Minister responsible for Scottish agriculture feels that small farmers are protesting too loudly about their possible demise. Many of them will go out of business because of the drastic reduction in their income this year. If the Government's attitude continues we shall return to lobby the Minister and he will face another demonstration such as the one that he saw recently when farmers came down to let the Government know about their precise difficulties.
  The transformation of the Scottish economy has been a credit to management and workers who have accepted the kind of changes that were demanded. There have been extraordinary examples of workers and management working together to dispose of many of the old and outdated barriers that were between them and to create a partnership of success. As some hon. Members have said, many more companies now have a smaller number of production workers. It is important to listen to those people when they say that the recession is beginning to bite.
  I am not an economist. The hon. Member for Beaconsfield (Mr. Smith) said that he was merely an accountant and not an economist. I doubt whether economics is in any way a science. I am a mere engineer, but I know that interest rates have had a dramatic effect on opportunities for small Scottish businesses. Those who have small businesses and those who hope to have them say that while the present level of interest rates remains there is no possibility of investing in new or updated plant and thus remaining or becoming uncompetitive. There must be an immediate cut in interest rates before the recession deepens.
  The people of Scotland are usually tested as guinea pigs. We were the first to have the obnoxious, unwanted and unwarranted poll tax. The Under-Secretary of State for Scotland, the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton), has just entered the Chamber. That is excellent, because he can tell his colleagues that, whatever deal is done on the transformation of the poll tax—we hope that it will be abolished—and whatever arrangement is made to give rebates to people from whom money has been extracted, the Chancellor of the Exchequer should remember that the people of Scotland suffered this tax a year before anybody else. As a former trade union negotiator, I ask the Chancellor to ensure that when a settlement is reached the poor, hapless Scots get a year's back money.
  7.43 pm
  Miss Emma Nicholson: I listened with care and thoughtfulness to the many excellent speeches, and in particular to the maiden speeches by the hon. Members for Paisley, North (Mrs. Adams) and for Paisley, South (Mr. McMaster), who have since left the Chamber. I add my tribute to the many that they have already earned from hon. Members.
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  I listened with care to the speech by the hon. Member for Glasgow, Provan (Mr. Wray). He made a thoughtful contribution about the difficulties facing his constituency. We all share his anguish about the high level of unemployment in his area. We wish that the jobs that he seeks for his constituents were immediately available. Despite listening carefully to the hon. Gentleman and to other Scottish Opposition Members, however, I still believe most sincerely and firmly, and with good evidence, that Government should allow business to operate freely.
  The evidence of the years since the war is that Government manipulation and intervention creates distortions, postpones trouble and smudges decisions. At the risk of being as parochial as some Scottish Members, I must tell the House that British Shipbuilders in my constituency was running at a large loss until it was privatised. Now that the company is privatised as Appledore Shipbuilders and free of Government intervention, distortions and the smudging of decision making, it is operating at a profit.
  It is not the task of Government to find jobs. It is the task of industry to create work and of people in those industries to make the jobs and invent the tasks that have to be carried out to fit the customer's needs. Perhaps I may tease Scottish Opposition Members even more by saying that the quality of life in Edinburgh tops the poll for the whole United Kingdom. The quality of life in Scotland as a whole, buttressed as it is by much Government intervention, is to be applauded.
  The competitive position of Britain depends on businesses, which must seek the opportunities of 1992. Governments inevitably make mistakes but, fundamentally, Conservative policies are proven to be the best way forward and give the best framework for business and the economy. Eastern Europe alone confirms that socialism has lost. The command economy has gone. We have seen the end of Marxism and Leninism as theories of history and of economic muddle. We have seen an end to the division of Germany and the end of the Soviet empire in Europe and the Russian empire in the Soviet Union. We have seen the end of the homogenisation of the media.
  All those successes are the successes of Europe as a whole and, in particular, of the political and economic policies of the United Kingdom. The United Kingdom must not lose confidence in its own efforts and fall prey to siren voices. We must not wait for the answers to be provided by someone else, by Government intervention and distortion. Such a course would drop us back into a sorry muddle and would be a return to the lack of vigour which has been too much of this country's history since the war.
  Our essential aim must be to see that the policies and structures that we adopt enable our citizens to hold their own in global competition with the United States and Japan. To do that we must play a constructive part in the European debate, certainly focusing first on United Kingdom interests, but accepting that those interests will be best served by a vital, economic and energetic Europe in which we respect one another.
  The motion exemplifies the muddled views and interventionist and manipulative policies that brought us to our knees a decade or more ago under a socialist Government. I often wonder at the continuing inaccuracy of Opposition thinking across the board. Despite the courteous words of the hon. Member for Kilmarnock and Loudoun (Mr. McKelvey) about hill farmers, the Labour

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  Front-Bench spokesman attacked farmers and said that they were too greedy. In that industry, incomes lag 30 per cent. behind the general development of the economy in Europe as a whole. The latest OECD report states that the same food package costs 25 per cent. less in Europe than in the United States of America, and that in the United Kingdom it costs 10 per cent. less again. Farming is a manufacturing industry, and one that is hugely successful. We have created a problem not of shortage but of surplus under Conservative and European policies.
  Information technology, in which I have some expertise, is a vast success. I criticise deeply and accurately that part of the motion that calls upon the Government
  "to promote the modernisation of British industry through the application of new technologies".
  Where have the Opposition been living in the past decade? The information technology world has had a growth rate of 20 per cent. compound in the past 19 years. It has had no recession since 1971, which was a year of plateau, and the current nosedive is created only by the delay in orders.
  Mr. John Garrett: Why is it that Britain suffers a £.1·5 billion deficit in overseas trade in information technology equipment?
  Miss Nicholson: I shall come on to that point in a moment, as I develop my thinking on information technology.
  The Government, as an employer, leads the way in the IT world. We are negating this part of the motion, because we are computerising rapidly. Almost every Government Department one cares to name, from the health service onwards, is developing the use of modern technological equipment.
  I said earlier that the delay in orders is responsible for the downturn in information technology. For example, military ovespend has meant that the new budget has been delayed until March of next year, and that is a large chunk of the information technology budget in both software and hardware. There is lagging in the City and a gradual lessening of business confidence, a trend that we need to turn round. The publication this week of the Massachusetts Institute of Technology report demonstr-ates the causal link between computerisation of business and the rise in profit.
  Therefore, I am in no doubt that, once business confidence has been restored, computerised planning and the putting in of new systems in the wake of the findings of that splendid report, which contains much new thinking, will mark the beginning of an upward surge in the computer industry.
  However, the very speed of growth in the information technology industry has meant some bad management of change and some implementation of bad systems. Here, I move on to training standards and the growing need for the heightening of them. Certification and common standards are crucial to the next stage of growth. That is an important international sector as well. I see the Government's task as setting the standards to which the industry must respond. Incidentally, we have only a 10 per cent. skills shortage in the United Kingdom, and that has come from the personal computer explosion, which requires a network of skills different from the earlier cluster required. Again, that is a problem of success.
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  We are now starting to achieve and certificate standards of competence through industry training investment, with Government assistance. Although I have the figures here, I shall not bore the House with them. Today, I was giving out the first ever computing practitioner awards. They have been planned since 1984, which shows how slow it is to get correct, agreed standards and certification. All the awards went to graduates, although they need not have done, and were given in conjunction with the National Council for Vocational Qualifications. This is in line with the Government's wish to have an employer-led national framework for all vocational training, which will encourage the orderly recruitment, training and certification of the United Kingdom work force. Last month saw the publication of a feasibility study into an industry training organisation for information technology, which I believe will lead the way.
  The Labour party thinks that the answer to education is to intervene and restrict freedom of choice and, failing other ideas, to throw money at difficult problems. Its solutions often make things worse, as happened in the 1970s. The figures show that the Government have a long-term commitment to education and training, whereas the Labour party has too often thought of education as social engineering, and failed to put the education of each child or young person at the centre of its policies.
  The Government are halting the decline of educational standards brought about by Labour policies—policies that militated against competition and choice. I see Labour Members shaking their heads, but I have only to point out that the Labour party has adopted as its policy disestablishment of the training education councils that we have set up and that are industry-led. The information technology training councils are even more important in this sector. That is nothing more than a destructive move, and one based on ideas that have in the past led to the formation of a highly regulated, low-aspiring comprehensive environment.
  The Opposition cannot get away with implying that the Government lack commitment to education and training. More money can always be used, but it has to be spent wisely and effectively. The Government are strenuously tackling the fundamental issues, which are standards in both expectations and performance. Here, I urge the Government to encourage and use even more effort to ensure competition and choice. I stress competition, because I do not believe that ownership is the key to a free market. That is why I am not concerned that Japan is to buy a large share of ICL. One of our great weaknesses, and one of the reasons why we have not been competing effectively internationally in information technology, is that we need the sharpening of competition. Competition, not ownership, lies behind the concept of the free market. I should like the Government to use even more effort to ensure competition and choice in education—by, for example, the opting out of schools.
  I reject the motion and warmly support the Government's amendment, because I strenuously believe that the free market philosophy, properly applied, is the only way forward for the United Kingdom. I urge my right hon. and hon. Friends to oppose the motion and to support the Government's amendment.
  7.57 pm
  Mr. John McAllion: I join other hon. Members in congratulating my hon. Friends the Members for Paisley, North (Mrs. Adams) and for Paisley, South (Mr. McMaster). Their speeches were not only intelligent and effective but showed the passion and independence that make them worthy successors to those who served in their constituencies before them. If I have any wish for them, it is that in the years ahead the qualities that they have brought to the House will be used to change the House rather than that the dead hand of the House changes those qualities. That happens to far too many hon. Members. They become transformed and accept that reality is what happens inside the Chamber rather than outside in the world of our constituents, who do not have the opportunity to come here to speak for themselves.
  The hon. Member for Torridge and Devon, West (Miss Nicholson) said that the quality of life in Scotland., and particularly in Edinburgh, was high and that this could be attributed to the Government's policies. She would have a hard time convincing the 10,000 homeless youngsters in Scotland or the 300,000 unemployed in Scotland that the quality of life is high there. She would have an even harder time convincing the 1 million-plus of Scots who live in poverty and on benefits and in damp and decaying housing that the quality of life in Scotland is high. I could take the hon. Lady to parts of Dundee and to parts of other cities in Scotland where the quality of life borders on that of people in the third world.
  Direct responsibility for those conditions lies not with those who live in our cities but with the Government, whose policies over the past 11 years have deepened the economic recession and exacerbated poverty not only in Scotland but in the north of England, in Wales and in the heart of London itself. The Government have created two societies—a rich society and a poor society. The only sector of society for which they have shown any concern is the sector that has done well in the past 11 years. They have turned their heads away from the poverty that blights far too many millions of our people.
  Miss Emma Nicholson: Just for the record, I took those figures from a national survey; they are not politically inspired. I would also point out that the quality of life in the north-east has been transformed under this Government.
  Mr. McAllion: The hon. Lady has been out of the Chamber for the past few minutes. She has missed most of the points that I have made and I, therefore, propose to continue with my speech.
  As the debate has shown, the deepening economic recession is not a figment of the Opposition's fevered imagination. It is now accepted as reality by many Conservative Members. The Chancellor himself used the memorable phrase to describe the recession, referring to it as "a marked slowdown". I am not sure that the Chancellor knows whether that slowdown is relatively shallow or relatively short or, indeed, exactly what "slowdown" means. But when a Tory Chancellor admits to a slowdown, we know that a real recession is taking place in the country at large.
  Last month, when the Secretary of State for Scotland announced a small drop in unemployment in Scotland, he warned that rising unemployment in Scotland could not be ruled out as the economy slowed in the years ahead. He
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  knew very well that the recession that had already begun south of the border would soon spread north of it. Cabinet Ministers know much more about recessions than Labour Members. For a start, they have been responsible for far more of them than we have. They also have access to information to which we are not privy.
  I have no doubt that, when the Secretary of State for Scotland spoke last month about rising unemployment, he already had access to information revealed today concerning British Rail's rail freight distribution division's decision to close down the speedlink service in Scotland from July next year. That will be a body blow to jobs and to the environment in Scotland. It is yet another crippling setback to Scotland's attempts to create transport links with Europe on the eve of the completion of the single integrated market. Given those circumstances, it is disgraceful that we should have had to wait four and a half hours for Scottish Office Ministers to appear. I can well understand why they have not been prepared to listen to the debate. No doubt they cannot even begin to defend the policies that have allowed such a catastrophic decision to be made. No doubt they will be here for a few brief minutes and will disappear again having made no contribution to the debate.
  Just as disgraceful is the fact that the new Secretary of State for Transport, who had five years' experience as Secretary of State for Scotland—who knows our problems and understands the significance of the withdrawal of the speedlink service from Scotland—has not considered it worth his while to attend the debate or to justify his lack of activity and intervention which have allowed British Rail to go ahead and make the decision.
  Let me concentrate on my area—Dundee and the north-east of Scotland. In recent years, we have had to face a catalogue of damaging decisions about our rail infrastructure. The first was the decision to close down the freightliner depots at Aberdeen and Dundee. Then came the decision not to electrify the east coast line north of Edinburgh, followed by the decision that our rail services should be fobbed off with second-best sprinters while investment in high-speed electrification elsewhere in the United Kingdom continued. We are now expected to bite the bullet and accept the closure of the speedlink services.
  Given that Scotland is on the periphery of Europe and that the north-east of Scotland is on the periphery of Scotland, the decision will be a hammer blow to our economic prospects. Business and commerce in my area will now effectively be cut off from the European network and from enjoying access to European markets on the same basis as their competitors. We have been asked to settle for second best. We have had to settle for a promise that there will be an international freight depot somewhere deep in the heart of central Scotland—probably at Motherwell but in any case somewhere that is unconnected to the north-east of Scotland by rail freight links.
  We must contrast that depressing scenario with the approaches of other European Governments and countries. France, for example, has recently decided to invest a further 100 million in its high-speed rail network, on top of the thousands of millions of pounds that it has already invested. France gets thousands of millions of pounds' worth of additional investment while the north-east of Scotland faces yet more cuts in investment in its railway infrastructure. How are we supposed to compete in the integrated market? How are we supposed. to fight our way out of the coming recession on the basis

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  of less investment and of infrastructure projects inferior to those elsewhere in Europe? The excuse trotted out for the closure by British Rail's rail freight distribution division is that half the volume and two thirds of the value of the freight traffic travelling on the speedlink service will now be transferred to other trains and services. That kind of argument may wash in the midlands where there are other services; it will not wash in the more remote parts of Scotland where there are no other services to which to transfer freight traffic.
  The freight traffic in Scotland will have to be transferred to our roads, with serious implications for economic efficiency and growth in Scotland—especially for what Ministers like to refer to as "green growth". It has been calculated that the closure of the speedlink services will cause an additional 300,000 additional lorry movements on Scotland's roads every year. The lorries will be carrying chemicals, timber, fertilisers and other agricultural products. All of them will be spouting carbon emissions and they will make roads such as the A77 and the A9 even more dangerous than they are now. Will Scottish Office Ministers take this opportunity to tell us whether the possibility of an increased death toll on our roads ever figures in their calculations of economic efficiency and in their efforts to secure economic growth in Scotland? That is one of the realities that they will have to face. More people will die, there will be more pollution and Scotland will be less efficient as a result of the decision that the Government have allowed to go ahead.
  The speedlink decision is even more depressing when one remembers that only last week the Secretary of State for Scotland came to the Dispatch Box and announced a £9 million cut in funding for Scotland's roads. It is an old story but it is worth remembering that, on his first day as Secretary of State for Transport, the right hon. and learned Member for Edinburgh, Pentlands (Mr. Rifkind) received more money than he was given to spend on Scottish roads in five years as Secretary of State for Scotland. He received £1 billion to create a 10-lane super highway to replace the M25. He never had anything like that amount to spend on Scotland's roads. I know that my hon. Friend the Member for Kilmarnock and Loudoun (Mr. McKelvey) and others will support me in my argument because they have campaigned for a long time for investment in the A77 and other roads in Scotland. The Government have persistently denied us that investment, yet here they are ready to spend much more money in the south because that is where they think most of the votes are.
  The danger to Scotland's rail network goes even deeper than that. A succession of Ministers in both the old and the new Administration have washed their hands of British Steel's decision to push ahead with the closure of the Scottish steel industry. That will push 20,000 people into unemployment. A minimum of £200 million will be sucked out of the Scottish economy every year. Half the freight traffic and revenue generated by Ravenscraig and the steel industry will also be lost. As we know from today's speedlink decision, where business is lost, where profits disappear and where prospects for privatisation diminish on that scale, the service or industry concerned will quickly be lost as well. Scotland faces the prospect not only of the crushing loss of its steel industry but of the closure soon
  1018
  afterwards of its whole freight rail network which will not be economically viable after the closure of the Scottish steel industry.
  How can we rise to the challenge of the single market when we shall be disadvantaged not only compared with other European countries—all of which invest heavily in their transport infrastructure—but compared with other parts of the United Kingdom where freight services will survive, where electrification and investment will continue and where there will be a direct rail link with the rest of Europe? Scotland will have no such link, so how can it be expected to compete in the face of such a calamity?
  As has already been said, this Government are one of the most profligate in recent history. They have received £80 billion in North sea oil revenues and many billions more from the proceeds of privatisation, but they have wasted almost all of that in private tax cuts in lining the pockets of the already rich. The Chancellor used one of his memorable phrases to describe the process—he called it the equal right to be unequal. That is exactly what the Government have been relentlessly pursuing. [Interruption.] Hon. Members may shake their heads; I also shook my head when I heard the Chancellor use that phrase, but that is what he said. To put it in simpler terms, it means the right of the rich to become richer and the right of the poor to be made poorer. That is what the Government have been about since they took office.
  During the 1980s, the rich have had the party; in the 1990s, the poor will have to pick up the tab for that. The infrastructure has been neglected, the welfare state has been starved of investment and the American experience under Reagan—public squalor and private affluence at one and the same time—is being repeated in this country. That record is not good enough and the Government's time is up. Indeed, it was up a long time ago, and it was only because circumstances and luck combined that they were not defeated in 1983 and 1987.
  It is time for a new era in British politics. It is time for decision making to be taken away from the House, because the House is largely unaccountable to most of the United Kingdom. In current circumstances, it is accountable only to the south-east and to nowhere else in this so-called United Kingdom.
  It is time for a new political and constitutional settlement that will give Scotland a home-rule Parliament which can take charge of Scottish domestic affairs, including large parts of the Scottish economy. It is also time for the Welsh people to have the right to decide for themselves how they want their local economy to be run. It is time for the regions of England to be given powerful regional assemblies, so that they can regenerate the economies on which their people depend. For that to happen, there needs to be a Labour Government, and for that to happen, there needs to be a general election.
  The Prime Minister and the present Cabinet were never elected to their offices and they have no right to hold office simply because of an internal Conservative party coup. That is no basis on which to rule a democratic society. They are living on borrowed time and sooner or later they will have to face the people of this country, who will then have a say in who should be placed in authority over them. I hope that it is sooner rather than later, because the sooner the Government go to the country, the sooner they will be defeated, the sooner there will be a Labour Government, and the sooner we can begin the fight back out of recession.
  8.13 pm
  Mr. Martin M. Brandon-Bravo: I join hon. Members on both sides of the House in paying tribute to the two new Members of Parliament who made their maiden speeches tonight, the hon. Members for Paisley, North (Mrs. Adams) and for Paisley, South (Mr. McMaster). The hon. Lady's speech had an enviable fluency and content, and I have no doubt that she will make a major contribution to the House in coming years.
  Every hon. Member who has spoken, with the exception of the two Front-Bench spokesmen, has distanced himself from the label "economist". I have no intention of seeking to compete with the professional financiers and those with degrees in economics. I speak as one of the few hon. Members—sadly, all too few—who are genuine manufacturers. One or two Scottish Labour Members have made an issue of manufacturing. My industry was textiles. Of course, that industry covers a multitude of sins. I survived in it for 30 years before coming to this House, 20 of them as production director and the last five as managing director of a company that I joined as a young man. Some may dispute this, but I venture to suggest that anyone who has survived for that long in textiles—the mass production end to boot—knows what recession, hard times and tough trading conditions are all about. No one in this House can give me a lesson on that.
  I do not dispute that times are tough; it would be foolish to paint a different picture. However, I would not call it a recession in the sense that I understand the word. Technically, Britain may well have met the criteria that qualify it for that sad label, but I have seen much worse and with less good cause. It has righted itself before and it will do so again, provided that those with a vested interest and a compulsive attraction to failure are not allowed to talk the country into a problem that I believe is short term, that is viewed by much of industry as short term, and that, with a little thought and care, will be proved to be short term.
  I accept that the current retail figures, which show a 1 per cent. drop probably—perhaps certainly—mean minus 20 per cent. for some industries and plus 19 per cent. for others. Of course, for industries on the wrong end at minus 20 per cent., it is painful and it probably means a recession, but only in that industry. Aggregate figures always cover a multitude of gains and losses. I accept that there is a problem for the domestic construction industry and related industries such as furnishings and fittings, but the figures do not show an overall recession. It will get worse, or fail quickly to right itself, only if the doom and gloom voices on the Opposition Benches are allowed to peddle their miserable wares.
  I cannot deny that unemployment is rising, nor that there is an increase in company failures. However, those are more than offset by the number of start-up businesses, even in these difficult times. I am less than impressed by the claims of a lack of investment—a line that the Labour party has peddled for the eight years that I have been in this place. It has not been true at any period during those years, and it probably is not true now. Provided that a company is well managed and is not foolishly or wantonly overstretched, I know of no real investment decisions that have been scrapped simply because interest rates are two or three points higher than they were when that investment was initiated and evaluated. If the viability of an
  1020
  investment was that tight, it was probably a bad or the wrong investment. If it was viable only with a Government grant, other than in very special circumstances we are entitled to question why the investment was made. I accept that investment, especially in a small company, may be delayed by the cash position of a company or by its ability to fund the necessary borrowing.
  The ability to fund borrowing is the one issue that I want to address. Just as my experience gave me a feel for the limit to which any company should go without putting its existence at risk, so too must Britain and the Government have the will, skill and confidence to do what can safely be done—no more and no less—even if at the time it is less than popular.
  Like most hon. Members, I regularly visit industrial companies in my area of Nottingham. There is no doubt that the small companies are watching the pennies, and they are right to do so. The small regular plant replacement is being delayed—not cancelled—just as a sensible precaution to ensure that cash and interest are within a small company's ability.
  But the bigger companies—certainly the ones that. I have visited—have confidence. They are using the present tightness to strike good deals on major investment, and they will be there to take full advantage of the upturn when it comes. That confidence is well illustrated by the upbeat face of Nottingham and the east midland region, which has been the pattern during the past five or six years.
  But our industrialists would not dream of following the airy-fairy approach of the Opposition, who in the latter part of their motion talk of Government spending untold billions on tired old socialist schemes, presumably to put our future in hock once again with borrowed money.
  The Opposition, according to the motion, deplore Government policy. Let us look at one particular aspect. When the Government took over the shambles left by the socialist planners, the largest item of Government expenditure was not on health, education or defence, but interest—just interest on old debt. As my hon. Friend the Member for Horsham (Sir P. Hordern) said, it was then around 15 per cent. of the budget that the Government took over in 1979. Before the Chancellor could spend 1p on real public services, that debt interest had first to be paid. Then the old nationalised industries wanted their subsidies before any of the desired items on the list today even got a look in. That figure is now down to 5 per cent. —a massive reduction in the slice of cake that now goes on debt interest, a position which is envied in many countries.
  The Opposition will no doubt argue that we could and should run a higher debt ratio. I disagree. I made two trips abroad during the summer recess. I was with an all-party group who visited America.
  Mr. Oppenheim: Who paid?
  Mr. Brandon-Bravo: The Americans paid for the air tickets. We were part of the Anglo-American all-party group.
  We were there at the height of the political row over the United States federal budget. I recounted to my host the financial position that I have just outlined. His reaction was one of disbelief. I was asked what I thought the burden on the federal budget was, even without the current argument. To cut a long story short——
  Mr. George Foulkes: Thank God for that.
  Mr. Brandon-Bravo: The hon. Member for the Falklands and Jersey has only just come in and it would be helpful if he either left or joined in sensibly—preferably left.
  To cut a long story short, 35 per cent. of the American federal budget goes on funding old debt. It was my turn to express disbelief. The question of what would happen if nobody wanted to fund that debt went unanswered.
  I know that the American economy is a world apart from our own, but the concept of that level of debt confirmed my view that short-term pain was worth it if Britain avoided that slippery road back into debt—the kind of debt that we inherited in 1979.
  Shortly after, I joined another group visiting Australia. This time it was the Commonwealth Parliamentary Association, so the Australians were paying. In the state of Victoria the local joke was, "What's the capital of Victoria? No, not Melbourne; one dollar." That resource-rich state is now running a debt that takes 22 per cent. of the state's budget; it is socialist controlled. If Opposition Members think that 22 per cent. of anyone's budget going just on interest is funny, heaven help Britain if they were ever on the Government Benches.
  When we moved on to Canberra and asked about federal debt, we were told that that had risen to 18 per cent. That, too, is the result of a Labour Government and socialist thinking.
  I am not an economist—
  Mr. Foulkes: That is obvious.
  Mr. Brandon Bravo: —but I can recognise financial incontinence when I see it, even verbal incontinence, so ably demonstrated by the hon. Member for Carrick and wherever.
  I hope that those countries, for our sake and for their own people's sake, get their house in order and back on the rails. But it is the kind of road that I know the Government would never go along. We do not have the almost unlimited natural resources of those two countries, and that may be why they have let matters go that far. What we do have are our energies, our enterprise and our understanding of financial discipline—and understanding that may quietly be recognised by the shadow Chancellor, but not by the noisy Members behind him whom he would never be able to restrain if he ever had that responsibility.
  Interest rates will fall when that is prudent, and trade will pick up as families' disposable incomes ease as mortgage payments fall in cash terms and as a portion of the family income. Better a little caution now than tears later.
  8.27 pm
  Mr. John Garrett: I, too, offer my congratulations to the hon. Members for Paisley, North (Mrs. Adams) and for Paisley, South (Mr. McMaster) on their maiden speeches. Their predecessors were good parliamentarians. The previous hon. Member for Paisley, South was one of my best friends in the House or, for that matter, anywhere, and he will be much missed. Both the new hon. Members are worthy successors.
  The Treasury forecast for the United Kingdom economy for the next 18 months shows a shallow recession and output growth resuming about the middle of next year. We heard that repeated today, although every time it is repeated it seems to be with somewhat less confidence.
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  During a session of the Treasury and Civil Service Select Committee and again today I asked the Chancellor what action he would take, if the recession were deeper and longer, as seems likely, to get us out of it. On both occasions I was not favoured with an answer, so perhaps whoever replies to the debate will have a shot at it for me.
  We have heard that the reason for a recovery next mid-year or earlier will be a fall in inflation and the end of the current reduction in stock holding by industry. Industry will gain confidence early next year and rebuild its inventories, as it ought to at that stage of the cycle anyway, and as industry builds inventories, positive gross domestic product growth will resume.
  The firms that are going out of business will not be rebuilding their stocks in the middle of next year, and plenty of them are going out of business. It is not at all clear why, with interest rates as they are, inventory rebuilding on a scale to take us out of a recession would take place at all. In other words, we get the rediscovery of the business cycle, and the business cycle taking care of itself. We are on automatic pilot. It is Adam Smith's hidden hand come back to take us out of a recession.
  It is, however, difficult to share the Treasury's view of the depth of the recession which—as everyone now admits —we are already suffering. Real gross domestic product fell by 1 per cent. between the second and third quarters of 1990, and it is extremely likely to have fallen further between the third and fourth quarters. That is the definition of a recession: falling GDP in two successive quarters. We are told that it is the American definition. The Chancellor has described it simply as a rough time for industry, but in anyone's language that still amounts to a recession.
  Non-oil output fell by 0·3 per cent. between the second and third quarters of this year. Even worse, all the most sensitive indicators of upcoming changes in the economy fell during the third quarter, and those that we have continue to fall during the fourth. That applies across the board: it applies to indicators of demand, such as the retail sales index, indicators of supply, such as the manufactur-ing output index and indicators relating to confidence, such as the CBI's business confidence survey.
  The CBI forecast a much deeper recession than the Treasury. The CBI's figures show a decline of 1 per cent. in next year's GDP and a fall in investment of over 6 per cent., while the Treasury's show only a 2 per cent. fall in investment. Yet the CBI's figures are based on a direct survey of investment intentions in industry. There seems to be little justification for the belief in a self-reversing recession, and all the indicators suggest that this recession will be much deeper than the Treasury originally forecast, especially in the next two quarters.
  There are several reasons for that. First, real disposable income is falling sharply, which has resulted in a deceleration of retail sales volume and consumer spending. Secondly, the economy can no longer rely on buoyant exports to counteract the effect of depressed domestic sales, because the United States economy is in recession —as is much of Europe, apart from Germany—and there has been virtually no growth in our exports since the early part of the year. Most significantly, however, companies are now reacting to the financial squeeze by cutting spending, and there has been a wave of redundancies across East Anglia, part of which I represent.

  1023
  The new small firms in the south and east are the most vulnerable to recession, because they are so under-capitalised and have so few means of borrowing. Retail and construction firms—major employers and sources of economic development in those parts of the country—are particularly hard hit; the construction industry has virtually come to a full stop. It looks as though unemployment will rise, and by more than the Treasury's forecast. I expect it to rise by about half a million in the early part of next year.
  We should bear it in mind that we are now supposed to be enjoying a "soft landing"—a fall in inflation and in our trade deficit, without a recession. Yet the forecast deficit on current account for 1991 of £11 billion—or 2 per cent. of GDP—constitutes no great fall in a recession year and suggests that the landing is likely to consist of a substantial impact with the runway. Manufacturing output, which was considered to be the key to the achievement of the "soft landing", has now been falling for five successive months.
  What about the human side? Looking back on the past decade of economic management, The Guardian told us on 5 December:
  "Most people have more income at the end of the Thatcher years. Mr. and Mrs. Average are 23 per cent. better off. The rich are even more better off. But the income of the people at the bottom—the poorest 10 per cent.—has stood still ….
  A 45-year-old trend has been reversed: their share of the national income has shrunk. And the group just above them is suffering too. Inequalities within the working population have spread to their widest point since records began in 1986."
  On top of all that they have suffered in the past decade, the recession has hit the pensioners and the low paid hardest. Whatever the Government are remembered for, they will not be remembered for economic competence and their period of office is ending in a deep recession causing widespread hardship.
  When we find our way out of the recession, where will our future growth come from? We now spend 3·9 per cent. of GDP on education, as against 4·5 per cent. in 1979. French, German and Japanese companies invest 2 per cent. of their turnover in training; British companies invest 0·15 per cent. While 85 per cent. of young Germans receive post-school training and education, one third of our young people do.
  In a recession, a sensible Government would be expected to invest for the upturn. Recession gives us the opportunity at least to start to bring our training up to European standards. The present Government, however, continue constantly to cut the investment in human capital that is required if we are to be a successful, competitive nation. We are not investing in our human capital, and we shall pay a heavy price for that.
  8.35 pm
  Mr. Phillip Oppenheim: It has been said —I forget exactly by whom—that, if we had entered the exchange rate mechanism in 1985, we would not now be suffering inflation and all would be well. It is worth pointing out that neither Japan nor Switzerland has been part of any sort of fixed-currency system, yet both have managed to keep inflation very low. It is also worth reminding those who express that view that it was the very fact that we were shadowing the deutschmark in May 1988—a policy that was, supposedly, a precursor of ERM entry —that caused us to cut interest rates at a crucial time, which cranked up the money supply precisely when what
  1024
  we really needed was a rise in those rates. At the time, the former Prime Minister argued strongly against interest cuts, but effectively gave way to her Chancellor, who insisted on making the cuts to shadow the deutschmark.
  The real problem of inflation has nothing to do with whether we were members of the ERM—not that I am against our membership; the real problem is that, in the mid and late 1980s, our money supply took off to a degree that the Government should not have allowed. In the mid 1980s, our money supply growth was no less than three times that of France. Therein lies something of an irony: the supposedly socialist President Mitterrand turned out to be far more of a monetarist than our own Prime Minister. It was tight monetary policy in countries such as France that caused them to experience lower inflation than we are experiencing now—along with much higher unemployment, however. Opposition Members should remember that.
  Let me also remind Opposition Members that their part in this sorry saga of money supply growth was not exactly a happy one. Virtually at every instance they were urging us to cut interest rates. If we had followed their advice on every occasion, inflation would be very much worse than it is.
  The real problem is that, for many years, our economy has been skewed far too much towards consumption. As a result, when we inflate the economy, too much of the money goes into consumption rather than production. It is, I think, increasingly recognised that one of the ways in which we can break out of that cycle of over-consumption is to boost savings. A country with a high savings ratio will tend to have a larger pool of capital available for industry, which will allow industry to look more to the long term. Supposedly our industry's outlook is at present too short term. There are many simplistic remedies, but I believe that a higher savings ratio is one of the valid ones.
  Another advantage of that is that it tends to bear down on inflation. For some 130 years, Japan's policy has been to allow its citizens substantial tax-free savings accounts. The Japanese post office is now the largest savings institution in the world. Until recently every Japanese person was allowed to have a post office savings account completely tax free, to the tune of £20,000 a year. The Japanese equivalent of the Inland Revenue was not allowed to investigate any of the accounts. Therefore, the Japanese post office ended up with more savings accounts than there were Japanese citizens. The Japanese Government recognised the value of pushing up the savings rate in the economy.
  Although we seem to have grasped that lesson, we still have a long way to go. I warmly welcome the fact that the former Chancellor of the Exchequer, now the Prime Minister, introduced TESSAs in the last Budget. However, as with the PEPs, they are a little complicated. They ought to be regarded just as a beginning. We must allow people to save, simply and efficiently, a substantial proportion of their capital tax free.
  Although the Opposition sometimes pay lip service to the need to boost savings, their record when in government was not promising. They harmed savers by having significant negative interest rates. Therefore, anyone who saved money in a building society or bank lost out, compared with the rate of inflation. The Labour Government also cranked up taxes at all levels, especially for wealthy people who sometimes are able to save a lot of money. They imposed all kinds of penal tax surcharges. In

  1025
  effect, that meant that it was far better for wealthy people to spend their money than to save it. I hope that the Opposition have learnt that lesson.
  A lesson that the Opposition have not learnt is that simplistic interventionist strategies do not work. In his speech the shadow Chancellor of the Exchequer trotted out today the old line that all we need is what he called an industrial strategy. That has been tried before. How can the Opposition forget the sorry medley of companies and industries in the 1950s, the 1960s and the 1970s that were interfered and meddled with by politicians and subsidised in such a way that the economy was hopelessly distorted. It led to the productive and efficient sectors of our economy being drained of capital. One only has to look at the mess made by politicians and bureaucrats of our car and motor cycle industries and the power generation industry, particularly nuclear power generation. Billions of pounds and huge resources in terms of skilled men and scientists were poured into those industries.
  Moreover, huge sums of money were wasted in investment in the steel industry. Decisions were made not with a view to arriving at the best commercial result, but on the basis of political expediency. Labour Governments were not the only ones to blame. One of the worst decisions ever made was by the Macmillan Government. They forced a private sector steel company to split its investment in a steel plant between Wales and Scotland. The investment was therefore far less efficient than it would otherwise have been. The steelworks at Ravenscraig were sited some way from deep-water ports and a very long way from the main markets. Politically inspired interference in industry has always been, and will always be, a complete disaster.
  One reason, I believe, why the Opposition stick with their interventionist strategy is because they have completely misread the Japanese experience. It is far too easy for people to make simple excuses for Japan's success. One excuse is based on an all-powerful and all-seeing Ministry of International Trade and Industry that subsidises selected industries and surreptitiously pulls the strings of Japanese industry. But for many decades Government subsidies to Japanese industries—whether they be general subsidies or specific subsidies for research and development—have been far lower than those in the United States, Europe or Britain.
  Two examples that are most frequently trotted out are the Japanese semi-conductor and computer industries. The subsidies that they received were minuscule compared with the overall investment that was made in those industries. They were also minuscule compared with the huge subsidies that we poured into companies such as ICL, that the Germans poured into Siemens and that the French poured into their computer national champion, Bull. They are minuscule too compared with the huge indirect subsidies that the American Government gave to their computer companies through tied defence contracts and other forms of indirect Government subsidy.
  Mr. John Garrett: Was not the way in which until recently the Japanese Government protected their domestic industry from imports interventionist?
  Mr. Oppenheim: I was coming to that later, but I will answer briefly now. It has been far too easy for western
  1026
  industrialists to excuse their failure to penetrate the Japanese market by saying that everything is unfair because the Japanese subsidise their industries and MITI controls everything. There has also been a significant element of exaggeration when it comes to Japanese trade barriers. Many western companies have succeeded in the Japanese market during the last 20 years. If one asked business men and women such as Michael Perry of Unilever, who worked for a long time in Japan, they would say that more often than not trade barriers were given as an excuse for the failure of western business men to penetrate the Japanese market effectively. If the Japanese market is so protected, why is it that the Americans manage to sell more to Japan than they sell to Germany, France and Italy put together? We are the guilty party when it comes to trade barriers. Only a very few items in Europe or America are not now subject to some form of trade barrier.
  The reasons for Japan's success have nothing to do with protectionism—which is not significantly worse than, and in recent years has been better than, the protectionism in the west—or with subsidies. All the World bank and Organisation for European Co-operation and Development reports show that Japan's subsidies to industry are significantly lower than ours. The reasons for the strength and vitality of the Japanese economy are more complex. One reason is that the Japanese economy is more geared towards production than ours. That is due in part to the high savings ratio. It facilitates investment and long-termism by industry.
  Japan's education system is also rigorously geared towards the needs of industry. It produces highly literate people. Japanese schoolchildren also almost always come top when international comparisons are made of achievements in mathematics and science. It is not a narrow education. The Japanese education system produces people with wide interests. There are cultured products of that system. However, the Japanese are not ashamed or afraid to gear their education system to the needs of industry. They believe that the first responsibility of education is to enable people to earn their living.
  It is fashionable for the Opposition now to say how important education is. I am glad that they have learnt that lesson. However, in areas where Labour controls the metropolitan and county councils and, therefore, the local education authorities, there is no evidence that Labour is making any effort to produce recruits for industry of the sort that industry needs.
  Is is also worth remembering that until recently the Japanese spent far less per pupil than we do, yet they still produced better results. Just to pour money into education is not the answer. We must gear our education far more towards science, literacy and the other things that we need if we are to earn our way in the world.
  Mr. Brandon-Bravo: To illustrate the point that my hon. Friend has just made, when the polytechnics were given their independence in April of this year they were no longer suffocated by the socialist control of our county council, with the result that a group of business men got together and our big polytechnic received £4 million of commercial money. The ethos that my hon. Friend has described in Japan is now possible in this country. That is possible only because we have given the polytechnics their independence; they are no longer under socialist control.
  Mr. Oppenheim: My hon. Friend has made his point well.
  I must not venture too far into education matters, for reasons that some of my hon. Friends understand. However, we on this side of the House know that we still have a long way to go if we are to improve our education system. It is a pity that the education reforms that we introduced in 1987 were not introduced much earlier during the period when my right hon. Friend the Member for Finchley (Mrs. Thatcher) was Prime Minister. If one reads books such as Corelli Barnett's "Audit of War", it is depressing to realise how long the lead time is in education. One can change the education system, but the benefits may not come through for another 10 or 20 years.
  One other reason why the Japanese have been successful is that the Japanese Government have been low spenders. They have not followed the policy that we in Britain and other western countries have followed of spending money that we cannot afford. Many people recognise that, although the things on which the British Government spent money in the 1950s, 1960s and 1970s may have been worthwhile in principle, the real question is whether the economy could afford it. If the economy cannot afford such expenditure, the productive side of the economy will be drained of capital, and that is what we have done. On the other hand, the Japanese have spent strictly within their means and have maintained tight control of their public spending.
  Another reason why the Japanese have been successful is that they have encouraged and inculcated pro-business attitudes. Opposition Members often criticise the performance of British industry and blame it on the Government, saying that we should be more pro-manufacturing. However, almost every successful business man or woman is derided by Opposition Members who do not seem able to come to terms with the fact that people who are successful in business make money. All too often "profit" is still considered to be a dirty word by Opposition Members.
  Part of the interventionist industrial strategy solution is that the state should fund more research and development. I urge hon. Members to consider that proposition more carefully. There is no point in pouring either private or public sector money into R and D if the economy is not capable of turning that R and D into saleable products. We have been through all this before. This country has spent billions of pounds subsidising R and D, and not only in the military sector. I agree with my hon. Friend the Member for Hertfordshire, South-West (Mr. Page) that R and D is skewed far too much towards the military sector of the economy. However, we have also spent R and D money on projects such as Concorde and System X, which have not been saleable products in world markets.
  Until relatively recently the Japanese spent very little on research and development. They concentrated on buying licences from the west, on improving western technology, producing it efficiently and marketing it effectively. It is worth remembering that this country is still a net exporter of licences while the Japanese are still net importers of licences. Something must be wrong, and I do not think that it is R and D itself. We must accept that we must make our production efficient and get our marketing right. Then when we get back into the ranks of being a leading economy, more money can flow into R and D. If anything, we have put too many resources into R and D and we have
  1028
  not seen the benefits because we have not been able to exploit the products in terms of production and marketing as well as other countries.
  Mr. Page: Surely the problem is the different culture in the two economies. I agree with my hon. Friend that the Governments of both Japan and the United Kingdom give about 0·7 per cent. of their gross national product to research and development. However, the figure for Japanese industry is 2·2 per cent., whereas in Britain it is only 1·5 per cent. That means that the Japanese are spending between 45 and 50 per cent. more on R and D.
  Mr. Oppenheim: My point is that that is a recent development. Until recently the Japanese spent far less on R and D, but now that Japan is the leading economy it spends more on R and D—for there is less technology to buy in the world market—[Interruption.] It is a case not of pinching but of buying in the technology. There is no harm in companies buying in licences. If more of our companies abandoned their "not made here" attitude and were prepared to buy in licences and to concentrate on improving those products, our economy might be more successful.
  The Dutch electronics company Philips is a good example because no one can accuse that company of not spending money on R and D. Its R and D is excellent, but the company is in deep trouble. By contrast, for many years, Matsushita, the Japanese consumer electronics conglomerate, has bought in thousands of licences and has concentrated on improving those products, with the result that it is the world market leader in consumer electronics.
  Philips is also a good example of how an industrial strategy can fail. No consumer electronics company in history has received more in subsidies from both the Dutch Government and the European Community than has Philips. No company has been more protected against takeovers and more protected by trade barriers, but Philips is still in the most appalling mess. The fact that the company has been protected against foreign competition must have some bearing on that, which brings me to my final point relating to trade.
  Everyone is aware that the GATT talks are in crisis and that it was the attempt to include agriculture that led to the crisis. Most hon. Members will agree that the attempt to include agriculture, textiles, intellectual property and services in GATT is a positive move. However, that has tended to divert attention from a dangerous development in world trade. I refer to the growth of what are sometimes called "grey area" protectionist measures. They include unofficial or semi-official import quotas, which are sometimes laughably called "voluntary restraint agreements" or "voluntary export restraints". Those measures also include provisions which appear fair on the surface, such as anti-dumping duties, but which, because of the way in which European Community and American anti-dumping legislation is drawn up, result in huge dumping margins and huge penalties being imposed on East Asian manufacturers, even when they have not been dumping.
  Few people realise the extent to which this has been going on. In America and Europe in the past 20 years, literally hundreds of product areas have been covered by quotas and import duties of one sort or another, or by anti-dumping duties. Almost everything is now covered,

  1029
  from cars to steel, and from semi-conductors through to video recorders. Hardly a product is now not covered by some European Community protectionist measure.
  As the case of Philips shows, not only does such protectionism not do industry very much good because it compounds inefficiency by reducing competition, but it also imposes significant burdens on consumers. The National Consumer Council recently estimated that, because of protectionist barriers to protect Philips and Thompson in Europe, British consumers pay 25 per cent. more for their video recorders than they need to do. However, it is not only the end consumer who suffers; industry itself suffers. The price of steel in Europe is 10 per cent. higher than the world price because of the trade barriers against non-EC steel. That impairs the efficiency of, among others, our car manufacturers. Semi-conductors are also heavily protected in Europe, which makes our computer industry less able to compete in world markets because it has to buy expensive European semi-conductors.
  I have been deeply disappointed that in recent years our Government, who are supposedly committed to the free market, have not made a greater attempt at the European Community level to do something about those burgeoning trade barriers. If we are not careful, the world will break into three hostile trading blocs based around the United States or north America, east Asia and the European Community, and that will be dangerous.
  We now have protectionism by stealth. In the 1920s and 1930s we had big bang protectionism, such as the Smoot Hawley tariffs, which led to a trade war that exacerbated the slump and the depression and significantly contributed to the increasing tensions of the 1930s. If we are not careful, we in Europe will start to go down the same slippery slope because, although we do not have big bang protectionist legislation, we now have protectionism by stealth.
  The attitude of the Opposition is not encouraging. Labour Members are rightly ready to criticise huge subsidies and trade barriers in agriculture, but when it comes to textiles they want the multi-fibre arrangement to be strengthened and they completely ignore the damage that the MFA does to the developing world. According to many estimates, the cost of the MFA to the developing world far exceeds the aid given by western nations to developing countries.
  Dame Elaine Kellett-Bowman: Will my hon. Friend give way?
  Mr. Oppenheim: I hope that my hon. Friend will excuse me if I do not give way; I know that an Opposition Member wants to contribute to the debate.
  Dame Elaine Kellett-Bowman: Will my hon. Friend give way?
  Mr. Oppenheim: I hope that my hon. Friend will excuse me. I have only a minute more in which to speak, and I know that an Opposition Member wants to speak.
  The right hon. and learned Member for Monklands, East (Mr. Smith) said that, over the past decade, Europe had overtaken Britain. That is not true. Germany overtook us in the 1950s, France did so in the 1960s and Italy was rapidly gaining on us in the 1970s. In the 1980s,
  1030
  we have closed that gap somewhat. Manufacturing productivity grew faster in Britain than in any other country, and manufacturing output rose faster than in any other European country. It is also worth reminding the Opposition of one point. They often go on about manufacturing, and I agree that it is important, but when the Labour Government were in power, manufacturing output fell. Under this Government, it has increased by about one quarter.
  All over the world, countries are following the type of policies pioneered by the Government in the 1980s. They are not nationalising industries; they are privatising. They are not regulating their economies; they are liberalising them. They are not pushing up public spending as a proportion of their overall gross national product; they are holding it steady or reducing it. They are not raising taxes; they are reducing them. The more sensible and intelligent Opposition Members are beginning to realise that. Looking at the series of sickening, dizzying U-turns in Labour policy over the past few years, even they have to admit in their heart of hearts that they have learnt some hard lessons during the past 11 years. For whatever The Guardian says, Thatcherism is not dead—rather it is just coming into its own.
  9 pm
  Dr. Jeremy Bray: We have had two notable speeches, by my hon. Friends the Members for Paisley, North (Mrs. Adams) and for Paisley, South (Mr. McMaster). Paisley plays a special part in the industrial and social life of Scotland, and it is now represented by two splendid new Members.
  We have heard a memorable phrase used by the Chancellor—the right to be unequal—which will be echoed in the House for many months to come. We cannot let the talk of blips pass for ever. I am sure that the former Chancellor knew exactly what he was talking about when he said that inflation was just a blip. If a 5 per cent. rise in the retail prices index is just a blip, it means that real incomes fall by 5 per cent. Perhaps that is precisely what he was trying to do with the original VAT increase in the early 1980s and what the Government tried to do with the recent increase in interest rates. If money incomes follow the RPI up—as is happening now—it is not a blip, and the former Chancellor clearly understood that.
  Undoubtedly—this is not difficult to forecast—there will be a fall in inflation because the rate jumped by 3 per cent. last April. When that figure falls off the end of the 12-month moving average as next April's figures are announced in May, inflation will miraculously fall by 3 per cent. But that will not be due to any forecasting skill by the Chancellor; we shall simply be reading the record of what has been published and known for a long time.
  The overwhelming effect of the recession in Scotland has been the precipitation of British Steel's plans to close the Ravenscraig hot mill and the Clydesdale tube mill, with the loss of 2,000 jobs in prospect and the likelihood that, within a few years, we shall lose all steel production in Scotland. The arguments that we have pursued in Scotland on the future of steel making have been consistently based on economic grounds. That is what I shall do tonight, but in a wider context.
  The hon. Member for Amber Valley (Mr. Oppenheim) brought out the old canard that Ravenscraig is not on a deep-water port. In fact, it is closer to a deeper water port

  1031
  than are Scunthorpe and Llanwern. He said that it was further from its markets than other steelworks. In fact, it is as near its principal market of Shotton as is either Port Talbot or Llanwern. The hon. Gentleman's point is a total irrelevancy. He repeats simple slogans, the easy jargon of journalists who have never been north of Potters Bar. It is surprising to hear that from the hon. Gentleman.
  The hon. Member for Amber Valley was nearer the mark when he started talking about research and development, but, again, his facts were wrong. He said that Japanese civil and industrial research and develop-ment was far lower than that of the United Kingdom years ago.
  Mr. Oppenheim: I did not say years ago. I said, "until recently".
  Dr. Bray: All right, until recently. In 1964 civil research and development in Japan was 1·3 per cent. of GDP compared with 1·5 per cent. in the United Kingdom—just slightly lower. By 1979 the Japanese figure had shot ahead. In other words, 11 years ago, Japanese research was 2·3 per cent. of GDP compared with our 1·7 per cent. Today Japanese civil research and development is 2·8 per cent. and rising whereas in the United Kingdom it is 1·8 per cent.
  Mr. Page: Will the hon. Gentleman give way?
  Dr. Bray: I am sorry, but I am pressed for time.
  British Steel expenditure on research and development is £2 per tonne of steel produced. In a recent steel strategy document the European Community said that £3·5 per tonne was a reasonable EC target. The Japanese figure is £9 per tonne of steel. The hon. Gentleman will have read in the Financial Times yesterday an announcement that Kobe Steel is locating a new research and development laboratory. Where? In the United Kingdom. It is to study not steel research, but polymers and thin film diamond material to replace the next-but-one generation of semi-conductors. British Steel has abandoned all its basic research and does no research outside steel. What are the long-term prospects of British Steel surviving compared with those of Kobe Steel?
  I want to address the main issue of tonight's debate, the recession. I join hon. Members who have looked forward and shall address three questions. First, what are the risks? Secondly, what can the public do? Thirdly, what can the Government do?
  The underlying inflation problem is that there is no consensus on a sustainable income distribution, unlike that in less inflation prone countries, such as Germany, Austria and, in its better days, Sweden. The income distribution may be unequal, as in Germany and as the Chancellor of the Exchequer would prefer, or it may be more egalitarian, as in Austria and Sweden. So long as it is accepted, inflation is not a problem.
  Inflation is not a problem in this country that we can correct by norms for wage increases or, in their modern version, Government assumptions about increases in pay in the public sector. Uniform wage increases leave the distribution of income unchanged. A group of wage earners left behind stays left behind. What happens, particularly in the public sector, is that eventually the, group gets so far behind that there is an outcry. The cry becomes, "Money on the table now." A big increase is
  1032
  won. The rate lurches upwards, only to begin the long slide, establishing the saw tooth lurch and slide for another 10 years.
  If attention were concentrated in time not on today's gap or differentials but on the average relativity over the past 10 years, a sustainable objective could be agreed for different groups of workers. Then talk could be about how fast that group could move towards the objective. For example, there is general agreement on both sides of the House that teachers' pay has fallen far behind. If the Government leave the problem too long, we shall have another Houghton. Teachers will be better off for a few years and wastage and recruitment will temporarily improve, but the profession will soon fall behind again. The see-saw is not in the interests of either teachers or the Government because it does not allow evidence to emerge on what pay is needed steadily to attract, retain and motivate teachers with the ability that parents expect.
  The risk in the exchange rate mechanism is that in any move towards economic and monetary union people will not learn in time how radically the game has changed. The exchange rate will not be allowed to move to accommodate freely any faster rate of inflation in the domestic economy so that we can continue to sell our goods.
  It has not yet sunk in that increases in the cost of living cannot be the basis of wage increases. Ministers have not had the courage to say that, because it means admitting that last year's pay was higher than we could afford. If Ministers will not say clearly that cost of living increases cannot be the basis of wage increases, how can ordinary people be expected to believe it?
  It is because I believe that people can understand the problem that I am prepared to argue that we were right to enter the exchange rate mechanism, but Ministers have an awful amount of explaining yet to do. Most forecasters outside the Treasury have written in one realignment to correct for the level at which we entered the exchange rate mechanism. However, they then say that if there is more than one realignment, that will undermine the credibility of Britain's commitment to the ERM, which could extend by years uncertainty, risk and higher interest rates in the United Kingdom with damaging effects all round.
  We on this side of the House have often made the valid point that there are other factors in inflation and other types of income besides wages. However, incomes from employment, self-employment and social security benefits account for 90 per cent. of personal incomes, leaving only 10 per cent. derived from rent, dividends and interest. Capital gains may be equal to as much again as 10 per cent. of personal income. So there should be no cop-out in blaming the speculators when we divide the cake. The biggest trouble in capital markets in recent years has come from the price of houses bought and sold by ordinary people.
  There is a major issue in the distribution of incomes. The Government have indulged their prejudices too far and they are reaping, and will continue to reap, the consequences. If as a country we continue to fight over the issue, that will be the death of us as an industrial nation.
  What can the Government do besides being frank with the people? Let me deal first with a slightly technical point. Entering the exchange rate mechanism will not abolish the difficult judgments that every Chancellor must make. For example, our present troubles began with the over-reaction to the stock market crash of October 1987 and

  1033
  that could happen equally with exchange rates fixed within Europe. Treasury Ministers have often said that everyone at the time was demanding yet bigger cuts in interest rates.
  In October 1987, shortly after the crash, I sent a paper to the Treasury and to the Select Committee on Treasury and Civil Service reporting an exercise on the Treasury model using the Treasury's own policy optimisation programmes on the data and models available at the time. The Economic Secretary to the Treasury will recall that I raised this issue in the House during a debate on an order a week or so ago.
  The policy adjustments required on the Government's own priorities in response to the fall in the stock market were indeed a reduction in interest rates, but by less than 0·5 per cent. and for one year, and a reduction of income tax of 0·1 per cent., which was so small as to be effectively zero. The trouble was that the analysis of the situation before the stock market crash, on the data available at the time, was already calling for increases in interest rates and income tax, but the then Chancellor was not prepared to listen.
  Today, the new Chancellor acknowledged that the United Kingdom at that time was already enjoying, as he put it, strong growth. The evidence was there in the Treasury that the growth was so strong that restrictions should have been taken in the economy in October before the stock market crash. I am sure that comparable analyses were given to the Chancellor by Treasury officials using the same methods of analysis at the time. It would have saved the Government, not to mention the country, a lot of anguish if he had listened.
  Now, the London Business School and the National Institute of Economic and Social Research, as well as the Treasury, are using those policy optimisation methods. I doubt whether the Chancellor looks at the results. However, funds for research on the economic models and on the methods for using them are being cut by two thirds in the next academic year from £1·5 million a year to less than £0·5 million. It is typical of the stupidity and arrogance of Treasury Ministers that they think that they have nothing more to learn.
  I now turn to the approach that Labour Members will take. I trust that we shall be more ready to learn than the present Government. I am sure that we shall be franker, too. We have been careful and disciplined in not making expenditure commitments and making it clear that we shall keep public expenditure within the limits of what the economy can afford at the time. However, as we approach the election—we have been quite clear about this point, too—the hardening of policies inevitably raises the general issue of public expenditure, taxation and disposable incomes.
  There are two sources of change—shifts in shares of the cake as between disposable incomes, public expenditure and the role of taxation; and shifts from the growth of the cake. How quickly shares can be shifted depends on how much growth there is. There are three kinds of shifts—unconditional shifts, which we have limited to pensions and child benefit, short-term growth-generating shifts, which can contribute to growth within three to five years, and shifts that are conditional on growth.
  Deeply and passionately though we are committed to increased resources for health and education, it is difficult
  1034
  to argue that they can generate growth in the short term in the way in which, say, industrial investment and training can. It is a measure of our seriousness and readiness for government that that is being said as much or more by our health and education spokesmen as by our Treasury spokesmen. We are so determined to deliver real improvements in health and education that we will not wreck things by an undisciplined splurge. I do not think that the Government will get anywhere by looking in our direction for campaigning propaganda.
  If the Government get the politics right, the arithmetic is relatively straightforward for a Government who are prepared to learn, listen to advice, and do not think that they know all the answers. The trouble with the Government is that they get neither the politics nor the arithmetic right because they thought that they knew all the answers. It is a tragedy that the nation is paying such a heavy price in the deepening recession today.
  9.17 pm
  Mrs. Margaret Beckett: May I first send Opposition Members' sympathy to the new Chief Secretary to the Treasury, who I understand is flu-ridden and to whose debut on another occasion we look forward?
  We have seen the debut of the new Chancellor of the Exchequer. I am sorry to say that it was, perhaps, a rather graceless debut by the right hon. Gentleman, and surprisingly so. It was not up to his usual high standard of courtesy. Perhaps he will do better another time when he is not so nervous. Despite the fact that the motion mentions recession, the Chancellor condemned my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) for not saying much about inflation, which the Chancellor said was the crucial issue of the economy and the only thing which really mattered. The Chancellor's words reminded me of an editorial in the Financial Times of 9 November which stated:
  "Inflation, the previous chancellor"
  that is, the right hon. Member for Blaby (Mr. Lawson)—
  "said, is 'judge and jury'. If so, the government is guilty of mismanagement and the Treasury of misforecasting."
  Although the Chancellor argued that concentration on inflation should preclude discussion of the recession, the headline of that leading article was
  "The UK slides into recession."
  We were a little surprised that the Chancellor wanted to talk about inflation, since the current level is 10·9 per cent. —we await the new inflation figures with interest. The average inflation rate for the other European Community countries is 5·9 per cent. and for ERM countries it is 4·4 per cent. That the Government preferred to talk about inflation is an indication of how much they did not want to talk about the recession.
  Most Conservative Members slid over—no doubt they would prefer to say "rose above"—any discussion of recession. If they mentioned it, they did so in passing in the midst of great praise for Government policies. That was not true of the excellent speeches of my right hon. and hon. Friends, in particular two sparkling maiden speeches from my hon. Friends the Members for Paisley, South (Mr. McMaster) and for Paisley, North (Mrs. Adams). They spoke with far greater understanding of the reality of our economy than was evident in the speeches of Conservative Members.
  Just a few days ago, I was talking to a group of business men in the south-east. They told me that it is more than a

