Sitting of 17 July 1990

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

MESSAGE FROM THE QUEEN
HER MAJESTY QUEEN ELIZABETH THE QUEEN MOTHER
The Vice-Chamberlain of the Householdreported Her Majesty's Answer to a loyal and dutiful address as follows:
I thank you most sincerely for your loyal and dutiful address on the occasion of the 90th birthday of Her Majesty Queen Elizabeth the Queen Mother. I am deeply moved by this expression of your great pleasure on this joyful occasion and I welcome your intention to send a message to Her Majesty Queen Elizabeth the Queen Mother offering your cordial congratulations and expressing your warmest desire for her long continuing good health and happiness.

PRIVATE BUSINESS

  RIVER TEES BARRAGE AND CROSSING BILL [Lords]
  Order for Third Reading read.
  Queen's Consent, on behalf of the Crown, signified.
  Read the Third time and passed, with amendments.

  HASMONEAN HIGH SCHOOL BILL [Lords]
  Read the Third time, and passed.

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

Oral Answers to Questions
  DEFENCE

    NATO Summit
    Mr. Allen McKay: To ask the Secretary of State for Defence if he will make a statement on the defence implications of decisions taken at the NATO summit on 5 and 6 July.
    The Secretary of State for Defence (Mr. Tom King): The purpose of the London summit was to preserve the fundamentals of NATO while adapting the alliance to the new circumstances in Europe and to reassure the Soviet Union that a NATO including a united Germany represented no threat to them. The agreement between Chancellor Kohl and President Gorbachev yesterday confirms this success of the London summit.
    Mr. McKay: Two lines of NATO's press release state
    "that there are now circumstances in which nuclear retaliation in response to military action might be discounted."
    What is the difference between the new policy and the old policy of flexible response?
    Mr. King: The hon. Gentleman is aware that the declaration makes a number of references to nuclear weapons. It states that none of the NATO weapons will be used except in self-defence and that we seek the lowest and most stable level of nuclear forces needed to secure the prevention of war. Nuclear weapons will have an essential role in the overall strategy to prevent war in the way in which the hon. Gentleman described. NATO added that the weapons will be
    "truly weapons of last resort."
    That is a clearer definition of the nuclear strategy and emphasises the point that many Opposition Members still do not appreciate—that nuclear weapons are not for fighting a war, they are to prevent war.
    Mr. Cormack: During this period of uncertainty for those in our armed forces, will my right hon. Friend do everything possible to stress the nation's sense of gratitude and obligation to them for what they have done and for their contribution to the peace that we are now seeing in prospect? Will he also do everything possible to reassure them that this House will not forget them in their difficulties in the future?
    Mr. King: I am grateful to my hon. Friend and I shall certainly seek to do that. My hon. Friend has made an important point. I know that he did not mean this, and I do not say this, as some form of valedictory address. Although the position in central Europe has changed, our situation in needing to ensure a certain basic level of defences against the eventualities that we hope would not arise, but which could arise, mean that our defences will

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    have a continuing and important role and will offer a continuing and important career for those who give their lives and service to them.
    Mr. Menzies Campbell: If nuclear weapons are weapons of last resort and not for fighting wars, is not the Government's inclination to deploy the tactical air-to-surface missile on behalf of the United States a decision that should be scrapped immediately? Does not it also bring into considerable doubt the need for tactical air-to-surface missiles to be deployed by the NATO alliance?
    Mr. King: After the manifest success of the NATO summit, I am surprised that the hon. and learned Gentleman should seek to challenge head-on one of the statements of NATO policy, which is that
    "the Alliance must maintain for the foreseeable future an appropriate mix of nuclear and conventional forces based in Europe and kept up to date where necessary."
    He does so at the very moment when we are celebrating the success of the NATO strategy and on the day after one of the objectives of NATO strategy for 40 years—to seek a united Germany within NATO has been achieved. I am surprised that the hon. and learned Gentleman should query the unanimous agreement on that strategy.
    Mr. David Martin: Will my right hon. Friend continue to make clear the necessity for strong defence in the future not only for short-term foreseeable events but for long-term unforeseeable ones? Does he agree that it would be criminal folly to reduce our defences, including nuclear weapons, to a level lower than any eventuality, however unforeseeable, might demand?
    Mr. King: I am grateful to my hon. Friend. I know that in saying that, he also recognises that circumstances are changing and that one of the most important aspects is that NATO must adapt. One of the greatest strengths of recent events and one of the values of NATO that was shown yesterday is that after the NATO summit, after the NATO declaration and after the visit of the secretary general to Moscow, President Gorbachev felt confident enough to move because he knew that he was dealing with an alliance which had the strength to deliver.
    Mr. Rogers: In view of the Secretary of State's description of the talks as unanimous and successful, does he intend to make a full statement to the House on the implications of the unanimous decisions made and of "Options for Change", or shall we have to wait for a statement to be made during the recess?
    Mr. King: No. The House is well aware of the outcome of the NATO summit and the Leader of the Opposition has already made certain comments in the House about it. Indeed, I noticed that in New York the Leader of the Opposition, referring to the changes and the positive outcome of the NATO summit, said that it was a good time to be alive. I am not sure whether that spirit has spread to the hon. Member for Rhondda (Mr. Rogers).

    Defence Commitments (Europe)
    Mr. Cran: To ask the Secretary of State for Defence what progress is being made in his Department's review of Britain's defence commitments in Europe.
    Mr. Tom King: We are considering options for change in the scale and deployment of our armed forces and their supporting structures in the light of the changing international circumstances.
    Mr. Cran: Does my right hon. Friend agree that despite Mr. Gorbachev's good intentions—and there is no reason to doubt them—The Times was correct to draw attention today to the uncertain nature of Soviet politics and on another occasion to the fluid situation in eastern Europe? Against that background, does he agree that any defence cuts should be gradual and should take into account long-term rather than short-term political developments?
    Mr. King: I certainly agree with the importance of recognising that while much has changed, some elements endure. Our responsibilities in other parts of the world, whether in the Falklands, Belize, Cyprus or Northern Ireland, have not changed in any way. We must continue to recognise those elements and the need to maintain our defences. The one element that I would add to what my hon. Friend said is that it is also important that we work in close partnership with the NATO alliance and consult it about any changes that we might have in mind.
    Mr. Douglas: Will the Secretary of State confirm that changing circumstances require changing strategies, particularly in relation to nuclear weapons? If it is now NATO strategy that nuclear weapons should be weapons of last resort, why is it necessary for at least three countries in the alliance to possess them? Why should we not be content—if we can be content at all with nuclear weapons—with one nation, the United States, having sole possession of strategic nuclear weapons?
    Mr. King: In the end a Government must take responsibility for the defence of their country. We believe that nuclear weapons have been for this country, as they have for others, the ultimate instrument of war prevention. We believe that nuclear weapons have saved millions and millions of lives. That is the key reason why Europe has just enjoyed the longest period of peace this century. It is against that background that we believe it is sensible to maintain a nuclear deterrent.
    Mr. Maxwell-Hyslop: Will my right hon. Friend constantly remind the House that whereas the time sequence for developing new nuclear weapons and keeping current nuclear weapons effective is very long, the time sequence in which international political relationships can change is almost immediate? Therefore we must never bring about a situation whereby the Russian military deposing Mr. Gorbachev could leave us defenceless, effectively, against that changed situation.
    Mr. King: I am grateful to my hon. Friend for emphasising the need for a certain prudence. No one could have observed the events of the past year without recognising the truth of what he has said. The headlong process of change that has taken place in recent months could alter. Today's announcement, encouraging as it is, might easily have gone the other way and then there could have been a great deal of tension in Europe. If the Soviet military establishment had finally decided that it could not accept a united Germany in NATO, we would face a different situation. The very fact that we believed that in

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    the end the Soviet Union would recognise the rights of the German people to self-determination and to choose to which alliance they belonged is extremely important.

    Nuclear Tests
    Mr. Caborn: To ask the Secretary of State for Defence what nuclear tests have been carried out by NATO countries and France in the current year; and for what purpose.
    The Minister of State for the Armed Forces (Mr. Archie Hamilton): The last United Kingdom nuclear test was in December 1989. Such tests are required to maintain the effectiveness of our nuclear weapons capability.
    The French authorities have announced four and the United States three nuclear tests so far in 1990.
    Mr. Caborn: I thank the Minister for that reply. Were those tests carried out in conjunction with tactical air-to-surface missiles? If so, does the Minister condone that, given that the threat has now been considerably reduced, if not removed? Will he also inform the House whether the Government intend to start progress towards a comprehensive worldwide nuclear test ban? That would be a significant step in enhancing the agreement reached yesterday and the decision would be received throughout the world as a progressive move towards further stabilisation.
    Mr. Hamilton: The Government regard it as essential that we continue to test nuclear weapons so long as we remain a nuclear state, as we intend to do for the foreseeable future. That stand is unlike that of the Opposition, who have made it clear that they see no role for nuclear weapons and will negotiate them away as soon as they ever get into power. In those circumstances, we intend to continue to test nuclear weapons. We do not, of course, go into detail about the form that those tests take.
    The Government have made it clear that we do not support the idea of a comprehensive test ban because we regard the testing of nuclear weapons as essential for the future development of our nuclear programme.
    Sir Geoffrey Johnson Smith: Can my hon. Friend confirm that in recent years the Soviet air force has modernised its nuclear air capability and that it would be extremely foolish for us to deny ourselves similar opportunities other than as part of some international agreement?
    Mr. Hamilton: Yes, that must be right. The Soviet Union will continue to be a highly nuclear-capable country for the foreseeable future. In those circumstances, it would be madness if we did not maintain our capability as well.

    Weapons Development and Deployment
    Mr. Terry Fields: To ask the Secretary of State for Defence when he last met his United States counterpart to discuss weapons development and deployment.
    Mr. Tom King: I last met Mr. Cheney at the NATO nuclear planning group and the defence planning committee meetings in May. We discussed a wide range of current defence issues.
    Mr. Fields: Although I might argue from a socialist perspective that imperialist, capitalist treaties and pacts
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    are worthless pieces of paper, can the Secretary of State tell the House whether the Government are serious about the non-proliferation treaty, or does he support the statement made by his hon. Friend the Minister of State for Defence Procurement who described it as a "worthless piece of paper" on 18 June in the House? Is not that a further example of the Thatcher-Ridley tendency of chauvinistic dislike and hatred for foreigners and all things foreign?
    Mr. King: I am not sure what that contribution will do for the cause of the Leader of the Opposition in trying to persuade people in Washington that the Labour party is a very different animal now from that which some of its previous critics may have suggested. The hon. Gentleman's contribution said it all.
    Mr. Roger King: Does my right hon. Friend agree that technology in the United States, particularly in military aircraft, has reached an all-time high with the stealth characteristics of those aircraft? Would it be possible for European aviation manufacturers to feature much of that stealth technology in the next generation of European fighter aircraft, and thus benefit from American research?
    Mr. King: We seek to co-operate wherever possible in the European programme group on research and development in various collaborative projects and, where applicable, with the United States. Obviously, some of the skills of the United States are of great interest to us.
    Mr. Boyes: Is the right hon. Gentleman aware that American ships will be carrying stocks of nerve gas, in the form of 100,000 artillery projectiles, from Nordenham in Germany through the English channel? The projected time for the movement is mid to late September when there are frequently severe gales in the English channel. When precisely will the movement take place, and what contingency plans does the right hon. Gentleman intend to make in case of a serious accident? The British public have a right to know, or do the Government simply not care?
    Mr. King: I will see what information I can give the hon. Gentleman about that.
    Mr. Latham: Regarding contact with United States counterparts on weapons development and deployment, does my right hon. Friend agree that it is excellent that Sir Peter Levene has managed to copy the American system of labelling spares' costs, resulting in a substantial reduction in costs to public funds?
    Mr. King: Many of the innovations that Sir Peter Levene has brought to the public procurement process have been of tremendous benefit, and there is no question—this should unite the House, whatever levels of defence expenditure one may approve—but that whatever money is spent should be spent to the best effect.

    Germany
    Ms. Quin: To ask the Secretary of State for Defence what recent discussions he has had about the future defence role of Germany.
    Mr. Tom King: In recent months I have had discussions on defence aspects of German unification with Dr. Stoltenberg, with other Defence Ministers in NATO, and with Marshal Yazov. The British Government have consistently supported the right of a united Germany to be

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    a full member of the NATO alliance, and we are delighted that Chancellor Kohl and President Gorbachev have now reached agreement on this crucial point.
    Ms. Quin: Which Tory view is likely to prevail in future consideration of these matters? Will it be the views of the former Secretary of State for Trade and Industry and, presumably, the Prime Minister, or will it be wiser and more moderate counsels? Since the Soviet Union, despite its historic experience, has been able to change its stance towards the defence role of Germany, is not there a danger that only the United Kingdom will be negative and backward-looking?
    Mr. King: The Foreign Secretary has made it clear that friendship and partnership are at the heart of British foreign policy and I can tell the House that friendship and partnership with Germany are also at the heart of our defence policy. That could never have been more obvious than during the past more than 40 years when 60,000 to 70,000 British troops and their families have been stationed in Germany. I am deeply grateful for the friendship and warmth of reception that they have had in Germany and for the close collaboration that has existed between us. That has perhaps never been more true than now when, under the vicious terrorist threat that they face, the outstanding co-operation of the German police and security forces has been beyond praise.
    Mrs. Currie: Does my right hon. Friend agree that in this extraordinary week, in which President Gorbachev has withdrawn his objections to a united Germany joining NATO, the truth of the matter is that they could not beat us and therefore they are joining us? Does not it follow, therefore, that a united Germany should not be a weak member of NATO, but a strong one capable of playing a full part in the future?
    Mr. King: There is absolutely no question but that my hon. Friend is right. Germany is an essential member of NATO. The Soviet Union has properly recognised, as we hoped that it would, that in the final analysis it is a matter for the democratic decision of the German people which alliance they join. Hon. Members will have noticed the phrase used by Chancellor Kohl and President Gorbachev, that their agreement yesterday recognised the
    "full and unrestricted sovereignty of a united Germany."
    That has to be right.
    Mr. O'Neill: Does the Secretary of State agree that yesterday's momentous decision, which we all welcome, has come about because of the persistence and patience of the Federal Republic of Germany and its allies in seeking to do deals with the Soviet Union? The outcome of the negotiations would not have been possible without the long-standing co-operation to which the Secretary of State alluded in respect of Britain and the federal republic. In those circumstances, is not it the more surprising that one of the right hon. Gentleman's colleagues tried to upset the apple cart with his ill-tempered outburst last week? Will the right hon. Gentleman reassure the House that there is now no one in the Tory Cabinet prepared to talk in terms of German revanchism in the way that his former colleague was prepared to do?
    Hon. Members: What about the Prime Minister?
    Mr. King: There is not much point in covering ground that has already been covered. I have made absolutely
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    clear the importance of our alliance with Germany. The hon. Gentleman will know that I have consistently made clear, on behalf of the Government, the belief that a united Germany should be in NATO and the hope that the people of a united Germany would so choose. It is Chancellor Kohl's clear belief that that is what they will choose after the German elections.

    County Regiments
    Mr. Speller: To ask the Secretary of State for Defence if he will make it his policy that under any Army reorganisation those county regiments with affiliated Territorial Army battalions bearing the same name will be retained.
    Mr. Archie Hamilton: It is not yet possible to comment on the future of particular regiments or their organisation.
    Mr. Speller: Does my hon. Friend agree that while military mergers are nothing new, it must be logical to encourage those regiments with centuries of local recruiting tradition to continue that tradition? Examples include the 11th Foot, the North Devonshire regiment, now the Devonshire and Dorset regiment, where the local groundswell of support is such that recruiting will continue even in times when it is more difficult than in other parts of the world.
    Mr. Hamilton: Yes. Clearly, the ability of any regiment to recruit—and the ability of the Devon and Dorsets to get the support that they enjoy in their part of the country—will be taken into account in any reorganisation that we consider.
    Mr. Thorne: In considering that matter, will my hon. Friend ensure that he does not overlook the claims of the Household Division or the Gurkhas? This year the brigade of Gurkhas celebrated 175 years of service to the British Crown and in the last war they raised 250,000 troops. If we overlooked them, I am sure that the British public would never forgive us.
    Mr. Hamilton: I am well aware of the concern and respect that hon. Members have for the Gurkhas and the Household Division. We shall take that into account when we reconsider the shape that the Army should take in the future.

    Mobile Forces
    Mr. David Nicholson: To ask the Secretary of State for Defence what emphasis his Department places on mobile forces.
    Mr. Archie Hamilton: As last week's summit declaration made clear, NATO forces will in future need to be highly mobile and versatile. We are currently examining options for change in our force structures to reflect new circumstances.
    Mr. Nicholson: With reference to mobile forces, is my hon. Friend aware that I strongly support the point made a moment ago by my hon. Friend the Member for Ilford, South (Mr. Thorne) about the role of the Gurkhas? Will my hon. Friend take this opportunity to say something about developments in NATO's strategy in view of the exciting and reassuring developments in eastern Europe, and about the possibility of a NATO role out of area?
    Mr. Hamilton: Yes, indeed. One of the advantages of the versatility and mobility alluded to is that they will enable the forces to be dual-hatted and play a role out of area as well as a reinforcement role in NATO.
    Mr. Graham: The Minister mentioned versatility and mobility, but was it in order for a Royal Navy helicopter to be deployed at a Tory party event in my constituency, since, as has been admitted by the local Tory party, it was a fund-raising event for the Tories? Is that the new role for our military helicopters—to be used to prop up the Tories' fund-raising effort to try to win the next general election?
    Mr. Hamilton rose—[Interruption.]
    Mr. Speaker: Order. I think the question was about mobile forces.
    Mr. Hamilton: In as much as the supplementary question refers to mobility, I have answered the hon. Gentleman's question. As he well knows, that occasion was not laid on solely for the benefit of the Tory party. Serious sums of money were raised for other charities—[Interruption.]
    Mr. Speaker: Order. The House must listen to the Minister's reply.
    Mr. Hamilton: Serious sums of money were raised for other charities, but if it had been known that it was a Tory event, the contribution from the Royal Navy would not have been made.
    Mr. Conway: When my hon. Friend has recovered from that formidable onslaught, will he give his attention to the role of the Territorial Army in the mobile forces and say whether in the light of developments, he believes that in future reservists and Territorial Army personnel will be able to play an even larger part in our mobile and specialist forces?
    Mr. Hamilton: The Territorials and the reserves will certainly have an important role in terms of reinforcement of our role in NATO. We are considering that carefully under "Options for Change".

    Low Flying
    Mr. Wallace: To ask the Secretary of State for Defence what is the policy of his Department with regard to low-level military flying over the Isle of Man.
    The Parliamentary Under-Secretary of State for Defence Procurement (Mr. Michael Neubert): Much of the Isle of Man falls within controlled airspace associated with Ronaldsway airport. Military aircraft do not generally carry out flying training at low level over the remainder of the island, although the RAF makes extensive use of the air weapons range off Jurby Head.
    Mr. Wallace: I am grateful for that answer, but does the Minister accept that if having civilian air traffic over Ronaldsway airport is good cause for not having low-level military flying, that must also be a relevant consideration in low-level flying over my islands constituency, where the two important airports, at Kirkwall and Sumburgh, deal with not only a large amount of civilian inter-island traffic but with helicopter traffic from the North sea oil platforms? If this has been a relevant consideration in not
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    allowing low flying over the Isle of Man, will the hon. Gentleman reconsider the decision to increase low-level flying over Orkney and Shetland in recent years?
    Mr. Neubert: Ronaldsway airport was a factor in the consideration but it was not, as the hon. Gentleman seeks to suggest, the only one. He knows that each case is considered on its merits.—I am sure that the people of Orkney and Shetland want to make their contribution to the defence of these islands. The Isle of Man does so by contributing the range for low-level flying, and other ranges—for example, RAF Tain—are equal contributors. The hon. Gentleman might have a word about that with his hon. Friend President Kennedy.
    Mr. Bill Walker: Does my hon. Friend agree that in the Isle of Man or anywhere else in the United Kingdom, low-flying sorties, if they are to mean anything, have to be about 300 miles long so that pilots and navigators can undertake the necessary training to be able to operate in wartime conditions wherever they occur?
    Mr. Neubert: My hon. Friend understands these matters much better than does the hon. Member for Orkney and Shetland (Mr. Wallace). It is true that the average sortie takes at least 300 to 500 miles, and it must encompass that distance to be worthwhile practice. It is our intention, through the United Kingdom low-flying system, to spread low-flying training as fairly and evenly as possible. Avoiding one area puts an unnecessary burden on other areas. [Interruption.]
    Mr. Speaker: Order. I ask the House to settle down; a lot of background conversation is going on.

    NATO Summit
    Mr. Mullin: To ask the Secretary of State for Defence if he will make a statement on the defence implications of decisions taken at the NATO summit on 5 and 6 July.
    Mr. Tom King: I refer the hon. Gentleman to the reply that I gave earlier to the hon. Member for Barnsley, West and Penistone (Mr. McKay).
    Mr. Mullin: Now that it is alleged that our nuclear weapons are for use only as a last resort, are there any plans for doing away with our short-range nuclear weapons—I am talking about artillery and Lance—or am I being naive?
    Mr. King: The hon. Gentleman would have done better to read the London declaration before he came to the House because it contains a specific proposal on nuclear artillery.
    Mr. Wilkinson: Now that the NATO alliance has unambiguously extended the hand of friendship to the Warsaw pact and the Soviet Union, which leads it, will my right hon. Friend, in concert with the Foreign Secretary, see whether pressure can now be put on the Soviet Union to withdraw its remaining troops from Poland?
    Mr. King: Certainly we wish to see the withdrawal of Soviet forces as soon as possible. My hon. Friend will know that Chancellor Kohl accepted that it will probably be three to four years before those troops can be withdrawn from East Germany. One should not underestimate the sheer logistical problems of withdrawal

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    of the numbers involved, but we want it to happen as soon as possible. We should welcome the real progress that has been made.
    Mr. John D. Taylor: Were the decisions taken at the NATO summit consistent with the decision taken yesterday in Moscow? If so, do the Government support the restriction on the size of German forces following a united Germany?
    Mr. King: Not only were they consistent, but the very tone of the London summit was intended to make clear to the Soviet Union that a united Germany in NATO presented no threat to the Soviet Union. The success of that summit is borne out by yesterday's events, which have given President Gorbachev the confidence to proceed as he has, some might say courageously, to accept against the background of his domestic position the important step forward of a united Germany in NATO. The German proposals for the Bundeswehr and the Volksarmee were well anticipated and we have taken note of them.
    Sir Bernard Braine: À propos my right hon. Friend's answer to my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson), does he agree that the real test of Soviet sincerity about the new relationship with the west would be its withdrawal from a country that suffered grievously from both Germans and Russians during the war and that has suffered grievously since? The withdrawal of Soviet troops from Poland would be a great step forward.
    Mr. King: I understand my right hon. Friend's feelings and wish to see that withdrawal as soon as possible. We must recognise the most remarkable landmark that emerged yesterday. A few months ago, no one would have thought it possible for the Soviet Union to accept a united Germany in NATO. Three months ago it was almost unthinkable in Moscow and it has now been confirmed. We should welcome that.
    Mr. O'Neill: Will the Secretary of State confirm that a statement about the Government's reaction to the NATO summit will be made before the House rises for the summer recess? Will the document "Options for Change" be available for debate, or will it simply be published before the end of the Session?
    Mr. King: My right hon. Friend the Prime Minister commented on reaction to the summit in her statement to the House following the G7 summit at Houston. I cannot comment further today on a separate statement about "Options for Change".
    Mr. Sayeed: If at the London summit the Government had made an immediate announcement to cut defence spendng by over a quarter, what would have been the effect?
    Mr. King: That is a rather subtle question of which I would have liked more notice. The London summit showed the importance of the members of the NATO alliance working together. As I said, one factor that must have been important to President Gorbachev was that he was dealing with a united alliance and knew from talking to Chancellor Kohl that the Chancellor's views were consistent with those of the whole of the NATO alliance.

    Conventional Forces in Europe
    Mr. Eastham: To ask the Secretary of State for Defence what decisions he has made about the role of the Army following a possible conventional forces in Europe agreement.
    Mr. Archie Hamilton: No decisions have yet been taken regarding the future role of the Army, although we are examining the options for change in the light of changing international circumstances.
    Mr. Eastham: In view of the dramatic discussions between East and West Germany and the ultimate withdrawal of Russian troops, does the Minister recognise that there is no longer any justification for the retention of 55,000 British troops in Germany? Can he assure us that the Government will not try to introduce some strategy under which those 55,000 troops will be deployed somewhere else in the world, in a continuation of the imperialism that we used to experience 100 years ago?
    Mr. Hamilton: "Options for Change" recognises the dramatic alterations in the scene in Europe generally and especially in east-west relations. It will therefore deal with the size of the Rhine Army.
    Dame Elaine Kellett-Bowman: Does my hon. Friend accept that whatever agreement may be reached on conventional forces, the Territorial Army must always be maintained as a back-up to the regular forces? Will he congratulate those who serve in the Territorial Army in my area on the opening last Thursday of the Alexandra barracks by Her Royal Highness Princess Alexandra? They will provide magnificent training opportunities for the Territorial Army of the future.
    Mr. Hamilton: I am glad to hear what great support is being given to the Territorial Army in my hon. Friend's area. It is an invaluable and essential part of our commitment to reinforce NATO at a time of conflict.

    Arms Conversion Agency
    Mr. Henderson: To ask the Secretary of State for Defence whether he has received any representations to set up an arms conversion agency.
    Mr. Fatchett: To ask the Secretary of State for Defence whether he has received any representations to set up an arms conversion agency.
    The Minister of State for Defence Procurement (Mr. Alan Clark): This question appears to have been widely syndicated on the Opposition Benches. It is found in three of the top dozen questions. Let us hope that hon. Members have adequately memorised their supplementaries.
    The answer is that I have received various representations.
    Mr. Henderson: Has the Minister had the temerity to contact the Department of Trade and Industry on the possibility of an arms conversion agency? If so, can he tell us about the nature of those talks and specifically whether he has received reports from the DTI on how manufacturing industry can obtain its share of the peace dividend?
    Mr. Clark: That question has been asked no fewer than seven times, and answered by three Ministers, during the

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    past six months. The question does not alter and nor does the answer. British industry is responsible for determining its product ranges, not the Government.
    Mr. Fatchett: Does not the Minister's answer show clearly that the Government feel that they have no responsibility to the companies and workers which have supplied the British forces over the years? Is not the Minister happily washing his hands of companies such as Vickers in Leeds? Is not it time that the Government accepted some responsibility for those who have supplied Britain so well for so long?
    Mr. Clark: I thought that the hon. Gentleman spoke from the Opposition Front Bench on some subject or other, and I had hoped that he would produce some enlightenment on the subject. All that he has done is produce the standard socialist formula—convene a committee of friends, throw some public money at the subject and then claim that something is being done about it. In fact, we have no details about the project. We do not know how it is to be constituted, whether it is to be funded from taxation revenue, or whether—as I understand it—it is to be funded by a surcharge on those in arms production. There are no details: it is simply a down-memory lane formula of socialism.
    Mr. Hind: Does my hon. Friend agree that it is essential that we retain a military complex in our industry that is capable of turning out the necessary minimum weapons to guarantee our security? Is not military aviation such as that at British Aerospace at Walton essential to continue the defence of this country?
    Mr. Clark: Of course, there are certain key capabilities that we shall retain at all times. We shall always continue to need a strong and vigorous defence sector in our manufacturing industry.
    Mr. Viggers: Has my hon. Friend had the opportunity to read some of the articles commemorating Adam Smith? Did they refresh his natural inclination that if market forces do anything, it is crucial that the Government should not become involved in the issue? The very last thing that we should have is an arms conversion agency.
    Mr. Clark: I entirely agree with the latter part of my hon. Friend's proposition, but I am not sure whether all Adam Smith's precepts are entirely applicable to the defence industries.

    "Options for Change"
    Mr. Duffy: To ask the Secretary of State for Defence when he expects to publish the findings of the "Options for Change" inquiry.
    Mr. Tom King: I appreciate the keen interest, particularly in the armed services themselves, in the progress of our work which is proceeding against the background of the changing international situation and similar studies among our allies. I advised the House on 18 June of the essential elements in our study of "Options for Change". I am not yet in a position to go further.
    Mr. Duffy: Before publishing those findings, will the Secretary of State assure the House that he will have given due weight to a service dividend as well as a peace dividend?
    Mr. King: Yes, Sir. I have not used the word "findings" because we hope to come forward with proposals. I hope that there will be an opportunity for wider consultation. Obviously this is an important time for the armed services. We must take account of the interests of the armed services and all those who serve in them as well as those involved in defence generally.
    Mr. Nicholas Bennett: What does my right hon. Friend think of the morality of those who want to spend the peace dividend but refuse the investment in nuclear weapons which makes that dividend possible?
    Mr. King: I do not know whether my hon. Friend was referring to the Opposition. At this very moment, the Leader of the Opposition is trying to persuade people in Washington that the unilateralist views shared by many Opposition Members do not really exist.