  1035
  year since they warned the Government that we were then, in their view and from their experience of business conditions at that time, approaching recession. All they got for their pains was a patronising little lecture on the folly and disloyalty of talking themselves into a recession. In fact, they were trying to talk themselves out of one by convincing the Government that there was a danger of a recession, in the hope that the Government might listen and change course. That was a year ago, but, judging from today's debate in December 1990, their message has still not got through.
  It is important that we should place on record the true state of affairs, so that people outside, who must have been bewildered by much of today's debate, know that some of us, at least, are in touch with reality. In July 1990, a report appeared in The Guardian that contained a survey from KMPG Peat Marwick McClintock showing that the number of companies that have been placed into receivership had doubled. The same article contained a report by Dun and Bradstreet that business failures were at their highest level for 10 years.
  I remind the House of reports in the Financial Times of 10 December that talked of the number of company failures being the "second highest on record" and added: "bankruptcies may now be running at unprecedented levels."
  The Financial Times also recorded the view of the Association of British Chambers of Commerce. On 26 November, the Confederation of British Industry warned not just of a recession, but of severe recession. On 30 November, Barclays bank said that trading conditions had deteriorated since the summer and that the problems extended to all aspects of its loans nationwide. On 4 December, the National Council of Building Material Producers referred to conditions already in severe decline, which it said were likely to become worse next year. The following day, Oxford Economic Forecasting spoke of a decline in engineering output and mechanical and electrical engineering. It also spoke of the dangers and problems of recession. Only yesterday, retailers produced figures to show the biggest slump for 10 years.
  Let us dispose of the idea that it is only grudging people on the Labour Benches who believe that the economy is in recession. The Government have been reluctant to make that admission. Last year, in front of the Treasury and Civil Service Select Committee, the present Prime Minister, then Chancellor, was much more forthcoming. He was happy to give a definition of recession as a two-quarters decline in output. As the recession approached, however, the right hon. Gentleman's frankness receded. By October of this year he was admitting under pressure in the House that it was "conceivable" that there was a recession, although that was still not clear. He said that we would soon see, when the statistics were produced, whether there had been a recession.
  By 8 November in the autumn statement the then Chancellor was sufficiently alarmed to get quite cross with my right hon. and learned Friend the Member for Monklands, East because he dared to mention the word recession. The right hon. Gentleman claimed that my right hon. and learned Friend used the words
  "in the way most calculated to alarm".
  What a shocking thing to do! It conjured up
  "an image quite different from the reality of what is happening or is expected to happen in future."—[Official Report, 8 November 1990; Vol. 180, c. 125.]
  1036
  The reports from which I have just quoted show who was really in touch with reality.
  The Chancellor went on to talk about a period of "weak activity", which was as near as he could bring himself to using the word recession.
  The present Chancellor, to give him credit, was prepared to tell the Select Committee last week that, although he would not go into definitions of recession, we were probably in one because, as he said,
  "Business, I know, is pretty rough for people at the moment."
  I had the distinct impression today that the Chancellor had had his knuckles rapped, since he was not as forthcoming in today's debate.
  The Government's attitude to recession seems to be that we should not talk about recession while we are on the way into it—as if the people who mention it are more to blame than those whose policies caused it. We cannot be absolutely sure that there is a recession while it is happening because we cannot get the figures until afterwards. We must not talk about recession while we are in the middle of one, therefore, and it does not take much foresight to guess what the Chancellor will say when recession starts to diminish: there is no need to talk about it now because it is over. There seems to be no stage at which it is acceptable to use the word recession.
  Apart from the fact of recession, we have been anxious to hear from the Government why we are in one. We have heard much recycled material from previous debates, as well as the old excuse that the Government made just one little mistake in 1987 when they cut interest rates when everyone else, including the Opposition, said that they should. Governments across the world cut interest rates in 1987 because of the stock market crash. The Government say that that created inflation and that we had to have a recession, as the Chancellor said today, to squeeze out that inflation.
  The Government always leave out of this explanation the fact that the 1987 cuts in interest rates were followed by the 1988 cuts in income tax. The Chancellor again argued today that they were of no significance. The Opposition disagree. We think that those income tax cuts added in a full year, as I recall, £6 billion to demand——
  Mr. Norman Lamont indicated dissent.
  Mrs. Beckett: The Chancellor said about £3 billion; the lowest figure previously quoted was £4 billion. We shall let it pass—substantial sums were involved. Quite apart from them, a signal was sent by the tax cuts and by the rhetoric that accompanied them——
  Mr. Tim Smith rose——
  Mrs. Beckett: The Opposition and the Government will never agree about whether any of this mattered, but there is evidence that the Government's claim that they did nothing wrong except for the 1987 cuts in interest rates is false. After all, it was not only the United Kingdom that cut interest rates. The other G7 countries did, too. So why are we in recession? What happened to the other countries that also made this 'one mistake, given that the Government do not admit that any of their other actions thereafter were a mistake?
  Let us compare the inflation figures. Inflation is 10·9 per cent. here compared with 4 per cent. when we cut interest rates in 1987. The rate in Italy is 6·5 per cent., in Germany

  1037
  3·1 per cent., and in France 3·8 per cent.—all higher than the percentages in 1987, but nothing like as high as our inflation.
  Growth in France is up from 2·4 to 3 per cent.; in Germany it is up to 5 per cent.; in Italy it is down a little, but not by much. Here it is down to 0.5 per cent. and falling, because we are in recession.
  As for the balance of payments, Germany has a bigger surplus now than in 1987. France is in much the same position, and Italy is slightly worse, but our balance of payments deficit had quadrupled as a proportion of gross domestic product, and we are alone in that. In October 1987, when the Government made that one mistake, we did not have the highest interest rates in Europe, but we have now.
  Mr. Tim Smith: I do not know where all this is leading us. Most economic commentators accept that a too-lax monetary policy led to higher inflation. In 1988–89, after the 1988 Budget about which the hon. Lady expresses so much concern and in which tax rates were cut, we moved to a much tighter fiscal policy and had a very large public sector debt repayment.
  Mrs. Beckett: As the hon. Gentleman knows, I am saying that the Government claim that the only mistake that they made was in 1987. The hon. Gentleman and I may disagree about the relevance of the different factors, but the Government say that nothing that they have done since 1987 has added to the problem. If they have not added to the problem, why is Britain the only country that is in recession?
  The Government say that they made one mistake and the argument is about whether it led us to further problems. Since then, the Government have scored a series of inflationary own goals. Those were the increases in electricity and water charges in order to fatten those industries for privatisation; the increases in rents insisted on by the former Secretary of State for the Environment in order to make council rents competitive with those in the private sector; and increases in fares forced on the transport industry by Government policies. There has also been the imposition of the poll tax and, of course, the increases in interest rates. The Government have used interest rates, and interest rates alone, to resolve the problems that were being created.
  We now have the consequences of a two-year squeeze to reduce the inflationary pressures in the economy that the Government had created. I should like to draw attention to two aspects of the consequences of that squeeze. Yesterday the National Westminster bank report drew attention to the bank's forecast that unemployment will rise by 700,000 over the next 18 months because of the severity of the recession. In the first half of 1990, more than 95,000 people had mortgage arrears of more than six months. Those people have serious debt problems as a result of the Government's policies. Not unrelated to that is the acknowledgement this week from the Government of the increase in homelessness. Some 72,830 households were officially accepted as homeless in the first six months of this year. Hon. Members know that the actual figure substantially exceeds the official figure.
  Let us look at the future of the economy. In January the CBI said:
  1038
  "The danger that investment plans will be undermined by the high cost of capital, the squeeze on profits, and slower growth, is the most serious risk that the UK is facing at present".
  That was in January and since then manufacturing investment is only 5 to 6 per cent. above the 1979 level from which it fell so catastrophically in the Government's first recession in the early 1980s. In the third quarter of this year manufacturing investment was 7 per cent. down on the same period last year, and manufacturing output fell by more than 1 per cent. in just one month towards the end of the summer. The very cuts in investment that cause most danger to our economy are taking place.
  I should like to draw attention to correspondence that has been passing between the Government and the Machine Tool Technologies Association. In a letter, the association says:
  "it has become evident … that despite the claims of Government, investment in advanced technology by UK manufacturing has declined sharply since the beginning of this year."
  It drew attention to the fact that export figures show that overseas manufacturers are investing in high technology, and that their exports have increased by 27 per cent. in the first nine months of the year. The association says that it believes that lack of investment in this country
  "is due to the lack of a favourable economic climate which would allow for large scale, long term investment in advanced technology. This is vital if we are to maintain a competitive productive capacity as a manufacturing nation."
  The chairman of ICI recently pointed out that we shall not have economic growth for the next two years and that
  "this time, unlike in the Eighties, growth had to be based on 'solid industrial substance—not the shadow or 'fluff' of the second half of the Eighties, which has so swiftly evaporated in the current harsher economic climate'."
  He was talking about the ridiculous effects of the Government's policies.
  As my hon. Friend the Member for Norwich, South (Mr. Garrett) said, the Government talk of a potential soft landing, but it is more likely to be a nasty thump as we hit rock bottom and an ugly scraping as we are carried along into recession. The Labour party argues, although the Government contest it, that part of the reason for our problems is the way that the Government got their signals to the economy and the country wrong in 1978–88. They are doing it again. They claim that, in order to make a success of our membership of the exchange rate mechanism, there must be sacrifices, an understanding of how we have to become more competitive, and a willingness to rein back our demands. Therefore, to make a success of ERM, people have to understand that there may be difficult times ahead and we must make the right adjustments to ensure that our economy is competitive.
  However, so that they can win the election, Conservative Members are already saying, as they will increasingly say, exactly the opposite—there is not really a problem, it is just another of those little blips so immortalised by the right hon. Member for Blaby. They claim that the problem is nearly over, it is just a short hiccup and soon everything will be all right. These messages are incompatible, as the well-being of the economy is incompatible, with the return of the Conservative party to government.
  Perhaps what was most alarming about the Chancellor's speech was his reiteration that there will be no change in Government policy and that——
  Sir William Clark: Will the hon. Lady give way?
  Mrs. Beckett: The right hon. Member was not present throughout the debate and I have only three minutes left if I am not to cut into the Minister's time.
  The alarming thing about the Chancellor's speech was that he said that there would be no change in Government policy and that it remained their objective to cut income tax further. He rounded his speech off with an extraordinary statement, to which a number of my hon. Friends have referred, and which will be the most remembered statement of the debate. It was that the Government believe in the equal right of everyone to be unequal. That will ring round cardboard city for many a month to come.
  What was saddening about today's debate was the tone of it. There was nonsense about the Labour party having no policy and claims that the House had heard nothing. The reason for that is simple. The Labour party talks about promoting investment in education, about the need for investment in education and training and in research and development. Conservative Members do not think that is an economic policy. But let them say that to the Germans, French or Japanese. They will be thrown out on their ears and thought to be crazy.
  Conservative Members may not have studied the papers carefully in the past week or so, so let me remind them that our economic proposals—the policy which they say does not exist—have been put through the Treasury model and there is evidence to suggest that we might produce rather better results than the present Government. So let us have no more of this childish, petty, silly suggestion that we have no policy.
  If we want to build a world-class economy we must invest the national dividend in the nation's future. Despite what the Chancellor said, I hope that we shall hear from the Financial Secretary tonight that there will be no more tax cuts until we have the world-class economy and services that we need and deserve. We remember how, when the Chancellor was Chief Secretary, he told us that one often has to make a choice between public expenditure—public investment—and income tax cuts. We want to hear from the Financial Secretary that he recognises that the need of the country is for public investment and not for further income tax cuts.
  My right hon. and learned Friend the Member for Monklands, East drew attention to the Chancellor's less than felicitious words about the Titanic. My hon. Friend the Member for Leeds, West (Mr. Battle) has reminded me of the poet who wrote that those with tinkling glasses were the last to notice that the Titanic was sinking. The first to notice were those below decks in the engine room who were trying to plug the holes.
  If the economy is the Titanic, the Government are the orchestra, still playing the same old tunes. Despite those tunes, hundreds of thousands of our fellow citizens face a Christmas blighted by the fear or reality of the unemployment, bankruptcy and homelessness that accompany the recession brought about by the Government's policies. They will find neither comfort nor hope in the Chancellor's speech. For that, they need a Labour Government.
  9.41 pm
  The Financial Secretary to the Treasury (Mr. Francis Maude): The debate started with two distinguished maiden speeches from the hon. Members for Paisley, North (Mrs. Adams) and for Paisley, South (Mr. McMaster). It must be exceptional—particularly in the middle of a Parliament —to have two new hon. Members from the same town, and they both distinguished themselves greatly. The hon. Member for Paisley, North spoke exceptionally movingly and eloquently. Like other hon. Members, I knew her late husband Allen and worked with him. We shared in the mysteries of the Whips' Office, serving on Committees arid so on. He had genuine friends on both sides of the House. We miss him, but we welcome her. Her speech lent lustre to the debate, and we look forward to hearing many more contributions from her.
  The hon. Member for Paisley, South also distinguished himself in an exceptionally good speech—if I may say so as one who has also not been in the House for very long. It was most impressive and we look forward to hearing many more. The hon. Gentleman's predecessor, Norman Buchan, was a salutary reminder to us all that there is a life for politicians outside politics. That is something that we tend to forget.
  Other than those two speeches, and save for some distinguished speeches from my hon. Friends—my hon. Friend the Member for Horsham (Sir P. Hordern), who cannot be here for the winding-up speeches, my right hon. Friend the Member for Hertfordshire, North (Mr. Stewart) and many others—we have had what one might call a quiet debate. That is somewhat surprising considering the vehemence of the Opposition's motion arid their apparent anxiety about the state of the economy.
  We have made no bones about the fact that one of the causes of the present downturn in the economy is to be found in the measures that we have had to take to counter inflation. That illustrates the essential point, which we have been trying to din into the Labour party, with limited success, for years: the deadliest enemy of long-term growth and prosperity is inflation. The last Labour Prime Minister had it right when he said that inflation is the mother arid father of unemployment.
  We have been clear and straightforward about the reasons why we have a problem with inflation at the moment. In 1987 and 1988, our monetary policy was not as tight as it should have been, for reasons which led to almost universal support for our policy at the time. We must be fair to the Labour party. It did not support our monetary policy at the time—not because it was too loose, but because it thought it was too tight.
  Whatever the circumstances, the Opposition said that interest rates were still too high and that they should be lowered even more. We all remember them saying that; but, oddly enough, the Leader of the Opposition does not. We all think of things after the event that we would have liked to have said at the time, but would it not be more straightforward if the Leader of the Opposition were now to say that he has it wrong and that he was not saying, "Steady, steady?"
  The Government have been straightforward and have accepted that mistakes were made. It would be nice if the Labour party could, just this once, bring itself to admit that, on the basis of what it said at the time, it would have doubled, redoubled and compounded those mistakes.
  Dr. Bray rose——
  Mr. Maude: I am sorry, but I do not have the time to give way.
  One of the most remarkable assertions made during the debate was made by the right hon. and learned Member for Monklands, East (Mr. Smith), who said that tax cuts fuelled the growth in demand. We were running a fiscal policy as tight as there had ever been in this country, and we had a budget surplus as large as any in the world. Some £14 billion of budget surplus was taken out of the economy.
  Dr. Bray rose——
  Mr. Maude: No, I will not give way. I have only a limited time available and I must press on with my speech.
  Mr. John Smith rose——
  Mr. Maude: I am sorry, but I will not give way. I must press on with my speech.
  Demand having increased too much, we had to rein back by raising interest rates——
  Mr. Smith rose——
  Mr. Maude: I am not giving way. I have only 14 minutes left, and I will not give way to the right hon. and learned Gentleman.
  The Government had to rein back by increasing interest rates. That we did——
  Mr. Smith rose——
  Mr. Maude: No.
  Mr. David Winnick: On a point of order, Mr. Deputy Speaker. You have had long experience in the House. Is it the usual custom for a Minister to refuse to give way to the main Opposition spokesman? Is it not discourteous of the Minister——
  Mr. Deputy Speaker (Mr. Harold Walker): Order. That is a matter for the Minister.
  Mr. Maude: I have ended up with much less time to speak than the hon. Member for Derby, South (Mrs. Beckett) had, although I have rather more to say.
  Interest rates have had to go up. It has been painful, but that process——
  Mr. John Smith rose——
  Mr. Maude: No, I will not give way. The right hon. and learned Gentleman spoke at considerable length this afternoon, although he had nothing to say. I have only a short time to say rather a lot, and I propose to say it.
  Mr. Smith rose——
  Mr. Maude: I can well understand why the right hon. and learned Gentleman does not want to listen to what I have to say, because what the Government say is the truth. I propose to get on with my speech and say it.
  Mr. John Battle: On a point of order, Mr. Deputy Speaker. Under the rules of debate, the Government have the privilege of winding up. Surely the Opposition should be allowed to put questions to the Government——
  Mr. Deputy Speaker: Order. I repeat that that is a matter for the hon. Member who has the floor, in this case the Minister.
  Mr. Maude: Such bogus points of order make me even less inclined to give way——
  Mr. Allen McKay: On a point of order, Mr. Deputy Speaker. The Minister referred personally to my right hon. and learned Friend the Member for Monklands, East (Mr. Smith). It is the convention of the House that an hon. Member who is referred to personally has a right to reply. This is an Opposition Supply day and we are discussing an Opposition motion——
  Mr. Deputy Speaker: Order.
  Mr. McKay: It is an Opposition——
  Mr. Deputy Speaker: Order. The hon. Gentleman must resume his seat when I am on my feet. These are not points of order——
  Several Hon. Members rose——
  Mr. Deputy Speaker: Order. The Minister is entitled to a hearing. The hon. Member for Derby, South (Mrs. Beckett) had a fair hearing, and I ask the House to give a fair hearing to the Minister.
  Mr. Jimmy Hood: On a point of order, Mr. Speaker. You will remember that when the proceedings of the House were first televised one of the rules laid down was that if an hon. Member is mentioned——
  Mr. Deputy Speaker: Order. These are bogus points of order. They are not matters for the Chair, and I very much hope that hon. Members will allow the Minister to resume his speech.
  Mr. Hood rose——
  Mr. Deputy Speaker: Order. The hon. Gentleman knows perfectly well that these are not matters for the Chair, and they seem to be intended to disrupt the Minister's speech.
  Mr. Hood rose——
  Mr. Deputy Speaker: Order. I shall call the Minister to resume his speech, and I hope that the House will give him an opportunity to address the House for the remainder of the debate.
  Mr. Maude: This is an Opposition day, as it has been pointed out, and it is conspicuous that we have had two speeches from Opposition spokesmen who have had little to say. It is not particularly surprising that, when a Minister chooses to talk about Government policy, about the real world as it is, Opposition Members go in for organised barracking and bogus points of order to try to reduce the amount of time available to the Minister to tell the truth about what is happening.
  Dr. Bray: Will the Minister give way?
  Mr. Maude: No, I am sorry; I shall not give way.
  It cannot be said too often that low inflation is an essential condition for sustained economic growth in the 1990s, and we shall do whatever is necessary to lower it. The present slowdown is bound to be painful. It is clear

  1043
  that across a number of sectors demand in the economy is static or falling. But however much Opposition Members want it to be so, this is not a replay of the recession of 1980–81. Then output fell in five successive quarters and by 5 per cent. in total. Today we expect a fall in demand and in GDP between the two halves of this year with a recovery during 1991 as inflation recedes. That is confirmed by independent forecasters.
  The reason for that difference is simple. In 1980–81 we had to pick up the pieces after years of drift, disorder and disillusion. Those were years in which inflation soared to 27 per cent. The British economy's growth rate was the worst in Europe. Investment hardly increased and the country was forced to beg from the International Monetary Fund.
  Today there is a different story. Our problems have their source in too much confidence, not too little, in too fast a growth in investment, not too slow. The downturn is a necessary adjustment after a period of excessive and unsustainable demand.
  Mr. Hood: Will the Minister give way?
  Mr. Maude: No, I will not.
  It means that we must learn better how to manage a dynamic economy. The Labour party's only task in power was to manage a declining economy.
  In 1980–81 we had to pick the economy up by the scruff of its neck. After years of misdirection and neglect we had to begin to fashion the circumstances in which fundamental changes of attitude could take place. The 1980s were the only decade since the war in which we had an average growth rate higher than Germany and France, higher productivitity growth than Japan, living standards higher than ever, more shareholders, more home owners, more businesses, more people self-employed, 2 million more people in work, investment higher than it had been and a sustained period of fast growth and low inflation.
  Some have argued that the currency should be depreciated to enable British exporters to compete. What rubbish. The great exporters of the 1980s, Germany and Japan, increased their exports dramatically at a time when their currencies were not depreciating but appreciating. The right hon. Member for Swansea, West (Mr. Williams) who claimed that somehow we should devalue is way off.
  Some hon. Members—including, again, the right hon. Member for Swansea, West—derided the services sector, suggesting that we should not place too much emphasis on it. We should be clear about this: the jobs in that industry are real jobs, and form part of the real economy. Hon. Members should not sneer at the people who do those jobs; they are producing wealth for the country, and we should respect and support their work.
  Several Hon. Members rose——
  Mr. Maude: Opposition Members do not support what is done by businesses. Labour talks about manufacturing industry as though it owned it——
  Mr. Battle: Give way.
  Mr. Speaker: Order.
  Mr. Battle: The Minister will not give way.
  Mr. Speaker: Order. I ask the House to listen to the debate in a parliamentary manner.
  Mr. Maude: I suppose that at one stage the Labour party did own quite a lot of manufacturing industry, but, happily, most of it has now been liberated from state ownership into genuine public ownership, where it prospers and will continue to do so. British Steel, for instance, is now one of the most efficient and profitable steel producers in the world, with more than 10 per cent. of the European Community steel market—the second largest share. That is another classic case of abject failure under Labour being turned into shining success under the Conservatives.
  Mr. Hood: Will the Minister give way?
  Mr. Maude: No, I am not going to give way; I am going to carry on.
  This has been an Opposition day, and an outside observer might have expected the Opposition to take the opportunity to tell us a little about their policies. I know that the hon. Member for Derby, South thinks it frightfully rude to talk about them, but she and the right hon. and learned Member for Monklands, East—
  Mr. Hood: On a point of order, Mr. Speaker—
  Mr. Speaker: Order. We do not know whether it is one yet.
  Mr. Hood: On a point of order, Mr. Speaker. I am a relatively new Member, but, to my knowledge, this is the first time that a Front Bencher has refused to give way——
  Mr. Speaker: Order. It is perfectly in order, and is frequently done.
  Mr. Maude: Time and again, we waited for the right hon. and learned Member for Monklands, East and the hon. Member for Derby, South to tell us—[HON. MEMBERS: "Give way."] They have already had an hour and a half between them: they have had plenty of time in which to disclose to a wondering world what their policies are. Time and again we waited, poised to hear those policies; time and again, the wondering world was disappointed.
  I am bound to say, however, that that demonstrates a modicum of wisdom on the part of the right hon. and learned Gentleman, and a difference, perhaps even a split —an important split—between him and the Leader of the Opposition. When the Leader of the Opposition—maybe I should say, "the Leader of the Opposition for the time being"—has nothing to say, he goes ahead and says it anyway; when the right hon. and learned Gentleman has nothing to say, he takes refuge in silence. "Don't watch my lips", one might call it.
  Mr. Hood: On a point of order, Mr. Speaker. The Minister has again referred to a Member whom he has refused the opportunity to speak.
  Mr. Speaker: Order. That is not a point of order. If the Minister will not give way, an hon. Member must resume his seat. I have not observed any Opposition Front Bencher trying to intervene.
  Mr. Maude: I am endeavouring to be sympathetic to Opposition Front Benchers, because I understand that there is little that they can do. Their only policy was to recommend our joining the exchange rate mechanism. One can see the benefits to them of such a policy. It can be

  1045
  summed up in three letters; as long as they got those letters in the right order, it was a memorable policy, and they could rely on their colleagues to mouth it again and again. Now that we have joined the ERM, however, they are left with nothing, and they are bewildered.
  Labour's historic mission was to undermine and destroy capitalism, to destroy free enterprise. What Labour and its fellow practitioners across the world have achieved is destructive not of capitalism but of socialism. All round the world they are reading the funeral rites of socialism. Only here does the Labour party continue with its crusade.
  Mr. Hood: Will the hon. Gentleman give way now?
  Mr. Maude: No. Socialism is finished. Free enterprise works. In that lies our future.
  Question put, That the original words stand part of the Question:—
  The House divided: Ayes 222, Noes 328.

  Division No. 27]

  [10 pm

  AYES

  Abbott, Ms Diane

  Cunningham, Dr John

  Adams, Mrs. Irene

  Davies, Rt Hon Denzil (Llanelli)

  Allen, Graham

  Davies, Ron (Caerphilly)

  Anderson, Donald

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

  Archer, Rt Hon Peter

  Dewar, Donald

  Armstrong, Hilary

  Dixon, Don

  Ashdown, Rt Hon Paddy

  Dobson, Frank

  Ashley, Rt Hon Jack

  Doran, Frank

  Barnes, Harry (Derbyshire NE)

  Douglas, Dick

  Barnes, Mrs Rosie (Greenwich)

  Duffy, A. E. P.

  Barron, Kevin

  Dunwoody, Hon Mrs Gwyneth

  Battle, John

  Evans, John (St Helens N)

  Beckett, Margaret

  Ewing, Harry (Falkirk E)

  Beith, A. J.

  Ewing, Mrs Margaret (Moray)

  Bell, Stuart

  Fatchett, Derek

  Bellotti, David

  Faulds, Andrew

  Benn, Rt Hon Tony

  Field, Frank (Birkenhead)

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

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

  Benton, Joseph

  Fisher, Mark

  Bermingham, Gerald

  Flynn, Paul

  Bidwell, Sydney

  Foot, Rt Hon Michael

  Blunkett, David

  Foster, Derek

  Boateng, Paul

  Foulkes, George

  Boyes, Roland

  Fraser, John

  Bradley, Keith

  Fyfe, Maria

  Bray, Dr Jeremy

  Galbraith, Sam

  Brown, Nicholas (Newcastle E)

  Garrett, John (Norwich South)

  Brown, Ron (Edinburgh Leith)

  Garrett, Ted (Wallsend)

  Bruce, Malcolm (Gordon)

  George, Bruce

  Buckley, George J.

  Gilbert, Rt Hon Dr John

  Caborn, Richard

  Godman, Dr Norman A.

  Callaghan, Jim

  Golding, Mrs Llin

  Campbell, Menzies (Fife NE)

  Gordon, Mildred

  Campbell-Savours, D. N.

  Gould, Bryan

  Canavan, Dennis

  Graham, Thomas

  Carlile, Alex (Mont'g)

  Griffiths, Nigel (Edinburgh S)

  Cartwright, John

  Griffiths, Win (Bridgend)

  Clark, Dr David (S Shields)

  Grocott, Bruce

  Clay, Bob

  Hardy, Peter

  Clelland, David

  Harman, Ms Harriet

  Clwyd, Mrs Ann

  Haynes, Frank

  Cohen, Harry

  Henderson, Doug

  Coleman, Donald

  Hinchliffe, David

  Cook, Robin (Livingston)

  Hoey, Ms Kate (Vauxhall)

  Corbett, Robin

  Hogg, N. (C'nauld & Kilsyth)

  Corbyn, Jeremy

  Home Robertson, John

  Cousins, Jim

  Hood, Jimmy

  Cox, Tom

  Howarth, George (Knowsley N)

  Crowther, Stan

  Howell, Rt Hon D. (S'heath)

  Cryer, Bob

  Howells, Geraint

  Cunliffe, Lawrence

  Howells, Dr. Kim (Pontypridd)

  1046

  Hoyle, Doug

  Patchett, Terry

  Hughes, John (Coventry NE)

  Pendry, Tom

  Hughes, Robert (Aberdeen N)

  Pike, Peter L.

  Hughes, Roy (Newport E)

  Powell, Ray (Ogmore)

  Hughes, Simon (Southwark)

  Prescott, John

  Illsley, Eric

  Quin, Ms Joyce

  Ingram, Adam

  Radice, Giles

  Janner, Greville

  Randall, Stuart

  Jones, Barry (Alyn & Deeside)

  Rees, Rt Hon Merlyn

  Jones, leuan (Ynys Môn)

  Reid, Dr John

  Jones, Martyn (Clwyd S W)

  Richardson, Jo

  Kaufman, Rt Hon Gerald

  Robertson, George

  Kennedy, Charles

  Robinson, Geoffrey

  Kinnock, Rt Hon Neil

  Rogers, Allan

  Kirkwood, Archy

  Rooker, Jeff

  Lamond, James

  Rooney, Terence

  Leadbitter, Ted

  Ross, Ernie (Dundee W)

  Leighton, Ron

  Rowlands, Ted

  Lestor, Joan (Eccles)

  Ruddock, Joan

  Lewis, Terry

  Saimond, Alex

  Litherland, Robert

  Sedgemore, Brian

  Livingstone, Ken

  Sheerman, Barry

  Livsey, Richard

  Sheldon, Rt Hon Robert

  Lloyd, Tony (Stretford)

  Shore, Rt Hon Peter

  Lofthouse, Geoffrey

  Short, Clare

  Loyden, Eddie

  Skinner, Dennis

  McAllion, John

  Smith, Andrew (Oxford E)

  McAvoy, Thomas

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

  McCartney, Ian

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

  Macdonald, Calum A.

  Smith, J. P. (Vale of Glam)

  McFall, John

  Snape, Peter

  McKay, Allen (Barnsley West)

  Soley, Clive

  McKelvey, William

  Spearing, Nigel

  McLeish, Henry

  Steel, Rt Hon Sir David

  McNamara, Kevin

  Steinberg, Gerry

  McWilliam, John

  Stott, Roger

  Madden, Max

  Strang, Gavin

  Mahon, Mrs Alice

  Straw, Jack

  Marek, Dr John

  Taylor, Mrs Ann (Dewsbury)

  Marshall, David (Shettleston)

  Taylor, Matthew (Truro)

  Martin, Michael J. (Springburn)

  Thomas, Dr Dafydd Elis

  Martlew, Eric

  Thompson, Jack (Wansbeck)

  Maxton, John

  Turner, Dennis

  Meacher, Michael

  Walley, Joan

  Meale, Alan

  Warden, Gareth (Gower)

  Michael, Alun

  Wareing, Robert N.

  Michie, Bill (Sheffield Heeley)

  Welsh, Andrew (Angus E)

  Michie, Mrs Ray (Arg'l & Bute)

  Welsh, Michael (Doncaster N)

  Mitchell, Austin (G't Grimsby)

  Wigley, Dafydd

  Moonie, Dr Lewis

  Williams, Rt Hon Alan

  Morgan, Rhodri

  Williams, Alan W. (Carm'then)

  Morley, Elliot

  Wilson, Brian

  Morris, Rt Hon A. (W'shawe)

  Winnick, David

  Morris, Rt Hon J. (Aberavon)

  Wise, Mrs Audrey

  Murphy, Paul

  Worthington, Tony

  Nellist, Dave

  Wray, Jimmy

  Oakes, Rt Hon Gordon

  Young, David (Bolton SE)

  O'Brien, William

  O'Hara, Edward

  Tellers for the Ayes:

  O'Neill, Martin

  Mr. Ken Eastham and

  Orme, Rt Hon Stanley

  Mr. Jimmy Dunnachie.

  Parry, Robert

  NOES

  Adley, Robert

  Banks, Robert (Harrogate)

  Aitken, Jonathan

  Batiste, Spencer

  Alexander, Richard

  Beaumont-Dark, Anthony

  Alison, Rt Hon Michael

  Bellingham, Henry

  Allason, Rupert

  Bendall, Vivian

  Amery, Rt Hon Julian

  Bennett, Nicholas (Pembroke)

  Amess, David

  Benyon, W.

  Amos, Alan

  Bevan, David Gilroy

  Arbuthnot, James

  Biffen, Rt Hon John

  Arnold, Jacques (Gravesham)

  Blackburn, Dr John G.

  Ashby, David

  Blaker, Rt Hon Sir Peter

  Aspinwall, Jack

  Body, Sir Richard

  Atkins, Robert

  Bonsor, Sir Nicholas

  Atkinson, David

  Boscawen, Hon Robert

  Baker, Nicholas (Dorset N)

  Boswell, Tim

  Baldry, Tony

  Bottomley, Peter

  1047

  Bottomley, Mrs Virginia

  Greenway, John (Ryedale)

  Bowden, A (Brighton K'pto'n)

  Gregory, Conal

  Bowden, Gerald (Dulwich)

  Griffiths, Peter (Portsmouth N)

  Bowis, John

  Grist, Ian

  Boyson, Rt Hon Dr Sir Rhodes

  Ground, Patrick

  Brandon-Bravo, Martin

  Grylls, Michael

  Brazier, Julian

  Gummer, Rt Hon John Selwyn

  Bright, Graham

  Hague, William

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

  Hamilton, Hon Archie (Epsom)

  Browne, John (Winchester)

  Hamilton, Neil (Tatton)

  Bruce, Ian (Dorset South)

  Hampson, Dr Keith

  Buchanan-Smith, Rt Hon Alick

  Hanley, Jeremy

  Buck, Sir Antony

  Hannam, John

  Budgen, Nicholas

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

  Burns, Simon

  Hargreaves, Ken (Hyndburn)

  Burt, Alistair

  Harris, David

  Butcher, John

  Haselhurst, Alan

  Butler, Chris

  Hawkins, Christopher

  Butterfill, John

  Hayes, Jerry

  Carlisle, John, (Luton N)

  Hayward, Robert

  Carlisle, Kenneth (Lincoln)

  Heath, Rt Hon Edward

  Carrington, Matthew

  Heathcoat-Amory, David

  Carttiss, Michael

  Hicks, Mrs Maureen (Wolv' NE)

  Cash, William

  Hicks, Robert (Cornwall SE)

  Chalker, Rt Hon Mrs Lynda

  Higgins, Rt Hon Terence L.

  Chapman, Sydney

  Hill, James

  Chope, Christopher

  Hind, Kenneth

  Churchill, Mr

  Hogg, Hon Douglas (Gr'th'm)

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

  Holt, Richard

  Clark, Dr Michael (Rochford)

  Hordern, Sir Peter

  Clark, Sir W. (Croydon S)

  Howard, Rt Hon Michael

  Clarke, Rt Hon K. (Rushcliffe)

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

  Colvin, Michael

  Howarth, G. (Cannock & B'wd)

  Conway, Derek

  Howe, Rt Hon Sir Geoffrey

  Coombs, Anthony (Wyre F'rest)

  Howell, Ralph (North Norfolk)

  Coombs, Simon (Swindon)

  Hughes, Robert G. (Harrow W)

  Cope, Rt Hon John

  Hunt, David (Wirral W)

  Cormack, Patrick

  Hunt, Sir John (Ravensbourne)

  Couchman, James

  Hunter, Andrew

  Cran, James

  Hurd, Rt Hon Douglas

  Currie, Mrs Edwina

  Irvine, Michael

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

  Irving, Sir Charles

  Davis, David (Boothferry)

  Jack, Michael

  Day, Stephen

  Janman, Tim

  Devlin, Tim

  Jessel, Toby

  Dickens, Geoffrey

  Johnson Smith, Sir Geoffrey

  Dorrell, Stephen

  Jones, Gwilym (Cardiff N)

  Douglas-Hamilton, Lord James

  Jones, Robert B (Herts W)

  Dover, Den

  Jopling, Rt Hon Michael

  Dunn, Bob

  Kellett-Bowman, Dame Elaine

  Durant, Tony

  Key, Robert

  Dykes, Hugh

  Kilfedder, James

  Eggar, Tim

  King, Rt Hon Tom (Bridgwater)

  Emery, Sir Peter

  Kirkhope, Timothy

  Evans, David (Welwyn Hatf'd)

  Knapman, Roger

  Evennett, David

  Knight, Greg (Derby North)

  Fallon, Michael

  Knox, David

  Favell, Tony

  Lamont, Rt Hon Norman

  Fenner, Dame Peggy

  Lang, Ian

  Fishburn, John Dudley

  Latham, Michael

  Fookes, Dame Janet

  Lawrence, Ivan

  Forman, Nigel

  Lawson, Rt Hon Nigel

  Forsyth, Michael (Stirling)

  Lee, John (Pendle)

  Forth, Eric

  Lennox-Boyd, Hon Mark

  Fowler, Rt Hon Sir Norman

  Lester, Jim (Broxtowe)

  Fox, Sir Marcus

  Lilley, Peter

  Franks, Cecil

  Lloyd, Peter (Fareham)

  Freeman, Roger

  Luce, Rt Hon Richard

  French, Douglas

  Lyell, Rt Hon Sir Nicholas

  Fry, Peter

  McCrindle, Sir Robert

  Gale, Roger

  Macfarlane, Sir Neil

  Gardiner, George

  MacGregor, Rt Hon John

  Garel-Jones, Tristan

  MacKay, Andrew (E Berkshire)

  Gill, Christopher

  Maclean, David

  Glyn, Dr Sir Alan

  McLoughlin, Patrick

  Goodhart, Sir Philip

  McNair-Wilson, Sir Patrick

  Goodlad, Alastair

  Madel, David

  Goodson-Wickes, Dr Charles

  Major, Rt Hon John

  Grant, Sir Anthony (CambsSW)

  Malins, Humfrey

  Greenway, Harry (Ealing N)

  Mans, Keith

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  Maples, John

  Shersby, Michael

  Marland, Paul

  Sims, Roger

  Marlow, Tony

  Skeet, Sir Trevor

  Marshall, John (Hendon S)

  Smith, Sir Dudley (Warwick)

  Marshall, Sir Michael (Arundel)

  Smith, Tim (Beaconsfield)

  Martin, David (Portsmouth S)

  Soames, Hon Nicholas

  Mates, Michael

  Speed, Keith

  Maude, Hon Francis

  Speller, Tony

  Mawhinney, Dr Brian

  Spicer, Sir Jim (Dorset W)

  Maxwell-Hyslop, Robin

  Spicer, Michael (S Worcs)

  Mayhew, Rt Hon Sir Patrick

  Squire, Robin

  Meyer, Sir Anthony

  Stanbrook, Ivor

  Miller, Sir Hal

  Stanley, Rt Hon Sir John

  Miscampbell, Norman

  Steen, Anthony

  Mitchell, Andrew (Gedling)

  Stern, Michael

  Moate, Roger

  Stevens, Lewis

  Monro, Sir Hector

  Stewart, Allan (Eastwood)

  Montgomery, Sir Fergus

  Stewart, Andy (Sherwood)

  Morrison, Sir Charles

  Stewart, Rt Hon Ian (Herts N)

  Morrison, Rt Hon P (Chester)

  Stokes, Sir John

  Moss, Malcolm

  Stradling Thomas, Sir John

  Moynihan, Hon Colin

  Sumberg, David

  Mudd, David

  Summerson, Hugo

  Neale, Gerrard

  Tapsell, Sir Peter

  Nelson, Anthony

  Taylor, Ian (Esher)

  Neubert, Michael

  Taylor, Teddy (S'end E)

  Newton, Rt Hon Tony

  Tebbit, Rt Hon Norman

  Nicholls, Patrick

  Temple-Morris, Peter

  Nicholson, David (Taunton)

  Thompson, D. (Calder Valley)

  Nicholson, Emma (Devon West)

  Thompson, Patrick (Norwich N)

  Norris, Steve

  Thorne, Neil

  Onslow, Rt Hon Cranley

  Thornton, Malcolm

  Oppenheim, Phillip

  Thurnham, Peter

  Page, Richard

  Townend, John (Bridlington)

  Paice, James

  Townsend, Cyril D. (B'heath)

  Parkinson, Rt Hon Cecil

  Tracey, Richard

  Patnick, Irvine

  Tredinnick, David

  Patten, Rt Hon Chris (Bath)

  Trippier, David

  Patten, Rt Hon John

  Trotter, Neville

  Pawsey, James

  Twinn, Dr Ian

  Peacock, Mrs Elizabeth

  Vaughan, Sir Gerard

  Porter, Barry (Wirral S)

  Viggers, Peter

  Porter, David (Waveney)

  Wakeham, Rt Hon John

  Portillo, Michael

  Waldegrave, Rt Hon William

  Powell, William (Corby)

  Walden, George

  Price, Sir David

  Walker, Rt Hon P. (W'cesfer;

  Raffan, Keith

  Waller, Gary

  Raison, Rt Hon Timothy

  Walters, Sir Dennis

  Rathbone, Tim

  Ward, John

  Redwood, John

  Wardle, Charles (Bexhill)

  Renton, Rt Hon Tim

  Warren, Kenneth

  Rhodes James, Robert

  Watts, John

  Riddick, Graham

  Wells, Bowen

  Ridley, Rt Hon Nicholas

  Wheeler, Sir John

  Ridsdale, Sir Julian

  Whitney, Ray

  Rifkind, Rt Hon Malcolm

  Widdecombe, Ann

  Roberts, Sir Wyn (Conwy)

  Wiggin, Jerry

  Rost, Peter

  Wilshire, David

  Rowe, Andrew

  Winterton, Mrs Ann

  Rumbold, Mrs Angela

  Winterton, Nicholas

  Ryder, Richard

  Wolfson, Mark

  Sackville, Hon Tom

  Wood, Timothy

  Sayeed, Jonathan

  Woodcock, Dr. Mike

  Scott, Rt Hon Nicholas

  Yeo, Tim

  Shaw, David (Dover)

  Young, Sir George (Acton)

  Shaw, Sir Michael (Scarb')

  Shelton, Sir William

  Tellers for the Noes:

  Shephard, Mrs G. (Norfolk SW)

  Mr. David Lightbown and

  Shepherd, Colin (Hereford)

  Mr. John M. Taylor.

  Shepherd, Richard (Aldridge)

  Question accordingly negatived.
  Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 30 (Questions on amendments), and agreed to.
  Mr. SPEAKER forthwith declared the main Question, as amended, to be agreed to.
  Resolved,

  1049
  That this House congratulates Her Majesty's Government on the on the improvement in economic performance over the last 11 years and on its maintenance of tight monetary and fiscal policies necessary to reduce inflation which have been
  1050
  reinforced by membership of the ERM; and notes that inflationary pressures are now easting as prelude to falling inflation and the resumption of sustainable growth.

Part-time Workers
Mr. Speaker: I ask hon. Members to leave the Chamber quietly if they are not remaining for this debate. I should announce to the House that I have selected the amendment in the name of the Leader of the Opposition.
10.15 pm
The Parliamentary Under-Secretary of State for Employment (Mr. Eric Forth): I beg to move,
That this House takes note of European Community Documents Nos. 8072/90 and 9601/90 on non-standard work; and endorses the Government's view that, in the light of the 1·6 million new part-time jobs created in the United Kingdom since March 1983 and the overwhelming preference of part-time workers for part-time rather than full-time work, the Government should not accept proposals which would greatly increase the cost of employing part-time and temporary workers and would significantly reduce the number of jobs, thereby damaging the competitiveness of our industry, and that of the European Community.
I begin by apologising to the Scrutiny Committee for the fact that it has had very little time to consider the new explanatory memoranda on the revised versions of these directives. As I am sure hon. Members will appreciate, the new documents were received only at the end of last month, just in time for the Social Affairs Council on 26 November.
This debate is timely, as it allows me to outline the Government position in the run-up to the next Social Affairs Council on 18 December, where these three directives will again be considered.
The motion concerns three proposed directives which the European Commission published earlier this year as part of the social action programme to implement the social charter.
I should like to make a few general points which will, I hope, help to put this debate into context. The Government believe that what the Community does must pass the test of three criteria—those for Community action which were unanimously agreed at the Madrid European Council in June 1989. This implies looking at each Commission proposal on its merits and asking the following three questions. First, will the proposal encourage the creation of jobs for the people of Europe? Secondly, if the proposal passes this test, is action necessary at Community level? Finally, if such action is shown to be necessary, does the proposal respect the different national traditions and practices which exist in the Community?
The social action programme contains nearly 50 proposals which the Commission has committed itself to bringing forward by the end of next year. About half the proposals are for legally binding directives. That represents a significant volume of new regulation of employment and social affairs. Overall, we hope to be able to accept most of the Commission's proposals, especially on health and safety. Others pose great problems for the United Kingdom and at least two of the three directives referred to in the Government motion fall into that category.
Before getting on to the detail of the motion, I should like to say a word about our commitment to the European Community. The true criterion for commitment is the extent to which countries have implemented and put into
1052
effect measures that the Community has already agreed. On that criterion, our record of commitment is outstanding.
Let me give some figures. Of the 107 measures due for implementation by March of this year under the single market programme, the United Kingdom had failed to implement only 18. That is an excellent record. There is a yawning gap between our performance and that of those at the bottom of the league. For example, Italy still must implement no fewer than 62 single market measures.
Our record in the social area is even better. At the last Social Affairs Council in November the Commission produced a report on implementation of existing EC social legislation throughout the Community. According to the Commission's own figures, the United Kingdom leads all other member states; and of the 18 existing directives in the social field, we are the only member state to have implemented all of them.
It is also worth looking at the extent to which countries take rapid action to comply with judgments of the European Court of Justice when legislation to enact measures approved by the Community is held to be deficient. We have only one judgment outstanding. Germany has 12 and Italy 37. Those are figures in which we can justifiably take pride. In my view, they are not sufficiently well known or understood, but they illustrate and underline our commitment to the Community.
The three draft directives referred to in the motion amount to a package of measures covering part-time and temporary work—what the Commission, rather unhappily, calls "atypical" or "non-standard" work.
The first directive deals with
"certain employment relationships with regard to working conditions",
to use the Commission's wording. We normally refer to it for convenience as the article 100 directive, referring to the fact that the Commission has put it forward under article 100 of the treaty of Rome. The directive contains a large number of proposals governing the working conditions of part-time and temporary workers, excluding those who work an average of less than eight hours a week, but including temporary staff working through employment businesses and also those on fixed-term contracts.
The second directive concerns
"certain employment relationships with regard to distortions of competition",
again to use the Commission's own wording. For convenience, we normally refer to that as the article 100A directive, to distinguish it from the other two, which are put forward on different legal bases. This draft directive contains a number of provisions intended to remove alleged distortions of competition caused by different rules in member states governing the employment of part-time and temporary workers. It is subject to the same exclusion and inclusion which I have just mentioned on the article 100 directive.
I say in parenthesis at this point that the Commission has produced no evidence to substantiate its allegations about "distortion of competition". Many part-timers are in fact employed in the non-trading sector where competitiveness is unlikely to be affected by differences in their treatment. Furthermore, any competitive distortion of this kind is insignificant compared with the much greater differences in labour costs resulting from differences in pay levels and overall social security provision.

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Finally, the third draft directive deals with the health and safety of temporary workers.
Mr. Teddy Taylor: Before my hon. Friend the Minister moves on from the article 100A directive, can he tell us whether the Government believe that 100A is the appropriate article, bearing in mind that these very expensive and silly regulations can now be imposed on the United Kingdom, whether we like it or not? Do the Government accept article 100A? How can all this be happening when apparently we have not even signed the social charter?
Mr. Forth: As usual, my hon. Friend has made a telling point. Indeed we did not sign the social charter and this programme flows from it. We have taken to ourselves the right, as a member state, to examine each element in the programme on its merits and to apply to it the tests to which I have just referred to see whether the measures are appropriate or worthwhile. As I have said, we believe that some of the measures, particularly with regard to health and safety, are defensible and desirable and they will have our support. However, as I was about to say, we do not believe that the other measures on atypical work deserve our support, certainly not in their present form. The truth is that we do not accept that the legal base is sound and we have indicated our unhappiness and dissatisfaction about that. That is a cause of continuing discussion in the Council of Ministers. I hope that I can satisfy my hon. Friend more fully later in my speech, although I doubt it.
I was about to refer to the directive known in shorthand as the article 118A directive. I should make it clear at the outset that the Government support the principle of the article 118 directive on the health and safety of temporary workers. A broad measure of agreement has been reached in official discussions on this proposal. While some important points of detail still need to be resolved—for example, we need, in particular, to ensure a flexible requirement that does not impose unnecessary burdens on industry—I am sure that the Council of Ministers could move fairly quickly to a common position on this directive.
However, the other two draft directives pose great problems and are in our view misguided. Our view is that the Commission's proposals would greatly increase the costs of employing part-time and temporary workers. They would significantly reduce the number of jobs and thereby damage not only our industrial competitiveness, but that of the European Community as a whole.
It may help if I set the scene on part-time and temporary work in the Community as a whole before referring to the position in the United Kingdom.
Throughout Europe, employers are having to find new and more flexible forms of work to attract into jobs the peope whom they need for their businesses. The number of part-time and temporary jobs in the Community has grown rapidly in recent years, and there are now 14 million part-time employees, and 10 million temporary workers throughout the Community.
Community labour markets are extremely diverse. For example, part-time work is unusual in Italy, Portugal and Greece. But in Denmark, the Netherlands and the United Kingdom more than one in five jobs are part-time. As far as temporary workers are concerned, in some countries, such as Spain, Portugal and Greece, about one in five
1054
employees are employed on a temporary basis. By contrast, in Italy, Belgium and the United Kingdom only about one in 20 jobs fall into that category. It is worth noting that in Italy temporary work is very strictly controlled.
But all the signs are that employers will need to create more flexible job opportunities in response to changes in industries and occupations and the nature of work itself. The demographic changes that are taking place throughout Europe mean that employers will increasingly need to take on women and older workers. Moreover, there will be increasing demand for part-time and other flexible opportunities.
What is the Commission's response to that? There is a clear signal in its description of part-time and temporary work as "non-standard" or "atypical". It appears to think of part-time and temporary work as in some way second-rate and unpopular with employees.
That is certainly not the experience of the United Kingdom. Nor does it square with the experience in other Community countries, where the unsatisfied demand for part-time work is such that there are many applications for every part-time vacancy advertised.
In the United Kingdom, almost a quarter of our employed work force is part-time—about 6·5 million people. Clearly, there is nothing "atypical" about part-time work here. Well over 1·5 million new part-time jobs have been created since 1983 and there is clear evidence that the demand for part-time jobs will continue to increase.
Moreover—this point is crucial—there is no doubt that part-time work is popular with employees in this country, as well as with employers. People who work part time in Britain do not think that they are second-best to those who work full time. They work part time because they want to.
The most recent labour force survey shows that fewer than one in 14 work part time because they cannot find a full-time job. Part-time work is particularly popular with women. Only 6 per cent. of women with part-time jobs took them because they could not find a full-time job. A survey commissioned by the CBI in the spring of 1990 showed that 80 per cent. of women in Britain who want to return to work in the next five years will be looking for part-time work.
The Commission's approach to part-time and temporary work would put at risk all those desirable developments. The effect of this proposal would clearly be to make part-time and temporary work more expensive for employers and more difficult for them to organise. There can be only one result of that—fewer opportunities for part-time work.
My Department's economists have estimated that the direct impact costs of the Commission's proposals to employers in the United Kingdom would be about £1 billion. The figure does not include the increased burden of regulation associated with the directives. Therefore, the implementation of those directives in the United Kingdom would imperil thousands of jobs.
The social security aspects of those proposals would also have a direct effect on the pay of many employees. For those 1·75 million employees in Britain who work part time and earn less than £46 per week, the proposals would actually have the effect of reducing their take-home pay by making them liable to pay national insurance contribu-ions for the first time.

1055
We are not alone in our views. Unlike most other member states, we consulted widely on the Commission's proposals. Almost every response from United Kingdom employers saw the potential in the proposals for costs to increase and the inevitable consequences for their ability to create jobs.
The general approach of the Government to these matters is to encourage employers to create part-time and flexible job opportunities. That is good for efficiency and it is what gives choice to employees. It means avoiding the unnecessary regulation of employment, which would add to employers' costs and make it harder for them to create jobs, while maintaining a strong framework of essential employment protection.
Mrs. Audrey Wise: The Minister mentioned consultation and employers. Who else did he consult? Specifically, did he consult trade unions?
Mr. Forth: Yes, indeed. We consulted several hundred organisations and companies and undertakings. Overwhelmingly, the response from employers who create wealth and provide job opportunities was hostile to the directives.
Perhaps surprisingly, the trade unions generally support the measures. That confirms my long-held belief that the trade unions are no longer interested in employment and jobs. They might be interested in providing misguided protection for those relatively few of their members who are left, but they are not interested in providing increased job opportunities for people who tend not to be trade union members. The response from the trade unions is revealing and damaging.
Mr. Tony Lloyd: Given that the Institute of Personnel Management has made the same kind of welcoming noises to the directives, does the Minister also believe that that institute is not interested in employment and jobs?
Mr. Forth: The hon. Gentleman is wrong. The institute welcomed some elements of the directives, but, equally, it thought that some others would be damaging. I think that it would be fair to characterise its response as somewhat mixed. Although the hon. Gentleman is entitled to take a selective view of what one body said——
Mr. Paul Flynn: The Minister is also being selective.
Mr. Forth: I did not mention the Institute of Personnel Management; I am simply responding to the question. I want to ensure that the House is not misguided by what the hon. Member for Stretford (Mr. Lloyd) said.
Mr. Tim Janman: My hon. Friend has rightly described how the British Government have consulted with employers and paid heed to their valuable contribution. It might be more positive if the Governments of Germany and Portugal took more note of what their employers have said. The Select Committee on Employment recently visited those countries and we were pleasantly surprised at the degree of scepticism and, in some instances, the sheer opposition of employers' organisations to the directives issued as a result of the social charter. They are are opposed for the very reasons that my hon. Friend has expertly advanced tonight.
Mr Forth: My hon. Friend has made an important and striking point.
Although we make efforts to consult widely on such matters—such efforts are also made by other Departments such as the Department of Trade and Industry—it is noticeable that most of the other member states do not have the mechanism, or the will, so to consult. That explains why politicians from the continent can come to the Council of Ministers and support such measures, which can damage employment prospects. Apparently they are unwilling to acknowledge those potentially damaging effects because they have failed to consult their employers—their wealth creators—or other represen-tatives. That is damaging not only to those member states, but to the Community.
Mr. William Cash rose——
Mr. Forth: I gladly give way to the newly elected chairman of the Back-Bench European affairs committee.
Mr. Cash: Does my hon. Friend agree that one of the problems is that the other EC member states do not scrutinise the legislation properly? Although we may have to improve our methods of scrutiny, those countries have an absolute requirement to do so. Many things are not sorted out at the appropriate level in the Community because other member states do not go through the stuff in the right manner, while we are trying to do it even better.
Mr. Forth: That is correct.
Often measures before the Council of Ministers have hardly been scrutinised in the sense that the House would understand the meaning of that word. Often we have to force other countries to undertake such scrutiny and that leads to allegations of unhelpfulness, when the reverse is true. We are trying to make things workable and effective, but our attempts are often misconstrued as being negative.
Mr. John Butterfill: Is not it true that the Italian president of the Social Affairs Council, Sr. Donat Cattin, admitted that people did not realise what they had signed up to under the social charter?
Mr. Forth: My hon. Friend has demonstrated his usual perception.
The presidency has been disappointed to note that, now that we have got to the detail behind the measures contained in the social action programme, many member states that had rushed quickly to sign up to the social charter are now beginning to wonder whether those measures are what they bargained for. That explains the change in attitude in the Council of Ministers as we reach the later stages of the development of the social action programme.
Mr. Flynn: I hate to interrupt the chorus of self-adulation among Conservative Members, but I must point out that the Government are highly selective in the way that they treat the representations that they receive. They recently consulted on statutory sick pay. Every trade union and organisation of employees and of employers said that it was opposed to the changes in SSP, because they would rob industry of jobs and hence of its ability to employ people. The Government wholly ignored that consultation, yet tonight they pretend to be responding to consultation. When they disagree with the results of consultation, they ignore it.
Mr. Forth: The hon. Gentleman is entitled to his own interpretation. I was not responsible for the DSS consultation on SSP, but I am sure that it was comprehensive and detailed. In my experience, once changes of the sort mentioned by the hon. Gentleman have been carefully explained to those affected by them, they see them in a more positive light. I have found when dealing with small business, for which I am responsible, that, once people have the true nature of the changes explained to them, they respond more positively. That gives the lie to the hon. Gentleman's suggestion. But as we are not debating statutory sick pay this evening, I do not want to use up any more time——
Mr. Flynn rose——
Mr. Forth: I really must get on. The hon. Gentleman has introduced a red herring to the debate, and we should now allow it to rest.
The Commission's proposals on part-time and temporary work deal with matters that are best left to individual member states to decide. In other words, the proposals offend against the Commission's own principle of subsidiarity—the principle that action should not be taken at Community level unless the objective can be achieved only by action at that level; and that such action should go no further than is necessary to achieve the objective.
The proposals are costly. They are unnecessary. They are also counter-productive because they would harm the interests of the very people whom they seek to protect. The result would be a loss of jobs throughout the Community.
The effect on employers would be equally disastrous. They would face restrictions on their ability to organise and to afford the flexible working patterns that they and their employees need. At the same time, businesses throughout the European Community must continue to compete with businesses in countries such as the United States of America and Japan, to say nothing of the newly industrialised countries, which do not have similar restrictions. It is significant that in the 15 years between 1973 and 1988 total employment in the Community grew by only 5 per cent. Over the same period employment in the United States of America grew by 35 per cent.
The Commission takes no notice of all this. It has not even entered its head. For example, it is astonishing that it has put forward its proposals without making any assessment of the impact that the proposals would have on employers' costs and on jobs in the Community.
It is often suggested that we are on our own in having doubts about the Commission's proposals on part-time and temporary work. That is quite wrong. It was clear from the last meeting of the Social Affairs Council on 26 November—my hon. Friend the Member for Bournemouth, West (Mr. Butterfill) made this point—that other member states shared a number of the United Kingdom's doubts and reservations about the Commission's proposals, both on the legal base and on the substance. That Council meeting showed that when the Community gets down to discussing the reality of actual proposals, our priorities and our concerns are shared widely throughout the rest of the Community. I welcome the realism and pragmatism of that approach.
We will continue to challenge the need for these directives, while playing a full and constructive part in discussions on them. During the negotiations we will urge
1058
our Community partners to ensure that whatever we do at Community level will help, instead of hinder, employers in every Community country to create the part-time and other job opportunities which the people of Europe want and which employers need.
Mr. Teddy Taylor: Will the Minister give way? He promised to answer a specific point.
Mr. Forth indicated dissent.
Mr. Taylor: Will the Minister give way?
Mr. Deputy Speaker (Sir Paul Dean): Order. Is the Minister giving way?
Mr. Forth: No.
Mr. Taylor: That is unfair.
10.39 pm
Mr. Tony Lloyd: I beg to move, as an amendment to the motion, to leave out from "work" to the end of the Question, and to insert instead thereof:
"recognises the significant increase in the numbers and proportion of people in the United Kingdom labour force engaged in part-time and temporary work; is aware that many people, including a high percentage of women workers, rely on such work in the absence of full-time employment or to fit in with other demands on their time; is conscious of the important economic contribution of such workers; believes that measures designed to put the working conditions of such people on the same footing as full-time employees is in itself socially desirable and would reduce any artificial incentive for employers to create part-time rather than full-time work.".
I shall leave Conservative Members to continue their internal row while the Opposition continue to speak for the interests of the nation and for the interests of those people, mainly women, who are engaged in part-time work. I am pleased to be accompanied by the Opposition spokesman on women's issues, my hon. Friend the Member for Barking (Ms. Richardson). I contrast that with the attitude of the Prime Minister, who failed to appoint a woman to his Cabinet.
We are debating the social charter, about which the Minister and his hon. Friends have become quite excited. The debate is important because, as the Minister has said, it is the first debate on the substance of the social charter. It is a great shame that Conservative Members talk about consultation and the demerits of Europe's devious Foreign Ministers. The Council of Ministers had already met to discuss the directives before the House had an opportunity to debate them.
The Minister shows contempt for our democratic processes by complaining about consultation by other bodies, when it is obvious that the Government did not make a meaningful attempt to bring about consultation. Conservative Members who read the Government's consultation document might be surprised to find that the Government's consultation offer was couched in a way that would lead a casual reader to conclusions warranted only by the premises in that so-called consultation document. It answered its own questions, and as an exercise in consultation it was nothing more than a hollow joke.
Mr. Janman: Will the hon. Gentleman give way?
Mr. Lloyd: No.
Mr. Janman: The hon. Gentleman is frightened to give way.
Mr. Lloyd: We are debating not only progressive measures from the European Commission but also the way in which the Government are prepared to sabotage the interests of our working people. By their stupid and crass approach to European matters, the Government are jeopardising not only the position of part-time workers but their own position. I shall develop that matter later.
Mr. Janman: I am grateful to the hon. Gentleman for giving way. It proves that he is not frightened. Why does the hon. Gentleman think that the Government are sabotaging the interests of working people? I emphasise the word "working". If the Government were to support the directive on part-time working and some of the other European Commission directives, there would be a substantial reduction in the number of people in work.
Mr. Lloyd: I invite the hon. Gentleman to listen carefully to my speech. I hope that I can set his mind at rest and that he will have the intellectual honesty to vote with the Opposition on this matter. By being alarmist, the Government may please Conservative Members, but such an approach serves no useful purposes to employers or to employees.
The Minister has said that, throughout Europe, there are about 14 million part-time workers and about 10 million temporary workers. In Britain there are well over 5 million part-time workers. The Minister says 6 million, but we are not here to quibble over the exact figure or to deny that part-time work plays an important part in our economy. Our amendment makes it clear that we value the contribution of part-time workers and recognise their importance and the importance of such work as a means of offering flexibility to employers and employees. In so far as the relationship is acceptable to both parties, the Opposition are as determined as anybody to make sure that part-time work remains a useful and successful part of the national working and economic scenes.
Mr. Patrick Cormack: Will the hon. Gentleman also recognise that there is a difference between temporary and part-time work, and that both are equally important?
Mr. Lloyd: I agree, and the Labour party has no objection to temporary work. Many employers are beginning to employ part-time and temporary workers on contracts equivalent to those offered to full-time workers. The Incomes Data Service found in its study of June of this year that, out of a sample of 32 companies, all but five had made improvements to the conditions of part-time workers over the past five years, and had moved them more into line with full-time workers. We know from evidence given to the Select Committee on Employment that Unilever feels that it gets a 9 per cent. productivity advantage by employing part-time workers. Many firms in banking, finance and retail are beginning to bring part-time conditions into line with those for full-time workers. Ford has recently announced that it intends to employ part-time workers so as to get over problems of absenteeism.
Government Departments, such as the Treasury and the Customs and Excise, have moved some way towards approximating conditions for both full and part-time workers. In none of those companies and Departments has the cry gone up that they are either jeopardising employment or introducing an unnecessary financial
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burden. The House must understand that many enlightened employers already recognise that it is in their interests, both in moral and productivity terms, to make sure that this happens. In some cases, this is because both local or national skill shortages, or demographic changes, have meant that employers have had to take into account the need to provide flexible employment conditions so as to attract into work people who would not otherwise be available.
Mr. Butterfill: I thank the hon. Gentleman for giving way; he has been most generous in doing so. Does he accept that the principle of subsidiarity is important, and, if so, does he accept that a directive such as this should be introduced only if there is serious distortion of competition arising out of it that needs to be corrected? Does he also accept that the Commission has given no evidence that there is any such distortion?
Mr. Lloyd: While we understand the concept of subsidiarity, and in some circumstances would accept it as a rationale for national decision making, the Opposition accept the social charter as a necessary parallel to the single market process. We not only believe that the charter is social justice, but demand that employees should be given social conditions comparable to the best in Europe. That is important, and because of the Government's failure to do anything to protect the employment rights and conditions of part-time workers, we insist that the Community brings in these directives to do so instead. That does not violate the principle of subsidiarity, but rightly means that, where a Government fail to behave acceptably, the Commission has an obligation to protect the people of the country.
The Minister did not address the downside of part-time work. While national and local skill shortages and demographic change may lead to employers needing to offer flexible employment, the Opposition are not content to rely on those factors as the guarantor of acceptable working conditions for millions of lower paid, part-time workers, the majority of whom are women.
More than four in five part-time workers are low-paid on any normal definition of that term. We are not prepared to accept the lack of training opportunities for the low-paid. This country and Ireland alone in the Community have legal systems that actively discriminate against part-time and temporary workers, allowing their employment conditions to be worse than those of people in full-time work. The Opposition find that morally objectionable and economically unjustifiable.
I am conscious of the challenge put to me by the hon. Member for Thurrock (Mr. Janman). The existence of legal discrimination against part-time workers is tantamount to indirect discrimination against women, and runs contrary to article 119 of the treaty. No one looks to the present Government to do anything practical about those problems. We welcome the decision made by the courts in the Bilka-Kaufhas case, which made it clear that less favourable pensions for part-time workers ran contrary to article 119 and effectively amounted to unlawful discrimination against women. I want to place on record our strong support for the recent decision by the Equal Opportunities Commission to take the Government to court on the issue of indirect discrimination against

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part-time workers who work too few hours to qualify for protection against unfair dismissal, and who lose out on redundancy compensation.
We applaud the EOC's decision, but will the Minister quash once and for all the rumour that the Government intend to extract a penalty from the EOC for its temerity in taking them to court? It is important that the Minister should place it on record that there will be no retribution.
There is no doubt that our legislation directly discriminates against women, and as such it has no role in the kind of society that we want to build, although it is entirely consistent with the policies of a Government who have abandoned any pretence of making available adequate child care provision and the concept of allowing women to go back to work.
The Minister cited his own study. I propose to quote from the EOC's study:
"The two disincentives to women working longer hours, or in some cases going out to work at all, are the lack of affordable quality child care while children are young and the absence of attractive employment prospects."
The provision of adequate child care is in the Government's hands; they do nothing about it and therefore condemn many women to part-time work. The lack of acceptable work for women is central to the part of the directive dealing with training.
Will the Minister explain why the Government oppose —or have made no positive noises about—that part of directive 100 which would give part-time workers access to training on an equivalent basis to full-time workers? Without that, he knows that he condemns many women to continue in part-time work when they would benefit from the training that would allow them to move into a different kind of employment when their circumstances allow it.
Mr. Janman: The hon. Gentleman is discussing part-time workers, the way in which Britain goes about things and the opposition to the directives. He says that we are discriminating against women in some way. That is complete and utter piffle. Only 6 per cent. of women in part-time work in Britain are in part-time work because they cannot find full-time work. More than nine in 10 are in part-time work because that is what they want and because part-time working fits in with their other responsibilities, such as looking after their families.
We have a good record in the European Community when it comes to providing part-time jobs in the marketplace. How can the hon. Gentleman seriously allege that, in standing up to the Commission on the directives, we are acting against women's interests, given that we merely seek to protect part-time jobs which more than 94 per cent. of part-time women workers want?
Mr. Lloyd: That was an inordinately long intervention. The Government survey is nonsense. Those 94 per cent. of women do not seek part-time work: they work part-time because in many cases child care facilities are not available to enable them to work longer hours. The hon. Gentleman has little experience of these matters. I invite him to come and talk to many women—my wife is an example—[Laughter.] I am amazed that the Government Whip, the hon. Member for Derby, North (Mr. Knight), should find it a source of mirth that the spouse of an hon. Member should be denied access to better working conditions because of inadequate child care facilities.
Mrs. Edwina Curries: May I suggest that the hon. Gentleman shuts up and sits down, and allows somebody on the Conservative Benches to put the case better?
Mr. Lloyd: The hon. Lady is never shy to put forward the virtues of her arguments. If she will allow me, I shall make my case in my own way. I shall listen with interest to what she has to say when she makes her speech.
There is discrimination against women in the workplace because of the discriminatory nature of legislation. It is important to contrast the position in Britain with that in other countries. The Minister made great play with the position elsewhere and mentioned that there is a higher proportion of people in part-time work in the Netherlands and in Denmark than there is in Britain. They have greater regulation—[Interruption.] The Minister disagrees. Can he give any examples of comparable discriminatory legislation against part-time workers in those countries? Such legislation does not exist in those countries, but it certainly exists in Britain.
I know that Sweden is not a member of the EEC, and as such will not be bound by the directives, but it already has conditions that apply to part-time workers that are more stringent than those that would apply under these directives, but it found that there was no diminution in part-time work.
France is probably a better example. In 1982, it introduced provisions that are much tighter than those contained in the directives. Between 1983 and 1988—a period that the Government often use as a basis for jobs growth—the increase of part-time work in Britain was about 26 per cent., but in France it was 36·6 per cent. Despite all the onerous regulations on part-time work in France, there was a much greater increase than in Britain —[Interruption.] The figures are in front of hon. Members, and it is for them to draw the interpretation from them that I draw.
There has been a greater growth in the proportion of part-time work in France than in Britain, despite the Minister's claim that regulations would destroy jobs. There is no evidence for that. I have read the methodology of the Department of Employment; the Minister should be ashamed to pray that in aid, because it is a shoddy piece of work.
Even if the figure of £1 billion that the Minister said would be the cost of the directives was accurate, is not that a little less than the costs imposed on business through the uniform business rate? Can the Minister draw any conclusions about the relative impact of the two? Will the cost of the uniform business rate destroy jobs in the way that the Minister claims the cost of the directives will do? If cost is central, the Government have already cost business more by the one move to the unified business rate than the directives will cost.
The Minister spoke about removing barriers, but that is a myth that the Government have perpetuated for many years. It is nonsense to say that the so-called barriers would act as a disincentive to employment. Survey after survey shows that only a small proportion of employers are deterred from employing people because of onerous employment rights.
According to a survey undertaken by Wood and Smith in 1988 for the Department of Employment, less than 1 per cent. of employers gave as a reason for employing

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part-timers the fact that they have fewer rights under employment protection law. The idea that a lack of employment rights is an incentive to employ is nonsense.
Three quarters of employers said that they used part-time workers to carry out tasks that are done for a limited number of hours, 30 per cent. to match staffing levels to peaks in demand, 33 per cent. because applicants wanted part-time work and 21 per cent. in order to keep staff who no longer wished to work full-time. There was no suggestion that removing the barriers would, as the Government claim, have any real effect on the location of employment.
Mr. Butterfill: Is not the hon. Gentleman saying that, because grass is green, everything that is green is grass? What he is saying is a non sequitur. If he is saying that employers do not choose to employ part-time workers because they cost less, that does not mean that they choose them for that reason. It does not mean that they would not be deterred if there were these impositions. He is surely putting the matter the wrong way round.
Mr. Lloyd: The hon. Gentleman has to understand that the position cannot be tested and I cannot give empirical evidence of what would happen were the directive in force, because the situation has not arisen. I have given examples of what happens in other countries and the view of employers, and that is as far as I can go. The hon. Gentleman can speculate, and his ideology insists that he speculate in a particular direction. All I can say is that the evidence does not support the views that he puts forward.
The same arguments have been put forward in the past, when other social legislation affecting employment terms and conditions has been introduced. I can remember Conservative Members arguing that equal pay would lead to lack of work for women. It did not. We saw a growth of employment for women in the period that followed. Whenever social legislation offers protection to workers, the Conservative party says that it will destroy jobs. It does not in Europe and it does not in Britain, but hon. Members want to believe it, because it fits in with their ideology and with the myth that protecting people at work harms jobs. It gives their economic and social arguments a veneer of respectability.
Mr. Quentin Davies: Is the hon. Gentleman denying the proposition that an increase in the price of anything reduces demand for it—a proposition which applies equally to labour as to any other commodity? If he is denying that, he is altering the basic rules of economics, as well as, I am afraid, denying the rules of common sense.
Mr. Lloyd: The hon. Gentleman has a weak understanding of economics, because there is something called derived demand and if he consults elementary text books he will discover that that can account for exactly that situation. The hon. Gentleman will forgive me if, rather than engaging in a debate about elementary economics, I press on with the more important matter of the directives.
It is significant that the Minister talked hardly at all about specifics. He said nothing about the Government's insistence on denying part-time workers access to training. That beggars belief, given the Government's claimed
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commitment to high quality training. The Opposition do not believe their claims, and we are reinforced in our lack of belief by the Government's action on the directive.
Do the Government still believe the nonsense peddled some time ago in the press that people on high incomes working fewer than eight hours would automatically be exempt from national insurance contributions as a result of one of the directives? It is important that the Minister should face up to the truth rather than continue to peddle that nonsense.
The Government's approach is dangerous, because, if the Minister is right, those on low pay could find themselves in difficulty. Lawyers would need to resolve the matter, but I can understand why the Minister argues as he does. But rather than risking a situation in which the French and Germans, having resolved their difficulties, accepted the directive and thus the situation that the Minister claims he is trying to defend us from, surely he would be better to negotiate seriously and not simply try to disrupt the whole basis on which the Commission and the Council of Ministers are proceeding—a much more important debate than the one in which the Minister wishes to engage. We should be in there; a Labour Government would be in there.
Mr. Forth: Can the hon. Gentleman explain this term that his party is so fond of using and abusing—"in there negotiating"? Officials from my Department spend days and days each month negotiating, and my fellow Ministers and I spend hours and hours, days and days, negotiating in the Council of Ministers. Where does the hon. Gentleman get the impression that all the Departments of Her Majesty's Government are not "in there negotiating" in the European Community?
Mr. Lloyd: I will tell the Minister precisely what I mean by that term. It comes up when Ministers make their frequent comments in the press—for example, when the now departed Secretary of State said that the Government would launch a crusade against the social charter, sounding like a latter-day Richard Coeur de Lion; when the Secretary of State told the press earlier this year, when the proposals were first drafted, that the Government intended to oppose them fundamentally; even when the Minister left the Council of Ministers meeting a couple of weeks ago and said that he felt that some long and tough negotiations would take place. It came up when the Minister told the TUC not so long ago that the Government were not prepared to accept anything in the first two directives, and would accept only a little in the third.
That is why we believe that the Government are not negotiating, and have no intention of giving part-time workers decent working conditions. That is why the Opposition disagree fundamentally with their position. We should be in there negotiating: we should be protecting the interests of part-time workers, and, where there is a legitimate national interest to defend, we should be defending it. What we should not be doing is what the Government are doing. They are using their own internal war as a justification for a war in Europe, and using divisions within the party as a reason to continue to play the European card to promote dissension—although, in so doing, they jeopardise that legitimate national interest, and the interests of workers.

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In general, the Opposition welcome the directives—although parts of them should be subject to negotiation —and will do what we can, certainly when we are in government, to pursue them unilaterally if needs be.
Mr. Jonathan Aitken: On a point of order, Mr. Deputy Speaker. I fear that we are suffering the effects of a conspiracy of elongated boredom on the part of the two Front Benches. The hon. Member for Stretford (Mr. Lloyd) has now bored the House for 28 minutes, with much less excuse than my hon. Friend the Minister, who had the Government's point of view to present—and he took 24 minutes.
In a 90-minute debate, with many distinguished former Ministers, Back Benchers and other hon. Members on both sides of the House wishing to contribute, this really is a disgrace. It is yet another example of how the procedures of the House simply cannot work in 90-minute debates that take place late at night.
Mr. Deputy Speaker (Sir Paul Dean): I understand the point that the hon. Gentleman is making. It is true that the debate must end at 11.45 pm. I have the strong impression that the hon. Member for Stretford (Mr. Lloyd) is approaching the conclusion of his speech.
Mr. Lloyd: I was, Mr. Deputy Speaker; but let me remind the House that I will make my own speech in my own time, on behalf of the Opposition.
I agree with the hon. Member for Thanet, South (Mr. Aitken) on one point: it is ridiculous that a Minister should return from a Council of Ministers meeting, and we should have a debate after that. Nevertheless, I am not prepared to fail to make the Opposition's case—and, more important, that of the people of this country—for the sake of those whom my hon. Friend the Member for Newport, West (Mr. Flynn) rightly describes as the "Bruges loonies" on the Conservative Benches.
This issue is far too important for us to let the Minister pursue his own ideological fantasies. People expect better of the Government, but they will not get it. They therefore look to the European Community to bring in the directives, and they will have the Opposition's support.
11.10 pm
Mrs. Edwina Currie: I am not very happy about the wording of the motion. If we had tabled a motion to take note, or a motion that supported our Ministers in active negotiations to achieve whatever is best for the work force of this country, I should have felt very much happier. The wording of the motion is somewhat dismissive of part-time workers, the majority of whom, as the hon. Member for Stretford (Mr. Lloyd) said, are women.
The economics are probably wrong. Jobs in this country will not disappear in the 1990s. On the contrary, the demographic time bomb to which the Department of Employment drew our attention means that we shall be short of recruits in the 1990s. We shall not be short of jobs. Much of what has been said by the Minister flies in the face of all our efforts during the last 11 years to improve pensions and to ensure that people make an investment in their own future, with businesses being encouraged to help them to do so. It will cost us a lot more money if we do not pick up the point about pensions for part-time workers.
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The Government are right to emphasise that the overall package is far too expensive and that to impose it on every business would be a mistake. To impose it overnight on business would also cause great problems. I shall restrict my remarks, therefore, to pensions for part-time workers.
The politics are wrong. If we asked women part-time workers whether they would like to have pensions as part of their part-time work, pro rata with their salaries, I think that they would be thrilled to bits. It is already good practice in this country; it is the policy of the very best employers and the practice is increasing year by year.
Who are we talking about? In 1989, 72 per cent. of all women of working age had paid jobs of one kind or another and 29 per cent. of them were part time. It is complacent nonsense to suggest that the reason they are part time is that they all passionately want to be part time. The reason that they are part time is that they are looking after children. In many ways that has to be in the public interest. It is certainly the policy on this side of the House that women should have such a choice. Twenty-nine per cent. of women with children under five are working part time; 49 per cent. of those with children between the ages of five and nine are working part time; 43 per cent. of those with children between the ages of 10 and 16 are working part time; but only 22 per cent. are working part time once their children reach the age of 16. Then they switch to full-time work. By that stage we are close to having eight out of 10 women in this country in paid work. Therefore, we are referring to millions upon millions of women for whom the preference for part time work is a matter of having no choice. We want them to be part time and we want to encourage them to do part-time work.
Even those women who are in full-time work in this country enjoy far fewer benefits, particularly with regard to pensions. The OPCS monitor of the general household survey for 1989, published on 30 October, showed that 80 per cent. of male full-time workers are in a pension scheme, whereas only 66 per cent. of female full-time workers are in a pension scheme. We do not yet have the 1989 figures for part-time workers in pension schemes, but they are mostly women and most of them do not stand a whisker's chance of being in a pension scheme unless they are employed by one of the most thoughtful and enlightened employers.
Let me pursue the question about loss of jobs. The Department of Employment says that by the end of the 1990s there will be 1 million new jobs. Conditions in the 1990s will not be the same as those that we experienced in the 1980s. There was a glut of young people in the 1980s. We had to find 1 million additional jobs just to keep unemployment below the 3 million mark. That will not happen now. The Department of Employment's own figures show that the number of 16 to 19-year-olds coming into the jobs market during the next few years will drop by 23 per cent. By the end of the century the number of people of working age under the age of 25 will have dropped from around the 8 million mark, where it is now, to about 6 million. So 2 million people will simply disappear. The Department of Employment has been hammering away, trying to persuade employers to take this fact on board and to be realistic about it.
What that will mean is more women workers. Again, the Department of Employment has said that, of the 1 million new jobs between now and the end of the century, 90 per cent. will have to go to women because there will be no fellas to do them. In particular, there will be no young

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workers to do them. On the one hand, the Department says that 90 per cent. of the new jobs will go to women workers. On the other hand, it says, suddenly, that all those jobs will vanish. Frankly, I doubt it. I do not think that they will vanish. I am not sure that the hon. Member for Stretford made a very good case, but the economics are all there and the figures are all there.
However, my main concern and the reason why I shall not support the Opposition in the Lobby is that an important point of public policy has been completely missed. What do most businesses and working people in this country complain about? The answer is tax. If we add up the amount of tax that the average working man with a family is now paying, including income tax and VAT and all the other bits and bobs, one finds that a higher proportion of his income is taxed now than when this tax-cutting Government came into office in 1979. Most businesses would prefer to pay less corporation tax and less VAT.
It costs us a fortune to assist people who do not have a pension. What is the largest burden on businesses? Tax. What is the largest departmental budget? Social security. What is the largest single item in the social security budget? Pay-as-you-go pensions, and the second largest item is income support. I would like to bet that if the Department of Employment carried out a careful analysis of the social security statistics, it would find that many of those who are claiming income support and who have no contributions towards their pensions are people who worked part time —mostly women—or women whose husbands did not have a pension scheme or whose pension scheme did not have an allowance for survivors.
Three and a quarter million women of pensionable age live alone in this country. They are—they do not wish to be—a considerable burden on the public purse. What bothers me is that if we continue to be so negative about notions of encouraging pensions for part-time workers, that will increase. It is the one budget that will not shrink. In the interests of keeping public expenditure under control and of bearing down on inflation, on which we do not have the best record in Europe, I believe that there is a strong public policy case for looking once more at the question of pensions.
We should begin to require employers to work towards having a decent pension scheme for every employee. That should be done gradually, over a long period. We could exempt smaller businesses, as we do from many other burdens, and ensure that the costs were kept under control for them. The pension should be pro rata to the employee's salary, as is the case in Marks and Spencer, Sainsbury and many other businesses. The costs should be shared between the worker, the employer and the Government —in the sense of tax relief, which is how we could encourage the development of the pension scheme.
That would mean that in years to come fewer people would be dependent on the pay-as-you-go pension, fewer people would need to draw social security and there would be more people proudly having invested in their own pensions with the encouragement and the contributions of their employers. That fits mightily with everything that this Government have tried to do since 1979.
11.17 pm
Mr. David Bellotti: Early in his speech the Minister quoted figures relating to our colleagues in the European Community and the directives that they had implemented. That was a weak argument with which to begin, because surely the purpose of the European Community is to encourage good practices across all the countries in the Community. We and other countries should be setting an example. To compare this country with those that do nothing is a very poor argument.
The Minister then quoted only the employers and said that they were not in favour of the directives. He gave us a whole string of reasons for that, but his quotations seemed selective. Is he aware that the Confederation of British Industry gave evidence stating that
"cost savings are not significant factors on most employers' decisions to employ part-time staff"?
It is interesting that the Minister chose to ignore that evidence from the CBI and did not share it with us, while trying to convince us that all employers are against the directives.
Perhaps I can help the Minister a little more. If he had done some further reading, he would have found that a Department of Employment report on "Labour Use Strategies" concluded:
"The main reasons given for using part-time staff were to carry out tasks that only need to be done for a limited number of hours a day or to meet peaks in demand".
If the Minister had looked further, he would have found even more compelling reasons to move from the policies that he has advanced. He quoted some companies, but is he aware of the practices of that great company, Marks and Spencer, which has equal rights for its part-time workers across a variety of personnel practices? I wonder whether he is aware of the policy of the Halifax building society which offers equal rights for all employees. If the Minister took evidence from all employers, he would conclude that the views which he put to the House are not complete.
I suspect that the Minister's views are more concerned with supporting Government policy on a variety of matters. I do not believe for one moment that he is trying to be fair and just to people in terms of employment. When he looks at the Government's training policy, he might like to consider why their employment training programme discriminates against part-time training. Why is there legislation that states that a person who moves to employee status has to continue to work for 30 hours a week to get the training allowances? That is interesting, coming from a Government who believe that part-time work and part-time training are valuable.
The pressures of Government policy on local authorities have led to a reduction in the pay and conditions of part-time staff. Supply teachers employed by my local education authority are no longer paid pro rata or enjoy working conditions pro rata. That is a direct result of the Government's policy of curbing local expenditure. Supply teachers are doubly hit—they cannot work during the holidays because schools are not open, so they cannot get allowances.
The Government's policy in requiring local authorities to carry out competitive tendering has led to a reduction in the pay and conditions of part-time staff. In my county of East Sussex, many part-time staff, particularly cleaners, no longer enjoy the pension rights that they enjoyed before the authority was forced to carry out competitive

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tendering. The Minister said that he welcomed the health and safety aspects of the directive. Does he accept that the competitive tendering policies that he is forcing local authorities to undertake put some of those aspects at risk, because people try to rush their work?
Part-time youth workers are discriminated against, but the directives would help them if the Government accepted them warmly. The Government's curbs on local authority spending have led, in local authority after local authority, to a reduction in the pay and conditions of part-time youth and community workers. Those who work for 10 per cent. of a full week do not get 10 per cent. of the pay, benefits, holiday or pension contributions of full-time workers, despite their being equally qualified. If the Minister says that he supports the large numbers of part-time workers, why will he not do more to help part-time youth workers?
The hon. Member for Derbyshire, South (Mrs. Currie) referred to women. She was right in everything that she said. Part-time women workers are disproportionately affected in terms of working conditions compared with men. Child care provision is perhaps the greatest concern. Not long ago, the Government had the power to do a great deal but did little. Extending the tax relief proposals to cover all women with children in child care would be an enormous help for part-time women workers.
It is a question of what principle the House wants to adopt. We should adopt a fair standard in terms of pay, training, holidays, pensions and health and safety—whether a person works part time or full time. The Government's attitude to non-standard work is to support the small number of mean-minded employers who do not want to meet the costs that they should meet. The Labour amendment does not go far enough, but we will support it. There is much for the Minister to answer, and I hope that he will address some of the issues which I raised.
11.25 pm
Mr. Ian Bruce: I declare an interest that is directed more to knowledge than to pecuniary advantage. I was an employment agent in Yorkshire for more than 10 years and I still own a technical employment agency, although it is not active.
It is always surprising to hear hon. Members say how much they support an EC directive or draft directive. They do not say that EC directives have changed enormously since the Labour and Liberal parties rushed forward to say that the social charter was a wonderful idea. They seem to think, or suggest, that the EC directives of today are the same as those which came before us years ago. It was clear from the earlier directives that the European Community was against part-time and temporary work. It is now saying, however, that those employment relationships cannot be called into question in any circumstances. Over two decades, the Commission has produced documentation in which it has attempted to persuade us that part-time and temporary work is damaging and needs to be brushed away. It has suggested that regulations should be introduced to stop people being part-time or temporary employees for a long period.
I was surprised to hear what my hon. Friend the Member for Derbyshire, South (Mrs. Currie) had to say about part-time employees. Any private employment agency will say that the relationship between part-time or
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temporary work and employers is such that an employer will prefer to take on permanent staff. In general, an employer will prefer to take on full-time staff rather than part-time staff. Unless that is understood, the relevant arguments will be turned on their head. It is necessary almost to persuade employers that there is some market advantage in giving part-time workers full rein and allowing them to do what they want in their employment.
The average employment agency will have filing cabinets full of details of people who want part-time work. The women among them are not saying, "If I could get child care for my children for this number of hours or that number, I would do full-time work." In general, women who have young children try to ensure that they are with their children for as long as possible. Against that background, they try to find part-time work.
Mrs. Currie: My hon. Friend is right, but if employers want full-time workers and they appoint part-time workers, they do so because those are the only workers they can get. That does not rule out an obligation on both sides to ensure that, when part-time workers end their working lives, they are entitled to some sort of pension.
Mr. Bruce: I understand what my hon. Friend says, but I believe that this is the wrong debate in which to advance the views that she has outlined. I do not think that she believes that the EC should frame a set of directives to ensure that all employees should have equal conditions.
I give an extreme example. Let us suppose that an employment agency is telephoned on a Monday and told, "My employee has not turned up for work and I want a part-time or temporary employee." Let us suppose also that the employer wants especially a temporary employee. The documents are aimed at ensuring that the person who is told to rush to Smith Brothers because someone has not turned up for work is paid the same wages as the comparable staff in the organisation, has had the same training, is a member of the same pension scheme and is entitled to the same national insurance.
The market determines that the people that employment agencies send to employers to fill gaps are paid more money than full-time employees, especially in London. In other areas, where perhaps there are plenty of people available to do the work, temporary employees will be paid less money than full-time employees. The employer who takes in a temporary employee from an agency will almost always pay more money per hour for him or her than he would normally pay his own employee to do the same work. The relationship is complex. To suggest that everyone must have the same conditions is nonsense.
Mrs. Maria Fyfe: Will the hon. Gentleman clear from his mind for a moment his hostile feelings towards the Community in general and concentrate on the principle? Is he saying that in some parts of Britain, because there is a surplus of available part-time labour, employers should get away with paying less than the rate per hour that they would have to pay full-time workers? Does he agree that that would be a great injustice to those workers, who are mostly women, who have to work part time because of other responsibilities?
Mr. Bruce: I am sorry that the hon. Lady has never been in the real world. In the real world, people earn money on the basis of the demand for their particular skills. That happens in every job—except perhaps being a

1071
Member of Parliament, as hon. Members seem to get paid the same amount of money whether or not they have any knowledge of a subject. We are all paid the same.
Mrs. Fyfe: Will the hon. Gentleman give way?
Mr. Bruce: No; I have answered the hon. Lady's point.
Some points were made earlier about trade union hostility. There is indeed a great deal of such hostility to temporary employees. I am certain that that stems from the fact that trade unions do not like the thought of temporary employees not paying trade union dues. I have evidence to support that. The Manpower organisation found an easy way of ensuring that it had no bother from the trade unions when it supplied drivers to certain companies. Manpower had an agreement with the area office of the trade union involved that the company would collect the equivalent in trade union dues for every day that someone worked and ship it off to the trade union. The union got its money, although it did not know who the heck was supposed to be part of its membership. The union told the company that it could enter any of the union's closed shop areas because it was collecting union dues.
With regard to health and safety, it is right that people should have the same safety conditions whether or not they are employed on a part-time or temporary basis. We must ensure that the conditions are reasonable, because some earlier draft legislation tended to suggest that a temporary employee might have to be given one or two weeks' worth of safety training before he or she was allowed to start work. I believe that temporary employees tend to be placed in the least hazardous jobs and in those that do not require as much training. Clearly that is best for a worker who has been taken on for only a short period. I will support the Government in the Lobby.
11.32 pm
Mrs. Maria Fyfe: I was surprised to hear the Minister decry the consultation efforts of our opposite numbers in the Community. He recently admitted in a letter to me that, when consulting British organisations about maternity rates, he had not thought to consult—of all people—the Royal College of Midwives, and nor had he consulted a large number of women's organisations. He does of course consult employers, and he then presents their views as the consensus of British opinion.
The Minister compounded the offence by quoting a poll of the opinions of women in Britain, saying that only 6 per cent. want to work full time. That is hardly surprising when we consider that, by 1991, there will be more than 9 million people over 65 in the United Kingdom and 11 million children under 14. That amounts to more than 20 million people. When we consider that the responsibility for caring for the elderly and for young children lies mostly with women, then of course they will want to look for part-time work—if they feel able to look for work at all.
We must ask women what they would like for their life style if child care were provided. With the exception of Ireland, Britain has the worst record of child care among EC countries. If we did not have the disgraceful state of community care in this country, many more women would welcome the chance to work full time. The Government are bandying nonsensical figures about and taking no account of women's wishes; they are using their hostility to
1072
the EC as an excuse for permitting some unscrupulous employers to get away with paying part time women workers disgracefully low pay.
Mrs. Audrey Wise: Does my hon. Friend agree that, whether or not women want to work full time or part time, they should have equal conditions and not be exploited? Is she familar with the Department of Employment's statement that acknowledges that part timers and temporary workers are treated worse and states that that is the price that women are prepared to pay? Women are not asked whether they are prepared to pay that price. They should have the right to decent conditions, whether they work full time or part time.
Mrs. Fyfe: My hon. Friend is absolutely right. I pay tribute to her great record of work on behalf of working women, in particular low-paid, part time working women. Many thousands of working women in this country work for disgracefully low rates. The bunch opposite argue that employers should get the benefit because that is what the market demands. An hon. Member said that the dearer a commodity is the harder it is to sell it. That kind of thinking sent seven-year-olds into the mills during the last century, and there is absolutely no excuse for it.
I have still to hear why Conservative Members think that it is acceptable to pay part-time workers lower rates of pay and put them in worse conditions than those in full-time jobs. All their criticisms of EC regulations do not justify their views. If any Conservative Member would like to interrupt me to explain why he thinks that a part-time worker should have less pay per hour or worse working conditions, I should be glad to hear from him. No Conservative Member is rising to his feet to intervene. The debate is about letting greedy and selfish employers get away with it.
11.37 pm
Mr. James Paice: Many of the points that I wanted to make have already been excellently made by my hon. Friend the Minister, but certain factors need to be brought to the attention of the House, not least the hollowness of the Opposition's amendment. It specifically states that many people, including a high percentage of women workers, rely on part-time work in the absence of full-time employment. The Opposition have produced no evidence to justify that statement, which is the meat of their amendment. My hon. Friend the Minister made it clear that all the evidence is exactly the opposite. Not only the labour force survey but the Select Committee on Employment, on which I served until a year ago, have made it abundantly clear that there is no evidence that any more than a tiny proportion of part-time workers have any ambition to do anything other than part-time work. That destroys the Opposition's amendment.
The hon. Member for Stretford (Mr. Lloyd) stressed that a number of businesses are now providing good terms for their part-time workers—equivalent or even better than those for their full-time workers. They are providing the pensions that my hon. Friend the Member for Derbyshire, South (Mrs. Currie) mentioned, and all the perks that workers want. However, the hon. Gentleman failed to recognise that they are voluntarily providing them. Those business are able to assess, first, whether it is

1073
necessary to provide such terms to recruit part-time staff and, secondly, whether they are in a position to provide those opportunities.
The important thing that one must understand—it goes over the Opposition's head no matter how many times we say it—is that any business can pay its work force only that which it can afford. If it cannot afford to pay, the result may be a smaller work force, if one at all.
Mr. Peter Bottomley: Will my hon. Friend give way?
Mr. Paice: I know that the Minister wants to respond to the debate, so my hon. Friend must forgive me for not giving way.
I agree with the Minister that the directives would affect the availability of jobs. In my constituency, in common with that of my hon. Friend the Member for Stamford and Spalding (Mr. Davies), many people are involved in field-scale vegetable production. Large arable farms employ hundreds, and in one case thousands, of people for seasonal, casual work. That work attracts people from all over the country.
Recently we concluded lengthy negotiations with the Inland Revenue about oppressive regulations that it wanted to impose on employers in relation to the employment of part-time workers. Those negotiations forced the representatives of the pre-packing and processed vegetable industry to examine all aspects of the employment of their work force. They discovered that they were reliant on their freedom to meet the market for labour and for their produce. If extra restrictions had been imposed, thousands of jobs would have been lost. That would have been a disaster for my constituents who rely on such work, particularly in the summer when they are happy to be outside.
It would be equally disastrous if the directives went through unamended. I support the Government's stand.
11.41 pm
Mr. Jonathan Aitken: On a point of order, Mr. Deputy Speaker. I seek your ruling about the possible violation of Standing Order No. 14, which states:
"if Mr. Speaker shall be of the opinion that, because of the importance of the subject matter of the motion, the time for debate has not been adequate, he shall, instead of putting the question as aforesaid, interrupt the business, and the debate shall stand adjourned till the next sitting".
In support of my case, I cite the fact that the Opposition spokesman, the hon. Member for Stretford (Mr. Lloyd), took up no less than 30 minutes of the debate. That represented one third of the time allocated. I believe that it was Disraeli who said of Gladstone that he was
"inebriated with the exuberance of his own verbosity."
Tonight, the hon. Member for Stretford anaesthetised the House with his own boredom. It was an amazing performance given the short time allocated.
Even my hon. Friend the Minister is not entirely without blame as he took 24 minutes. I admit that there were many interruptions in his speech and he had to deploy the Government's case, so I cheerfully acquit him. Nevertheless, we need a voice from the Chair to stop such abuse of our procedures, which destroys the ability of Back-Bench Members to contribute. Many of my hon. Friends either walked out because they were unable to
1074
speak or they truncated their remarks to an unreasonable degree. Debates late at night cannot go on like this if the Front-Bench spokesmen take up such a large percentage of the time allocated for the debate.
Mr. Deputy Speaker (Sir Paul Dean): I understand the hon. Gentleman's point and he has put it on the record. I must inform him and the House that I am not prepared, in all the circumstances, to adjourn the debate under Standing Order No. 14(1)(b).
11.43 pm
Mr. Forth: I apologise to my hon. Friend the Member for Thanet, South (Mr. Aitken) and to the House for the length of my opening speech. I wanted to set out the Government's case, and this was the first opportunity that we had to do it. I also took nearly all the interventions that were made.
In the brief time left, I want to answer my hon. Friend the Member for Southend, East (Mr. Taylor), who left the Chamber because he was dissatisfied by my failure to answer him, although I thought that I had. My officials wrote me this answer, so it is pukka. We do not accept that article 100A is the correct legal basis and we have made our views known to the Commission and other member states, some of which share our view. These matters should be dealt with on the basis of unanimity. I hope that that satisfies my hon. Friend.
The debate has been about deciding between imposition and choice—about deciding whether we shall have a certain policy imposed on us by the Community or whether we shall leave the choice to employers. If, as a result of these measures, we risk ending up with fewer jobs and fewer part-time jobs, especially for women——
It being one and a half hours after the commencement of proceedings on the motion, MR. DEPUTY SPEAKER proceeded, pursuant to Standing Order No. 14 (Exempted business), to put the Questions necessary to dispose of them.
Question put, That the amendment be made:—
The House divided: Ayes 112, Noes 153.

Division No. 28]

[11.45 pm

AYES

Abbott, Ms Diane

Cunliffe, Lawrence

Adams, Mrs. Katherine

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

Allen, Graham

Dixon, Don

Archer, Rt Hon Peter

Evans, John (St Helens N)

Ashdown, Rt Hon Paddy

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

Barnes, Harry (Derbyshire NE)

Flynn, Paul

Barron, Kevin

Foster, Derek

Beith, A. J.

Foulkes, George

Bell, Stuart

Fyfe, Maria

Bellotti, David

George, Bruce

Benn, Rt Hon Tony

Godman, Dr Norman A.

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

Griffiths, Win (Bridgend)

Benton, Joseph

Harman, Ms Harriet

Bermingham, Gerald

Hinchliffe, David

Bradley, Keith

Hood, Jimmy

Bray, Dr Jeremy

Howarth, George (Knowsley N)

Brown, Nicholas (Newcastle E)

Howells, Geraint

Brown, Ron (Edinburgh Leith)

Howells, Dr. Kim (Pontypridd)

Caborn, Richard

Hoyle, Doug

Callaghan, Jim

Hughes, John (Coventry NE)

Campbell, Menzies (Fife NE)

Hughes, Simon (Southwark)

Clark, Dr David (S Shields)

Illsley, Eric

Clay, Bob

Ingram, Adam

Clelland, David

Jones, Barry (Alyn & Deeside)

Cohen, Harry

Jones, Martyn (Clwyd S W)

Cousins, Jim

Kinnock, Rt Hon Neil

Cox, Tom

Kirkwood, Archy

Cryer, Bob

Lamond, James

1075

Leadbitter, Ted

Pike, Peter L.

Livsey, Richard

Powell, Ray (Ogmore)

Lloyd, Tony (Stretford)

Quin, Ms Joyce

Lofthouse, Geoffrey

Reid, Dr John

McAllion, John

Richardson, Jo

McAvoy, Thomas

Rogers, Allan

McCartney, Ian

Ross, Ernie (Dundee W)

Macdonald, Calum A.

Rowlands, Ted

McFall, John

Short, Clare

McKay, Allen (Barnsley West)

Skinner, Dennis

McKelvey, William

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

McLeish, Henry

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

McMasfer, Gordon

Smith, J. P. (Vale of Glam)

Madden, Max

Soley, Clive

Mahon, Mrs Alice

Spearing, Nigel

Marek, Dr John

Steinberg, Gerry

Martin, Michael J. (Springburn)

Taylor, Mrs Ann (Dewsbury)

Martlew, Eric

Thompson, Jack (Wansbeck)

Meale, Alan

Turner, Dennis

Michael, Alun

Wardell, Gareth (Gower)

Michie, Bill (Sheffield Heeley)

Wareing, Robert N.

Moonie, Dr Lewis

Welsh, Andrew (Angus E)

Morgan, Rhodri

Welsh, Michael (Doncaster N)

Morley, Elliot

Williams, Alan W. (Carm'then)

Murphy, Paul

Wise, Mrs Audrey

Nellist, Dave

O'Hara, Edward

Tellers for the Ayes:

O'Neill, Martin

Mr. Frank Haynes and

Patchett, Terry

Mrs. Llin Golding.

Pendry, Tom

NOES

Aitken, Jonathan

Davis, David (Boothferry)

Alexander, Richard

Day, Stephen

Allason, Rupert

Devlin, Tim

Amess, David

Dunn, Bob

Amos, Alan

Eggar, Tim

Arbuthnot, James

Evennett, David

Arnold, Jacques (Gravesham)

Fallon, Michael

Ashby, David

Favell, Tony

Aspinwall, Jack

Fishburn, John Dudley

Atkinson, David

Forman, Nigel

Baker, Nicholas (Dorset N)

Forsyth, Michael (Stirling)

Beggs, Roy

Forth, Eric

Bennett, Nicholas (Pembroke)

Fox, Sir Marcus

Bevan, David Gilroy

Franks, Cecil

Blackburn, Dr John G.

Freeman, Roger

Blaker, Rt Hon Sir Peter

Gale, Roger

Boswell, Tim

Glyn, Dr Sir Alan

Bottomley, Peter

Goodhart, Sir Philip

Bowis, John

Goodlad, Alastair

Brazier, Julian

Goodson-Wickes, Dr Charles

Bright, Graham

Greenway, John (Ryedale)

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

Gregory, Conal

Bruce, Ian (Dorset South)

Griffiths, Peter (Portsmouth N)

Buck, Sir Antony

Hague, William

Burt, Alistair

Hamilton, Hon Archie (Epsom)

Butcher, John

Hampson, Dr Keith

Butler, Chris

Hanley, Jeremy

Carlisle, Kenneth (Lincoln)

Hargreaves, Ken (Hyndburn)

Carrington, Matthew

Harris, David

Chalker, Rt Hon Mrs Lynda

Haselhurst, Alan

Chapman, Sydney

Hawkins, Christopher

Chope, Christopher

Hayes, Jerry

Coombs, Anthony (Wyre F'rest)

Hayward, Robert

Coombs, Simon (Swindon)

Hicks, Mrs Maureen (Wolv' NE)

Cope, Rt Hon John

Hind, Kenneth

Cormack, Patrick

Howard, Rt Hon Michael

Couchman, James

Howarth, G. (Cannock & B'wd)

Cran, James

Howell, Ralph (North Norfolk)

Currie, Mrs Edwina

Hughes, Robert G. (Harrow W)

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

Hunt, Sir John (Ravensbourne)

1076

Hunter, Andrew

Powell, William (Corby)

Irvine, Michael

Raffan, Keith

Jack, Michael

Redwood, John

Janman, Tim

Rhodes James, Robert

Johnson Smith, Sir Geoffrey

Riddick, Graham

Jones, Gwilym (Cardiff N)

Ridley, Rt Hon Nicholas

Key, Robert

Rumbold, Mrs Angela

Kilfedder, James

Ryder, Richard

Kirkhope, Timothy

Sackville, Hon Tom

Knapman, Roger

Shaw, David (Dover)

Knight, Greg (Derby North)

Shephard, Mrs G. (Norfolk SW)

Knox, David

Shepherd, Colin (Hereford)

Lawrence, Ivan

Speed, Keith

Lennox-Boyd, Hon Mark

Speller, Tony

Lester, Jim (Broxtowe)

Spicer, Sir Jim (Dorset W)

Lightbown, David

Spicer, Michael (S Worcs)

Lloyd, Peter (Fareham)

Stanley, Rt Hon Sir John

Lyell, Rt Hon Sir Nicholas

Stern, Michael

MacKay, Andrew (E Berkshire)

Stevens, Lewis

Maclean, David

Stewart, Andy (Sherwood)

McLoughlin, Patrick

Summerson, Hugo

Malins, Humfrey

Taylor, Ian (Esher)

Mans, Keith

Taylor, Rt Hon J. D. (S'ford)

Mates, Michael

Taylor, John M (Solihull)

Mawhinney, Dr Brian

Temple-Morris, Peter

Mayhew, Rt Hon Sir Patrick

Thompson, D. (Calder Valley)

Miller, Sir Hal

Thurnham, Peter

Mitchell, Andrew (Gedling)

Tredinnick, David

Molyneaux, Rt Hon James

Warren, Kenneth

Montgomery, Sir Fergus

Widdecombe, Ann

Moynihan, Hon Colin

Wiggin, Jerry

Neubert, Michael

Wilshire, David

Nicholls, Patrick

Winterton, Mrs Ann

Nicholson, David (Taunton)

Winterton, Nicholas

Norris, Steve

Oppenheim, Phillip

Tellers for the Noes:

Paice, James

Mr. Neil Hamilton and

Patnick, Irvine

Mr. Timothy Wood.

Peacock, Mrs Elizabeth

Question accordingly negatived.
Main Question put and agreed to.
Resolved,
That this House takes note of European Community Documents Nos. 8072/90 and 9601/90 on non-standard work; and endorses the Government's view that, in the light of the 1–6 million new part-time jobs created in the United Kingdom since March 1983 and the overwhelming preference of part-time workers for part-time rather than full-time work, the Government should not accept proposals which would greatly increase the cost of employing part-time and temporary workers and would significantly reduce the number of jobs, thereby damaging the competitiveness of our industry, and that of the European Community.
11.55 pm
Mr. Peter Bottomley: On a point of order, Mr. Deputy Speaker. Following on the point of order made by my hon. Friend the Member for Thanet, South (Mr. Aitken), it should be put on record that the hon. Member for Stretford (Mr. Lloyd), fairly and courteously, gave way many times in his speech. I hope that my hon. Friend's point of order will be interpreted as a stricture on the time limits imposed on the debate rather than on the hon. Gentleman.
Mr. Deputy Speaker (Sir Paul Dean): That is not a point of order, but the hon. Gentleman has got his point on the record.

Information Technology
11.56 pm
The Minister for Corporate Affairs (Mr. John Redwood): I beg to move,
That this House takes note of European Community Document No. 6864/90 on a Research and Development programme on Information Technology; and endorses the Government's view that Community support for research in this area should be given a high priority.
The Commission's proposal for the new IT research programme was published on 1 June 1990 as document 6894/90. The DTI submitted an explanatory memorandum on the proposal on 28 June. The Select Committee on European Legislation has reported on these documents. I am speaking on behalf of my noble Friend the Minister for Industry and my hon. Friend the Under-Secretary of State for Industry and Consumer Affairs, who is in Brussels on Government business tonight.
Further research and development into information technology will be the largest single element of the third framework programme. It will provide around £200 million a year of support for IT research which will be carried out by industry, research organisations and higher education institutions. The new programme will have three main objectives—first, to strengthen the scientific and technological basis of the IT industry; secondly, to promote collaboration between companies and the higher education institutions across the EC; and, thirdly, to promote research leading to the development of international standards—an excellent area for Community activity.
A good deal of technology has been developed under ESPRIT—the European strategic programme for research and development in information technology—I and II. This should be available to users. The new programme will devote more effort to technology transfer. In principle, the United Kingdom Government welcome this. We shall be working closely with the Commission to ensure that United Kingdom users of IT can benefit from these new Community initiatives. We are pressing the Commission hard to place more emphasis on research that meets the needs of users rather than just being driven by the technology. We want to ensure that clear priorities for the new programme are established; and that it is properly co-ordinated with research activities in related sectors.
The Government want a strong management committee, with the member states actively involved. We wish to modify a proposal for the special procedure that will allow the Commission to give grants outside the normal competition for proposals. We are critical of the idea and seek transparent procedures and opportunities for all corners to tender.
The United Kingdom Government are participating in the debate on priorities under the budget. We are broadly content with the Commission proposals, but would prefer to see more emphasis on software and business applications, avoiding an over-emphasis on silicon micro electronics. We also wish to see more smaller companies benefiting from the programme.
Mr. Tim Devlin: Will the European Community's initiative be targeted through the regional development fund or will it be pan-European, without particular emphasis on the special assisted areas?
Mr. Redwood: It is a programme for the IT industry throughout the European Community, run under its own procedures laid down in the document before the House and intended to assist collaborative projects with more than one company from more than one member state involved in the partnership.
In the past, the ESPRIT programme have provided opportunities for United Kingdom firms. United Kingdom organisations are involved in nearly 70 per cent. of the successful proposals—a high figure compared with that in other countries. Overall, 230 United Kingdom organisations have taken part in a total of 416 ESPRIT projects. The Government have every expectation that the United Kingdom will continue to be a strong and effective participant. We will press home our concerns in the negotiations. I commend the motion to the House.
12.2 am
Dr. Lewis Moonie: We are discussing one of the most important research fields in the world today. It is no exaggeration to say that it is, above all, on the future development of infomatics that the success or failure of EEC manufacturing industry next decade depends.
The Opposition welcome the commitment of 1,352 million ecu to the programme of collaborative research over the next five years. I might say in passing, however, that that is only a small fraction of the amount that IBM is likely to be spending over the same period. It is important to put the matter into perspective.
It is my duty to question the capacity of British industry to benefit from the framework II programme, given the difficulties that have arisen over the past few years and the Government's apparent inability—exemplified by the hands-off attitude of the Department of Trade and Industry—to realise that such programmes can be only a small part of the national effort that we require.
Let me refer to some of the problems that have beset our industry in the past few years. First, and perhaps most significant, is the recent takeover of ICL by Fujitsu, which effectively spelt the end of our indigenous control of our mainframe computer manufacturing industry. I welcome wholeheartedly the commitment by Fujitsu to continue research and development and manufacture in this country and wish ICL well under the new regime.
I regret, however, that such a takeover had to happen. Can we really stand here with our hands on our hearts and say that it could not and should not have been prevented? Sadly, the short-term attitude prevalent in British business, the lack of available funds for long-term investment and the hostility of successive DTI Ministers to any suggestion of a Government role probably made it inevitable.
A similar pattern can be seen in the loss of the transputer development, with INMOS now in foreign hands. It can be seen in the failure to follow up the undoubted benefits that should have accrued from the Alvey programme. It can be seen in the take-up by Japanese firms of the flat screen technology developed by United Kingdom companies. There is an endless list of missed opportunities, gleefully seized on by our competitors abroad.
There have also been successes and it is important to refer to them in order to put the matter into perspective. IBM maintains hugely successful operations in Britain, as

1079
do Hewlett Packard, Digital Systems, Motorola and other foreign companies. But the major worldwide benefits of their success accrue to their own centres of operations in their own countries. Certainly, with Amstrad assembling its highly successful laptops and personal computers here —in my constituency, as it happens—we can draw some satisfaction. But the technology comes from the United States and almost none of the components used in the machines bear a "made in Britain" tag. Even in the production of software, in which we have long held the dominant position in Europe, people abroad are seeking to acquire the skills, which they are capable of developing themselves, by taking over British companies, as happened to Hoskyns earlier this year.
Are we then to welcome a programme from which few truly British companies will benefit? Where is the necessary Government action to underpin our attempts to ensure that they do?
Some general points are worth mentioning. The level of expenditure in Britain on civil research and development is far below that of our competitors. This programme, welcome though it is, is no substitute for that. We suffer from a crippling shortage of science and engineering graduates and, specific to the information technology industry, from a shortage of computer programmers. We also suffer from the ingrained prejudice that rewards and treats the skills of those groups as second class.
The level of skills training in Britain is woefully inadequate and far below that of our competitors—yet the Government have pushed through further cuts this year in the budget for that key area. The level of Government support for industry is a bit of a joke. They are so concerned with avoiding any suggestion of partiality that they have managed to ensure that on the so-called level playing field of Europe Britain is the only side to play without a goalkeeper.
How can we benefit from this imaginative programme of research? Each of the five areas of the programme is vital to the future of the industry. On microelectronics, I agree with the Minister that the programme will be of less benefit to United Kingdom manufacturers and research departments than to those in Europe. The withdrawal of Philips from involvement in semi-conductor manufacture is disappointing and, perhaps, a gloomy prognosis for the future.
Information processing systems and software, which increase the effectiveness of the computers that we use, are also important. Although it is not explicitly stated in the document that we are discussing, the development of the new safety-critical packages is important. They are now often required to run the complex systems that influence our daily lives. I should welcome some comment from the Minister on the Government's attitude to that.
The advanced business and home systems point to an exciting future when they are developed. The computerised manufacturing, design and research programmes could all benefit from collaborative research. They are all vital to our future prosperity. I suspect that, as with previous programmes, British-based programmes and research departments will secure a reasonable share of the available funds, probably slightly in excess of what we might expect based on the proportion of the research carried out. We are effective in taking up EEC money. We have to be, because there is not much available from any other source. I trust that the Minister will tonight give further reassurance about collaborative research, and in particular
1080
that ICL will suffer no disadvantage because of its takeover when tendering. I hope that the Department will be vigilant in ensuring that other European companies will not be allowed to do what they have threatened and freeze out ICL from collaborative research projects.
It remains to be seen whether we shall secure any lasting benefit from our research efforts. Given the dismal track record of the Government and the indifference of Ministers to the problem, I fear that the Department may prove to be a burden too great for industry to bear, and that, while we may secure the short-term benefits of the research fund, there will be no long-term benefit to jobs and products.
12.8 am
Mr. Kenneth Warren: I wish first to declare an interest as I have been involved in the computer industry for many years. Unfortunately, that interest has never led me successfully to obtain any money from any of the programmes, so perhaps I can speak objectively—not that I would not have wished to do so anyway. My experience of watching other people have a go has led me to conclude that people should not have a go unless they have a great deal of money and can afford to bid. The ponderous procedures and the enormous overheads connected with the programmes deny many small businesses the chance of getting any money.
I welcome what my hon. Friend the Minister said. I wish to comment on the programmes as they have been and as they will be. I have one minor pedantic comment to make. The document is stated to be about research and technological development. As an engineer, I always wish that people would stop putting research and development together. There should be no development without production, and research is quite different from development. The overhead structures, the method by which one works and the kind of people used are completely different. People who are associated with development should be associated with production. Running research and development together in the same phrase is the old story of people not understanding how industry should work, and how it does work in the better-run companies.
One notices from the explanatory memorandum that some £1·5 billion has been spent, but there is nothing about what has been done with it or the effectiveness of it. Some of that money was spent as far back as 1984–88. There was some £500 million of Community support with probably an equal amount of industrial investment as well. It would be helpful if the Minister, perhaps not tonight, would be so kind as to look at the need to deploy the quality of results that have been achieved so that one can learn from the value of the investment. It worries me that we are charging forward from 1992 onwards with a suggestion of further substantial sums, which might be correct. When I see moneys rounded off to £500 million and £1·25 billion, I think that there has not been enough investigation about the proposals that the Commission has in mind based on its knowledge of the reality of business and investment.
I notice that the explanatory memorandum says that the scope of the instrument is broadened so that co-operation with third countries, including those outside the European Free Trade Association, may be promoted. The hon. Member for Kirkcaldy (Dr. Moonie) spoke

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about ICL and it would be helpful to know whether Fujitsu is allowed to bid directly or whether it has to go through ICL and whether ICL is allowed to bid. The Minister may want to consider that rather than refer to it tonight.
On the policy implications of the investment sums involved, the explanatory memorandum says that there are issues on which there will be further discussions, such as the underlying rationale of priorities of the programme. That is putting the cart before the horse. The rationale of priorities should be identified before sums of money can possibly be talked about. We should vote on the rationale of priorities and then vote on the sums of money.
The explanatory memorandum illustrates once again the kind of problems that one runs up against when one looks at Euro-legislation from Brussels. The document published on 1 June uses the kind of verbiage that cannot be taken seriously. For example, "whereas" appears 12 times. In the articles there is no description of what one will be doing, and eventually one reaches page 12 and a reference to the JESSI programme, which at that time had just about collapsed. What is proposed for two years hence on a programme that has already gone into the sand?
The document goes on to talk about work being addressed
"to the major components of the chain of designing, manufacturing, testing and applying advanced semiconductor products."
Again, we are looking at something some years ahead which, with great respect to these wonderful gentlemen in Brussels, has already been in action in Austin in Texas for the past two years. They should take off their blinkers and look more widely at what is happening in the world of information technology, including communications.
I recognise that my hon. Friend the Minister said that we should concentrate more on software, but it grieves me considerably that there should be no reference to the more advanced types of microelectronics, for example based on gallium arsenide technology.
My hon. Friend is right about software, but we must take the software problem by the throat and shake it. When the Select Committee on Trade and Industry, of which I have the honour to be Chairman, looked at information technology 18 months ago, we visited Japan and the Japanese gave us a clear understanding that by the year 2000 all the population aged from 20 to 30 in Japan would be engaged on software production. Something is wrong somewhere. I acknowledge that software, as opposed to hardware, is becoming an increasingly large component of any given system, but I nevertheless hope that we can secure what the document originally asked for. We need to introduce some rationale into the proposals rather than just voting money.
It seems that it is only late at night that we debate the important subject of the workings of the European Community and what it should be doing. The debate before this lasted only 90 minutes, more's the pity, but we cannot return to it. As far as I could see, none of the documents—and none of the other documents dealing with science and technology that we have discussed—mentions the needs of users, to which the Minister very properly referred. Those needs must predominate: this must be a market-led business operation or it is nothing.
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More attention should be paid to standards and technical norms, which are not given the priority that they deserve. Given the leadership of the market from research stage to production and development stages, we ought to get the prime users in the Community together. I believe that they could instil in the nations and companies participating—and seeking to participate—in the programme the understanding that the Community's main market is the public sector.
Our Government spend some £4 billion a year on hardware and software for the application—civil and military—of information technology, excluding communications. Half that is spent in the civil sector. The Select Committee tried to persuade the Department of Trade and Industry and the excellent Ministers who were there at the time—I am sure that the even better Ministers who are there now will pay attention to this splendid suggestion—that industry could be given a good deal of leadership if the Government saw themselves as a customer. Given the quality of their purchasing, the Government would indeed find themselves leading their industry forward, enabling it to obtain the investment that it should be granted and, as a result, the success that it deserves.
I commend the work that is being done, but I am afraid that the scepticism of experience always shines through.
12.17 am
Mr. Redwood: I am grateful to my hon. Friend the Member for Hastings and Rye (Mr. Warren) for his comments. We are debating an issue that will come before the Research Council, probably in the early spring of next year; my hon. Friend's comments will be very helpful to my noble Friend Lord Hesketh, the Minister for Industry, who will be negotiating on our behalf. The Government agree that rationale is needed in the proposals and that is what we are injecting into the debate, as I tried to explain at the outset. I agree with my hon. Friend the Member for Hastings and Rye that research is different from development. The purpose of this programme is to finance research rather than development.
My hon. Friend raised the crucial issue of effectiveness. This is indeed a vital issue of great concern to the United Kingdom Government. We believe that our proposals will improve the effectiveness of the programmes and will tackle the just elements of the criticisms voiced comparatively recently in, for example, the Financial Times. That paper made some points that we feel are reflected in our negotiating position; we do not, however, agree with some of the others.
In the past, such research programmes have eventually produced results in terms of products and market developments, but we should bear it in mind that the programme is in its earliest phase and is not designed to produce products directly. Monolight, a small company that benefited from a previous programme, produced an optical spectrum analyser as a result of initial work.
Can ICL, in the United Kingdom, gain access to the funds? Yes, we are told by the Commission that it is still eligible to enter into collaboration with others and bid for the funds in the usual way. We have made that an important part of our negotiations with the Community. I cannot say how easy it is to form collaborative ventures. That is a matter for private sector companies. However, we regard them as wholly United Kingdom companies, as

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they always were, and as full participants. Therefore we shall do all that we can to ensure that they remain full participants.
The hon. Member for Kirkcaldy (Dr. Moonie) referred to the JESSI project. The board has approved 54 projects to date, 26 of which involve the United Kingdom. Those involved find the projects useful. I agree with my hon. Friend the Member for Hastings and Rye that leadership can be important when the Government are the customer. We shall bear that in mind when considering our procurement policies.
I am glad that the Opposition acknowledge so many good features. They acknowledge that there are many inward investors. It shows that the policies are working and that we are creating exactly the right climate for information technology and its related areas. What good news it is that IBM intends to add to its massive investment here its worldwide telecommunications headquarters. They are to be here in London. It is a sure sign that our industrial policies, based on liberalisation and trusting the market, are doing well.
We welcome Fujitsu's commitments, as does the hon. Member for Kirkcaldy. I am glad that he acknowledged them.
Dr. Moonie: Will the Minister reflect on our balance of trade with the rest of the world in information technology and how it has progressed during the last few years?
Mr. Redwood: I am glad that the hon. Gentleman asked that question. Last year we ran a £900 million surplus in investment technology with the other EC countries. I am sure that he will agree that that is a fine achievement. I am glad that he welcomes the size of the programme. He suggests that we are inactive nationally. That is untrue. We have national programmes, too. The proportion of
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Government expenditure on research and development is higher than that in Japan and the United States. I am sure that the hon. Gentleman agrees that Japan is also successful in this area.
During the summer of 1990 we announced a national research and development programme in safety critical software. We are encouraging industrial and academic collaboration. We have considerable strengths in that area.
Our policies are creating the right climate and background for a very strong industry in this country. I commend the proposals and our negotiating position to the House.
Question put and agreed to.
Resolved,
That this House takes note of European Community Document No. 6864/90 on a Research and Development programme on Information Technology; and endorses the Government's view that Community support for research in this area should be given a high priority.