  PRIME MINISTER

    Engagements
    Mrs. Margaret Ewing: To ask the Prime Minister if she will list her official engagements for Tuesday 17 July.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House I shall be having further meetings later today. This evening I hope to have an audience of Her Majesty the Queen.
    Mrs. Ewing: Is the Prime Minister aware that when I read the memorandum from the Chequers seminar and saw the words "angst", "aggressiveness", "assertiveness" and "bullying"—[Interruption.]
    Mr. Speaker: Order. Will the hon. Lady proceed with her question please? [Interruption.] Order. These pauses take a lot of time.
    Mrs. Ewing: —I believed that the Prime Minister was painting a self-portrait. Does she realise that, through her failure to sack the Secretary of State for Trade and Industry and her association with that memorandum and the attack on the German people, she is now tarred with the Ridley brush and is no more fit to lead than he was?
    The Prime Minister: No, Mr. Speaker. At one time, I am accused of being isolated and of not consulting anyone; at another time, I am accused of having consultations with those who have something interesting to say. People must make up their minds which they are criticising. The hon. Lady could have read the constructive result in a speech at the Koenigswinter conference some five days later. That constructive speech concerned all our relationships in the Community, particularly with Chancellor Kohl, who shows much more understanding of these matters than does the hon. Lady.
    Mr. Wiggin: Given the now general acquiescence about the reunification of Germany, does my right hon. Friend agree that the first act of a newly reunified Germany should be the signing of a full and unqualified peace treaty with the former allies? Will she take steps to ensure that that happens?
    The Prime Minister: After unification, I think that Germany and Poland will wish to sign a treaty confirming Poland's existing borders. That will be one of the most

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    important international measures. I do not think that a unified Germany would wish to have a full peace treaty, for obvious reasons. We might have arrangements that lead to a peace settlement.
    Mr. Hattersley: Is the Prime Minister aware that four of the six academic experts who attended her Chequers seminar on Germany have said that Mr. Charles Powell's minute of that meeting gave a slanted—that is, anti-German—account of the discussion? Does the Prime Minister agree?
    The Prime Minister: No, Mr. Speaker.
    Mr. Hattersley: The whole House, and people in many places and chanceries throughout the world, will be astonished that the Prime Minister has not taken this opportunity to repudiate the more offensive sections of the minute. Four of the experts at the seminar say that the minute was slanted against the Federal German Republic. Everyone in the world now believes that the Prime Minister's private secretary was reflecting not so much the opinions of the experts as the prejudices of the Prime Minister. Why does not she take this opportunity to refute them?
    The Prime Minister: I am amazed that the deputy leader of the Labour party chooses his opportunity to question me to use it—[Interruption.]
    Mr. Speaker: Order.
    The Prime Minister: —chooses to use his opportunity for questioning to attack a civil servant who cannot reply and who has served all Governments with equal integrity. His conclusion on that meeting was highly constructive, as was the meeting itself. There used to be more honour in the House than that.
    Mr. Hattersley: The Prime Minister's reputation is far too tarnished for her to maintain this haughty stand any longer. Does not she understand that there is a problem with Anglo-German relations and that that problem is the Prime Minister? What we want—and, I believe, what the majority of people want—is an honest statement of the Prime Minister's opinion. Has she the courage to make such a statement to the House and to face cross-examination?
    The Prime Minister: Perhaps the right hon. Gentleman will read the many speeches and consider the many actions in which we have been staunch allies of Germany in NATO and in which the Germans have been staunch allies of ours in NATO and in the EEC. Germany joined us in stationing cruise and Pershing at a critical time. We could not say that the Opposition supported that.
    Sir Peter Blaker: Is my right hon. Friend aware that every other Government in the world regularly make assessments of the British character and of Britain's performance, and that they all admire and respect her quality of leadership much more than they respect the inane posturing of the Leader of the Opposition?
    The Prime Minister: Had this country followed the policies of the Leader of the Opposition on defence, we should never have seen the remarkable changes that we are seeing now.
    Mr. Andrew Smith: To ask the Prime Minister if she will list her official engagements for Tuesday 17 July.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Smith: As the Prime Minister chose in the exchange of resignation letters to refer to
    "the policies we both believe in so deeply",
    does not she owe it to the House and the country—she was the person who mentioned the word "honour"—to say whether she repudiates the view that her former Secretary of State for Trade and Industry expressed in his resignation letter which was that the proposal by the European Commission for economic and monetary union in the Community would be a disaster? Does she repudiate him, or does she agree with him that it would be a disaster?
    The Prime Minister: The policies on which the former Secretary of State and I agree are the policies that have transformed Britain from the state in which Labour left it and which it would recreate. The hon. Gentleman cannot have listened to what I said last week—that my right hon. Friend's views were not those of the British Government. I should have thought that the hon. Gentleman would have known that.
    On the resignation letter, my right hon. Friend condemned the move to a single currency. Does Labour now support that?
    Mr. Paice: Will my right hon. Friend reflect on the policies that she has just mentioned which have brought eight years of successive economic growth, improvements in productivity and record levels of employment? Is not it her determination to pursue those policies which will ensure that the British economy is the best counter-balance to any other economy in Europe?
    The Prime Minister: Yes, Sir. Our policies have been very successful. We now have the fastest growth in manufacturing productivity in the G7. In the 1960s and 1970s we had the lowest growth in productivity in the G7. We now have the second largest growth of output in the EEC. In the 1960s and 1970s we had the lowest growth of output in the EEC. We now have the second fastest growth in business investment after Japan. I am delighted to have a chance to say how bad it was in Labour times and how good it is now.
    Mr. Carr: To ask the Prime Minister if she will list her official engagements for Tuesday 17 July.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Carr: Given the announcement last Friday that the retail prices index has now reached 9.8 per cent., the continuing balance of payments deficit running at over £1 billion a month and the continuation of interest rates at 15 per cent., causing record numbers of bankruptcies, does the Prime Minister agree that the economy is in a mess and that the responsibility for it lies squarely with her and her Government?
    The Prime Minister: I am amazed that the hon. Gentleman calls it a mess. We have the highest-ever standard of living, more people in work than ever and the highest standard of investment. In fact, 28 of the 50 top performing European companies are British.
    Mrs. Currie: May I say to my right hon. Friend the Prime Minister—[Interruption.]—
    Mr. Speaker: Order. This is the first opportunity that the hon. Lady has had to put a question and I ask her to do it.
    Mrs. Currie: May I say that my right hon. Friend the Prime Minister is looking jolly nice today? Does she agree that is is a time of great celebration? As she has observed, it is the end of the cold war. Does she also agree that while we celebrate we should not be complacent about the peace?
    The Prime Minister: I thank my hon. Friend and return her compliment. I said in November 1988 that we had reached the end of the cold war provided that Mr. Gorbachev went on as he has done. That was when I first said it, but others have come rather later.
    Mr. Ted Garrett: To ask the Prime Minister if she will list her official engagements for Tuesday 17 July.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Garrett: Does the hon. Lady recognise that there are not only splits in her party, but different views in ours? Does she also recognise that they are legitimate differences? Stripped of the hysteria and counter-charges of the past few days, we have to think as a nation about the balance of power, especially in a free, open and democratic Europe. My generation—there are many hon. Members of my generation—should consider the part we played to return the balance of power. Our parents and grandparents did the same. The last three centuries have taught us lessons. Those who did not experience the
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    1939–45 war or the post-war period should read the history of Europe over the past three centuries. Some of the pro-Europeans should also re-read their history.
    The Prime Minister: I thank the hon. Gentleman for those words which I think he has truly spoken. I point out that I said—
    Mr. Skinner: He should have been at the seminar. [Interruption.]
    Mr. Speaker: Order. I am anxious to call as many hon. Members as possible.
    The Prime Minister: May I point out—because I think that the hon. Gentleman will agree—that when I said in November 1988,
    "The cold war is already at an end",
    I went on with the words that were very much in keeping with his sentiments:
    "Now, that does not mean to say a strong defence is at an end—far from it."
    I think that the hon. Gentleman would firmly agree with that: we always have to keep up a strong defence to safeguard peace.
    I note what the hon. Gentleman said about learning from history. I was interested to see what Chancellor Kohl said at a press conference today. He said that he understood the concern—especially on the part of the British—whose entire national existence had been at stake in the fight against Hitler. He went on to say that he had not taken my right hon. Friend's comments amiss
    "The man has been punished enough."
    I think that the hon. Gentleman, Chancellor Kohl and I would very much agree on the wisdom of learning from history.

Prescribed Drugs (Compensation)
Sir Michael McNair-Wilson: I beg to move,
That leave be given to bring in a Bill to provide statutory rights to compensation to sufferers from serious side effects from prescribed drugs; and for connected purposes.
Alongside, and complementary to, the great advances in medical science—[Interruption.]
Mr. Speaker: Order. Would those hon. Members who do not propose to remain in the Chamber please leave quietly?
Sir Michael McNair-Wilson: Alongside, and complementary to, the great advances in medical science and surgery that have taken place in the past 50 years has been the introduction of new drugs which, in their efficiency and effectiveness, have helped to banish so many of the illnesses that were common when I was a boy. Diphtheria, measles, scarlet fever and even tuberculosis, which were once the scourges of our nation's health, are now of little consequence. I name those diseases; I could easily name a dozen others that have ceased to be serious and epidemic illnesses—[Interruption.]
Mr. Tony Banks: On a point of order, Mr. Speaker. I apologise to the hon. Member for Newbury (Sir M. McNair-Wilson), but I cannot hear a word that he is saying. This motion is very important.
Mr. Speaker: I quite agree that it is important. I have already appealed to hon. Members to leave quietly, and I appeal to those hon. Members remaining in the Chamber to listen to what the hon. Gentleman has to say.
Sir Michael McNair-Wilson: As it notches up its successes, the pharmaceutical industry has moved on to tackle new challenges and, as I speak, the Committee on Safety of Medicines—the watchdog body that decides when a drug has progressed sufficiently through its clinical trials to be licensed—is considering between 10 and 20 new drugs for which the manufacturers are seeking a licence. A licence is sometimes thought to mean that all the known side effects of the drug have been established. That is not so. As Professor Bill Asscher, the chairman of the Committee on Safety of Medicines, said recently in a "World at One" news programme:
"The policy has always been to advise Ministers to license drugs early so that the Committee can study them after they are being used, by proper post-marketing surveillance."
He pointed out that a licence means that, in clinical trials, a drug has been found to be effective, safe and of quality. But he added:
"You don't know until you've used a drug in a very large number of people precisely what problems there might be."
Professor Asscher then explained that his committee relied on a voluntary reporting scheme whereby GPs fill in yellow cards commenting on any unexpected side effects that they notice when using a new drug. The monitoring scheme produced 20,000 reports last year, and is continually being assessed by the committee. The scheme depends on the diligence of the GPs, and makes one realise that the fact that a drug has been licensed in no way guarantees that it will not create harmful side effects. If it does, what recourse to compensation is open to the victim? In theory, the Consumer Protection (Registration of Professional Chemists) Act 1988 could be called in aid, as it imposes a liability on manufacturers of defective products without the need to prove negligence. However,
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I am told that the cost of a complex drug claim would be prohibitive for a family not on legal aid. That must be wrong.
A drug is a product. An analogy could be drawn between a new drug and a new car: both will have been rigorously tested by their manufacturers before going on sale. In the case of the new car, it will have been driven for thousands of miles before appearing in the showroom. However, if, after it is available to the public, it begins to show unsuspected faults, the manufacturer will recall the model and have the defects put right.
At that point my analogy breaks down. It is possible to recall a car and put it right, but what about someone who has been severely damaged by the side effects of a drug? I mean lasting damage, not just a massive skin-peeling rash like the one that I developed after being given a particular medicine in hospital but of which there is now no trace. I am referring to serious, drug-induced side effects. Thalidomide is the classic example, but it is not an isolated case; other examples are Opren the arthritis drug, Myodil, the heart drug Pexid and the steroid Prednisolone. People who were given high dosages of steroids in the 1960s now have bodies cruelly deformed by their side effects. They will carry those abnormalities to the grave.
The latest addition to the list of drugs giving serious cause for worry is another heart drug called Corwin. It was licensed in May 1988; by 1989, the monitoring system used by the Committee on Safety of Medicines had shown that the drug could cause deterioration in patients with severe heart failure. Other information from the yellow-card "adverse drug reaction" monitoring scheme indicated that it was sometimes being used inappropriately in such patients. In January this year, the Committee on Safety of Medicines made recommendations severely restricting the use of Corwin. It is continuing to monitor the situation.
The exact number of people suffering from severe drug-induced side effects is not easy to establish. Professor Asscher is reported to have stated that 7 per cent. of all admissions to hospital are due to the serious side effects of modern medicines. By anyone's standards, it is a matter for concern. Yet our pharmaceutical industry seems indifferent to the question of compensation, refusing to admit liability and effectively challenging the victims to sue if they can afford it—of course most of them cannot. Just occasionally, one of the drug companies seems willing to accept its responsibility: in the 1970s, ICI set up a £10 million voluntary compensation scheme for victims of its heart drug Eraldin.
Then there is Danny Heffernan, now 23 years old and only 4 ft 4 in tall. He discovered that his stunted growth was caused by very high dosages of steroids. After an 11-year battle he persuaded Glaxo, the makers of the drug that had affected him, to offer an out-of-court settlement.
I do not believe that the present situation is good enough, especially as we now know that licensing by the Committee on Safety of Medicines in no way certifies that a drug is free of side effects. To that extent, I believe that Parliament should insist that our pharmaceutical companies set up a compensation fund. I suggest that they should be required by law to do so.
I believe that we should use the West German example for the sort of law that I have in mind. The West German drug law of 1976 has a section that reads:
"If as a result of the administration of a drug intended for human use which was distributed to the consumer within the purview of the law … a person is killed or the body or the

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health of a person is considerably injured the pharmaceutical entrepreneur who placed the drug on the market within the purview of this law shall be obliged to compensate for the harm caused to the injured party."
The Germans have that law. The Swedes and the Finns have comprehensive pharmaceutical injury insurance schemes, designed to compensate for injuries caused by drugs. Drug importers and manufacturers share the cost of funding the scheme. I can see no reason why we should not follow those examples. I hope that the House will give me leave to bring in my Bill.
Question put and agreed to.
Bill ordered to be brought in by Sir Michael McNair-Wilson, Mr. Jack Ashley, Mr. Spencer Batiste, Mr. Churchill, Mr. James Kilfedder, Mr. Austin Mitchell, Mr. Michael Morris and Mr. Nigel Spearing.

Prescribed Drugs (Compensation)
  PRESCRIBED DRUGS (COMPENSATION)
  Sir Michael McNair-Wilson accordingly presented a Bill to provide statutory rights to compensation to sufferers from serious side effects from prescribed drugs; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 20 July and to be printed. [Bill 187.]
BILL PRESENTED
  DECLARATION OF WAR AND COMMITMENT OF TROOPS ABROAD (CONSTITUTIONAL ARRANGEMENTS)
  Mr. Harry Cohen, supported by Mr. Tony Banks, Mr. Andrew Bennett, Mr. Jeremy Corbyn, Mr. Ron Leighton, Mr. Ken Livingstone, Mrs. Alice Mahon, Mr. Chris Mullin, Mr. Peter L. Pike, Ms. Dawn Primarolo and Ms. Clare Short, presented a Bill to ensure that war cannot be declared or troops committed or kept abroad by Her Majesty's Government without the approval of the House of Commons: And the same was read the First time; and ordered to be read a Second time on Friday 20 July and to be printed. [Bill 186.]

  Points of Order
  Mr. Harry Ewing: On a point of order, Mr. Speaker. In recent times, some hon. Members have raised points of order about those being called at Prime Minister's Question Time, and we have rightly been told that we did not have questions on the Order Paper. I have noticed in recent weeks that hon. Members, particularly Conservative Members, who have been called at Prime Minister's Question Time did not have questions on the Order Paper. Today, two of the three hon. Members whom you called from the Conservative Benches—I am not questioning your selection—simply did not have questions on the Order Paper. I am beginning to wonder what the trouble is in going into the Table Office to table questions to the Prime Minister and to try to catch your eye—
  Mr. Speaker: Order. I find it difficult to understand what the hon. Member means. Surely he is not suggesting that I should not go across the Chamber to get a proper balance, because that is exactly what I did today. I am anxious to ensure that those who have nil scores and who had not put a question to the Prime Minister were able to do so. Today I did just that. All hon. Members who were called at Prime Minister's Question Time had a nil score, and that was their first opportunity to ask a question.
  Mr. Ewing: Further to that point of order, Mr. Speaker. That is precisely the dilemma. When hon. Members have previously raised this point of order, we have been told by you that we had not tabled questions to the Prime Minister. I would certainly object if you did not preserve a balance between both sides of the House. However, has your advice on previous days now been changed, and do we no longer require to table questions to the Prime Minister in order to catch your eye? Until recent weeks, my understanding has been that we should have questions down to the Prime Minister to try to catch your eye.
  Mr. Speaker: I do not know from where the hon. Gentleman got that idea. I hope that the whole House will agree that I should seek to strike a fair balance. The hon. Member for Oxford, East (Mr. Smith) has, during this Session, put three questions to the Prime Minister, and he asked question No. 2 today. For supplementaries, I seek to give an opportunity to those who have not put a question, and that is exactly what I have done today. I hope that that is of some comfort to the hon. Member.
  Mr Tony Banks: Further to that point of order, Mr. Speaker. Hon. Members understand that, unlike the Pope, you are infallible in the Chamber. However, you have just said that you call hon. Members who have a nil score. The whole House knows that you keep an accurate record, but from when was the nil score dated? That is an important point. If we are to have nil scores, what about a penalty shoot-out?
  Mr. Speaker: The House would do best to leave these difficult decisions to the Chair—[Interruption.] I am not prepared to have my arm jogged by hon. Members who seek to ask questions. However, if an hon. Member has a legitimate constituency interest in a departmental question, that is a different matter. I cannot accept bids for Prime Minister's Question Time.
  Mr. Jeremy Corbyn rose—
  Mr. Andrew Faulds rose—
  Mr. Speaker: No, let me deal with this first. The hon. Gentleman who raised the point of order has already had an opportunity to put a question to the Prime Minister. I do not exactly know when—
  Mr. Tony BanksExactly.
  Mr. Speaker: Well, it does not state the date on my list. The hon. Member for Falkirk, East (Mr. Ewing) has also put a question to the Prime Minister.
  Mr. Faulds: As a nil scorer, Sir, may I await your future pleasure?
  Mr. Corbyn rose—
  Mr. Speaker: Order. The answer to the hon. Member for Warley, East (Mr. Faulds) is yes!
  Mr. Richard Tracey: Further to that point of order, Mr. Speaker. I have every respect for the views of Back Benchers, as I am one myself, but while in no way wishing to question your judgment, perhaps you will bear in mind that it often appears to Conservative Members that too many opportunities are given to the Opposition Front Bench, and especially to the Leader of the Opposition, to ask two or three questions, at rather great length.
  Mr. Speaker: That is perennial. Some Leaders of the Opposition have not risen as many as three times, but that has become a practice in recent years. The more times that Front-Bench spokesmen rise, the less time there is for Back Benchers. That should be borne in mind.
  Mr. Corbyn: On a point of order, Mr. Speaker.
  Mr. Dennis Skinner rose—
  Mr. Speaker: No, just a minute. I understand that the Opposition Treasury team is anxious to proceed with the Finance Bill.
  Mr. Skinner rose—
  Mr. Speaker: I shall take the hon. Gentleman.
  Mr. Skinner: I think that you have a point about the Opposition Front Bench and you must take that into account, Mr. Speaker, but you said that if an hon. Member raised a constituency matter, he or she would be in with a fair chance. I reckon that, on that basis, if any hon. Member mentions the National Union of Mineworkers, and I am the only sponsored NUM Member standing, I must have a chance. That is roughly what you are saying.
  May I have an assurance that the deputy Prime Minister registers only half a score, which means that an hon. Member would get another chance if the right hon. and learned Gentleman answered for the Prime Minister?
  Mr. Speaker: Of all hon. Members, the hon. Member for Bolsover (Mr. Skinner) is certainly not deprived in any way—[HON. MEMBERS: "Hear, hear."]—and the reason why he is regularly called—[interruption.]—I must say this in defence of the hon. Gentleman—is that he is always here.

Orders of the Day
  Finance Bill
  As amended (in the Committee and in Standing Committee), further considered.
New clause 2

  CAPITAL ALLOWANCE: MANUFACTURING INCENTIVES
  '1. This section shall have effect only in relation to trading companies whose activities consist wholly or mainly—

  (a)in the subjection of goods to a process so as to produce finished or partly finished manufactured goods for sale on a retail or wholesale basis and

  (b) of activities falling within such classes, groups or activities set out in the Standard Industrial Classification issued by the Central Statistical Office as may be prescribed by way of regulations made under this subsection.

  2. This section shall have effect only in relation to accounting periods which end after 31st July 1990 and begin before 1st August 1991.
  3. Where this section applies, subsection 24(2)(a)(i) of the Capital Allowances Act 1990 shall have effect as if for 25 per cent. in that subsection there were substituted the percentage specified in subsection (4) below, and subsection 3(2) of that Act shall have effect as if for one twenty-fifth in that subsection there were substituted the percentage specified in subsection (5) below.
  4. The percentage specified in this subsection is
  Ax25+Bx40/A+B
  where A represents the total number of days in the accounting period which either fall before 1st August 1990 or fall after 31st July 1991, and B represents the number of days in the accounting period which fall within the period starting on 1st August 1990 and ending on 31st July 1990.
  5. The percentage specified in this subsection is
  Ax4+Bx10/A+B
  where A and B have the meanings assigned to them in subsection (4) above.'.—[Mrs. Beckett.]
  Brought up, and read the First time.
  3.50 pm
  Mrs. Margaret Beckett: I beg to move, That the clause be read a Second time.
  On Sunday in a television interview, the Foreign Secretary, when discussing some matters of some difficulty and delicacy, was drawn almost in passing into observations on the differences between the economies of our European partners and our own. He referred especially to the German economy, saying that it has, indeed, become more successful than our own by
  "doing the things and taking the steps we failed to do."
  We know—this has become more apparent in recent days—that we have a divided Government. Perhaps among all the different causes for dissent, the greatest rift is opening up between those who, like the Foreign Secretary and occasionally the Lord President, not only recognise but admit the difficulties of our economy, and those who, like the Treasury Front-Bench team, still assert, in the teeth of all the evidence, that we have had an economic miracle and that our present problems, which even those right hon. and hon. Members cannot completely ignore, are temporary and will be short lived.

  867
  I recognise that it is a bit of a cheek for the Lord President to take the high-minded tone as he was presiding over our economy when much of the damage was done, but we must at least give the right hon. and learned Gentleman some credit for admitting his error now.
  In contrast, today's Treasury Ministers still seem determined—no doubt, for short-term political gain—to undermine their own and their country's long-term interests by encouraging misplaced optimism. It undermines their own interests because the more they seek to convince people that the difficulties are temporary, the less likely people are to pay attention to their exhortations to cease borrowing and to save. That would all be less important, although worrying, but for the fact that the Government's refusal to acknowledge that there is a problem leads to their rejection of any remedy. That is why we await with considerable interest the reaction to our new clause. It is, indeed, a modest step and should commend itself to any Government, with the slight exception of a printing error in subsection (4) which reads "1990" instead of "1991". I am sure that that will not deflect the Chief Secretary from giving it serious consideration.
  The new clause is a modest step. It would alleviate a little the burden of high interest rates on businesses and the additional pressure on them to reduce manufacturing investment. That is just the type of step for which industry is calling. The new clause aims to give temporary additional financial help to companies by accelerating somewhat the capital allowances that they would otherwise have received after 1991 and bringing them forward into 1990 and 1991. It also aims to increase the rate of writing down allowances to 40 per cent., rather than 25 per cent., and 10 per cent. rather than 6 per cent.
  As I have said, the new clause is a minor and modest measure. While it does not commit the Treasury to the additional relief in the long term, to which Treasury Ministers have been so resistant, it accelerates the relief that would have been given anyway in later years and gives that relief at a time when the state of the economy is causing particular difficulty and when manufacturing industry and investment is so hard pressed.
  One of the most damaging myths of the Thatcher years, promoted so heavily by the former Chancellor, the right hon. Member for Blaby (Mr. Lawson), is that manufacturing is no longer of critical importance to our prosperity. That statement from the former Chancellor of the Exchequer revealed a great deal about his attitude. The reason why he advanced a proposition so ludicrous to most Opposition Members was not even that he believed it himself but that he had to find something to explain away the problems that began to be evident in the mid-1980s following the devastation of our manufacturing industry presided over by the now Lord President. The Chancellor needed to show that the devastation, to which even he had to admit, did not matter too much, so he came up with the idea that it was because manufacturing did not matter so much any more. He argued that the improvements in earnings from internationally tradable services—the so-called invisibles—more than made up for any deficiencies in manufacturing earnings which were apparent even then.
  Unfortunately, time has overtaken that argument because invisible earnings themselves are becoming invisible and that excuse is no longer credible even to Ministers who are used to believing or putting forward 10 incredible things a day, particularly at the behest of the
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  chairman of the Conservative party. Now, instead of trying to explain what is happening in terms of the overall record on manufactured trade and the statistics that summarise our position, the Government have taken to talking loudly, rather fast and somewhat aggressively about particular aspects of policy which they claim, if they are particularly selective about their statistics, show some degree of success. Of late, the Chief Secretary has talked about output, productivity levels, exports and so on.
  The Opposition certainly welcome any signs of improvement in the vitally important manufacturing trade on which Britain depends for its prosperity, but the selected figures that the Government use are usually, if not always, completely unrepresentative. In fact, they represent a period of recovery from catastrophe rather than a record of success. It is rare indeed for Ministers to dare to examine the entire record of their period of stewardship.
  We gain the clearest picture of where the country stands as against our competitors by considering just two of the many confusing different sets of statistics that tend to be put before us in such debates. Those two sets of statistics encapsulate the picture. One set represents the results of our overall performance, never mind the bit on output, productivity or exports. The overall results of our performance in manufacturing is perfectly summarised by our balance of payments deficit. The second set of statistics, which provide the underlying contributory factor behind that balance of payments deficit, are those concerning the levels of investment in manufacturing industry.
  Let us first consider the statistics preferred by the Government. I will put them in context to help the Chief Secretary with the argument that he will no doubt advance. The most favourable statistics that the Government can put before us relate to the increase in manufacturing productivity. Some of my hon. Friends argue—I concede that the argument has some force—that if one throws hundreds of thousands of people on to the dole there is bound to be some improvement in productivity. Apart from that, however, we recognise that some improvements in productivity have occurred and we welcome them, even if the pace of such improvements is now, unfortunately, slowing down.
  The Opposition argue, with more force, that if investment per capita had been higher in earlier years, productivity improvements might not only have come earlier but have been more soundly based and thus not have needed the impetus of large-scale unemployment. Those are the caveats that one must enter against the best figures that the Government can produce.
  We often hear in the House and elsewhere about the increase in manufacturing output. Not so long ago, the Chief Secretary made a speech about the improvements that he has recently witnessed in manufacturing output. He said that in the past three years that output has risen faster than the gross domestic product as a whole. That is fine, but he also went on to say that that
  "indicated a marked turn-around compared with the historic performance of manufacturing industry"
  That statement suggests to us that whoever else should he consulted about the history syllabus, it should not be the Chief Secretary. The historical record of manufacturing output as a percentage of GDP shows that, from 1948, there was a general gradual rising trend, followed by an unprecedented nose-dive between 1979 and 1981, since

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  when it has been more or less static. There has been a slight improvement on the more or less static record that preceded the latter part of the Government's record, but there is no doubt that output is nowhere near the levels reached between 1948 and the late 1970s. It is rather strange to define the last few years as "historic". The scale of the nose-dive that occurred in the early 1980s is equivalent to between 3 and 4 per cent. of GDP. That is the order of magnitude of our balance of payments deficit and that decline in output is directly linked with it.
  We are delighted to note the recent growth in manufacturing exports. It is more than welcome, but there is a long way to go before we can overcome the volume of manufacturing imports, which, between 1979 and 1989, has risen to more than double the rate of manufacturing exports during the same period—the period since the Government came to power. Such are the factors which have contributed to the accumulation of our massive balance of payments deficit that summarises the overall effect of our manufacturing performance.
  If we want to take a historic moment from the years of the Government's stewardship it is 1983 when, for the first time since the industrial revolution, manufacturing trade in this country went into deficit—it has continued to decline ever since. Even the appearance of such a deficit is alarming enough for a country that still earns its living, and must continue to do so, by manufactures. The size and scale of the deficit—some £16 billion last year on manufacturing goods alone—is the most alarming feature of all. Equally alarming is our failure to take the steps most likely, even in the very long term, to redress that balance.
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  That leads on to the question of investment. Just as manufacturing is the source of our wealth and the engine of growth, so investment is the engine of manufacturing. Our record on investment is worse than appalling—it is frightening. Apart from productivity, the Government's other boast in terms of recovery is of the recovery in company profitability. That is good and my hon. Friends and I are pleased to see company profitability improve, but where did that profitability go? If it went into increased investment at all, it went into increased investment overseas—investment by acquisition rather than investment for growth of the kind being carried out by our competitors. That is the main reason why Britain, in too much of its manufacturing, has lost its competitive edge.
  That has not happened everywhere. There are companies in Britain that are world leaders in their fields, and we applaud them. We are delighted to have them and we are grateful for their performance, but it is no coincidence that those companies, the leaders in their fields, are the firms which invest. It is no coincidence that they put money into research and development and into training, and that they plan long term instead of considering investment, as some of the Prime Minister's favourite industrialists do, only if it results in profits in two or three years' time. Nor is it any coincidence, most of all, that those companies plan to expand and grow and not simply to stand still.
  The Chief Secretary may be familiar with a study carried out by Warwick university and quoted in the MBA review in June 1989. It suggested that four out of five United Kingdom companies considered that their sales
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  objective should be to defend the status quo and their existing market share. In Japan, four out of five companies considered that their sales objective should be to grow, to overtake and to take the market shares of their competitors.
  The Chief Secretary may have had a chance to study papers presented at a recent conference sponsored by the Department of Trade and Industry on innovation in industry and on the needs of high technology. Apart from the many papers that commented in depth on the fact, for example, that we were the only country to cut spending on civil research and development in recent years when our competitors were increasing their spending on those items, a senior industrialist pointed out that some of the most famous Japanese companies took 20 years of planning, investment and expansion to become world leaders in their fields, to take over from previous world leaders—frequently American companies—and that they succeeded, at least in part, because they set themselves the goal rather than to stand still.
  The Opposition believe that Britain and British manufacturing industry need most of all to foster a culture of sound management devoted to investment and growth. We greatly regret that that culture has been undermined by the decade of Conservative rule, which instead has fostered admiration of tycoons and asset-strippers and has rather sneered at people who look for long-term prosperity rather than making a fast buck.
  The consequences of the lack of that general culture are most evident when we consider our record on investment. Manufacturing investment as a proportion of gross domestic product fell sharply in the recession period 1979 to 1981. Indeed, as a level of expenditure in constant prices, only in the last couple of years has it recovered to just above the 1979 level. But when one examines the position not in terms of constant prices, but as a percentage of GDP—the percentage of wealth available and the indication of the commitment of our country to investment in our future—one sees that it has still not returned to the lowest level achieved between 1974 and 1979.
  The Government prefer to talk about business investment, which includes investment in such things as car parks and casinos, rather than about manufacturing investment, but even as a percentage of business investment, manufacturing investment has fallen in recent years by as much as 7 per cent.
  I said earlier that many of us would argue that productivity might have improved more soundly and earlier if investment per capita had been at higher levels. Investment per person employed in the manufacturing sector has been so disastrous that among the 18 countries of the Organisation for Economic Co-operation and Development we come 14th, above only one or two immediate neighbours such as Greece and Portugal.
  Equally disturbing are the developments in industry, such as the increased number of bankruptcies. I am sure that the Chief Secretary has received the recent Dun and Bradstreet report showing that more than 11,600 firms went bankrupt in the early part of this year and that the pace of failure was quickening. Against that background, the forecast from the Government and others is that our levels of investment are declining while those of our competitors are increasing all the time. That forecast is true both of the Government's favoured business investment and of manufacturing investment. The most

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  recent Confederation of British Industry forecast shows that investment intentions are at their lowest level since 1982, with the balance of future investment intentions at minus 8 per cent.—and the Government's reply to those problems is nothing, absolutely zilch. It has been stated that when the Department of Trade and Industry—for once taking an interest in industry which the then Secretary of State for Trade and Industry did not find out about in time—asked McKinsey and Co. to examine our electronics industry, its report cast doubt not just on the industry's prosperity, but on whether it could survive at all. Yet despite that worrying report on a key sector of industry, the Government did absolutely nothing.
  In the 11 years for which the Government have held office, our ability to supply our own need for manufactured goods has steadily declined, and with it the underlying strength of our economy. That has been reflected in our historically catastrophic balance of payments deficit. That is the road to ruin, paved not with good intentions, but with weak excuses.
  The Opposition believe, as does most of British industry, that we must take steps of the kind set out in a minor and modest way in the new clause if Britain is not to be left even further behind as our competitors plan, invest and grow to meet the challenges of the single market. More than that, we need a vision for the future—a different culture for manufacturing industry.
  The Opposition's vision for manufacturing industry is not a plan to increase company earnings per share by fiddling the accounting rules or having more takeovers. It is not a scheme to push up the nominal returns by delaying much-needed investment or squeezing up profits by cutting back on training. The Opposition's vision is of a British industry which extends its knowledge through research, and expands its capability through training and its output through investment.
  That is the reason for the new clause which, if carried, would represent a minor contribution towards helping British industry to continue to invest despite the problems heaped on it by the Government's failures. If the Government are not prepared even to consider such a helpful but minor step, for which the Government and the Chief Secretary know that industry and the Opposition are calling, it will be a clear signal to British industry, to the country and, most of all, to our competitors, that Britain has given up the race for 1992.
  The Chief Secretary to the Treasury (Mr. Norman Lamont): I want to respond briefly to the remarks of the hon. Member for Derby, South (Mrs. Beckett); I shall then listen to other contributions and, if I catch the Chair's eye, I may be allowed to respond to them later.
  The new clause is about a short-term acceleration in the rate of tax depreciation for investment in equipment and building by manufacturers and other industries, but the hon. Lady turned the debate into a rather more general discussion of the economy. Many of the issues that she raised have been debated many times before—for instance, at Question Time.
  First, the hon. Lady alleged that there had been no improvement in recent years in the British economy. We, of course, refer to the marked step-change in growth. The hon. Lady chose to concentrate all the time on manufacturing—for her, it was the only measure of
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  economic performance. Of course manufacturing is an extremely important part of our economy, but it is wrong to suggest that it is the only measure of economic success.
  When assessing overall economic policy, the real measure should be a combination of growth and inflation performance over the decade. Judged by those two criteria, the performance of our economy in the past decade compares well with that of our competitors and better than it did before. That is certainly true of growth. We are going through a lower period of growth now, but even taking account of this year's lower growth rate we shall have grown faster over the past decade than the EEC average, and we certainly compare much better with our competitors in growth terms than we did in the previous decade. So growth is the most appropriate measure to employ.
  The hon. Member for Derby, South sought to dismiss the growth in manufacturing productivity as merely the result of de-manning. Of course there was a considerable shake out in the early 1980s, but that just shows how uncompetitive British industry was. There was a strong concealed unemployment element in British industry, and most business men and manufacturers admit that the problems faced up to in the early 1980s had to be faced up to; and that has helped make British industry more competitive and profitable.
  I was pleased to hear the hon. Lady acknowledge for once that there has been a considerable increase in the profitability of British manufacturing and business—it is extremely important. Where on earth is investment to come from? It must come from profitability. There are all sorts of arguments in which statistics are bandied about, but it is an indisputable fact that the profitability of British business is, thank goodness, higher than it has been for several decades. That is extremely encouraging.
  Mr. A. J. Beith: I have been following the right hon. Gentleman's argument closely. He said that we should use two measures of economic performance: growth and inflation. He went on to talk about growth but somehow omitted to talk about inflation, which is not only much higher than that of any of our key competitors but scoops up much more in corporation tax and therefore places a greater burden on industry.
  Mr. Lamont: The Government repeatedly make it clear that we regard our inflation as unsatisfactory and unacceptably high. I did not make the usual speech about performance under the last Labour Government because we are always accused of delving too much into the past and of exploiting it. It is, understandably, something which Opposition Members prefer to forget. The inflation record of this Government is incomparably better than that of the Labour Government, but even that is not so relevant as the fact that the policies that the Opposition advance are likely to bring a return to high inflation, especially because of their attitudes to public spending.
  The hon. Lady also spoke about investment. She did not say explicitly but presumably believes that the corporation tax reforms that were introduced by my right hon. Friend the Member for Blaby (Mr. Lawson) when he was Chancellor of the Exchequer are inadequate for encouraging investment. When Labour was in power corporation tax was 52 per cent. We have reduced it to 35 per cent. and have got rid of the allowances.