ESTIMATES
Resolved,
That this House agrees with the Report [4th December] of the Liaison Committee.—[Mr. Lightbown.]

EUROPEAN COMMUNITY DOCUMENTS
Ordered,
That, notwithstanding the provisions of Standing Order No. 102 (European Standing Committees), if the proposals described in the un-numbered Explanatory Memoranda submitted by the Ministry of Agriculture, Fisheries and Food on 11th December 1990 relating to Total Allowable Catches and Quotas for 1991 and relating to the reciprocal fisheries Agreement between the Community and Norway for 1991 are recommended by the Select Committee on European Legislation for further consideration, the said proposals shall not stand referred to a European Standing Committee.— [Mr. Lightbown.]

Independent Living Fund
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lightbown]
12.22 am
Mr. John McFall: It is my privilege and pleasure to speak on behalf of two of my constituents with regard to the independent living fund. That fund has been a victim of its own success. I refer the Minister to the ninth report of the Social Services Committee on community care. I echo what the Select Committee says in paragraphs 62 to 88—that the Government have not fully appreciated the innovation of the independent living fund in giving some disabled people and their families the resources to build up their own care packages. I ask the Minister to endorse what is said in the ninth report by establishing the ILF as an independent body.
Disabled people are now asserting their right to live as equal and independent citizens in the community, but to be independent and equal requires opportunity and resources. Since 1988, the independent living fund has given people the opportunity and the resources to live independently within the community, to participate on an equal basis and to contribute both economically and socially to the life of the community. Not only has the ILF provided the opportunity and resources for independent living; many will also testify to the undoubted fact that the ILF has also secured the preservation of their lives and liberty and has enabled them to gain much happiness, all of which is considered to be essential for a good quality of life.
However, the independent living fund is now doomed to close in 1992. I am armed with a petition signed by 4,000 of my constituents which expresses their deep concern about the future of the ILF. Those 4,000 citizens believe that such moneys to maintain severely disabled people in the community should be given as of right to those who need it under the social security system to ensure uniform provision throughout the United Kingdom.
To date, the Minister and the Government have been deaf to that suggestion, so my constituents decided to arrange this petition and to present it to me after seeing the plight of Jim and Monica Elder Woodward. The main force behind the petition was a lady called Betty Campbell of Dalvait road, Balloch, in my constituency. She was ably assisted by Brenda Newton of Halketh crescent. Alexandria, who was equally determined that these signatures should be presented to Parliament, and that I should do that on their behalf. I have received tremendous support from the workers at factories in my constituency, from the Polaroid factory, from the Vale of Leven district hospital, from the Whisky Bonds, and from post offices and general practitioners' surgeries. The parish priest at the church that Monica Elder Woodward attends has also given his support.
All those people are urging the Minister to reconsider because, without the independent living fund, more than 6,000 people would have to leave their own communities and live in socially isolated residential care at a cost of between £250 and £1,000 per week. The average cost to the ILF of providing help is £72. I quote that figure from the Minister's comments in Committee yesterday. Therefore, even if the Minister disregards the humanitarian case, there is a sound economic case for continuing the ILF. As the Minister said yesterday:
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"That is a clearly good value for money, as an alternative to someone going into institutional care."—[Official Report, Standing Committee E, 11 December 1990; c. 62.]
With the ILF, disabled people can organise their own care plans exactly to their needs. The care plan is developed with them, and they have control of the decision-making process. The care plans are also more appropriate and flexible than most local authority services, so disabled people can do more what they would like to do. They can mix with others of their choosing or enjoy their own company. The choice is theirs. Surely that is an eminently sensible Tory principle.
That new approach has been possible because, since 1988, frightened at the chaos that ensued after the social security changes, the Department worked with the Disablement Income Group to set up the independent living fund as a charity. The Minister knows that the ILF is not perfect, and DIG has told me that itself. Although the charity expedites independent living, it is nonetheless a charity and, because of those nuances, it cannot treat its recipients as equals. Disabled people regard that as the downside of the ILF. As its war cry states, they want "Rights, not Charity."
However, the Government now want to close the ILF and to transfer the responsibility to local authorities through the proposed community care legislation. That is a real cheek, from a Government who have passed 40 separate pieces of legislation against local authorities and who have tied and buckled them. The Government benignly say that local authorities will look after community care. That is nothing less than abdication by the Government, and it will have a disastrous effect on those affected.
As I have said, Jim and Monica Elder Woodward are a severely disabled husband and wife who live in my constituency and who are beneficiaries of the independent living fund. The husband works full time for social services, helping other disabled people. He has cerebral palsy; nevertheless, he is contributing economically, socially and politically to the life of his community. He is paying his taxes—even the poll tax, despite the fact that the rates recognised the additional costs and needs of disability, which the present insensitive levy does not.
The wife, Monica, has multiple sclerosis and is even more severely disabled. Her case was on Scottish Television tonight, when every viewer saw exactly how disabled she was and how dependent she was on the ILF. She has been given many electronic aids to reading and writing by the Open university because it recognises her brilliant mathematical skills. She already has two degrees —one in architecture, the other in social sciences. She is also a qualified social worker, having had responsibility for the development of services for disabled people in an English local authority.
Together, they enjoy music, the theatre and the arts. Together, they reinforce and respect each other's separate interests. The husband's interest is local and Scottish history. He is no Christy Nolan, but he also tries to write. His first book about disability will be published soon. His wife unwinds from mathematical problems by reading the New Scientist. Together, they make a fine, happy, loving couple.
But all that is possible only through a network of devoted helpers who come in at different times of the day to accomplish different tasks, from shopping to toileting —the network being wholly dependent on the ILF. There

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is no guarantee that the local authority will take on the ILF's commitment of £170 a week to support the two of them, and that is the core of their concern. They have made a pact: if one goes into a residential home, the other will give up work, the house and the dog and follow, just to be together.
That is what the Government are driving people to consider seriously. That is why I am armed with 4,000 signatures from my constituency, spontaneously given by people who are concerned about the likes of Jim and Monica Elder Woodward. Such people have to consider giving up home, family and work, to live a life in sterile institutionalisation. They have a good future together in the community, if they have the resources to secure their support network. Without those resources, their future lies with aseptic hospital wards or barns of "homes for the incurable".
The ILF, this life-saving, life-enhancing system of community support for so many, and potentially so many more, is a victim of its success. It warranted only one paragraph in the White Paper on community care. It was dismissed without a thought as the responsibility of local government. Jim and Monica Elder Woodward want to eliminate the historical tendency for disabled people to be regarded as mere objects of charity.
Disability is a social phenomenon, created by the way in which the environment is built, by attitudes shown towards disabled people, by the structure of organisations, as well as by organisational behaviour. Disabled people are disabled not because they have cerebral palsy or MS, but by steps and doorways, by people saying, "No." and, "Go away," and by the inflexible systems and rules which overlook their specific needs. It is society that disables, not the medical condition. Surely it is up to society and its representatives in power, the Government, to break down those barriers and let disabled people in. All they are asking for are the tools to break down these barriers to an independent life in the community.
We in the House have begun by giving them the attendance allowance and mobility allowance. They are being combined in the Government's Bill to establish the disability living allowance, but it will continue the two-tier system of day and night, and day-only attendance allowance. In addition, a new lower rate of £10 will be introduced for those who hitherto did not need enough care to be eligible for the day-only allowance.
The ILF, however, is used to assess exact needs and to pay accordingly. In its present form, it has to operate a means test to ascertain the contribution that the individual has made. Nevertheless, the assessment is based on the practical needs of the individual and the estimated cost of satisfying them, and the cost will vary from individual to individual and from geographic region to region. These factors are not taken into account within the new disability living allowance. Instead of scrapping the uncharitable benefits of the ILF, I urge the Minister to integrate the new disability living allowance with the ILF system of independent living support.
For dismal reading, I refer to the Minister's final remarks in Committee yesterday. He said:
"We should still look to the local authorities to undertake the vast majority of cases."
Shortly after that, he said:
"We must consider the situation as we approach 1993. I should be extremely reluctant to envisage a situation in which a great gap appeared … disabled people were anxious"—
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the Minister is here referring to my remarks—
"to have an idea about the arrangements as soon as possible. I am conscious of that and would want to respond to that point but cannot do so this morning."—[Official Report, Standing Committee E, 11 December 1990, c. 63–4.]
Twenty-four hours have passed, and I ask the Minister to "respond to that point". I shall ask the Minister to do so when 48 hours have passed. I shall ask him to respond when four weeks have passed. The issue will not disappear. I am speaking on behalf of many disabled people who want their time to come now. The Minister's statements in Committee, which I have quoted, are insufficient and insulting as they stand. I ask the right hon. Gentleman to make a positive statement tonight. Let him understand that the issue will not go away.
12.36 am
The Minister for Social Security and Disabled People (Mr. Nicholas Scott): Despite the somewhat dramatic urgings of the hon. Member for Dumbarton (Mr. McFall), I welcome the opportunity to advance to a wider forum than that which was available to me yesterday in Committee—I suppose that there were more people assembled yesterday in Committee than there are present in the House tonight, but my remarks now might receive more attention than those made yesterday—some of the arguments which I deployed in response to an amendment which was proposed to the Committee considering the Disability Living Allowance and Disability Working Allowance Bill. If, however, the hon. Gentleman expects me within little more than 24 hours to go further than I went yesterday, he will be disappointed.
I object in a delicate sense to some of the comments of the hon. Member for Dumbarton which implied that the Government are less caring and less sensitive to the needs of disabled people than right hon. and hon. Members who represent the Opposition. We have demonstrated our commitment. The House will, perhaps, be weary of hearing the extent to which we have improved the totality of financial resources available to meet the needs of the long-term sick and disabled during our period of office. The real annual rate of increase is substantially in excess of anything that was achieved by our predecessors—the Labour Government—and the same can be said of the way in which we have extended the scope of, and made more flexible, the care that we give to the long-term sick and disabled.
We are discussing a Bill in Committee that will bring two new important benefits to meet the needs of disabled people. I am sure that in 1993, as planned, we shall be moving to a system of community care that will be much more locally responsive to the needs of the disabled. That is not a bad record, and nor is it a bad prospect when it comes to meeting the needs of the disabled.
I understand that Mr. and Mrs. Elder Woodward are not complaining, and did not complain to the hon. Member for Dumbarton, about the provision that is being made for them through the independent living fund I understand that their concern is about the future of the scheme. I do not know what it was that led the hon. Gentleman to say—I assume that I heard him aright—that the ILF was doomed to end in 1992. I have never said that. To my knowledge, none of my colleagues, and certainly no one from the Treasury Bench, has suggested that the ILF is doomed to end in 1992.
Mr. McFall: Am I correct in thinking that the ILF has a five-year life span and therefore is not its future after 1992 in jeopardy? Can the Minister confirm that it will continue after 1992?
Mr. Scott: The period 1988 to 1992 is four years, not five. Therefore, the independent living fund's current trust deed will run out in June 1993 and that will be some months after the introduction of community care in April 1993. The hon. Gentleman's reference to 1992 may have been a slip of the tongue. The trust actually has a life until mid-1993 and that is beyond the time when we plan to introduce community care.
It might be worthwhile if I remind the House and perhaps a wider audience of the origins of the independent living fund. It was established by the then Department of Health and Social Security in co-operation with the Disablement Income Group and DIG (Scotland). It was set up partly in recognition of the fact that, after the 1988 social security reforms, severely disabled people would no longer be able to claim additional requirements payments, in particular for domestic support.
It was felt that some of the severely disabled people on income support would not be adequately compensated for that loss by the disability premiums that were to be available under the new income support system. At the same time, it was decided that it was necessary to provide help not only with domestic assistance, but also with personal care in order, as the hon. Gentleman said, to enable as many severely disabled people as possible not to have to enter institutional care, but to allow them to sustain their independence within their own homes with the support of their families or local communities. It was hoped that as many as possible would be able to achieve that aim with which all hon. Members would be sympathetic.
The fund, with cases examined individually under the guidance of independent trustees, offered an opportunity to deal flexibly and sensitively with that small group of people in a way that simply was not possible under the mainstream benefit system.
As I understood it, the hon. Gentleman was advocating that the ILF, either in the near future or certainly before its life expired, should be incorporated into the disability living allowance and, in effect, placed on a statutory basis. As I argued in Standing Committee E yesterday, I do not believe that that would be sensible or practical or would have a chance of meeting the needs of disabled people either as they are met presently under the ILF or will be met under the terms of the community care policy after 1993.
I will explain why I believe that by referring to an example I gave to the Standing Committee yesterday. The fund copes with about 7,000 individuals in a sensitive and flexible manner. We must set that against nearly 1 million people who, by 1992 or 1993, would be receiving either attendance allowance or the care component of the disability living allowance. There are in essence two concepts that do not come together in any real way. First, there is the statutory provision of attendance allowance —and the care component in due course of DLA—which gives a broad level of support as of right to a large number of people, as I said, about 1 million. That does not attempt to reflect the actual costs of disability of any individual,
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but it recognises that extra costs arise from particular levels of disability and that the state should recognise that and make payment in respect of it.
Secondly, against that, the independent living fund deals with a fraction of that number—as I said, about 7,000. It deals with them with discretion in a way that reflects the care needs and costs of the individuals or couples concerned. It is flexible, sympathetic and discretionary and the ILF trustees, staff and social workers work expertly on their behalf in a way in which no Department of Social Security office—there are 500 in the country—could conceivably respond to those needs.
Whatever differences we may have about the future, I ask the hon. Gentleman to recognise that, to attempt to incorporate such specialised provision for a relatively small minority of severely disabled people into the generality of the social security system or the care component of DLA, which is obviously a fraction of that, would simply not meet the needs of disabled people. Having served in a previous incarnation, Mr. Deputy Speaker, in the former Department of Health and Social Security, you will recognise the difficulties of drafting regulations that could reflect the flexibility that has been shown by the trustees and staff of the independent living fund. The hon. Gentleman is going up a false alley in making his suggestions. Perhaps he wants to look forward to a time when we have a long-term and developing role for the independent living fund. However, I take issue with his suggestion that, in some way, the Government are not fulfilling their duty to the fund.
Having returned from across the water, when I first confronted the situation that was to follow the 1988 reforms, and I could see a gap opening, I went to the then Chief Secretary to the Treasury, my right hon. Friend the Prime Minister, and asked him for some money for that purpose. We set up the fund with £5 million. In the first year, only £1 million was spent on the independent living fund. Now, only three years later, we are making provision in the current year for £32 million for the fund, and £62 million next year. We have recognised that there is a need, and we have been able to respond in that dramatically increased way to meet it.
It has become increasingly clear that it is more difficult for the trustees, staff and others involved with the independent living fund to meet the burdens placed upon them by the substantial increase in the caseload. If the hon. Gentleman will look back fairly, he will note that the Government, voluntary organisations and so on were dealing with a few hundred people. The number has turned out to be a few thousand, and, as the word has got around, it looks set to increase further as the months and years go by. We have made additional provision, but we must be prepared to look ahead to what the long-term pattern of care should be.
It is worth registering the fact that the independent living fund is not the only source of help for disabled people. There also are flat-rate benefits within the social security system. There is already help from local authorities and health authorities. I suspect that some have been pushing some of what should be their caseload on to the shoulders of the independent living fund. Voluntary organisations, families, friends and so on could play their part in helping disabled people and provide the help that they need to maintain their independence. Also, some of the best provision is to be gained from a partnership between family, friends, community, and statutory,

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voluntary and other agencies. They can put together a comprehensive support package to enable individuals and couples to sustain their independence.
We have put forward proposals in our White Paper, "Caring for People", which, together with the National Health Service and Community Care Act 1990, set out the Government's policy framework for community care in the next decade and beyond. I do not want to go through that tonight, but we must accept two propositions: first, that the general social security system is not flexible or responsive enough to cope with the needs of that small group of people; secondly, that the number who are dependent upon support from the ILF is now growing to the extent that it is difficult for the ILF, the trustees, the staff and the social workers to bear the burden.
The sensible way forward, which is favoured by the Government, is for the decisions about support for such severely disabled people to be devolved to local level. There will be a transfer from the Department of Social Security, through the Department of the Environment, to local authorities to enable them to cope with those problems.
A local authority or a health authority should be able to assess the needs of individual disabled people in their locality. They could then decide on the care package that is needed to ensure that those individuals can maintain their independence in the community. The authorities should be financially neutral about such decisions so that
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there is no particular financial advantage to be gained from those decisions. That should be the best way to determine the matter.
As we approach 1993 and the implementation of care in the community policies, the ILF will still be going. It will, however, have built up a caseload that is substantially greater than the existing one. It is impossible to conceive that, on some particular date in 1993, the whole burden for the ILF will be transferred to local authorities. Some transitional period must be set and even a point at which some further cases are accepted.
In response to the hon. Gentleman's plea, may I say that it should be the proper expectation that, after a particular date, local authorities—with the support or otherwise of health authorities—should be able to assess the needs of individual disabled people to enable them to acquire independence. I also hope that some beneficiaries will be able to play a more active part in their care management. They should be able to assume responsibility for the day-to-day management of their carers—that has been a particular feature of the success of the ILF. Even though local authorities are unable to make cash payments in lieu of services, such responsibility would induce a great degree of choice. That is the best way forward on such a sensitive and difficult issue.
I look forward to sharing exchanges on this subject with the hon. Gentleman in the coming months.
Question put and agreed to.
Adjourned accordingly at eight minutes to One o'clock.

ENERGY

  Spent Nuclear Fuel
  Mr. Cryer
  To ask the Secretary of State for Energy what consideration he has given to the application of nuclear safeguards to spent nuclear fuel designated for direct disposal.

  Mr. Heathcoat-Amory
  The United Kingdom applies the requirements of the international safeguards authorities to all civil spent nuclear fuel.

  Electricity Privatisations
  Mr. Morgan
  To ask the Secretary of State for Energy if he will estimate the breakdown of individual to institutional shareholders in the 12 regional electricity companies(a) on first dealings day and (b) one year hence.

  Mr. Heathcoat-Amory
  Approximately 54·6 per cent. of the shares in each company have been made available to the general public and to employees and pensioners. The balance has been sold to United Kingdom and overseas institutions. Figures for a year hence are obviously not available.

TRANSPORT

  Pelican Crossing, Kibworth
  Sir John Farr
  To ask the Secretary of State for Transport if he will make it his policy to commence work on the A6 trunk road pelican crossing between Kibworth Harcourt and Kibworth Beauchamp in Leicestershire before Christmas.

  Mr. Chope
  I regret that it will not be possible for work to begin before spring 1991. But the detailed design is almost complete.

  School Buses
  Mr. Ian Bruce
  To ask the Secretary of State for Transport what examination his Department has made of the American example of stopping traffic when children are alighting from school buses; and whether he has any plans to introduce such a system in the United Kingdom.

  Mr. Chope
  The Department has no wish to emulate the position in the United States of America where in spite of special regulations some 40 children are killed and 800 injured each year in school bus loading zones.

  We do, however, intend to require school buses to display special signs and regulations will be made as soon as possible.

  Belfast-Gatwick Air Route
  Mr. Beggs
  To ask the Secretary of State for Transport whether he will seek to increase competition and service to customers on the Belfast-Gatwick air route; and if he will make a statement.

  Mr. McLoughlin
  The pattern of services on individual routes is a matter for the commercial judgment of airlines, which may apply to the Civil Aviation Authority at any time for a licence in accordance with statutory procedures.

  South Manchester Study
  Mr. Sumberg
  To ask the Secretary of State for Transport whether he will make available to the public the south Manchester study which he commissioned in 1988.

  Mr. Chope
  No. The study was a background paper and not prepared for publication.

  MFV Antares
  Dr. Godman
  To ask the Secretary of State for Transport if he will outline the structure and status of the proposed inquiry into the recent loss of the MFV Antares; and if he will make a statement.

  Mr. McLoughlin
  The inquiry into the loss of MFV Antares, which is now well advanced, began on 23 November and was given the status of an inspector's inquiry, under the Merchant Shipping (Accident Investigation) Regulations, on 26 November. The inspectors appointed have extensive powers under the Merchant Shipping Acts, including the power to call witnesses before them, require witnesses to answer their questions and produce documents, and to carry out any examination of ships or equipment they deem necessary.

  The inspectors will report to the chief inspector of marine accidents who will in turn report to the Secretary of State. The chief inspector's report will include the inspectors' findings and whatever recommendations he considers will help to avoid a similar accident in the future. The regulations require the report to be published unless the Secretary of State orders a formal investigation or there is good reason not to publish.

  In addition, a Royal Navy inquiry is taking place; and there will be a fatal accident inquiry before the sheriff, in preparation for which the Strathclyde police is carrying out an investigation. All three groups of investigators—Royal Navy, police and inspectors—are fully co-operating with each other, but they will each arrive at their conclusions and make their respective reports independently.

  Specialist Advisers
  Mr. Cryer
  To ask the Secretary of State for Transport if he has any plans to increase the number of specialist advisers to his Department concerned with environmental and global warming issues.

  Mr. McLoughlin
  No.

  M23 (Signals)
  Mr. Soames
  To ask the Secretary of State for Transport when he intends to announce the appointment of a consulting engineer to report on the design of traffic signals at junction 10 on the M23.
  399
  Mr. Chope
  Tenders have been invited for the appointment of a consulting engineer to report on the traffic signals at junction 10 of the M23. The tender period closes on 21 December and the appointment will be made in the new year.

  Speedlink Freight Service
  Mr. David Marshall
  To ask the Secretary of State for Transport what proposals he has received from the chairman of British Rail about the future of the Speedlink freight service; and if he will make a statement.

  Mr. Freeman
  British Rail has today announced its plans following its consultations with Speedlink customers. I have arranged for a copy of the announcement to be placed in the Library of the House.

  South Yorkshire Supertram
  Mr. David Evans
  To ask the Secretary of State for Transport whether he will make a statement about the funding of the South Yorkshire Supertram project.

  Mr. Freeman
  The South Yorkshire passenger transport authority has now provided the assurances about the project to which I referred in my answer to my hon. Friend the Member for Tynemouth (Mr. Trotter) on 28 November, column 406. I have accordingly informed the authority that grant under section 56 of the Transport Act 1968 together with credit approvals will be provided to enable it to implement the scheme.

  Safety Belts
  Mr. Flynn
  To ask the Secretary of State for Transport if he will bring forward proposals to change the law to make safety belts compulsory in minibuses used for the transport of children.

  Mr. Chope
  [holding answer 11 December 1990]: Minibuses first used on or after 1 October 1988 are already required to have seat belts fitted to all front seats. We have been pressing for agreement in the European Community to enable us to require the fitting of seat belts in all seats in minibuses. As a result, the European Commission is now committed to bringing forward proposals for consideration by the Community by the end of 1991.

HOME DEPARTMENT

  International Friendship Club
  Mr. David Nicholson
  To ask the Secretary of State for the Home Department whether he has had any representations about services offered by the International Friendship Club, of Regents park, Southampton, in the context of immigration by Filipino citizens; and whether he has any proposals to curb efforts by such agencies to obtain fees from United Kingdom citizens for these services.

  Mr. Peter Lloyd
  The Government receive representations from time to time about the activities of international marriage agencies but have received no specific representation about International Friendship Club. Such agencies neither have nor confer any special status: they and overseas national using their services have at all times to observe the requirement of the immigration rules. There are no present plans for legislation.

  Electoral Registers
  Mr. Meacher
  To ask the Secretary of State for the Home Department how many expatriates have now had a vote registered in the United Kingdom under the 1989 Act; and if he will give a breakdown of the countries where they are now resident, following the publication of new draft electoral registers for 1991–92.

  Mrs. Rumbold
  Lists of overseas electors were published by individual electoral registration officers on 28 November. We shall make the figures known to the House in due course. A breakdown of the number of overseas electors by country of residence could be published only at disproportionate cost.

  Firearms Certificates
  Mr. Ron Davies
  To ask the Secretary of State for the Home Department (1) how many firearm certificates were currently valid in each police authority area of England, Scotland and Wales for 1988, 1989, and 1990, respectively;

  (2) how many shotgun certificates were currently valid in each police authority area in England, Scotland and Wales for 1988, 1989 and 1990, respectively.

  Mr. John Patten
  The number of firearm and shotgun certificates on issue on 31 December of both 1988 and 1989 is shown for each police authority in England and Wales in tables 2 and 4 of Home Office statistical bulletins 18/89 and 26/90. A copy of these bulletins is in the Library.

  Figures for 1990 are not yet available. I am informed by my right hon. Friend the Secretary of State for Scotland that the number of firearm and shotgun certificates on issue on 31 December of both 1988 and 1989 was as follows:

  Number of firearm and shotgun certificates in Scottish police force areas 1988 and 1989

  Number of certificates

  1988

  1989

  Police force area

  Firearm

  Shotgun

  Firearm

  Shotgun

  Central Scotland

  1,380

  4,837

  1,364

  4,626

  Dumfries and Galloway

  3,033

  6,702

  2,637

  6,496

  Fife

  1,801

  6,307

  1,754

  6,152

  Grampian

  6,183

  14,221

  6,144

  14,132

  Lothian and Borders

  4,575

  12,494

  4,418

  12,256

  Northern

  9,928

  13,696

  8,037

  13,391

  Strathclyde

  6,642

  21,116

  5,513

  20,167

  Tayside

  4,799

  10,120

  3,673

  9,829

  Total in Scotland

  38,341

  89,493

  33,540

  87,049

  Note: Figures are at 31 December each year.

  Road Fund Licence Discs
  Mr. Hill
  To ask the Secretary of State for the Home Department if he will call for a report from the chief constable of Hampshire on the outcome of the latest survey carried out in the Southampton area on display of road fund licence discs by motorists.

  Mr. Peter Lloyd
  I understand from the chief constable that Hampshire constabulary, in conjunction with the Driver and Vehicle Licensing Agency, conducted a vehicle excise campaign in Hampshire and the Isle of Wight between 1 and 30 November. Information about the outcome of the campaign is not yet available because offence reports are still being processed.

  Game Licences
  Mr. Ron Davies
  To ask the Secretary of State for the Home Department how many game licences were issued in the 1989–90 season; and what were the net revenues to his Department from the issue of such licences.

  Mrs. Rumbold
  47,432 game licences were issued in Great Britain in the financial year 1989–90 and £245,812 was raised in revenue. The costs of issuing game licences are borne by the Home Office and came to a total of £172,406, but the revenue passes to local authorities.

  Data Protection
  Mr. Cohen
  To ask the Secretary of State for the Home Department whether he will make a statement on the meeting of the Council of Ministers on 27 November in relation to the proposal for a directive on data protection from the European Commission.

  Mr. Peter Lloyd
  I understand that this meeting was cancelled and that the draft directive is not on the agenda for the Council's meeting later this month.

  Convicted Murderers
  Mr. Butcher
  To ask the Secretary of State for the Home Department how many convicted murderers have committed further murders after being released from a prison sentence for that offence; and how many people have been murdered by such ex-prisoners since 1965.

  Mr. John Patten
  Information on the number of persons convicted of murder who had previous murder convictions is published annually in Criminal Statistics, England and Wales—table 4.10 of the latest issue, for 1989, Cm. 1322—copies of which are available in the Library.

  During the period from 1946 to 1989, 10 persons in England and Wales were convicted of a second murder after previously being convicted of murder and being released on life licence. In addition, one person was convicted of murder in England and Wales, released, and was then convicted of a second murder in Scotland and one person was convicted of murder in England and Wales, released, and was then convicted of a murder in prison in Northern Ireland.

  Since the abolition of the death penalty in 1965, there have been eight persons in England and Wales who have been murdered by persons previously convicted of murder. Of those previous murder convictions, four were committed before abolition of the death penalty; only one of the others might have attracted the death penalty under the terms of the Homicide Act 1957. In addition, one person was murdered in Scotland by a person who had previously been convicted of murder in England and Wales, and one person was murdered in Northern Ireland by a person who had previously been convicted of murder in England and Wales.

  Racism
  Mr. Soley
  To ask the Secretary of State for the Home Department when he received a copy of the European Parliament's report on "Xenophobia and Racism"; and what response he intends to make.
  402
  Mrs. Rumbold
  The report of the European Parliament's committee of inquiry into racism and xenophobia was received in September and its recommendations are being studied.

  Asylum
  Mr. Darling
  To ask the Secretary of State for the Home Department (1) how many applicants for asylum in the United Kingdom have been held in detention for longer than three months in(a) 1989 and (b) 1990;

  (2) how many people seeking asylum in the United Kingdom have been detained in Her Majesty's prisons for more than seven days since (a) 1 January 1989 and (b) I June 1990;

  (3) how many people by nationality were held in detention on the first day in each month in 1990 pending their seeking asylum.

  Mr. Peter Lloyd
  The information requested is not available centrally and could be obtained only at disproportionate cost. On 7 December, 51 persons who had claimed asylum had been detained under Immigration Act powers for three months or more.

  Mr. Cartwright
  To ask the Secretary of State for the Home Department how many staff are currently employed in the asylum and special cases division of the immigration and nationality department; how many of these are processing applications for asylum; and what were the comparable figures in each of the preceding five years.

  Mr. Darling
  To ask the Secretary of State for the Home Department what was the staff complement at the Home Office refugee unit in each year since 1980.

  Mr. Peter Lloyd
  [holding answer 11 December 1990]: Figures are not available for years before 1984. In subsequent years the number of staff in post or in training dealing with asylum matters was as follows:

  Numbers

  1 April 1984

  39

  1 October 1985

  48

  1 October 1986

  47

  1 October 1987

  52

  1 October 1988

  57

  1 October 1989

  67

  6 December 1990

  100

  The figures for 1990 include three senior managers, two personal secretaries, and three members of the research unit, none of whom is directly engaged in processing applications; a similar number of staff were engaged in these duties in previous years. The asylum and special cases division, which was established as a separate division on 12 November 1990, is also responsible for the issue of Home Office travel documents and re-entry visas on which 17·6 staff are employed, in addition to those dealing with asylum matters.

  Mr. Darling
  To ask the Secretary of State for the Home Department what specialist training relating to asylum issues is given, upon appointment, to officials in the public inquiry office of the immigration and nationality department.

  Mr. Peter Lloyd
  Staff in the public inquiry office receive training which lasts about 11 weeks. The course
  403
  covers immigration law and practice, interviewing and communication skills and customer care. No specialist training on asylum policy is given as the staff in the public inquiry office do not take decisions in such cases. Their role in asylum cases is confined to receiving applications and interviewing applicants to obtain details of their claim on behalf of the asylum and special cases division who provide guidance on specific geographical areas as necessary.

  Mr. Darling
  To ask the Secretary of State for the Home Department if he will publish all written instructions for officials dealing with asylum applications, including immigration officers and officials in the public inquiry office and refugee unit.

  Mr. Peter Lloyd
  No. It is not the usual practice to publish such internal management instructions.

  Mr. Darling
  To ask the Secretary of State for the Home Department whether written reasons of refusal of asylum are given, at the time of refusal, to those seeking asylum in the United Kingdom who are refused asylum but granted exceptional leave to remain.

  Mr. Peter Lloyd
  Written reasons are given only when the applicant is to be removed to the country in which he claims to fear persecution.

  Mr. Darling
  To ask the Secretary of State for the Home Department what steps he intends to take to ensure that the procedures used by his Department for dealing with applications for asylum in the United Kingdom comply with internationally recognised standards for the protection of refugees and asylum seekers.

  Mr. Peter Lloyd
  I am satisfied that asylum procedures in my Department meet the United Kingdom's obligations under the 1951 United Nations convention relating to the status of refugees.

  Immigration
  Mr. Darling
  To ask the Secretary of State for the Home Department what steps he has taken to recover sums due by airlines under the Immigration (Carriers' Liabilities) Act 1987; how much has been received to date; how much is outstanding; and if he will make a statement.

  Mr. Peter Lloyd
  A total of £22·792 million had been incurred by carriers—that is, airlines and sea operators —to 13 November 1990. Of this sum, £8·135 million had been paid and £1–142 million waived on the basis of representations in individual cases, leaving £13·515 million outstanding.

  Vigorous action is being taken to enforce payment of outstanding liabilities. In July, writs were issued against four airlines; three have since settled out of court. In October and November final demand letters were sent to all carriers with outstanding debts. These have produced a mixture of payments, promises of payment and requests for urgent meetings. Early meetings are being arranged, where requested, to discuss the scope for resolution without recourse to the courts. But the Treasury Solicitor will be instructed to institute civil recovery proceedings where payment or satisfactory proposals for payment are not forthcoming promptly.
  404

  Refugee Unit
  Mr. Darling
  To ask the Secretary of State for the Home Department what specialist training is given, upon appointment, to officials in the Home Office refugee unit; what follow-up training is given to such officials; and if he intends to take steps to improve such training.

  Mr. Peter Lloyd
  Officials in the asylum and special cases division of the Home Office specialise in geographical areas and they are trained by working under close supervision on individual cases; additional training on general determination matters is being developed with UNHCR; and seminars are held on particular geographical areas with outside academics.

  Bradford Magistrates Court
  Mr. Madden
  To ask the Secretary of State for the Home Department if he will arrange for facilities at Bradford magistrates court to be extended to include a creche, interpreters, and refreshments.

  Mr. John Patten
  It is for the Bradford magistrates courts committee, in consultation with its paying authority, to decide whether to pursue the provision of creche facilities. I understand that arrangements for interpretation are already in place, and that there is a restaurant at the court house which provides refreshments thoughout the day.

  Prisoners (Suicide)
  Mr. Andrew Mitchell
  To ask the Secretary of State for the Home Department what action he plans: (i) to strengthen the efforts made by the prison service to prevent suicides by inmates and (ii) to ensure that the families of inmates who die in custody receive the support which they require following the death.

  Mr. Kenneth Baker
  I regard suicide and self-injury in prison as an extremely serious problem. I have asked the Director General of the Prison Service to give very high priority to it. Prison staff already make very considerable efforts to identify and care for inmates at risk, but I want to ensure that the necessary lessons are learned from past tragedies and consistently applied in future. The recent reorganisation of the prison service has presented the opportunity to reinforce existing guidance and secure more effective implementation of the prevention strategy set out in circular instruction 20/1989. Under a new addendum to CI 20/1989, area managers and governors are being required to institute more regular and thorough reviews of the measures being taken at their establishments. The suicide prevention management group within the establishment will be mainly responsible for such reviews: a thorough checklist of suicide prevention measures has been issued to ensure that all aspects of this complex and distressing problem are properly tackled.

  In addition, governors are being given fresh guidance in circular instruction 52/1990 on support for bereaved families. Wherever practicable, visits will be made to close relatives of deceased inmates to offer sympathy, to respond to their questions and concerns and to pass on information, as appropriate, about specialised counselling and support services in the community.

  I am conscious, too, of the traumatic effects which suicides can have on prison staff, particularly those who

  405
  had responsibilities for the care and supervision of the inmate concerned. CI 52/1990 also stresses the need for support to be given to any member of staff who may need it.

  The addendum to CI 20/1989, together with CI 52/1990, will be issued tomorrow, 13 December, under cover of a letter to managers in the prison service from the Director of Inmate Administration and the Director of Prison Medical Services. Copies of all these documents are being placed in the Library.

  We shall be reviewing our suicide prevention policies in the light of the report on this subject by Her Majesty's Chief Inspector of Prisons which will be published very shortly.

WALES

  Cardiac Surgery
  Mr. Gareth Wardell
  To ask the Secretary of State for Wales how many open heart operations have been undertaken this year at the University hospital of Wales.

  Mr. Nicholas Bennett
  I understand from South Glamorgan health authority that 544 open heart operations were undertaken at the University hospital of Wales between 1 January and 30 November this year.

  Mr. Gareth Wardell
  To ask the Secretary of State for Wales if he will provide the capital allocation his Department is making in the current financial year to enable South Glamorgan health authority to reach its target of open heart operations to be performed yearly at the University hospital of Wales as a regional service.

  Mr. Nicholas Bennett
  As part of the Department's continuing commitment to increasing the number of open heart operations per year capable of being achieved by the University hospital of Wales, capital allocations of approximately £1·2 million are being made available to South Glamorgan health authority in the current financial year for adult cardiac services and £1·5 million for paediatric cardiac services.

  Work in the course of the current financial year to enhance cardiac service facilities at the University hospital of Wales has included upgraded catheter laboratories, additional intensive care facilities and a new paediatric cardiac unit at a cost to central funds of some £4 million. Our officials are currently discussing with South Glamorgan DHA further developments to ensure that targets are reached.

  Mr. Gareth Wardell
  To ask the Secretary of State for Wales what was the cost to Clwyd health authority and South Glamorgan health authority of referring patients for open heart surgery outside Wales between 1 April and 31 October this year.

  Mr. Nicholas Bennett
  I understand from Clwyd health authority that the cost of referrals between 1 April and 31 October this year was approximately £160,000 and from South Glamorgan health authority that the costs were in the region of £260,000.

  Mr. Gareth Wardell
  To ask the Secretary of State for Wales what is the target date by which 120 open heart operations will be undertaken on children at the University hospital of Wales.
  406
  Mr. Nicholas Bennett
  Building work on the paediatric cardiac unit at the University hospital of Wales having been completed, the unit is being commissioned to come into service during 1991. The date by which capacity will be approached will depend upon the nature and timing of referrals.

  Alcohol Misuse
  Mr. Michael
  To ask the Secretary of State for Wales if he will list the organisations in Wales which have received funding to help the development of local programmes within Welsh counties to combat alcohol misuse; and if he will give the amount given to each organisation for 1990–91 and the figure projected for each organisation for the 1991–92 financial year.

  Mr. Nicholas Bennett
  No allocations have yet been made. Allocations will be made early in the new year.

  Epilepsy
  Mr. Michael
  To ask the Secretary of State for Wales if he will make it his policy to provide financial support to the Wales Epilepsy Association to enable it to develop services of advice, guidance and support network for epileptics and their families throughout Wales.

  Mr. Nicholas Bennett
  Health and social services authorities are responsible for assessing the needs of their local populations and for securing such services as they feel are appropriate to meet them.

  The Wales Epilepsy Association has submitted an application for financial assistance in support of headquarters and project development costs under section 64 of the Health and Public Services Act 1968. I am shortly to see a delegation from the association, led by the hon. Member for Caernarfon (Mr. Wigley) to discuss their work. A decision on the application for section 64 funding will be made as soon as possible in the light of our consideration of all applications made for the available funds.

  Snowdonia National Park
  Mr. Martyn Jones
  To ask the Secretary of State for Wales if he will take steps to protect the environment of Snowdonia national park from acidification caused by the burning of orimulsion fuel at Ince power station.

  Mr. Baldry
  I have been asked to reply.

  There has been no increase in sulphur dioxide emissions from Ince power station as a result of the burning of orimulsion. Under agreements made between Her Majesty's inspectorate of pollution and Powergen, the operators of Ince, less than half of the station's 1,000 megawatts capacity is being used for the burning of orimulsion. Power production from the remaining 500 MW boiler has been curtailed to keep the sulphur dioxide emissions within the previous level for the plant as a whole.

  Under the Environmental Protection Act 1990, the operator of every large combustion plant will be required to apply to HMIP by 1 May 1991 for an authorisation to continue operating the plant. In setting conditions in an authorisation, HMIP must aim to ensure the use of batneec to prevent or minimise releases of prescribed substances including SO2, and compliance with any plans set by the Secretary of State. These will include the plan for

  407
  implementation of the large combustion plants directive. The Government's proposals for this will require substantial overall reductions in emissions of SO2 from Powergen's plants.

TRADE AND INDUSTRY

  Trade Statistics
  Mr. Austin Mitchell
  To ask the Secretary of State for Trade and Industry what has been the percentage increase in investment each year since 1979 in real terms in(a) chemicals, (b) man-made fibres, (c) textiles, (d) clothing,

  United Kingdom demand: percentage changes

  Per cent.

  1980–1979

  1981–1980

  1982–1981

  1983–1982

  1984–1983

  1985–1984

  1986–1985

  1987–1986

  1988–1987

  (a) Chemicals (SIC 25)

  -2

  +7

  +7

  +14

  +12

  +4

  +2

  +13

  +11

  (b) Man-made Fibres (SIC 26)

  -28

  +4

  -3

  +8

  +11

  +7

  +14

  +15

  -1

  (c) Textiles (SIC 43)

  -11

  +2

  +7

  +15

  +12

  +8

  +6

  +7

  +6

  (d) Clothing (SIC 453)

  0

  -1

  +9

  +8

  +15

  +10

  +9

  +5

  +8

  (e) Footwear (SIC 451)

  0

  +3

  +7

  +9

  +12

  +9

  +10

  +6

  +7

  (f) Motor Vehicle Manufacturing (SIC 35)

  -11

  -5

  +21

  +16

  +7

  +16

  +14

  +18

  +24

  (g) Mechanical Engineering (SIC 32)

  0

  -4

  +13

  +12

  +8

  +8

  +6

  +10

  +18

  United Kingdom output: percentage changes on 1979

  Per cent.

  1980–1979

  1981–1979

  1982–1979

  1983–1979

  1984–1979

  1985–1979

  1986–1979

  1987–1979

  1988–1979

  (a) Chemicals (SIC 25)

  +3

  +9

  +15

  +28

  +43

  +53

  +56

  +72

  +88

  (b) Man-made Fibres (SIC 26)

  -18

  -29

  -36

  -25

  -15

  -13

  -10

  -3

  +2

  (c) Textiles (SIC 43)

  -8

  -12

  -8

  0

  +10

  +20

  +24

  +31

  +36

  (d) Clothing (SIC 453)

  0

  -5

  +2

  +10

  +22

  +37

  +46

  +50

  +56

  (e) Footwear (SIC 451)

  +2

  -4

  -2

  +2

  +10

  +24

  +35

  +40

  +47

  (f) Motor Vehicle Manufacturing (SIC 35)

  -3

  -9

  -4

  0

  +9

  +26

  +36

  +69

  +98

  (g) Mechanical Engineering (SIC 32)

  +6

  +3

  +12

  +13

  +22

  +32

  +36

  +45

  +62

  Import penetration from the E.C. and the rest of the world

  1980

  1988

  Import Penetration

  Import Penetration

  E.C. per cent.

  Rest of World per cent.

  E.C. per cent.

  Rest of World per cent.

  (a) Chemicals (SIC 25)

  18

  10

  30

  11

  (b) Man-made Fibres (SIC 26)

  36

  20

  53

  13

  (c) Textiles (SIC 43)

  18

  17

  27

  21

  (d) Clothing (SIC 453)

  9

  19

  14

  26

  (e) Footwear (SIC 451)

  22

  13

  20

  28

  (f) Motor Vehicle Manufacturing (SIC 35)

  30

  9

  37

  14

  (g) Mechanical Engineering (SIC 32)

  18

  11

  26

  13

  Notes:

  1. The sectors are defined in terms of the Standard Industrial Classification (SIC), and the code references are shown in brackets.

  2. United Kingdom demand is defined in terms of output (i.e. United Kingdom manufacturers' product sales) plus imports, less exports.

  3. The import penetration figures are defined as imports from the E.C., or the Rest of the World, as a percentage of United Kingdom demand. Both 1980 and 1988 E.C. figures relate to imports from the current 11 member states (i.e. including Spain and Portugal). 1980 figures are given, as 1979 figures are not available in this form.

  4. The percentage changes in demand and output are in current price terms.

  Source: Department of Trade and Industry.

  Consumer Guarantees
  Mr. Austin Mitchell
  To ask the Secretary of State for Trade and Industry what proposals he has for requiring consumer guarantees to be enforceable beyond the life of the company issuing them.

  Mr. Leigh
  The Government have no proposals for such legislation. The enforcement of long-term guarantees
  408
  (e) footwear, (f) motor-vehicle manufacturing and (g) mechanical engineering: to what extent this has resulted in an increase in capacity; what has been the increase in the demand for such goods; and whether he will publish in the Official Report a table showing in each case the increase in capacity since 1979, the increase in output as a percentage of 1979 and the figures for import penetration from the EEC and the rest of the world now and in 1979.

  Mr. Leigh
  The available information is shown in the tables: 1989 data are not yet available. Investment figures in real price terms are a matter for the Treasury. Statistics on capacity are not available.

  was considered by the Director General of Fair Trading in his report on consumer guarantees (June 1986). The report makes a number of recommendations on good practice and indicates that the Office of Fair Trading will keep this matter under review to see whether voluntary initiatives by industry can bring about improvements.
  409
  Mr. Austin Mitchell
  To ask the Secretary of State for Trade and Industry what proposals he has for making guarantees issued on goods sold a liability to be taken into account by the Official Receiver on liquidation.

  Mr. Redwood
  The insolvency legislation—rule 13.12 of the insolvency rules 1986—already provides that contingent debts or liabilities that materialise after a company has gone into liquidation by reason of an obligation incurred before that date are provable claims in the proceedings. This in effect means that claims under valid guarantees are taken into account by the liquidator.

  Auditing Firms
  Mr. Austin Mitchell
  To ask the Secretary of State for Trade and Industry whether he will propose legislation under which auditing firms would be banned from conducting public opinion polls for their audit clients.

  Mr. Redwood
  I see no reason for doing so. Under part II of the Companies Act 1989, the recognised supervisory bodies must have adequate rules and practices to ensure that company audit work is conducted properly and with integrity, and that persons are not appointed as company auditors in circumstances in which they have any interest likely to conflict with the proper conduct of the audit.

  Mr. Austin Mitchell
  To ask the Secretary of State for Trade and Industry whether he will propose legislation under which auditors would be prevented from issuing a disclaimer of opinion.

  Mr. Redwood
  No. Circumstances of fundamental uncertainty may occasionally arise in which the auditor is unable to form an opinion one way or the other on whether a set of accounts gives a true and fair view. In such circumstances, it is better that an auditor should decline to give an opinion than that he should be forced to give one which cannot, on the evidence available, be justified and could therefore be misleading.

  Mr. Austin Mitchell
  To ask the Secretary of State for Trade and Industry what arrangements applicants for supervisory body status under the Companies Act have offered to enable a member of the public to ascertain whether an auditor(a) has derived 15 per cent. or more of his fee from any one client and (b) has lent money to an audit client.

  Mr. Redwood
  All the applications that we have received for recognition as supervisory bodies include guidance to the effect that an auditor should not lend money to an audit client, and should not in normal circumstances derive more than 15 per cent. of his fee income from one client.

  Company Accounts
  Mr. Austin Mitchell
  To ask the Secretary of State for Trade and Industry what proportion of company accounts are lodged on time; what efforts are made to pursue late reports; and what studies he has carried out of the correlation between late reporting and subsequent company failures.

  Mr. Redwood
  Of the company accounts accepted by Companies house during the financial year 1989–90, 54 per cent. of those filed by public companies and 53 per cent. of 410
  those filed by private companies were received by the due date. A further 25 per cent. of public and 20 per cent. of private company accounts came in within three months of the due date. If accounts are not submitted within the statutory period allowed, a series of letters are issued. Action taken by Companies house can result in prosecution of the individual directors. There have been no studies carried out on the correlation between late reporting and subsequent company failure.

  Single European Act
  Mr. Austin Mitchell
  To ask the Secretary of State for Trade and Industry what were the expected gains and losses to the United Kingdom expected under the Single European Act; what assessment has been made of the benefits to date; and if he will publish a table showing the current account balance on visible and invisible trade with the EEC in each of the past five years together with the forecast for this year and next.

  Mr. Redwood
  The single market is expected to raise the level of income in the European Community by removing the remaining barriers to trade between member stales. The Cecchini report published by the European Commission in 1988 sets out the range of expected benefits to the Community as a whole. Projections for the United Kingdom are contained in table A 4.4 on page 622 of volume 2 of the report "Research on the cost of non-Europe—Basic findings—Studies on the economics of integration", which is available in the library. The benefits which ultimately accrue to the United Kingdom from the completion of the single market will depend crucially on the response of firms to the opportunities and challenges which it presents.

  Figures on the United Kingdom's visible and invisible trade with the Community can be obtained from table 10.1 of "The Pink Book" United Kingdom Balance of Payments, which is also available in the Library. No forecasts are made for the trade balance with the Community.

  Weights and Measures
  Ms. Richardson
  To ask the Secretary of State for Trade and Industry what plans he has to increase the number of qualified inspectors of weights and measures; and if he will make a statement.

  Mr. Leigh
  Inspectors of weights and measures are employed by the local weights and measures authorities and it is the responsibility of each of these authorities to recruit, train and retain sufficient qualified inspectors to enforce consumer protection legislation in their area.

  Occupational Health Services
  Mr. Ieuan Wyn Jones
  To ask the Secretary of State for Trade and Industry what arrangements exist for the provision of an occupational health service for employees within his Department; and(a) how many staff are employed to provide occupational health services, (b) how many of those staff are qualified nurses and (c) how many employees work in his Department in total.

  Mr. Leigh
  My Department uses the civil service occupational health service which employs some 100 fully
  411
  qualified occupational health professionals—doctors, nurses and hygiene and safety advisers. The current total number of staff working for DTI is 12,345.

  Defence Equipment Licensing
  Mr. Cohen
  To ask the Secretary of State for Trade and Industry what safeguards exist in the defence equipment licensing system to cover dual-use machinery.

  Mr. Lilley
  Industrial machinery which is capable of use for defence purposes (dual use) is subject to export licensing in the same way as defence equipment.

  Export Controls
  Mr. O'Neill
  To ask the Secretary of State for Trade and Industry on how many occasions he and his ministerial colleagues have met representatives of industry to discuss licence applications for goods under the Exports of Goods (Control) Order 1987.

  Mr. Lilley
  I and my ministerial colleagues meet representatives of industry frequently to discuss many subjects, including export licence applications.

  Mr. O'Neill
  To ask the Secretary of State for Trade and Industry if he will make a statement on the effectiveness of his Department's handling of export licence applications by the firms, Walter Somers Ltd. and Sheffield Forgemasters Ltd.

  Mr. Lilley
  I have nothing to add to the statement made by my hon. Friend on 29 November at column 1060.

  Environment Conferences
  Mr. Flynn
  To ask the Secretary of State for Trade and Industry if his Department was represented at, or provided information and documentation for, the conference on recycling in the future, organised by the Institute of Waste Management on 4 December.

  Mr. Leigh
  [holding answer 10 December 1990]: My Department was invited to participate in the conference on recycling in the future on 4 December, but was unable to attend due to other commitments. My hon. Friend the Under-Secretary of State for the Environment spoke at the conference.

  Insolvency
  Mr. Cousins
  To ask the Secretary of State for Trade and Industry what representations he has received proposing the introduction of procedures equivalent to chapter II of the United States bankruptcy code into British insolvency law.

  Mr. Redwood
  [holding answer 11 December 1990]: I have received no such representations. The effectiveness of United States procedures is sometimes discussed with officials of the Insolvency Service Executive Agency by some of those who are interested in the development of insolvency policy.

  Mr. Cousins
  To ask the Secretary of State for Trade and Industry whether he proposes to review the working of the Insolvency Act.

  Mr. Redwood
  [holding answer 11 December 1990]: The working of the Insolvency Act 1986 is kept under review by the Insolvency Service Executive Agency.

  Advertising
  Mr. Fisher
  To ask the Secretary of State for Trade and Industry whether he will publish a table showing the amount spent in each of the last five years by his Department on(a) advertising in the press, (b) advertising on television and radio, (c) other advertising and promotion and (d) promotion videos and sound cassettes.

  Mr. Leigh
  [holding answer 11 December 1990]: The information is as follows:

  £000's1

  A

  B

  C

  D

  Press Advertising

  Television and Radio Advertising

  Other promotional materials

  Films Audio-visual Slides

  1985–86

  1,216

  —

  877

  242

  1986–87

  987

  3

  1,008

  44

  1987–88

  3,417

  5,721

  1,501

  263

  1988–89

  4,300

  13,575

  4,800

  818

  1989–90

  5,656

  5,900

  11,353

  739

  1 Figures for 1985–86–1988–89 relate to the Department's central publicity budget. The figure for 1989–90 includes expenditure by divisions which is in addition to that carried by the central publicity budget.

  Goods and Services
  Mr. Fisher
  To ask the Secretary of State for Trade and Industry whether he will publish tables showing the amount spent on(a) acquiring and (b) commissioning goods and services by his Department in each of the last five years.

  Mr. Leigh
  [holding answer 11 December 1990]: Departmental purchasing information systems do not differentiate between acquiring and commissioning goods and services. However, information on departmental purchasing expenditure from 1986–87 is set out in the annual reports of the central unit on purchasing, copies of which are available in the Library.

  Reports
  Mr. Dobson
  To ask the Secretary of State for Trade and Industry, pursuant to the answer of 15 November,Official Report, column 184, if he will place in the Library the Department of Trade and Industry reports listed along with the reports listed in the answers of 1 November, Official Report, column 657, 25 October, Official Report, column 272, 21 February, Official Report, column 789 and 19 December 1989, Official Report, columns 138–39.

  Mr. Redwood
  [holding answer 11 December 1990]: All reports to which the hon. Member refers are available in the Library.

  Exports (Iraq)
  Mr. Caborn
  To ask the Secretary of State for Trade and Industry how many approaches were made to his Department by Walter Somers querying the Iraqi order for equipment in respect of the supergun.

  Mr. Lilley
  [holding answer 11 December 1990]: Three: two directly and one indirectly on its behalf.

  Mr. Caborn
  To ask the Secretary of State for Trade and Industry if he will publish the technical specifications
  413
  of the steel ordered for the pipes intended for Iraq that were the subject of correspondence between his Department and Sheffield Forgemasters in July 1988.

  Mr. Lilley
  [holding answer 11 December 1990]: No. It is not the practice to reveal details of individual licensing inquiries.

  Mr. Caborn
  To ask the Secretary of State for Trade and Industry what action his Department took when it was first made aware of the pipeline equipment built in the United Kingdom for Iraq having possible military implications.

  Mr. Lilley
  [holding answer 11 December 1990]: When the military implications of the equipment became clear the Department responsible for taking action was HM Customs and Excise. That Department acted with commendable swiftness to prevent the export of the equipment.

  Mr. Caborn
  To ask the Secretary of State for Trade and Industry on what date his Department first became aware that an Iraqi export order was for military equipment.

  Mr. Lilley
  [holding answer 11 December 1990]: My Department first became aware that the Iraqi export order for steel tubes was for military equipment in April this year.

  Mr. Caborn
  To ask the Secretary of State for Trade and Industry whether officials of his Department made any statement or communication to the press prior to 18 April indicating his Department's opinion on whether the pipes impounded on Teesside by Her Majesty's Customs were for military purposes.

  Mr. Lilley
  [holding answer 11 December 1990]: No.

  Mr. Caborn
  To ask the Secretary of State for Trade and Industry (1) when his Department saw the contract involving Sheffield Forgemasters for the Iraqi order;

  (2) whether, on receipt of the Forgemasters contract for the Iraqi order placed in 1988, his Department called for any further information from the company.

  Mr. Lilley
  [holding answer 11 December 1990]: My Department has not seen the contract to which the questions refer.

  Mr. Caborn
  To ask the Secretary of State for Trade and Industry what was the Government's shareholding via British Steel in Sheffield Forgemasters when the order for the Iraqi gun was first placed with Forgemasters.

  Mr. Lilley
  [holding answer 11 December 1990]: In June 1988 the Government's shareholding via British Steel in Sheffield Forgemasters was 50 per cent.

  Mr. Caborn
  To ask the Secretary of State for Trade and Industry what was the day on which his Department was first made aware of the military implications of the Iraqi contract with Sheffield Forgemasters and Walter Somers.

  Mr. Lilley
  [holding answer 11 December 1990]: My Department was first made aware of the military implications of the Iraqi contract with Sheffield Forgemasters and Walter Somers in April of this year.
  414
  Mr. Caborn
  To ask the Secretary of State for Trade and Industry how many letters his Department sent in 1988 to Forgemasters about whether an export licence for the Iraqi contract was required; and what were the Department's conclusions on this matter.

  Mr. Lilley
  [holding answer 11 December 1990]: One letter was sent; on the basis of information provided by the company it was concluded that no licence was required.

PRIME MINISTER

  Test Ban Treaty
  Mr. Cryer
  To ask the Prime Minister if he will make it his policy to raise the amendment conference of the 1963 partial nuclear test ban treaty, to be held in January 1991, when he meets the President of the United States.

  The Prime Minister
  We consult with the United States Administration on the partial test ban treaty at all levels.

  Mr. Cryer
  To ask the Prime Minister if he will make it his policy to attend the opening session of the amendment conference of the partial test ban treaty in New York in January 1991.

  The Prime Minister
  I have no plans to attend the partial test ban treaty amendment conference.

  AIDS
  Mr. Cryer
  To ask the Prime Minister if he will reconvene the Cabinet committee reviewing AIDS.

  The Prime Minister
  The Government will continue to pursue vigorously a strategy for dealing with AIDS, but I have no plans to establish a Cabinet committee specifically to consider AIDS issues.

  Israel
  Mr. Nellist
  To ask the Prime Minister if he will make a statement on his recent meeting with Prime Minister Shamir.

  The Prime Minister
  I had a useful first meeting with Mr. Shamir. We discussed bilateral and regional issues including the immediate issue of the Gulf crisis, as well as the longer term issue of the Arab-Israel dispute.

AGRICULTURE, FISHERIES AND FOOD

  Occupational Health Services
  Mr. Ieuan Wyn Jones
  To ask the Minister of Agriculture, Fisheries and Food what arrangements exist for the provision of an occupational health service for employees within his Department, stating(a) how many staff are employed to provide occupational health services, (b) how many of those staff are qualified nurses and (c) how many employees work in his Department in total.

  Mr. Curry
  This Department has access to the services of the civil service occupational health service which employs some 100 fully qualified occupational health professionals—doctors, nurses and hygiene and safety advisers. It operates via a network of regional offices
  415
  throughout the United Kingdom. The Department, including its agencies, has 10,632 employees in total, none of whom is employed to provide occupational health services.