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  Is that a good bargain? Is it better for business to have higher profits, a better rate of return and permission to keep more of its profits, or is it better to have a much higher rate of corporation tax which subsidises and provides an incentive by way of allowances to investment? I do not think that there is any evidence that the new system has damaged investment because since it was introduced we have seen strong investment growth.
  In the past three years business investment has grown by 40 per cent. Non-residential investment is a higher proportion of our GDP than of the GDP in any other country except Japan. The hon. Lady says that we should talk only about manufacturing investment. I reject that argument, just as I reject the argument that we should talk only about manufacturing when discussing the economy as a whole. We must look at investment in all sectors.
  It was amusing to hear the hon. Member for Derby, South say that business investment included car parks and all sorts of "frivolous" investment. It includes important investment in the retail sector and in tourist facilities, some of which employ many people. It is not correct to say that the only investment that matters is in manufacturing. As the hon. Lady said, manufacturing is important, but it is by no means the whole story.
  Since the new tax regime was introduced, there has been strong growth in investment. Britain has been enjoying an investment boom. One of the reasons for problems about inflation and on the current account is that the enormous boom in investment has exceeded domestic savings. The suggestion that the new structure introduced by my right hon. Friend the Member for Blaby when he reformed the corporation tax system has damaged investment is not borne out by the facts. If it had damaged investment, we would not have an extraordinary and continuing good record on inward investment. We get a larger proportion of American and Japanese investment than any other country in the European Community. Foreign companies come here for many reasons, and among them is the tax regime. They like the fact that we have one of the lowest corporation tax rates of any country.
  When the new tax regime was introduced, Labour strongly opposed it, but I still do not know the Opposition's precise attitude. Of course, Labour has opposed many things in the past. The Opposition seem to jettison everything right, left and centre and nobody quite knows what they stand for. We certainly do not know their stance on capital allowances. I hope that when the hon. Lady speaks again she will make it clear whether she wishes to see a system with capital allowances that subsidises investment through the tax system. Such a system is not necessary to encourage investment. It is not especially desirable, nor does it encourage the best sort of investment.
  Opposition Members scoff and laugh at the phrase "quality of investment". When we say that the quality of investment is better today, we simply mean that the rate of return earned on investment is higher than ever before. We want a tax system that does not subsidise people to invest purely in quantitative terms. We want a system that encourages people to retain their earnings and ensures investment in the most profitable areas.
  The hon. Lady is right to say that investment is what matters for the longer term, but it must be investment in
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  the right projects and in those that earn the best rate of return. That will do most to underpin the long-term performance of the economy.
  The hon. Lady referred to a speech of mine about manufacturing, and I think that it was probably the one that I made to the French Chamber of Commerce. Speaking from recollection, I think that I said that foreign investment in Britain was contributing to the manufacturing base. I evidenced the motor industry which, when the Labour party was in office, had suffered from a remarkable increase of more than 50 per cent. in import penetration. Since then, it has stabilised and there has been considerable foreign investment, not just by the highly publicised Japanese firms—one of which is to invest in the hon. Lady's constituency—but by American companies. I do not think that anyone can dispute that the outlook for the British motor industry has improved beyond all recognition—profitability has improved; industrial relations have improved; the market share has stabilised; and there is much higher investment than for many years.
  During that speech, I pointed to the fact that some independent commentators had analysed the position and said that a number of independent reports had been published suggesting that there might be a rise in manufacturing as a proportion of gross domestic product. The hon. Lady is right to suggest that that is a marked difference from the trend during the past few decades, under both Conservative and Labour Goverments, during which manufacturing as a proportion of GDP declined. The proportion of GDP represented by manufacturing in Britain is not markedly different from that in France, Italy or the United States. Opposition Members hark back to a world that existed decades ago, and which I do not think will easily return. However, it is interesting that the independent commentators to whom I referred thought that a small change was taking place on the back of some spectacular foreign investment in, for example, the motor industry.
  The debate is really about the tax regime that we want for investment. Do we want a low rate of corporation tax—one of the lowest in the world—that encourages people to retain their earnings and look for the most profitable investment? The hon. Lady implied that that was not the Labour party's view. She said that she did not want companies to retain earnings per share simply for the benefit of shareholders. In fact, that is how companies raise capital from the private market to provide the investment that is needed tomorrow.
  Although the hon. Lady made a general economic speech, she did not produce one scrap of evidence that the tax regime and the changes to it have in any way harmed investment. On the contrary, there has been a strong growth in investment since the changes were made. I do not think that there is a good case either to make the hon. Lady's proposal a permanent change—which I think is what she wants—or to implement it just for one year, which is what she was advocating. It would be a mistake to change the tax system just for one year to accommodate slower growth in the economy and in investment.
  Mr. Roy Hughes: I obtained information from the Library showing that, as a percentage of gross domestic product, British corporation taxes are far higher than those of our principal competitors. I was given the following figures: the United States, 2 per cent.; West Germany, 2 per cent.; France, 2.4

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  per cent.; and the United Kingdom, 6.2 per cent. The Library staff were amazed. Can the Chief Secretary enlighten me on this point?
  Mr. Lamont: I do not know whether I can enlighten the hon. Gentleman, but I can attempt to answer his question. This has been a subject of considerable debate. The comparisons depend on what taxes are included. Some comparisons have included social security payroll taxes in other countries. The comparisons are affected also by the rate of growth of profitability. We have cut the rate of corporation tax, just as we have cut other tax rates, and revenues have soared. The profitability of British industry has risen markedly, resulting in a considerable increase in the rate of tax paid by British companies. For the first reason I gave, I would treat the comparisons with caution. It is not a matter of comparing like with like. Japan, which has highly profitable industry, appears to bear a high company tax burden. That is a reflection of its profitability.
  I do not believe that there is a case for mucking about with the tax system on a temporary basis. The evidence so far is that the original corporation tax changes have proved to he effective and have stood the test of time.
  Mr. Beith: The Government try to have it both ways. They spend some of the time telling us that the rate of corporation tax has been reduced and that business is better off and some of the time telling us that the Revenue is so buoyant from corporation tax that the community as a whole is better off.
  Mr. Lamont: What is the contradiction between rate and yield?
  Mr. Beith: It cannot be true that business is better off from paying less tax and that the tax yield is greater. The Chief Secretary knows that the revenue that the Government have obtained from corporation tax has increased sharply because of profitability and inflation. I, for one, welcome lower rates of corporation tax, and I have supported the Government when they have lowered those rates. Business is still paying a great deal of corporation tax, so that is a relevant consideration when we look at the level of investment and the extent to which corporation tax might influence it. Obviously, it is only one of the influences, but it could be significant.
  The Government are fond of telling us that investment is booming and that we have remarkable levels of investment. The Red Book is full of relatively flowery phrases about our investment record. The Chief Secretary knows, however, that the quality of investment and where it is taking place are contested. The phrase "business investment" includes an enormous range of sectors—manufacturing, finance, business services, buildings, computers and leisure activities—which are of varying significance in terms of helping our balance of payments and their effect on future profitability.
  Many analyses have suggested that key manufacturing groups have not been the subject of an investment boom. The Chief Secretary will know of the arguments put by Gavyn Davies in the paper that he presented to the Treasury and Civil Service Select Committee and the points made on similar lines by John Muellbauer in an article in the Financial Times. The latter said:
  "The evidence … here suggests that, with few exceptions, investment has grown more in the sectors in the economy
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  which are more sheltered from international competition and which make a smaller contribution to the balance of payments."
  John Muellbauer made the interesting point that one manufacturing sector in which there has been increased investment has included paper, printing and publishing. He said:
  "The rise in investment there is partly due to national newspapers moving out from Fleet Street, the spread of free newspapers and the demand for printed material from the growth of financial services"—
  printing all those privatisation prospectuses and other things that generate so much paper in our society. For that to be about the only major exception to a pattern in which the key areas of manufacturing industry have not attracted major investment is worrying and significant.
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  The large increase in investment between 1986 and 1988 was built on the back of an unsustainable credit boom—for which we are now paying the price—and the current levels of inflation date back to that period. Already, the effect of high interest rates seems to be hitting investment and investment intentions have been cut sharply. It is debatable whether the improvements already made will continue.
  It can be concluded that the corporation tax structure is worsening the position because of the effect of inflation. Inflation is at a far higher level than that of our competitors, which raises the tax that companies have to pay. Business is paying for the Government's failure to control inflation. Some of the time the Government like to blame business for inflation because they claim that business is being weak in dealing with wage claims; that depends on whether the Government are in a monetarist mood at the time. Business is paying the price for the high level of inflation.
  One of the elements that could contribute most to encouraging investment is stability in economic policy and that includes stable exchange rates and stable interest rates. That argues for membership of the exchange rate mechanism, which has been the universal call of business for a long time. It also argues for the mechanisms to ensure stable prices which exist in those countries about which the Government are having such difficulty in their public pronouncements at present. Here we are lecturing Herr Pöhl, saying that he does not know how to handle inflation and that he would not have known how to deal with the kind of unemployment that existed in Jarrow, when Germany has produced a stable price regime out of its independent central banking system.
  The stability in Germany is the envy of British business and, in that climate, a great deal of investment is taking place. As the unification of Germany proceeds, German business is especially confident about being able to invest in East Germany because it knows that it would be doing so in the stable economic and political climate of the Federal Republic, with all the assurances that that gives that there will not be sudden and dramatic changes of policy and that there will not be sudden and dramatic changes in the economic management of the country. All that is a result of a German system that brings together a proportional representation election system, and a monetary and financial discipline system. Some members of the Labour party now deride and laugh at that, but it

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  is the key to much of Germany's post-war success and the investment in which German firms so freely and readily engage.
  Those who want to lecture Germany and say that we are doing it far better simply have not got the evidence to do so. Neither the Chief Secretary nor Labour Members who wish to do so—there seem to be fewer of them now—have the evidence to make the claim that we know how to operate the system better.
  Along with stability, money is of crucial relevance to investment. That will be determined by the success of the Government's economic management. There is at present a debate—partly stimulated by the Government—about short-termism, which is a phrase that occasionally escapes the lips of Ministers. Industry has accused the City of not taking a sufficiently long-term view of investments and has accused the banks of looking for the second-hand value on which to lend rather than for the potential profitability of the investments that industry seeks to make. Clearly, the Government must give attention to that side of the problem as well as to the tax implications of the new clause if we are to make progress.
  Alongside that, there should be key public investment in transport if industry is to take advantage of and be able to operate effectively in the single European market, and if industry in the north of England, Scotland and Wales is to operate once the channel tunnel is open on a competitive basis. That is an area in which countries in mainland Europe—and especially Germany—are willing and keen to invest. However, it is an area in which the British Government seem to think that there is something indecent or improper about serious and significant public investment.
  There needs to be investment in education and training to give us the work force who can make use of the high-technology investment in which industry needs to engage. The Government's reluctance in those areas is seen by industry to be a handicap.
  If all those policies were pursued, would it help to make changes in the corporation tax structure such as those proposed by the new clause? The Labour party's new clause seeks to increase capital allowances from 25 per cent. to 40 per cent. That would enable a firm to set off more of the capital cost of an investment against corporation tax in any one year.
  That is potentially an expensive change and I am surprised that the Government did not refer to the cost—perhaps they are saving that for their reply. We could be talking about cost implications in the order of £1.5 billion. That is why we have previously put forward proposals for increased capital allowances on new investment so that we do not take on the large deadweight costs of increasing the allowance for writing down all the existing investment. That would have a stimulating effect, particularly in the present circumstances, and could be undertaken at less expense than the proposals we are considering.
  I am sympathetic to the intentions of Opposition Front-Bench Members, but I wonder whether this proposal has been subject to the rigorous examination of all proposals lest they add to the total cost of the Labour party's programme, which is now under such scrutiny.
  Mrs. Beckett: I said that this was a temporary measure. I do not have the papers immediately to hand, but I am sure that if the hon. Gentleman reads the clause with care
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  and looks at the dates involved he will find that the cost is more likely to be about £130,000 or £150,000 than the sums he mentioned.
  Mr. Beith: I am naturally suspicious about the claim that such a measure can be as temporary as the hon. Lady suggests. Perhaps I am doing her a disservice. Such a short-term change in the tax system would not survive. At the end of the period industry would be crying out for an extension and there would be a great deal of pressure. To be fair, if the period were strictly limited, the costs could be contained on that basis.
  A more logical distinction is one that attracts to new investment the higher level of depreciation allowance mentioned in the new clause. The Government cannot continue to be so complacent about investment in manufacturing industry. I should have thought that their experience over the past 12 months with the rate of inflation taking off should have taught them that there is no advantage in claiming that things are better than they are. The Government have spent much of the past few years making exaggerated claims about the economy, some of which were extremely damaging to expectations. If people are told that they will be better off and that the standard of living will improve, they will borrow more because they will expect to be earning more money to pay for it when the day of reckoning comes. Constantly repeating a misleading view about the state of the economy does not do any good and does not encourage us to address the key problems faced by the economy. A little more realism on the part of the Government and an admission that there are problems with investment would be welcome. I am glad that the new clause is before us and I am sympathetic to its objectives.
  Mr. Robert Sheldon: The speech of the Chief Secretary to the Treasury would have been more impressive if it had not been made against a background of a balance of payments deficit of £15 billion to £20 billion, which, I note, he did not mention.
  The Government's true record lies in two factors. First, manufacturing industry turned into deficit for the first time in centuries. Secondly, there was the coincidence of the arrival of North sea oil. Those are the economic factors that will determine the way in which the Government are viewed in the future.
  I agree with the Chief Secretary about the need to achieve quality of investment. This is a modest measure. I agree with the counter-cyclical argument which was, after all, used by the previous Chancellor of the Exchequer, the right hon. Member for Blaby (Mr. Lawson). The right hon. Gentleman introduced a counter-cyclical measure, and very valuable it was. If one tells people that there is to be an investment incentive with a cut-off date, and if one chooses the right time in the economic cycle, one can achieve continuing growth for the future based upon it. That, too, is of value.
  The most important aspect lies in the forecasts given in the Red Book at the time of the Budget. In the summary of economic prospects, we read that manufacturing output in 1989 grew at a rate of 4.75 per cent. In 1990, growth is forecast at zero. In the first half of 1991, it is forecast at 0.75 per cent. That is a truly miserable record, and there will be little incentive for anyone to invest in the plant and machinery that are so important.

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  The Chief Secretary is right to say that we need to look at all investment, but when the right hon. Gentleman said that manufacturing was not the only measure of economic success, he was not according to it the importance that it should be accorded. Financial services have been the glamorous part of our investment and our economy. We had hoped to be the banker of the world. We had hoped to make enormous improvements and extensions. But we must remember that a financial economy rests fundamentally on its manufacturing industry. We seem not to recall that important fact. Britain became a financial centre as a result of the industrial development that took place in the last century and the century before that. New York became a financial centre as a result of the development of America's manufacturing industry. Frankfurt is becoming a financial centre as a result of the development of Germany's manufacturing industry and Tokyo has become a financial centre as a result of the development of Japan's manufacturing industry. There is a time lag in all these matters and the time lag is working against us and in favour of Frankfurt and Tokyo. I do not view that process with pleasure because I understand and accept the importance of having a financial centre. But in organising the structure of our investment and in arriving at an appreciation of the importance of that sector, we should not fail to take into account the basis on which it rests; if we fail to do that, we do ourselves a great disservice.
  The Chief Secretary noted that productivity had improved as a result of the removal of concealed unemployment in the early 1980s. I am sorry to say that there was not much waste of energy and activity in Ashton-under-Lyne when the $2.40 pound and 17 per cent. interest rates reduced the number of manufacturing companies by one third. I am talking about medium-sized, reasonably high-tech firms—plenty of companies of the kind to be found in Tokyo and in Germany. Those companies suffered as a result of our economic performance in those years and we must restore to them some of the advantages that similar companies in other countries enjoy.
  I am concerned that capital allowances hardly meet the cost of depreciation. In my early years as an engineer, I used to operate a jig borer. It was a very expensive piece of machinery. I do not know how much the comparable model—taking into account the development of that branch of engineering—would cost today, but I would guess about £50,000. At the end of 12 months, one would get £12,500 in capital allowances. What is the profit margin on such equipment? I bet that if one tried to sell the jig borer back to the manufacturer, the salesman or the distibutor, one would not get £37,500 for it. That means that there is an investment disincentive because we have not allowed for the true cost of depreciation. We are giving no incentive at all because we are failing to meet the cost of depreciation. The hon. Member for Lewisham, West (Mr. Maples) shakes his head. I do not think that he understands the size of the profit margins in such industries. The salesmen get paid very handsome sums indeed. As a result, the depreciation costs are not met.
  The figures produced by the Financial Secretary at the time of the Budget show how little prospect there is for growth—zero growth is forecast this year. As my hon. Friend the Member for Derby, South (Mrs. Beckett) rightly pointed out, this is just the time when we should be doing something to promote investment incentives. As the hon. Member for Berwick-upon-Tweed (Mr. Beith) said,
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  there are various ways of doing that. I find it sad that the Government do not appear to understand the nature of the problem sufficiently to come up with some sort of solution. They think that there is no problem. That is most worrying. Once we have realised that there is a problem, we can deal with the matter. The Government's failure to do that will take me into the Lobby with my hon. Friends tonight.
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  Mr. Denzil Davies: My hon. Friend the Member for Derby, South (Mrs. Beckett) said that new clause 2 was a modest proposal. Perhaps it is too modest, but as my hon. Friend and my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) rightly said, it is at least an attempt to give some minor assistance to British manufacturing industry.
  The Chief Secretary was extremely euphoric about the economy. Let me remind him that in 1979 the United Kingdom had a balance of trade surplus in manufactured goods. That was in the days of the Labour Government—the days of picking winners, investment grants and 100 per cent. writing-down allowances. But in 1989—the last full year—we had a balance of trade deficit of £16 billion in manufactured goods. Those figures are the best evidence available and they tell their own story. They tell the story of the massive decline in Britain's industrial and manufacturing base during 10 years of Tory Government. The blame for that decline lies at the Government's door and it has been caused by the actions that they have takenmdash;and have failed to take—in respect of manufacturing industry.
  Those actions are perhaps too numerous to detail in such a short debate, but I can give one or two examples. My right hon. Friend the Member for Ashton-under-Lyne referred to the years from 1979 to 1982, when the present Leader of the House was Chancellor of the Exchequer. It has been calculated that the right hon. and learned Gentleman managed to obliterate 25 per cent. of Britain's manufacturing industry in those two years.
  It is extraordinary to note that when the Tories came to power, mouthing monetarism, in 1979, few of them understood how a monetary system could be operated within the open financial system that we have in Britain. They certainly did not understand the limitations of monetarism. Eventually, the right hon. Member for Blaby (Mr. Lawson) understood its limitations, but it took a long time for the Government to reach that conclusion. Between 1979 and 1982 we had macho overkill monetarism. The body count of factories and industries on the industrial battlefield was horrendous. My right hon. Friend the Member for Ashton-under-Lyne referred to his constituency, but we all have examples from our own constituencies.
  While the present Leader of the House was beavering away at the Treasury, Lord Joseph was beavering away at the Department of Trade and Industry dismantling most of the regional incentives, grants and investment allowances that went to the areas where most of Britain's manufacturing industry was located. The Treasury and the Department of Trade and Industry both did their job and, as a result, at least 25 per cent. of our manufacturing base disappeared, never to return.
  Let us move on to 1984 and the actions of the right hon. Member for Blaby which are, to a certain extent, the

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  reason for the present new clause. Before the 1984 Budget, we had 100 per cent. writing-down allowances in respect of plant and machinery. If a manufacturing firm invested in plant and machinery in the first year, it could write off the whole cost. However, that did not suit the Government's plans or their view of the way that the economy should operate. Therefore, the Budget provided for 75 per cent. in the second year; in the third year the figure would be 50 per cent.; and in the fourth year the allowance disappeared completely. Now it is 25 per cent., which goes into the pool. The new clause proposes to increase the figure temporarily to 40 per cent.
  The right hon. Member for Blaby would have justified what he did. We heard echoes of that from the Chief Secretary, on the basis that it is better to have a lower rate of corporation tax and to eliminate the tax breaks. That is a Reagan view of taxation. However, because most of the allowances benefited more manufacturing industry, the benefit of lower corporation tax in the main goes to the service sector, the financial sector and the south-east. All those areas are less dependent on plant and machinery. That was the effect of what was done in 1984, and that is why pressure was put on manufacturing industry: because it lost the benefit of the allowances for investing in plant and machinery.
  We have been told that the Government do not believe in using the tax system for social engineering, and that we must have a level playing field. They have no inhibitions about using the tax system to encourage the business expansion scheme—all that money went into property; to encourage the personal equity plan schemes—all that money went into the stock exchange; or to encourage private shareholding. However, we apparently cannot use the tax system for the social engineering purpose of trying to benefit our manufacturing industry.
  Since the 1970s, the Tory party has shown little understanding, sensitivity or belief in manufacturing industry. Those of us who sat in the House throughout the 1970s saw successive Tory Members with some experience in manufacturing and industry being replaced by the estate agents, the so-called financial analysts, the stockbrokers and insurance brokers and the third-rate merchant bankers. Most of them were from the south-east, where there is no tradition of heavy manufacturing or engineering. There was no belief in manufacturing industry and, apparently, no need to examine it.
  If the speeches of 1978–79 are read again, they prove very informative. Hon. Members suggested then that Britain no longer needed a manufacturing industry, but would rely on its overseas investments; that it would become a tax haven fit for such people as the Rolling Stones and Tony Jacklin to come back to. The Leader of the House made such a speech in 1978–79. Britain was to be dependent on invisibles, living off those invisibles. We know what has happened. The Government have an extraordinary record: they have destroyed much of our industrial base, and have managed to eliminate the invisibles as well—to the extent that they are now literally invisible. It is no good the Chief Secretary shaking his head. We know that there has been a revision of the figures, but the invisibles are now minute. We have lost our industrial base and the oil, and we do not even have the
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  invisibles. That is the measure of the success of the Government's economic stewardship of the country in the past 10 years.
  There may be one final act of mayhem—the exchange rate mechanism, the final solution. There is a case for the ERM and for fixed exchange rates—which I happen to believe in—provided, as the Prime Minister rightly said the other day, that in the end the exchanges can be chained by the actions of a sovereign Government. There is a case for linking exchange rates—as much as possible—with those of our trading partners, especially as 60 per cent. of our trading is now done with the EEC. There is also a political case for the ERM: it is better to be a member, and to try to stop the nonsense of economic and monetary union. However, I doubt whether we can do that.
  The Government have said that the exchange rate mechanism is the magic formula—the deus ex machina—that will apparently win them a fourth term of office. Their strategy—if it can be called one—is brutally simple. First, we should march the jolly old pound up to the top of the ERM mountain—the Treasury has been doing its best—and then, a little later, we should march interest rates as fast as we can down the mountain. Of course, with lower interest rates, the British consumer-elector feels better, and spends more on imported goods. The property-owning democracy sees the value of its property increasing and the prospect of unearned capital gain. Everyone is happy again, and people vote for the present Government. Where does that leave British manufacturing industry? It is at the top of the ERM mountain, withering away like the ark on Mount Ararat.
  The wheel has come full circle. The curse of the early 1980s seems set to be repeated by the Government in the early 1990s, and British manufacturing industry will again suffer. I would like the Chief Secretary to accept the new clause, but of course he will not, because the Government have no interest in manufacturing industry.
  Mr. Roy Hughes: I support the new clause. It essentially concerns capital allowances and manufacturing incentives, and—as my right hon. Friend the Member for Llanelli (Mr. Davies) said—it is a modest proposal.
  The new clause illustrates the need to improve the efficiency of our manufacturing industry and to encourage investment, not only in capital goods but in training. Likewise, it points to the need for a major extension of our manufacturing industry. Some seasoned observers would say that we need to increase our manufacturing base by as much as 20 per cent.
  We are trying to examine what Government policy is about. I suggested to the Chief Secretary that the Government claim that they have reduced the rate of corporation tax. Let me repeat the figures that I have been given by the Library, which show that British corporation taxes as a percentage of gross domestic product are much higher than those in our competitor countries. In 1988 the figures were as follows: United States, 2 per cent.; West Germany, 2 per cent.; France, 2.4 per cent.; and the United Kingdom, 6.2 per cent. I grant that the Chief Secretary has tried to give me some explanation of those figures.
  If the Government are really keen to help our manufacturing industry to grow and become more competitive, they need to turn their attention more decidedly to tax matters.