  Pesticides
  Mr. Simon Hughes
  To ask the Minister of Agriculture, Fisheries and Food what assessment he has made of the potential replacement of pesticides by mycoherbicides in respect of control of fungal diseases; what research his Department is presently undertaking or sponsoring; and if he will make a statement.

  Mr. Gummer
  Mycoherbicides are fungi which are used to control weeds; they are not capable of controlling fungal diseases.

  Food Surpluses
  Mr. Amos
  To ask the Minister of Agriculture, Fisheries and Food if he will meet his European colleagues to draw up plans to distribute the EEC's food surpluses to the Soviet Union in the form of aid; and if he will make a statement.

  Mr. Curry
  No formal USSR request for food aid has yet been received by the Government. As my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs indicated at the Foreign Affairs Council on 4 December, the Government are ready to participate fully in any Community response to real shortages in the USSR to ensure food aid reaches those genuinely in need.

  Agriculture Council
  Mr. Andy Stewart
  To ask the Minister of Agriculture, Fisheries and Food what was the outcome of the Agriculture Council held in Brussels on 10 and 11 December.

  Mr. Gummer
  I represented the United Kingdom at this meeting of the Council together with my hon. Friend the Member for Skipton and Ripon (Mr. Curry), Parliamentary Secretary in my Department.

  Agreement was reached on a directive laying down the principles covering veterinary checks on meat and other animal products entering the Community from third countries and laying down rules on the definition of vermouths. These were satisfactory for the United Kingdom.

  Ministers agreed in principle to extend for a year the ban on the use of bovine somatotropin (BST) in the Community pending the results of relevant scientific experiments. This is a sensible approach which is expected to be formally agreed when the relevant Commission proposal comes forward which is expected to be very soon.

  I took the opportunity to press the Commission to take steps to ensure that east European suppliers respect minimum prices when exporting soft fruit to the Community. The Commissioner showed sympathy with this request.

  There was a discussion on the GATT round following the disappointing conclusion to the conference in Brussels last week. I pushed hard for a united Community position which provided a sufficient envelope for the Commission
  416
  to be able to negotiate a satisfactory arrangement on agriculture which, as all recognise, would be a vital component in any final settlement.

THE ARTS

  Arts Expenditure (Scotland)
  Dr. Godman
  To ask the Minister for the Arts what has been the Government's total expenditure on the arts in Scotland for each of the past five years and as a total over the same period.

  Mr. Renton
  Government funding for the arts in Scotland is channelled through the Scottish Arts Council. Over the past five years the annual grant to the council has been as follows:

  £

  1990–91

  17,451,000

  1989–90

  15,732,000

  1988–89

  15,358,000

  1987–88

  14,237,000

  1986–87

  13,584,000

  Total

  76,362,000

  In addition, I understand that my right hon. Friend the Secretary of State for Scotland funds a small number of performing arts organisations directly.

NATIONAL FINANCE

  European Community (Economic Benefits)
  Mr. Austin Mitchell
  To ask the Chancellor of the Exchequer what studies have been undertaken to examine the net economic benefits to the United Kingdom of membership of the European Community.

  Mr. Maude
  Useful bibliographies of studies on some of the key policy issues can be found in various editions of the EC publication "European Economy".

  Teachers' Pay
  Mr. Straw
  To ask the Chancellor of the Exchequer what increase in income tax would be required if the whole of the additional cost of transferring the total teachers' pay bill to the Exchequer was to be met from this source of revenue.

  Mr. Mellor
  [holding answer 26 November 1990]: Local education authorities in the United Kingdom are likely to spend nearly £10 billion on teachers' pay in 1990–91. The additional cost to central Government of transferring the responsibility for that spending would depend on the extent to which there was a reduction in the grant paid to local authorities.

  Benefits in Kind
  Mr. Allen
  To ask the Chancellor of the Exchequer how much revenue would be raised from treating all taxable benefits in kind as earnings for national insurance contributions in 1991–92.

  Mr. Maude
  [holding answer 10 December 1990]: For 1991–92 it is estimated to be £750 million. This estimate is based on projections of data relating to 1987–88 and is provisional.

NORTHERN IRELAND

  Goods and Services
  Mr. Fisher
  To ask the Secretary of State for Northern Ireland whether he will publish tables showing the amount spent on(a) acquiring and (b) commissioning goods and services by his Department in each of the last five years.

  Dr. Mawhinney
  [holding answer 11 December 1990]: Departmental purchasing information systems do not differentiate between acquiring and commissioning goods and services. However, information on departmental purchasing expenditure from 1986–87 is set out in the annual reports of the central unit on purchasing, copies of which are available in the Library.

EDUCATION AND SCIENCE

  Football
  Mr. Barry Field
  To ask the Secretary of State for Education and Science what has been the response from the football authorities to the Sports Minister's recent call for one body to represent both the Football League and Football Association.

  Mr. Atkins
  I understand that the Football Association council is to consider the proposals made by the Football League for a joint board of management at its meeting on 14 January. I welcome any constructive proposals for greater unity between the two bodies but the details of how this is achieved arc matters for the football authorities.

  Cricket
  Mr. John Carlisle
  To ask the Secretary of State for Education and Science what measures he is considering to promote the game of cricket in the community.

  Mr. Atkins
  The Sports Council already runs a number of schemes aimed at developing sport in the community. In announcing the council's grant in aid for 1991–92 I asked it to pay attention to developing initiatives for young people in partnership with cricket clubs and I know that they are now working up detailed proposals. I am also in touch with the Test and County Cricket Board, the National Cricket Association, the English Schools Cricket Association and the Marylebone Cricket Club on a regular basis to discuss these matters.

  School Premises
  Mr. Cartwright
  To ask the Secretary of State for Education and Science if he will list the organisations to be consulted in the review of the School Premises Regulations announced on 2 October; and when the consultation process is likely to begin.

  Mr. Fallon
  I refer the hon. Member to the reply that I gave to him on 28 November, at column 421, regarding timing of consultations for the review. The list of consultees has not yet been finalised.

  School Meals
  Mr. Clay
  To ask the Secretary of State for Education and Science what the average cost of a school meal is in 1990 in(a) primary schools and (b) secondary schools.
  418
  Mr. Fallon
  In January 1990 the average cost1 of a school meal in England was:

  Fixed charge2 Pence

  Authorised spend3 Pence

  Primary schools4

  68

  68

  Secondary schools

  72

  74

  1 This is the simple average of the most common charge reported by individual local education authorities.

  2 This applies to dining centres.

  3 This applies to a cash cafeteria service.

  4 Includes nursery schools.

  Research Councils
  Mr. Cryer
  To ask the Secretary of State for Education and Science if, pursuant to his reply to the hon. Member for Havant (Sir I. Lloyd) of 19 November,Official Report, column 30, he will make a further statement on his meeting with the chairman of the Advisory Board for the Research Councils on priorities for United Kingdom science.

  Mr. Alan Howarth
  My right hon. and learned Friend will hold this meeting after he has received the board's advice on the allocation of the science budget for 1991–92 and later years, which is expected shortly.

  Postgraduates (Fees)
  Mr. Pawsey
  To ask the Secretary of State for Education and Science what will be the tuition fee met under the awards arrangements for postgraduate students in the academic year 1991–92.

  Mr. Kenneth Clarke
  The maximum tuition fee reimbursed through the awards system for eligible home students and those from other European Community countries on full-time postgraduate courses will be increased from £1,985 in the current academic year to £2,104 in 1991–92. As for tuition fees for students on first degree and equivalent courses, fees will be paid in three termly instalments.

  Medical Research Council
  Mr. Pawsey
  To ask the Secretary of State for Education and Science whether he has received the annual report of the Medical Research Council for 1989–90; and if he will make a statement.

  Mr. Alan Howarth
  The Medical Research Council has submitted to my right hon. and learned Friend its 1989–90 annual report under the requirements of the Science and Technology Act 1965, and we are placing a copy before the House today.

  We were very interested to read of the good progress made in the year, and to learn about work in areas of current public concern such as AIDS research—where the council continues to work towards the development of effective vaccines and drugs to limit the progress of the disease. I was greatly encouraged that the council's income from contracts with industry has increased from £4–4 million in 1987–88 to £6·1 million in 1989–90, and that royalty income has more than doubled over the same period. I congratulate the MRC laboratory of molecular biology for winning, jointly with Cambridge Research Biochemicals, the Queen's award for technological achievement as a result of a successful collaboration on the generation of improved peptides.
  419
  I congratulate the council on these and other achievements and look forward to reading about further advances in next year's report.

  1. United Kingdom bilateral aid to Caribbean countries in 1989

  2. Bilateral aid per capita1

  Total £'000s

  (of which CDC project aid expenditure)

  £

  Anguilla

  1,997

  —

  249·61

  Antigua and Barbuda

  757

  —

  9·01

  Bahamas

  30

  —

  0·12

  Barbados

  285

  —

  1·12

  Belize

  3,786

  (1,472)

  20·80

  Bermuda

  39

  —

  0·69

  British Virgin Islands

  4,448

  (2,200)

  317·73

  Cayman Islands

  1,305

  (1,299)

  62·14

  Dominica

  2,493

  —

  30·77

  Dominican Republic

  25

  —

  ·

  Grenada

  1,352

  —

  13·25

  Guadeloupe

  0

  —

  —

  Guyana

  6,561

  —

  8·21

  Haiti

  0

  —

  —

  Jamaica

  20,304

  (16,639)

  8·36

  Martinique

  0

  —

  —

  Montserrat

  4,044

  —

  337·02

  Netherlands Antilles

  0

  —

  —

  St. Kitts-Nevis

  711

  —

  16·52

  St. Lucia

  8,872

  (5,500)

  61·19

  St. Vincent

  1,091

  —

  8·95

  Trinidad and Tobago

  640

  (295)

  0·52

  Turks and Caicos Islands

  5,240

  —

  748·51

  1 1988 population figures used: 1989 not yet available.

  Least-developed Countries
  Mr. Corbyn
  To ask the Secretary of State for Foreign and Commonwealth Affairs how the least-developed countries will benefit from the new initiatives related to aid procurement and local cost rules which were announced at the second United Nations conference on the least-developed countries in Paris in September.

  Mrs. Chalker
  Allowing least developed countries to which we provide aid to use some of our aid funds to procure from other poor countries, as well as from the United Kingdom, should make a positive contribution to trade between developing countries and help to achieve good value for money from the aid programme.

  The removal of limits on the extent to which our bilateral financial aid to the least developed countries can be used to meet local costs should give added flexibility in ensuring that our aid meets the most pressing needs of recipients.

  Mr. Corbyn
  To ask the Secretary of State for Foreign and Commonwealth Affairs what percentage of gross national product is currently spent on aid to the least-developed countries; and if he has any plans to raise this to meet the United Nations targets for such spending.

  Mrs. Chalker
  In 1989 Britain's net official development assistance to the 42 countries presently classified by the United Nations as least developed was 0·10 per cent. of GNP. In the programme of action adopted by the Second

OVERSEAS DEVELOPMENT

  Caribbean Countries (Aid)
  Mr. Fraser
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is the amount of bilateral aid per capita for each of the Caribbean countries, including Guyana.

  Mrs. Chalker
  Following are the figures for the latest available year:

  UN Conference on the least developed held in Paris on 3–14 September 1990 no target applicable to all donors was established. The UK along with several other donors undertook to make our best efforts to reach the previously agreed UN target of 0·15 per cent. Over 60 per cent. of our bilateral aid in 1989 was provided to the poorest fifty countries.

  Mr. Corbyn
  To ask the Secretary of State for Foreign and Commonwealth Affairs what are the criteria by which the least-developed countries are adjudged to meet the requirements of good governance.

  Mrs. Chalker
  The criteria for least developed countries are the same as for other recipients of our aid. They were set out in my right hon. Friend the Secretary of State's speech to the Overseas Development Institute of 6 June.

  Mr. Corbyn
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the outcome of the second United Nations conference on the least-developed countries held in Paris in September.

  Mrs. Chalker
  I refer the hon. Member to my answer to him of 29 October 1990, which said:"The Government welcome the outcome of the second United Nations conference on the least developed held in Paris from 3–14 September and will support those least developed countries which implement the policies outlined in the programme of action.
  The British delegation to the conference was led by the Parliamentary Under-Secretary of State, Foreign and

  421
  Commonwealth Office. The Delegation played an active and positive role in the negotiations for the programme of action for the 1990s adopted by the Conference. Two new British initiatives relating to aid tying and local costs rules, which will be of direct benefit to the least developed countries, were announced at the conference. The delegation kept in close contact with British non-governmental organisations, both before and during the conference. The booklet 'LLDCs in the 1990s: Development or Oblivion' was taken into account in formulating the United Kingdom position on the various issues."—[Official Report, 29 October 1990; Vol. 178, c. 361.]

FOREIGN AND COMMONWEALTH AFFAIRS

  Cambodia
  Mr. Lester
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the current situation in Cambodia.

  Mr. Hurd
  As one of the five permanent members of the United Nations Security Council, Britain has played an active role in continuing diplomatic efforts to resolve the Cambodian conflict. In August 1990 the five agreed on a framework for a comprehensive political settlement. This was accepted in its entirety by the Cambodian parties in September when they also agreed to form a Supreme National Council (SNC) which will embody national sovereignty and represent Cambodia at the United Nations. The framework was subsequently endorsed unanimously by the Security Council and the General Assembly.

  The five's framework was elaborated into a full-scale draft agreement at meetings in Jakarta from 9–10 November and in Paris from 23–26 November. A copy has been placed in the Library of the House. The document covers the major aspects of a settlement, including the proposed mandate for a UN Transitional Authority in Cambodia (UNTAC); a ceasefire and related military measures; elections; the repatriation of Cambodian refugees and displaced persons; and principles for a new constitution. A draft agreement guaranteeing the sovereignty, independence, territorial integrity and inviolability, neutrality and national unity of Cambodia; and a declaration on Cambodia's rehabilitation and reconstruction were also produced.

  Our objective remains a durable settlement which will enable the Cambodian people to choose their own Government free from the fear of Khmer Rouge atrocities, invasion or civil war. We believe that the five's plan offers the best chance of this. It is now up to the Cambodians to play their part, firstly by resolving the differences between them which have so far prevented the Supreme National Council from functioning; and by stopping the fighting. It will then be possible for the French and Indonesian co-chairmen to reconvene the Paris international conference on Cambodia to complete work on the settlement documents and formally adopt them. We hope that will happen soon.

  Antarctica
  Mr. Simon Hughes
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list those countries proposing a protocol at the Antarctic conference in Chile and those Antarctic treaty consultative parties who support the proposal.

  Mr. Garel-Jones
  Argentina, Norway, Uruguay, the United Kingdom and the United States had proposed,422
  before the meeting, that a protocol to the Antarctic treaty, together with annexes setting out detailed rules on specific activities, would provide a practical means of protecting the Antarctic environment.

  This proposal, together with illustrative draft protocols tabled by the United Kingdom and United States of America, and a draft protocol tabled by New Zealand, together with a proposal for separate convention tabled by France and Australia, were discussed at the meeting. The outcome of these discussions is set out in paragraphs 18–20 of the report of the meeting as follows:
  "18. Detailed discussion of the various proposals led to the conclusion that there was unanimous support for the need to adopt a new legally binding international instrument for the protection of the Antarctic environment and its dependent and associated ecosystems. Although the proposed texts represented alternative options, there was a considerable measure of agreement as to the general structure of such a legal instrument. A member of one delegation, Mr. Rolf Trolle Andersen from Norway, presented, on a personal basis, a single text drawing upon the documents mentioned in paragraph 9 as well as on draft articles proposed in the Working Group I and sub-groups.
  19. The Meeting agreed that this draft Protocol and Annexes should be attached to this Report as Annex F. Reflecting, as it does, the papers submitted and the discussions at the XIth Antarctic Treaty Special Consultative Meeting, it would form a valuable basis for further work to be undertaken at a future session of XIth Antarctic Treaty Special Consultative Meeting in 1991. It was understood that these texts would not prejudice the position of any government with regard to the issues addressed therein nor any proposals already made.
  20. The Meeting noted that the present restraint on Antarctic mineral resource activities continues. In the context of future work on the issue addressed in Article 6 of the attached Protocol, a number of delegations expressed their strong preference for a permanent ban, others continued to see merit in CRAMRA, but there was a widespread willingness to consider a lengthy prohibition or moratorium. Several aspects of this issue, in particular the circumstances and modalities under which a prohibition might be reviewed or terminated needed further consideration. In regard to a moratorium, it was stressed that internationally agreed arrangements for taking decisions on mineral resource activities should be in place before the need for such decisions arises."

  Mr. Barry Field
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the Antarctic treaty negotiations.

  Mr. Garel-Jones
  The XIth special consultative meeting of the Antarctic treaty parties ended in Chile on 6 December. A copy of the interim report of the meeting is being placed in the Library of the House. When final texts of the annexes to the report are available, they will be added to the report.

  Anti-Semitism
  Mr. Soley
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether he has discussed the problem of anti-Semitism in the Soviet Union and east Europe with the Governments of those countries; and if he will make a statement.

  Mr. Douglas Hogg
  My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs discussed with Soviet Foreign Minister Shevardnadze the problem of anti-Semitism in the Soviet Union during his visit to Moscow in September. At the CSCE Paris summit in November, all participant states signed the charter of Paris for a new Europe which contained a statement of determination to combat anti-Semitism.

  Arms Control Meeting
  Mr. Cryer
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he has entered into any correspondence with any individual or organisations on any matter raised during the meeting with nongovernmental organisations on arms control, nonproliferation and disarmament held at his Department on 23 October.

  Mr. Douglas Hogg
  I have written to two nongovernmental organisations to amplify points raised during the meeting which the hon. Member refers to. The proceedings were held under Chatham house rules and were thus off the record.

  Test Ban Treaty
  Mr. Cryer
  To ask the Secretary of State for Foreign and Commonwealth Affairs if his Department plans to produce and distribute any briefing material on the amendment conference of the partial test ban treaty, to be held in New York in January 1991.

  Mr. Douglas Hogg
  The partial test ban treaty amendment conference is addressed in the arms control briefing material published regularly by the Foreign and Commonwealth Office.

  Nuclear Tests
  Mr. Cryer
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether any research is presently being conducted by his Department towards assisting technical advances in verification of nuclear test locations and magnitudes.

  Mr. Douglas Hogg
  Research into the verification of nuclear testing is the responsibility of the Ministry of Defence, which has maintained an active programme in this field for more than 30 years.

  Mr. Cryer
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is his current assessment of the attitudes of other states party to the partial test ban treaty towards establishment of a comprehensive nuclear test ban at the conference in New York in January 1991.

  Mr. Douglas Hogg
  We cannot comment on the attitudes of other Governments to the partial test ban treaty amendment conference.

  Israel
  Mr. Nellist
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the Prime Minister or Government of Israel concerning the third anniversary of the intifada on 9 December; what is the latest information available to his Department on the numbers(a) killed, (b) injured, (c) deported, or (d) arrested during the intifada; and if he will make a statement.

  Mr. Douglas Hogg
  We estimate that since the outbreak of intifada, 858 Palestinians have been killed by the Israeli defence forces, 58 deported and about 10,000 held in administrative detention. Figures for the wounded range from an Israeli estimate of about 13,000 to the Palestine human rights information centre's estimate of about 424
  100,000. These figures speak for themselves and show clearly the urgent need for a settlement to the underlying political dispute. We continue to underline the importance of this in our contacts with the Israeli Government, as well as the need for maximum restraint by the Israeli defence forces.

SOCIAL SECURITY

  Disability
  Mr. Wigley
  To ask the Secretary of State for Social Security if he will estimate how many people would qualify for the disability working allowance if the requirement to be in receipt of other benefits was removed.

  Mr. Scott
  The number of people who would qualify for disability working allowance would depend on the disability test adopted.

  Income Support
  Mr. Allen
  To ask the Secretary of State for Social Security what would be the cost in 1991–92 of restoring entitlement to income support to 16 and 17-year-olds at(a) the rate for those aged 18 to 24 years, and (b) the rate for those aged 25 years or over.

  Miss Widdecombe
  Information is not available to calculate the costs of restoring entitlement to income support to 16 and 17-year-olds.

  I regret that the answer which was given by my hon. Friend the former Parliamentary Under-Secretary to the hon. Member for Halifax (Mrs. Mahon) on 26 July at column 494 was consequently incorrect. The costs then quoted related not to the costs of changing the basis of entitlement but only to the costs of increasing the rate of income support for 16 and 17-year-olds who would satisfy the current entitlement conditions.

  The best estimates that can now be made of the costs of increasing entitlement remain the same as those given earlier, that is, an annual £10 million in relation to the rate of income support of those aged 18 to 24 and an annual £150 million in relation to the rate for those aged 25 or over. More precise estimates are not available because of the unquantifiable interaction between youth training and income support.

  I have written to the hon. Member for Halifax (Mrs. Mahon).

  Occupational Health Services
  Mr. Ieuan Wyn Jones
  To ask the Secretary of State for Social Security what arrangements exist for the provision of an occupational health service for employees within his Department, stating(a) how many staff are employed to provide occupational health services, (b) how many of those staff are qualified nurses and (c) how many employees work in his Department in total.

  Mr. Jack
  In common with other civil service departments and agencies, the Department of Social Security uses the civil service occupational health service (CSOHS) for the provision of occupational health services for its 76,096 full-time and 9,061 part-time employees. The CSOHS employs some 100 fully qualified occupational health professionals—doctors, nurses and hygiene and safety advisers—and operates through a network of
  425
  regional offices throughout the United Kingdom. The Department employs 18 staff who are also qualified nurses engaged on occupational health including the treatment of sick members of staff and first-aid responsibilities.

  Young Persons (Benefits)
  Mr. Battle
  To ask the Secretary of State for Social Security if he has any plans to amend the rules regarding those persons aged 16 and 17 years and entitlement to benefits; and if he will make a statement.

  Miss Widdecombe
  We have no such plans. The Government's policy of guaranteeing a youth training place to all 16 and 17-year-olds who want one removes the need for them to become dependent on benefit.

  Mr. Battle
  To ask the Secretary of State for Social Security how many persons aged 16 and 17 years receiving special hardship allowance are(a) living independently and (b) living in board and lodging.

  Miss Widdecombe
  Special hardship allowance was replaced by reduced earnings allowance from 1 October 1986. I assume that the question concerns 16 and 17-year-olds receiving severe hardship payments of income support. The information is not available in the form requested. However, in the week ending 30 November 1990 the numbers of 16 and 17-year-olds for whom a direction was made enabling income support to be awarded, under the severe hardship provision, was as follows:

  Number

  Living independently

  147

  In lodging

  240

  A further 12 directions were made for which the requested information is unavailable.

  Taxes and Benefits
  Mr. Clay
  To ask the Secretary of State for Social Security if he will publish a table similar to those used in the tax benefit model showing net weekly spending patterns for(a) a single person, (b) a couple with two children aged under 11 years with one earner, (c) a couple with two children aged under 11 years with two earners, (d) a lone parent with one child under 11 years old and (e) a lone parent with two children under 11 years in the old tax and benefit system before the 1988 social security changes and in 1990 in the following weekly £10 bands of income from £60 to £170.

  Miss Widdecombe
  The information requested is contained in the published tax-benefit model tables for the years in question, copies of which are available in the Library. I regret that it is not possible to provide an answer to(c), since the hon. Member has not stipulated whether income is gross or net; whether it is just earnings and how it is divided between the two earners. This will affect the amount of income tax and national insurance contributions paid and the amount of income-related benefits to which the family is entitled.

  Family Credit
  Mr. Clay
  To ask the Secretary of State for Social Security how many people will lose without transitional protection under his proposals in "Children Come First"426
  from the change in the definition of full-time work from 24 hours to 16 hours; and what the cost of transitional protection will be.

  Miss Widdecombe
  The majority of people receiving income support and working between 16 and 24 hours at the point of change will qualify for family credit and will be better off. We expect that some 25,000 people will be entitled to receive protection at an estimated cost of £25 million in the first year (1990–91 prices), decreasing thereafter.

  Mr. Clay
  To ask the Secretary of State for Social Security what is the average number of days it takes to process a family credit claim for(a) all claimants, (b) employees and (c) the self-employed.

  Mr. Jack
  For the 12 months ending 30 November 1990 the average was as follows:

  Working days

  All claimants

  18·45

  Employees

  17·01

  Self-employed

  26·90

  A fast path arrangement is available to people who have just started work after being on unemployment benefit or income support, and which enables family credit to be put into payment very quickly.

  Benefits (Monitoring)
  Mr. Battle
  To ask the Secretary of State for Social Security how many 16 and 17-year-olds have been interviewed by his Department's staff under the provisions announced on 13 March 1989,Official Report, columns 27–28.

  Miss Widdecombe
  Information about the number of 16 and 17-year-olds interviewed by local office staff is not available. However, between 1 April 1989 and 30 November 1990, 39,341 claims were referred after interview to the severe hardship claims unit for consideration of payment under the severe hardship provisions.

  Community Care
  Dr. Godman
  To ask the Secretary of State for Social Security if he will make extra funds available for community care grants for his Department's offices in Greenock and Port Glasgow.

  Mr. Scott
  We have no plans to do so.

  Housing Benefit
  Dr. Godman
  To ask the Secretary of State for Social Security how many local authority tenants of pensionable age in(a) Greenock and Port Glasgow, (b) Strathclyde and (c) Scotland as a whole, are in receipt of (i) full housing benefit and (ii) partial housing benefit; and what proportion they are of the total number of local authority tenants of pensionable age in (a), (b) and (c).

  Miss Widdecombe
  It is estimated that the number of people aged 60 and over in receipt of rent rebates at 31 May 1989 for Scotland was:
  427

  Thousands

  Percentage of LA tenants1

  Claimants in receipt of rent rebate and also in receipt of income support

  105,000

  (24)

  Claimants in receipt of rent rebate and not in receipt of income support

  156,000

  (35)

  Total

  261,000

  (59)

  1 LA tenants are men aged 65 and over; and women aged 60 and over.

  Source:

  (a) Housing Benefit Management Information System annual statistical enquiry, and

  (b) Department of Employment Labour Force Survey April 1989.

  Information concerning the number of housing benefit recipients aged 60 and over in Greenock and Port Glasgow and Strathclyde is not available.

  Benefits (Monitoring)
  Mr. Battle
  To ask the Secretary of State for Social Security how many of his Department's staff have been trained to deal with the requirements of 16 and 17-year-olds under the procedures announced on 13 March 1989,Official Report, columns 27–28; what was the training involved; and if he will make a statement.

  Miss Widdecombe
  No records are held of the number of staff who have been trained. All appropriate staff receive technical training in the income support benefit provisions for 16 and 17-year-olds. Specialised training is provided for staff who interview young people under the severe hardship provisions, to enable them to recognise the needs of this vulnerable group.

  Pensions
  Mr. Meacher
  To ask the Secretary of State for Social Security what was the state earnings-related pension payable in each year since 1978; and if he will give a projection for each year to 1999 based on earnings rising by 1·5 per cent. above prices each year for(a) a full-time worker consistently earning half the average wage, using average gross weekly earnings for all full-time workers on adult rates in all industries and services excluding those whose pay was affected by absence, (b) a full-time worker consistently earning the average wage, as above and (c) the maximum addition payable.

  Miss Widdecombe
  [holding answer 6 December 1990]: The information requested is set out in the table.

  The weekly amounts of additional pension payable on retirement on 6th April in the stated year are as follows, for:

  Year of Retirement

  (a)

  (b)

  (c)

  1978

  0·00

  0·00

  0·00

  1979

  0·30

  0·85

  1·30

  1980

  0·75

  1·95

  2·90

  1981

  1·35

  3·35

  5·25

  1982

  2·10

  5·55

  8·45

  1983

  2·85

  7·55

  11·70

  1984

  3·60

  9·80

  15·10

  1985

  4·55

  12·05

  19·10

  1986

  5·55

  14·70

  23·25

  1987

  6·85

  18·00

  28·50

  1988

  8·40

  21·70

  34·00

  1989

  10·25

  26·10

  40·45

  428

  Year of Retirement

  (a)

  (b)

  (c)

  1990

  12·70

  31·85

  48·65

  1991

  14·70

  36·90

  56·00

  1992

  16·85

  42·45

  63·65

  1993

  19·20

  48·15

  72·05

  1994

  22·05

  54·85

  81·35

  1995

  25·00

  62·10

  91·40

  1996

  28·30

  70·10

  102·35

  1997

  32·00

  78·95

  114·30

  1998

  36·10

  88·65

  127·35

  (a) A person on one-half of average earnings.

  (b) A person on average earnings.

  (c) A person earning at or above the Upper Earnings Limit.

  Notes: From 1990 onwards 5 per cent. prices and 6·5 per cent. earnings growth is assumed.

  Average earnings are those for all full-time workers on adult rates in all industries and services, excluding those affected by absence.

  Glasgow East End Community Conference
  Mr. David Marshall
  To ask the Secretary of State for Social Security what was the total cost to public funds of the Glasgow east end community conference in 1988, 1989 and 1990.

  Mr. Allan Stewart
  I have been asked to reply.

  The east end management unit has estimated the direct cost to public funds of the Glasgow east end community conference for the years in question to have been as follows:

  £

  1988

  6,400

  1989

  12,700

  1990

  14,825

HEALTH

  General Practitioners
  Mr. Allen
  To ask the Secretary of State for Health what information he has on patients being required to change general practitioners because of their failure to agree to have such tests as cervical smears.

  Mrs. Virginia Bottomley
  There have been a number of allegations, but no hard evidence to suggest that patients are being forced to change GP for such reasons. Such behaviour would be highly unprofessional.

  Nuclear Industry Workers
  Mr. Cryer
  To ask the Secretary of State for Health if he will commission a study of the incidence of retinoblastoma in the offspring of nuclear industry workers.

  Mr. Dorrell
  The Department and the Health and Safety Executive are finalising the contractual arrangements for detailed epidemiological studies into the health of offspring of individuals who are occupationally exposed to radiation. These studies will include data on the incidence of all cancers in the offspring of radiation workers where relevant.

  Sexual Behaviour
  Mr. Cryer
  To ask the Secretary of State for Health if he has any plans to establish a national survey of sexual behaviour.

  Mrs. Virginia Bottomley
  No.

HOUSE OF COMMONS

  Stationery
  Mr. David Shaw
  To ask the Lord President of the Council what quantity of office and correspondence paper is used annually by hon. Members and staff in the House; and how much it costs.

  Mr. MacGregor
  The approximate total cost of stationery items supplied to the House by HMSO during the year from 1 october 1989 to 31 September 1990 was £333,000. The individual quantities of each of these items could only be obtained at disproportionate cost.

  Information Technology
  Mr. David Shaw
  To ask the Lord President of the Council what proposals he has to make the Official Report and other parliamentary documents available to hon. Members and the public on compact disc.

  Mr. MacGregor
  HMSO and Chadwyck-Healey Limited plan to launch the Official Report on compact disc (CD-ROM) during 1991. This is a joint venture and the discs will be made available commercially, although the pricing structure has yet to be finalised. The intention is to include initially at least the previous Session plus the current Session, with cumulatively updated discs being issued following each recess. Users with an IBM-compatible personal computer equipped with a CD-ROM drive will be able rapidly to search and access the text by keying in a significant word or combination of words.

  A separate joint venture involving HMSO and Context Limited should also see the appearance in 1991 of statutory instruments on CD-ROM.

  Energy Efficiency
  Mr. Cryer
  To ask the Lord President of the Council if, pursuant to his reply to the hon. Member for Southwark and Bermondsey (Mr. Hughes) of 19 November,Official Report, column 24, he will set out details of the specific energy conservation projects, better housekeeping and energy-conscious design of facilities in the House.

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

DEFENCE

  The Guff
  Mr. Mills
  To ask the Secretary of State for Defence if he will make a statement on the level of pay and allowances, and the standard of equipment, including clothing, provided to British troops in the Gulf.

  Mr. Archie Hamilton
  My right hon. Friend has already made it clear that no member of the armed forces will suffer financially as a result of being posted to the Gulf.430
  Sufficient desert pattern combat clothing has been delivered to meet the needs of the personnel in theatre. More is on order for the additional troops that will deploy with 4 Brigade and 1 Armoured Division. Equipment provided to British troops in the Gulf has been trialled and tested extensively, much of it in hot, dry climates. The equipment in the Gulf is performing well.

  Contracts
  Mr. Grylls
  To ask the Secretary of State for Defence what proportion of defence contracts in the calendar year 1989 was awarded directly to small and medium-sized enterprises.

  Mr. Alan Clark
  I regret that this information is not readily available at the present time.

  Ministry of Defence Police
  Mr. Beith
  To ask the Secretary of State for Defence whether he plans to reduce the numbers of Ministry of Defence police based at Brizlee Wood, Northumberland; and if he has anything to add to his answer of 23 November,Official Report, column 234.

  Mr. Kenneth Carlisle
  I refer the hon. Member to the answer given by my hon. Friend the Member for Epsom and Ewell (Mr. Hamilton) to the hon. Member for Walsall, South (Mr. George) on 3 December 1990,Official Report, column 51. Brizlee Wood is one of the sites concerned.

  United States Nuclear Laboratories
  Mr. Cryer
  To ask the Secretary of State for Defence if, pursuant to his reply to the hon. Member for Bradford, South of 21 November,Official Report, column 135, he will set out (a) the number of officials who have visited, respectively, Los Alamos, Lawrence Livermore and Sandia research laboratories, (b) the purpose for each visit, (c) the cost of each visit, (d) the dates of each visit and (e) the benefits of the visits to which he made reference.

  Mr. Archie Hamilton
  It has been the policy of successive British Governments not to disclose such detailed information on visits made under the terms of the 1958 US-UK agreement for co-operation on the uses of atomic energy for mutual defence purposes.

  Dartmouth Naval College
  Mr. Steen
  To ask the Secretary of State for Defence what plans he has for the future of the Dartmouth naval college; and if he will make a statement.

  Mr. Archie Hamilton
  Following my right hon. Friend's statement on 25 July on "Options for Change", the future of the whole of the naval estate and support services is under consideration. Any announcements of changes will be made at the appropriate time.

  Iraq
  Mr. Corbyn
  To ask the Secretary of State for Defence what is his current assessment of Iraq's capability of constructing a nuclear explosive device.

  Mr. Archie Hamilton
  We assess that Iraq is not currently capable of constructing a nuclear explosive device.

  Atomic Weapons Establishments
  Mr. Cryer
  To ask the Secretary of State for Defence if there have been any visits to the atomic weapons establishments at(a) Aldermaston, (b) Burghfield and (c) Llanishen by scientific experts from (i) the United States and (ii) the Union of Soviet Socialist Republics in the current year.

  Mr. Archie Hamilton
  In the current year United States officials have visited all three of these establishments under the terms of the 1958 United States/United Kingdom agreement for co-operation on the uses of atomic energy for mutual defence purposes. There have been no visits by Soviet officials.

  Mr. Cryer
  To ask the Secretary of State for Defence what funds were allocated to the atomic weapons establishment in 1990; and what will be the level of funding in 1991.

  Mr. Kenneth Carlisle
  It is not our practice to disclose information of this kind on funding of the nuclear programme.

SCOTLAND

  Cleveland Fuels (Pollution)
  Mr. Sillars
  To ask the Secretary of State for Scotland what representations he has received from the chairman of Clydeside against Pollution opposing Cleveland Fuels proposals to install an incinerator at Clyde street, Renfrew; and what reply he has sent.

  Lord James Douglas-Hamilton
  A letter from the group Clydeside against Pollution was received on 4 December 1990 and was acknowledged by Her Majesty's industrial pollution inspectorate on 7 December 1990. In that it makes further representation about the application by Cleveland Fuels Ltd. for registration of an incinerator works in Renfrew under section 9(1) of the Alkali etc. Works Regulation Act 1906, Her Majesty's industrial pollution inspectorate will take account of its contents during their consideration of the application.

  Govan Initiative
  Mr. Sillars
  To ask the Secretary of State for Scotland if Govan Initiative has used public funds to purchase or lease the premises at 6 Harmony Row, Govan.

  Mr. Allan Stewart
  No.

  University Students
  Mr. Wray
  To ask the Secretary of State for Scotland what research he has commissioned on the reasons for the reduction in numbers of students in the Scottish universities since 1979.

  Mr. Michael Forsyth
  There was no reduction in the numbers of students in Scottish universities between 1979–80 and 1988–89. The number of full-time undergraduate students at Scottish universities rose over the period from 38,570 to 42,870, an increase of more than 10 per cent.

  Council Houses
  Dr. Godman
  To ask the Secretary of State for Scotland how many council houses he expects will be completed during 1990–91.

  Lord James Douglas-Hamilton
  In their housing plan checklists which were submitted to the Scottish Development Department in November, local authorities estimate that they will complete approximately 1,181 houses in the financial year 1990–91.

  Homelessness
  Dr. Godman
  To ask the Secretary of State for Scotland how many people are classed as homeless in(a) Inverclyde, (b) Strathclyde and (c) Scotland as a whole.

  Lord James Douglas-Hamilton
  Over the 12 months to 31 March 1990, the numbers of households which applied under the homeless persons legislation and were assessed by local authorities as homeless, as recorded in the returns submitted to the Scottish Development Department, were as follows:

  Number

  Inverclyde district

  142

  Strathclyde region1

  4,812

  Scotland1

  10,962

  1 provisional.

  Residential Homes
  Dr. Godman
  To ask the Secretary of State for Scotland if police forces give information to directors of social work departments on any criminal records of persons who apply for registration of ownership of homes which care for persons who are severely mentally handicapped; and if he will make a statement.

  Lord James Douglas-Hamilton
  Yes. Information of this kind is provided by the Scottish criminal records office on request to designated senior officers in social work departments.

  Local Government Finance
  Dr. Godman
  To ask the Secretary of State for Scotland how many suggestions he has received concerning alternatives to the poll tax; and if he will make a statement.

  Mr. Allan Stewart
  My right hon. Friend regularly receives correspondence proposing improvements to the community charge and possible alternatives to it. These views will be taken into account during the Government's review of the community charge.

  Dr. Godman
  To ask the Secretary of State for Scotland how many merchant seamen have been granted exemption from poll tax obligations by way of decisions taken by(a) community charge registration officers and (b) sheriffs upon appeals made by merchant seamen against decisions made by community charge registration officers.

  Mr. Allan Stewart
  Information on decisions as to where individuals are solely or mainly resident is not held centrally.

  Dr. Godman
  To ask the Secretary of State for Scotland what is the progress of his latest review of the poll tax; and if he will make a statement.
  433
  Mr. Allan Stewart
  The Government have made it clear that the review is to be conducted on a Great Britain basis and will involve the Secretaries of State for the Environment, for Scotland and for Wales. My right hon. Friend the Secretary of State for Scotland will of course, be paying particular attention to Scottish aspects of the review.

  Forestry Grants
  Sir Hector Monro
  To ask the Secretary of State for Scotland whether the Government have any plans to review the rates of grant for forestry planting.

  Mr. Lang
  The Government considered the rates of grant for broadleaved planting as part of their recent review of broadleaves policy, the outcome of which was announced by my right hon. and learned Friend the Member for Edinburgh, Pentlands (Mr. Rifkind) in reply to a question from my hon. Friend on 23 July,Official Report, columns 6–11.

  We concluded that against the background of the considerable expansion in broadleaved planting that had taken place since we introduced our new broadleaves policy in 1985, and given the substantial rise in grant rates which accompanied the introduction of the woodland grant scheme in 1988, there was no evidence that the planting grants on offer were inadequate. At the same time, however, we were able to announce that woodland management grants would be introduced under the woodland grant scheme for both broadleaved and conifer woodlands from 1 April 1992, with enhanced rates of grant for woodlands of special environmental value. This move has been widely welcomed.

  We have also received the rates of grant for conifer planting and, as with broadleaves, we have concluded that there is no convincing case at present for general increases under the Forestry Commission's grant schemes. There has been a drop in conifer planting, but it is our view that this has been due not to any inadequacy in grant rates as such but to a combination of factors, including the price and availability of suitable land and the general economic situation.

  Nevertheless, it remains an important part of our forestry policy that a higher proportion of planting should take place on low ground of better quality than hitherto. We have therefore decided to increase the better land supplement of £200 per hectare, which is available as a top-up grant under the woodland grant scheme for planting on arable land or grassland which has been cultivated and improved within the previous ten years. The new rates will be £400 per hectare for conifer planting and £600 per hectare for planting with broadleaves, and will apply to any eligible planting done under the scheme on or after 1 October 1990. The supplement is not available under the farm woodland scheme, for which special annual payments are made by the agriculture departments.

  The cost of the higher supplements will be in the region of £1 million per annum; this will be met from within existing resources.
  434
  I am sure that these increases in the better land supplement will lead to considerably more planting on better land "down the hill" and that they will be welcomed by landowning and environmental interests alike.

  Higher Education
  Mr. Harry Greenway
  To ask the Secretary of State for Scotland what percentage of the adult population is now in higher education; what was the figure in 1978–79; and if he will make a statement.

  Mr. Michael Forsyth
  [holding answer 11 December 1990]: The number of adults in full-time higher education in Scotland in 1988–89, expressed as a percentage of the Scottish population aged 21 to 34 was 3·5 per cent. The equivalent figure for 1985–86 was 3 per cent. Information on the numbers of adults in higher education in years before 1985–86 could be obtained only at disproportionate cost.

  The provisional figure for the proportion of young Scots entering higher education in 1989–90 has risen to over 24 per cent. compared with 21 per cent. in 1988–89.

  Goods and Services
  Mr. Fisher
  To ask the Secretary of State for Scotland whether he will publish tables showing the amount spent on(a) acquiring and (b) commissioning goods and services by his Department in each of the last five years.

  Lord James Douglas-Hamilton
  [holding answer 11 December 1990]: Scottish Office purchasing information systems do not differentiate between acquiring and commissioning goods and services. Information on the Scottish Office total purchasing expenditure, from 1986–87, is, however, reproduced in the annual report of the Treasury's central unit on purchasing, copies of which are available in the Library.

ENVIRONMENT

  Local Government Finance
  Mr. Ron Brown
  To ask the Secretary of State for the Environment how many people have been prosecuted for non-payment of the community charge; and if he will make a statement.

  Mr. Key
  The Department does not have this information, but I understand that most authorities in England have now started their enforcement procedures.

  Mr. Nellist
  To ask the Secretary of State for the Environment if, pursuant to his reply to the hon. Member for Coventry, South-East,Official Report, 26 November, column 259, he will give further information for those local authorities for which information is missing in the material deposited in the Library.

  Mr. Key
  Five local authorities have sent in returns to my Department since the previous answer I gave to the hon. Member.
  435

  Birmingham

  Purbeck

  Authority Three Rivers

  Warwick

  York

  Number of people who have made a payment in respect of a personal community charge by 30 September 1990

  474,409

  32,379

  53,554

  89,750

  64,949

  Number of people liable who have not made a payment in respect of a personal community charge by 30 September 1990

  187,704

  1,309

  6,360

  11,750

  11,594

  Proportion of charge payers making a payment Per cent.

  71·7

  96·1

  89·4

  88·4

  84·9

  Mr. Alton
  To ask the Secretary of State for the Environment what is the projected shortfall in collection of the poll tax in Liverpool for the current financial year.

  Mr. Key
  The Department does not have this information, but I understand that in the current financial year Liverpool has budgeted for £7,500,000 for community charge debts.

  Mr. Jacques Arnold
  To ask the Secretary of State for the Environment what are the personal community charges set in the current year in the boroughs of Gravesham and Thurrock.

  Mr. Key
  The figures are as follows: Gravesham £294; Thurrock £417.

  Mr. James Lamond
  To ask the Secretary of State for the Environment if he has any plans to transfer the educational component of local authority spending to the Exchequer; and if he will make a statement.

  Mr. Portillo
  I have announced that we shall be undertaking a fundamental review of local government finance and structure.

  Mr. Hardy
  To ask the Secretary of State for the Environment what proposals he has for changes to the community charge; and if he will make a statement.

  Mr. Kirkwood
  To ask the Secretary of State for the Environment what representations he has received seeking the repeal of the community charge.

  Mr. Canavan
  To ask the Secretary of State for the Environment whether he will make a statement about his policy on a review of the poll tax.

  Mr. Alan W. Williams
  To ask the Secretary of State for the Environment if he will make a statement on further proposals he is now considering for reform of the community charge.

  Mr. Boyes
  To ask the Secretary of State for the Environment if he will undertake a fundamental review of the poll tax; and if he will make a statement.

  Mr. Heseltine
  I refer the hon. Members to the answer I gave earlier today.

  Home Improvement Grants
  Ms. Short
  To ask the Secretary of State for the Environment if he has had any discussions with the local authorities associations about the operation of the home improvement grant system.
  436
  Mr. Yeo
  Officials from my Department have done so regularly, most recently on 30 November.

  National Rivers Authority
  Mr. Butler
  To ask the Secretary of State for the Environment what information he has on the number of prosecutions undertaken by the National Rivers Authority.

  Mr. Heseltine
  I understand that the National Rivers Authority brought 3,997 successful prosecutions for all types of offences during its first year of operation. Of these, 3,549 were for fisheries offences, 370 for water pollution offences, 59 for navigational offences and 19 for water resources offences. I shall be reviewing progress with Lord Crickhowell in the near future.

  I attach great importance to securing improvements in environmental standards wherever they are needed. We have established an environmental and economic framework within which decisions will be taken.

  Council Housing
  Mr. Litherland
  To ask the Secretary of State for the Environment how many additional council houses he anticipates being completed during 1990–91.

  Mr. Yeo
  Local authorities are expecting to complete about 13,000 houses during 1990–91. The Government see housing associations as the main providers of additional subsidised housing for rent. Public funding for associations through the Housing Corporation will increase from £1·1 billion this year to over £2 billion by 1993–94. Together with their increased ability to draw in private funds, this will permit a sustained increase in output of subsidised housing by associations over the next few years.

  Homelessness
  Miss Lestor
  To ask the Secretary of State for the Environment how many children are currently housed by local authorities in bed-and-breakfast accommodation.

  Sir George Young
  This information is not available centrally.

  Mr. John P. Smith
  To ask the Secretary of State for the Environment what is his estimate of the number of people who will be homeless this Christmas.

  Sir George Young
  I refer the hon. Member to the answer that was given by my hon. Friend the then Minister of Housing and Planning on Tuesday 27 November 1990 to the hon. Member for Knowsley, North (Mr. Howarth).

  Housing Associations
  Mr. Bowls
  To ask the Secretary of State for the Environment what discussions he has had with tenants of housing associations in London on the subject of home ownership.

  Sir George Young
  My right hon. Friend receives representations on this subject from a variety of sources, including housing association tenants and their representatives.

  Buy British Policy
  Mr. Holt
  To ask the Secretary of State for the Environment whether his Department has a buy British policy.

  Mr. Heseltine
  We seek to achieve value for money and to honour our international obligations.

  Nature Conservancy Council
  Mr. Morley
  To ask the Secretary of State for the Environment when he last met the chairman of the Nature Conservancy Council to discuss reorganisation.

  Mr. Trippier
  Ministers from my Department have met the chairman of the Nature Conservancy Council on a number of occasions during the last 18 months at which the Government's proposals to reorganise the Nature Conservancy Council were discussed.

  Methane Gas
  Mr. Trimble
  To ask the Secretary of State for the Environment what steps can be taken to reduce or eliminate any hazard resulting from the escape of methane gas from domestic rubbish dumps.

  Mr. Trippier
  A number of technical solutions are available to reduce or eliminate the hazard resulting from the escape of landfill gas, which contains methane, from landfill sites containing domestic waste. Guidance on these measures is given in the Department's waste management paper No. 27—"Control of Landfill Gas".

  Water Charges
  Mr. Michael
  To ask the Secretary of State for the Environment whether he has any plans to introduce legislation to require water companies to charge for their services by means of(a) a flat-rate charge per properly or (b) a water poll tax.

  Mr. Trippier
  No. Methods of charging for their services are for individual water companies to determine.

  Housing Action Trusts
  Mr. Martlew
  To ask the Secretary of State for the Environment how many housing action trusts have been established.

  Mr. Yeo
  No housing action trusts have so far been established. However, discussions are proceeding with the council and tenants in the London borough of Waltham Forest, and Hull city council is consulting tenants about the proposal for a housing action trust for the North Hull estate.

  Rented Housing
  Mr. Flannery
  To ask the Secretary of State for the Environment if he has any plans to build houses for rent at reasonable prices for those people who cannot afford to buy houses.

  Sir George Young
  The Government see housing associations as the main providers of additional subsidised housing where it is needed. Public funding for the Housing Corporation will increase from £1·1 billion this year to over £2 billion by 1993–94. Together with their increased ability to draw in private funds, this will permit a sustained increase in output of low-cost housing by associations over the next few years.

  Victoria Tower
  Mr. Harry Greenway
  To ask the Secretary of State for the Environment, pursuant to his answer to the hon. Member for Ealing, North, 30 November,Official Report, column 500, if he will indicate the depth beneath ground level of the support structures for the scaffolding recently erected on the Victoria Tower; and if he will make a statement.

  Sir George Young
  The answer is 21 m.

  Catalytic Reduction Technology
  Mr. Simon Hughes
  To ask the Secretary of State for the Environment what recent assessment he has made of the potential environmental benefits of selective catalytic reduction technology in respect of large combustion plants; and if he will make a statement.

  Mr. Baldry
  My Department has recently received a report on NOx abatement technologies which includes an assessment of the performance of selective catalytic reduction technology. The report is currently being considered.

  Birds
  Mr. Ron Davies
  To ask the Secretary of State for the Environment if he will list all changes to the protection or quarry status of bird species in the United Kingdom since the enactment of the Wildlife and Countryside Act.

  Mr. Baldry
  There have been no changes to the status of any bird species since the Act came into force.

  Mr. Ron Davies
  To ask the Secretary of State for the Environment whether capercaillie and black grouse are still quarry species in the United Kingdom; and if he has any plans to alter their status.

  Mr. Baldry
  Both capercaillie and black grouse may be hunted in the open season. There are no plans at present to alter these arrangements.

  Bathing Waters
  Mr. Simon Hughes
  To ask the Secretary of State for the Environment (1) if he will set maximum limits for the presence of salmonella and enterovirus in bathing waters;

  (2) what plans he has to ensure compliance with the salmonella and enterovirus standards in the EC bathing water directive.
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  Mr. Baldry
  The EC bathing water directive sets limits for salmonella and enteroviruses. The limits are zero salmonella in 1 litre and zero enteroviruses in 10 litres in 95 per cent. of bathing water samples. It is widely accepted that these standards are deficient and have no regard to risks to public health: the Environment Select Committee has recently endorsed this view. The European Commission has brought forward proposals for a committee of adaptation to review the bathing water directive. One of its remits would be to look at those standards. This Government have supported the need for such a review. Pending adoption of revised standards we shall continue to monitor and report in accordance with the directive, but our assessment of compliance will be based on its coliform standards.

  Community Forests
  Mr. Simon Hughes
  To ask the Secretary of State for the Environment what progress is being made towards the establishment of community forests on the outskirts of towns and cities; and if he will make a statement.

  Mr. Baldry
  Project teams have been set up in east London, south Staffordshire and Tyne and Wear to prepare business plans for the forests launched in those areas. In addition the Countryside Commission is considering proposals for forests at various other locations.

  RECHAR
  Mr. Brandon-Bravo
  To ask the Secretary of State for the Environment if he will review the rules governing local authority finance in those areas which militate against local authorities being able to fully take up grants under European Community programmes, in particular the RECHAR scheme.

  Mr. Yeo
  In setting annually the level of public expenditure programmes for local authorities, account is taken of anticipated European Community receipts so that these programmes are larger than they would otherwise be. However, in addition for 1990–91 the other services block was "top sliced" by £25 million for distribution as supplementary credit approvals to local authorities in receipt of European regional development fund. In the light of representations received from local authorities it is proposed to increase the top slice to £45 million for this purpose in 1991–92.

  Emissions
  Mr. Simon Hughes
  To ask the Secretary of State for the Environment what is his policy with regard to the application to large combustion plants by Her Majesty's inspectorate of pollution of the BATNEEC provisions in the Environment Protection Act where these provisions require stricter standards than those in the national emission reduction plan.

  Mr. Baldry
  Under the Environmental Protection Act 1990, Her Majesty's inspectorate of pollution must, among other things, ensure the use of BATNEEC and compliance with any plan made by the Secretary of State. Where one of these requirements is more onerous than the other, Her Majesty's inspectorate of pollution must include conditions in authorisations which achieve the more onerous standards.
  440
  Mr. Simon Hughes
  To ask the Secretary of State for the Environment whether he has any plans to exempt the electricity generation industry from the new BATNEEC guidance notes being issued by Her Majesty's inspectorate of pollution.

  Mr. Baldry
  No.

  Public Paths
  Mr. Hunter
  To ask the Secretary of State for the Environment what representations he has received from Hampshire on his policy regarding the reclassification of public paths; and if he will make a statement.

  Mr. Baldry
  We have received a number of representations both from local councils and individuals. While I appreciate the concern expressed about the possible effects of reclassifying roads used as public paths (RUPPs) as byways open to all traffic (BOATs), the regulation of use by vehicles, were necessary, is a separate management issue. There are already appropriate powers available to highway authorities. However, the rights of way review committee is presently considering a number of issues relating to the use of vehicles in the countryside, and I look forward to hearing its views.

  Fire Advisory Panel
  Mr. Hayes
  To ask the Secretary of State for the Environment what steps he takes to ensure that the advice he receives from his fire advisory panel is completely impartial.

  Mr. Yeo
  The fire advisory panel has been established to provide a forum for the discussion of technical issues related to fire safety aspects of the Building Regulations 1985. The panel draws its membership from across the whole field of fire safety in buildings, and from both the public and private sectors, and this wide spectrum of professional expertise safeguards the impartiality of the panel's advice. A further safeguard is provided by the need for proposals from the panel for changes to the regulations to be considered by the Building Regulations Advisory Committee, which has the statutory responsibility of advising the Secretary of State on them.

  Mr. Hayes
  To ask the Secretary of State for the Environment whether he has any plans to revise the membership of his fire advisory panel.

  Mr. Yeo
  Membership of the fire advisory panel is kept under regular review. A technical expert from the Loss Prevention Council has recently been invited to join the panel.

  Mr. Hayes
  To ask the Secretary of State for the Environment what steps he takes to ensure that the membership of his fire advisory panel is fully representative of all aspects of the fire safety limits.

  Mr. Yeo
  Membership of the fire advisory panel includes representatives from the Home Office, the Scottish Development Department, and the Department of the Environment (Northern Ireland) as well as of my Department. Non-governmental members include fire safety consultants, architects, building control officers, representatives of the fire service, and technical experts from universities, fire testing organisations, the building
  441
  materials industry, and the fire insurance industry. The secretariat is provided by the fire research station. The panel therefore already has available a wide range of experience and expertise, but whenever gaps are identified, steps are taken to fill them.

  Landfill Gas
  Mr. Corbyn
  To ask the Secretary of State for the Environment if he will make a statement on contracts recently placed by his Department to prepare guidelines for the safety and environmental management of landfill gas recovery.

  Mr. Baldry
  Such a contract was let in June 1990. It is jointly funded by the Department of the Environment, the Department of Energy, via the Energy Technology Support Unit, and the Office of Gas Supply. It should be completed by next summer.

  Radioactive Substances
  Mr. Corbyn
  To ask the Secretary of State for the Environment to which international treaties and conventions which cover the impairment of the environment caused by the spillage, leakage or discharge of radioactive substances is the United Kingdom a party.

  Mr. Baldry
  The United Kingdom is party to many international treaties and conventions concerned with the discharge of radioactive substances to the environment. In particular, the International Atomic Energy Agency and the European Communities conventions on early notification of a nuclear accident require that signatories should inform the relevant international organisation whenever there is an accident from which an international transboundary release is likely to occur that could be of radiological significance for another state.

  Litter
  Mr. Jack Thompson
  To ask the Secretary of State for the Environment (1) if he has made an order under section 90(3) of the Environmental Protection Act 1990 to describe land as litter control areas for the purposes of designation by local authorities;

  (2) if he will list those organisations he intends to consult about the implementation of section 90(3) of the Environmental Protection Act 1990.

  Mr. Baldry
  No order has yet been made under section 90 of the Environmental Protection Act 1990. We do, however, intend to consult on a draft order in the near future and are currently finalising the list of those to be consulted. I will ensure that the hon. Member is sent a copy. If he wishes to suggest the names of bodies which should be consulted, I invite him to pass them on to my office.

  Beach Pollution
  Mr. David Martin
  To ask the Secretary of State for the Environment when the Government response to the Environment Select Committee report on pollution of beaches will be published; and if he will make a statement.

  Mr. Trippier
  The Government response is being published today and a copy has been placed in the Library. We welcome the report as pollution of beaches is a matter of great public concern and is something that we are taking active steps to combat.
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  The Government are committed to improving the quality of bathing waters. In 1990 77 per cent. of our 446 identified bathing waters met European standards compared with only 51 per cent. in 1986. A major investment in the sewerage system around our coasts of £1·4 billion was announced last year to bring all our bathing waters up to European standards.

  The Select Committee report coincided with a major Government review of their policies on disposal of sewage to sea. My right hon. Friend the Secretary of State announced in March that the discharge of raw sewage from coastal towns is to be banned. Over £2 billion is to be spent on additional treatment and £600 million of this will be spent on bathing waters over the next five years.

  The Select Committee has also focused on the relationship between risks to health and sea bathing and concluded that the risk of contracting serious disease is minimal. The Government accept that more research is necessary into the risks of contracting minor infections and, with the National Rivers Authority, will fund a continuation of the existing programme.

  We also believe that the public should be better informed about bathing water quality. I announced an initiative earlier this year for a voluntary scheme for local authorities to publicise, at the beach or at other prominent sites, up-to-date information on bathing water quality which will be provided by the National Rivers Authority. The local authority associations in England and Wales have endorsed the idea and we are pressing ahead finalising the arrangements for the scheme to be ready for the start of next year's bathing season. A poster is being developed for local display which will give easily understood information on bathing water quality as part of our policy on improved access to environmental information.

  Goods and Services
  Mr. Fisher
  To ask the Secretary of State for the Environment whether he will publish tables showing the amount spent on(a) acquiring and (b) commissioning goods and services by his Department in each of the last five years.

  Mr. Heseltine
  [holding answer 11 December 1990]: Departmental purchasing information systems do not differentiate between acquiring and commissioning goods and services. However, information on departmental purchasing expenditure from 1986–87 is set out in the annual reports of the central unit on purchasing, copies of which are available in the Library.

  Advertising
  Mr. Fisher
  To ask the Secretary of State for the Environment whether he will publish a table showing the amount spent in each of the last five years by his Department on(a) advertising in the press, (b) advertising on television and radio, (c) other advertising and promotion and (d) promotion videos and sound cassettes.

  Mr. Heseltine
  [holding answer 11 December 1990]: The information in respect of paid publicity and associated staff costs for my Department, including PSA, is as follows:

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  £ million

  1985–86

  3·5

  1986–87

  4·2

  1987–88

  4·8

  1988–89

  6·9

  1989–90

  31·5

  Expenditure is not broken down between different publicity media.

  The increase in expenditure in 1989–90 arises mainly from the flotation of the 10 water plcs, and from specific information campaigns on new legislation on local government finance and housing and to encourage the use of lead-free petrol.

  Council Houses
  Mr. Harry Greenway
  To ask the Secretary of State for the Environment how many council houses have been sold(a) nationally and (b) in the London borough of Ealing, in each year since 1979; and if he will make a statement.

  Mr. Yeo
  Tables giving available information on each local authority's sales for each financial year up to June 1990 were laid in the Library on 29 November. The equivalent figures for England are as follows:

  Local authority sales and transfers England: (thousands)

  Sales to owner occupiers

  Other transfers1

  Total sales and transfers

  1979–80

  54

  —

  54

  1980–81

  68

  —

  68

  1981–82

  128

  —

  128

  1982–83

  181

  —

  181

  1983–84

  119

  3

  122

  1984–85

  91

  —

  91

  1985–86

  82

  —

  82

  1986–87

  85

  1

  86

  1987–88

  103

  10

  113

  1988–89

  145

  12

  156

  1989–90

  134

  14

  148

  21990–91

  27

  11

  38

  1 To housing associations and private developers.

  2 1st quarter only.

EMPLOYMENT

  Employment Training
  Mr. Meacher
  To ask the Secretary of State for Employment what has been the cost in income support plus the £10 bonus of payments to employment training trainees in 1988–89 and 1989–90; and what was the average weekly income support and the £10 bonus during each of those two years.

  Mr. Jackson
  Employment training was launched in September 1988. Expenditure on employment training trainee allowances was £151·7 million in 1988–89, and £527·4 million in 1989–90.

  The average allowance per trainee on employment training was approximately £48 per week in 1988–89 and £50 per week in 1989–90.

  Youth Training
  Mr. Battle
  To ask the Secretary of State for Employment if he will estimate the number of those persons aged 16 and 17 years who are not undertaking a YTS placement.

  Mr. Jackson
  The latest, mid-1989, estimated total population figure of persons aged 16 and 17 years in Great Britain is 1,552,266. The number of persons in those age groups undertaking a YTS placement in July 1989 was 408,900.

  Tourism
  Mr. Tony Lloyd
  To ask the Secretary of State for Employment (1) in what manner his Department intends to input the tourist industry's view into the ongoing review of the poll tax;

  (2) what recent representations he has received from the tourist industry on the 100-day rule and bed-and-breakfast accommodation;

  (3) what plans there are for amending the 100-day rule within the British tourist industry.

  Mr. Forth
  Through their frequent contacts, Ministers and officials in the Department ensure that their counterparts at the Department of the Environment (DOE) are kept fully informed of the views of the tourism industry about the community charge and the uniform business rate. This will also apply to the planned comprehensive review of local government finance.

  The Department has received many representations, both directly and via the tourist boards, about bed-and-breakfast accommodation and the uniform business rate, all of which have been critical of the "100-day rule". We therefore welcome the DOE's plans to draw up alternative regulations, drawing on the responses to its extensive consultation exercise.

  Ports (Accidents)
  Mr. Tony Lloyd
  To ask the Secretary of State for Employment if he will give the fatal accident statistics and serious injury statistics for each employee for the years 1984 onwards for the port of London and each of the Medway ports.

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

  Tenosynovitis
  Mr. Ashley
  To ask the Secretary of State for Employment (1) what research has been conducted by his Department into means of preventing tenosynovitis; and in which industries workers suffer from tenosynovitis;

  (2) how many actions for damage to health by tenosynovitis have been initiated in each of the last five years;

  (3) what is his estimate of the number of people who suffer from arm or wrist damage from the repetitive work syndrome called tenosynovitis.

  Mr. Forth
  Tenosynovitis is one of a number of musculo-skeletal disorders affecting the hand and arm which can be brought on by working conditions,
  445
  particularly by repetitive grasping and twisting performed under time pressures. These upper limb disorders can occur throughout industry and are not specific to particular sectors.

  The Health and Safety Executive has recently published a booklet, "Work related upper limb disorders: a guide to prevention", drawing on the following research which it has funded:
  "Clinical epidemiological study of relations between upper limb soft tissue disorders and repetitive movements at work". Institute of Occupational Medicine, Edinburgh. Research Report TM/88/19;
  "Development of an aid to identifying task elements which may predispose individuals to work related upper limb disorders". Institute of Occupational Medicine, Edinburgh. Research Report TM/90/08;
  "Occurrence and mechanism of occupational repetition strain injuries". University of Birmingham. ISBN 070441094X

  There are no reliable estimates of the number of workers affected by tenosynovitis. But the first study listed found a 4·8 per cent. incidence of tenosynovitis (21 cases) from a sample of 437 individuals presenting to orthopaedic clinics with upper limb disorders and who had worked during the previous two years.

  I regret that information on actions for damage to health by tenosynovitis is not available.

  Employment Agencies Act
  Mr. Gorst
  To ask the Secretary of State for Employment what proportion of refusals or revocations of licenses granted under the provisions of the Employment Agencies Act 1973 have been on account of(a) a criminal conviction, (b) civil proceedings against the applicant and (c) other grounds of unsuitability.

  Mr. Jackson
  Of the 55 refusals or revocations of licences(a) 25 were on grounds of criminal convictions (b) one on grounds of civil proceedings and (c) 29 on other grounds of unsuitability.

  Mr. Gorst
  To ask the Secretary of State for Employment how many appeals against refusals or revocations of licences under section 4 of the Employment Agencies Act 1973 have been lodged with him since 1973; and with what result.

  Mr. Jackson
  Since 1976, when the Act came into force, there have been 36 appeals of which eight were successful.

  Mr. Gorst
  To ask the Secretary of State for Employment if he will list the actual grounds on which any licences have been refused or revoked under the provisions of the Employment Agencies Act 1973.
  446
  Mr. Jackson
  The grounds on which licences have been refused or revoked are: convictions for criminal offences, lack of financial probity, civil debt, failure to conduct an employment agency or an employment business properly and unsuitability of the relevant premises.

  Mr. Gorst
  To ask the Secretary of State for Employment on how many occasions in the last 10 years licences granted under the Employment Agencies Act 1973 have been(a) refused or (b) revoked under the provisions of section 3 of that Act.

  Mr. Jackson
  In the last 10 years, 33 licences have been refused and five licences have been revoked.

  Crown Premises
  Mr. Cryer
  To ask the Secretary of State for Employment if he will introduce legislation to replace the system of Crown notices to cover health and safety at work at Crown premises with a regime that incorporates all Crown premises under the Health and Safety at Work etc. Act and the Control of Substances Hazardous to Health Regulations 1988.

  Mr. Forth
  Generally the Crown is required to comply with the Health and Safety at Work etc. Act 1974, and the relevant statutory provisions, which include the Control of Substances Hazardous to Health Regulations 1988. However, the Crown is immune from prosecution, and therefore the arrangements for enforcement are earned out through an alternative system of Crown notices. There are no plans to introduce legislation to change this position.

  Disabled People
  Mr. Hannam
  To ask the Secretary of State for Employment what discussions he has had with organisations representing disabled people regarding the introduction of rehabilitation leave to encourage employers to retain workers who become disabled.

  Mr. Jackson
  [holding answer 11 December 1990]: The Royal National Institute for the Blind told my right hon. and learned Friend the Secretary of State of a proposal that they are developing for rehabilitation leave. His response was that we should like to see employers taking more positive action on addressing the needs of any people who become disabled while in employment and that the employment service can help employers to do this.

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

"Derbyshire" Bulk Carrier
Lord Campbell of Croy Lord Campbell of Croy asked Her Majesty's Government:
Whether, in the light of the recent research paper from Brunel University, they have reached further conclusions about the sudden disappearance at sea 10 years ago of the bulk carrier "Derbyshire".
The Minister of State, Department of Transport (Lord Brabazon of Tara): My Lords, the marine accident investigation branch is examining this paper. Our report on the conclusions reached will be submitted to my right honourable friend the Secretary of State for Transport shortly.
Lord Campbell of Croy: My Lords, I am grateful to my noble friend for that satisfactory reply. Do the Government still have an open mind on whether changes in design for these very large vessels, or modifications to their sister ships, may prove desirable?
Lord Brabazon of Tara: My Lords, after the loss of the "Derbyshire" the department investigated reports of defects in sister ships. Where appropriate, action was taken to rectify such defects. None of the three sister ships now sailing is under the United Kingdom flag. However, all will be required to meet appropriate standards at the time of their annual surveys. I should add that the formal investigation considered the effect of defects in the larger sister ships.
Lord Clinton-Davis: My Lords, I thank the Minister for that reply. However, will he concede that there has been and remains considerable anxiety concerning the mystery of the "Derbyshire", the largest vessel of its kind under the United Kingdom flag to disappear? Will he also inform the House why, at the time of the inquiry, counsel appearing for the Department of Trade was instructed not to call on Professor Bishop's report? That was clearly relevant. Can he also explain what action was taken in relation to the "Kowloon Bridge", a sister ship of the "Derbyshire", which appeared to suffer similar structural failures? These matters are not confined to the "Derbyshire". Are they matters which will come within the Minister's consideration when he looks at the report?
Lord Brabazon of Tara: My Lords, I appreciate that there is anxiety. However, I should point out that the formal investigation into the loss, which took place between October 1987 and March 1988 under a wreck commissioner, went very deeply into the issue. Regarding the report of Professor Bishop, the Question relates to new material which was not
496
available at the time of the formal investigation. The original report could have been called for by any of the witnesses concerned.
The Earl of Halsbury: My Lords, I speak as chancellor of Brunel University. Will the Minister confirm that the late Professor Bishop, whose untimely death I mourn greatly, was one of the most prestigious marine engineers in the country? Anything that he wrote should be taken very seriously.
Lord Brabazon of Tara: My Lords, I agree with the noble Earl. That is why we are investigating the latest material which has appeared.
Lord Clinton-Davis: My Lords, can the Minister explain why instructions were given by the department to its counsel at the time not to refer to Professor Bishops's initial report?
Lord Brabazon of Tara: My Lords, I was not aware that such instructions had been issued to counsel for the Department of Transport. But that is not relevant. Anybody else in the inquiry could have called for the report.

Inflation: Effect of Earnings
2.41 p.m.
Lord Dean of Beswick Lord Dean of Beswick asked Her Majesty's Government:
What figure has been built into the estimate of a rate of inflation of 5·5 per cent. by the end of 1991 to represent the estimated increase in earnings during that period.
The Minister of State, Department of Trade and Industry (Lord Hesketh): My Lords, earnings growth is expected to moderate in 1991. But in line with long established practice, precise forecasts of earnings are not published.
Lord Dean of Beswick: My Lords, I am grateful to the Minister for that Answer. However, is it not true that settlements being made are considerably above what is required if a substantial impact is to be made on the cost of living or inflation figures? Is the Minister aware of recent reports from responsible sources suggesting that senior civil servants are trying to negotiate substantial increases in order to match their salaries with those in the private sector? If conceded will those increases not have an adverse effect on inflation as a whole?
Lord Hesketh: My Lords, we clearly expect wage demands to fall. That is why we are predicting 5.5 per cent. inflation at the end of next year. There are already indicators that M0, retail sales, and surveys of consumer and business attitudes should encourage the Government to believe that the battle against inflation is going to be won.
Lord Bruce of Donington: My Lords, in view of the importance that is attached to the inflation figures month by month, will the noble Lord give the House an undertaking that the Government will review the method by which the various prices of goods and services are obtained for incorporation in the index? Is the noble Lord aware that, in the 34th report of the

497
Public Accounts Committee following an earlier document by the Comptroller and Auditor General, there is evidence of serious defects in the way in which data are collected by representatives from local employment offices who regard that task as having a lower priority than that for which they were primarily engaged? Will the noble Lord give this matter serious attention so that one can rely on the RPI, which at the moment lacks all contact with reality on certain points?
Lord Hesketh: My Lords, I am sure that it will be a very disappointing day not only for myself but for your Lordships' House when the noble Lord, Lord Bruce of Donington, is satisfied with the statistics that the Government or the Treasury collect. However, I assure him that constant efforts are being made to improve what is done. Examples of those efforts are the work of the Pilkington Committee and the Chancellor's initiative last year. The desire is constantly to improve the collation of instruments of financial fact and to prevent those of fiction existing.
Lord Hatch of Lusby: My Lords, if the Government are improving their statistics, can the noble Lord say how the estimate given by the Government for inflation this year was only half of the actual figure? Why should this House or anyone else believe that the estimate of 5.5 per cent. inflation for next year is any more accurate than the wildly underestimated figure that the Government last year predicted for the present year?
Lord Hesketh: My Lords, as the noble Lord, Lord Hatch, will be well aware, it is historically exceptional for high interest rates to take so long to dampen down demand. However, I am entirely confident that the figure for inflation of 5.5 per cent. will be achieved. The figures that I mentioned in my earlier reply are among the indicators which I believe will ensure that that will happen.
Lord Molloy: My Lords, does the noble Lord not agree that this is an extremely serious subject? We are discussing the data provided by Her Majesty's Government which are used by thousands of those whom they employ. In answer to my noble friend Lord Bruce of Donington, the Minister said that efforts were being made to improve the data. Does he not agree, therefore, that the Government must know that the data are not up to scratch? May the House be informed from time to time of the improvements that are being made?
Lord Hesketh: My Lords, this Government are particularly aware that the victims of inflation are the weakest in society. The Government are committed to reducing inflation. Between 1974 and 1979 inflation ran at an average rate of 15.5 per cent. We desire to reduce that rate to a manageable level. The fact that we have never exceeded half that rate throughout this Government's term of office shows that we are doing a far better job.
Lord Stoddart of Swindon: My Lords, does not the fact that it has taken so long to reduce inflation through the use of high interest rates reveal that this
498
single measure is not enough and indeed that it is wrong? Does the Minister not agree that it would have been better if the noble Lord and the Government had listened to this side of the House and used other more direct measures to bring down inflation?
Lord Hesketh: My Lords, if we had listened to the other side of the House we would have taken advantage of this advice: "This is a time for judgment and that judgment decrees that there should be a big cut in interest rates". That statement was made after the stock market crash by the Leader of the Opposition in another place.
Lord Jenkins of Hillhead: My Lords, can the noble Lord say what he meant when he said that this Government never exceeded half of the 15 per cent. rate of inflation which he quoted? Would he like to give us the figures, for example, for the years 1979 and 1980 or amplify the very recent figure for inflation, which is 10 per cent. or a little more? That figure is well over half of 15.5 per cent. That casts a little doubt on the confidence that we can place in the Minister's absolute confidence—which struck me as a rash remark—that inflation will be 5.5 per cent. by the end of next year.
Lord Hesketh: My Lords, the noble Lord, Lord Jenkins, is absolutely right to pull me up by the traces. I was referring to the average and not the individual year.
Lord Williams of Elvel: My Lords, is the noble Lord aware that the House will be grateful for his clarification of what he really meant in his earlier answer? Will he also accept that the House will be equally grateful for the assurance of his confidence as to the attainment of a rate of inflation of 5.5 per cent. by the end of 1991? In itself that figure goes much further than that given by the Treasury. The appendix to the Autumn Statement put out by the Treasury dealing with the inflation forecast shows a variation which allows the Treasury a certain leeway. However, we are extremely grateful to the noble Lord for his absolute assurance that inflation will be at 5.5 per cent. by 1991. Will the Minister accept our thanks?
Lord Hesketh: My Lords, I am grateful for the commitment of the noble Lord, Lord Williams of Elvel, to my confidence.
Baroness Seear: My Lords, does the noble Lord not agree that part of the trouble, though by no means all of it, is the unreliability of the statistics on which the Government now work? Is he aware that a previous head of the Central Statistical Office, Sir Claus Moser, at a meeting held last week in a committee room upstairs, said that it was not the inaccuracy of the Central Statistical Office, but the Government's insistence on staff cuts which was leading to inaccurate figures on which bad judgments were inevitably made?
Lord Hesketh: My Lords, two events in the past 12 months—the Pilkington Report and the Chancellor's initiative—were generally accepted on both sides of the House as contributing towards an improvement in the statistics.
Lord Dean of Beswick: My Lords, as regards my first supplementary question, is the Minister aware

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that his answer that prices are beginning to be contained is very welcome? Is he further aware that on Friday morning of last week when shopping in Stockport at Marks and Spencer I noticed that tinned food was already being marked down by 30 per cent.? If that shop can afford to do that now, is it not an indication of the rip-off that was taking place previously?
Lord Hesketh: My Lords, I was not in a position to go shopping with the noble Lord last Friday. However, I have to assume that he was witnessing a change in the policy of a particular store.
Lord Leatherland: My Lords, can the Minister tell the House whether, in view of inflation, the salaries or allowances paid to Members of another place have recently been increased or are about to be increased?
Lord Hesketh: My Lords, if the noble Lord cares to put down a Question on that subject and it falls within my remit, I shall be more than happy to answer it.
Lord Leatherland: My Lords, is the Minister confessing that he is ignorant of matters of that kind?
Lord Hesketh: My Lords, the Minister is confessing that the question is very wide of that which exists on the Order Paper.

"Antares": Inquiry Procedure
2.52 p m.
Lord Hatch of Lusby Lord Hatch of Lusby asked Her Majesty's Government:
Whether they will reconsider their decision to instruct the maritime investigation unit to carry out an inquiry into the sinking of the trawler "Antares" and instead hold a public inquiry into the incident.
Lord Brabazon of Tara: My Lords, whether or not my right honourable friend the Secretary of State for Transport decides to hold a formal investigation into the accident, an investigation by the marine accident investigation branch is still necessary in order to gather evidence.
Lord Hatch of Lusby: My Lords, I thank the noble Lord for that Answer. Is he aware that there will be general approval for the fact that the new code of conduct proposed by the Navy has been accepted by the Clyde Fishermen's Association? In view of the fact that the Minister for the Armed Forces described it as a freak incident and as there have been at least 12 similar incidents, fortunately without loss of life, over the past 11 years, is this not now a matter for a public inquiry rather than an internal inquiry by the Ministry?
Lord Brabazon of Tara: My Lords, I sought to explain in my original Answer that a decision on whether to have a formal investigation, which is the form of public inquiry that would take place in this type of shipping accident, has not yet been taken. There is, however, very likely to be a Scottish fatal accident inquiry—that is a matter for the Scottish Law Officers—which would go into this matter in great detail.
Lord Campbell of Croy: My Lords, can my noble friend confirm that within the past few days an agreement has been reached between the Royal Navy and the fishermen's organisations in the Clyde which will enable the fishermen to know the routes which these operational submarines will be taking? That should greatly reduce any possibility of a repetition of this accident, which everyone greatly regrets.
Lord Brabazon of Tara: Yes, my Lords, and I entirely endorse what my noble friend has said.
Lord Clinton-Davis: My Lords, can the Minister tell us why the very much welcomed safety code has not been extended to the Irish Sea, or at least to parts of the Irish Sea, where it is alleged similar incidents have occurred in the past? Can he inform the House whether the reports following the inquiries which are currently being carried out will be published? After all, these matters have given rise to very considerable public anxiety. There have been serious incidents in the past and indeed there is an overwhelming case for public anxiety to be allayed by full publication.
Lord Brabazon of Tara: My Lords, the noble Lord's first question is very different from the one on the Order Paper. The inspector's report will be published unless the Secretary of State orders a formal investigation or there is a very good reason not to publish. If a formal investigation is held, that report will be published.
Lord Campbell of Alloway: My Lords, is there not a serious danger in giving advance notice of these movements outside our own territorial waters?
Lord Brabazon of Tara: My Lords, that, again, is a different question from the one on the Order Paper.
Lord Trefgarne: My Lords, following the question of my noble friend, is it not the case that the arrangements surrounding the movements of our nuclear-powered submarines are among the most sensitive of our defence secrets? Will my noble friend therefore take steps to ensure that, whatever arrangements are very properly agreed with the fishermen, they will in no way prejudice those arrangements?
Lord Brabazon of Tara: My Lords, I shall of course pass on the remarks made in your Lordships' House this afternoon. However, I have to say that those questions are well outside the Question on the Order Paper.
Lord Cledwyn of Penrhos: My Lords, in replying to the noble Lord, Lord Campbell of Croy, the noble Lord confirmed that there was an arrangement between the Clyde fishermen and the Royal Navy to the effect that the Royal Navy would inform those fishermen of the routes taken by its submarines and ships generally. Does that agreement not apply to other fishermen? My noble friend Lord Clinton-Davis referred to the Irish Sea. As the noble Lord well knows, the sad event occurred in the Irish Sea and affects Welsh fishermen and English fishermen as it does the fishermen of the Clyde.
Lord Brabazon of Tara: Yes, my Lords, but as I said in reply to my noble friend Lord Campbell of Croy, I understood that the code of conduct had been agreed.

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I welcome that. The Question on the Order Paper relates to what type of inquiry will take place into this incident. I cannot go further than that this afternoon.
Lord Cledwyn of Penrhos: My Lords, the noble Lord is not dealing with the question I put to him. In reply to the noble Lord, Lord Campbell of Croy, he said that an agreement exists between the Clyde fishermen and the Royal Navy. I am asking whether that agreement applies to British fishermen other than the Clyde fishermen.
Lord Brabazon of Tara: My Lords, what I am saying is that that question is well outside the Question on the Order Paper. I do not have the information.
Lord Campbell of Croy: My Lords, arising from the point raised by the noble Lord the Leader of the Opposition, is my noble friend aware that this agreement has been reached only within the past three or four days and can therefore refer only to the area in question? But presumably other areas will be dealt with in due course.
Lord Brabazon of Tara: My Lords, that may well be the case. I am not in a position to answer on details of the agreement. It is quite outside the Question on the Order Paper.
Lord Mackie of Benshie: My Lords, is it not a fact that there have been many complaints from fishermen about the activities in their fishing grounds of nuclear-powered submarines? It took a sinking and four deaths to get any action as regards the matter. Is there not a case for looking at the complaints in respect of other areas before more serious accidents occur?
Lord Brabazon of Tara: My Lords, these matters can be dealt with in the inquiry. Any previous accidents can be raised.
Lord Campbell of Alloway: My Lords, will the Minister pass on the concern expressed by my noble friend Lord Trefgarne and myself?
Lord Brabazon of Tara: My Lords, I have already said in reply to my noble friend Lord Trefgarne that that will happen.
Lord Clinton-Davis: My Lords, will the Minister also undertake to report to the Secretary of State the desire of noble Lords to extend the safety code into other areas? We may then be able to return to the matter at a later time. Will the Minister join me in extending our condolences to the family of Mr. Jamie Russell, the skipper of the "Antares", and to the families of the three other members of the crew who perished in this unfortunate accident?
Lord Brabazon of Tara: Certainly, my Lords, I readily agree to do so. I am sure that we all feel very sympathetic in regard to what happened. As I have already said, I shall draw to my right honourable friend's attention what has been said.
Lord Hatch of Lusby: My Lords, will the Minister state that Her Majesty's Government are as concerned for the lives of fishermen working off the Scottish coast, as well as those working off all our other coasts,
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as they are for the welfare and operation of nuclear submarines? Further, in view of the fact, as I pointed out earlier, that there have been many incidents around the coast which cannot be proven, will he pass on to his right honourable friend the feeling in this House that there ought to be a public inquiry which would incorporate the Irish Sea and other coasts where similar incidents have been reported?
Lord Brabazon of Tara: My Lords, as I said, if there is to be a formal investigation into such matters all those issues can be raised on that occasion.
Lord Nugent of Guildford: My Lords, as we have now spent 23 minutes on three Questions, which exceeds our total allowance of 20 minutes, should we not move on to deal with the next Question?

CAP: Tobacco Regime
3.2 p.m.
Lord Renton Lord Renton asked Her Majesty's Government:
Whether they will now negotiate for the elimination of the United Kingdom's £47 million per annum contribution to the cost of producing tobacco under the CAP.
The Earl of Strathmore and Kinghorne: My Lords, the United Kingdom contributes to the EC budget as a whole, not towards individual elements of CAP expenditure such as the tobacco regime. The figure which my noble friend mentions is therefore notional. The Government have consistently sought to reform the CAP regime for tobacco and to reduce expenditure on it. We will continue to do so.
Lord Renton: My Lords, I thank my noble friend the Minister for that reply. However, is he aware that the figure of £47 million mentioned in the Question was given to me by another member of the Government? Further, can he say why British taxpayers should subsidise the production of tobacco, which is one of the main causes of lung cancer?
The Earl of Strathmore and Kinghorne: My Lords, so far as I understand it, the figure of £47 million is correct. On the second issue my noble friend raised, he made a good point. When we joined the EC in 1973 we accepted the CAP, of which the tobacco regime was a part. One of the principal aims of the CAP is to protect farm income, including the income of tobacco farmers. Our contribution is to the EC as a whole. However, that is abated to take account of the fact that most agricultural expenditure occurs elsewhere. Under that mechanism we get back two-thirds of our net EC expenditure.
Lord Bruce of Donington: My Lords, is the noble Earl aware that this is one of the fields which has attracted considerable criticism from the European Court of Auditors over the past three years on the grounds of fraud and irregularity occurring within this sphere of operations of the CAP? Will he therefore undertake to ask his right honourable friend the Prime Minister whether it would be possible, on all future occasions when the agricultural Ministers meet together for the purpose of determining what aid is to be given to tobacco, for a Treasury representative to

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sit alongside our Minister and to concur in what is agreed? That would be better than seeking to escape any responsibility for what is done by the Minister of Agriculture.
The Earl of Strathmore and Kinghorne: My Lords, I can only reiterate to the noble Lord what I said on previous occasions. The Government treat fraud very seriously. However, I shall endeavour to pass on his comments to my right honourable friend the Prime Minister.
Lord Boyd-Carpenter: My Lords, is my noble friend aware that many British taxpayers enormously resent their money being used to subsidise the production of a commodity which brings death and disease to a considerable number of people, especially in the third world, to which the tobacco is exported? Will he also make it perfectly clear to his European friends that we are not prepared to continue with what many of us regard as an immoral act?
The Earl of Strathmore and Kinghorne: My Lords, my noble friend makes an extremely good point. About 10 per cent. of Community tobacco production is exported to developing countries. World trade in unmanufactured tobacco is highly competitive with most exporting countries aiding export sales by means of subsidies. Nevertheless, we are concerned about the detrimental effect on health resulting from tobacco consumption. Therefore, we shall continue to press for reductions in all forms of support in order to remove the incentive to produce surplus tobacco, especially the higher tar varieties, and to reduce subsidised exports.
Lord Stoddart of Swindon: My Lords, is the noble Earl aware that millions of people all over the country would welcome a complete renegotiation of the common agricultural policy to eliminate the £2,200 million subsidy which we pay and also the £18 per week that every family in this country pays towards this ridiculous and absurd system?
The Earl of Strathmore and Kinghorne: My Lords, I believe that the noble Lord has made that point on previous occasions. All I can say is that it is somewhat wide of the Question on the Order Paper.
Lord Gallacher: My Lords, in the light of what has been said on many occasions in this House, will the noble Earl invite his right honourable friend the Minister to consider pressing the Community to wind up the tobacco regime? Apart from other points which have been made today, it is a fact that most of the product is of such low quality that it is unusable and, as has been said, that which is usable constitutes a real danger to public health.
The Earl of Strathmore and Kinghorne: My Lords, tobacco is an agricultural crop and therefore eligible for CAP support. In criticising the regime we are one member state among 12 and alone in seeking a fundamental change. There is strong support for it, especially from producers. Although I have previously given the statistics to your Lordships I shall do so again in order to back up what I have just said. About 200,000 holdings are involved in tobacco cultivation, employing almost 800,000 people mostly in the poorer
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southern member states. In Greece, up to one-third of the agricultural labour force is involved in the cultivation of tobacco.

Business
Viscount Davidson: My Lords, it may be for the convenience of the House if I say a brief word about the length of speeches in today's debate standing in the name of my noble friend Lord Elton, to which your Lordships have agreed to apply a five-hour time limit. The number of speakers is such that it is not necessary to apply a formal time limit, but I am sure that noble Lords would agree that it would conform with the spirit of these debates if, save for my noble friend Lord Elton opening and my noble friend Lord Ferrers, who will be winding up, speeches were kept within the 15 minutes maximum time limit, as recommended in the Companion.

King's Cross Railways Bill
The Chairman of Committees (Lord Aberdare): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That this House do concur with the orders made by the Commons set out in their Message of yesterday.—(The Chairman of Committees.)
On Question, Motion agreed to, and it was ordered that a Message be sent to the Commons to acquaint them therewith.

Sentencing Policy
3.7 pm
Lord Elton Lord Elton rose to call attention to the need to ensure a proper balance between custodial and non-custodial sentences; and to move for Papers.
The noble Lord said: My Lords, before I begin my speech I cannot refrain from extending a welcome to my noble friend the Leader of the House, who so appositely proposes to make his maiden speech only eight days after starting his own life sentence on such a germane subject, having come straight to this House from the Home Office.
The Motion standing in my name draws attention to,
"the need to ensure a proper balance between custodial and non-custodial sentences".
In other words, it draws attention to the importance of sending the right people—and only the right people—to prison. That is not an academic subject. For a great many British citizens imprisonment is a subject of vivid, actual, immediate and personal importance.
For example, in 1988 almost 82,000 of our fellow citizens were sentenced to prison by our courts. Even if all of them came from families consisting of only three people—which is not very likely—and if only the members of those families were touched by the experience, what happened to those 82,000 people had a profound and formative effect on a further 164,000 to whom they stood as parent, child, breadwinner or

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dependant. Therefore, the group immediately affected by sentencing policy in that one year amounted, on the most cautious estimate possible, to roughly 250,000 people.
Imprisonment is a necessary institution. It is necessary for the enforcement of law and for the protection of the public. It is also the most readily available and most easily understood way that our society has of expressing its rejection of criminal behaviour, but that is almost all that it is. Despite all the reformers, from Elizabeth Fry down to those of the present day, it has not become an institution which brings any positive benefit to society as a whole or to the vast majority of those who undergo it. That is not a view born of prejudice. On the contrary, it was formed during my three years as the Home Office Minister responsible for the prison service and confirmed during the five years I have had to reflect on it since. It is not a prejudice; it replaces a prejudice.
Before I encountered the system, I had supposed that the experience of imprisonment would suffice to deter all but a few eccentrics from further crime. That natural view did not survive exposure to the facts. Let me provide one of the facts in the form of the reconviction rates for prisoners discharged from prison department establishments in 1985. Thirty-four per cent. of females and 55 per cent. of males were back in court and convicted again within two years. That fact becomes even more interesting upon analysis. I should perhaps begin by saying that one of the things that first hits one when one starts visiting prisons is the youth of the prisoners. Even middle-aged men are a rarity. Offending reaches its peak in the teens. The great majority of our prisoners are young men. Somewhere in their mid to late thirties, most of those who have not acquired the skills to avoid detection, or the lawyers to avoid conviction, have reached what, in the jargon, is called the age of criminal burnout.
Criminal careers end early in this country, but they tend to start very young indeed. As a teacher, a parent and a responsible Minister, I found the statistics far more illuminating when broken down by age. Of all those over 21, only 31 per cent. of the women and 45 per cent. of the men were reconvicted within the following two years. If we take, for example, youth custody trainees aged 17 to 20, we find that the figures are 44 per cent. for females and 65 per cent. for males. For those aged 15 to 16 the rate of reconviction within two years goes up to 49 per cent. for females and no less than 81 per cent. for males.
If those statistics mean anything, they mean that custodial treatment does not cure a 15 year-old of crime; it confirms him as a criminal. It does so at a cost of about £300 a week. The statistics also suggest (do they not?) that the present balance between custodial and non-custodial sentences is at least not perfect. It is not surprising that we should find such high rates of offending and reoffending around the ages of 14 to 16. It is precisely then that most male children are searching most desperately for an identity. They want to stop being just Mrs. Brown's boy or Mary Jones's
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brother—the lad with brown hair—and be someone within their own right: one who counts. The healthy expression of that need is the natural wish to be good at something.
Everyone possesses some skills and has the ability to be good at something, even at the age of 14; or perhaps principally at the age of 14. But if the skills young people possess are not the skills encouraged or recognised by their school, those skills will not provide the children with the means to secure recognition as someone who counts. They will instead give a few of them the chance to score in the role of buffoon and a great many more the chance to shine as rebels, first, against the discipline of school and then against the rules of society. They have a motive. They want to read in the eyes of their contemporaries not the amusement or condescension that is due to a dunce but the respect that is due to a man. Whatever a 14 year-old reads in the eyes of his contemporaries when he returns to school from serving a custodial sentence, it is neither amusement nor condescension. As he finds it, he is confirmed in his own perception as someone who counts, who knows who he is. He has won his identity: he is a criminal —a hard man. Their respect is his reward, and he will not lightly give it up.
It is therefore what their contemporaries respect that determines the course upon which many children start out in life, and what they respect depends in its turn upon the society in which they live, the family by which they are brought up and the school in which they are taught. This is not a debate on education, but it is relevant that if more of our schools did as our best ones already do and enabled more of our children to exploit the skills that they have and to succeed in the fields in which they can succeed, both the social and the academic results of those schools would improve dramatically and we would have fewer youngsters dropping gratefully into the role of the hard man in their group and ultimately into the tragic statistics to which I have referred.
The work I did as chairman of the recent committee of inquiry into discipline in schools, and subsequent reactions to our report, suggests that that change is on the way, but in the meantime the courts must deal with those customers along with the rest. For some of them custody is a dingy but desirable accolade.
The courts are already under constraint to make the minimum use of custody in certain areas. In 1982 it fell to me to introduce into the House the Bill that was to become the Criminal Justice Act 1982. Section 81 of that Act, now amplified by the 1988 Act, as your Lordships will be aware, laid down that no court should impose any custodial sentence on a young offender unless it was satisfied that no other method of dealing with him was appropriate. That section, as amended, and as amplified to embrace 17 to 20 year-olds in 1988, seems to me to have marked out the correct path for us to follow in developing sentencing practice.
Since 1983 the number of juvenile offenders given custodial sentences has halved, without any corresponding increase in the level of juvenile crime. That trend continues. A Home Office statistical bulletin

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published on 24th October this year draws attention to falls in the sentenced population in the year ending July 1990 as against the previous year. For the overall population the figure is 13 per cent. That is a welcome change. Better still is the news about those age groups to which the 1982 and 1988 changes were applied. The reduction for males aged 17 to 20 is 17 per cent. and for males aged 14 to 16—boys—it is no less than 33 per cent. That is welcome.
The bulletin emphasises that considerable uncertainty is attached to long-term projections. Nonetheless, it is a matter for welcome notice that one of them shows the average number of sentenced male young offenders, which was 7,100 in 1989, falling to between 4,800 and 5,300 by 1998. It cites the legislation to which I have referred as the principal reason for that drop. I am glad to note therefore that in the Criminal Justice Bill, soon to come before your Lordships, Her Majesty's Government propose to take the principles which were applied by those Acts to younger offenders only and apply them, with one small exception at which we shall look in Committee, to all offenders. I look at my noble friend Lady Faithfull because that touches the part of the 1982 Act which she carried into Section 1 against my advice. I concede now that she was right.
While the Home Office projection for the young offender population is a fall, that for the total average annual prison population is a rise. It is a rise by 1998 to between 55,700 and 56,700. That is up to 6,800 more than the highest figure it has ever yet reached. That figure is less alarming than it sounds, because it does not allow for the impact of the provisions of the Bill now in Parliament which I have just described. It is a warning. It is a measure of what will happen if we fail to act and therefore a powerful reason for enacting the provisions when they come before us.
So far I have spoken, as too many people are apt to speak, as though all that were necessary was to tell the courts not to be so hard on offenders. That is a silly way to speak, for three reasons. First, the courts are better judges than we can ever be of the cases that they try. That is sufficient answer on its own to those who want to follow certain of the states of the United States of America and introduce statutory control of sentencing. Secondly, the courts have a duty to the public, and also, let us remember, to offenders and their families, to provide justice and nothing less. They have a duty to award a sentence chosen from the array of sentences which Parliament has set out and which the Executive has made available which they believe to be the most appropriate to each individual case. They need to have a reasonable idea of its effect. That, incidentally, is one of a number of replies to those who argue for executive release.
If the courts are to send fewer people to prison, they must have other more effective sentences to award. Then reason for using those other sentences cannot simply be that we in Parliament urgently wish to keep people out of prison. The courts must be confident that non-custodial sentences are in every respect—for the convicted offender and for society as a whole—
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more effective than custody, in result certainly and, one would hope also, in cost. The courts must have confidence in the sentences.
Thirdly, in order for the courts to do the job properly, the pattern of sentences awarded must be arranged according to a visible logic that relates to the seriousness of the crimes committed. By "visible logic" I mean a logic that is recognised and can be understood by, or at least explained to, all those involved in the criminal justice system, including offenders and, most important of all, would-be offenders. It is not therefore enough for the system to achieve a proper balance between custodial and non-custodial sentences; it must be seen to do so.
A further welcome feature of the Bill is that it begins to provide that logic in the structure of sentences available. However, the pattern will be void of discernible logic if the heavy end has been arbitrarily locked off by Parliament with no compensating adjustments elsewhere. The need therefore is not for the courts to put the public at risk by leaving dangerous criminals at large; nor is it for them to cease awarding sentences that reflect the seriousness of the offences committed. The need is for careful consideration by the courts, by government and by Parliament, of those crimes for which imprisonment, an exceedingly expensive treatment in any form, is also entirely negative. It is for the courts to decide appropriate disposals which they can use with confidence in all such cases.
Is it really right, for example, that no less than 16,817 people should have been sent to prison in 1988 for failure to pay fines? It must surely be right to put attachment of earnings and even of benefits ahead of that. The unit system of relating fines to ability to pay could help to reduce the numbers in default in the first place. We should give that favourable consideration when it comes before us in the Bill.
Two of the principal purposes of custodial sentences are the deterrence of those who might commit crimes and the reform or rehabilitation of those who have already committed crimes. The annual conviction figures make it pretty clear that deterrence is not working very well. For the 76,430 people received in Prison Department establishments last year, it certainly did not work at all. One might expect rehabilitation to work better, yet the figures I have quoted for reoffending show that rehabilitation is not working either.
The success of present prison regimes in straightening out crooks becomes more and more marginal the younger the age group we look at. In one teenage group the reconviction rate was 81 per cent. Even with the most successful group —adult males—there was failure in respect of almost half the candidates. That is due partly to the huge pressures of volume the service has had to cope with and partly to the way in which staff-management relationships have developed under those pressures. If the prison service were relieved of the pressure generated by present rates of custodial sentences, it would have a chance to sort out its outdated industrial relations. Prison regimes could be provided that would actually be

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rehabilitative. The job satisfaction of making a significant proportion of the crooked go straight would be a great reward in itself. The reward to the taxpayer would also be considerable.
These benefits are, I believe, within our reach. We can further reduce the pressure of numbers on the prison services if we ensure the availability of an array of non-custodial sentences which accomplish the purposes of sentencing to at least the degree at present offered by custodial sentences and which have the confidence of the courts. It is plain from the striking fall in the sentencing of young offenders which I have quoted that such disposals already exist in that sector and that they have the confidence of the courts. They are locally supervised, community-based sentences which have in large part been built up, with the considerable help of the DHSS, now the Department of Health, by a wide range of voluntary organisations. When not referred to as community-based, such sentences tend to be called intermediate treatment. They are structured, demanding and highly effective in dealing with young people who have appeared before the juvenile bench up to the end of the 16th year.
We now need to put some real muscle behind extending and developing schemes of the same kind for young adult, and some adult, offenders. The new legislation will not be fully effective until the schemes are in place. I am convinced that, firmly pressed, this policy can divert a substantial further proportion of offenders from custody; that it can achieve a higher rate of rehabilitation among those diverted to it; and that it can provide the prison service with the elbow room it desperately needs to improve its own rate of rehabilitation.
However, this strategy, and the legislation now in train, can only succeed if the courts have confidence in it. Their confidence will largely depend on the reports they receive of it from the probation service and on their perception of the role of the probation service itself. That role is changing as probation becomes a sentence of the court. I hope that this will increase the readiness of the courts to pass to the probation service, strongly supported by the voluntary sector, cases that at present they send to custody for want of a more appropriate sentence.
This debate is opportune not just because of the approach of the Criminal Justice Bill but also because it falls within the consultation period of two important Home Office discussion papers. Within that consultation, the Home Office is receiving comments from a wide range of voluntary organisations, including one in which I declare an interest as its chairman called the Intermediate Treatment Fund. It has extensive experience of instigating local IT schemes using government funds as a catalyst in evaluating their effectiveness on behalf of the Government.
The courts are the guardians of justice. It is they who must be satisfied that the sentences they award are effective. It is they and not the offenders who are the clients of the probation service. There is a delicate and difficult stage to be gone through in broaching this new field during which the probation service must be
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satisfied that the voluntary sector is capable of running strictly rehabilitative schemes and be prepared to vouch to the courts that it is doing so. There is here, I believe, a valuable role for those in the voluntary sector with specific experience of making such judgments.
The Government have recognised the key roles of both the probation service and the voluntary sector. I am immensely heartened by the remarks of my right honourable friend John Patten last Wednesday in the West Midlands when he said of the probation service:
"Our commitment to the service could not be clearer. We have already announced additional resources, including 800 more staff in the next four years, a 25 per cent. increase in real terms in the probation service budget and over £13 million which the Home Office will allocate to local voluntary and private sector schemes working in co-operation with the probation service".
With that kind of approach and level of commitment, I am sure that we can achieve the proper balance of sentencing referred to in the Motion that stands in my name on the Order Paper. My Lords, I beg to move for Papers.
3.29 p.m.
The Lord Privy Seal (Lord Waddington): My Lords, in rising to make my maiden speech, I am very conscious of what a great honour and privilege it is to be a Member of this House. It is certainly something I never expected to be; I am proud to be one of your number. However, I have also been appointed Leader of the House and I am very well aware of the heavy responsibilities that now rest on my shoulders. Thinking of all the distinguished people who have held the office before me, I accept those responsibilities with real humility. I can only assure your Lordships that while serving the Government of which I am proud to be a Member I shall do my utmost to uphold the honour, traditions and interests of the House and the whole House. I know that in following in this Office my noble friend Lord Belstead, I am succeeding someone who was greatly respected, and I hope that in time I may earn the same respect. In the meantime, while as a humble beginner I learn the ropes, I hope that your Lordships will be patient with me, will guide me and correct me where I go wrong, and that I will in due course earn your Lordships' support.
I am grateful to my noble friend Lord Elton for his kind remarks. We were Ministers of State together in the Home Office some years ago and he was a splendid colleague. I thank him for that and I thank him also for today giving me the opportunity to make my maiden speech on a subject with which I have been greatly concerned throughout the past year. I agree heartily with the arguments that my noble friend has advanced.
Your Lordships will be aware that in February this year the Home Office published the White Paper Crime, Justice and Protecting the Public. It contained proposals which were in fact designed to achieve a better balance between custodial and community penalties. The proposals were taken forward in a Bill which I was able to present in another place last month. I hope your Lordships will not think that in what I am saying today, I am trying to anticipate the

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debates on the Bill which will no doubt take place here in due course. Not surprisingly, however, the Bill reflects my thoughts on the subject now before the House.
There is, I believe, general agreement that those who commit very serious crimes, particularly crimes of violence, should be sent to prison, often for a long time. Sentences for that type of offence—rape for instance—have in fact been increasing in recent years following Court of Appeal guidance. I certainly would not support proposals which weakened in any way the court s power to deal severely with very serious crime. Indeed, I believe that in certain cases—for instance where sex or violence is involved—a tougher sentence than that warranted by the seriousness of the offence before the court may be justified by the need to protect the public from serious harm.
I also believe that the time has come to make changes in the parole system on the lines of those recommended by the committee chaired by my noble friend Lord Carlisle of Bucklow. That means not only getting rid of some of the absurdities of the present system which result in offenders who have been given different terms of imprisonment serving the same length of sentence, but also that an offender sent to prison would generally spend a greater proportion of his sentence in custody. The sentence served would be more closely related to the sentence passed. I certainly believe that that would be a good step in terms of respect for the criminal justice system.
However, the vast majority of crimes committed in this country—94 per cent. of them—are not crimes of violence but crimes of dishonesty, often of a fairly petty nature. When it is not necessary to impose a prison sentence to mark society's condemnation of the offence or to protect society, there are strong arguments for not passing one. In prison lesser offenders rub shoulders with the more experienced and often come out worse than they were when they went in. While inside they are relieved of all responsibilities and are quite unable to pay a penny towards the support of their wives and families or to pay a penny by way of reparation to those whom they have harmed.
When one adds to that the absence of any evidence to suggest that an offender who has had a custodial sentence is less likely to reoffend than one who has not, there are the strongest arguments for punishing less serious offenders in the community—in any event they could only be kept out of circulation, as it were, for a limited period of time—and not sending people to prison merely because they have a record of petty offending.
However, it is necessary to face up to why such offenders sometimes finish up in prison at the present time. It happens, I fear, because until now community penalties have often not been perceived as real punishments; and, if truth be told, sometimes they have not been as rigorous and demanding as they should have been. Furthermore, the range of community penalties has not been wide enough. In prow ding more community penalties, there is an
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opportunity to make tough demands on offenders and offer the courts what they and the public will recognise as an adequate response to criminal behaviour.
It should, for instance, be possible to combine probation with community service and make a curfew order requiring an offender to remain at home between certain hours, away from the pub on a Saturday night, for instance, and away from the criminal associates who led him into trouble in the first place. In all this the probation service would have a key role to play. It would obtain the extra resources necessary for it to carry out the task. The service has done a great deal recently to enhance the effectiveness of its work with offenders and I am sure it would respond well to the new challenges we would be asking it to face.
The courts would be encouraged to use community penalties more often as a result of the extension over the whole age range of the sort of requirements which are already placed on the courts as regards young offenders by reason of the 1982 and 1988 Criminal Justice Acts, to which my noble friend referred. For instance, there is a requirement that a custodial sentence should be passed only if the court is of the opinion that the offence is so serious that only a custodial sentence is justified, and after a pre-sentence report has been studied by the court.
It is worth noting that the statutory requirements as regards young offenders have contributed significantly to the recent fall in the prison population. They have done so without any discernible increase in offending in that age group. The prison population has in fact fallen by over 3,000 in the past year. It is highly satisfactory that the opening of new prisons, together with fewer young people being given custodial sentences, means that we are now a lot nearer to the end of prison overcrowding. As my noble friend said, less overcrowding means more opportunities in prison for education, training and work. It also means opportunities for far more imaginative regimes than exist now and opportunities for prison officers to carry out more challenging and satisfying work than they are able to do now. That is wholly to the good.
I do not believe, however, that sentencing proposals should be designed just to reduce the prison population. Their purpose should be to ensure that convicted persons are punished suitably for their crimes. However, if suitable sentencing results in a further fall in the prison population, no sensible person will complain about that.
The best-used non-custodial sentence is not probation or a community service order but the good, old-fashioned fine, 80 per cent. of offenders being dealt with in that way. I think that it is important to make the fine an even more attractive option for the sentencer.
I am in favour, therefore, of a unit fine system being introduced in the magistrates' courts which will enable magistrates to take account of the ability of offenders to pay and to fine in a way which makes equal demands on offenders of different means. I believe that a new system on those lines would not only mean

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better justice but would also mean fewer people finishing up in prison for fine default. As my noble friend said, too many fine defaulters finish up there now.
In all our discussions we should never forget the victims of crime. Although this is not the time to canvass all the various suggestions for enhancing the rights of victims which were contained in the Victims Charter which we published in February this year, it is certainly relevant to the present debate that the courts have already been encouraged to make greater use of compensation orders so that offenders can make some reparation direct to their victims. The framework for sentencing now suggested should provide even more opportunities for such orders to be made.
Once again, I am grateful to my noble friend for initiating the debate. I do not believe that we now have the correct balance between custody and community sentences, but we have been moving in the right direction in recent years, and it is now, I think, time to put on more speed.
My Lords, I thank your Lordships for listening to me with such patience.
Noble Lords: Hear, hear!
3.41 p.m.
Lord Richard: My Lords, I trust that it is not too presumptuous for one who is so recent a Member of this House to speak on its behalf in congratulating the noble Lord, Lord Waddington, on his maiden speech and on his assumption of the leadership of this House. The noble Lord comes to us with a reputation of ministerial office and service in another place. As someone who spent some time in another place some time ago, I would say only one thing to him—he will find this place different. Whatever else it is, it is not the House of Commons. The noble Lord's reputation as a forthright Minister and individual has preceded him. I hope that he will find the somewhat calmer, quieter, more reflective and less overtly partisan atmosphere of this House to his liking. For our part, on these Benches we wish him well.
We hope that we shall be able to establish with the noble Lord, in his new capacity, the same cordial working relationship as we had with his predecessor. We much appreciated what the noble Lord, Lord Waddington, had to say about his predecessor. The noble Lord, Lord Belstead, always had the ear of the House. He was unfailingly courteous. He clearly had the interests of the House much in mind and he earned its deep respect.
Since by an accident of the speakers' calendar I am the first speaker to follow the noble Lord, Lord Waddington, on behalf of the whole House I congratulate him again, wish him well and welcome him to this House.
The wording of the Motion, coming as it does from the Government side of the House, is interesting. It speaks of
"the need to ensure a proper balance".
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That seems to me, as a relative newcomer to this field of political activity, to imply that the balance at the moment is not a proper one—a sentiment with which I imagine many noble Lords would agree. If it is not a proper balance, two further questions arise. First, in what respect is the present balance not a proper one and why is that so? Secondly, what, if anything, can be done about it?
There seem to be varying fashions in sentencing policy. When the noble Viscount, Lord Whitelaw, was Home Secretary, one gained the impression that in order to deter crime, judges should think of sending more people to prison. They did so. The figures changed rapidly, rising through the early 1980s to a total of no less than 50,800 in 1987. Since then there has been a dip to 45,500 in 1990. The Home Office estimates that the figures will rise again in the 1990s to between 55,700 and 56,700, although I recognise that that does not take account of the possible effect of the proposals in the Criminal Justice Bill.
If in the early 1980s the fashion seemed to be to put more people in prison, in later years the curve has seemed to be moving in the opposite direction. The provisions of the Government's White Paper—now incorporated into the Criminal Justice Bill—appear to be a further expression of the Government's desire to reinforce that trend. So where are we now? Is the balance out of kilter, or is it not?
In approaching the problem I started almost from scratch with little detailed knowledge of the subject. I was buoyed up in my endeavours by a remark which I believe that the noble and learned Lord, Lord Hailsham, once made when returning to his ministerial office on a Monday morning with his red boxes in the same state as they had been on the Friday afternoon. When his civil servants remonstrated with him he was heard to say: "Better fresh than briefed".
I approached the matter fresh but not entirely briefed. Therefore, I started with the comparative figures. The Council of Europe figures on comparative prison populations may be well known to interested Members of this House. However, I have to confess that although I was aware of the general trend and conclusions, until I looked at them in detail I was not aware of their full implications. I found the figures highly disturbing.
If one takes the comparative figures based on the number of prisoners per 100,000 of the population one finds that the situation in Council of Europe countries is this: Iceland 35.6; Cyprus, 39.3; Greece, 40; Norway, 48.4; Ireland, 55; Sweden, 56; Italy, 60.4; Belgium, 65.4; Malta, 67; Denmark, 68; Finland, 73; Switzerland, 73; Spain, 75; Austria, 77; France, 81; Portugal, 83; West Germany, 84.9; Luxembourg, 86.5; Turkey, 95.6; and at the top of the list, the United Kingdom, with 97.4. Therefore the United Kingdom has a higher prison population, both in absolute numbers and relative to its overall population, than any other member state of the Council of Europe. Furthermore, that figure for the United Kingdom does not include 1,511 prisoners, mostly unsentenced, who were held in police custody on the relevant date.