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  Taxation, after all, impinges on training, research and development. The Government seem to be reluctant to invest in our universities and polytechnics to produce skilled people and new ideas. It is ideas that bring about the new industries and factories, and provide employment for our people. They help to build the economic strength of our country. We must build and create for ourselves the products that our people increasingly demand. At present we are importing many of those goods.
  Not long ago, the Government were claiming that they had achieved an economic miracle. Their claim was illusory: it was nothing more than a South sea bubble. The position is summed up for me by the fact that West Germany has a trade surplus of about £50 billion, while we have a trade deficit of some £16 billion—or even more—in manufactured goods.
  A few days ago, a senior Cabinet Minister resigned. He was very critical of West Germany. From my observations, over the past 40 years or so Germany has adopted a most responsible position in international affairs. Perhaps even more important, it has built a highly successful economy. The right hon. Member for Cirencester and Tewkesbury (Mr. Ridley) was the Secretary of State for Trade and Industry. He had an opportunity to do something about Britain's economic position and the difficulties in which it finds itself. Instead, the Government seem to have taken almost a fiendish delight in the destruction of much of our manufacturing industry. It is as though the Government thought that the economy was all about trade union organisation, the closed shop, and so on: the dragon had to be slain. That was their attitude. We had an illustration of that a week or two ago, with the attitude of the former Secretary of State for Trade and Industry to razing Ravenscraig to the ground—the last remaining bastion of the steel industry in Scotland. That has been the Government's attitude. How wrong can they be?
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  Much in British manufacturing industry needed to be put right—I grant that. There was overmanning, inefficiency, poor management and, above all, a failure to invest. For the past decade or so the country has had all the benefits of North sea oil. Germany, with its strong currency and extremely favourable trading position, has had no such benefit. North sea oil revenues were paid out in social security benefits, and the rest has been invested overseas, presumably to fatten up our competitors. That money should have been used to restore the manufacturing base in this country.
  The charge to be levelled against the Government is that they have essentially failed the nation. In fact, the more successful that we have become in our quest for invisible earnings, as my right hon. Friend the Member for Llanelli has pointed out, revenue from invisible earnings has tended to diminish. The more success there is, the greater will be the tendency to import manufactured goods, so there is no light at the end of the tunnel.
  We have witnessed a major growth in the service industry, which, with great respect, produces nothing tangible. Manufacturing jobs have dramatically declined and, in turn, have tended to be replaced by low-paid jobs, many of them part time and largely for women. We have gone cap-in-hand to the Japanese and the Germans. We have said to them, "Come and invest in our country. Wales in particular at present has all the hallmarks of an
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  undeveloped country." Our trading deficit has got out of hand. The gap will not be bridged by a growth in tourism or by increased efforts on the part of the City of London.
  New clause 2, in its limited way, points to the logic of our present situation. Our vast balance of payments problem is due to the size of our manufacturing base. A small base dictates the output of manufacturing industry. When we do not make in Britain the goods that people in Britain want, there is a demand for imports. In our case, the demand is substantial. Whatever gloss or disguise is put on that problem, it brings about the deficit in our balance of payments current account. For any lasting solution, we must rebuild our manufacturing industry. To do that, we need incentives. New clause 2 at least points the way.
  We need a favourable exchange rate. We also need a marked decline in interest rates. We must compare our interest rates with those of our major competitors—indeed, they just do not compare. People are not being encouraged to invest. We must examine service costs—for example, water, gas and electricity. All that privatisation has done is to increase charges for those services. A credit boom did not help. Its only effect was to suck in more imports. The Chancellor should now talk to financial institutions and tell them to refrain from advertising and promoting credit.
  An impediment to our economic success is the increasing decline of our infrastructure. Firms rightly point to extra cost, the direct result of congestion and difficulty in moving goods around.
  Our record on research and development is far behind those of Germany and France. Our investment in training, for example, is reckoned to be only one tenth of that in West Germany. Training must be stimulated and innovation must be encouraged. New clause 2 is merely a pointer in the right direction.
  We are to form an integrated single market in the EEC in 1992. Competition will be ever more fierce. We are ill-prepared, and much responsibility for that rests with the Government. What should be an exciting challenge is turning into a serious threat for Britain's whole economic future. Much of the responsibility for that dire situation is directly due to the Government.
  Mr. Eric Martlew: I support new clause 2. As my hon. Friend the Member for Newport, East (Mr. Hughes) said, it points the way, but it is not the solution to the economic and manufacturing decline that we have seen under Governments of both parties in the past 20 years or perhaps even during the latter part of this century. One of the reasons why our manufacturing base has declined is that too few Members of Parliament have actually worked in industry. Too many come from the commercial sector, and too few actually know what it is like to work with out-dated equipment, to have personal skills but not to be given the tools to finish the job. To an extent, that is what new clause 2 is about.
  The Department of Trade and Industry in Victoria street has been used as a siding for failed Cabinet Ministers. We saw a perfect example of that during the past week, but I had better draw a veil over that incident or the House will get excited again, although judging by the present attendance I doubt whether that would be likely.
  The fact that we have had so many Secretaries of State for Trade and Industry in the past few years raises the

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  question of whether the Prime Minister really regards that aspect of the economy as important. The answer is clearly no. She seems to emphasise trade rather than industry and the latter is allowed to wither. As I have said, the House does not really understand industry because Parliament is based in the south of England, which has not had a great tradition of industry and of manufacturing objects that are useful. The south is very good at manufacturing money, insurance and banking and it is the location for the headquarters of many companies, but it has always been second best to the north in producing goods. Thus, when industry declines, the wealth of the north of England, Scotland and Wales also declines. We never saw the recession here in the south. When I walk through the suburbs of London, as opposed to the inner city areas, I am well aware that there is a great deal of affluence and that, although many people are working, pushing pieces of paper about, very few are actually manufacturing products.
  When I worked in industry, I worked for a multi-national company and we used to look at the productivity levels of the various factories in Europe. We often lagged behind Germany, Holland and Switzerland, not because we were less skilled, although training in this country was not given the same premium as in others, but because we tended to be a low-wage economy. When considering investments and assessing how much it will cost to install a new machine to increase productivity, the pay-back time in a low-wage economy is much longer than in a higher-wage economy. That meant that we did not get any investment. Because the Germans were far more highly paid, it was much easier to justify such incentives in the German economy, so Germany tended to get new plant and equipment and its productivity was therefore much greater than ours. That was a tragedy. Indeed, it is a tragedy that low wages do not help the economy of any country. If we are trying to compete with the third-world countries—or even with second-world countries such as Singapore or Taiwan—with a low-pay, low-wage economy, we shall fail. We can succeed only if we are prepared to invest in manufacturing industry to the extent that our competitors in Germany, France, Holland and Japan are investing.
  The Minister made great play of the amount of investment that we receive from Japan, Germany and other countries, but when did a British company last buy a Japanese car firm? When did we open a television assembly plant near Tokyo? The answer is that we have not done so. We are trying to attract foreign investment. Our economy is failing in important areas such as high technology. Yet we invest in Taiwan and Singapore. The captains of industry and banking in this country say, "There's a nice low-wage economy—we should be able to make healthy profits if we close our plants here and move them over there." They simply cannot come to terms with the fact that we need to be opening assembly plants ourselves, similar to the Datsun plant in Sunderland. Why are we not saying to British Aerospace, for example, "We should be opening similar plants in Japan and Germany"?
  It is difficult for us to export to Japan because the Government have yet again failed to get rid of the unofficial tariffs that the Japanese have erected against us.
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  Although we are exporting, we are not successful. We have to rely on inward investment because the incentives given to our own companies are not great enough.
  I was a member of a promotional organisation called Inward in the north-west of England. Our job was to attract inward investment from abroad, but we ultimately concluded that we should open an office in London—if we could get away with it—to try to attract industry from the south-east. To me, that illustrates the great divide between north and south. The south of England was regarded almost as a foreign country, and we felt that we should look there for our inward investment.
  There are no incentives to invest. The Budget was supposed to provide an incentive to savers, and we can save only if we earn, and this country in general and its population in particular do not earn enough. If we were earning more, we could save more and invest more, but we are all aware that that has not been the case.
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  As my hon. Friend the Member for Newport, East has said, we have probably the least well-equipped work force in western Europe in terms of training. We have failed to give our people the educational qualifications and the skills training that are needed to bring this country into the top rank of manufacturing and industrial countries. We have wasted our time on poor youth training schemes—they are better now—and on employment training, which beautified the countryside when we should really have been equipping our young people with skills to match those of the Germans, the Italians and the French. The Government should have taken a lead in that. Even in eastern Europe, work forces were given skills. That is why, even before there was talk of German unification, no resentment was felt towards the workers who were crossing the Berlin wall because the West Germans knew that those people were bringing with them skills which could be marketed in the west.
  My constituency of Carlisle has recently been classed as a "boom town for the 90s" by the Henley Centre for Forecasting. Carlisle is the only city in the north of England to have been put in that category. Carlisle has developed despite the Government's refusal to give it industrial grants, and only because the Labour-controlled council has—with the private sector—developed schemes to make Carlisle attractive.
  However, we suffer from one of the problems that has recurred in the debate—a poor infrastructure. We are a long way from the markets that we serve. Our rail service is inadequate. The road service to the south is reasonable, as anyone who travels down the M6 would accept, but the road to Europe—the road from the west of England to the east—is appalling. By any standard, the A69 and the A66 are appalling. I welcome the Government's decision to improve the A 1 to motorway standard, but we shall not see the benefit of that until the Government decide to develop the A66 as a dual carriageway.
  That is another example of the way in which the Government are not generally prepared to invest in the infrastructure. My city is doing well not because of its manufacturing base but because of its service base, because it is the regional capital of Cumbria and because we now have a major shopping centre. Unfortunately, however, due to the Government's policies in the past, too many of the shops that are doing well in my constituency are selling goods that have been made abroad. We see the

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  words, "Made in Great Britain" on too few labels. It is always "Made in Germany"—I keep returning to Germany—or "Made in Japan".
  The Government and the House must realise that unless we can manufacture more higher-quality goods and sell them abroad, no matter what we do with the exchange rate we shall go bankrupt at the end of the exercise if we do not put our balance of payments right. Great Britain Limited will not cease to exist, but it will cease to be an economic power just as it ceased to be a nation with an empire. We shall sink as Greece sank from being a great power with a major say in what went on in the world to a nation that is regarded as not in the front rank. I do not want to see that happen to Great Britain Limited. Unless we are prepared to take initiatives such as the one in new clause 2, we shall fail.
  The new clause is not an answer, but it is part of an answer. In the Budget the Government once again entirely ignored the problem of the decline in manufacturing industry, but we ignore it at our peril. It is easy to make proposals in opposition, but I hope that the next Labour Government will recognise the need to manufacture more, invest in new equipment and re-equip our industries. Let us buy an H registration car for our industry, instead of running it on a B or C registration as we are doing now—let us give our workers the tools that they need so that we can compete equally with the continent and with the Japanese.
  Mr. D. N. Campbell-Savours: Until a few moments ago I had not given the first thought to speaking in the debate. I have just attended a meeting with Ministers where we discussed industrial development and its implications for my constituency and the problems there. I do not wish to labour the point about my constituency. I simply wish to say a few words about the importance of measures such as that proposed in new clause 2 and why I believe that they are important.
  Ministers will be aware that over the years I have always argued for a market analysis and that a free market in a mixed economy can be harnessed to deal with problems of unemployment wherever they arise in the country. I have never advocated massive state intervention. On occasions I have supported Government measures which I believed would have the desired effect. But there is a huge, gaping hole in the Government's position which persists today and from which I cannot understand why the Government refuse to move. I cannot altogether accept the Government's position, but I see the reasoning behind it. They believe that regional policies are not required in the sense that regional assistance is not necessary or could be reduced. That is not my case, but I understand the logic of the Government's case. They believe that it is not only the level of assistance that draws people to an area of high unemployment and that other factors should be taken into account.
  I reject the proposition that the Government should stand idly aside while sectors of manufacturing industry are lost which are significant to the national economy. I wish to give an example that I used in Committee some years ago. It supports my case more vividly than any other example.
  I was once a clock manufacturer. After I left the industry about 12 or 13 years ago I took an academic interest in it. I watched the destruction of the British quartz movement manufacturing industry. I saw it move
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  from two firms to one firm and then from one firm to, in effect, the end of the industry. When there was only one firm, I saw the failure of Smith's Industries, which was a big employer in Wishaw in Scotland, to invest in the technology in which the Germans were investing. The consequence was that, in effect, Smiths lost its market. Now it is not even in business.
  I use the clock movement and quartz movement industry only as an example. Is it in the national interest to allow companies to lose labour, technology and expertise and allow an invasion of imports? That is the inevitable consequence of the Government's approach to industrial development. In my view, it is irresponsible to proceed on that basis. That automatically makes the case for returning to conditions in which some sort of Government machinery is responsible for defining the areas of manufacturing industry which should be supported by whatever means or mechanism to ensure their survival and, indeed, development.
  Under the Labour Government the Government machinery took various forms. There was the Industrial Reorganisation Corporation in the 1960s, the National Enterprise Board in the 1970s and then the National Economic Development Council, which had working parties to deal with various aspects of manufacturing industry and produce policies to ensure industries' survival and investment in them. In microchip technology Inmos is an example of where such a policy might be said to have been successful. One cannot avoid adopting such an approach to the modern economy.
  I do not envisage armies of civil servants sitting around in offices making macro-economic commercial decisions on who should invest where and how much. When arrangements such as I have described are restored, I envisage a far greater role for the private sector in terms of manufacturing, distribution, retail, banking or other experience in taking decisions. However, there is a role for people to ease our industry into a position in which it can compete effectively with other countries.
  To return to quartz clock movements, it seems that a product of which the Germans can produce tens of millions, the Japanese can produce hundreds of millions and the Koreans and Taiwanese can turn out could be turned out by Britain. Yet those countries send the mechanisms to the United Kingdom. The product could be made by British manufacturers. Why cannot Britain produce its own quartz clock movements? Why must every clock made in the United Kingdom have a Japanese or other foreign movement in it? It is because we have not taken a strategic decision on the clock industry. As I said, I have no family or other connection with the clock industry, but only an academic interest in what happens in so far as it illustrates my case.
  Surely a strategic decision should be taken and Britain should have a quartz producer that is capable of feeding case makers throughout the United Kingdom with movements to put in their clocks which they could then export round the world. There would be nothing wrong with that. It would not require the Government to bend an ideological principle or commitment to accept that proposition. It requires some flexibility and understanding that someone, somewhere must take a decision and make sure that resources are available. Whether someone wants to build a factory in the middle of Westminster or in

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  John o' Groats is not a consideration here. We must simply make a decision to ensure that the products are made in the United Kingdom.
  The Minister might say, "Leave it to the market." When the Minister replied to me earlier, he said that he subscribed to the market. The market is not capable of taking the decision. While the market might identify the product, it might say that the investment required and the return on that investment was too long-term. No entrepreneur would be willing to enter the market on that basis. That is the dilemma. In many product areas short-term decisions are taken in the knowledge that, were longer-term ones taken, those products would not be viable. In the balance of calculation about how we frame our manufacturing industrial policy, I wonder whether we reasonably consider the longer-term implications of the decisions that should be taken.
  We cannot rely exclusively on the market, although we do not want the state to interfere by saying, "Put a factory up there. Here is all the money. It does not matter who you hire." We need the state to put together a package whereby we give birth to industry and the private sector is pump-primed to ensure that the manufacture of whatever product takes place in the United Kingdom in the national interest.
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  I have picked on one product, quartz clock movements—what an obscure product—but there are many others that one could cite. If one reads the Monthly Digest of Statistics one discovers areas in which there is a huge gap between the level of exports and imports. One also discovers product areas in which there is a preponderance of imports in the market. Those areas of heavy import penetration should be identified.
  I believe that my hon. Friends in the trade and industry team have published some figures that identify particular problem product areas. Those areas should be targeted. I am not asking for massive state funding to get industries off the ground, but the Government should devise policies to ensure that somehow those product areas lift off as centres of manufacturing industry. To some extent, the new clause meets that objective as it is the vehicle for identifying
  "in the Standard Industrial Classification issued by the Central Statistical Office"
  particular areas that might be targeted. I believe that I have not mistaken the aim of the new clause.
  In the past nine years we have been utterly reliant on the market to attract industry and, in that time, I have proposed that we should target particular areas to give birth to manufacturing industry. However, we are now moving to a different scenario. On our doorstep in eastern Europe a huge, new economic power is about to develop. In the short term, eastern Europe will offer cheap labour. It also has an absence of traditional trade union areas of restrictive practice. Many of the factories set up in western Europe operate on the basis of green-field sites even within the trade union legislative umbrella. Following the liberalisation of eastern Europe the trade unions created may mirror the trade union structure created in Germany after the war—I understand from my hon. Friends that Britain was largely responsible for that. Trade union
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  development in eastern Europe may more closely mirror the industrial complexion of Germany than of other parts of the world, including parts of our manufacturing base.
  New trade union representational arrangements, green-field sites, new plant and development, cheap labour and the pivotal position of east European countries will mean that their industries will have a considerable advantage over companies that locate in the United Kingdom. After all, those countries will have far easier access to Europe's main markets, despite the advent of the channel tunnel. How will Britain compete if we rely exclusively on the market mechanisms to which the Minister is totally committed? To some extent, I share his commitment, but how can we possibly compete?
  I understand that reservations have been expressed by some industrialists in West Germany as they appreciate that the drift will be for new plants and factories to develop in Czechoslovakia, Poland and particularly in Hungary. Such developments will also take place in other parts of eastern Europe as they open up. If that happens, how will we compete? In those conditions we might be forced to reassess whether regional policies are required to deal with the problems in areas such as west Cumberland.
  In three years' time, when we are through the hoop of at least some of the difficulties that will arise in eastern Europe, for which the European Bank for Reconstruction and Development will take responsibility, capital will be funnelled into eastern Europe to take advantage of the new markets created. I do not think that it will then be easy for the United Kingdom to attract industry to areas such as my own. In those conditions, the new clause would be even more important because at least it addresses the problem of targeting assistance into manufacturing companies. At least that would give us a competitive edge against companies starting up in other parts of Europe, especially eastern Europe.
  Although I want eastern Europe to develop, I am extremely concerned about its implications for the United Kingdom, particularly if we have a Government who remain ever wedded, in an unrelenting fashion, to the principle of a free market that is able to respond to the industrial and employment needs of our people. I cannot place my faith in that analysis and I believe that there are some Conservative Members who share my concerns.
  The new clause does not require any massive compromise on the Government's ideological stance. I believe that the Government should look favourably upon it. Despite any reservations that the Government may have about the new clause—its wording, the appeal system or the extent to which it can be implemented—were Ministers to say that they took on board its central thrust, I am sure that British industry would respond favourably.
  Mr. Norman Lamont: This has been an interesting and wide-ranging debate. The hon. Member for Berwick-upon-Tweed (Mr. Beith) ranged particularly wide and made a real motherhood speech. In a debate that was meant to be about capital allowances, he managed to introduce the channel tunnel, proportional representation and his favourite subject, the ERM, all of which he felt would solve whatever investment problems existed in the British economy.
  I am sorry that the hon. Gentleman is not in his place because I wanted to explain why I had not given the cost of the Opposition new clause. It is difficult to give the cost because it depends on how successful the proposal would

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  be in generating new investment. As drafted, it is not restricted specifically to new investment. It would apply to existing investment, so potentially it would have a huge deadweight cost. Disregarding that, if it attracted just new investment, the cost might be about £260 million in 1991–92 and a further £360 million in 1992–93. While the costs are difficult to quantify, if the hon. Member for Derby, South (Mrs. Beckett) were successful in her proposition and it brought forward more investment, the costs would be higher.
  The right hon. Member for Ashton-under-Lyne (Mr. Sheldon) made an interesting speech and was concerned that I had not referred to the balance of payments and current account deficit. I did not do so because I had not anticipated the debate being so wide-ranging. I differ from the way in which the right hon. Gentleman views the current account deficit—I do not regard it as the profit and loss account of the nation, as many Opposition Members appear to do. As I have said on many occasions, the current account deficit reflects much more a phenomenon of excess demand in the United Kingdom and not of a loss of competitiveness. If it were a loss of competitiveness, we should not be seeing the extraordinary growth in exports, particularly manufactured exports, that we have witnessed in the recent past, particularly in the past 12 months.
  Although the deficit must be reduced, it is much more a symptom of excess demand—of inflation—than of anything else. Inflation is the main problem. When the hon. Member for Derby, South says that we do not recognise the problems, I assure her that we have always recognised inflation as a problem. Indeed, we recognise it much more than the Labour party is prepared to say it is a problem. We are absolutely determined to get inflation down and we regard it as unacceptably high.
  Mr. Denzil Davies: Does the right hon. Gentleman accept that a reason for the deficit may be the fact that there is a structural problem in relation to British industry? In large areas of the production of consumer goods, are we not producing because the production is done abroad?
  Mr. Lamont: I do not accept that the current account deficit reflects structural problems. The great structural change, to which the right hon. Gentleman refers, that occurred in the British economy took place in the early part of this decade. The structural change in our current account deficit has occurred in the last few years—in the period when demand has plainly been excessive—when the Government responded to the conditions of 1987, a response which, with hindsight, was over-generous. But it is not a structural problem because the structural changes—the loss of some manufacturing capacity, the most inefficient and unprofitable—all occurred in the early 1980s, whereas the phenomenon of the current account deficit is more recent.
  The right hon. Member for Ashton-under-Lyne dwelt on manufacturing, and I shall say more about that, but he also played down the role of the service industries in the economy and referred to services as though they were totally dependent on manufacturing. I suggest that that is the wrong way to look at it. Services and manufacturing are interdependent. Some manufacturing industries have a close relationship with service industries. For example, the output of the computer industry is heavily influenced by the demands of the financial services industry. The idea
  892
  that services are not wealth-creating or are dependent entirely on manufacturing is a myopic and out-of-date view.
  5.45 pm
  I freely agree that manufacturing is an important part of the economy, but it is no use harking back to an age that is past. In the early part of the century, this country enjoyed about 75 per cent. of the output of the world's textile industry. Had Opposition Members been present over the years, they would have been complaining every decade as that percentage fell, reflecting an inevitable transfer of manufacturing capacity to some of the poorer countries. We should not be against that, as it has been greatly to the advantage of those countries. It was inevitable as poorer countries industrialised and came into the world trading system.
  The right hon. Member for Ashton-under-Lyne also felt that the 25 per cent. allowances under the new regime did not match depreciation. As he will recognise on reflection, writing-down allowances of 25 per cent. give an effective eight-year write-off period for machinery and plant, with relief, of nearly 60 per cent. of the cost in the first three years. The rate of depreciation allowed by the tax system compares well with commercial rates of depreciation in most situations. Obviously it varies, according to the assets and from one company to another, and there are also some special arrangements for short-life assets.
  The right hon. Member for Llanelli (Mr. Davies) made an interesting and entertaining speech, as he always does. He began by saying that the Government did not understand monetarism, a point that he often makes. I think that he sometimes tries to disguise the fact that he is a true monetarist, as we know from his remarks that interest rates are the best way of controlling monetary growth and that credit controls are ineffective. The right hon. Gentleman, when a Treasury Minister, studied these matters, understood them and drew the correct conclusions. That is why he occasionally feels that he has a licence to attack the Government for not being monetarist enough. I sometimes think that he is trying to cover up his own position.
  The right hon. Gentleman felt that the 1984 reforms had helped the service sector as opposed to manufacturing. It is true to a point that, by its nature, the reduction in allowances—which went more to manufacturing—benefited the service sector, but it depends on the profitability of the individual company. The changes gave the greatest incentive and reward to the most profitable companies, including profitable manufacturing companies. That is an important point to make about the new tax regime.
  Much of the debate has centred not on the new clause but on the economy. Indeed, it has been an economic philosophy debate about the role of manufacturing in the economy. As I said at the outset, manufacturing is extremely important to the traded sector. But Opposition Members are in danger of disregarding the other three quarters of the economy which comes from non-manufacturing. It is ridiculous to regard all wealth creation as coming from one sector.
  I said that if one looked at manufacturing as a share of GDP, one found that the transition in this country, which happened under the last Labour Government—the reduction in manufacturing as a share of GDP—has gone

  893
  on for decades. It mirrors what has happened in European countries and in north America. The share of GDP represented by manufacturing in this country is comparable with the situation in France and America.
  In recent years, however, we have seen some encouraging signs, with remarkable growth in productivity in manufacturing. In the recent past we have also witnessed strong growth in manufacturing investment, which has grown by an average of 8 per cent. per year since 1983, compared with an average of 1.5 per cent. per year under the last Labour Government.
  I said that foreign investment had played a part, which illustrates that foreign companies do not regard the tax regime for taxing profits and giving incentives for investment as anything other than attractive. If they did, we should not be doing so well as we have been in attracting foreign investment.
  The hon. Member for Carlisle (Mr. Martlew) asked a strange question. He asked when a British firm last took over a Japanese car company. I was not aware that the Japanese had taken over any British car firms. What they have done is to invest in green field sites. Nissan and Toyota have been new green field investments, which should be welcomed by everyone, including the Opposition. I am sure that the hon. Member for Derby, South will agree, since Toyota is in her constituency, that there is no reason why Nissan and Toyota should not be regarded as just as much a part of the British economy as the Ford motor company was in the past.
  The hon. Member for Workington (Mr. Campbell-Savours) referred to his earlier speech on clocks, which I remember because I was here when he made it. The clock does not seem to have moved on very much since then. He said that he was in favour of market forces and did not favour interventionism. He went on to say that he favoured only a little bit of interventionism, but that sectors should be identified and there should be a bit of money in the resources. I fear that once we begin that argument, it is difficult not to do so with ever-gathering enthusiasm, as the Labour party does.
  The hon. Gentleman also referred to Inmos, although he was not quite sure what it did. He said that we were rather good at it, but it was a complete disaster.
  Mr. Denzil Davies: It is still there.
  Mr. Campbell-Savours: My right hon. Friend says that it is still there.
  The Chief Secretary to the Treasury seems to question the balance between interventions and markets. Why is it that the Japanese target in that way? If they can do it, why can we not do it?
  Mr. Lamont: This is not a debate on the Japanese economy.
  Mr. Campbell-Savours: But the Japanese do it.
  Mr. Lamont: I do not believe that the Japanese pursue the model that the hon. Gentleman describes. It may have been the model in Japan after the second world war; the Japanese may have a different relationship with their banking system, but that is a different matter. However, the relationship between the state and the industry is not as the hon. Gentleman describes it. [HON. MEMBERS: "MITI."] I hear Members on the Opposition Front Bench muttering about the Ministry of International Trade and Industry in Japan, but the role of MITI has changed
  894
  considerably. The striking factor about the Japanese motor industry is the sheer number of different, competing companies, which is more significant than any alleged relationship with MITI.
  There has been much argument about the state of manufacturing industry in this country. I can give no better authority than the director general of the Confederation of British Industry, who remarked a few weeks ago:
  "We enter the 1990s with the supply side of the British economy in comparatively better shape than at any time in our history."
  No doubt Labour Members will describe that as hype, belief in a miracle and exaggerated Tory propaganda, but it is the considered judgment of the director general of the CBI. I much prefer his opinion to anything that the Labour party has put forward in this debate.
  Mrs. Beckett: This has been a most interesting debate. I have a feeling that I may have misled the hon. Member for Berwick-upon-Tweed (Mr. Beith) earlier. I was so amazed by the figures that he gave on the cost of our new clause that I gave an example of the implications that it would have for an individual company. I also stressed that I thought his proposals were completely exaggerated. I am not sure whether I made that as clear to the hon. Gentleman as I would have wished, but no doubt he will deduce it from the record.
  When he opened the debate for the Government, the Chief Secretary talked about growth and inflation during the decade, and how the Government's record was good and stood up well to any comparison. As the hon. Member for Berwick-upon-Tweed said, the Chief Secretary did not say anything else about inflation, and we all know why.
  The Chief Secretary talked as though growth had been spectacularly higher than at any time in our history. Growth rates during the decade as a whole were no higher than those that we had generally experienced before the initial oil crisis of the early 1970s. Although we were all pleased by the levels of growth achieved, they were not, I repeat, anything to boast about in terms of our general history and the development of the country's economy.
  Mr. Norman Lamont: What about our growth rate in the 1980s—was it or was it not above the EC average, and was it or was it not below that in the 1970s?
  Mrs. Beckett: From memory, if one leaves out—as the Chief Secretary prefers to do—the figures at the start of this Government's period of office, from 1979 to 1980, the answer is yes. However, once those figures are included and we look at the Government's entire period in office, the picture is different. I made that point earlier. [HON. MEMBERS: "There was no oil."] As I hear from the Benches behind me, there was the minor matter of the large revenues that the Government enjoyed from the North sea which were not available to any previous Government. One must question the Chief Secretary's use of that set of statistics.
  The Chief Secretary referred, however briefly, to the problems of the current account and suggested that part of the reason for them was increased investment. He said that investment goods had contributed to the deficit. As I am sure the Chief Secretary is aware, the proportion of imports of goods for investment and production—we accept that our imports are extremely high—is no higher than in the 1970s and early 1980s. If anything, the

  895
  proportion has declined and many of the goods described in the categories of production and investment are not what most of us would think of in relation to the manufacturing industry. They include X-rays and coconut. I understand that in 1988, for which I have the figures, only 18.6 per cent. of manufactured imports were pure capital goods. Therefore, we can dismiss the argument that it is only the high level of goods for investment that has contributed to our current account deficit.
  The Chief Secretary said that there had been a strong growth in manufacturing investment, particularly in the past couple of years. He suggested that some commentators thought that there was a bit of a change and that there would be an even greater improvement in the near future. That is the most extraordinary claim of all, apart from the one that the Chief Secretary has just made and to which I shall return. Manufacturing investment as a proportion of our gross domestic product has declined since 1979 and is still nowhere near the 1979 levels. Even if we consider it in, not quite cash terms but constant prices, it returned above the 1979 level only as late as 1988.
  Mr. Andrew Rowe: I had always understood that one of the difficulties about computing the percentage of investment in manufacturing industry was that when vertically integrated companies decided, for example, to hive off their transport function to an independent company, that became, by definition, no longer a manufacturing function. One of our difficulties in comparing the figures is that a great deal of what used to be called manufacturing is now called service.
  Mrs. Beckett: That is one of the most spurious arguments that I have heard for a long time. There is no doubt that, under this Government, every section of the collection of statistics has been degraded and, in its use, been distorted. I am quarrelling not with the statisticians, but with the politicians who try to make a case that will not stand up to close examination. However one measures manufacturing investment and compares it with that of our competitors, there is no dispute—not even from the Government—about the figures that I have just given: as a percentage of gross domestic product, manufacturing investment has declined and, at constant prices, it has only just climbed back above the level from which it fell in 1979.
  6 pm
  The Chief Secretary had the cheek to say a moment ago that since 1983 manufacturing investment has grown by an average of 8 per cent. compared with 1.5 or 2 per cent. under the last Labour Government. I remind him of a recent answer that the Chancellor gave my hon. Friend the Member for Carmarthen (Mr. Williams) which showed clearly what would have happened had the comparatively lower rates continued. I accept that there was a smaller rate of increase, year by year, in manufacturing investment under the last Labour Government. Nevertheless, had that rate of increase been attained by this Government manufacturing investment would be almost £2 billion higher than it is today.
  The Chief Secretary then suggested that investment might be improving; we certainly hope so, but we see little sign of that in his or anyone else's forecasts.
  The right hon. Gentleman asked whether the Opposition favour tax allowances of the sort trailed in our new clause. I thought that we had made it clear that we
  896
  favour the use of tax allowances for investment, although we should certainly want them to be well targeted and used primarily by manufacturing industry. There is no difficulty about that, and I am not sure why the right hon. Gentleman thought that there might be.
  The Chief Secretary criticised me for suggesting that companies should not seek to increase their earnings per share. Of course, I understand that companies want to increase their earnings per share—that is what the market wants. I pointed out that we do not want companies to do this by fiddling accounting rules or by launching takeovers; we want them to improve their earnings by improving the performance of the company—a rather different point.
  Mr. Campbell-Savours: The Minister put a price on the amendment, which reads,
  "may be prescribed by way of regulations made under this subsection".
  Given that the goods covered are not classified in the new clause, surely it is impossible to price it.
  Mrs. Beckett: My hon. Friend is right. The new clause offers scope for careful targeting, which is why it was drafted in that way. To be fair to the Chief Secretary, he said that his costing was something of a guess. We must be kind to the Government; they have to find something to say and their guesses are growing increasingly desperate with every day that passes—
  Mr. Campbell-Savours rose—
  Mrs. Beckett: If my hon. Friend does not want to he kind to the Chief Secretary, I am happy to let him have another go.
  Mr. Campbell-Savours: The Government spread myths throughout the country about the cost of Labour's programme. If they included in their assessment the figure that the Minister gave at the Dispatch Box, it would be a gross misrepresentation. Certain products might be covered at a cost of less than £1 million. It is quite impossible to assess the cost of the new clause.
  Mrs. Beckett: My hon. Friend is right.
  Mr. Norman Lamont rose—
  Mrs. Beckett: If the right hon. Gentleman must.
  Mr. Lamont: The hon. Lady gave an astonishing reply to the hon. Member for Workington (Mr. Campbell-Savours). Is she really suggesting different rates of allowances, defined for specific sectors within manufacturing? That is what the hon. Member for Workington suggested, and she knows it.
  Mrs. Beckett: My hon. Friend suggested no such thing. The Chief Secretary cannot have been listening. The new clause suggests no such thing, either. My hon. Friend merely suggested that it was important to define carefully the categories within which the allowance might be made, which is not the same as suggesting different rates.
  The Minister said that there was not a scrap of evidence that a lack of capital allowances is harming investment. It is one thing to suggest that there has not been a dramatic deterioration in the figures since the abolition of the allowances—although there has certainly not been much improvement, as they are still low. But the whole point of the new clause was to suggest a slight alleviation of the

  897
  predicament of interest rates being so high. All the statistics and Government and other forecasts for the recent period have shown the problems that industry faces because of interest rates, which are expected to have a damaging effect on investment, and that is what the new clause attempts to deal with.
  As to whether the problem will do long-term damage, I remind the Chief Secretary of what the April-May issue of "European Economy" magazine said. The Commission drew attention to levels of investment across the Community and referred to the Community's co-operative growth strategy—and to the fact that across the Community the growth of investment is stronger than the growth of gross domestic product. The Commission hoped for an expansion of 4 per cent. in real terms this year. However, the magazine also says that there has been a marked slow-down in some countries and says of the United Kingdom:
  "In this last country, gross fixed capital formation could actually decrease in 1990."
  It is significant that the Commission pointed out that that aspect is improving, although not as fast as it would like, in most Community countries; so this is another example of our competitiveness being harmed—and it is already poor.
  I referred earlier to the world competitiveness report produced by World Economic Forum. It lists the United Kingdom as a mediocre 12th of 23 countries, with its problems compounded by the fact that we are 16th in the table when measured by per capita investment in education, and 19th measured by the numbers enrolled in higher education. That, too, can only harm our competitive position.
  Several of my hon. Friends have made excellent speeches drawing attention to the problems of manufacturing industry which we believe the new clause might, in a small and temporary way, help to alleviate. The Chief Secretary ended by quoting the CBI, and I should like to do the same. The CBI called on the Government to make precisely this sort of assistance for industry a priority in this Finance Bill. The then president of the CBI referred to the danger that investment plans will be undermined
  "by the high cost of capital, the squeeze on profits, and slower growth".
  He spoke of these risks
  "undermining Britain's growth potential throughout the decade".
  That is the danger.
  Throughout this debate the Chief Secretary has failed to refer to our enormous balance of payments deficit, and it has clearly emerged, as we feared it would, that the Government are not prepared to take steps or to consider measures to alleviate the problems faced by British industry—because they refuse to accept that they exist. One of the worst features of the Chief Secretary's remarks was his pooh-poohing of the idea that manufacturing industry was important. He claimed that the Opposition say that it is all that matters in wealth creation. He must be well aware that, from the point of view of our overseas earnings and our traded sector, it is manufacturing that is the wealth creator and the source of all our wealth. It could be the basis of a secure and successful future for this country, but it is plain that under this Government such a future holds no security.
  Question put, That the clause be read a Second time:—
  The House divided: Ayes 207, Noes 264.