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To discover that our comparative rate is more than double that of Holland, Greece, Norway, Cyprus and Iceland is staggering. Further, to find that the rate in Ireland is 55 and in Italy 60.4 whereas in the UK it is 97.4 is extraordinary. One has to ask why.
There seem to be only two possible reasons for that discrepancy. Either those other countries are more law-a siding than we are, and there is little evidence of that—indeed in terms of serious crimes of violence, particularly murder, the evidence is to the contrary—or we in this country send more people to prison than do the others. The evidence seems to point to the second of those conclusions rather than to the first. Again, that invites the same question: why? Why should the United Kingdom, of all the countries of the Council of Europe, choose to send more people to prison than any other country?
Not only do we have the highest absolute comparative prison population of all those countries, but in turn much of that prison population includes individuals for whom alternatives to custody are not only desirable but essential. I do not want to bore the House with too many figures, and I realise that there are criminal statistics upon criminal statistics. Nevertheless, some are more important than others. I hope that I have managed to trawl from the mass of inforination available one or two statistics which will assist the House in considering the Motion. A serious estimate is that between 15 per cent. and 20 per cent. of those in prison are either mentally ill or chronically addicted to drugs, or both. Again, I am bound to say that I find that an astonishing figure.
We should also remember that many of those in prison—indeed, 20 per cent. of the average prison population—were remand prisoners during the decade 1980 to 1990. In 1977 people on remand in prison comprised only 8.5 per cent. of the total population. Again, one has to ask why there has been that increase. Either the provisions of the Bail Act are not functioning in the way Ministers envisaged or there is some other reason. I do not know. I can only imagine that the Act is not working as it should. There are far too many people on remand in prison awaiting trial—more than is justified either by the seriousness of the, offence or the circumstances of the accused. A solution must be found for the excessive number of untried prisoners who are in custody—many of them are young men on remand —particularly as the Government are about to receive Judge Tumim's report into prison suicides.
As NACRO said yesterday, the Government should accelerate their plans to phase out juvenile remands to adult prisons. It said that every year over 1,400 boys aged between 14 and 16 are remanded in custody to await trial and sentencing. I agree with what NACRO says; namely, that this is a recipe for bullying, criminal contamination and suicide attempts. Here I put in a plea. Whatever else it is, the situation is grossly unfair to the prison officers who have to run our prisons. I received from the Prison Officers' Association some material which I found
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extremely helpful. That organisation patently is giving this problem earnest and deep consideration. It is real and immediate.
Turning from the remand figures to sentencing policy generally, non-custodial sentences, as well as often being more appropriate, have another great advantage over custodial sentences in that on the whole they are very much cheaper. The noble Lord, Lord Waddington, when he was Home Secretary, speaking at this year's Conservative Party conference—I believe that he reiterated his remarks in almost the same words this afternoon—said:
"Prison must be the only appropriate way of dealing with those from whom the public must be protected. But there is no point in sending to prison those guilty of far less serious offences who can better be punished outside … Those sent to prison avoid their responsibility to their wives and families all too often … they use prison as a university of crime".
He went on to say that prison also,
"costs the taxpayer a mountain of money—£15,000 a year for every prison place".
It is 20 times cheaper to supervise an offender on a community service order than it is to send him or her to prison. In 1988–89 the average weekly cost of keeping someone in prison was £321, with the most expensive place costing £554. I do not know what luxuries can be bought for £554 which are not available for £321 but it seems to me that £554 per week for the privilege for keeping someone in custody is an extraordinary burden on the Exchequer and I wonder whether it could be reduced.
The average cost of attendance at an attendance centre in the same period was £156 a week. The annual average cost—not the weekly cost—of a probation order was £990. A community service order costs £760 per year. So the Government's answer to the first of my questions—namely, is there a proper balance between custodial and non-custodial sentences?—is clearly no. Indeed, it can hardly be otherwise, having regard to the terms in which the noble Lord, Lord Waddington, moved the Second Reading of the Criminal Justice Bill in another place. He said that the Bill would,
"lead to a fall in the use of imprisonment and therefore to a fall in the prison population".—[Official Report, Commons, 20/11/90; co1.140.
The raw facts of the situation, particularly the comparative ones, must lead one to the conclusion that there is something seriously wrong with the way in which offenders are dealt with in our criminal justice system.
I should like to make it perfectly clear in what I am about to say that the principle of the independence of the judiciary is one which, as a practising barrister off and on for some 35 years, I regard as axiomatic. It is not only foolish in practice but would be wrong in principle to attempt to tell judges how they should approach these very difficult questions of sentencing. Nothing that the Labour Party has proposed is designed to do that nor, indeed, has that effect.
There is a public interest in these matters as well as a judicial one. If we as a nation are concerned about the number of prisoners in custody and if they have been put there by judicial decision (as clearly they

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have) some way of meeting that public concern has to be found. I do not believe that the general public will be content with a policy of leaving it solely to the judges to remedy the situation.
In a debate on an Unstarred Question on 23rd May this year the noble and learned Lord, Lord Ackner, dealt with the possibility of a sentencing council. If I may say so, he dealt with it in somewhat scathing terms. I am glad to see him in his place this afternoon. He concluded by saying:
"Finally, perhaps I may suggest that the answer to the question posed by this debate"—
that debate was in almost the same terms as this one—
"is as follows. A new approach to sentencing is being provided by the Government's proposals contained in their White Paper by the provision of new powers to enable more offenders to be punished in the community, and it can be confidently expected that proper use will be made of those new facilities by the judiciary".—[Official Report, 23/5/90; cols. 991–2.
I do not think that that statement will allay public anxiety on this matter. The fact is that, as all who practise in the criminal courts know, there is not sufficient consistency in the way judges approach this task. I recognise totally how difficult is that task. I also recognise—if it needs stating at all—that absolute consistency is impossible to achieve and is almost certainly undesirable were it possible to achieve it.
Nevertheless—I should like to put some facts before the House—the situation exists whereby, for example, for the same offence an offender in St. Helen's is three times more likely to be sent to prison by the magistrates than is an offender in the neighbouring borough of Rotherham. That situation is frankly too disturbing. At Wood Green in London, 30 per cent. of those convicted are sent to prison. At Mold, the figure is 69 per cent. In Powys 6 per cent. of convictions for theft carry a custodial sentence. In Cheshire the figure is 17 per cent. In Gloucester 29 per cent. of burglars go to prison. In North Wales the figure is 54 per cent. I do not know whether burglars in North Wales are over-skilled and that much more villainous than those in Gloucester, but that is the place to commit burglary because in Gloucester 29 per cent. go to prison, whereas in North Wales the figure is 54 per cent.
A recent Home Office study into Crown Court sentencing found that for thefts of under £200 no less than 39 per cent. of offenders received an immediate prison sentence. Again I say to the House that prima facie this is surely unacceptable, or at the very least requires a public justification. Nor do I believe that anomalies of that nature can be left solely to judicial self-regulation.
As the House knows, one proposal of the Labour Party is that there should be a sentencing council—an independent body to monitor what is happening in the courts and to assist the judges. We realise that such a proposal is not universally popular with the judiciary as such—one would hardly expect it to be—but it is widely advocated by bodies and organisations which take a particular interest in criminal justice. I regret
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that no such proposal appears in the Criminal Justice Bill. We should like to see a council issuing practical guidance on such matters as the sentencing ceiling for different types and grades of offences and on principles governing, for example, the sentencing of persistent offenders or multiple offenders.
At present the Court of Appeal produces guideline judgments. In those areas where it has done so, it has been helpful in producing a greater degree of consistency. But, emanating as they do from an appeal they are only, and can only be, in a limited number of areas. In our view, a proper balance between sentences and consistency in sentencing can only be achieved when a body exists such as a sentencing council.
I hope that nothing I have said this afternoon will in any way give the impression that the Labour Party is soft on punishment. It is not. We believe that serious offenders should be punished and punished severely. But we do not accept that the present balance between those sent to prison and those allowed to remain at liberty is a proper one. In the end, the only way to adjust the balance between those sent to prison and those not sent to prison is to ensure as best one can that fewer people receive prison sentences. In that respect, a sentencing council would be of great assistance.
I conclude where I began. There is a problem that needs to be addressed. Something needs to be done as a matter of urgency. I offer this reflection. Home Secretaries, I fear, are inevitably placed in the delicate position of having to advocate a reduction in prison population against the background of a rising crime rate. On the one hand, they have to calm the fears of their "law and order" supporters. That inevitably means sounding tough and sending what are thought to be proper signals to the public about their determination to stamp out crime. On the other hand, they have to consider practically, as well as intellectually, that at present far too many people are being sent to prison for offences and for periods that are clearly inappropriate.
It is in the resolution of those two apparently contradictory imperatives that the difficulty lies. Unless one is very careful, the end result is a ritual genuflexion to both and the realisation of neither. I am afraid that without a greater and a more overt attempt to produce a more uniform pattern of sentencing throughout the country, we shall not succeed in dealing with the problem. In my view that would be a shame.
4.2 p.m.
Lord Hutchinson of Lullington: My Lords, I warmly welcome the noble Lord the Leader of the House to his new position. He has the inestimable advantage of being a lawyer. Noble Lords opposite will now have a lawyer on both flanks. I am not sure whether that has ever happened before. He will soon appreciate the deep affection in which lawyers are held in this House—in particular by the Government Chief Whip, who appreciates the succinctness with which the lawyers in

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the House put forward their arguments and the modesty and moderation in which they help the dispatch of business.
But the noble Lord the Leader of the House has a hard act to follow. As a modest Back-Bencher, I should like to pay tribute to the noble Lord, Lord Belstead—he is not in his place at the moment—for his great approachability, his kindness to all of us and his unfailing good humour. We shall miss him enormously.
Noble Lords: Hear, hear!
Lord Hutchinson of Lullington: My Lords, it is a remarkable fact that we have had two debates within seven months on sentencing. The other debate was introduced by the noble Earl, Lord Longford. Even more remarkable is that very soon we shall consider the Bill which contains clear statutory criteria which sentencers must observe in all but the most serious offences. Parliament will have then established its right to lay down a framework, and to set out guidelines limiting the discretion of judges and of magistrates. The House had much to do with the criteria for sentencing young offenders in the 1982 and 1988 Acts. It is a great satisfaction for us to see most of those criteria extended to cover the majority of sentencing decisions. One hopes that it will not be long before judicial resistance is finally broken down and the criteria made applicable across the board.
The seriousness of the offence and protection of the public from serious harm from the accused are to be the sole criteria. The balance of sentencing is not to be upset any more by considerations of general deterrence—by the infamous ladder principle: that everything has been tried already and therefore it has now to be custody. Sentencing on an offender's record, and by ideas of the protection of the public in general, are concepts which have been swept away. In my opinion, that is a great triumph for the noble Lord the Leader of the House. Furthermore, the extended sentence and the partially suspended sentence have gone. Sentencers must receive all the necessary information before imposing custodial sentences and must explain in open court their reasons for the imposition.
The emphasis on the new community sentence and the unit fine scheme makes the noble Lord's Bill in my view a turning point in penal policy in this country. It is a matter for sincere congratulations. I am sure that the noble Lord will be the first to admit that the hard work of Mr. John Patten and in particular the officials in the Home Office working under Mr. Hurd has made this breakthrough possible.
To ensure the proper balance—the subject matter of the noble Lord's Motion—which the Bill makes possible, the sentencer must ask two obvious questions: when should I impose a custodial sentence; and, if I do, for how long? It is only too likely that the noble and learned Lord, Lord Ackner—who will soon receive the accolade (or perhaps I should say the Acknerlade) of our favourite law Lord in these debates—will say that the judges have been following those precepts, obeying guidelines laid down by the
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Lord Chief Justice. If that is so, a great deal more needs to be done because we are still sending far too many people to prison, as the noble Lord, Lord Richard, said.
Those guidelines are the basis of the new Bill and the reason for it. In spite of a welcome drop in the total numbers received into custody in the past two years, the proportion of adult males, females, and young offenders serving over three years continues to rise. Sentence lengths have substantially increased. The noble Lord, Lord Waddington, appears to approve of that fact. But I believe he will find that many in this House take the opposite view. I look forward to hearing whether the noble and learned Lord, Lord Ackner, believes that the Bill will result in a wholly new approach by the judges.
The White Paper said that the principle to be followed would be that every criminal should receive his just deserts. The Bill very sensibly couches the criteria in a negative way: that the courts cannot pass the sentence "unless …" The just deserts principle has never seemed to me a workable principle for a balanced policy. If one takes, for example, two youths of 18, one of whom is bright, still in education, living at home and doing very well, and the other dull, unemployed, married and doing very badly, under the just deserts principle the bright youth should surely receive the more severe sentence because he should have known better and he has no family responsibilities. Yet custody in his case would be devastating, ruinous and totally unconstructive.
I find it hard to agree with the wording of the Motion. It continues a dichotomy of contrast which I had hoped the Bill would end: that is the concept of custody on the one side and all other penalties as alternatives on the other. I hope that with the passing of the Bill custody will be regarded simply as one of a number of penalties.
The balance that the sentencer must find is different. The art of sentencing involves no more than the imposition of an effective penalty. It must be a penalty which successfully meets agreed sentencing objectives. The objectives need to be spelt out: it is there that the balance must be found. They will include considerations of punishment, the protection of the public against reoffending, compensation, rehabilitation, cost, consistency yet flexibility, and the approval of an informed public. The list is not exhaustive.
The achievement of effectiveness matters and demands a great deal of the sentencer. First, he requires full and reliable information in regard to the offender and the offence. For that he will rely upon the CPS, the probation service, the legal aid authority, the police, the defending advocate, the medical profession, the proper organisation of the courts and the admirable Home Office research department.
Secondly, the sentencer requires knowledge and understanding of the penalties available; for example, the machinery for the enforcement of fines, the results of non-payment, the package making up the community sentence, and the different forms of

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community service and their suitability depending, for instance, on whether the offender is male or female, a member of the ethnic minorities and so on. Thirdly, he must know the effects of a custodial sentence. He will need statistical information covering the incidence of different types of offence and the rate of reoffending in different age groups, as was set out so impressively by the noble Lord, Lord Elton.
The sentencer will wish to ask himself, for instance, why in 1988 39 per cent. of those convicted in the Crown Court for theft of property under £200 in value went to prison while more than 40 per cent. of those convicted for theft of property over £5,000 in value did not go to prison. He will need to have first-hand knowledge of all the different institutions, their regimes, the effect of overcrowding, the opportunities for work or education, the removal of responsibility and self respect, the confirmation of criminality, the effect on families and so forth. The sentencer should know the cost of the different disposals and the provision for the mentally disabled and the young. He should know the results of the sentences and of the feedback that comes from his previous sentences. For instance, is it sensible to increase custodial sentences for sex crimes which do not involve violence, as the Bill suggests? That presumption is continually found in the speeches of those who support the power of increasing sentences.
Will all that happen? The answer is: only if some changes come about. There must be a change in the culture of those from whom the judges are drawn. The present practising lawyers are too busy and too rooted in tradition to wish to play any part in the broad area of penal affairs which surrounds those with whom they must deal. Judges must cease their isolation from other agencies in the system. The noble and learned Lord the Lord Chancellor is, after all, responsible for the judiciary but his absence from our debates on sentencing is a symbol of that isolation. There must be far more intense and in-depth training than that which is now served up by the Judicial Studies Board. The present narrow and limited tariff compiled from the decisions of a small number of senior Appeal Court judges without research staff or back-up will have to be replaced. In that regard I agree with the suggestion of a forum; a place where, under the guidance of the judges, policy guidelines can be worked out after receiving input from all responsible and experienced areas of the criminal process. It may be a sentencing council or a sentencing commission—call it what you will.
In this increasingly complex and media-orientated world, co-operation, cross-fertilisation, integration and consensus point the way forward to a true balance in sentencing. If, after the passing of the Bill, things simply continue as before; if the proper balance is not struck; if the prisons continue to be filled to overflowing; and if the level of sentences remains high, surely we must think seriously of a career judiciary. Judges and stipendiary magistrates might be trained in depth and at length and they might venture abroad to
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see how such matters are conducted in other countries. Then at last there would be a sufficiency of black and female sentencers on the Bench.
4.16 p.m.
Lord Allen of Abbeydale: My Lords, the issue raised in the Motion is central to problems with which I have wrestled during much of my official career and, indeed, in later years. Although many of the points which concern me have already been covered in what is becoming an interesting debate, marked as it has been by a distinguished maiden speech, I wish to offer a few comments. In doing so I shall not take up my full ration of time.
When I joined the Home Office at the start of my career more than half a century ago I was posted to the criminal division. I found that a principal problem with which it was then wrestling was the desirability of cutting down on the number of people sent to prison for debt, sometimes for only a few days. Since then I have, off and on, found myself confronted with comparable problems, including the period when I served as deputy chairman of the Prison Commission. Indeed, I still have my Royal Warrant of appointment as no one has yet cancelled it.
When I look back over the years I realise that I have seen many changes. I recall our experimenting with corrective training and the new form of preventive detention, the introduction of detention centres, the introduction of parole; the setting up of open prisons and pre-release hostels and polishing off borstal, to name only a few from a long list. However, from early on one thing stood out in my mind and it has remained at the forefront of my thinking. One can experiment endlessly with different forms of sentence and custody but the fact remains that imprisonment —that is the imposition of a custodial sentence—is a sanction which is likely to lose its effectiveness once it is employed.
Under the prison rules—and I believe that this rule still applies—we had to do our best to equip a prisoner to lead a useful and law-abiding life on release. Although during my time we did not have some of the problems which now face the prison service—for instance, overcrowding, dealing with ethnic minorities, AIDS and the violence which mirrors the increasing violence outside—it was always difficult to believe that there was much prospect of carrying out the admirable intentions of the prison rule to which I have referred. As was said by the noble Lord, Lord Waddington, the lessening of the prison population and the improved accommodation are likely to help, but I believe that the basic issue remains.
It was always clear that imprisonment, sometimes lengthy, would be necessary for certain types of offenders and for the protection of the public. But it became equally clear that for some there must be a better way, and so increasing emphasis was put on devising alternatives to custody. That meant in particular putting increasing importance on the developing role of the probation service; and then in due course there evolved refinements in the provisions for fines —and I know that there is still some way to

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go—and such developments as attendance centres and community service orders. In our own way I think I can say that we were all along in pursuit of the kind of balance for which this Motion calls.
But one had to pay regard to the reaction of the public, and I do not mean just those attending Conservative party conferences. The public have an insatiable appetite for crime, as the TV programmes on any day of the week will confirm, but it is not easy to put over a balanced picture. In the post-war period, for example, what hope was there of persuading Ministers to allocate resources to improving conditions for criminals when their constituents were crying out for houses, schools, roads and the rest?
I must say that, deeply regrettable though the troubles at Strangeways and other prisons have been, they have at least done something to help to rouse the public conscience about the state of our prisons, and so far as I know there have not been protests about the substantial amounts that the Government are committing to prison construction. But, all the same, the alternatives to custody—and although there may not be enough we already have rather more than exist in other countries and are adding to them in the Criminal Justice Bill—have throughout tended to be looked on as rather wet; as a kind of soft option. Somehow the public as well as the courts have to be persuaded that they are not.
But since the probation service is much involved with many of these other methods it has to be recognised that it presents that service with something of a dilemma. Traditionally the probation officer is likely to see his responsibility as looking after the well-being of someone who has been entrusted to his care as an alternative to punishment, and for him to adopt a punitive approach, and one that is seen to be punitive, runs contrary to what the service once regarded as its basic principles. Perhaps the Minister will be able to tell us whether he thinks that the service is adjusting to a new role. I think that he must do so, as it seems that the Government are content to entrust their new policies to the service, reorganised as it will be following the publication of the Green Paper, but an assurance from the Minister on this point would be welcome.
Then there are the courts. I hope that this will not sound patronising, but it seems to me that, speaking within the context of this Motion, things have changed for the better. When I was a prison commissioner going round the establishments it was pretty rare to see a judge's name among the list of visitors. Just to take one historical example, I recall that when corrective training was introduced in the Criminal Justice Act 1948 I went with two colleagues who were explaining it all to a gathering of King's Bench judges, and in particular explaining what we meant by corrective training. That mission must have been a pretty dismal failure because corrective training never took off and was never used as we hoped and intended.
But, as I understand it, detailed guidance on sentencing is now provided under the auspices of the Judicial Studies Board for assistant recorders, and there are regular sentencing conferences for judges of
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the Crown Court, the emphasis being on resorting to a custodial sentence only if all other possibilities are considered and found to be inappropriate. Developments of this kind, together with the various statutory hurdles to which reference has been made and which are being added to in the Criminal Justice Bill in the other place, have shown dividends, as in respect of the numbers of young offenders committed to custody.
Perhaps the Minister will tell us whether he is satisfied with the level of consultation and cooperation between the judiciary and Ministers and those responsible for preparing legislation in the criminal justice field. It certainly was not always so. I take it that he will not greet with any enthusiasm the suggestions that have been made for a sentencing council, or sentencing conference, or whatever it may be called, but I wonder if he might feel able to drop some hints that there would be a welcome for guidelines from the Court of Appeal on sentencing policy over a rather wider category of case than exists at present? Could he also say anything about the prospects of securing rather greater uniformity in the decisions on custody or otherwise taken by the magistrates' courts?
There is nothing new about the problem we are discussing, and although the new Bill will clearly help I cannot myself see it as a dramatic breakthrough and a dramatic change in what has been achieved so far. One can strive for gradual improvement but there can, alas, be little hope of achieving perfection. It has been said that the treatment of offenders is one of the criteria by which to judge a mature and caring society. I hope that even against the background of increasing crime we are getting a little nearer passing that test.
4.27 p.m.
Lord Carlisle of Bucklow: My Lords, it is a great honour to be the first Member from the Government side of your Lordships' House to speak following the maiden speech of my noble friend, and therefore to have this opportunity to add my congratulations to him both on his maiden speech and on his appointment as Leader of the House. It so happens that there has been a close friendship between my noble friend and myself, going back many years since we started together at the Bar in Manchester in 1955.
I suspect that he and I, over those years, have been either against each other or at least in the same court in many different towns in Lancashire probably more than almost any other pair of barristers. I have had the good fortune to be present at many of the important points in his life; as his best man and as the godfather to his eldest son. Therefore, I was delighted to be invited by him to have the honour of being one of his proposers on his entry into this House, and I am indeed delighted that I have had the chance to speak immediately after him from this side of the House in the debate today and to add my congratulations to him.
I should also like, I hope with the due cynicism of a close friend, to congratulate my noble friend on the role that he played as Home Secretary. He knows as

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well as I do that we do not always agree on every aspect of penal policy and indeed on some we disagree substantially. But I believe that my noble friend's experience of the courts and of the criminal law, his ability to bring an understanding of the realities of sentencing through sitting as a recorder in those courts, and his ability to be aware of the conflicting interests that judges have to take into account when passing sentence, have enabled him to sire a Bill that will help to rectify the balance between custodial and non-custodial sentences, even if the happenings of the last few months mean that it has now been handed over to foster parents to take it through the House.
It is also a pleasure to have the opportunity of following the noble Lord, Lord Allen of Abbeydale. Anything that I have ever learnt about penal policy I learnt from the noble Lord, Lord Allen, when I was a junior Minister in the Home Office and he was Permanent Secretary. Like him, I want to make just a few general remarks.
The first, which is I suppose obvious and I hope acceptable to all, is that while it is clearly desirable to deal with as many offenders as possible within the community, the fact remains that imprisonment is an unattractive but sometimes necessary way of dealing with fellow citizens who have committed crimes. It is unattractive for all the reasons set out in his speech by my noble friend Lord Elton. It is damaging to the individual, it makes his future life more difficult, it has the effect on some of institutionalising them and clearly it hardens many of them in their criminal ways.
On the other hand, it is regrettably necessary. It is necessary not only for the protection of society but because we must remember that part of the purpose of a sentence is to punish the individual, thus expressing the abhorrence of society for the act he has committed. To a degree it is an act of retribution, and in certain cases only imprisonment can satisfy that test.
It follows from that, first, that imprisonment should be used only when no other suitable way of dealing with an offender is available and, secondly, that when imprisonment is imposed it should be for no longer than is necessary. As the noble Lord, Lord Richard, said, other means of dealing with offenders are far cheaper in monetary terms than sending them to prison. They are also far cheaper in human terms than sending offenders to prison.
Secondly, I should like to take up a point made by the noble Lord, Lord Richard. One cannot put too much weight on the argument of international comparisons in this area. We looked at the matter in the committee which I chaired on reviewing the parole system. The fact is that while it is right, as the noble Lord, Lord Richard, said, that by quoting the basic facts one can show that we have on any one day more people in prison than other countries in Europe, it is to some extent a meaningless exercise unless it is clear that we are comparing like with like.
It is also somewhat meaningless unless the comparison takes account—and it does not take account—of the variation in the volume and the
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seriousness of crimes in different countries. The fact is —I hope that the noble Lord, Lord Allen of Abbeydale, will confirm this—that high as our figures may look compared to those of some other European countries, not only are they lower than those in Canada and dramatically lower than those in America but they are far lower than even the Home Office in this country predicted they would be in a paper which I saw on becoming a junior Minister in that department in 1969. However, I accept that as a society we should aim to send fewer people to prison if at all possible.
My third general point is that I profoundly disagree with the approach which starts with the question: what on earth can we do about further legislation to stop judges from sending people to prison? It is based on a hidden implication that the judges are tough, sadistic-minded people who are happy about sending people to prison. I believe that that is a total misconception and falsification of the truth.
The fact is that the vast majority of sentencing, even in the higher courts, is being done by ordinary members of society who have exactly the same family and individual problems as do other members of society. Much of that sentencing is being done by people who sit like my noble friend the Leader of the House sat, as I now sit and as the noble Lord, Lord Richard, and various other Members of this House probably sit as part-time members of the judiciary as recorders.
The truth is that judges are not tough and sadistic. I believe that they are people who strive hard to avoid sending people to prison. Nevertheless, they realise that they have a duty not only to protect society but to reflect society; and it is important that judges should remember that they are there as a reflection of society's attitude to the criminal. The public believes that certain types of cases can be dealt with only by imprisonment, and judges undoubtedly would be failing in their duty to the public if they did not recognise that fact when passing sentences.
I do not believe that success in promoting non-custodial methods of penalty depends upon criticising our judges or bringing in statutory straitjackets for penalties. I believe that it depends on success in providing an adequacy of non-custodial penalties which are shown to be, and are seen by the public to be, both tough and demanding.
Although I do not want to foreshadow in its entirety the debate that we shall presumably have later on the Criminal Justice Bill, perhaps I may say—to take up a point made by the noble Lord, Lord Allen of Abbeydale—that I am concerned about the attitude of those who from time to time say that they are worried about the punitive element in non-custodial sentences. Surely any sentence must by its very nature have a punitive element, and it is only if non-custodial methods of dealing with criminals are seen by the public to be tough and demanding and to have a punitive element that they will be acceptable and widely used in the way that we wish.

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The reality today is surely that it is often very difficult to know what to do. A person may appear before you who pleads guilty to an offence of burglary. He is out of work so it is not very much good fining him. The probation order states that he is not suitable for community service. In many cases it is very difficult to know what to do with people when one is dealing with them in court. Therefore, I believe that anything that widens the width of non-custodial sentences available to the courts is to be welcomed and will, by its very nature, lead to more non-custodial sentences being given. I believe that the proposals about the day-fine unit, the unit of fine, the proposals about combining fines with probation orders and combining probation with community service orders would all help in that way.
I should like to say that I totally disagree with the noble Lord, Lord Richard, and to a certain extent with tile noble Lord, Lord Hutchinson regarding the introduction of a sentencing council. I recognise that wide discrepancies can be pointed out, as the noble Lord, Lord Richard, said, between sentences in different parts of the country for similar types of offence. However, I do not see what a sentencing council will do.
A sentencing council only makes sense if it is combined with rigid statutory guidelines, which may themselves cause injustice. When we are told, as Mr. Hattersley told us, that the sentencing council will iron out discrepancies but will not play a role in the individual case, I do not understand how that is to be achieved. My own belief is that the way in which to achieve greater unanimity is by a wider use of the training given through the Judicial Studies Board and a greater use of guideline cases given by the Court of Appeal. I believe that their use, rather than rigid statutory guidelines, is the way in which to achieve the desired end.
If the noble Lord, Lord Richard, cares to look at the projection figures produced in America in anticipation of a sentencing council combined with statutory guidelines, he will see that they project a doubling or even trebling of the prison population over the next 10 years.
Perhaps I may make one final point regarding the length of sentences. My noble friend the Leader of the House was kind enough to say in the course of his speech that it was the Government's intention to implement many of the recommendations made in the report of the committee I chaired on the future of parole. He said—and this was the purpose of our report—that the intention of the proposals was that the sentence served should bear closer reality to the sentence passed. That is so, and I believe it is vitally important that the proposals are implemented for that reason.
I remind my noble friend, and through him the present Home Secretary, that we made absolutely clear in the report that the implementation of that proposal must and should be accompanied by a determined effort both by the Government and the judiciary to secure a reduction in the length of prison sentences passed. Account should be taken of the fact
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that there is now a greater reality between the sentence passed and the sentence served, and that those proposals substantially enhance the effect of the sentence and the quotient of punishment. For those reasons I hope that he will look at the length of sentences as well as the number of people sent to prison.
4.43 p.m.
The Earl of Longford: My Lords, I feel privileged to speak between the noble Lord, Lord Carlisle, and the noble Lord, Lord Windlesham, who have played such distinguished parts in the recent penal history of this country. The noble Lord, Lord Carlisle, for our purposes, may be regarded as a judge; he is part of the judiciary and sentences people. I am glad that some of the people who sentence offenders are speaking this evening. In the past in these debates they have been rather shy about taking part. More recently the noble and learned Lord, Lord Ackner, took part and will take part again today. Also the noble Lord, Lord Carlisle, has come forward to defend the judiciary.
I hope that the noble Lord, Lord Carlisle, will not say that everyone who criticises judges accuses them of being sadistic. That was not a judicial remark. It is perfectly possible to criticise judges; they are open to criticism. They are not like the Royal Family or lords of cricket; we are able to criticise them and I do criticise them. Too many people are sent to prison in this country, and judges send them there. Therefore the noble Lord who represents the judiciary must face the music. We shall come to that as the debate proceeds.
I join in the welcome to the noble Lord, Lord Elton, and congratulate him on introducing the debate. He won the respect of everyone when he was a Minister at the Home Office. If it be possible he won my respect even more when he took over at very short notice, almost overnight, a very large Bill—a disastrous Bill for me—to abolish the GLC. He piloted it through to what some may call a triumphant conclusion. He did a remarkable job which I believe ranks very high in parliamentary annals.
I extend a warm welcome to the new Leader of the House on behalf of that select if rather variegated trade union, the former leaders. I was admittedly rather frightened when I heard that he was coming here. I heard that he was a formidable gentleman who, given a chance, might hang some of us. However, I asked one or two of his colleagues and they said, "Not at all. He is a very nice man". Of course, all Leaders of the House are nice, but some are nicer than others. I feel sure that in time the noble Lord will prove to be one of the very nicest.
I now turn to the debate. There are two serious omissions in the Bill. People keep calling me from the Chamber—on rather trivial matters, no grave questions of state—and I missed some of the best points made by other speakers. However, I heard the speech of the noble Lord the Leader of the House in full.
The absence of a sentencing council, which was stressed by my noble friend Lord Richard, is a serious

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defect in the eyes of penal reformers. We look at the matter from a different angle from that of a judge such as the noble Lord, Lord Carlisle, who does not want people to interfere with his freedom. We understand that; we are human. But on behalf of the penal reformers—people who believe that there are far too many people in prison—I say that the only way to reduce that number is to control the judges, to exercise pressure on them, and not to allow them to be as free as they have been in the past.
That is my view and it is a view which may be shared. In this House it is not compulsory to share any view, but my view may be widely shared. Without a sentencing council I do not see how that reduction in numbers will be effected. Therefore I am sorry that it was omitted. I suppose that in the course of these debates it would be in order for someone to move that a sentencing council should be included in the Bill, either in this House or in the other place. Therefore, we may yet see a sentencing council.
There is another omission. Although I may be told that it would not be appropriate in this Bill, I believe that there should be some reference to the maintenance of minimum standards. Whatever government happens to be in power in this country, we are all aware that the standards of life in many and possibly most of our prisons are deplorably low. I hoped that there would be some insistence on the maintenance of minimum standards in prison. Again, that could be introduced later and I shall leave that subject for the moment.
Something which I very much welcome and which has been welcomed by other speakers, is the insistence in the Bill that when custodial sentences are passed —with certain exceptions—the court should give reasons. That looks innocuous enough. I believe that it had a tremendous effect in the case of young offenders and I hope that it will have the same effect in the case of the older ones. Therefore let me say straight away that that is entirely to be welcomed.
Whether any of the changes will produce a new attitude on the part of judges, I do not know. They may say that they are already perfect and will not alter their ways. In that case they will behave in the future exactly as they have in the past, and then, as now, we shall have far too many people in prison. It may be that the Bill will have an effect on them. It did as regards their attitudes towards young offenders, and I hope that it will as regards adults.
I do not want to suggest that all the harshness lies in the judiciary, and that politicians are all sweetness and light. It is true that when sentences are passed some are excessive. The other day I gave evidence as to character for a man convicted of a serious offence. He was in his fifties and suffering from severe asthma. I cannot claim that my advocacy did him very much good. I do not know what his sentence would have been had I not been there, but he was sentenced to 25 years plus five years unless he could pay some colossal fine far beyond his means. The judge passed that sentence while I was there. I also know a prisoner who has been in prison for 25 years. The prisoner has been
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twice recommended for parole by the local review committee yet he has been told by the authorities that not only is parole refused at the moment but that it will not be considered for another five years. To my mind that is utterly unChristian and inhuman. It was not a decision made by a judge so I do not blame the judiciary for everything.
I shall now turn to more cheerful subjects by looking at some of the principles of this Bill. I welcome one principle which earlier was regarded with a good deal of suspicion by most of my friends in the world of penal reform. I have welcomed the principle before now. I refer to the principle of punishment in the community which is a thoroughly constructive idea. It was brought forward during the term of office of the present Government. It was first outlined before the noble Lord, the Leader of the House, took office, but let us give him credit because he is responsible for the Bill. I hope that eventually this very important principle will be placed on the statute book. I give him undiluted and unequivocal credit.
I express a word of caution which will have to be given again. This measure can only be carried out effectively with the co-operation of the probation service. I believe that most of us will agree that creating another kind of service to do the job would be out of court. I am sure that the Home Office Minister in this House and others will agree that it is essential to carry the probation service along with this tremendously constructive idea. I certainly wish it well and I do not wish there to be any misunderstanding about that.
The other principle is that of just deserts. That was spelt wrongly in the original White Paper and it may have been corrected now. It was called retribution, but it now has a new and more fashionable name. I have never said in the past that there was no room for retribution in a just sentence. I wrote a small book about 30 years ago. Anything I write is small and I can assure noble Lords that if they wish to read it they will not have to spend very long doing so. The book is concerned with punishment and in it I found a place for retribution. It was not a popular measure at the time because retribution had been discredited, and not only in penal reform circles of 30 years ago. Experts like the noble Lord, Lord Windlesham, know that very well. Retribution was derided by everybody. I believe that people put it down to some kind of archaic, religious point of view. I am perfectly ready for retribution to be included in a just sentence, although one can call it just deserts if one so wishes. There is something to be said for not calling it retribution.
There are other elements including the reform of the criminal and deterrents for warning other people against doing such things in future. In addition there is prevention, which is a much more elusive concept. That involves keeping people in prison so that they cannot do any harm outside. The subject of reparations—compensation to the state or to the individual—has also come forward a little, but not fast enough.

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I am basing my remarks more on the thinking which is revealed in the White Paper and the Bill. These measures will play an even larger part in future legislation. Talking about just deserts sounds fine but we should pause for one moment to ask what it means. Are we to judge by the gravity of the offence or by the wickedness or the immorality of the offender? Those are very different matters.
Other ideas will be introduced. For example, in a recent and much-publicised case the judge paid a good deal of attention to the fact that two of the convicted prisoners had performed valuable philanthropic service. Where does that factor come into the concept of just deserts? I do not say that it is an impossible concept, but one has to look at it very carefully. In the case to which I have referred, the judge quite rightly paid a good deal of attention to the health of the prisoners. There are other concepts. There is room for just deserts, but if that factor ever became dominant I fear that it would gratify the public desire for revenge.
The noble Lord, the Leader of the House, is only too well aware that very strong feelings are aroused very easily. Perhaps I may return to that matter on another occasion. Anything that exploits the feelings of the public or gives vent to them, can be dangerous. It is not the politicians who appeal to those feelings to begin with, but the tabloid press which stirs up wicked feelings among large sections of the public. All too often the politicians go along with those views. One must be very careful with this concept. I am not against including just deserts but it should not be given a predominant place.
If we approach this matter from a Christian and not a sectarian point of view, we are bound to realise that it involves interests of the community and of the individual. I am only frightened that in this Bill the interests of the individual, the human being and the prisoner, will be lost sight of. However, I congratulate the noble Lord on bringing forward a matter which is of the utmost interest.
4.56 p.m.
Lord Windlesham: My Lords, I wish to add my voice to those of noble Lords who have already congratulated my noble friend Lord Waddington on his maiden speech, and to welcome him as Leader of our House. He will find that there are periodic debates on penal policy and that many of the noble Lords speaking today regularly do so. I am delighted that he has made this Motion the occasion for his maiden speech, and I hope he will continue the practice of taking part in similar debates in the future.
As we have been reminded by the noble Lord, Lord Allen of Abbeydale, who spoke from his long experience at the Home Office, for more than 20 years governments have been trying to encourage the wider use of non-custodial penalties. There have been some successes. I instance community service orders. Although they were introduced by a Conservative government in 1973 the concept owed much to a Labour life Peer, Baroness Wootton, whom some of us in this House still remember with affection.
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Such orders have been widely used. The last year for which I have any statistics is 1988 and are those published in the recent White Paper. In that year 35,000 community service orders were made, which compares with 69,000 offenders sentenced to immediate custody. Despite that trend, in the decade from 1977 to 1987, the proportion of offenders who were sentenced to immediate custody continued to rise. The inescapable conclusion is that probation and community service were promoted at the expense of other non-custodial penalties, most conspicuously fines.
Another measure which can be regarded as successful is the general restriction on the use of imprisonment for young offenders below the age of 21, which has already been referred to in the debate. This was first incorporated in Section 1(4) of the Criminal Justice Act 1982 and re-enacted and strengthened in the Criminal Justice Act 1988. It seems likely that the statutory restriction will have been one of a number of factors contributing to the welcome decline in the number of young people in custody. But these measures, valuable and effective as they have been in practice, have been piecemeal. They have not really dented the deeply ingrained belief that has taken root in the public mind, especially in the past few decades and has been shared and reflected by sentencers in magistrates' courts and Crown Courts, that, for all save the most petty criminal offences, punishment, real punishment, means imprisonment, and that anything else is a soft option.
The first determined and considered attempt, in recent years at any rate, to dislodge that belief came in 1987 in the immediate aftermath of the general election of that year. It is fair to say that it came about to a considerable extent because the then Home Secretary, Mr. Hurd—he had already been Home Secretary for two years by the time of the general election—was reappointed as Home Secretary in the new Administration. At his instigation a comprehensive and urgent review was mounted of policy relating to criminal justice and what its objectives should be. The exercise was carried out as a matter of priority as a result of the Home Secretary having thought carefully about what he should give his attention to first. The underlying assumption was that it should be an acknowledged objective of the system of criminal justice to reduce crime as well as to punish offenders. That sentiment can be found in both the Green Paper, published in 1988, and in the White Paper which followed it, and was published in February of this year.
The Green Paper, titled Punishment, Custody and the Community, was a remarkable document. Its first paragraph included the following statement. I remind the House that this is a statement of government policy, albeit in a Green Paper, not, as it well might be, an extract taken from the publication of a penal reform group.
"But for other, less serious, offenders, a spell in custody is not the most effective punishment. Imprisonment restricts offenders' liberty, but it also reduces their responsibility; they are not required to face up to what they have done and to the effect on their victim or to make any recompense to the victim

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or the public. If offenders are not imprisoned, they are more likely to be able to pay compensation to their victims and to make some reparation to the community through useful unpaid work. Their liberty can be restricted without putting them behind prison walls. Moreover, if they are removed in prison from the responsibilities, problems and temptations of everyday life, they are less likely to acquire the self-discipline and self-reliance which will prevent reoffending in future. Punishment in the community would encourage offenders to grow out of crime and to develop into responsible and law abiding citizens".
The expression "punishment in the community" was thus born, or reborn—it is an old concept that is encapsulated in this phrase. Backed by the philosophy which I have just quoted, it obtained common circulation and got into the currency of debate.
In that public debate, punishment in the community was generally welcomed by all political parties and informed groups or individuals who take an interest in penal policy. It was skilfully presented and handled by my right honourable friend Mr. Hurd, assisted by Mr. John Patten, who remained as Minister of State when Mr. Waddington (as he then was) succeeded Mr. Hurd as Home Secretary. They managed to broaden its appeal and to enrol the support of the higher judiciary, in the shape of the Lord Chief Justice, who welcomed punishment in the community, and of the Judicial Studies Board which plays an increasingly important part in the workings of criminal justice.
The practical interpretation of these noble sentiments was a formidable task. Obstacles included one that has been referred to by at least two speakers in the debate this afternoon. I refer to the unhappiness of the probation service about the penal overtones of strengthening community penalties, and yet that strengthening community penalties was regarded as crucial if sentencers, especially perhaps sentencers in the magistrates' courts where community penalties are used more frequently, were to have confidence that they would be rigorously and thoroughly supervised.
There were also difficulties in drafting legislation to embody statutory restrictions on imposing custodial sentences on adult offenders, following on from the restriction on the imprisonment of young offenders in the 1982 legislation. Such legislation would have implications for judicial discretion. Anyone who has grappled, as I have, with the first two clauses of the current Criminal Justice Bill will appreciate what a task that must have been for the draftsman and for those who briefed the draftsman. I would be surprised if these clauses survive their passage through both Houses of Parliament without being subject to some amendment.
Over the whole policy initiative hung a large black cloud. I refer to the scandal of prison overcrowding. The colossal cost of the prison building programme to alleviate over-crowding and inadequate conditions has been another factor. In 1987 the prison population broke through the psychological threshold of 50,000 prisoners in England and Wales, including those held in police cells. Since then, there has been a welcome fall. In September 1990 the prison population in England and Wales was down to 45,500, a very
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substantial fall of almost 5,000. It has enabled some reduction to be made in the prison building programme. I imagine the noble Lord, Lord Waddington, will know more than I, but the actual projected expenditure may well be similar, because the savings made from dropping three of the projected new prisons from the building programme will be more than made up for by the extra expenditure necessary at Strangeways and in repairing damage done at other prisons in the serious disturbances in April of this year.
In the White Paper, Crime, Justice and Protecting the Public, published in February of this year, the Government announced, after a long period of consultation, their proposals for legislation. The main proposals were for a,
"coherent legislative framework for sentencing, with the severity of the punishment matching the seriousness of the crime and a sharper distinction in the way the courts deal with violent and non-violent crimes".
That was the first of what were listed as the main proposals.
The second item forecast,
"new powers for the Crown Court to impose longer sentences for violent and sexual offences, if this is necessary to protect the public from serious harm".
This raises the other track of the so-called twin-track policy, the balance, in the words of this Motion, between custodial and non-custodial penalties. It is easy to see the publicity value of presenting policies in that way. In privileged assemblies of this sort, I believe that it would be a mistake to disregard the importance of public presentation.
Nevertheless, there are some questions to be asked as to where this second track is leading. Are there dangers in lengthening still further the already historically high sentences for certain serious offences? What are the implications for the burgeoning long-term prison population in terms of control within the prisons, in terms of cost, and in terms of the prospects for rehabilitation? Further, what are the justifications for what has been described as "topping up" sentences; that is, encouraging and empowering crown courts—as the White Paper does and as the wording of the Criminal Justice Bill permits—to pass sentences longer than would otherwise be justified by the circumstances of the offence on certain categories of violent or sexual offenders, if it is thought necessary to protect the public from serious harm? Anyone who has grappled with assessing the risk of future offending, as the noble Lord, Lord Hunt, myself and some others in the House have done, will know what an unpredictable and uncertain venture that can be.
In his response the noble Earl may say that these provisions are all part of a package, and that it is not possible to pick and choose without upsetting that balance which is central to the Motion this afternoon. I do not reject such arguments. However, I suggest that they call for careful scrutiny. In criminal justice legislation especially, any change which can have such profound effects must be justified on its merits. It will

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be our responsibility when the Criminal Justice Bill comes to this House to ensure that the scrutiny we give to the legislation concentrates on such justifications.
5.12 p.m.
Lord Donaldson of Kingsbridge: My Lords, I was so certain that today's debate would feature speeches chiefly from my own noble friends that I convinced myself that the main topics of the fairly narrow subject on the original Motion would be fully covered. I felt sure that enough of my friends would speak thus enabling me to feel certain that I would agree with what was said. Therefore, I propose to extend the debate somewhat in the following manner.
The debate is about a balance. Every balance must have a dividing line. It seems to me that the dividing line of whether you send an individual to prison must depend to some extent on the prison. I should like to concentrate upon some of the more obvious and easy remedies to improve the present very bad state of our prisons. That does not seem to me to be irrelevant to the ma in topic.
Returning to the speakers' club to which we all belong, I also welcome the noble Lord the Leader of the House and congratulate him on his maiden speech. His speech was of the right length and as clear of controversy as was the speech made the other day by the noble Baroness, Lady Castle. I feel sure that he will be able to enter into our debates with a great deal of experience and understanding. After many years of receiving no response, I am very pleased to have received a response both from him and his predecessor which agrees that there are far too many people in prison, and that the prison system can damage people. There may be other matters involved upon which we shall rot agree. For example, we may differ on levels of sentence, and so on. However, we have agreed on one aspect of the matter. It is new in these debates that such an agreement should be common ground throughout.
As I said, I shall concentrate on the other side of the line where those deciding whether to send someone to prison must think about what they are doing. Thirty years ago prison reformers thought only of rehabilitation. About 20 years ago it became evident that it was rare to find any rehabilitation in prisons. The best you could hope for was humane containment, which became the catchphrase of the day. That may still apply in between 70 per cent. to 80 per cent. of cases. But if you find that even 20 per cent. of your population would respond to constructive treatment, you would greatly improve present conditions by having at least that 20 per cent. of the prison population in prisons which ran securely and well, which did not riot and which were not only more humane but also cheaper.
I have never been able to understand why, in view of those facts, the Home Office does not exploit its success and copy the example of one or two of these prisons which run effectively and well. I do not exclude other prisons, but I speak especially of Grendon and Blantyre. Neither of those prisons is suitable for everyone; nor are they overcrowded. Each has a
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carefully selected group of prisoners, coming in on a voluntary basis, and each could be reproduced all over the country without ever being short of suitable candidates from the huge population of 45,000.
Grendon, the psychiatric prison which runs as a therapeutic community, deals with what is called "personality" disorders; that is, not madmen or psychopaths, but men with lesser difficulties. The basis is always that the incoming prisoner feels that something is wrong with him and wants to try and put it right. On the other hand, Blantyre deals with long-sentence men who have served not less than three years of their sentence and who are anxious to prepare themselves for their release. They can choose what they want to do and are helped to find the type of instruction needed.
Grendon has run for over 30 years, while Blantyre has run for nearly four-and-a-half years. Both of them have operated virtually without trouble in the form of escapes or serious injury to inmates or staff. There are very few prisons about which that can be said. I am entirely certain that anyone who casually visits either prison and talks to either inmates or staff will gain the impression that the men want help and that they are receiving it. I once made the noble Lord, Lord Elton, tour around Grendon, so I think he will bear out that assumption. I do not claim that all the prisoners will leave and become law-abiding citizens; but a good few of them will do so. Further, they all combine to keep stability in their prisons.
Therefore, why do we not build on that evident success? The governor of Grendon thinks that he could probably find about 10 in every 100 prisoners acceptable. A new Grendon in the North is surely essential, if the example in the South is as good as I believe it to be. In future we can open one in the West, and one in the East; and perhaps a similar prison for women, although the present facilities do not exist in that form, and it is rather a different problem.
I turn now to the Blantyre regime. There are 14,000 men serving sentences of over three years at present. Therefore one can assume that at least 300 or 400 of them would volunteer for the regime and be considered suitable, so that immediate provision could be made for three or four small prisons across the country using the Blantyre regime.
Prisons that do not do have riots are much cheaper to run than prisons that do. That must never be forgotten when considering expense. There will always be a number of prisoners who are wholly unto-operative and resentful and who need careful management. That becomes more and more difficult in overcrowded conditions. There are also a number of men who are unhappy with their condition, and they will respond to a convincing offer of help. Grendon and Blantyre prove that. The prison service should be looking all the time for ways of responding.
Drug abuse seems to offer an important opening. Professor Gunn of the Institute of Psychiatry suggests that "substance abuse"—which is, I imagine, medical jargon for drug or alcohol addiction—is found in 23 per cent. of men and 30 per cent. of women prisoners.

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As we are aware, drugs have taken the place of tobacco in prison as the "barons'" stock in trade. Many prisoners, especially young ones, would volunteer for a specialist drug cure in a specialist prison or wing where real efforts could be made to help them break away from their addiction. Such places exist for free people and they should also exist within prisons. I do not believe there is provision for anything like the numbers needed. I do not know whether the Minister can tell me what provision there is.
There is a need to respond to any motivation shown, whether to be helped psychologically, to learn a trade, or to come off drugs or drink. Such men or women should be put where they feel they are obtaining some help, instead of being mixed up with everyone else who is criminally minded. They can be organised in separate institutions or wings which would be easily run and relieve overcrowding elsewhere.
I have one last point. The most helpful prisons, in addition to those that I have mentioned, are, not unexpectedly, the open prisons. There are fewer than 4,000 open places, and they are underused by about 13 per cent. Will the Minister tell me what is the provision in the building plans for new open prisons? If he cannot do so tonight, a letter will suffice because there is no hurry. I think that at least 10 per cent. of the prison population would be suitable for open prison treatment. That would mean that a further 1,400 places could be provided profitably at once. They are much cheaper than secure prisons and offer some relief of overcrowding. I notice that two years' ago the Chief Inspector of Prisons said in his annual report:
"Many inmates who are wholly suitable for open prisons are kept in closed prisons".
Has any notice been taken of what he said?
I do not want to sound too optimistic: the problems of the rising crime rate are intractable, and punishment cures little. If there were 10 Grendons and 30 Blantyre-type prisons within our provision for 45,000 prisoners, the line of being careful not to send someone to prison would move some way to a realisation that some people would obtain better treatment in such places than they would outside.
I do not know whether anyone other than I has read the Butler Trust pamphlet entitled A Right Liberty prepared as the result of a travel scholarship by D.F. McAllister, a prison governor, and D.J. Little, a principal prison officer. It has been sent to Lord Justice Woolf, and I am sure that he will make full use of it and will observe how some of the problems similar to those from which we suffer have been solved by Sweden, West Germany, the Netherlands and Hungary. It makes what we are trying to do look unsuccessful. I fear that all we can expect tonight is that the Government will legitimately defend themselves by saying that they cannot anticipate the Woolf recommendations. However, it has been an interesting debate, and will continue to be interesting. It will not be wasted if it reaches Lord Justice Woolf.
5.25 p.m.
Lord Campbell of Alloway: My Lords, it is always a considerable privilege to follow the noble Lord, Lord Donaldson of Kingsbridge, and, today, to listen to his authoritative extension of the area of the debate which sets a perspective in which his proposals clearly warrant some further consideration. Surely, to build upon success is a sound policy.
Although two former Leaders of the House have already spoken, nonetheless, from the "legal eagles' nest" of three of us who have sat as recorders, perhaps I may give a word of congratulation to my noble friend the Leader of the House on a most impressive maiden speech: a word of welcome, and the best of good wishes for his tenure of office. Having heard him today, any hint of apprehension is allayed, as we know that he will follow in the footsteps of his illustrious predecessor.
It was an impressive speech made by a distinguished Queen's counsel who practised in the criminal courts, who, as holder of an important office of state, used his legal and political expertise to reset the balance between custodial and non-custodial sentences in the Criminal Justice Bill. My noble friend has also, as instigator of the Bill, resisted the temptation to advocate his own cause so as to pre-empt discussion in another place or in your Lordships' House upon a potentially controversial subject. Although it is in a sense inevitable that today's debate raises the edge of the curtain of future discussions on the Bill, it should not serve as a dress rehearsal for its Second Reading, as the Bill is still under consideration in another place.
It is far easier to propose striking a proper balance than to strike that balance in the most radical reform of sentencing policy since 1945, heralded in the Government White Paper earlier this year. If the noble Earl, Lord Longford, were here, I would look him in the eye, because a sentencing system must afford adequate protection to the public, and be seen by the public to afford such protection and to be effective. Otherwise, confidence in the rule of law could evaporate and so engender resort to self help. That is almost axiomatic to those of us to have practised in the courts and who have sat as part-time recorders. It is not axiomatic to everyone. The point has been so well taken by my noble friend the Leader of the House, who sat as a recorder, and my noble friend Lord Carlisle, who also sits as a recorder, that there is nothing more that needs to be said; but the point has to be made, taken and firmly held in the interests of the maintenance of the rule of law.
Although we are all concerned with overcrowding in prisons; the worrying aspects of Judge Tumim's reports; staffing in the prison service; the statistics of rising crime; the revelations of cooked-up confessions; and questions of administration and public expenditure; the essence of today's debate raises moral and social questions. Those aspects are not academic, as my noble friend Lord Elton said. They affect the matters of concern to which I referred. Those questions lie only within the remit of Parliament to settle in principle, it being within the remit of the

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judiciary to implement the will of Parliament as guardians of justice in the exercise of residual discretion. In this, the Executive, the Home Office and the Lord Chancellor's Department remain subservient to the will of Parliament. It is not for the Executive to issue guidelines on sentencing. It is for the Lord Chief Justice and the Court of Appeal to deal with such guidelines in the exercise of the residual judicial discretion in the implementation of the principles of the Bill when enacted.
This was confirmed by my noble friend the Leader of the House. Hence the need for and the value of constructive discussion upon these matters in principle, by which the balance is to be reset. Noble Lords on all sides of the House will be grateful to my noble friend Lord Elton for having introduced this timely and important debate. I know that my noble friend will forgive me if I say that I could not follow the statistics. I shall read them in Hansard tomorrow. There were rather too many given too fast to assimilate.
I take the point that the noble Lord, Lord Hutchinson, made. With the greatest respect to him, I do not believe that it matters how the Motion is worded because it served a valid and useful purpose. Let us not bother about the wording but let us take comfort from what is said in the debate. For my part, I cannot see what is wrong with the wording. If the balance has to be shifted against custodial sentences, it is right because it takes account of the stigma and erosive effect of imprisonment, the futility and hardship of the disruption of family life and employment unless no other sentencing option is available.
At all events, this proposed new framework for sentencing offenders will be of interest to noble Lords—the noble Lord, Lord Hutchinson, in particular—who for a long time have expressed the view in your Lordships' House and no doubt elsewhere that the balance has been far too heavily weighted in favour of custodial sentences.
The linchpin that holds this balance—I believe that it is called the twin-track approach—is that full and proper consideration should be given to sentencing options available other than imprisonment before determination as to whether custody is appropriate. Custodial sentences are only to be awarded when justified by the seriousness of the offence or when only such a sentence would be adequate to protect the public from serious harm from the offender. In the latter context, the court will be able to take the previous convictions into account. In addition, the circumstances in which the previous offences were committed may be taken into account to determine the seriousness of the offence. Therefore previous convictions may be taken into account to determine whether custody is appropriate, but not for the purpose of determining the length of the term of imprisonment imposed. If that analysis is right, I wholly support it.
The obligation is to give reasons for the determination as to whether custody is appropriate and custodial sentences are only to be awarded when
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justified by the seriousness of the offence or when such a sentence would be adequate to protect the public from serious harm from the offender. The use of the term "offender" appears to inhibit deterrent sentences or responses to previous convictions. As was pointed out, the deterrent sentence has not worked well in the past. The limiting word "offender" appears to make the deterrent sentence no longer available.
The sentencing options available have already been considered by other noble Lords: the combination order with the community service order and the probation order; the curfew order, with or without electronic monitoring; the new way in which the level of fines is to be increased in courts of summary jurisdiction; the new way in which means are generally to be taken into account in assessing fines; in other words, also the establishment of the community service order as a community sentence in its own right as distinct from an alternative to custody. These are the main sentencing options other than imprisonment which are available and they have to be taken into account before a custodial sentence is imposed.
One cannot but congratulate my noble friend the Leader of the House on his bold and constructive initiative and hope that the Bill will in due course receive the favourable reception that it deserves. It is assuredly my hope that no amendment shall be carried to the Bill when it comes before the House to establish the sentencing council as advocated by the noble Lord, Lord Richard, who spoke for the Labour Party, and the noble Earl, Lord Longford. I hope no amendment will be carried to alter the culture from which judges are drawn, or to establish a career judiciary as advocated by the noble Lord, Lord Hutchinson.
I believe the noble Lord spoke: for himself. Certainly it is not understood how the sentencing council could conceivably achieve the object that the noble Earl, Lord Longford, imagines is possible. Perhaps the noble Earl has forgotten that the majority of custodial sentences are imposed by lay magistrates or by part-time recorders. I hope the noble Earl will allow me to suggest respectfully that his attitude and approach to sentencing, and to the matter of whether a custodial sentence should be passed, might not receive the understanding and support of the public. If that were the case, the rule of law would tend to evaporate.
The Earl of Longford: My Lords, does not the noble Lord realise that in the eyes of a great many people judges pass too many custodial sentences which are too long at present? If judges carry on in their same old sweet way, how does the noble Lord propose to deal with that matter?
Lord Campbell of Alloway: My Lords, this is not merely a question of judges imposing sentences. The majority of sentences are imposed by perfectly ordinary lay people—they are not sadistic, though that term has been bandied about—or by part-time judges. The sentences are subject to appeal to the Court of Appeal. The provisions of the Bill will ensure that the balance is reset. If that is not sufficient for the noble Earl, so be it. The balance must be reset in a

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form and in a way which is acceptable to the public and commands the support of the public. I say with respect to the noble Earl that I believe the Bill achieves that objective. There is nothing more that I can usefully add to the debate. I apologise to your Lordships for having lost my notes and I thank you for your indulgence.
5.42 p.m.
Lord Renton: My Lords, my noble friend Lord Campbell of Alloway was quite right in stressing the part played by lay magistrates in the sentencing of offenders. Indeed, well over 90 per cent. of all criminal cases are tried by lay magistrates. Fewer than 10 per cent. of those cases are sent by the lay magistrates for trial on indictment or for sentence. As regards the point made by the noble Earl, Lord Longford, on judges sentencing people to prison, we have to bear in mind the fact that it is only the really serious cases that come before the judges at all. Therefore it is not surprising that a high proportion of the sentences that the judges award are necessarily custodial.
I too wish to join in the tributes that have been paid to my noble friend Lord Elton for initiating this debate and for the way he did so based on his valuable experience as a former Minister of State at the Home Office. No fewer than seven of the speakers in this debate have held that position. That fact made me rather reluctant to accept my noble friend's invitation to speak in the debate as I held that position 30 years ago. Therefore it may be thought that I am getting a little rusty.
To the extent that the history of the matter can help us to understand the present problems of it, I hope I may draw upon my experience as a recorder. We are all grateful to my noble friend Lord Campbell of Alloway for having at last found a collective noun for recorders. He referred to us as "a nest of recorders". That is a very felicitous thought. I carried out part-time judicial work on about 30 days a year for eight years up until 1970. I believe the only other speaker in this debate who had judicial experience before 1970 is the noble and learned Lord, Lord Ackner. I was only once reversed on appeal and that was by a Divisional Court presided over by the noble and learned Lord. He was of course absolutely right.
In those days we were most severely restricted in the sentences that we could award. Prison, borstal, detention or fines were the only sentences available. We could of course put people on probation to keep them out of prison—I did that frequently—but the probation service was pretty fully stretched. We could bind people over but that occurred nearly always for first offences that were not very serious.
It was a great relief when eventually the Conservative Government rectified the whole situation in 1973 by introducing the Powers of Criminal Courts Act. That Act gave the power to impose for the first time suspended sentences of imprisonment and gave the power to impose community service orders. Credit for that Act and for those important reforms goes largely to my noble friend Lord Carlisle of
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Bucklow, who was Minister of State at the time and piloted the Bill, on behalf of the Home Secretary, through its Committee stage in another place.
Lord Allen of Abbeydale: My Lords, is the noble Lord quite right about suspended sentences? My impression is that they were introduced by the Criminal Justice Act 1967.
Lord Renton: My Lords, I am grateful for the correction but I believe that that part of that Act did not come into operation until a year or two later when my time as a recorder was coming to an end. That, I think, is why I did not have the benefit, which others enjoyed later, of being able to award suspended sentences.
The 1973 Act came into operation on 1st July 1974. After all the administrative preparation had been carried out, a Labour Government brought the Act into force. The 15 years' experience since then has been interesting and should now be built upon. In spite of a smaller proportion in the total number of people being sent to prison, there are many more people in prison now than was the case 16 years ago. Many speakers have pointed that out. When I was in the Home Office the late Lord Butler of Saffron Walden introduced the biggest prison building programme of this century. I include in that programme the building of detention centres. They were an important part of the programme.
My noble friend Lord Whitelaw had to introduce another big prison building programme 10 years ago. Incidentally, remarks that have been made on behalf of the party opposite have given some of us an uneasy feeling that the Labour Party seems prepared to scrap what would remain of that programme in the unlikely event of its having the chance to do so. It would help us very much if a noble Lord who is to speak from the Benches opposite would confirm that the Labour Party believes in the prison building programme and would continue with it.
My noble friend Lord Whitelaw, with valuable help from my noble friend Lord Elton, also introduced the Police and Criminal Evidence Act 1984. That Act strengthened and clarified police powers when investigating crime and interviewing offenders. I am sure that the noble Lord, Lord Allen of Abbeydale, would agree with me that the guidance which flowed from it greatly improved the way in which mentally handicapped offenders were dealt with by the police and by the courts. Thanks to the co-operation of the police, with MENCAP to a great extent, the problem that was caused by mentally handicapped people being unjustly treated has almost disappeared. Now we have the Criminal Justice Bill which will give greater flexibility to the courts in imposing non-custodial sentences.
I have always felt that the powers of the courts and discussion of criminal justice should be above party. However, as members of parties opposite so often claim to be better penal reformers than other people it is only fair to point out that all the most enlightened

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penal legislation since 1973 was introduced by Conservative governments. The proposals in the Bill are a necessary next step.
It is most important that courts should give reasons for all custodial sentences. There are still too many people who think only of punishing offenders with stiff prison sentences, thinking that deterrence is all that is needed to reduce the crime rate. It has been pointed out that that is not so. As my noble friend Lord Carlisle of Bucklow said, it overlooks the fact that prison has disadvantages in its effect.
The only other point that I wish to make is this. I am against the idea of a sentencing council. I agree with those of my noble friends and others who have cast doubt upon it. I agreed with the noble Lord, Lord Richard, when he said that one should not attempt to impose consistency of sentencing upon the courts. It simply cannot be done. Sentences must vary with the circumstances of the offender and the nature of the offence, but one cannot entirely exclude the need for an element of deterrence in some cases. For example, if there is a particularly bad wave of crime of a particular kind in one part of the country, in my opinion the courts sitting in that part of the country are entitled to bear in mind the prevalence of that crime and sometimes, where suitable but not in every case, to add an element of deterrence to the sentence.
I have grave doubts as to whether, if a sentencing council is intended to impose consistency on the courts, that would be doing a good service. I believe that it is better that we should continue to do as we do at present, while no doubt improving on it. In principle we should rely upon the Court of Appeal, the judicial conferences and the various other means of helping, those who have the heavy responsibility, whether as magistrates, judges or recorders, of sentencing the great variety of criminals for the great variety of offences.
5.55 p.m.
Lord Ackner: My Lords, perhaps I may begin with a quotation:
"I am becoming increasingly impatient, as did Lord Justice Taylor last week, with those who needlessly and persistently criticise judges for all their decisions, many of whom have not been in court to listen to them let alone read the transcripts".
Thus spoke Mr. Patten in the other place during the Second Reading of the Criminal Justice Bill. I share his sentiments entirely.
I hope that your Lordships will forgive me if I speak on this subject with a little more spirit than one expects from a sitting Law Lord. My central justification is twofold. First:
"Public confidence in the fair and honorable administration of justice, upon which ultimately depends the rule of law, is the transcending value at stake".
Those were the words of that great judge Mr. Justice Frankfurter given in a judgment in the case of Sherman v. United States in 1958. Secondly, I much regret that there has been a conspicuous reticence in recent years about defending the judiciary from the increasing number of unjustified criticisms.
The last debate that took place on the subject of sentencing, referred to by the noble Lord, Lord
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Richard, occurred as recently as May this year. It was initiated by the noble Earl, Lord Longford. I attended essentially at his invitation, which was transmitted through my noble and learned friend the Lord Chancellor and onwards through the senior Law Lord. At the outset of his speech the noble Earl paid me what he called a tribute. He referred,
"to the courage, or audacity, of the noble and learned Lord for coming forward at a time when the judges are under fire for the first time in a lifetime. In all honesty, we look forward to his defence of the judiciary".—[Official Report, 23/5/90; col. 982].
Why should that defence be necessary? I believe that it is because certain notorious miscarriages of justice have been laid at the door of the judges. In the process the role of the trial judge has been misunderstood out of sheer ignorance of the trial process, or intentionally misrepresented. A judge does not try an accused; the jury does that. The jury decides what evidence to accept, what to reject and whether the accused is guilty or innocent. The judge's function is that of an umpire—to see that the trial is properly conducted. He has no investigative powers. It is the jury which accepts or rejects confession evidence. The police, not the judge, are responsible for the integrity of statements allegedly made to them by an accused. It is the jury, not the judge, which accepts scientific evidence. It is the responsibility of the scientists, not the judges, to ensure that the scientific evidence is honest and reliable.
Typical of the irresponsible attacks which have had to be tolerated unanswered is one made at a recent Labour Party conference by Mr. Hattersley, the shadow Home Secretary. He claimed:
"The judicial tragedies of the last twenty years have largely arisen from judges who are unable to discard their judicial prejudices".
We had more of that ilk with our cornflakes this morning.
This debate is concerned with sentencing. However, as part and parcel of the accelerating attack on the judiciary comes ill-conceived criticism of its sentencing role. I offer three recent examples. In the debate on the Address on 12th November 1990 Mr. Hattersley, having asserted that there never has been a time in modern history when the British people were less confident about their criminal system, suggested—and I paraphrase—that their doubts had, inter alia, been furthered by the preposterous sentences by judges and their absurd opinions.
What a wild and baseless allegation! I know not whether the shadow Home Secretary had in my mind one particular judge. If so, that judge is but one of more than 1,000 judges, circuit judges, recorders and assistant recorders who administer justice in the Crown Court. The Times newspaper, which appears to have joined the campaign, stated in a particularly silly leader last month:
"Judges are notoriously their own creatures, disinclined through long exercise of power to heed outside influence".
That is sheer nonsense, as I hope to demonstrate.
In your Lordships' House moderation is the rule. Those of us who were members of your Lordships'

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Select Committee on murder and life imprisonment were much assisted by the noble Baroness, Lady Ewart-Biggs. She and I were both members of a House of Lords swimming team which, for the benefit of a very reputable charity, a couple of years ago successfully competed against another place. That made me even more confident that she would be on my side in the debate last May. I was therefore more than a little astonished to hear her say from the Opposition Front Bench in that debate:
"The judiciary in Britain regard criminal justice policy as a contradiction in terms. Policy is viewed as inimical to their independence". [Official Report, 23/5/90, col. 1006.
In the very limited time at my disposal I shall briefly seek to demonstrate how misconceived are those sentiments. When I first became a recorder nearly 30 years ago it was believed that prison, properly used, could encourage a high proportion of offenders to start an honest life on their release. I recall the then Lord Chief Justice, Lord Parker, calling together the recorders and emphasising to them that it was more appropriate when sentencing to err on the long side rather than on the short side; otherwise the remedial effect of prison would be lost. He made it clear that any excessively lengthy sentence would be corrected by the Court of Appeal.
No one now regards prison itself as an effective means of reform for the majority of prisoners. The change in attitude towards the value of prison has been one of the factors affecting sentencing in the past couple of decades. Sentencing alters as judges respond to changes in the pattern of crime, in legislation and in public attitudes. The Government recognise that in recent times courts have taken account of public anxiety about violence, rape, drug trafficking, deaths caused by reckless driving and incest. As a result of guidelines promulgated by the Court of Appeal, sentences for such offences have been getting longer in recent years. As I understand it, that development has the full support of the Government. Indeed the Criminal Justice Bill confirms the appropriateness of heavy sentences.
Perhaps I may offer my congratulations to the noble Lord, Lord Waddington, on his important maiden speech. I remind the House that, speaking in another capacity in another place in the debate on the Address, he said that for the most serious offences there was no doubt that a prison sentence would normally be necessary and that often it would be a long one. Those words contrast with the remarkable observation by Mr. Hattersley in the same debate, to the effect that it was assumed that the normal outcome of many convictions was imprisonment and that this was the tragedy of our criminal justice system. The tragedy of our criminal justice system is that for the proper protection of the public from the increasing number of serious offences so many people have to be sent to prison and for such long periods. Had Mr. Hattersley referred to the prison statistics for 1989 he would have learnt that between 1984 and 1989 there were large increases in those serving sentences for violence against the person (up by 46 per cent.), for rape (up by 120 per cent.), for other sexual offences
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(up by 105 per cent.), for robbery (up by 63 per cent.) and for drug offences (up by 105 per cent.). That is but one aspect of the existing criminal justice policy which the noble Baroness thought non-existent.
Let me turn to another aspect of sentencing policy. Against the increase in sentences in the categories to which I referred there must be contrasted the decrease in sentences for those involved in non-domestic burglary (down 17 per cent. over the same period) and theft, handling, fraud and forgery (down 27 per cent.). Fifteen years ago I was in charge, as a judge of the Queen's Bench Division, of sentencing conferences for Crown Court judges, recorders and assistant recorders. For some 10 years I also ran seminars on sentencing at Cambridge for its institute of criminology.
As long ago as that, the emphasis was on using prison as the last resort and imposing the minimum sentence consistent only with the duty to protect the interest of the public and to punish and deter. Guidelines were laid down by the Court of Appeal over 10 years ago in the case of R. v. Bibi, emphasising how dangerously overcrowded were the prisons and stressing the need to ensure that if an immediate custodial sentence was essential it should be as short as possible in the terms that I have described.
The Judicial Studies Board is responsible for ensuring that newly appointed assistant recorders, recorders and circuit judges attend residential courses where they are instructed on sentencing principles recorded in guideline cases. Those cases do not cover, as your Lordships might have thought, two or three offences but the following: causing death by reckless driving, riot, violence at football matches, robbery, kidnapping, rape, unlawful sexual intercourse, buggery, gross indecency, living on the earnings of prostitutes, theft in breach of trust, benefit frauds, offences involving drugs and offences involving obscene publications, incest, and detention for young offenders. All those judges are subsequently required to go on refresher courses. Each of the six circuits has annual sentencing conferences for all judges, recorders and assistant recorders.
Significantly, the guidelines are all published. They can conveniently be found in the Judicial Studies Board handbook. I have not heard any public criticism of the guidelines by criminologists, police officers or welfare authorities. That surely is a good indication that those who have read them are satisfied with their soundness; and those who feel so impelled to criticise the current system have not even taken the trouble to acquaint themselves with that vital material.
Perhaps I may repeat what I believe to be so important to disabuse those who consider the judiciary to be "trigger happy" with custodial sentences. There is provided to every judge a written instruction entitled The Current Approach to Sentencing. It is a kind of route card and contains the following six distinct steps which must always be gone through.