  Division No. 297]

  [6.10 pm

  AYES

  Adams, Allen (Paisley N)

  Foster, Derek

  Allen, Graham

  Foulkes, George

  Anderson, Donald

  Fraser, John

  Archer, Rt Hon Peter

  Fyfe, Maria

  Armstrong, Hilary

  Galloway, George

  Ashdown, Rt Hon Paddy

  Garrett, John (Norwich South)

  Ashley, Rt Hon Jack

  Garrett, Ted (Wallsend)

  Ashton, Joe

  George, Bruce

  Banks, Tony (Newham NW)

  Godman, Dr Norman A.

  Barnes, Harry (Derbyshire NE)

  Golding, Mrs Llin

  Barron, Kevin

  Gordon, Mildred

  Beckett, Margaret

  Gould, Bryan

  Beith, A. J.

  Graham, Thomas

  Bell, Stuart

  Grant, Bernie (Tottenham)

  Benn, Rt Hon Tony

  Griffiths, Nigel (Edinburgh S)

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

  Griffiths, Win (Bridgend)

  Bermingham, Gerald

  Hardy, Peter

  Bidwell, Sydney

  Harman, Ms Harriet

  Blunkett, David

  Hattersley, Rt Hon Roy

  Boateng, Paul

  Haynes, Frank

  Boyes, Roland

  Heal, Mrs Sylvia

  Bradley, Keith

  Healey, Rt Hon Denis

  Bray, Dr Jeremy

  Henderson, Doug

  Brown, Gordon (D'mline E)

  Hinchliffe, David

  Brown, Nicholas (Newcastle E)

  Hogg, N. (C'nauld & Kilsyth)

  Bruce, Malcolm (Gordon)

  Home Robertson, John

  Buckley, George J.

  Hood, Jimmy

  Caborn, Richard

  Howarth, George (Knowsley N)

  Callaghan, Jim

  Howell, Rt Hon D. (S'heath)

  Campbell, Menzies (Fife NE)

  Howells, Geraint

  Campbell, Ron (Blyth Valley)

  Hoyle, Doug

  Campbell-Savours, D. N.

  Hughes, John (Coventry NE)

  Canavan, Dennis

  Hughes, Robert (Aberdeen N)

  Carlile, Alex (Mont'g)

  Hughes, Roy (Newport E)

  Carr, Michael

  Hughes, Simon (Southwark)

  Clark, Dr David (S Shields)

  Janner, Greville

  Clarke, Tom (Monklands W)

  Jones, Barry (Alyn & Deeside)

  Clay, Bob

  Jones, Ieuan (Ynys Môn)

  Clelland, David

  Kennedy, Charles

  Clwyd, Mrs Ann

  Lambie, David

  Cohen, Harry

  Lamond, James

  Cook, Frank (Stockton N)

  Leighton, Ron

  Cook, Robin (Livingston)

  Litherland, Robert

  Corbett, Robin

  Lloyd, Tony (Stretford)

  Cousins, Jim

  McAllion, John

  Crowther, Stan

  McAvoy, Thomas

  Cryer, Bob

  McCartney, Ian

  Cummings, John

  Macdonald, Calum A.

  Cunliffe, Lawrence

  McFall, John

  Cunningham, Dr John

  McKelvey, William

  Darling, Alistair

  McLeish, Henry

  Davies, Rt Hon Denzil (Llanelli)

  Maclennan, Robert

  Davies, Ron (Caerphilly)

  McNamara, Kevin

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

  McWilliam, John

  Dewar, Donald

  Madden, Max

  Dixon, Don

  Mahon, Mrs Alice

  Dobson, Frank

  Marek, Dr John

  Doran, Frank

  Marshall, David (Shettleston)

  Duffy, A. E. P.

  Marshall, Jim (Leicester S)

  Dunnachie, Jimmy

  Martin, Michael J. (Springburn)

  Dunwoody, Hon Mrs Gwyneth

  Martlew, Eric

  Eadie, Alexander

  Maxton, John

  Eastham, Ken

  Meale, Alan

  Evans, John (St Helens N)

  Michael, Alun

  Ewing, Harry (Falkirk E)

  Michie, Bill (Sheffield Heeley)

  Ewing, Mrs Margaret (Moray)

  Michie, Mrs Ray (Arg'l & Bute)

  Fatchett, Derek

  Mitchell, Austin (G't Grimsby)

  Faulds, Andrew

  Moonie, Dr Lewis

  Field, Frank (Birkenhead)

  Morgan, Rhodri

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

  Morley, Elliot

  Fisher, Mark

  Morris, Rt Hon A. (W'shawe)

  Flannery, Martin

  Morris, Rt Hon J. (Aberavon)

  Flynn, Paul

  Mullin, Chris

  Foot, Rt Hon Michael

  Murphy, Paul

  899

  Nellist, Dave

  Smith, Andrew (Oxford E)

  Oakes, Rt Hon Gordon

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

  O'Brien, William

  Smith, J. P. (Vale of Glam)

  O'Neill, Martin

  Snape, Peter

  Orme, Rt Hon Stanley

  Spearing, Nigel

  Owen, Rt Hon Dr David

  Steinberg, Gerry

  Parry, Robert

  Stott, Roger

  Patchett, Terry

  Strang, Gavin

  Pendry, Tom

  Straw, Jack

  Pike, Peter L.

  Taylor, Mrs Ann (Dewsbury)

  Powell, Ray (Ogmore)

  Taylor, Matthew (Truro)

  Prescott, John

  Thomas, Dr Dafydd Elis

  Primarolo, Dawn

  Vaz, Keith

  Quin, Ms Joyce

  Viggers, Peter

  Radice, Giles

  Wallace, James

  Randall, Stuart

  Wardell, Gareth (Gower)

  Redmond, Martin

  Wareing, Robert N.

  Rees, Rt Hon Merlyn

  Watson, Mike (Glasgow, C)

  Reid, Dr John

  Welsh, Andrew (Angus E)

  Richardson, Jo

  Welsh, Michael (Doncaster N)

  Rooker, Jeff

  Wigley, Dafydd

  Ross, Ernie (Dundee W)

  Williams, Rt Hon Alan

  Rowlands, Ted

  Williams, Alan W. (Carm'then)

  Ruddock, Joan

  Wilson, Brian

  Salmond, Alex

  Winnick, David

  Sedgemore, Brian

  Wise, Mrs Audrey

  Sheerman, Barry

  Young, David (Bolton SE)

  Sheldon, Rt Hon Robert

  Shore, Rt Hon Peter

  Tellers for the Ayes:

  Short, Clare

  Mr. Allen McKay and

  Sillars, Jim

  Mr. Martyn Jones.

  Skinner, Dennis

  NOES

  Alexander, Richard

  Channon, Rt Hon Paul

  Alison, Rt Hon Michael

  Chapman, Sydney

  Amery, Rt Hon Julian

  Chope, Christopher

  Amos, Alan

  Churchill, Mr

  Arbuthnot, James

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

  Arnold, Jacques (Gravesham)

  Clark, Sir W. (Croydon S)

  Arnold, Sir Thomas

  Clarke, Rt Hon K. (Rushcliffe)

  Aspinwall, Jack

  Conway, Derek

  Atkins, Robert

  Coombs, Anthony (Wyre F'rest)

  Atkinson, David

  Couchman, James

  Baker, Rt Hon K. (Mole Valley)

  Cran, James

  Baker, Nicholas (Dorset N)

  Critchley, Julian

  Baldry, Tony

  Currie, Mrs Edwina

  Batiste, Spencer

  Curry, David

  Beaumont-Dark, Anthony

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

  Bellingham, Henry

  Day, Stephen

  Bendall, Vivian

  Devlin, Tim

  Bennett, Nicholas (Pembroke)

  Dickens, Geoffrey

  Benyon, W.

  Dicks, Terry

  Bevan, David Gilroy

  Douglas-Hamilton, Lord James

  Blackburn, Dr John G.

  Dover, Den

  Blaker, Rt Hon Sir Peter

  Durant, Tony

  Body, Sir Richard

  Eggar, Tim

  Boscawen, Hon Robert

  Emery, Sir Peter

  Boswell, Tim

  Evans, David (Welwyn Hatf'd)

  Bowden, A (Brighton K'pto'n)

  Evennett, David

  Bowden, Gerald (Dulwich)

  Fairbairn, Sir Nicholas

  Bowis, John

  Fallon, Michael

  Boyson, Rt Hon Dr Sir Rhodes

  Farr, Sir John

  Braine, Rt Hon Sir Bernard

  Favell, Tony

  Brandon-Bravo, Martin

  Fenner, Dame Peggy

  Bright, Graham

  Field, Barry (Isle of Wight)

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

  Finsberg, Sir Geoffrey

  Bruce, Ian (Dorset South)

  Fishburn, John Dudley

  Buchanan-Smith, Rt Hon Alick

  Fookes, Dame Janet

  Buck, Sir Antony

  Forman, Nigel

  Budgen, Nicholas

  Forsyth, Michael (Stirling)

  Burns, Simon

  Forth, Eric

  Burt, Alistair

  Franks, Cecil

  Butler, Chris

  Freeman, Roger

  Butterfill, John

  French, Douglas

  Carlisle, John, (Luton N)

  Fry, Peter

  Carlisle, Kenneth (Lincoln)

  Gale, Roger

  Carrington, Matthew

  Gardiner, George

  Carttiss, Michael

  Garel-Jones, Tristan

  Cash, William

  Gill, Christopher

  900

  Glyn, Dr Sir Alan

  Marshall, Sir Michael (Arundel)

  Goodlad, Alastair

  Martin, David (Portsmouth S)

  Goodson-Wickes, Dr Charles

  Mates, Michael

  Gorman, Mrs Teresa

  Maude, Hon Francis

  Gow, Ian

  Mawhinney, Dr Brian

  Grant, Sir Anthony (CambsSW)

  Maxwell-Hyslop, Robin

  Greenway, Harry (Ealing N)

  Mayhew, Rt Hon Sir Patrick

  Greenway, John (Ryedale)

  Meyer, Sir Anthony

  Gregory, Conal

  Mitchell, Andrew (Gedling)

  Griffiths, Peter (Portsmouth N)

  Monro, Sir Hector

  Grist, Ian

  Moss, Malcolm

  Ground, Patrick

  Mudd, David

  Grylls, Michael

  Nelson, Anthony

  Hague, William

  Nicholls, Patrick

  Hamilton, Hon Archie (Epsom)

  Norris, Steve

  Hamilton, Neil (Tatton)

  Onslow, Rt Hon Cranley

  Hanley, Jeremy

  Oppenheim, Phillip

  Hannam, John

  Parkinson, Rt Hon Cecil

  Hargreaves, Ken (Hyndburn)

  Patnick, Irvine

  Harris, David

  Pattie, Rt Hon Sir Geoffrey

  Haselhurst, Alan

  Peacock, Mrs Elizabeth

  Hayes, Jerry

  Porter, David (Waveney)

  Hayhoe, Rt Hon Sir Barney

  Raffan, Keith

  Hayward, Robert

  Rathbone, Tim

  Heathcoat-Amory, David

  Renton, Rt Hon Tim

  Hicks, Mrs Maureen (Wolv' NE)

  Riddick, Graham

  Hicks, Robert (Cornwall SE)

  Ridsdale, Sir Julian

  Higgins, Rt Hon Terence L.

  Rifkind, Rt Hon Malcolm

  Hill, James

  Roberts, Sir Wyn (Conwy)

  Hind, Kenneth

  Roe, Mrs Marion

  Hogg, Hon Douglas (Gr'th'm)

  Rossi, Sir Hugh

  Hordern, Sir Peter

  Rost, Peter

  Howard, Rt Hon Michael

  Rowe, Andrew

  Howarth, G. (Cannock & B'wd)

  Ryder, Richard

  Howell, Ralph (North Norfolk)

  Shaw, David (Dover)

  Hughes, Robert G. (Harrow W)

  Shaw, Sir Giles (Pudsey)

  Hunter, Andrew

  Shaw, Sir Michael (Scarb')

  Irvine, Michael

  Shelton, Sir William

  Irving, Sir Charles

  Shephard, Mrs G. (Norfolk SW)

  Jack, Michael

  Shepherd, Colin (Hereford)

  Janman, Tim

  Shepherd, Richard (Aldridge)

  Jessel, Toby

  Sims, Roger

  Johnson Smith, Sir Geoffrey

  Skeet, Sir Trevor

  Jones, Gwilym (Cardiff N)

  Smith, Tim (Beaconsfield)

  Jones, Robert B (Herts W)

  Soames, Hon Nicholas

  Jopling, Rt Hon Michael

  Speller, Tony

  Key, Robert

  Spicer, Sir Jim (Dorset W)

  Kilfedder, James

  Spicer, Michael (S Worcs)

  King, Roger (B'ham N'thfield)

  Squire, Robin

  Kirkhope, Timothy

  Stanbrook, Ivor

  Knapman, Roger

  Stanley, Rt Hon Sir John

  Knight, Greg (Derby North)

  Steen, Anthony

  Knight, Dame Jill (Edgbaston)

  Stern, Michael

  Knowles, Michael

  Stevens, Lewis

  Knox, David

  Stewart, Allan (Eastwood)

  Lamont, Rt Hon Norman

  Stewart, Andy (Sherwood)

  Lang, Ian

  Stradling Thomas, Sir John

  Lawrence, Ivan

  Sumberg, David

  Lee, John (Pendle)

  Summerson, Hugo

  Leigh, Edward (Gainsbor'gh)

  Tapsell, Sir Peter

  Lester, Jim (Broxtowe)

  Taylor, Ian (Esher)

  Lightbown, David

  Taylor, Teddy (S'end E)

  Lloyd, Sir Ian (Havant)

  Tebbit, Rt Hon Norman

  Lloyd, Peter (Fareham)

  Temple-Morris, Peter

  Lord, Michael

  Thompson, D. (Calder Valley)

  Lyell, Rt Hon Sir Nicholas

  Thompson, Patrick (Norwich N)

  McCrindle, Robert

  Thorne, Neil

  MacGregor, Rt Hon John

  Thornton, Malcolm

  MacKay, Andrew (E Berkshire)

  Townend, John (Bridlington)

  Maclean, David

  Tracey, Richard

  McLoughlin, Patrick

  Tredinnick, David

  McNair-Wilson, Sir Michael

  Twinn, Dr Ian

  McNair-Wilson, Sir Patrick

  Viggers, Peter

  Madel, David

  Waddington, Rt Hon David

  Major, Rt Hon John

  Walden, George

  Malins, Humfrey

  Walker, Bill (T'side North)

  Mans, Keith

  Ward, John

  Maples, John

  Warren, Kenneth

  Marland, Paul

  Watts, John

  Marshall, John (Hendon S)

  Wells, Bowen

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  Wheeler, Sir John

  Woodcock, Dr. Mike

  Widdecombe, Ann

  Yeo, Tim

  Wiggin, Jerry

  Young, Sir George (Acton)

  Wilkinson, John

  Wilshire, David

  Tellers for the Noes:

  Winterton, Mrs Ann

  Mr. John M. Taylor and

  Winterton, Nicholas

  Mr. Tom Sackville.

  Wood, Timothy

  Question accordingly negatived.

New clause 3

  ADDITIONAL RELIEF FOR LDC DEBT
  'After section 88C of the Taxes Act 1988 inserted by Section 66 above there shall be inserted the following section:
  "88D additional relief for overseas Government debt.

  (1) Where in relation to a debt to which section 88A(2) above applies, a company has included a provision in its accounts for any accounting period ending on or after 20th March 1990 which exceeds the aggregate amount which has a been deducted under section 74(j) above in relation to that debt for that and any previous accounting period, then it shall be entitled to additional relief under subsection (2) below subject to the clawback provided for by subsection (3) below.

  (2) The additional relief shall be a deduction from profits chargeable to corporation tax for that accounting period equal to the difference between the aggregate amount mentioned in subsection (1) above and the lesser of

  (a) the provision mentioned in subsection (1) above and

  (b) the maximum provision which would have been made in relation to the debt had the company followed the recommendations contained in the Bank of England's guidelines for overseas debt provisioning in force at the end of that accounting period;

  and for the purposes of subsection (1) above any relief given by virtue of this subsection shall be regarded as an amount deducted under section 74(j) above.

  (3) The additional relief granted by subsection (2) above shall be withdrawn to the extent that, at a date three years from the end of that accounting period the company has not made a relevant release of the debt; and an assessment made to give effect to this subsection (or subsection (5) below) may be made at any time up to six years after that date.

  (4) For the purpose of subsection (3) above, a relevant release means

  (a) a release of the debt in favour of the Creditor Overseas State Authority for no consideration, or

  (b) a disposal of the debt to the Overseas State Authority for a consideration equal to or less than its book value at the end of that accounting period, or

  (c) a disposal of the debt by the company under a development plan or an environmental protection plan approved by the Treasury;

  and the Treasury shall be empowered by this subsection to issue regulations demonstrating the criteria which it will use in deciding whether or not to approve under this subsection a development plan or environmental protection plan submitted to it for approval.

  (5) Nothing in subsections (1) to (4) above shall cause the aggregate profits charged to corportion tax of any person for the accounting period in question, and all previous accounting periods in relation to which he was chargeable to corporation tax, to exceed those which would have been so charged had this section never been enacted; and this section shall have no effect to the extent that it would otherwise cause such excess to be charged to corporation tax.".'.—[Mr. Boateng.]

  Brought up, and read the First time.
  Mr. Paul Boateng: I beg to move, That
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  the clause be read a Second time.
  New clause 3 is a modest measure, made all the more so by the restrictions of the Ways and Means resolution. However, its principle is important. It is introduced against a backcloth of crisis because of growing poverty in the developing world. There is a debt crisis that threatens to make that poverty even worse, and that will impact adversely upon Britain's banking system.
  One in every five of the world's population has less than a dollar a day on which to live. More than 1 billion people—about a third of the developing world's population—are living on less than $370—£206—a year. The problem of poverty has been ably and comprehensively recorded in a recent report on world development by the World bank. It studies the last decade, which it considers to be a lost decade because of the opportunities that presented themselves to deal with the problems of poverty, but which were not taken or were squandered. Even more than a lost decade, it was a decade of despair, especially for the children upon whom poverty impacts adversely as it reduces their opportunity to achieve even basic standards of education. It was a decade of despair for the farmers, especially the single crop and subsistence farmers who found the whole basis of their agricultural economy undermined. It was a decade of despair for the women of the third world whose backs have borne the greatest brunt of debt and poverty.
  Against that backcloth, the measures are meagre. Nevertheless, they are important because it is vital that there is a reduction in debt and that we recognise the contribution that the commercial banking sector can make in that process. Commercial banks play a disproportionate role in the net transfer of resources. Debts to banks, including guarantee export credits, represent 40 to 45 per cent. of the total debt of the debt-burdened countries. In 1988, £28 billion of their £30 billion net transfer to creditors was on transactions with commercial banks. It is clear from those figures that a reduction in net transfers to commercial banks is critical if we are to alleviate the debt burden. Even with that reduction, there is unlikely to be any substantial gains in that area.
  The new clause seeks to offer banks more relief than that proposed in the Bill. However, the relief would not be unconditional; it would not be just a handout. It would be clawed back if, within three years of the accounting period in which the relief is claimed, it had not been given by way of reduction in indebtedness—either through the sale, at a loss, of the debt to the debtor country, or a swap that had environmental or development gain. That must be done within three years or the relief is clawed back, with interest.
  6.30 pm
  This modest measure is an incentive to the commercial banks to take their obligations seriously. It is commercially desirable to the banks, but there is also a moral obligation on them. It is important that the banks see their responsibilities as a matter not simply of commerce but of common morality. The Opposition are bound to say—I do not think that they are entirely alone in this—that there was something distinctly unseemly about the paean of special pleading in the Grand Committee Room by several Conservative Members on behalf of the banks. They addressed us at great length about the hardships experienced by the banks. It was a bit rich that their cry should drown the cry of the dispossessed

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  and the deserted of the world. Such pleas are a bit much from Conservative Members who come along with their carpetbags loaded with dosh while people in the developing world have to live on a dollar a day.
  One in five people in the world has to live on a dollar a day—a shaming statistic, as hon. Members would agree. It should be possible to devise a programme of aid and assistance that is not limited to reducing indebtedness but is geared towards providing not just a safety net but a trampoline by which it will be possible for the developing world to bring itself up. The issue relates to the obligations not simply of aid donors but of aid recipients to ensure that the aid is not misused and abused. All too often over the past decade aid has been misplaced by us donors then misused by the regimes and Governments of the recipient countries. The poor have not had the advantages of development, and medium and long-term gains in those countries have not been made possible.
  The new clause should not be seen as an end in itself; it is but a faltering step in the right direction. I wish to set it in the context of the Brady initiative. That initiative made a truly faltering start in addressing the issues, the magnitude of which we now fully understand. That faltering start was highlighted in the recent report by the Treasury and Civil Service Select Committee, which concluded that the Brady initiative
  "will be partial in its effect; and in the case of those countries which have adopted a Brady package its impact will be modest. The Brady initiative is not likely to provide a solution to the problems of the middle income debtors as a whole."
  I do not think that any hon. Member could find fault with that conclusion. The United States Treasury Secretary, Mr. Brady, said that creditor Governments should consider how to reduce regulatory accounting or tax impediments to debt reduction where they exist. The new clause would reduce one such impediment and as such is commendable. We hope that the Government will find it in their heart to take it on board, and we commend it to them with that in mind.
  The Brady initiative is weak in terms of its lack of ambition. It aims to reduce bank debts by some 20 per cent. The former vice-president of the World bank, David Knox, argued that we should try to cut the Latin American debt service to private creditors by 70 to 80 per cent. That shows the scale of the Brady initiative. A wider study group was chaired by the former managing director of the International Monetary Fund—not a body known in the developing world for its liberality or for its breadth of understanding of the impact of its strictures on debtor countries.
  I am obliged to my hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) for helping me to pronounce the name of that former managing director, Dr. Witteveen—they are very communautaire in Islington; the Dutch trips off the tongue. We in north-west London must learn from them. Dr. Witteveen correctly said that we should take 50 per cent. as a starting point for bank debt service reduction by highly indebted countries. I note that the Chief Secretary is waiting to demonstrate his linguistic ability. No doubt there are plenty of authorities upon whom he can rely.
  The number of authorities that support the Government's approach on this issue is limited, if not non-existent. Who knows? Perhaps some can be dredged up from somewhere. Perhaps a family friend will help—but we must not trespass into family grief. We look
  904
  forward to hearing what the Economic Secretary has to say because this is an issue that requires urgent solutions. There are no easy solutions, and we do not pretend that there are. This matter requires us to go beyond sentiment to strategy, but we require some strategy if we are to deal with the problems of indebtedness.
  The "World Development Report" was clear about the importance of addressing the issue of debt in relation to poverty because it is a prerequisite and a precursor to a successful arrival at a position from which it is possible to address the issue of poverty in the developing world, to deal with the issue of debt and to relieve some of the burden that currently encumbers those countries. If the necessary domestic policies—which are recommended by the World bank—to maximise the best available resource of those countries, their labour, are linked to social policies and to welfare policies that are focused on the needs of those most in need in the countries in question, that in itself is a welcome development. I am sure that hon. Members will agree with the thinking of the World bank on this issue.
  Before one is able to address those domestic concerns, the international context of indebtedness must be got right. That is the conclusion of the "World Development Report" and it is worth considering in full. The report concludes:
  "Many low-income countries—especially but not exclusively in Sub-Saharan Africa—find themselves with daunting debt and debt service burdens at a time when they need to invest more (in order to improve their long-term prospects) and, simultaneously, to increase the consumption of large numbers of people in poverty. Further efforts by the international community will be needed to reduce their debts and to increase concessional assistance to them. These efforts should be conditional on appropriate policy reform in the countries concerned. Aid and debt relief will be to no avail if appropriate policies are not in place."
  That report puts the issue of debt clearly in perspective. The new clause addresses that issue in a way that will effectively suspend the operation of new clause 88B and will reapply the old law, although only temporarily. If in the three years after relief has been granted the debt has not been released completely, sold at a loss to the creditor state or disposed of under an approved development plan or under an environmental protection plan, the additional relief is withdrawn and new clause 88B comes back into operation. That is secured by new clause 88D(3). Our proposal is more modest than we would want and the Ways and Means resolution weighed especially heavily on us in this respect. However, the new clause is a start and we have to begin somewhere. As a start, we commend it to the House.
  Mr. James Wallace: We welcome the new clause. The hon. Member for Brent, South (Mr. Boateng) did not make any great claims about how radical the effect of the new clause would be. However, it pushes the modest provision that the Government have introduced in the Bill a step further in the right direction. The hon. Member for Brent, South said that the new clause and the Government's proposal are consistent with the Brady initiative, although he is right to point out that, as the Select Committee on the Treasury and Civil Service concluded, the Brady initiative
  "will be partial in its effect; and in the case of those countries which have adopted a Brady package its impact will be modest."
  Given the scale of the debt crisis facing many developing countries, any package is to be welcomed

  905
  inasmuch as it helps to relieve them of debt. However, we should be under no illusion about the amount that still needs to be done if the heavy burden of debt is to be removed and if, in removing it, we are to allow those countries the opportunity to go forward and to seek and undertake development with far greater confidence and ability.
  6.45 pm
  The hon. Member for Brent, South referred to the background against which the new clause is moved and to the need to relieve many nations of their debt. It is important that we remind ourselves of the scale and consequences of that debt. The debt crisis has ensured that over many years many of the debtor states have been denied the resources that they need to build sustained and sustainable economic growth. As a result, many of the basic services of food, shelter, health, education and employment have been denied to the people.
  The hon. Gentleman made the valid point that much of the debt that has been incurred has not gone to relieve the burden of the plight of the poorest people in those countries. They have continued to suffer and the prospect of any relief of their suffering has been seriously hindered by an ever-growing debt problem.
  "The State of the World's Children Report 1989" states that average incomes in Africa and Latin America have fallen by 10 per cent. to 25 per cent. in recent years, that health spending has been reduced by half, that education spending has been reduced by 25 per cent. in the 37 poorest nations and that in over half the 103 developing nations there has been a 20 per cent. drop in the number of children attending school in the six to 11-year-old age bracket. Those are startling figures and should bring home to us the nature of the problem and its human dimension. They should also encourage us to an even more dramatic response than we have had in the Bill or in the new clause.
  It is also important to recognise, as we are now all environmentalists, the effect that debt burdens have had on the environment. That has resulted in the marginalisation of small farmers, which has been one of the causes of the slash-and-burn exploitation of forests and of other desperate and environmentally destructive survival strategies. Apart from the need to improve the lot of many of our fellow human beings, there is also an urgent need to take steps to remove the need for many people in these countries to take action that will be environmentally damaging.
  The hon. Member for Brent, South did not make great claims for the new clause. However, much will depend on the Bank of England guideline. My reading of the new clause—I am subject to correction if I am wrong—is that if the guideline for a country does not increase by more than 15 per cent. over three years, nothing in the new clause would give any further relief above that already provided under clause 74. However, the incentive for packages to be implemented which is implicit in the new clause is welcome; the matter is not left to chance. A degree of urgency is instilled into the measures and that is especially welcome, as is the definition of what releasing a debt amounts to. That is helpful and widens the original definition.
  This gives us an opportunity to ask whether the amendment is a big step forward. The answer is that it is
  906
  not. I suspect that some of its deficiencies are a fact of life because there are things that Opposition parties are unable to do in the context of the Finance Bill. There are restrictions which prevent Opposition Front-Bench Members from taking steps which are as dramatic as they would like. It also gives us an opportunity to ask in which direction the Government wish to move in future Finance Bills to extend the provisions that they have introduced. Is this to be the sum and substance of their contribution towards encouraging banks to write off or sell back debt, or can we look forward to further initiatives in future Finance Bills, particularly if the measures introduced in this Bill are seen not to be sufficient? I should be interested to hear from the Economic Secretary what proposals he has to monitor the use made of the current clause and what further proposals he might have to extend it.
  One way to improve the new clause and make it more effective would be to entitle banks to full relief on any level of provision and subject that to clawback. That may have been impossible for the Opposition to propose, but it would be much more effective in trying to achieve the objectives which I am sure that all hon. Members wish to achieve. The debate will have been worth while if the Treasury Bench will say that this is only a first step towards taking much more drastic and radical action to alleviate a global problem affecting our fellow citizens. Although the provisions are modest, they are to be welcomed.
  Mr. Mike Watson: The scale of the debt problem relating to developing countries should not be underestimated. No one participating in this debate or in the Committee has underestimated the problem, but there are differences in the way people feel that it should be addressed. The World bank classifies 46 of the 111 countries reporting to it as "severely indebted". Those countries owed $675 billion out of a total developing country debt of about twice that figure. They are mostly to be found in the African continent, mainly in the sub-Saharan region. Relative to their exports and economic activity, the total debts of low-income debtors are even larger than those of the developing world's largest debtors such as Mexico and Brazil. Most of those countries have a debt service to export ratio of at least 25 per cent., which goes some way towards explaining the fact that many of the aid agencies viewed the 1980s as a decade of negative development for those countries.
  For some countries, the debt repayment and the austerity measures designed to facilitate that repayment have had such serious economic consequences that social and political unrest has resulted. There have been riots in countries such as Algeria, Venezuela and Zambia, which are countries that we are supposed to be assisting. The austerity demanded by the so-called middle-income countries was no more effective. Brazil's external debt in 1973 was $9 billion. Between that time and 1985 Brazil paid $145 billion as debt service while a total of $121 entered the country as new loans. That means that in that period there was a net outflow of $24 billion, yet the total debt still rose to $95 billion by 1985. If that is an example of the developed world helping the developing world, one can forgive the average Brazilian for saying, "You can keep your money—if that is the way the International Monetary Fund and the World bank assist us, heaven help us if they ever try to undermine our economy."