"1. Can a non-custodial sentence be passed? If so, such a sentence must be imposed.

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2. If a non-custodial sentence is not out of the question, is it possible to make a community service order as an alternative to a short custodial sentence?

3. If it is not possible to make a community service order, is it possible to suspend the whole of the prison sentence which must inevitably follow? If so, you must suspend the whole of the sentence you impose, but remember you must determine the length of the sentence on the merits of the case. It is wrong to increase the length of the sentence simply because you are suspending it.

4. If it is not possible to suspend the whole sentence is it possible to pass a very short immediate sentence without any suspension?

5. If a short sentence is insufficient to meet the needs of the case is it possible to suspend part of a longer sentence which must necessarily follow?

6. If it is possible then a partially suspended sentence should be imposed and you must decide what proportion of the whole must be served. If a partially suspended sentence is inappropriate what is the least possible total sentence which can be imposed bearing in mind the circumstances of the case and the record of the offender".

Those who suggest that there are many in prison who should not be there may care to know that burglars comprise the group which has the greatest proportion of persons recording 11 or more previous convictions—41 per cent. High rates were also registered for theft, handling, fraud and forgery. Thirty-two per cent. in that group had over 11 previous convictions. With regard to robbery the figure was 30 per cent. Out of 24,286 males whose previous convictions were investigated only 2,311—about 10 per cent.—had no previous convictions. Those with six to 10 previous convictions amounted to 6,500, and those with 11 and over 9,058. Although the comment will obviously be made that it demonstrates that imprisonment does not reform, it does at least provide a measure of protection for society from those who are intent on leading a violent and/or dishonest life.
To those who think that the guidelines laid down by the Court of Appeal are but pious advice to be adopted or ignored at the will of the judges, perhaps I may make a brief observation about the appellate system After an accused is convicted and sentenced he remains in receipt of legal aid for advice as to whether he has a reasonable basis for an appeal. Counsel considering the sentence imposed by the trial judge will view it in relation to the guidelines in order to see whether it is a justifiable sentence. If he is of the view that an appeal is justified, then the legal aid covers the application for leave to appeal against sentence and the drafting of the notice of appeal. There were over 5,000 such applications last year for leave to appeal against sentence and 1,822 were granted leave. Of those granted leave, 1,314—approximately one-quarter of the total applications—were allowed, and those include not only sentences quashed but sentences varied.
I have no doubt that the judiciary will welcome the new options of punishment within the community proposed by the new legislation. Punishment, as the recent White Paper on Crime, Justice and Protecting the Public confirms, has a major part to play in reducing crime. I entirely share the difficulty expressed by the noble Lord, Lord Waddington, in the debate on the Address in understanding why some who are in
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favour of less custody do not seem to recognise that rigorous and demanding penalties must be provided if that aim is to be achieved. Community penalties imposed in lieu of custody must not be perceived as "let-offs", if they are to be acceptable as alternatives to custody, as I sincerely hope that they will be.
6.15 p.m.
Baroness Platt of Writtle: My Lords, I am grateful to my noble friend Lord Elton for initiating the debate on this important subject. I speak only as a lay person. Like other noble Lords, I congratulate my noble friend the Leader of the House on his maiden speech. I join other noble Lords in their welcome. After his long service at the Home Office, not surprisingly my noble friend's maiden speech was an excellent one, and we look forward to hearing him on many future occasions.
There is general anxiety at the overcrowding in our prisons and the conditions under which prisoners are detained. The Government are spending millions of pounds on improving such conditions. However, that will take time. Many people, especially the elderly, live in fear of violent crime. Their lives are more restricted than need be because of that fear. Those people must be protected from criminals who are likely to repeat crimes of violence if they are free. Those people need to believe that the criminals are being punished for their crimes.
Young people who have committed less serious offences if imprisoned may learn further undesirable practices from hardened offenders. They may emerge from prison more liable to commit a serious crime than before.
I look forward to the Government's Criminal Justice Bill which is being introduced this Session. Its aim is to separate those two types of offender and to treat them differently. In short, the aim is to strike a better balance between custodial and non-custodial sentences. In its foreword, the Bill emphasises the necessity of protecting the public from serious harm from an offender. I very much agree with that. However, courts must in the majority of cases state their reasons in ordinary language —I welcome that phrase in particular—for imposing custodial sentences, and the length of sentence must be commensurate with the seriousness of the offence. Tougher sentences on persistent, violent offenders can take into account previous convictions which are serious and relevant when considering the protection of the public.
The parole board is to continue in existence. In making recommendations as to a prisoner's release, it will have regard to the need to protect the public from serious harm from offenders, and the need to secure offenders' rehabilitation. After short-term prisoners have served half their sentence, they will be released unconditionally if the sentence was one year. If the sentence is over one year, they will be released on licence. Longer term prisoners will be released on licence after two-thirds of their sentence has been served. The parole board can recommend release on licence for long-term prisoners after half their sentence has been served. Apart from the freedom such release

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conveys on the prisoner, and the consequent reduction of the prison population, the advantage of release on licence is that the prisoner is supervised by a probation officer. I am sure that that will be to everyone's advantage. It gives the prisoner a lifeline in a strange world after emerging from prison. At the same time so far as possible it makes it less likely that he or she will recommit serious crime.
If prisoners are likely to commit violent crimes, they can be recalled. That is a very important provision in the case of "lifers" who have committed murder or manslaughter. However, under the provisions of the Bill, if prisoners feel that they have been unjustly recalled, they can make representations to the parole board which, after listening to their cases, may release them if they feel it justified.
At the same time, there is a new emphasis on non-custodial sentences of a tough, demanding nature. That aspect is particularly relevant to young offenders and adults who are before the courts for the first time. The sentences will include hours of work of a demanding nature in the community. Such sentences by their very nature restrict people's liberty, but at the same time allow offenders to make direct reparation to the community for their crime. Other sentences could include a curfew order which involves electronic monitoring, or probation, supervision or attendance centre orders or unit fines.
As a county councillor some years ago I saw the work of an attendance centre. I was most impressed with its success. The young people had to travel long distances to the centre on Saturdays and take part in demanding physical exercises and work which gave them new skills. Inevitably they missed leisure activities such as afternoon football matches, but there was no question of custody. At the same time, interest was taken in their future and careers advice was given by volunteer officers. That kind of work has considerable prospect of success in the future.
The Bill provides the opportunity to achieve the correct balance between custodial and non-custodial sentences. As the Bill states, in either case there is a need for every effort to be made to rehabilitate. If young offenders and those convicted of serious offences but on release under supervision, are to be successfully rehabilitated, the provisions of the Bill will provide a considerable challenge for the probation service. In its financial commentary, the Bill makes clear the need for more expenditure on the service. I am sure that it will rise to that challenge in its best traditions.
In planning for expenditure on both the prison and probation service, I hope that the plans will include much better education and training opportunities in the future than they have in the past. I was most encouraged to hear my noble friend the Leader of the House make reference to imaginative plans in that direction. That education and training must be available for prison and probation officers, in their demanding work, to offer to every kind of offender. Such opportunities must be available to the young first-time offender who has not committed a serious
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offence and who needs to be firmly diverted from a life of crime and, at the other extreme, to the persistent and violent offender who may have committed murder or manslaughter. Between those two extremes will be the person who goes back to living on the straight path throughout his or her future life; prisoners who will need education and training while undergoing custodial sentences so that they too decide to give up a life of crime; and those who, despite all efforts, must undergo long periods of custody because there is so little chance of dissuading them from violence. In the latter case, the public need for protection must have priority.
The present long periods of custody in cells in primitive conditions, referred to in Judge Tumim's report, are demoralising to prisoners and staff alike. There must be more emphasis on education and training in the prison service. The provisions in this Bill, with its two-track approach, when put into effect in the future, will provide hope where there is at present despair, and in years to come will reduce crime and the number of prisoners in custody.
6.24 p.m.
Lord Gisborough: My Lords, the first issue that must be clarified is that in most magistrates' courts, while penalties and punishments are inevitably meted out, magistrates do and should lean over backwards to take any action that they can to help the villain to go straight and put crime behind him if they think that is in any way possible or likely. Time and again probation or conditional discharge is given to try to achieve that. I believe we all agree—and it is obvious—that if it can be achieved, it is much cheaper and better to gain success by reforming a character than by imposing penalties. There is a steady stream of miscreants who commit offences—particularly motoring offences including driving while disqualified—but who are already paying as much in fines as they can possibly afford, often taking into account the families that they must support be they married or unmarried.
I have a cutting from yesterday's paper which is of interest. The article states:
"Driver admits 32 of 504 offences.
A teenage learner driver who was originally charged with 504 motoring offences was banned for three years and fined £350 when he appeared in a Liverpool court. He pleaded guilty to 32 offences including driving without insurance and MOT … The remaining 472 charges were withdrawn at an earlier hearing".
How will he be dealt with when he next appears in court—probably next month—on charges for which he cannot be sent to prison; for example, another case of driving without the necessary documents or supervision?
There is a danger and a likelihood that the bad cases will end up in prison because they are fined so much that they cannot pay and so they default. Thus we now have the unit fines system to try to stop that happening. Needless to say, the system is proving to be something of a success because more fines are collectable. But even under that system many people will soon overrun the ability to pay more when they next appear in court, even at the reduced rate of fines.

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I do not like the idea of the unit fines system because it is grossly unfair to the man who is working and earning money. Time and again unemployed youngsters come into court as a result of expensive drinking bouts and for offences relating to their cars and they say that they have no money to pay a fine. Why should the hardworking man have to work for weeks to pay off his fine, while the unemployed youngster, who has little intention of getting a job, waits for the state to pay his fine for him? Furthermore, the employed man may lose his job but must pay far more than the person on social security, although he will then be receiving the same benefit. That again points to the benefit of the scheme that I have previously advocated—that is, the provision of work on piece rate so that the unemployed man can work off his fine, as can anyone else who chooses to pay by that method. That will not be community service, which in any case appeared to be a doddle on all the occasions that I witnessed it. It will be in the form of piecework for which they will be awarded a certificate for an amount of money rather than the money itself. I have already explained the scheme in the House and written to the Home Office, and therefore there is no point in going over it again now. Suffice it to say that there are satisfactory answers to all the points that have as yet been raised against it. Furthermore, work in lieu of a fine would leave income free for the payment of maintenance or compensation which is so often coupled with such cases.
I am sorry to see that the White Paper cast doubt on suspended sentences. Apparently the offenders see it as a let off giving them only a duty not to offend again. Surely that is the object that we are trying to achieve. It would be even more effective if, as suggested, it were combined with compensation or a fine. I do not believe that longer sentences will stop violent or sexual crimes. People do not commit crimes with the length of a sentence in their minds. They commit crimes for greed; and, above all else, they hope rot to get caught. The biggest reason why crimes are committed is lack of self control often combined with drinking. It is more important to look towards treatment than to long sentences which are often quite pointless. It would be much cheaper and more productive to go down the route of treatment than down the route to prison.
It is strange that we as a nation are advocating two opposite courses. On the one hand, we say that we must lower the prison population and stop sending people to prison. In my experience, no one is sent to prison unless there is no alternative. Those who are sent to prison would be a danger to themselves or the public if they were left at large or the gravity of their crime demands a prison sentence. On the other hand, we demand that in order to reduce crime, prison sentences should be longer and penalties stiffer. We cannot have it both ways.
That reinforces a need for additional methods of effective punishment. The piecework scheme could play a valuable part by providing the option of being able to punish severely with a heavy fine rather than
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sending someone to prison. Yet it would give the person the opportunity to pay the fine by working. There is a great need for additional options. I am glad to see that it will in future be possible to award a greater mixture of penalties for multiple offences and to mix; for example, a fine with probation.
The young adult attendance centres provide a useful option, but I do not think that they are adequately used. They do not appear to be on the menu in many magistrates' courts. That is probably because there are not enough of them around the country, and more are needed. They could probably play a much more constructive role than community service, which may offer serious work in a few cases but which I personally believe to be a doddle in most. One option that could be considered in certain cases would be to link a probation order with a requirement to take a training course. In certain circumstances that would not only put a man in a position where he could get a job, but it would also occupy his time, which may otherwise be idle.
Obviously there are those people who set out to commit a crime and they must expect a hard punishment. But there is a steady stream of people who come to court because they have lost their temper with their wives, or someone else, and have behaved in an irrational manner in respect of which the police have been called. Many of those people are living with very little resources, are already paying fines, and are at their wits' end as regards how to survive. It needs only a small spark to touch off a scene that then gets out of hand. They come to court, they are fined again for assault, and their situation becomes twice as bad. You may say, "Good, they deserve it for losing their tempers", but I often think that it is help that they need rather than a compounding punishment, but I do not know the answer.
Perhaps far more cases of this kind should be dealt with by the police with warnings after a night in the cells. Wives often do not want to see their husbands jailed even if they have suffered from them. I find it difficult to see what good it does to send a case of domestic assault to prison—as in the case of R. v. Smith in 1988—unless the wife is in real danger. It is far better to get the man out of the house on piecework so that his energies are used up by the end of the day, and give him training as an option to punishment so that he can either get a job, or improve his own job.
One thing that stands out is the poor mental and educational ability of so many of those who come before the courts. If they are sentenced to custodial punishment they receive some training in some of the establishments, but if we really want them to come out with the ability to get a job and with the self respect to look for one, then the most important thing is to ensure that they are educated and trained while they are locked up. Naturally the more the training the greater the cost, but surely this must be a good investment if it increases the number of those able to stay out of trouble once they are out.
There is education in youth detention centres, but some of the youngsters are not in for long enough to benefit from the education provided. I wonder

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whether sentences for youngsters should be for periods of a term, or two terms, so that they can be subjected to a planned educational programme even if this is a longer sentence than they might otherwise have been awarded. Perhaps an imaginative school regime would be better than the way they are treated at the moment.
Finally, magistrates do their best to reform and to punish, but they can only judge the success of their policies and learn how to better achieve these aims if they have feedback from the probation service and the system generally of the results of their sentences, and in particular the results of the risks that they have taken from time to time by giving warnings, or probation, instead of severe punishment. There are theoretically means by which this can be done to some extent, but I think that much more emphasis should be paid to getting information back to magistrates so that they can gain experience based on the real results of their disposals, and so better judge how to treat their customers in the future.
6.34 p.m.
The Earl of Clanwilliam: My Lords, I should like to take up a little time in thanking my noble friend Lord Elton for instituting this debate. There is indeed a dilemma inherent in the subject of the debate, which has already been well defined by your Lordships, between the need to keep society secure and to punish offenders of the nearly half million indictable offences. As my noble friend the Leader of the House, Lord Waddington, said in his notable maiden speech, 6 per cent. of offences concern violent crime and 94 per cent. non-violent crime, and for them custodial sentences are not necessary. It is they, the young first or even third-time non-violent offenders who most deserve our attention.
They are mostly young, jobless, insufficiently educated and unmotivated towards society, and sentenced to a range of training, young offender or youth custody establishments, with various forms of community work which, in many cases no doubt, is the appropriate treatment. The new Bill provides a welcome range of combinations. But just as our existing penal system has proved useless over the centuries as a place of reform, I am not totally persuaded that punishment in the community will solve all our problems.
The new Criminal Justice Bill advocates a direction away from custody on the basis that imprisonment restricts offenders' liberty and simultaneously diminishes the individual's responsibility. But supported evidence suggests that a large proportion of habitual criminals only reoffend because of the absence of any alternative activity which, by demanding their attention and commitment, would remove the temptation and opportunity to reoffend. A very heavy level of supervision by the probation service will be required to provide this cover if large numbers of offenders are to be released into society. The new quota of 800 additional staff is no doubt most welcome, but I venture to suggest that it is but a drop in the ocean.
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The results of the six-month electronic tagging trial were concluded to be a great success on the basis that breaches of curfew were spotted with great accuracy. However, to be realistic we must look at the facts. Twenty-nine out of the 50 defendants used in that experiment were arrested for bail violations or had absconded in the course of the trials. If those offenders had been in custody instead, the police resources and the probation officers' time required to cope with those incidents would have been better spent. On that basis 58 per cent. of all offenders who are shown leniency under current community punishment plans would be reoffending. What will that do to police resources, and what will it do to the confidence of the public?
Within the context of this debate where we are searching for a proper balance in what we are trying to achieve, the most desirable element must be one that comprises two simple elements that have been ably propounded by many noble Lords. First, adequate punishment and deterrent value, and secondly, and most importantly, a rehabilitation and reformation of the offender. With violent offenders or serious crime, the custodial sentences provide the basic requirement in the safeguarding of society. But essentially we are looking for new measures to meet these two basic criteria: will the offender and the public see the punishment as being an adequate deterrent against future criminal activity, and is there a rehabilitation and reformation element to help the offender rejoin society with respect and dignity?
The ethics of punishment require that sentencing should contain a value-focused approach as well as reformative and punitive components. Punishment needs to be an expression of society's disapproval of a criminal act, and hence an encouragement to habitual law-abiding conduct. It is both constructive and essential for the victim and the rest of society to acknowledge adequate punishment if only for deterrent reasons. Equally importantly the defendant must expect to face up to the consequences of his actions. It is self-evident that if he is not made to recognise the wrong he has committed through punishment, there is no incentive to prevent him from committing the same crime again.
Indeed, if punishment in the community in its current form persuades the public that it is either adequate punishment or that it holds a sufficient degree of deterrent value, I should be in total agreement with the new Bill. But the underlying motives which encourage a potential offender towards crime, such as unemployment and pressure from one's peers, will continue to influence the offender as vividly as ever when serving a non-custodial sentence. When sentencing an offender a magistrate—and I must refer to noble Lords who have more experience in that field—even with all the resources at his disposal, which were so ably mentioned by the noble Lord, Lord Hutchinson of Lullington, can never be fully aware of the offender's background circumstances, nor the degree to which he was influenced by them when he offended. Therefore, if the offender is not removed, even if only briefly, from destructive elements such as

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lax parental guidance, opportunities for crime, peer pressure or similar negative controls, the welfare officer's work will be continually negated by countervailing pressures.
It seems to me that there will still be a need for an alternative custodial sentence designed to provide the necessary punishment and deterrence, combined with a very strong element of rehabilitation. The noble Lords, Lord Gisborough and Lord Donaldson, both made those points, though approaching them from a different angle. I suggest that this alternative sentence would be an option, to be offered by the magistrate, of a shorter duration than the normal sentence which would have been provided under the existing rules. The offender would have the option to take, at his will, either the full course or the short one.
The short course would involve a large educational element, including revision of his basic educational standards, rehabilitation, vocational training and additional subjects such as Outward Bound courses, lots of physical exercise, and so on. While serving this custodial sentence the offender would be actively and fully employed throughout the day, with no time to start thinking of other more luscious activities outside.
I hope that your Lordships will forgive me if I appear to be starting an old hare. It perhaps bears the hallmark of the short sharp shock, but with respect I suggest that that is not so. In the past there was perhaps an element of punishment for punishment's sake with less emphasis on rehabilitation, which is the core of the proposal. We need to offer young offenders a positive approach to reform. Indeed, we owe it to them. Valiant though the efforts of the probation service may be, it can by its very nature offer no more than supervision and counselling. I hope that the Bill will pass successfully, but I make a plea that more positive reform principles are incorporated in it.
6.43 p. m.
Baroness Seear: My Lords, I should first like from these Benches to congratulate the noble Lord the Leader of the House on his most appropriate and expert maiden speech. He will find that this is a subject which recurs often in your Lordships' House and it is most valuable to us to have someone who has been both Home Secretary and an eminent lawyer to contribute to our debates on this subject.
I also wish to thank the noble Lord for what he said at the very beginning of his speech about his attitude towards this House and his role as Leader of it. In particular, I welcome the stress that he laid on seeing himself not only as a powerful Conservative Minister in this House but also as the Leader of your Lordships' House. We have always greatly valued the way in which Leaders of the House have recognised that they have the dual role of representing the Government and leading the House.
We on the Opposition Benches—certainly I can speak For these Benches and I think noble Lords on the Labour Benches will agree—have found in his predecessors Leaders who have had the greatest possible appreciation of the Opposition's point of view and the fallen over backwards (to use an
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unparliamentary expression) in endeavouring to accept our views. It was a great pleasure and relief to hear the new Leader reiterate the same policy.
I had thought that in this debate we were talking not about the Criminal Justice Bill but about custodial and non-custodial sentences. Of course, the subject overlaps the Criminal Justice Bill, but I have no doubt that we shall soon be debating that Bill at tremendous length. I therefore confine my remarks to the matters which deal more specifically with the terms of this debate.
As one would have expected, it has been almost entirely a cross-party, or non-party, debate. The only controversial issue that arose was that of the sentencing council and sentencing guidelines. We on these Benches support the view taken by Justice that there should be a sentencing council and sentencing guidelines, but we do not for one moment think that they should in any way lay down rigid conditions on the way in which sentencing should be done. It is complete nonsense to suggest that an outside organisation could say with any precision how sentencing should be done. Only the people in the courts can know the difference between the various cases and the way in which they should be handled.
Before noble Lords suggest that the proposal for a sentencing council and sentencing guidelines is in some way an attack on the judges—a point of view which we most certainly do not share—it should be remembered, as I am sure it is, that these guidelines apply to the magistrates' courts, to the lay magistracy throughout the country, and are also intended to be a way of alleviating the anxiety which the public undoubtedly feel about the great diversity of sentences that are given. Though there may be very good reasons for some variations I am sure that all concerned, including judges, agree that the differences are too great. Without in any way wishing to join in an attack on the judges, I am sure they all agree that, like other people, they are human beings—indeed, that is the burden of their case—and, that being so, they will from time to time make mistakes.
The last thing that I wish to see develop—I know that the noble Lord, Lord Richard, said this and I am sure my colleagues agree—is any attempt to exercise executive control over the judiciary. If there is one principle on which our freedom depends it is the separation of powers. I would go a long way to avoid any invasion of that very important separation. We do not have it totally, even now. We certainly do not want to go down the line of a further diminution of that separation.
That said, the only other point that I wish to raise, which has been made by previous speakers, is that I very strongly endorse what was said by my noble friend Lord Donaldson about Grendon and the importance of developing other prisons similar to Grendon. I had the extremely educative experience of taking part in a seminar at Grendon, at which the prisoners and the governors were mingled in the audience. I had some difficulty in distinguishing between them, partly because of the very attractive clothing which the prisoners wear.

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I should like to give your Lordships an idea of the atmosphere at Grendon, where one has the impression that the staff and prisoners are in one sense—not in a soft and sentimental sense—on the same side. Both are concerned with trying to get over the very real difficulties and problems that exist. At the end of the seminar the vote of thanks was given by a prisoner who said that the the last time he made a speech it was to an audience of twelve. That was well received and understood by the audience. I mention that as evidence. One would not find that happening in very many prisons. Let us pursue the possibility of having more prisons like Grendon in other parts of the country.
I should like to turn to one or two matters which were only raised in passing in the debate. We have spoken of young persons and prisoners; surprisingly nobody mentioned women. Perhaps someone did, but not to any great extent.
Some years ago I was involved in a short inquiry for the Howard League with a very expert adviser on the question of women in prisons. The point that startled me when I began the study was that at that date there were 46,000 men in prison and only 1,500 women. I fully recognise that even in these liberated days there are some differences between men and women. But I cannot believe that the propensity to commit crime is so strongly marked on a sex basis that those figures reflect anything other than a sex difference.
It is extraordinary to find how few women are committing crimes which carry prison sentences as against the large numbers of men. Some people say it is because women have less opportunity to commit crime. I was never convinced by that argument. Unless one says that women are totally not disposed to commit criminal actions, which I cannot believe, it establishes that the likelihood of being sent to prison is not a deterrent. At any rate, the difference between the numbers of men and women in prison is extremely marked.
Something else may be learnt which applies to men as well as to women. We speak of reducing the number of people in prison in comparison with the number of people outside prison. Four or five years ago over half the women in prison on remand did not receive a custodial sentence. That cannot be sensible in terms of providing justice for women. To be put in prison and then to find when one is tried or finally sentenced that one's crime did not merit a custodial sentence is surely harsh and unfair in the extreme.
In addition, it is very expensive to keep women in prison. It costs £300 a week, but that is only the start. Many have families and children. The social services must be mobilised to support the families while the women are in prison. It must be possible to make better arrangements to ensure that people are not kept in prison on remand. That would immediately reduce the numbers. It may be said that they must be there; otherwise they might bolt. Those women are certainly not the kind of people for whom there is a plane round the corner to take them to the Caribbean. They were living at home with their families. They could be
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required to report to the police station every day if necessary, but anything is better than keeping them in prison. That seems to me to be totally ridiculous.
At the time of the study some women were in prison for non-payment of fines, including a small number of prostitutes. It is no longer permissible to send a woman to prison for being a prostitute. A heavy fine can be imposed. She then does a sensible calculation and works out how many weeks she will need to be in prison as against paying a fine, and says, "Thanks, I will accept prison". We then bear the cost of keeping the woman in prison. The money for the fine is not received. What good does that do anybody?
In regard to stopping people from returning to prison, I was present when a prison governor was seeing women as they came out, having completed their sentence. There was one woman in her thirties —not the brightest, I would guess—who had been in prison for a couple of years. The governor asked if she had money. She answered "Yes, £61". He said, "You have a rail ticket to London?" She answered, "Yes". On being asked where she intended to live in London she replied that she had bed and breakfast accommodation in Putney. She was asked how she would travel from Euston to Putney and said that she would take a taxi. There would not have been a great deal left of the £61 after she took a taxi from Euston to Putney.
My point is that if that is the best we can do when such a person comes out of prison—no money, effectively nowhere to go, no friends, no idea as to how to obtain a job, having been completely dependent on prison for two years and thus having lost any initiative she may originally have had—we are making it as certain as night follows day that a great many of those people will find themselves back in prison. Some kind of sensible aftercare arrangements should be provided, including places in which for short periods of time women and men could stay until they settled themselves into reasonably acceptable housing. We should also provide sensible care of the kind given by an organisation with which I am connected called SOYA, where a one-to-one relationship is established with people who are prepared to give personal help to ex-prisoners. They are guided over accommodation and jobs and how to obtain money until they are able to stand on their own feet.
Support for such schemes would do a great deal to stop people from returning to prison, which they do because they simply give up trying to deal with the complexities of life and the difficulties that face them when they leave prison. Support for schemes of that kind is chicken feed compared with the cost of keeping people in prison, to put it simply on an economic level.
I should also like to mention the mental health cases that are kept in prison but surely should not be there. I visited C block in Holloway. The previous day a woman had torn the porcelain wash basin from the wall, broken it, taken the jagged pieces of porcelain and slashed herself. The blood was on the floor and in the lavatory. I said to the governor, who was doing his utmost to cope, "Surely that woman should not be here. Nobody in their right mind behaves like that".

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He said that of course she should not be there. He had told the courts that she should not be there, but they said to him, "Bad luck. You have got to have her. We cannot make the hospitals take her but we can make you take her". That must be wrong.
We have a National Health Service as well as a national prison service. We should provide secure units in hospitals for those people. If secure units exist it should not be too much to say that the hospitals should be required to look after those people. That is preferable to their being sent to prison because that is the only place to which a harassed court can send a person who plainly must be sent somewhere. The only place the courts can force such people to be accepted is prison. It is totally unfair on the governors, who, goodness knows, are struggling to deal with the cases that they already have. It is also grossly unfair on the individuals concerned.
I speak of women because that is my own experience. I am sure that the same applies to men. I see my time is nearly up. I meant to speak primarily as chairmen of APEX, which works to provide training and placement for ex-offenders. If more people are not to receive custodial sentences, more convicted people will be in the community. Most will be unemployed and are likely to continue to be unemployed after their sentences are finished in the community. Unless those people can obtain jobs they will continue committing offences.
Obtaining jobs today is becoming increasingly a matter of training. APEX provides training and placements. The noble Earl, Lord Clanwilliam, and the noble Lord, Lord Gisborough, suggested that training should be included as part of the sentence. We do not want people sentenced to training but we very much want them to be encouraged in some way or another to undertake training. It is very much in their interests and those of the system that they should.
There is a practical problem here to which I wish to draw the attention of the House. The TECs are now responsible for funding the training and that is the major source from which training can be received because it is no longer available from the Department of Employment. The TECs have had their money cut but they will also be judged for their success by their placement rates for people who receive training. If I were running a TEC and were to be judged on my placement rates the last person I would take for training would be an ex-offender because he takes longer to train and he is more difficult to place.
Unless it can be made clear to the TECs that they have the responsibility and also the resources for financing the training of offenders and ex-offenders, I do not expect that they will undertake training except in a very small number of cases. If they do not undertake this measure, training cannot be provided. If training cannot be provided there is precious little prospect for the ex-offender. These days if you have not been trained and even if your record is as pure as the driven snow it is not too easy to get a job. If you have not any skills or competences and you have a record, you might as well settle for a life of crime.
7.1 p.m.
Baroness Ewart-Biggs: My Lords, it is a great privilege for me to speak from the Dispatch Box on this side of the House in a debate that has featured the maiden speech of the noble Lord, Lord Waddington. I add my congratulations to him. I wish him great success in his new position as Leader of the House. I detected only one moment when the noble Lord seemed to regret that he is with us. That was yesterday evening when I could see that he was itching to get his teeth into the debate about the vagrancy Bill. However, I was happy to hear his speech today.
I congratulate too the noble Lord, Lord Elton, for moving the Motion, even more so because it is usually the role of my noble friend Lord Longford to carry out that task. For those of us who are interested in penal policies it has been a very interesting debate.
The theme is a very important one. The aim is to ensure that non-custodial sentences are set when appropriate, thus reserving custodial sentences for those whose offending is an actual danger to the public. The noble Lord, Lord Elton, made it clear that he did not think that prison really worked. He saw it only as a means of protecting the public from dangerous offenders.
The noble and learned Lord, Lord Ackner, made very clear his views and that of the judiciary on the role of custodial sentences. He quoted remarks that I had made. I am sad that he did not give me notice of his intention; it would have been helpful. I was surprised that he attacked my noble friend Lord Hattersley with so much enthusiasm.
The Minister of State, Home Office (Earl Ferrers): My Lords, perhaps I may interrupt the noble Baroness. She made an error in enhancing Mr. Hattersley to the title of Lord Hattersley.
Lord Graham of Edmonton: It was in anticipation.
Baroness Ewart-Biggs: My Lords, it could not have been in anticipation. I am grateful to the noble Earl for pointing out my mistake. My right honourable friend Mr. Hattersley has views on a sentencing council which are shared by the noble Baroness, Lady Seear. I wonder whether the noble and learned Lord, Lord Ackner, understood what my right honourable friend meant. The noble and learned Lord described the present situation as if it were perfect; he spoke of sentencing policies that were bringing about a perfect situation. The other side of the coin has been shown. We have overcrowded prisons and high reconviction rates. It is for those reasons that we feel policies should be looked at.
It is not surprising that some attention has focused on the Criminal Justice Bill. The debate overlaps so much that is in the Bill. It is very important that the Bill officially recognises for the first time this century that as a penal measure prison is ineffective and that the numbers in custody need to be reduced. That is very plainly stated in the Bill. As the noble Baroness said, we shall have ample time to discuss the Bill; however, I wish to say something now about it.
I applaud the decision to reduce the maximum penalties for theft and non-domestic burglary; the

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introduction of a unitary fine system; the legislative restrictions on the use of custody; and the obtaining in certain cases of a social inquiry report. All these changes are to be welcomed. They will prevent a proportion of offenders entering prison. It has also been rightly said that the Bill sends a mixed message to sentencers in that it is written in the language of punishment. It seems that the Government wish to entice sentencers to use non-custodial sanctions by making them sound tough and restrictive. That factor worries the probation service and myself. As the noble Lord, Lord Windlesham, said, the community service orders used until now have proved a great success without giving them this severe and rather punitive aspect.
The remand population stands at the high level of 22 per cent. of the total prison population. That is a national shame. The Penal Affairs Consortium is a body made up of 16 voluntary agencies concerned with penal affairs. All of them—and this is surprising for voluntary agencies—speak with one voice within the consortium which has prepared a paper on the remand system. The consortium feels that the number of people on remand should be drastically reduced. It also feels that there should be improvements made to the conditions in which remand prisoners are held in prison.
The consortium would like more bail hostel accommodation—a call often made in this House. It would also like to see the establishment of bail information schemes throughout the country to provide the courts and the Crown Prosecution Service with verified information about dependants' circumstances. There is a need, it believes, to address the problem of the inordinate length of time which prisoners face while awaiting trial. It would welcome further moves towards tougher limits for pre-trial procedures. That is an area where enormous change needs to be made.
The National Association of Probation Officers is worried about the remand situation and wishes to see certain changes. It would like to ensure that an individual charged with a summary offence cannot be remanded in custody unless he or she has a history of absconding. It would also like magistrates and the police to be forced to take into account issues of race and gender before reaching a remand decision. Implicit in this recommendation is the need for the training of personnel and the monitoring of decisions. The concern about the number of people we keep on remand has a place in this debate.
I was glad that the noble Lord, Lord Donaldson, mentioned the Butler Trust pamphlet. It is well worth reading because it was written by governors of our prisons who observed the systems in other countries. I often wonder whether our penal policy-makers look across the Channel to see what is happening there. My experience is limited to a visit to prisons in the Netherlands, but I can say that a different atmosphere and culture prevails in Dutch penal policy. In the Council of Europe league table, to which my noble friend Lord Richard referred and to which one must
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have some regard, Holland is low in terms of the number of people imprisoned. That is not because the Dutch are less criminally inclined than the British—until 1955 the Dutch prison population exceeded that of Britain—but because public attitudes in the Netherlands have changed. The Dutch believe that a remedial system can be more successful than a punitive one.
Perhaps I may say in the presence of the noble and learned Lord, Lord Ackner, that Dutch judges appear less inclined to imprison and have a greater expectation of rehabilitative ideas. Although we have a larger range of alternatives to custody, it would seem that in the Netherlands a more restricted range is used more flexibly. That seems to work better than our wider range of alternatives. If we wish to bring down our prison population it would be wise to look at some of the trials and experiments now going on in countries across the Channel.
The noble Baroness, Lady Seear, said she was surprised that no speaker had raised the subject of women. When I nodded I did not mean to suggest that someone already had; I meant that I was planning to do so in my speech. In regard to women there is a case for a high rate of non-custodial sentencing. I have some figures which are relevant. The figures for 1988–89 show that, of the 1,601 women in prison, 901, which is more than half, had children under 16. The fact that half the women in prison have children outside surely points to the need to keep those women in the community to fill, even if inadequately, the role of mother.
The noble Baroness, Lady Seear, also referred to female remand prisoners. The 1988–89 figures show that of the 3,397 women remanded in custody, only 46 per cent. were finally given custodial sentences. Half of the women who were taken away from their children and families were given non-custodial sentences. It is distressing and wrong that more male offenders than female offenders are given community service orders. The number of convictions of women for violent crimes is very low; so only a small number of women are dangerous to the public. Of those women convicted in 1988–89, only 18 per cent. were convicted for violent crimes including armed robbery, while 82 per cent. were incarcerated for petty crimes such as bank cheque frauds, shoplifting and not paying their fines. Such women (who were in no way a threat to the public) were relieved of their duties as mothers and members of families.
The noble Lord, Lord Elton, and the noble Earl, Lord Clanwilliam, referred quite rightly to the desirability of rehabilitating offenders when they leave prison. There is a dangerous gap when they leave and before they become integrated by way of a job and a home. That is the time when reconviction is likely. I hope that in the Criminal Justice Bill agencies such as New Bridge, of which I was chairman and which my noble friend Lord Longford set up many years ago, will be given the funds and the support that they need to carry out their employment service and their befriending service.

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I should like to ask the Minister who is to reply a question about the recommendations of the noble Lord, Lord Carlisle. I was happy to hear the speech of the noble Lord, Lord Carlisle, but I was disappointed that he did not focus very much on the proposals and recommendations he made which we know are to be incorporated in some way into the Criminal Justice Bill. It is feared that, while the sentencing system is as it is, these proposals, if accepted, will cause the prison population to rise. I wonder whether the noble Earl can say something about that.
The noble Lord the Leader of the House referred to the importance of victims. I am on the advisory council of the Victim Support Scheme. The scheme is a little disappointed that it has not been mentioned in the Criminal Justice Bill. I should be grateful if the noble Earl can say something about that.
We all start from the same point when discussing penal Policy. We all wish to protect the public from violent crime. However, the use of excessive custodial sentences has not been fully successful in reducing violent crime. I am happy to think that we shall try to protect the public by dealing with offenders outside prison and in the community.
Lord Renton: My Lords, will the noble Baroness be good enough to give us her views, or the views of her party, on the prison building programme, bearing in mind the unsatisfactory state of some of our prisons?
Baroness Ewart-Biggs: My Lords, I have noticed that my party does not give many figures at the moment. I feel safe in saying that our priority is for the rehabilitation of existing prisons rather than a continuation of the costly prison building programme. I say that on my own account, but I believe that it is true.
Lord Campbell of Alloway: My Lords, before the noble Baroness sits down, perhaps I may ask a supplementary question.
Noble Lords: Oh!
Lord Campbell of Alloway: I shall withdraw, my Lords.
7.18 p.m.
Earl Ferrers: My Lords, I would not wish to prevent my noble friend from asking a supplementary question; but his doing so might extend the rules of procedure a little wide. I am sure that he will have the opportunity to ask his question outside the Chamber; indeed, he might get a more forthright answer.
The whole House has been most grateful to my noble friend Lord Elton for giving us the opportunity to discuss these matters today. He is well qualified to do so. He is also a very distinguished previous holder of the office to which I now have the privilege of being an ornament and chairman of the Intermediate Treatment Fund which does so much in connection with alternatives to custodial sentences, especially for young people. He introduced the debate with the style, quality and erudition which have become hallmarks of his features. We are grateful to him.
One of the hallmarks of this debate has also been the maiden speech made by my noble friend Lord
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Waddington. If I were permitted to congratulate him upon it, I should only do so with respect. I say that because it is hardly for me to congratulate an old hand on being a maiden. However, to make a maiden speech in this House both as a Member and as a Leader is a proposition which does not fall to many people. If I may say so, I thought that he acquitted himself magnificently.
My noble friend Lord Elton said that he and my noble friend Lord Waddington were Ministers of State together at the Home Office, and that they shared the Home Office together. However, I also had the privilege of sharing the Home Office with my noble friend; but I always looked up to him as the deity because he was Secretary of State. I always regarded him with awe, admiration and respect, and that still applies in his new position as Leader of the House.
I was interested to hear the noble Lord, Lord Hutchinson of Lullington, congratulate my noble friend Lord Waddington and welcome him as a lawyer to the House. He then continued to say that my noble friend would realise as time goes on how the lawyers in this Chamber conduct their arguments with such brevity. I am sure that my noble friend will come to realise that he will never fail to be surprised at the speeches made by some noble Lords and at the conclusions they reach.
My noble friend Lord Waddington explained the background to our proposals with regard to the Criminal Justice Bill, which is after all a major Bill to deal with the treatment of offenders. Our purpose is to establish a coherent framework for sentencing which will enable offenders to be punished suitably, according to the seriousness of their offences. We have heard many speeches today of great knowledge, and we have had many contributions from people who have great experience in the field, for which the Government are grateful.
My noble friends Lord Clanwilliam and Lord Gisborough were concerned about rehabilitation and how well that could be carried out in prison. We never abandon the reform of the offender or the person who is in prison. However, we believe that the chances of achieving rehabilitation are stronger if the offender stays in the community. But if the sentence is to be —and is to be seen to be—fair, it should be based first and foremost on the seriousness of the offence.
At the lower end of all penalties, we have the fine which is suitable for the vast majority of offenders. My noble friend Lord Gisborough argued that unit fines would be unfair to the working man. It is right for a fine to have a similar impact on different offenders according to their disposable weekly income. Unit fines will result in fairer fines. But, on the other hand, custody is clearly placed at the other end of the scale of penalties. However, in between, there are community penalties which are suitable for serious offenders—especially those who offend against property—who now receive a custodial sentence.
One uses the words "community penalties" and not "non-custodial penalties" deliberately. It is not just a question of semantics; by calling them community

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penalties, we emphasise that the punishment is in the community and that it is a credible way of dealing with offenders. It should not be seen just as an alternative to custody. That is important if we are to get the balance right between custody and community penalties.
Custody should only be used when there is no alternative. There are occasions when that applies. My noble friend Lord Windlesham asked about our proposals for serious and violent offenders. The House will have an opportunity to scrutinise such matters more closely when the Bill comes before us for consideration. It is right to say that the proposals will seek to offer a balanced package. They reflect our responsibility to protect the public from serious harm and ensure that the courts have the requisite powers.
The noble Earl, Lord Longford, was anxious to control the judges who, as he said, keep putting people into prison. He received a fairly robust sidewinder from the noble and learned Lord, Lord Ackner, who quite correctly portrayed the duties and responsibilities of the judges. In effect, he blew the noble Earl, and everyone who took a similar view, out of the water.
The Earl of Longford: My Lords, at least I am unbiased in the matter. The noble and learned Lord, Lord Ackner, simply speaks on behalf of the judges' trade union; indeed, "he would, wouldn't he?"
Earl Ferrers: My Lords, that is a most curious expression to have used. The noble Earl in his Utopia would not put anyone in prison and he would release most of those already in custody. Fortunately he was generous enough to say that we did not all have to go along with his views. I accept that offer.
The noble Earl also asked about minimum prison condition standards. We all want decent, humane conditions in our prisons. The question of minimum standards is being considered by Lord Justice Woolf. The noble Lord, Lord Donaldson, was right in his assumption that we shall consider most carefully what Lord Justice Woolf has to say.
The noble Lord, Lord Richard, advocated a sentencing council. He believes this to be the only way to ensure that custodial sentences are imposed only when it is strictly necessary. I share the doubts expressed by my noble friends Lord Renton and Lord Carlisle. A sentencing council would only work with rigid guidelines. By the very nature of things, that removes flexibility. We do not believe that it would be necessary or helpful. Moreover, we believe that it would blur responsibilities. The courts will receive guidance from the proposed statutory framework for maximum penalties to reflect the seriousness of the offence. They will also be able to consult the Court of Appeal.
I was most grateful to the noble and learned Lord, Lord Ackner, for describing the current breadth of the Court of Appeal's sentencing guidelines. The noble Lord, Lord Allen of Abbeydale, asked whether we believed that the Court of Appeal will extend its sentencing guidelines. The Court of Appeal has been very helpful in interpreting the young offender
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provisions in the Criminal Justice Acts of 1982 and 1988. I am sure that it will also help the lower courts to interpret the provisions of the Bill through its sentencing guidelines.
The noble Lord, Lord Allen, also asked whether our consultations with the judiciary on the Bill have been satisfactory. I am pleased to confirm that they have. The Bill reflects those consultations. My noble friend Lord Carlisle made an enormously helpful contribution to the matters under consideration by producing a report. It is right that, if a sentence of imprisonment has been passed which should reflect the seriousness of the offence committed, the sentence served should closely resemble the sentence passed. I was asked whether this means that more people will be in prison. If the sentences actually served reflect more the sentences passed, if the sentences remained the same, that would be so, but the chances are that the sentences would more accurately reflect the time that is going to be spent in prison.
We welcome the proposal of my noble friend Lord Carlisle for the reform of the parole system. We are glad to have been able to implement that in the Bill. The noble Baroness, Lady Seear, in what, if I may say so, was a penetrating speech, and the noble Baroness, Lady Ewart-Biggs, referred to women and the difficulties which exist. I believe that the noble Baroness, Lady Seear, said that there were fewer women in prison than men and that this was either sex discrimination—I am bound to say that I found that to be a curious line to take—or proof that it was no deterrent.
The noble Baroness was right to remind us of the need to ensure that custody for women is avoided so far as possible by establishing a coherent framework for sentencing. We hope to ensure that all people are treated fairly. The probation service has been encouraged to ensure that community service is feasible also for women with families.
Custody represents the severest deprivation of liberty; but it should not be despised because it has its purpose. Despite the best efforts of the prison service, it is generally agreed—all your Lordships have agreed this evening, I think—that imprisonment can hamper an offender's ability to turn away from crime. It makes it more difficult for him to maintain his ties with the community—including those with his family and his employment—ties which might encourage him not to reoffend. By bringing an offender into contact with other criminals he is inveigled into and rehearsed into a life of crime. Custody should be reserved for the most serious offenders—those who need to be tucked away from society and those who put the public at risk of serious harm.
My noble friend Lord Elton, in an impressive and thought-provoking speech, admitted that prison is essential to keep people away from society, and so did my noble friend Lord Carlisle who has done so much work on this subject. It is necessary, as my noble friend said, because it incorporates punishment, retribution and protection. There is an element of necessity in all three. The figures given by the noble and learned Lord, Lord Ackner, were impressive and

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confirm the purpose and necessity of prison to protect the public from those who are determined to lead a life of crime,. However much one may dislike the idea of putting people into prison, the public expect, as the noble and learned Lord said, to be protected from those who live a life of crime.
Although any government like to feel that they have introduced new ideas—and we have; your Lordsh ps have been generous enough to agree that —the underlying anxieties about prisons have been around for some time. The noble and learned Lord, Lord Bridge, reminded me only the other day that the Vicar of Wakefield wrote many years ago:
"our present prisons find or make men guilty, and enclose wretches for the commission of one crime, and return them, if returned alive, fitted for the perpetration of thousands".
That is a factor which lies behind many of your Lordships' anxieties.
The noble Lord, Lord Donaldson, asked important questions about facilities in prisons for drug and alcohol addicts and our plans for open prisons. I shall take up his offer and write to him about those matters; but I welcome his support for the therapeutic community at Grendon Underwood. The prison service is currently reviewing and reassessing its provision for sex offenders.
The bringing of offenders into contact with criminals, and the "university of crime" aspect, is the downside of imprisonment. The Bill which is now being considered in another place is an important step in tilting the balance. I know that it will receive the accolade of approval from the noble Lord, Lord Hutchinson, who was worried about it. The Bill contains important proposals designed to increase the spectrum of community penalties available to the courts. My noble friend Lord Renton described the constraints placed upon him when he was a recorder when he could choose only a fine, some form of custody or the placing of an offender on probation.
Under our new proposals, the courts will be able to impose the new combination order, or community service, or probation with or without requirements, or curfew orders. They will be able to use them on their own or in combination, and they will be able to combine them with financial penalties by giving compensation to the victim or by imposing fines. That gives the courts much more flexibility than was available in my noble friend's day.
In imposing community penalties, it is important for the court to have regard to the totality of the punishment. If the penalty is to be realistic, as well as demanding, it should first properly reflect the seriousness of the offence. There is no point in providing the courts with a greater range of community penalties merely in the hope that they will be used. Community penalties need to be properly supported, and adequate arrangements for enforcement are important. The quality of supervision is essential to community penalties. It is also central to their credibility. Effective supervision can protect the public, both in the short and in the longer term, by preventing reoffending and by assisting the reintegration into the community of the offender.
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Supervision can never be a complete guarantee against reoffending; but its risk can be reduced substantially by skill and good practice. The offender can be made to face up to his crime and to its impact upon the victim. He can be helped to avoid repeating it, and with the difficulties which may have caused him to offend, such as drug or alcohol addiction or poor control over his temper.
Successful reintegration into the community of an offender is easier if the offender is punished within the community. By staying in it, he can maintain his family responsibilities and his employment opportunities. As most of the opportunities for crime exist in the community, the offender has a better chance of learning how to resist those temptations if he stays there. My noble friend Lady Platt of Writtle described how supervision following release from custody can offer a lifeline to a prisoner. I agree. It can offer a bridge between total custody and total freedom, which can help to protect the public and support the offender. The noble Lord, Lord Allen of Abbeydale, asked for an assurance that the Government believe that the probation service will be able to meet the challenge presented by the Bill. We are confident of its ability to do so. The Green Paper Supervision and Punishment in the Community set out the options for the organisation and training of the probation service so as best to equip it for its tasks.
We had over 160 responses which we are considering carefully. We hope to be able to announce our conclusions soon. The development of the community service over the years has shown that change is coming about. However, when one changes an organisation's role one cannot expect it to act like a parade of guardsmen to the command, "Right, turn". It is more of a right wheel. The transition is smoother.
The noble Lord, Lord Richard, gave examples of the differences in sentencing throughout the country. The courts have to decide what in their view is the right sentence to impose in any circumstance. There is much excellent practice in the probation service in supervising offenders throughout the country. We intend to extend that everywhere by the introduction of national standards for key areas of probation work. They will enhance the confidence of the public and the judiciary in community penalties.
National standards for community service were introduced last year. They improved its status as a penalty for offenders who might otherwise have gone into custody. We propose to introduce national standards to cover pre-sentence reports, probation day centres and parole supervision.
We held a conference on pre-sentence reports in September which enabled us to discuss with judges, magistrates and probation officers what their needs are. That will be followed up by pilot schemes to test the operation of the reports in practice. The right environment must exist if the objective of treating offenders suitably is to succeed. Effective communication is crucial. The relationship between the courts and the probation service is especially important. The courts need to know what types of community

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penalties are available and what they involve. They need also to be aware of the outcome of the orders that they make which the probation service supervises. That is why we propose to place a statutory duty upon the probation service to inform the courts of the outcome of those orders.
My noble friend Lord Elton said that the decision between custody and a community penalty is especially important when young people are involved. My noble friend said that the majority of prisoners were young men until they reached the age of—to use his graphic description—"criminal burn out". There are many excellent projects up and down the country offering constructive and demanding community activities for young offenders. Over the years these have made a significant contribution to keeping young people out of custody. Your Lordships will be aware of the great success there has been in reducing the number of custodial sentences which are given to young offenders.
Since the early 1980s, the number has decreased by about 75 per cent. from 8,000 custodial sentences for juvenile offenders in 1982 to a little over 2,000 last year. At the same time, the number of known juvenile offenders has also fallen. This demonstrates what can be achieved by the determination to bring custodial sentencing rates down and to make community penalties work. It has enabled the Government to propose the abolition of the sentence of detention in a young offenders' institution for 14 year-old boys.
The noble Lord, Lord Richard, drew attention to the size of our prison population compared with those of other European countries. He expressed anxiety about the remand population. The Government are concerned about the number of people held on remand in prison. Our programme to expand the bail hostels and to establish bail information schemes is intended to help reduce the numbers. We hope to have 1,000 extra bail hostel places by 1993 and more than 100 bail information schemes by April 1992.
Many people measure the quality of our present proposals for community service by the extent to which they may reduce the prison population. We must remember that our primary aim should be not just to reduce the prison population but to secure the suitable punishment of offenders which, in some cases, includes imprisonment. As my noble friend Lord Waddington said, reduction of the prison population would be a welcome additional result, but it is not the prime aim. I am pleased that, as my noble friend Lord Waddington said, it has fallen by over 3,000 during the past year. This reflects a growing consensus that custody is not necessarily the right punishment for most offenders.
The House will be grateful to my noble friend Lord Elton for having given your Lordships the opportunity to discuss this subject, which is important and highly topical. There seems to be a strong measure of agreement on the right course to follow in respect of it.
Lord Ackner: My Lords, before the noble Earl sits down, can he confirm, as regards his comments on the proposition that there were many inconsistent sentences, that a Home Office research study was carried out in 1988 on Crown Court sentencing? It showed that there was already a considerable measure of consistency of approach in sentencing by Crown Court judges.
Earl Ferrers: My Lords, the noble and learned Lord is quite right. I was not seeking to say that there was a discrepancy in sentencing; the facts have been put forward by other people.
7.42 p.m.
Lord Elton: My Lords, one of the more important functions of your Lordships' House is occasionally to take the opportunity to give an authoritative opinion on important matters of national policy. This debate has attracted six Home Office Ministers, present or past, including a former Home Secretary, a former Home Office Permanent Secretary, three sitting coroners, one Law Lord and a former High Court judge. I apologise, my Lords, I should have said three sitting recorders—not coroners. If this is the first time during the debate that I have demonstrated that I am a layman, I am satisfied with my performance. I meant recorders. I have listed only a few of the eminent people, not to mention the justices of the peace. It shows that your Lordships' House has a reservoir of authority that can be usefully tapped. This afternoon has been helpful in that sense.
I am grateful to all of your Lordships who have taken part in the debate, not least the noble Lord, Lord Donaldson, and the noble Baroness, Lady Seear, for reminding me of my extraordinary teach-in at Grendon when I sat in on a seminar on rape. I learned a good deal that I would not otherwise have learnt. I am also grateful to the noble and learned Lord, Lord Ackner. In the opening round of the on the whole accurate and damaging salvo on Mr. Hattersley he mentioned an encounter with the noble Baroness, Lady Ewart-Biggs, in the swimming-pool. That is something else that we have in common. I am perplexed to discover how frequently the noble Baroness disports herself in the swimming-pool. In gallantry I must say I shall never forget that she was the lady who trod water in order that I might not be last. One cannot be too grateful for such an act of feminine gallantry.
One of the pleasures of a Wednesday afternoon debate is that the mover does not have to reply. I shall have to read the debate with close attention. A great deal of constructive material and original thinking has been contributed which I should like to take on board before I form any judgment.
I was delighted to hear in the powerful reply by my noble friend the Minister an ample recognition of the important contribution of the voluntary sector to the avoidance of custody and to rehabilitation. I urge upon him the acceptance that the new initiative under the new legislation will not work without full involvement of the voluntary sector and the probation service.

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It remains only for me to add my voice to those on all side of the House in extending warm, affectionate congratulations to our new Leader, not only on his maiden speech—which I should be obliged to do by convention, even if it had been a bad speech, which it was not—but also on the terms in which he prefaced it. They showed that he had fully understood his role in the House, which means that in some senses we share him with noble Lords opposite. We do not grudge that. We hope that good will come of it.
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I am tempted not to withdraw my Motion because I have always wanted to see what would happen if one did not do so. However, as we are rather short of storage space at home at the moment, I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.
House adjourned at fifteen minutes before eight o'clock.

  FIREARMS AND EXPLOSIVES LEGISLATION: CONSOLIDATION
  FIREARMS AND EXPLOSIVES LEGISLATION: CONSOLIDATION
  PRISONS: SUICIDE PREVENTION
  PRISONS: SUICIDE PREVENTION
  OIL EXPORTS TO EASTERN EUROPE
  OIL EXPORTS TO EASTERN EUROPE
  THE GULF: BRITISH COMMANDER'S VIEWS
  THE GULF: BRITISH COMMANDER'S VIEWS
  THE GULF OPERATION: COSTS AND ASSISTANCE TO THE UK
  THE GULF OPERATION: COSTS AND ASSISTANCE TO THE UK
  THE GULF: TRANSPORT OF EQUIPMENT AND MATERIAL
  THE GULF: TRANSPORT OF EQUIPMENT AND MATERIAL
  POLLUTION OF BEACHES: REPORT
  POLLUTION OF BEACHES: REPORT
  WHEEL CLAMPING: ORANGE BADGE VEHICLES
  WHEEL CLAMPING: ORANGE BADGE VEHICLES
  FORESTRY PLANTING GRANTS
  FORESTRY PLANTING GRANTS