  907
  Brazil is the sixth largest exporter of foodstuffs, yet 30 million of its people subsist on fewer than 1,600 calories a day—600 below what is regarded as the basic minimum by the World Health Organisation. There is no shortage of examples of other countries whose economies are in desperate straits and are being driven further into the mire by the avarice and heartlessness of the commercial banks throughout the developed world, including banks in this country.
  Between 1982 and 1988 there was a net transfer of resources from debt-burdened countries to the banks of $144 billion. That is a disgrace and a dereliction of the duty by the developed countries to their less fortunate counterparts. The pendulum must begin to swing back towards the third world countries. Banks now have provisions worth in excess of 50 per cent. of their third world loans and can afford substantial debt reduction without incurring significant additional losses.
  The Brady initiative of 1989, referred to by my hon. Friend the Member for Brent, South (Mr. Boateng), recognised that debt reduction is now essential. However, many banks still resist the temptation to reduce their debts. It is clear that neither Brady nor the 1980 Toronto agreement, under which western countries cancelled a third of debt servicing costs over 14 years—that was aimed at the more seriously indebted countries—eliminated the negative net transfer of resources to which I have referred.
  World problems require world solutions. The Government could and should be doing more to encourage our banks to reduce or sell their debts to the developing countries. Clause 66 gives tax advantages to banks when a debt is sold back to the debtor country. That is welcome as far as it goes, but it does not go far enough. In Committee the then Financial Secretary rejected the arguments advanced by my hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) relating to the widening of the scope of relief to cover environmental swaps. It is right that that issue should be the subject of further consideration now.
  These arrangements are becoming a major feature of the method by which commercial banks and voluntary aid organisations use debt reduction to assist indebted countries. The bank donates its loan expenditure to a charity—the Midland bank did this with UNICEF in the Sudan two years ago—and the charity then arranges with the developing country to provide in local currency an equivalent amount which is then used for approved development products. That is a sensible method of addressing a debt burden which is often a millstone around the neck of developing countries. It turns such a problem into a positive advantage. It is relieved of the debt while guaranteeing funding of a project that enhances the quality of life for at least some of its people. Surely that must be welcomed.
  The Government should recognise that and be prepared to offer tax incentives to British banks to encourage them to follow the example of the Midland bank. I am not so naive as to think that banks are in the business of philanthropy, but by using the corporation tax system they could be encouraged to sell back debts and become involved in meaningful debt disposal under a development or environmental protection plan.
  In Committee the Financial Secretary gave what I and many of my hon. Friends felt was an unconvincing response on this issue. I hope that the Economic Secretary, who I am sure will soon become the Chief Secretary's
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  successor, when he has had time to consider the matter further will feel it within his power to presage that appointment by appreciating the value of the provisions of the new clause and agreeing to add it to the Bill.
  The Economic Secretary to the Treasury (Mr. Richard Ryder): I am not surprised that this debate has ranged beyond the immediate tax provisions of new clause 3 Hon. Members have raised a number of important related points.
  Mr. Campbell-Savours: That could not have happened; the occupant of the Chair would have intervened.
  7 pm
  Mr. Ryder: The hon. Gentleman says from a sedentary position that that could not have happened because the occupant of the Chair would have intervened. I think, Madam Deputy Speaker, that Opposition Members were illustrating their arguments by providing examples that were not directly concerned with the tax provisions of new clause 3. Certainly those of us who were here enjoyed the debate and learned a great deal from what hon. Members said.
  On the United Kingdom's general strategy on third world debt, I cannot agree with those who argue that our approach is not working or that we are not making available sufficient resources. Our approach has been to give our support to an internationally agreed strategy which was reaffirmed by the G7 Heads of State at Houston earlier this month. The Government believe that the strategy that we and our international partners have adopted offers by far the best way forward.
  Hon. Members have referred to the provision of official resources. These have been significantly increased and will be increased again when the International Monetary Fund quota increase comes into force. The United Kingdom is contributing significantly.
  I accept that new clause 3, to which the hon. Member for Brent, South (Mr. Boateng) spoke, seeks to encourage debt reduction and debt forgiveness and that it is well intended. But clause 74—together with existing reliefs for charitable donations—already covers significant ground.
  The relief proposals in the new clause could be very costly, and I shall refer to that in a moment. It depends on what exactly is meant by giving extra relief up to the maximum provision recommended by the Bank of England's guidelines, as those guidelines provide not a precise level for each country but only broad bands. If the proposal means that banks could claim relief up to the top of the band within which any particular country fell, the extra relief in 1991–92 could cost up to £350 million. That is partly because it would override the phasing arrangements on increases in provisions which we have introduced and partly because it would allow tax relief up to the top of the Bank of England's bands rather than—as under the procedures that we are introducing—to an intermediate point within them. That would completely undermine one of the main objectives of the Government's proposals which is to keep the costs to the Exchequer of doubtful sovereign debt within bounds.
  The Opposition may feel that that money would be well spent if it went to reducing the debt of third world countries but, effectively, under their proposals, banks would get such loans whether or not they engaged in debt reduction. Under our proposals, they will get immediate

  909
  relief for any loss on disposals of debt back to the borrower Government. The tax advantage to a bank that took part in a debt reduction scheme—over a bank that did not—would be just the same under our proposals as under the Opposition's proposals. The only difference would be that, under the new clause, there would have been a substantial interest-free loan by the Government to the banks.
  Moreover, during the three-year period, banks would be discouraged from selling their debt on the secondary market. Any fall in sales as a result would hit those debtor countries that are able to buy back their debt, especially those that have acquired it unofficially on the secondary market.
  Mr. Campbell-Savours: Before Ministers slip into producing mythical figures in this debate, as they did in the previous debate, may I ask the Economic Secretary this? He referred to a figure of up to £350 million. Will he give us the bottom-end figure?
  Mr. Ryder: I am prepared to say that the relief would cost about £350 million and that if it cost less, it would not cost much less. We are talking about a significant sum. That much has been acknowledged throughout our proceedings on the Bill: we are dealing with very large sums. Some of my hon. Friends criticised my right hon. Friend the Chancellor for taking more than he should have done in his Budget on 20 March. No one is quarrelling about the fact that the sums that have been calculated and agreed among a wide variety of organisations are accurate, and those are the sums on which we have been working.
  The Government have greatly improved the provisions for tax relief for company donations to charities. Banks that wish to assist development and environmental charities can take advantage of the provisions. I recognise that gifts in kind are not deductible, but it is possible for banks to arrange a transfer of money which will achieve the same effect and, provided that the amounts do not exceed the allowable limits, there will be tax relief. I am happy to repeat the assurance that my right hon. Friend the Secretary of State for Trade and Industry—I look forward to reading this in Hansard tomorrow—gave in Committee that if charitable relinquishment of debt starts to run up against the 3 per cent. limit of dividends paid in the year, we shall, of course re-examine the matter.
  The resolution of international debt problems is inevitably a long-term matter. But we have come a long way since the crisis broke in 1982. It is significant that debt levels have stabilised. For the most heavily indebted middle-income countries—the so-called Baker 15—the total debt stock has fallen about 10 per cent. from its peak. It is also important to recognise that the systemic risk to the banking system has been averted. For example, the exposure of United States banks to least-developed countries has fallen from about 200 per cent. of their capital in 1982 to about 70 per cent. in 1988. For British banks, the figure has fallen from around 150 per cent. to 50 per cent. in the same period.
  Let me refer to this country's record on debt strategy. I remind the House that we fully supported the strengthening of the debt strategy agreed by the IMF and World bank boards just over a year ago. The Brady plan, which has been referred to, has encouraged the process of
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  debt reduction by the commercial banks. Progress has already been made. In particular, recent commercial bank agreements with Chile, Costa Rica, Mexico, Morocco, the Philippines and Venezuela involve significant debt and debt service reductions. A combination of debtor reform efforts and commercial bank debt reduction has helped improve confidence in debtor economies, perhaps most noticeably in Mexico where there has been some welcome return of flight capital.
  Among middle-income countries, the bulk of whose debt is owed to the commercial banks, it is primarily for the debtors and their commercial creditors to resolve debt problems. I cannot accept that the taxpayer should be expected to bail out the banks. Among the poorest countries, whose debts are primarily to official creditors, Governments have a more prominent role. That is why the Government have paid a good deal of attention to the needs of such countries. The House will be familiar with what has been done. My right hon. Friend the Member for Blaby (Mr. Lawson), the previous Chancellor, launched an initiative which led to the adoption of Toronto terms, alluded to by the hon. Member for Glasgow, Central (Mr. Watson), at the June 1988 summit. This recognised the need for relief on official debts for the poorest countries in sub-Saharan Africa. I am sure that we are all pleased that the Paris club has been implementing this initiative and that already about 18 countries have benefited from concessional rescheduling covering over $5 billion of debt. Additionally, the United Kingdom has written off nearly £1 billion of old aid loans and all our new aid to low-income countries is provided on grant terms. Some 70 per cent. of our aid goes to the world's 50 poorest countries and the recent Houston summit encouraged the Paris club to review the implementation of the existing options that apply to the poorest countries. It is worth quoting from paragraph 55 of the Houston communiqué:
  "Significant progress has been made during the past year under the strengthened debt strategy, which has renewed the resolve in a number of debtor countries to continue economic reforms essential to future growth."
  Of course, private sector investment is also important, and in that regard the United Kingdom's record in the developing countries is of a high order. Only the United States and Japan are greater sources of foreign direct investment than we are. Nearly $10 billion of United Kingdom net direct investment went to developing countries between 1985 and 1988. Of course we try to encourage countries to remove restrictions on foreign direct investment, and many are now doing so.
  The World bank has become increasingly environmentally sensitive in its project programme design, and the United Kingdom has encouraged and welcomed that development, playing a significant part in board discussions and initiating some time ago the desire for the World bank to become more environmentally sensitive. We are happy for commercial banks to engage in debt-for-nature swaps if they so choose. However, we think that official aid is better and more effectively used for directly financing environmental projects than for official participation in debt-for-nature swaps.
  We must all be encouraged by the progress made in some countries with severe debt problems in getting to grips with a more market-oriented approach to economic policy-making. An example of that is the trade liberalisation in Mexico and Venezuela. Several countries, such as Brazil, Argentina and Mexico, are implementing

  911
  privatisation programmes. As in eastern Europe, there has been a growing recognition of the failure of centrist policies and the dangers of excessive fiscal deficits. If the shift towards more market-oriented reforms can be sustained and extended, many of those countries will be more likely to achieve the growth objectives for which they have been searching. No one understands that better than the majority of the politicians now running debtor countries, many of whom come to London for talks.
  The hon. Member for Glasgow, Central referred to Brazil. As it happens, Brazil's Finance Minister was in London yesterday, and it was clear from what she said that Brazil has made major strides towards becoming a more market-oriented economy along the lines that we have been discussing tonight.
  7.15 pm
  Mr. Nigel Forman: I apologise to the House if I have not been here for all the Economic Secretary's remarks. From his glancing reference to eastern Europe, I gather that he is concerned about the possibility that, now that there has been a change of regime in those countries and they are following more sensible market-led policies, they may be burdened with debt from the previous regime that ran their economies in an unsatisfactory way. Can the Minister offer any hope of a degree of "forgiveness" for the debts that countries such as Poland incurred under the previous regime?
  Mr. Ryder: My hon. Friend knows that we are doing a great deal to help Poland, which is one of the most severely indebted countries in the world. Although I have not visited Poland, I think that my hon. Friend has, as have some of my ministerial colleagues, who came back and said that the Poles recognised that the advice with which we have been able to provide the Polish Government on market-oriented reforms and privatisation is as valuable as any economic advice that they have received.
  As my hon. Friend knows, the International Monetary Fund has been exceptionally helpful to Poland. The British Government play a full part in the councils of the IMF and the World bank, and will continue to do so. If my hon. Friend reads the communiqué of the Houston summit of 11 July 1990, he will find that there is no such commitment to Poland along the lines that he suggested, but paragraph 36 says:
  "We commend the work done by the Commission of the European Communities on the coordination by the Group of 24 … of assistance to Poland and Hungary inaugurated at the Summit … which has made a significant contribution to helping these countries lay the foundation for self-sustaining growth based on market principles. We welcome the decision of the Group of 24 to enlarge the coordination of assistance to other emerging democracies in Central and Eastern Europe, including Yugoslavia."
  I understand why the Opposition have tabled the new clause, but I do not think that we can support it. It would be very costly—
  Mr. Campbell-Savours: I do not think that the Minister replied to the important question asked by the hon. Member for Carshalton and Wallington (Mr. Forman). The hon. Member asked about debt forgiveness, and the Minister referred to the Houston agreement and what was decided there. Why does not he answer the question
  912
  directly? Why is it impractical to write off a part of Poland's debt that was incurred under a Government whom some might regard as fascist?
  Mr. Ryder: As the hon. Gentleman knows, Poland is not the only country in eastern Europe—although it is by far the worst affected—to have been misruled by a communist regime, to the extent that it owes money to other people. It is our aim to ensure that all the countries of eastern Europe are treated fairly and in the same way. It would not be right to select one country for special treatment. That much was recognised by other countries in the Community, and was acknowledged at the economic summit meeting in Houston only last week.
  Mr. Watson: The Minister referred to the need for a market-led economy to assist countries with vast foreign debts. He mentioned Brazil, as I did earlier. Brazil is massively in debt: I am not aware that it has ever—certainly in recent times—been anything other than a market-led economy. However, that has not stopped it having a low standard of living for the vast majority of its people, and building up a massive debt. Does the Minister agree that as long as Brazil—the sixth largest food exporter in the world—has 30 million people surviving on 1,600 calories a day, it is not just a question of a market-led economy, but a question of the debt that it is obliged to service and live with like a millstone round the neck?
  Mr. Ryder: I take the hon. Gentleman's views seriously. During my discussions with the Brazilian Minister of Finance only yesterday, she told me that the new policies being followed by the Brazilian Government along a market-oriented path were encouraging more foreign investment and helping to put that economy on to a surer footing than it had been on in the past. That is true of many other countries in Latin and South America, which are following precisely the same policies.
  The new clause could prove costly; I have put the figure at £350 million. I do not think that it will give the banks any new incentive to forgive debt, but it would have an adverse effect on the operation of clause 74, which already increases the relative attraction of debt reduction schemes by not phasing losses made on disposals back to the original borrower. We have pointed out for some time the scope for voluntary commercial debt reduction. The Government welcome the growing menu of options for the banks and the progress made under the strengthened debt strategy. Clause 74 already provides an adequate incentive to take part in debt reduction schemes, and I do not think that there is any need for the new clause.
  During his speech, the hon. Member for Brent, South referred to Dr. Witteveen, and he saw a broad smile cross my face. Perhaps he thought that I was smiling because he had mispronounced "Witteveen". I do not know how it is pronounced, but Dr. Witteveen is the distinguished person responsible for drawing up the IMF plan when the Labour Government went broke in the 1970s. The hon. Member for Brent, South spoke warmly about some remarks of Dr. Witteveen. I wonder whether the hon. Gentleman passed such kind remarks about Dr. Witteveen when he drew up the IMF agreement for Britain in 1976. I say that in a light spirit. I am sure that the hon. Gentleman—my favourite designer Jacobin from Brent—who has the last word in the debate, will explain that he supported Dr. Witteveen in 1976.
  Mr. Bowen Wells: Is not it true that the British system of taxation relief is more generous than that of any other country and that our banks have provided against third world debt more extensively and at greater speed certainly than the United States of America banks have been able under their legislative regime, and more quickly than those under European legislation? Therefore, it seems strange that the new clause should be advanced on this Finance Bill.
  Mr. Ryder: There has been a great deal of criticism of British banks by some—not all—Opposition Members, and I am certainly more than happy to confirm what my hon. Friend says. In view of the argument that he has just deployed, I am surprised that British banks come in for the amount of criticism that they often get from some Opposition Members. It is a pity that that is so. Most British banks are extremely keen to help developing countries. After all, they have lent a lot of money to those countries and they want to do everything that they can to get it paid back. It would be against their better interests to do anything else.
  I hope that the hon. Member for Brent, South will feel able to withdraw the motion. However, I do not expect that he will. This is my final word in the passage of the Bill. It has been great fun to speak opposite the Labour Front Bench team. I much look forward to the Third Reading speech of the hon. Member for Newcastle upon Tyne, East (Mr. Brown). I have heard his Third Reading speeches before. They are a turn that should not be missed. I hope that all my hon. Friends will rush into the Chamber when they see his name on the monitors.
  Mr. Boateng: I should not want to be churlish after the valedicatory remarks of the Economic Secretary as we reach the end of the passage of the Bill. The Economic Secretary should be able—I am sure that he is—in relation to banks and their approach to third-world debt, to make a distinction between debt provision and debt relief. The act of provision is of no comfort to the developing world. The act of relief is of considerable comfort. We are seeking to encourage the banks to move from provision to relief. It is as simple as that. This modest new clause pushes, prods and encourages the banks along that route. Given the chance, several Opposition Members would prefer a little more stick and a little less carrot, but we recognise the strictures of the Ways and Means resolution.
  As for the good Dr. Witteveen, I am now aware of the good doctor's somewhat chequered past, but it is a past in which he played a role in the economic history of our country. We have moved on. I do not envisage that his services will ever be required again by a Labour Government, and I do not intend to hold against him the fact that his services were required in the past. He is now a repository of considerable wisdom on the issue.
  I commend to the current Economic Secretary more of what Dr. Witteveen had to say about the proposal, which we developed upon the basis of work done by Dr. Stephanie Griffiths-Jones of the institute of development studies at the University of Sussex. On her work and, therefore, the new clause, Dr. Witteveen said:
  "Dr Griffiths-Jones has correctly pointed out that in most European countries provisions against country debt are tax deductible, so that no fiscal incentive remains for banks to actually reduce the debt of these countries. Her proposal to limit the tax deductibility to banks that participate in debt reduction plans seems quite reasonable to me. It seems a somewhat anomalous situation that in most European
  914
  countries commercial banks have now built up provisions of more than 50% of their total country debt, which in many cases have been deducted from their taxable profits, while in the Brady Plan debt reductions of much smaller percentages are being proposed."
  That goes directly to the heart of the new clause and approves it in circumstances in which the current level of provision is such as to warrant a measure of this nature.
  The four major United Kingdom banks—Lloyds, Midland, NatWest and Barclays—made provision of £4,290 million in the past financial year. That is 55 per cent. of their cumulative provision in recent years. Ultimately those provisions would attract—it goes precisely to the point that was made by the hon. Member for Hertford and Stortford (Mr. Wells)—£1,501 million in tax relief, which is roughly equivalent to one year's aid budget. Those figures are astronomic. The new clause would address the challenge that they present to convert some of that provision into relief for countries most desperately in need.
  At times during the Economic Secretary's speech there was a degree of complacency about the Government's record on overseas aid and development. It was a particularly unhelpful degree of complacency. In real terms we are donating less now than we did under the previous Labour Government. Let me reiterate the pledge that has been made by the Opposition time and again. We shall move, as a matter of priority, towards fulfilling the United Nations' objective. We shall not rest until 0.7 per cent. of our gross national product is devoted to overseas aid and development. That is the United Nations' objective, and we readily embrace it. It is one which, once again, has been commended by the World bank in terms that are directly in opposition to the implications of the speech of the Economic Secretary when he suggested that all that was really required—no, perhaps that is not entirely fair to the hon. Gentleman, when he suggested that what was required was largely that the developing world should embrace the rigours of the market and have a shot or two of privatisation.
  7.30 pm
  I am afraid that life is not as simple as that. We have learned in our own country that life is not as simple as that. Life is certainly not that simple in the developing world, which is precisely why the World bank's recent report made it clear that a two-pronged approach is now required. Yes, it should recognise the importance of restructuring the economies of the developing countries, but it should also recognise the importance of cushioning the shock of that restructuring with welfare plans that go hand in hand with that process. That makes sense. That is the pattern of development aid that the Opposition are promoting. We look to the Government to respond to the World bank's report. We pledge ourselves to a target of 0.7 per cent. of gross national product because we recognise that if that were done, in conjunction with the rest of the developed world, as the World bank has asked us to do we would together have increased the flow of assistance to $144 billion by the year 2000 from its current shameful level of $51 billion. To do less is not good enough.
  The Opposition are not complacent and we therefore intend to push our new clause to a Division.
  Question put, That the clause be read a Second time:—
  The House divided: Ayes 189, Noes 244.

  Division No. 298]

  [7.31 pm

  AYES

  Adams, Allen (Paisley N)

  Garrett, Ted (Wallsend)

  Allen, Graham

  George, Bruce

  Alton, David

  Godman, Dr Norman A.

  Anderson, Donald

  Gordon, Mildred

  Archer, Rt Hon Peter

  Graham, Thomas

  Armstrong, Hilary

  Grant, Bernie (Tottenham)

  Ashdown, Rt Hon Paddy

  Griffiths, Nigel (Edinburgh S)

  Ashley, Rt Hon Jack

  Griffiths, Win (Bridgend)

  Ashton, Joe

  Hardy, Peter

  Barnes, Harry (Derbyshire NE)

  Harman, Ms Harriet

  Barron, Kevin

  Hattersley, Rt Hon Roy

  Beckett, Margaret

  Heal, Mrs Sylvia

  Beith, A. J.

  Healey, Rt Hon Denis

  Bell, Stuart

  Henderson, Doug

  Benn, Rt Hon Tony

  Hinchliffe, David

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

  Hogg, N. (C'nauld & Kilsyth)

  Bermingham, Gerald

  Home Robertson, John

  Bidwell, Sydney

  Hood, Jimmy

  Boateng, Paul

  Howarth, George (Knowsley N)

  Boyes, Roland

  Howell, Rt Hon D. (S'heath)

  Bradley, Keith

  Howells, Geraint

  Bray, Dr Jeremy

  Hoyle, Doug

  Brown, Gordon (D'mline E)

  Hughes, John (Coventry NE)

  Brown, Nicholas (Newcastle E)

  Hughes, Robert (Aberdeen N)

  Bruce, Malcolm (Gordon)

  Hughes, Roy (Newport E)

  Buckley, George J.

  Hughes, Simon (Southwark)

  Caborn, Richard

  Jones, Barry (Alyn & Deeside)

  Callaghan, Jim

  Jones, Ieuan (Ynys Môn)

  Campbell, Menzies (Fife NE)

  Jones, Martyn (Clwyd S W)

  Campbell, Ron (Blyth Valley)

  Lambie, David

  Campbell-Savours, D. N.

  Lamond, James

  Canavan, Dennis

  Leighton, Ron

  Carlile, Alex (Mont'g)

  Litherland, Robert

  Carr, Michael

  Livsey, Richard

  Clark, Dr David (S Shields)

  McAllion, John

  Clarke, Tom (Monklands W)

  McAvoy, Thomas

  Clay, Bob

  McCartney, Ian

  Clelland, David

  Macdonald, Calum A.

  Clwyd, Mrs Ann

  McFall, John

  Cohen, Harry

  McKay, Allen (Barnsley West)

  Cook, Frank (Stockton N)

  McKelvey, William

  Corbett, Robin

  McLeish, Henry

  Cousins, Jim

  Maclennan, Robert

  Crowther, Stan

  McNamara, Kevin

  Cryer, Bob

  McWilliam, John

  Cummings, John

  Madden, Max

  Cunliffe, Lawrence

  Mahon, Mrs Alice

  Cunningham, Dr John

  Marek, Dr John

  Darling, Alistair

  Marshall, David (Shettleston)

  Davies, Rt Hon Denzil (Llanelli)

  Marshall, Jim (Leicester S)

  Davies, Ron (Caerphilly)

  Martin, Michael J. (Springburn)

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

  Martlew, Eric

  Dewar, Donald

  Maxton, John

  Dixon, Don

  Meacher, Michael

  Dobson, Frank

  Michael, Alun

  Doran, Frank

  Michie, Bill (Sheffield Heeley)

  Duffy, A. E. P.

  Mitchell, Austin (G't Grimsby)

  Dunnachie, Jimmy

  Moonie, Dr Lewis

  Dunwoody, Hon Mrs Gwyneth

  Morgan, Rhodri

  Eadie, Alexander

  Morley, Elliot

  Eastham, Ken

  Morris, Rt Hon A. (W'shawe)

  Evans, John (St Helens N)

  Morris, Rt Hon J. (Aberavon)

  Ewing, Harry (Falkirk E)

  Mullin, Chris

  Ewing, Mrs Margaret (Moray)

  Murphy, Paul

  Fatchett, Derek

  Nellist, Dave

  Faulds, Andrew

  Oakes, Rt Hon Gordon

  Field, Frank (Birkenhead)

  O'Brien, William

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

  Orme, Rt Hon Stanley

  Fisher, Mark

  Parry, Robert

  Flannery, Martin

  Patchett, Terry

  Flynn, Paul

  Pendry, Tom

  Foot, Rt Hon Michael

  Pike, Peter L.

  Foster, Derek

  Powell, Ray (Ogmore)

  Foulkes, George

  Primarolo, Dawn

  Fyfe, Maria

  Quin, Ms Joyce

  Galloway, George

  Radice, Giles

  Garrett, John (Norwich South)

  Randall, Stuart

  916

  Redmond, Martin

  Taylor, Mrs Ann (Dewsbury)

  Reid, Dr John

  Thomas, Dr Dafydd Elis

  Richardson, Jo

  Turner, Dennis

  Rogers, Allan

  Vaz, Keith

  Rooker, Jeff

  Wallace, James

  Ross, Ernie (Dundee W)

  Wareing, Robert N.

  Ruddock, Joan

  Watson, Mike (Glasgow, C)

  Sedgemore, Brian

  Welsh, Michael (Doncaster N)

  Sheldon, Rt Hon Robert

  Wigley, Dafydd

  Sillars, Jim

  Williams, Alan W. (Carm'then)

  Skinner, Dennis

  Wilson, Brian

  Smith, Andrew (Oxford E)

  Winnick, David

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

  Wise, Mrs Audrey

  Smith, J. P. (Vale of Glam)

  Worthington, Tony

  Snape, Peter

  Young, David (Bolton SE)

  Soley, Clive

  Spearing, Nigel

  Tellers for the Ayes:

  Steinberg, Gerry

  Mr. Frank Haynes and

  Stott, Roger

  Mrs. Llin Golding.

  Straw, Jack

  NOES

  Alexander, Richard

  Dover, Den

  Alison, Rt Hon Michael

  Dunn, Bob

  Amos, Alan

  Durant, Tony

  Arnold, Jacques (Gravesham)

  Eggar, Tim

  Aspinwall, Jack

  Evans, David (Welwyn Hatf'd)

  Atkins, Robert

  Evennett, David

  Atkinson, David

  Fairbairn, Sir Nicholas

  Baker, Rt Hon K. (Mole Valley)

  Fallon, Michael

  Batiste, Spencer

  Farr, Sir John

  Beaumont-Dark, Anthony

  Favell, Tony

  Bellingham, Henry

  Field, Barry (Isle of Wight)

  Bendall, Vivian

  Finsberg, Sir Geoffrey

  Bennett, Nicholas (Pembroke)

  Fishburn, John Dudley

  Bevan, David Gilroy

  Fookes, Dame Janet

  Blackburn, Dr John G.

  Forman, Nigel

  Blaker, Rt Hon Sir Peter

  Forth, Eric

  Bonsor, Sir Nicholas

  Fowler, Rt Hon Sir Norman

  Boscawen, Hon Robert

  Fox, Sir Marcus

  Boswell, Tim

  Franks, Cecil

  Bowden, A (Brighton K'pto'n)

  Freeman, Roger

  Bowden, Gerald (Dulwich)

  French, Douglas

  Bowis, John

  Fry, Peter

  Boyson, Rt Hon Dr Sir Rhodes

  Gale, Roger

  Braine, Rt Hon Sir Bernard

  Gardiner, George

  Brandon-Bravo, Martin

  Garel-Jones, Tristan

  Bright, Graham

  Gill, Christopher

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

  Glyn, Dr Sir Alan

  Bruce, Ian (Dorset South)

  Goodlad, Alastair

  Buchanan-Smith, Rt Hon Alick

  Goodson-Wickes, Dr Charles

  Budgen, Nicholas

  Gorman, Mrs Teresa

  Burt, Alistair

  Gow, Ian

  Butcher, John

  Grant, Sir Anthony (CambsSW)

  Butler, Chris

  Greenway, Harry (Ealing N)

  Carlisle, John, (Luton N)

  Greenway, John (Ryedale)

  Carlisle, Kenneth (Lincoln)

  Gregory, Conal

  Carttiss, Michael

  Griffiths, Peter (Portsmouth N)

  Channon, Rt Hon Paul

  Grist, Ian

  Chapman, Sydney

  Ground, Patrick

  Chope, Christopher

  Grylls, Michael

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

  Hague, William

  Clark, Dr Michael (Rochford)

  Hamilton, Neil (Tatton)

  Clark, Sir W. (Croydon S)

  Hanley, Jeremy

  Clarke, Rt Hon K. (Rushcliffe)

  Hannam, John

  Colvin, Michael

  Hargreaves, Ken (Hyndburn)

  Conway, Derek

  Harris, David

  Coombs, Anthony (Wyre F'rest)

  Haselhurst, Alan

  Couchman, James

  Hawkins, Christopher

  Cran, James

  Hayes, Jerry

  Critchley, Julian

  Hayhoe, Rt Hon Sir Barney

  Currie, Mrs Edwina

  Hayward, Robert

  Curry, David

  Heseltine, Rt Hon Michael

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

  Hicks, Mrs Maureen (Wolv' NE)

  Davis, David (Boothferry)

  Hicks, Robert (Cornwall SE)

  Day, Stephen

  Higgins, Rt Hon Terence L.

  Devlin, Tim

  Hill, James

  Dicks, Terry

  Hind, Kenneth

  Dorrell, Stephen

  Hogg, Hon Douglas (Gr'th'm)

  Douglas-Hamilton, Lord James

  Hordern, Sir Peter

  917

  Howard, Rt Hon Michael

  Ridsdale, Sir Julian

  Howell, Rt Hon David (G'dford)

  Rifkind, Rt Hon Malcolm

  Howell, Ralph (North Norfolk)

  Roberts, Sir Wyn (Conwy)

  Hughes, Robert G. (Harrow W)

  Rossi, Sir Hugh

  Hunter, Andrew

  Rost, Peter

  Irvine, Michael

  Rowe, Andrew

  Irving, Sir Charles

  Rumbold, Mrs Angela

  Jack, Michael

  Ryder, Richard

  Janman, Tim

  Shaw, Sir Giles (Pudsey)

  Jessel, Toby

  Shaw, Sir Michael (Scarb')

  Jones, Gwilym (Cardiff N)

  Shelton, Sir William

  Jones, Robert B (Herts W)

  Shephard, Mrs G. (Norfolk SW)

  Key, Robert

  Shepherd, Colin (Hereford)

  Kilfedder, James

  Shepherd, Richard (Aldridge)

  King, Roger (B'ham N'thfield)

  Sims, Roger

  Kirkhope, Timothy

  Skeet, Sir Trevor

  Knapman, Roger

  Smith, Tim (Beaconsfield)

  Knight Greg (Derby North)

  Soames, Hon Nicholas

  Knowles, Michael

  Speller, Tony

  Knox, David

  Spicer, Sir Jim (Dorset W)

  Lamont, Rt Hon Norman

  Spicer, Michael (S Worcs)

  Lang, Ian

  Squire, Robin

  Lawrence, Ivan

  Stanbrook, Ivor

  Lee, John (Pendle)

  Stanley, Rt Hon Sir John

  Leigh, Edward (Gainsbor'gh)

  Steen, Anthony

  Lester, Jim (Broxtowe)

  Stern, Michael

  Lightbown, David

  Stevens, Lewis

  Lilley, Peter

  Stewart, Allan (Eastwood)

  Lloyd, Sir Ian (Havant)

  Stewart, Andy (Sherwood)

  Lloyd, Peter (Fareham)

  Stewart, Rt Hon Ian (Herts N)

  Lord, Michael

  Stradling Thomas, Sir John

  McCrindle, Sir Robert

  Sumberg, David

  MacGregor, Rt Hon John

  Summerson, Hugo

  MacKay, Andrew (E Berkshire)

  Taylor, Ian (Esher)

  Maclean, David

  Taylor, Teddy (S'end E)

  McLoughlin, Patrick

  Tebbit, Rt Hon Norman

  McNair-Wilson, Sir Michael

  Temple-Morris, Peter

  McNair-Wilson, Sir Patrick

  Thompson, D. (Calder Valley)

  Madel, David

  Thompson, Patrick (Norwich N)

  Major, Rt Hon John

  Thornton, Malcolm

  Malins, Humfrey

  Townend, John (Bridlington)

  Mans, Keith

  Tracey, Richard

  Maples, John

  Tredinnick, David

  Marland, Paul

  Twinn, Dr Ian

  Marshall, John (Hendon S)

  Walden, George

  Marshall, Sir Michael (Arundel)

  Walker, Bill (T'side North)

  Martin, David (Portsmouth S)

  Ward, John

  Mates, Michael

  Wardle, Charles (Bexhill)

  Maude, Hon Francis

  Warren, Kenneth

  Mawhinney, Dr Brian

  Watts, John

  Maxwell-Hyslop, Robin

  Wells, Bowen

  Mayhew, Rt Hon Sir Patrick

  Wheeler, Sir John

  Miscampbell, Norman

  Whitney, Ray

  Mitchell, Andrew (Gedling)

  Widdecombe, Ann

  Monro, Sir Hector

  Wiggin, Jerry

  Montgomery, Sir Fergus

  Wilkinson, John

  Moss, Malcolm

  Wilshire, David

  Mudd, David

  Winterton, Mrs Ann

  Neale, Gerrard

  Winterton, Nicholas

  Nicholls, Patrick

  Wood, Timothy

  Parkinson, Rt Hon Cecil

  Woodcock, Dr. Mike

  Patnick, Irvine

  Young, Sir George (Acton)

  Peacock, Mrs Elizabeth

  Raffan, Keith

  Tellers for the Noes:

  Renton, Rt Hon Tim

  Mr. Tom Sackville and

  Riddick, Graham

  Mr. John M. Taylor.

  Question accordingly negatived.
  Order for Third Reading read.
  7.43 pm
  Mr. Norman Lamont: I beg to move, That the Bill be now read the Third time.
  The Bill has been less controversial than some of its illustrious predecessors. It has also been shorter. Nevertheless, it contains measures of substance, in particular on savings and for business. Debate on the Bill, both in Committee and on the Floor of the House,
  918
  has been characterised by a spirit of co-operation and good will. I pay tribute to the work of my right hon. Friend who is now Secretary of State for Trade and Industry and to my hon. Friend the Economic Secretary for their skill and hard work in negotiating the Bill through Committee.
  I am glad to say that the Bill has also benefited from several amendments tabled by both Conservative and Opposition Members. I am rather worried about the unity of the Opposition Front Bench team. When we debated ESOPs in Committee it was suggested that the doubts expressed by the hon. Member for Newcastle upon Tyne, East (Mr. Brown) about the need to have a majority of worker trustees or a minimum transfer to employees were a bid to join the Conservative party. It seems that the hon. Gentleman has taken up that suggestion. In The Daily Telegraph of 6 July I found a short piece headed "Tory candidate". It reads:
  "Mr. Nick Brown, 37,"—
  I shall not comment on that—
  " … has been selected as prospective Conservative parliamentary candidate for Derby South, held for Labour by Mrs. Margaret Beckett."
  I knew that the hon. Gentleman was after a Treasury job, but I did not know that he was after the hon. Lady's job.
  Mrs. Beckett: I think that I should correct the record. The gentleman in question is not my hon. Friend but a gentleman who runs a debt collection firm in the city of Derby.
  Mr. Lamont: I am very grateful for that clarification.
  The eloquence and persistence of my hon. Friends, notably my hon. Friends the Members for Beaconsfield (Mr. Smith) and for Richmond and Barnes (Mr. Hanley), were instrumental in the introduction of the new clause on actors. I hope that by giving tax relief for agents' fees the clause has gone some way towards allaying the fear that schedule E treatment would impose an unreasonable tax on performers.
  I am also grateful to the Opposition Front Bench for technical amendments on child care and charities and to the hon. Member for Berwick-upon-Tweed (Mr. Beith) for a helpful amendment on ESOPs.
  The Government have also introduced several new clauses and amendments since the Bill was read a Second time. Clauses 25 to 27 give effect to the proposals announced in the Budget to introduce gift aid. For a long time charities have asked for tax relief for one-off gifts to supplement the considerable reliefs that we have already introduced. We were glad to have been able to make a further extension to the reliefs available. It was suggested that the £600 minimum limit was too low. But I am sure that hon. Members will appreciate that it is not practical to give tax relief for all small one-off gifts to charities. Of course, the payroll giving scheme already offers tax relief for regular giving of small sums. Clause 24 raises the annual limit a further 25 per cent. to £600.
  The levy on trust port privatisations, provided under clauses 114 to 119, was debated extensively both on the Floor of the House when we discussed the Ways and Means resolution and in Committee when several hon. Members tabled amendments. The trust ports are owned by the state, not by the Government, and it must be for Parliament to decide who should benefit from the proceeds of sale. As we said in Committee, it is, of course, a matter of judgment what proportion should go the Exchequer. I

  919
  explained in Committee that, in our view, a 50 per cent. levy on the proceeds of the sale both recognised the fair claim of the taxpayer and left plenty of money in the business and for the new shareholders. It will provide an appropriate return to the taxpayer for past investment in the ports while rewarding the considerable initiative of the port authorities in introducing private Bills and ensuring sufficient funds for new investment without giving the newly privatised ports a competitive advantage over their competitors.
  Clause 30 and schedule 15, also introduced in Committee, provide for the abolition of composite rate tax from 1 April next year. The composite rate has been described as an abiding anomaly of the tax system. The hon. Member for Berwick-upon-Tweed has campaigned for a long time on this matter. It owed its existence to a long-running dispute between the Inland Revenue and the building societies in the latter half of the 19th century over whether and how tax should be collected from building society shareholders. CRT provided a compromise solution and came into effect in 1895. Sir Stafford Cripps proposed that it should be given a statutory basis in 1950, and this was effected in 1951 when Mr. Gaitskell was Chancellor.
  Everyone would agree that the composite rate has had a good innings and, although its administrative advantages should not be underestimated, the rapid growth in depositors and a growing number of non-taxpayers, with the introduction of independent taxation, means that it is time for it to go. Removing CRT over such a short time scale has presented the Inland Revenue with a major programme of work. I should like to pay tribute to Revenue officials for their positive response and for the rapid progress they have already made in dismantling the composite rate system.
  Abolition will benefit those savers who do not pay tax, a quarter of the population in all. Five million married women will gain, along with 4 million pensioners, 2½ million other adults, and 2½ million children.
  The abolition of CRT will support and complement the other savings measures contained in the Bill. Clause 28 will ensure that TESSAs—tax-exempt special savings accounts—are available from banks and building societies from next January, offering savers the opportunity to invest up to £9,000 over five years, with interest entirely tax free if the capital is left undisturbed.
  The beauty of TESSA is its simplicity and flexibility. We have had contractual savings schemes in the past, but they have always been considerably regulated, burdened by a plethora of rules and an interest rate determined by the Government. TESSA is different. The institutions will be free to offer competitive rates and savers will be able to take their interest in the way which suits them best—either in the form of a regular income, which will suit those retired, or rolling it up within the account, which the younger saver may prefer.
  The advent of TESSA has received a wide welcome, even before the final details have been settled, and a number of banks and building societies have said that they will be participating. I believe TESSA will contribute towards encouraging the saving habit and that it will be the success it undoubtedly deserves to be.
  The Bill does not, however, just benefit bank and building society depositors, important though they are.
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  Savers through friendly societies will benefit from the 50 per cent. increase in the annual limit on premiums payable under tax-exempt life insurance policies.
  Investors in equities will benefit from the abolition of stamp duty on shares, which gives Conservative Members particular pleasure. Stamp duty is an ancient tax dating back to 1714, the year of Queen Anne's death. I regret that it was introduced by a Tory Administration; and it has become increasingly anachronistic. It always seemed curious to me that, if one put one's money in a building society, one paid no tax, but if one put one's money into shares, one incurred an immediate loss on one's savings in the form of stamp duty. We have already halved this surcharge twice from the high level of 2 per cent. we inherited in 1979, but it is now time to take the final step. Abolition will help not only the direct investor in shares, but the tens of millions of people who save through the institutions, whether through pension funds, life assurance or unit trusts. It will also strengthen the competitive position of the City, which we all have in mind as we approach 1992.
  The increase in personal equity plan limits and the ESOP measures included in the Bill will also widen share ownership. Clauses 31 to 40 will introduce capital gains tax deferral for sales of owners' shares to ESOP trusts, which have received support from Members in all parts of the House. The Committee debates this year and last on ESOPs were like a meeting of the ESOP appreciation society, with no one waxing more lyrical than the hon. Member for Newcastle upon Tyne, East. Roll-over relief for sales to ESOP trusts will provide a further impetus to that special form of employee share ownership.
  Taken together, the measures I have described add up to a major package for savers and form the centrepiece of the Bill. In the medium term, they could play an important role in ensuring balance between savings and investment, which we discussed in earlier debates. Of course, in the short run there is no substitute for monetary policy.
  There is more to the Bill, however, than savings. It contains important measures for business which may not have been headline-grabbing measures since they were targeted at the smaller, less glamorous company. The rise in the profits limit for the small companies' rate of corporation tax to £200,000 and £1 million represents a doubling in two years. That will reduce the tax burden for 20,000 companies.
  The simplification of VAT registration rules will be of particular benefit to smaller companies replacing three complicated turnover tests, which required companies to assess an uncertain future, with one simple test based on turnover over the past 12 months.
  We have also tackled what many considered unduly onerous provisions concerning VAT relief for bad debts. Under the current scheme, bad debt relief is available only in the event of formal insolvency. The provisions in the Bill replace that for an automatic relief for debts which have been outstanding for two years. These proposals will save business £150 million in a full year, and have been widely welcomed. Indeed, as seems to be the case with much of the Bill, the main criticism, if any, is that we are not going far enough.
  We appreciate the concern that has been expressed by hon. Members and outside organisations. There has been some suggestion that the two-year period is still too long and that it should be reduced. Clearly any line is somewhat arbitrary. We settled on two years in the light of the

  921
  concern that there might be scope for abuse within a shorter time period. The other major concern was that some companies will have to wait somewhat longer for relief. That is true, but it is a cash-flow loss since they will get the relief in due course. No company is a cash loser from the scheme.
  The issue of the tax treatment of the doubtful sovereign debt provoked a lot of heated and lengthy debate, which I am sure was fruitful. The purpose of the provisions, which were again debated today, is to provide a more certain method of calculating the tax deduction that can be made for doubtful sovereign debt and to smooth out further increases in the cost of relief to the Exchequer while preserving the principles on which tax relief is based.
  Another measure that has provoked a lot of debate is the benefit-in-kind exemption for workplace nurseries. A number of hon. Members, including the hon. Member for Berwick-upon-Tweed, argued for a broader relief. I believe that we have drawn the line correctly. In the past decade the dominant thrust of tax reform has been to widen the tax base. The more one does that, the lower one can set marginal rates. That remains our policy and we must not lose sight of that. It is a targeted relief, which is inexpensive. In removing the small existing obstacle, we have simplified the system and given a small push to employers to provide more nurseries.
  This is the fourteenth Finance Bill introduced by the Government. It builds on our record of tax reform and includes a series of measures for savings and giving. It will also encourage wider share ownership and help business. I commend it to the House.
  7.58 pm
  Mr. Nicholas Brown: First, I congratulate the Financial Secretary to the Treasury on his promotion. He carried the main burden of work for the Government, as the Financial Secretary always does, when steering the Finance Bill through Committee. I am sure that I am giving away no secrets when I say that many of my hon. Friends predicted a move for him.
  I can understand the Prime Minister's thinking in this matter. She emerged beleaguered from her bunker, eyes glazed and fixed, staring at eastern Europe. Looking around her dwindling band of loyal, fanatical right-wing supporters she picked the most Teutonic-looking she could find, pinched him on the cheek and sent him off to his new post to hold out for as long as he could.
  I am genuinely sorry that the Financial Secretary is leaving Treasury affairs and I offer him two helpful pieces of advice for his new job. First, be nice to the Germans. Secondly, and perhaps closer to home, look out for the Scots.
  In our approach to the Bill, the members of the parliamentary Labour party have been conscious, as we were last year, of the views and advice of the Treasury and Civil Service Select Committee and the fact that the details of the Bill are not scrutinised in the other House. That places a heavy burden of responsibility on the shoulders of the Opposition, and I include in that the hon. Members for Berwick-upon-Tweed (Mr. Beith) and for Orkney and Shetland (Mr. Wallace). We tackled that burden in a thorough and carefully researched way.
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  The Chief Secretary referred to some of the changes that we managed to make to the Bill. It is important for the House to remember that the composition of the Committee reflects the composition of the House. It is therefore not possible for the parliamentary Labour party—although we tried hard—to get its way with amendments by force of votes. We have to persuade the Government of our case rather than outnumber their supporters. It reflects enormous credit on the work that my hon. Friends put in that we managed to achieve so many changes to the Bill. I will take the House through a few of them.
  Clause 25, which relates to gift aid, is perhaps the most significant single example that I could cite. As originally drafted, that clause would have allowed any individual who made a qualifying gift aid donation to escape all higher rate tax for that year. Although the Government voted against our attempted reforms in Committee, they finally conceded on Report that they had made an error and accepted our amendment No. 41.
  If that error had become known and used by the majority of higher rate taxpayers, it could have cost the British Exchequer a substantial sum, possibly as much as £4 billion, and potentially even more in the absence of retrospective correcting legislation. I believe that such correcting legislation would have been almost inevitable. When the Chief Secretary, in the run up to the next general election, tries to add up the Opposition's public expenditure programme and attempts to cram everything that we propose to do into year one and make it look as expensive as he can, I hope that he will have the decency to deduct from that vast and undoubtedly massively overstated total the money that we have saved the Inland Revenue with amendments of that sort.
  When we discussed clauses 31 to 40—the provisions relating to ESOPS—there was a consensus in the Committee. ESOPS has its supporters on all sides. A number of drafting points arose, which were successfully addressed by the Opposition and the Government accepted our case. As originally drafted, those clauses would have allowed many substantial sales of shareholdings in companies with ESOPS to be carried out free of tax. That could have been achieved by selling the shares at full market value to ESOPS and investing the proceeds in assets on which, in practice, no chargeable gain would have arisen when they were sold. Private homes and BES shares were the two major examples.
  We referred on the Floor of the House to the loophole in relation to private homes, and soon afterwards the Government tabled new clauses 14 and 15 to close it. The cost of that error, if uncorrected, may be difficult to assess because it would have required greater use to be made of statutory ESOPS, but it is clear that within a few years the abuse could have led to a substantial loss to the Revenue. It is right that the parliamentary Labour party should play its part in ensuring that such errors are corrected.
  When we discussed TESSA and SAYE we found that, as originally drafted, the TESSA legislation would have stopped banks and building societies deducting for corporation tax purposes the interest paid on TESSA accounts. The Government accepted our point in Committee. Yesterday, on Report, the error was corrected. The Government also realised that the SAYE rules, on which the TESSA rules were based, must have

  923
  been similarly flawed for the past 20 years or more. They introduced amendment No. 19, at least in part retrospectively, to correct the flaw.
  Many other matters were successfully addressed by the Opposition. When we discussed gift aid we suggested that a de minimis limit should be set. The idea was rejected, reconsidered and finally implemented. That correction was made yesterday by Government amendments Nos. 11, 12 and 15. We also suggested that the word "payment" in the gift aid clauses was not wholly clear. In response to our representations on that, the Government clarified the Bill.
  The Chief Secretary referred to the extensive debate that we had, in which the hon. Member for Beaconsfield (Mr. Smith) took part, about the tax treatment of actors. Our pressure, combined with pressure from Conservative Members, gained from the Government a concession that was introduced in new clause 7. Actors who may be following these matters should reflect that the parliamentary Labour party turned up in full strength to vote for a new clause to secure the concession. We would have voted for a new clause standing in the name of the hon. Member for Beaconsfield had we had the opportunity to do so and we tried to create such an opportunity by attempting to prevent the hon. Gentleman from withdrawing his proposal, but he did not feel able to stand by his guns. Had he done so and carried two or three of his hon. Friends with him, the concessions could have gone even further.
  On the question of personal tax returns, there was unanimity in part on the points that we made in Committee because the views that my hon. Friends and I expressed were echoed by some Conservative Members. Those efforts gained from Government amendment No. 24. The point of our amendment was expressly to limit the inspector's power to ask for extra information to accompany individuals' tax returns. In other words, we limited it to information relevant to the individual's tax liability. Our purpose was to prevent fishing expeditions—a practice that we regard as undesirable—and a number of Conservative Members agreed with us on that.
  We persuaded the Government to amend the clause dealing with child care. It would be wrong of me not to refer to a success that was achieved from the Opposition Back Benches. My hon. Friend the Member for Vauxhall (Miss Hoey), supported by hon. Members on both sides, pressed the Government to backdate the reduction in the rate of pool betting duty and this was agreed to by the Government.
  The Bill as drafted was amended substantially in Committee and again yesterday on the Floor of the House. The main reason for so many changes being made was that the Bill was sloppier in its drafting this year than had been the case with Finance Bills in the previous two years. No clause exemplified that more than the clause dealing with waste disposal, which we discussed at length, the Opposition desiring not to allow to go through uncorrected that which ought to be corrected. As originally drafted, the clause was a disaster and would have been virtually unworkable. The suggested changes, recommended largely by the industry, were reflected in a huge number of amendments, many of them in identical terms, tabled by the Government, by the Opposition and by Conservative Back-Bench Members. It must be almost unprecedented for a Government to table seven amendments to one short clause of a Finance Bill in Committee to correct appalling drafting. A total of 35
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  amendments tabled to such a clause, of which 33 were designed to correct drafting errors, must be an all-time record.
  I should like to place on record our thanks to the hon. Member for Staffordshire, South (Mr. Cormack) and to my hon. Friend the Member for Neath (Mr. Coleman), who chaired our proceedings in such a good-natured way and facilitated our discussions. I am sure that that view is shared by Conservative Members. I should also like to thank my hon. Friends who came on to the Finance Bill Committee and gave us such support. I hope that I do my hon. Friend the Member for Hackney, North and Stoke Newington (Ms. Abbott) no harm in expressing my thanks for her loyal support to those on the Labour Front Bench. I should also like to thank my hon. Friends the Members for Nottingham, North (Mr. Allen) and for Newcastle upon Tyne, Central (Mr. Cousins), who is my next door neighbour, for Vauxhall, for Makerfield (Mr. McCartney), for Halifax (Mrs. Mahon), for Carlisle (Mr. Martlew), and for Glasgow, Central (Mr. Watson), all of whom played their part in supporting us in our successes on the Bill, for which I am grateful.
  I am saddened, as I know that we all are, not to have had the services of my hon. Friend the Member for Leeds, West (Mr. Battle), who acts as the usual channels for the Labour party—a duty that seems to have fallen on my shoulders by default on the part of everybody else who let me do it. I know that hon. Members on both sides will wish my hon. Friend a speedy recovery from his back injury.
  I understand the restraints placed on Conservative Members during the course of the Bill, but I am surprised that Conservative Finance Bill Committee Members have not been taking part in today's debates on the Floor and did not take part in yesterday's debates. It is often said that Back Benchers on the Government side are wanted for their bodies, not their minds—an appalling prospect, but there it is—and that was nowhere more evident than during the discussion on clause 74. The largest rebellion on the Conservative side came in relation to that clause, which deals with the tax treatment of banks' sovereign debt. The division in the Committee was clear cut—Labour Members spoke for the third world, and Conservative Back Benchers spoke for the banks. Three of those Conservative Members, as two of them properly declared, have financial interests in banking. The banks involved are the Saudi International bank, Morgan Grenfell, a merchant bank, and the Standard Chartered bank.
  Hon. Members will be asking who those Tories are. Like other Conservatives, they have certain characteristics that we can identify from the past and expect to find in future. It is easier and more pertinent to the present discussion to think of their less happy characteristics, such as the insensitivity to others' feelings which was most noticeable in their behaviour on clause 74 when dealing with the debts of overseas Governments, their obsession with themselves, their strong inclination to self-pity and their longing to be liked. Some even less flattering characteristics can be attributed to those Conservatives as an abiding part of their character—in alphabetical order, angst, aggressiveness, assertiveness, bullying, egotism, inferiority complex and sentimentality. Two further aspects may be cited as reasons for concern about those people. The first is their capacity for excess—they love to overdo things and kick over the traces, as I am sure that the Chief Secretary will recognise. Secondly, they have a

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  tendency to overestimate their own strengths and capabilities, and so it came to pass when we voted. I am sure that the Government will be grateful to me for that penetrating analysis and I hope that it will help them with their management of future Finance Bills.
  Before leaving the Conservative party's performance on the Bill, I must say a word about the performance of the Chief Secretary to the Treasury. As the House has discovered, this is the third Finance Bill on which I have served and I am probably the Chief Secretary's greatest fan, although certainly not his only one. I admire his rumbustious performances in Committee and his command of the detail. In Committee he showed us how the Financial Secretary's job used to be done when he had the job—taking in washing and carrying out duties for the Secretary of State for Transport—in the exciting debate that we had on the clauses relating to privatised docks.
  The Chief Secretary brought back memories for me and for many of my hon. Friends who have served on such Committees before. He did the job well, with style and panache, but I hope that as the job is vacant he will not get it back: the Opposition have a different candidate for the post of Financial Secretary. Given that the Chief Secretary unaccountably ruled me out in his opening remarks, I think that the Opposition would vote for the Economic Secretary to get the job. Conservative Members will have to make up their own minds whether I am entirely sincere in putting forward for the post a person whose ability and decency in dealing with the Bill has won him genuine friends among the Opposition, or whether by recommending him I am seeking to destroy the chances of anyone competent getting the job in the hope that a less able person will be chosen instead. I leave the matter ambiguous so as to achieve the result that I want.
  Mr. Norman Lamont: Who does the hon. Gentleman want for the leader of the Liberal party?
  Mr. Brown: I will see about that next year.
  We have scrutinised the Bill in some detail and we have had some successes. We have relied heavily on our advisers and I think that the Government recognise that we have been well served by the whole of our team of advisers this year. I know that my colleagues on the Front Bench and my parliamentary colleagues who served with me on the Bill would like me to put on record our particular thanks to Mr. Steve Tovey, who had acted as our principal adviser. The advice that we have received has been of a high calibre and Mr. Tovey's diligence, hard work and sheer professionalism mean that it is he and not we who should take the credit for our successes with the Bill. That credit rightly belongs to him, while the blame for the Bill's shortcomings rightly rests with the Government.
  8.18 pm
  Mr. Ian Gow: We have just listened to a most agreeable speech from the hon. Member for Newcastle upon Tyne, East (Mr. Brown). This has so far been a most agreeable debate. It will be a matter of deep regret to you, Mr. Deputy Speaker, as it is to me, that we were not members of the Standing Committee. I have not served on the Standing Committee of the Finance Bill since the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) was Financial Secretary to the Treasury. Then we
  926
  had agreeable Standing Committees on the Finance Bill and the right hon. Gentleman, who, characteristically, is in his place, made a deep impression on the Standing Committee, as did my right hon. Friend the former Financial Secretary on this Standing Committee.
  We are coming to the end of the annual ritual of the Finance Bill. It starts on Budget day when the Red Book is published. In less than two hours, this Finance Bill will have completed its journey through the House. An agreeable ritual accompanies the Finance Bill, and it is clear that the good will in Standing Committee has been extended to the Third Reading debate.
  I shall address my remarks to only one aspect of the Finance Bill. My right hon. Friend the Chancellor has made it clear again and again that the overriding objective of the Government is to defeat inflation. Let us note how the military metaphors always apply to inflation. One may wonder what the Finance Bill has to do with defeating inflation. It has nothing whatever to do with the Government's monetary policy, but it has a great deal to do with their fiscal policy.
  In each of the past three years there has been a substantial public sector debt repayment, and I warmly welcome that. The first of those three years was the first time there had been a repayment of debt since Lord Jenkins of Hillhead was Chancellor of the Exchequer. His achievement gave rise to admiration among many of my right hon. and hon. Friends. It fell to my right hon. Friend the Member for Blaby (Mr. Lawson) to fashion the first of three successive Budgets which repaid debt—a policy greatly to be admired and one continued in this Finance Bill.
  The Finance Bill provides for a statement, made on 20 March, of public sector debt repayment for this financial year of a further £7 billion. I thought at the time that that target was not high enough. The excise duties should have been increased further than they were. Although less than four months have elapsed since my right hon. Friend presented his Budget to the House, the truth is that the estimate that he then made of public sector debt repayment for this financial year has already proved to have been too optimistic. That is not just my view; the Treasury also believes that there is a real likelihood that the public sector debt repayment outturn for this financial year will be less than the Chancellor forecast on 20 March.
  Mr. Graham Allen: Will the hon. Gentleman concede that the Treasury is borrowing money at the moment and that although there may be a net repayment by the end of the year it may prove to be small; and that there could even be net public sector borrowing by the end of the financial year?
  Mr. Gow: As the forecast by my right hon. Friend less than four months ago appears to have been too optimistic about the size of the public sector debt repayment, and as Treasury forecasts made by people, however eminent, have turned out in the past to be dramatically different—[Laughter.] I see that I carry the House with me. I hope that I am carrying Treasury Ministers with me. I am asserting the plain truth, acknowledged in the Red Book. Treasury forecasting is about as accurate as some of the weather forecasting that we receive—it is wildly out.
  The Red Book is littered with commitments to defeat inflation. For hon. Members who may think that I am exaggerating, I offer paragraph 1:

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  "The objectives of the Government's economic policy are to defeat inflation."
  Paragraph 2 states:
  "The central objective of the Medium Term Financial Strategy is the defeat of inflation."
  My right hon. Friend the former Financial Secretary then goes on to list the evils that flow from inflation, and I could not have put them better myself. I am pleased that the Economic Secretary is in his place; he is the architect of our monetary policy. I am glad that he has shown his characteristic courtesy by coming in, but in any case this is what the Financial Secretary said:
  "Inflation damages the economy by increasing uncertainty, discouraging investment and reducing profitability. The social effects of inflation are no less destructive. Inflation redistributes income and wealth arbitrarily and capriciously."
  I agree. One might have hoped, in view of that powerful and accurate analysis of the evils that flow from inflation, that the policy would have been more effective than it has been.
  I hope that my right hon. Friend the Chief Secretary will be given leave to address the House again because I want to remind him, and the Economic Secretary, and the Lord Commissioner, who also has some responsibility for these matters, of what our party said in its previous two election manifestos—
  Mrs. Beckett: What about the next one?
  Mr. Gow: It is not yet fashioned. It will be interesting to see whether the same commitments made in 1983 and 1987 are repeated in 1992. The hon. Lady and I will be watching for that with the keenest anticipation.
  I do not want to go back too far, but it is fair to go back to 1983, when we said:
  "In the next Parliament, we shall endeavour to bring inflation lower still. Our ultimate goal should be a society with stable prices."
  In 1987 the manifesto said:
  "The Conservative Government will continue to put the conquest"—
  note the military metaphor—
  "of inflation as our first objective. We will not be content until we have stable prices with inflation eradicated altogether."
  If my hon. Friend the Economic Secretary would like to intervene, I shall give way to him—but I see that he would not. So he does not quarrel with those words, upon which he and I fought the last election.
  Another matter which appears in the Red Book is the exchange rate mechanism. On page 22, the following words appear:
  "Tight monetary and fiscal policies will be maintained … The Government sees membership of the Exchange Rate Mechanism … once its conditions have been met, as complementary to the MTFS policy framework."
  If we join the exchange rate mechanism and by doing so we agree to use our best endeavours to keep sterling within a certain narrow range as compared, in effect, with the deutschmark—although my hon. Friend the Minister will say that it is compared with a basket of currencies—and if sterling appreciates so that it is in danger of going above the higher parameter that has been set, and if my right hon. Friends are then obliged to abate interest rates, what will happen to inflation 18 months to two years later? That is the drama with which the Treasury will be faced if we join the ERM, because the Government have said that they want to abolish fixed exchange rates and move to a floating exchange rate, and that is what we have done—apart from the period when my right hon. Friend the former Chancellor was shadowing the deutschmark. Apart from
  928
  that, we have said that we want a floating exchange rate. The moment that we join the exchange rate mechanism we shall go back to precisely that policy which hitherto the Conservative party has rejected.
  No doubt there are advantages in joining the exchange rate mechanism, but I advise caution on the part of the Treasury and the Lord Commissioner, who studies these matters with great care.
  I shall vote with enthusiasm for the Third Reading of the Bill, although I think that the Government's fiscal stance is not tight enough. We could have borne down heavily upon inflation because the key elements in defeating it are tight monetary policy and a tight fiscal stance. The Bill should provide for higher excise duties, especially because the Chancellor's estimate of £7 billion for the public sector debt repayment is likely to be less.
  I hope that the Treasury will reaffirm our commitment to persevere with the policy of abating inflation until that evil is finally removed from our economy, which in recent years has shown that it is peculiarly resistant to our attempts to defeat inflation.
  8.30 pm
  Mr. Beith: The hon. Member for Eastbourne (Mr. Gow), with whom I do not always agree, spoke about inflation and the role of fiscal policy in dealing with it. He is right that when we are in the exchange rate mechanism, which the Government intend to join, interest rates will not be readily available as a tool of economic management for other purposes. It follows that what the hon. Gentleman said about the Bill will be even more relevant to future Chancellors as they consider what part the level of taxation should play in controlling demand in the economy.
  Like the hon. Gentleman, I think that the Government were mistaken in their assumptions about the necessary level of taxation this year. Future Governments who say that there will be no increase in taxation, or that it will continue to fall until income tax is 20p in the pound, will be ignoring the position in the exchange rate mechanism. They may seek their objective by taxes other than income tax, such as excise duties or VAT, but there are certain dangers in that course. Fiscal policy will become more, not less, important when we are members of the ERM.
  The hon. Member for Eastbourne talked about the military metaphors that are applied to inflation. At the end of his speech he unwisely slipped into non-military terminology—the rather soft, peace corps terminology that the Government have started to use about inflation—when he talked about "bearing down" upon inflation. It is possible to bear down on something which is still going up and which will continue to go up. That conjures up the picture of a person throwing himself over the fuselage of a well-fuelled ascending aircraft in the vain hope that he can arrest its ascent by his weight. There is no sign that the process of bearing down is stopping inflation from rising. We are a long way from stable prices and zero inflation.
  The other member countries of the ERM, and the Federal Republic of Germany in particular, are nearer to stable prices and the achievement of zero inflation. What do they have in addition to fiscal policy and the other mechanisms that we might seek to use? They use all sorts of measures to which the hon. Member for Eastbourne and the former Secretary of State for Trade and Industry are most hostile, such as a central bank with autonomous

  929
  responsibility for price stability. I cannot understand why Conservative Members who care deeply about inflation do not recognise the success of the mechanisms that they are so prone to criticise.
  Several hon. Members have privately said to me that the Bill is boring. That in itself is not a criticism, because it is not the purpose of legislation to provide entertainment for legislators. If some of the exciting Bills this Session had not gone through the world would be a better place and Britain would be a better country. The poll tax Bill provided plenty of excitement, but now it is all misery for our constituents. Being boring is not in itself a bad feature of legislation. It is possible for legislation to be worthy as well as boring—as is this Bill in some respects.
  The Bill proposes tax-exempt saving schemes and the abolition of composite rate taxation, about which the Chief Secretary was kind enough to say that I have campaigned for a long time. If he had started on that road a year ago he would not have had the awkward transitional year of independent taxation before composite rate taxation is abolished. In that year it is in people's interest, and especially in the interests of married women, to take offshore bank and building society accounts because the composite rate taxation scheme is not yet in place. It seems much more sensible to proceed more quickly to the removal of composite rate taxation. Nevertheless, I welcome this long overdue tax reform and I am pleased that it is in the Bill.
  I welcome the use of tax changes in the Budget to improve safety at football grounds. We would have liked the Government to go further and bring an end to the removal by the Exchequer of so much money each year from amateur sport. Some Labour Members supported us in the Lobby yesterday. I am not sure of the precise number, but we were not supported by all those Labour Members who were present. That was disappointing.
  I welcome the proposals on third world debt, although they are but a small part of what needs to be done. We need much more official debt cancellation and there is obviously a need for the measures that we discussed earlier to increase the incentive on banks to write off or sell private sector debt.
  I also welcome the proposals on employee share ownership and I hope that the useful improved tax incentives will make the system more attractive. It is striking that the statutory basis for employee share ownership still has so many features that make it an unpopular means to the desirable extension of employee share ownership.
  The Government's proposals on workplace nurseries created a ripple of excitement when they were first announced. However, they make a paltry contribution to child care. By themselves the proposals are not logical. The Chief Secretary keeps saying that help is targeted, but it is not. The measure will assist that limited number of women who work in industries and factories that have workplace nurseries. There is nothing well targeted about it and it will not help any especially deserving group of women. I am glad that there is to be tax relief, but I should like to see it much more widely extended by the sort of voucher tax relief that I proposed yesterday and in earlier debates on the Bill and which Labour did not support. That would attract money from employers to child care more
  930
  effectively than the workplace nursery proposal could ever do. That is for the obvious reason that workplace nurseries are simply not appropriate for large sections of the retail trade, for the whole of small business and for many industries.
  The Government are quite wrong in their approach to the port levy. They have introduced what they say is a 50 per cent. tax on the privatisation ports. However, most people in the industry say that in practice the tax will be much larger, partly because it is combined with other tax liabilities and partly because it is assessed at market value. If ports seek to place their shares in local communities or in local institutions to keep the money in their own regions rather than seeing it all go to the Exchequer, they will be taxed as though they had not done so. That will discourage ports with a sense of responsibility to their areas from taking the privatisation route. At the moment only two ports are going through the process. If there had been only one perhaps the Finance Bill would have been ruled as hybrid. That would have made an interesting change to our proceedings.
  The Chief Secretary has said that if other ports seek privatisation through the private Bill procedure and manage to devise schemes which ensure that more resources are available for the port and the improvement of the infrastructure in the area round the port, he will introduce retrospective legislation to make sure that those ports pay the full 50 per cent. That is an unusual undertaking by the Government. It is a deliberate disincentive to the devising of schemes by which resources that have been largely contributed by local communities and through local effort and enterprise could be retained in those areas.
  The Chief Secretary said that a 50 per cent. or greater levy was a reasonable rate of return on the Government's investment in the ports—[Interruption.] He said that, and I wrote it down. Frankly, if the Government were offering any savings instrument that created a return of 1,000 per cent. or more which—will be the Government's return on their investment in the ports—there would be queues outside every post office in the land to buy such remarkable savings certificates. The Government are obtaining a nice rake-off because they think that there is money that no one appears officially to own. That money would be better used improving the roads and the rail services to the ports and in freeing those who have to live round the ports from environmental and other pressures created by the expansion of those ports.
  There are omissions from the Bill. There is little on environmental aspects other than further measures on the taxation of cars as a benefit. However, it is still more tax-efficient to buy a married woman a car than to provide her with child care facilities. That is a strange sort of level playing field—a phrase that the Government are so fond of using—but I recognise that the Government have gone some way along that road, although they need to go further. A great deal more could have been done, such as tax incentives for catalytic converters, reform of the vehicle excise duty, help for industries involved in recycling, incentives for recycling, and so on. Instead, the Government are sitting around awaiting proposals from the Secretary of State for the Environment that will come at a time when they cannot be introduced until, at the earliest, next year's Finance Bill.
  The Committee proceeded in the most cordial atmosphere, and I am sure that it would have co-operated

  931
  if the Government had seized the opportunity to introduce new clauses to deal with the appalling circumstances presented by the poll tax. If the Government had suggested major changes that would have brought immediate relief this year and paved the way for getting rid of the tax next year, I am sure that the Opposition would have co-operated to ensure that such clauses were passed quickly into law. The Bill could have tackled other issues, such as the integration of income tax and the national insurance system and the reform of capital taxation. However, those will have to wait for another day.
  The Finance Bill has been a sideshow to the economic divisions within the Government. While we were debating the details of taxation, the Chancellor was not gracing our proceedings. Even the Chief Secretary must, at times, have been distracted by the arguments within the Government about whether and when we should join the exchange rate mechanism, European monetary union and what the Governor of the Bank of England said about how he views the role of the Bank of England. All that culminated, in the closing stages of the Bill, in the promotion of the Financial Secretary to Secretary of State for Trade and Industry. He kindly stayed in his Treasury post to complete the Bill. I do not know whether he has been paid two salaries for the three days that he has performed his two roles. His departure symbolises the chaos within the Government over the most fundamental features of economic policy and which made the whole of the Finance Bill look like a minor sideshow.
  8.44 pm
  Mr. Jeremy Hanley: The hon. Member for Berwick-upon-Tweed (Mr. Beith) said that the Committee had proceeded in a cordial atmosphere. All who served on it would agree that, in the main, there was a cordial atmosphere. Indeed, as my hon. Friend the Member for Eastbourne (Mr. Gow) said, the Budget was a most impressive start to that procedure. It must have been an extremely difficult task for a new Chancellor, at a difficult time, to introduce exactly the right Budget that was needed by the nation. There is little doubt that the general impression given not only by the Chancellor but by the economic pundits was that it was a skilful Budget, clearly and cleverly presented.
  I am pleased that the Committee generally continued in that atmosphere. However, it is strange that the Opposition claimed that Conservative Members were only Lobby fodder, subservient to their masters, yet on the one occasion that there was a major debate involving Conservative Members they complained, as though only Opposition Members had the right to speak. I note that my hon. Friend the Member for Cannock and Burntwood (Mr. Howarth) is present, and he was one of those who spoke at extreme length on that occasion.
  The Finance Bill was delicately steered through the Committee by the Government team. My right hon. Friend the Chief Secretary was extremely well served by my right hon. Friend the Member for St. Albans (Mr. Lilley), now the Secretary of State for Trade and Industry. He showed the most marvellous lightness of touch through some of the long hours of debate. If Conservative Members had been as subservient as was suggested by the Opposition, it might be thought that the Government Whip had had an easy time. In fact, he had the most difficult and delicate task in keeping order when discussing
  932
  certain matters in which Conservative Members had either an expert or a particular interest. I assure him that he has kept his friends on the Committee, and the compromises accepted by the Government were most welcome.
  The Opposition Front-Bench spokesmen were noted for, more than anything, their breadth of knowledge and of selection of individuals. It was one of the largest Front-Bench teams of any Committee. They are a most attractive bunch of people—
  Mr. Ian Taylor: That is not how I would describe them.
  Mr. Hanley: I think that their variety was attractive. In the main, the Opposition Front-Bench spokesmen were well humoured and there was only one occasion on which we sat until 2 am. The hon. Member for Wrexham (Dr. Marek) served his party's interests well. He is respected on both sides of the House. However, one man's brief introduction is another man's filibuster. After he had spoken for many hours, Conservative Members had the feeling that it was just the beginning of a much longer speech. The Opposition were almost cheating in employing him on their team because he could always be called upon to give a speech that Conservative Members would take a fortnight to prepare and at least a week to deliver.
  Mr. Ian Taylor: Does my hon. Friend recall those vivid moments, which lasted for some six hours, when just one amendment from me provoked three and a half hours of debate? That shows the reticence and the skill of Conservative Members in taking three or four minutes to propose an amendment. It also shows the flowery language of Opposition Members.
  Mr. Hanley: I suggest that my hon. Friend watches his back as he walks home tonight. Many of us had forgotten that it was his fault that the debate lasted for so long that evening. I am amazed at his honesty. I was wondering who the swine was. That might be unparliamentary language, Mr. Deputy Speaker, but had you been there on that occasion I am sure that you would share my vocabulary. My hon. Friend was brief in introducing his measure, just as many of us were because we had to get through the business.
  I hope that the Opposition will not blame me for picking out one hon. Member, but I particularly enjoyed the maiden performances on the Labour Front Bench by the hon. Member for Brent, South (Mr. Boateng), who worked hard on what was clearly a most unfamiliar brief. We must welcome also the hon. Member for Newcastle upon Tyne, East (Mr. Brown), whose Geordie twang rang regularly round the Committee Room with great good humour.
  I should like to refer to some of the milestones in the Bill. It is consistent with the Government's policy that we should create an economy in which individuals have a greater choice over the use of most of their income. They should choose how to spend their money and should be guided in spending it responsibly. There are two ends to that. First, we should not encourage people to borrow money. I believe that the current interest rate policy, although unfortunate and difficult for many, is necessary. Secondly, we should encourage people to give if they have a surplus. There is no doubt that the growing spirit of charitable giving, which is welcome, has been well rewarded by the Government.

  933
  The move to increase payroll giving from £480 to £600 a year is extremely constructive. It is disgraceful that Members of Parliament who so regularly castigate the Government for not giving enough to charity, for whatever cause they espouse, set a miserable example. Hon. Members will say that Members of Parliament must meet many expenses out of their meagre incomes—[Interruption.] There are no flies on me—well, there is one near me at present. There are 650 Members of Parliament who receive a regular salary for their work in the House. Fewer than 50 make deductions under the payroll giving scheme. It is not difficult to make such deductions. If Members of Parliament made deductions, they would benefit many charities of their choice, and there is a rich variety to which they could give. They could take advantage of the taxation savings by giving and they would set an example to people outside. Payroll giving is one of the most hopeful aspects of recent Budgets, but hon. Members should set an example.
  Gift aid is hopeful for charities. In The Independent on 21 March, after the Budget, the Charities Aid Foundation said that the Budget was "a major breakthrough" and "a charities bonanza". It is a charities bonanza only if people take up the inspiration that the Government have given and if they give. That gift aid amounts to £600 or more up to a total of £5 million per donor. I hope that a new spirit of giving will result from the Government's contribution to the taxation system. I welcome the extension with respect to corporation tax.
  This is a savings Budget, not just a giving Budget. Surely savings must be the main focus for it. The tax-exempt special savings accounts are a good way of encouraging people to save money in the medium term. An even better measure was the announcement that composite rate tax would go. There is always something miserable about a taxation system that is so inflexible that it makes those who should not under any normal system pay tax have to suffer a deduction. The fact that children who saved their pocket money and elderly people who saved a few pence and pounds suffered by saving safely was a miserable part of our previous taxation system. It has taken a Government of vision and generosity to get rid of composite rate tax so that those on low incomes and those with small savings can make the most of their deposits. The Government's move came as a surprise to the House, but it was totally consistent with the Budget's savings angle.
  Personal equity plans have not always been a tremendous success because of the downturn in the market, with Black Monday just two short years ago.
  Mr. Tim Smith: My hon. Friend speaks from personal experience.
  Mr. Hanley: I speak from personal experience. It is one thing to have tax-free income and tax-free gains, but it can be a disadvantage to find that one has losses against which one cannot claim. No one ever said that investments always go up. Personal equity plans are a sensible way of saving money. They help to introduce the stock exchange and its ways to the smaller saver and to spread risk. I believe that this is an extremely good scheme. I know of
  934
  the personal interest of my right hon. Friend the Chief Secretary in the creation of PEPs, and I pay him full credit for that.
  The annual limit on investment in qualifying unit and investment trusts will be increased from £2,400 to £3,000 and the limit for non-qualifying unit and investment trusts will be increased from £750 to £900. That is sensible and will help to reduce the risk in these investments. PEPs are not for everyone—there is no doubt about that. That is why the abolition of composite rate tax is such a wise move.
  I disagree with some parts of the Budget. The threshold for inheritance tax has been increased in line with statutory indexation from £118,000 to £128,000. Most people who think of inheritance tax believe that it is right to tax wealth when a person dies. There is, however, one item which does not make one say that a family is wealthy but which on a death may give rise to a high payment of inheritance tax—the family home—[Interruption.] I wonder whether the fly has now departed.
  Mr. Boateng: No, it is going towards the hon. Gentleman.
  Mr. Hanley: As I am talking about inheritance tax, this may be relevant. What happens to a family which has lived in a home for some time and in which the children may be of adult age but not earning? It is a great tragedy that, as a result of the death of the second parent, the family should have to sell the family home. The value of homes now is often higher than £128,000, which is the maximum for inheritance tax. I know that there are ways of giving the house inter vivos, but an exemption should be introduced to allow children, while remaining in a home, to be exempt from the payment of inheritance tax, not only by paying by instalments, but by being wholly exempt for at least a time.
  I regret the taxation of actors. We are, of course, talking not about actors in general, as so many hon. Members seem to think, but about the taxation of new actors in the theatre only. I am talking not about people who act in films or on television, or those who have been acting for more than the past three years. The Bill affects the newest and lowest paid in the lowest-paid part of the profession. I regret the introduction of this tax, although I understand the general trend in the Inland Revenue for calculating schedule E rather than schedule D in certain cases. I sympathise with the feeling of my right hon. Friend the Economic Secretary that such a tax had to be introduced this year and I am pleased that a genuine and major concession was introduced thanks to the new clause tabled by my hon. Friend the Member for Beaconsfield (Mr. Smith), supported by many colleagues.
  It is typical of their approach to the Bill that the Government listened carefully to the arguments for many of the new clauses and amendments. I tabled a number of amendments, some of them on behalf of the Institute of Chartered Accountants in England and Wales. There was no blanket rejection of any amendment. The vast majority of them were picked up by the Government, considered carefully and sometimes reintroduced in words that were more acceptable.
  The Government gave way on a number of Opposition amendments and accepted the Opposition's suggestions. I pay tribute to the research that has been afforded to the Labour party. Many of the Opposition's amendments

  935
  were non-political. Let us be fair: they were technical amendments and showed the depth of the research available to the Labour party. It is only right that Conservative Members should pay tribute where errors have been corrected and where a Bill has basically been improved by work, from wherever that work has been funded or from whatever source it has been derived.
  The blind person's allowance will double to £1,080 at an annual cost of only about £2 million. That may seem a small amount, but it is a large improvement for people who deserve even more generous treatment. I am grateful for that.
  We have had the final confirmation of the introduction of separate taxation for women. That is a milestone in the history of taxation. The fact that married women can now have total privacy in taxation affairs is very important. It is the only decent step for a Government to take and the fact that it has been introduced and carried through by this Government is a matter of pride to me. The independent taxation of women represents the removal of one of the last shackles on women. A married man, for example, was entitled to receive a tax rebate on money that had been paid by his wife through her PAYE if she had made an overpayment of tax, and there was nothing in law to make the husband pay that money back to her. That is how we treat chattels. It is only right that the party that first created a woman as its leader—[Laughter.]—that first created a woman as its leader and first gave a woman the opportunity to be Prime Minister was the first to give women true independence in taxation affairs. That is a great tribute to this party and to this Government.
  9.2 pm
  Mr. Harry Cohen: It was a great revelation to hear that the Conservatives created women.
  Mr. John Home Robertson: Just one.
  Mr. Cohen: Yes, just one.
  Mr. Home Robertson: And they got it wrong.
  Mr. Cohen: Yes, they got it wrong in that instance.
  I am sorry that I cannot join in the camaraderie which has pervaded this debate. One of the main reasons is that I was not a member of the Committee on the Bill—which has certain benefits—although I pay tribute to my hon. Friends and to Conservative Members who were. I know that they carry out an arduous chore. The other reason why I cannot join the general camaraderie is the nature of the Bill itself. There is almost nothing in the Bill that is relevant to our main economic problems. There is a lack of investment in the future, despite the continuing North sea oil boom—about £83 billion over the past 11 years. There is a lack of skills training, a continuing rundown of our welfare state and national health service, and growing public squalor in transport, education and environment. The Bill does nothing to address those problems and is a consequence of a peculiarly poor Budget.
  The Chief Secretary mentioned wider share ownership. There are more individual share owners but there is a greater concentration of shares within the major companies—a greater concentration of power in fewer hands. It is significant that the Chief Secretary did not talk about wider home ownership. The Bill does nothing to help hard-pressed mortgage payers. The list of headings in the Bill does not even mention the subject despite the rising
  936
  number of arrears and repossessions. The Government's interest rates policy has caused the problem. That has been the main Government club with which they have bashed the economic crisis caused by the consumer credit boom which was let loose as an election bribe. The £20 billion per annum balance of payments deficit is a consequence of the rundown of manufacturing investment.
  As I said, the Government's high interest rates policy has been their club to bash the economic crisis. However, they are bashing new mortgage payers. There has been a rapid rise in interest rates—about 50 per cent. over the past 18 months. They have increased from about 10 per cent. to about 15·5 per cent. The Government claim to favour private home ownership and encourage people, particularly the young, to take out mortgages. They then leave them trapped by the rapidly rising mortgage rate. For example, in London, the average mortgage has increased by about £250 a month. That has contributed to inflation. I have seen a recent table showing that inflation in London increased by 14·9 per cent. from April 1989 to April 1990 and that was before the poll tax. That is 50 per cent. higher than the national average inflation rate. Increases in transport fares have been one contributory factor, but mortgage rates were the main factor. The Government are taking no action.
  On Tuesday I introduced my Mortgage Assistance Bill but it received no response from the Government. That is why I am raising the issue again. This is an opportunity for the Government to respond. My Bill would have provided some options other than repossession for hard-pressed mortgage payers in the form of part ownership and shared ownership. It showed that something can be done witout too great a cost. There would have been some capital cost involved, but, in exchange, there would have been revenue income and considerable savings from not having to deal with so much homelessness.
  The Treasury is to blame. High interest rates is the Treasury's policy and there is nothing in the Finance Bill—the main fiscal and economic policy of the year—to mitigate the problems that policy has caused.
  The Budget was in March and it has been in Committee since then. We have had two days on the Floor of the House, yesterday and today. We have heard nothing—not a word—from the Government, who keep insisting that mortgage interest rates are not a problem. They have kept them off the agenda and turned a blind eye. When will they do something about the problem? When will they stop being complacent and take responsibility for the effects of their policy?
  9.10 pm
  Mr. John Bowis: I served on the Finance Bill Committee for the first time this year—unlike other hon. Members who have spoken, most of whom seem to be aficianados of many years' standing—but I can vouch for the fact that it is a civilised Committee on which to serve.
  Mr. Brian Sedgemore: Surely not.
  Mr. Bowis: It is a civilised Committee and the atmosphere is contributed to by hon. Members of all parties and by the Chairmen of the Committee, to whom I join hon. Members in paying tribute.
  Mr. Sedgemore: Really?
  Mr. Bowis: Does the hon. Gentleman wish to intervene?
  Mr. Sedgemore: I remember serving on four Finance Bill Committees one year. It was the year in which there was an emergency every three months and we used to sit through the night. Our sittings were bitter, nasty, unpleasant occasions. What is all this syrup that I keep hearing about?
  Mr. Bowis: I, too, remember the days when the right hon. Member for Leeds, East (Mr. Healey) was Chancellor of the Exchequer. Nowadays we have more cross-party agreement on the wisdom of the measures introduced by the Chancellor of the Exchequer to enable Britain to progress from the position in which the hon. Gentleman rightly confesses that his party left it.
  We had in the Committee a mixture of common sense and imagination, as well as a degree of technical detail. I have often admired my colleagues' ability to grasp and to enlighten us on such detail. As has been pointed out, we have had the bankers' drafts in some of our debates. I am glad to see my hon. Friend the Member for Cannock and Burntwood (Mr. Howarth) here—no doubt to complete the speeches that he made in Committee one evening, which served only to convince me that I was wise to by-pass banking as a career. But I jest. It was a good Committee which supported a good Finance Bill based on a good Budget.
  The hon. Member for Leyton (Mr. Cohen) referred to home ownership, and I welcome his conversion to that cause. No doubt he will soon be coming across to support the party that created woman in its image. I am sure that the hon. Gentleman would accept that, as my hon. Friend the Member for Eastbourne (Mr. Gow) said, the best gift that we can give to homeowners is to get inflation under control. That is what the Conservative party's policy is all about and that is the background against which this year's Finance Bill should be seen.
  Others have said before now that there are many mothers and fathers of inflation—not least, excessive pay demands and spending beyond one's means—but no one has accused savings of contributing to inflation. That is why the savings element in the Finance Bill has been so important. My hon. Friends have rightly paid tribute to the Bill's contribution towards encouraging savings. That is especially true of TESSAs and the announcement about the end of composite rate tax as well as the disappearance of stamp duty on shares. To coin a well-worn phrase, we are beginning to move towards a level playing field in savings, which many of us have supported. We welcome the move towards level playing fields, specifically the level playing fields of the football clubs and the health—in every sense—and safety of our football grounds. It is an imaginative and unexpected step that the Chancellor has taken: it is all very well for hon. Members to say now that they would have liked him to go further, but I welcome what he has done.
  One item that I especially welcomed was the continued downward pressure on the company car perk—not that the Government are opposed to cars, to motorists or to all perks, but in constituencies such as mine we feel that more people should be using public transport to get to work. When we are trying to ensure that we have a good public transport infrastructure, it makes good sense to discourage people from using company cars.
  938
  The Bill also contributes to health. At last we have taken a step back up the tax ladder for tobacco products and, to a lesser extent, alcoholic products. That must be right. It is a great pity that in the last few Budgets it has been missed out. Those who support Parents Against Tobacco and other such organisations believe that ultimately the only way to deter young people from starting to smoke is to do so through prices. I hope that Treasury Ministers will continue that process in future years. I repeat the plea that I made in Committee for the committee that advises on the retail prices index to examine seriously the possibility of taking those items out of the index so that they are not seen as an inflationary item.
  I welcome one item that is not in the Budget. The Government have wisely kept the structures and extent of value added tax as they are. I welcome the fact that they did not bow to some of the pressures from across the channel to impose VAT on the written word—books and magazines. It is wise of the Government to resist that, especially at a time when we are seeking to encourage education through the Education Reform Act 1988 and the national curriculum.
  Like my hon. Friend the Member for Richmond and Barnes (Mr. Hanley), I warmly welcome the concession that was made for actors. I declared an interest in Committee as an unpaid director of an actors' touring company, the London Actors Theatre Company. I see at first hand young actors struggling to enter the profession and often living in scruffy surroundings such as mobile homes, cars and vans. They are the people who will be helped by the Government's concession, which will at least enable them to set off against tax the fees of their agents who will ultimately enable them, if they have the ability, to make their way in the profession. It is churlish of the Opposition to be critical of that measure, or of the welcome that the Conservative party has given to it. It is a genuine step forward for the acting profession, and especially for young actors.
  I must also express my gratitude for the steps forward that have been taken for those with disabilities, especially the blind. It is parallel to a decision made elsewhere on deaf students, which is also to be welcomed. Although that may not have been included in the Bill, I am sure that my right hon. Friend the Chief Secretary authorised the expenditure. As we create wealth in this country, we should bear the vulnerable in mind. We need to create that wealth and to spend it where appropriate, and it is certainly appropriate to spend it on people with disabilities.
  I welcome the Bill. It is a Bill for savings, for sport, for the environment, for health, for education, for charity, for arts, and for disability, but it will work only if we get the background of our policy against inflation right—and that will work through our interest rate policy. We are creating wealth. As we create wealth and reduce tax rates so that the tax take rises, we shall have money to spend. Through measures such as the Bill, we shall encourage people to save and to invest, and we shall enable service Departments to spend on areas of need, some of which I have highlighted. This is a wise Bill by a wise Government as part of a wide strategy to promote the well-being of our economy and our people.
  9.20 pm
  Mr. Christopher Gill: My hon. Friend the Member for Eastbourne (Mr. Gow) alluded to the fact that the process that was set in motion on 20 March will soon be brought to a conclusion. Perhaps this is an appropriate time to look towards the deliberations that will soon be set in motion for the next Budget. I should like to help future members of the Standing Committee by suggesting how their deliberations could be made simpler.
  I draw the attention of my right hon. Friend the Chief Secretary to the Treasury to table 1.2 on page 6 of the Red Book, which was published in March. He will see that, according to the latest estimate for 1989–90, receipts by the Inland Revenue from the six main taxes—income tax, corporation tax, petroleum revenue tax, capital gains tax, inheritance tax and stamp duty—will total £76.4 billion. That figure is somewhat exceeded by the total figure given in appendix F of Command Paper 1021 for the comparable year, when no fewer than 88 reliefs and allowances against those six same Inland Revenue taxes cost £80.3 billion. In other words, reliefs and allowances exceed the amount of receipts by £4 billion.
  I do not think that that is a party political point, but it is one to which my right hon. Friend could usefully turn his attention. That position exists because all politicians love to say to the electorate, "We shall give you so much against this and so much against that." Of course, we are sometimes in danger of losing sight of the fact that neither this place nor the Government have any money of their own to give away, save that which they took from the taxpayer in the first place. To counteract that, I must commend to my right hon. Friend the continuation of the shift of the burden of taxation from a direct to an indirect basis.
  Mr. Tim Smith: My hon. Friend will agree that the allowances to which he referred are mainly made up by personal tax allowances, tax relief on mortgage interest and tax relief for pension schemes. I have much sympathy with his view that we should broaden the tax base and cut allowances. Which of those should we tackle first?
  Mr. Gill: My hon. Friend asked me a direct question. Being a fairly blunt hon. Member, I tell him that the allowance that should be addressed is mortgage interest relief. I am convinced that, far from helping the overall longer-term position of people who want to get their feet on the first rung of the housing ladder, the effect of mortgage interest relief has been to accelerate the price of houses. Bricks and mortar are an attractive proposition to anybody, not least because of the substantial allowances also given under the capital gains tax regulations, which again are an accelerator in persuading and encouraging people to invest in bricks and mortar, thereby making bricks and mortar far and away the most attractive investment as against traditional savings, investing in stocks and shares or other means of disposing of one's income.
  In answer to a parliamentary question earlier this year, I was told that 70 per cent. of the Exchequer's revenue came from taxes which, broadly speaking, were raised upon production and that the balance—30 per cent.—emanated from taxes which, broadly speaking, were placed on consumption. As a nation, we should look towards reversing that equation. Initially, we should seek to equalise it. That shift of emphasis would have several
  940
  significant advantages. First, if we were to tax consumption more than production, we should be making a valuable contribution towards conserving the world's finite resources. My hon. Friend the Member for Eastbourne said that he regretted that we had not been harder in increasing duties in the Budget. By increasing duties on those resources which are finite, we would be very much in tune with the spirit of the age, which is towards conservation and the ecology.
  Another benefit from continuing the shift towards indirect taxation and away from direct taxation would be to stimulate investment still further. That is important to us as an industrial nation. We need to invest as much as we possibly can.
  A further advantage of a move towards indirect taxation and away from direct taxation would be to encourage spontaneous saving. Although I warmly welcome the introduction of tax-exempt special savings accounts in this Finance Bill, it would be preferable to create a situation in which a man's or a woman's disposable income had outlets that stood on all fours. In other words, the decision to save and to invest to buy a home, or to take out a pension scheme, would stand on all fours equally.
  If we reduced direct taxation—at the same time it would be necessary to increase indirect taxation—it would be an enormous psychological fillip to all wage and salary earners who, let us face it, like to take home as much of the fruits of their labour as possible.
  Finally, in my catalogue of the benefits of shifting the burden of taxation, much more importance would be given to that old fashioned word "thrift". I am sure that many hon. Members would welcome that.
  This is a good Finance Bill. I welcome it, especially for the help that it gives to companies, to savers and to the environment. Like my hon. Friend the Member for Eastbourne, I shall vote for its Third Reading with enthusiasm.
  9.27 pm
  Mr. Brian Sedgemore: I rise to speak only briefly because I know that many other hon. Members wish to participate. I wish to speak against the Finance Bill for three reasons.
  First, the Bill does nothing to bring down inflation. Indeed, it shows that the Conservative party is the party of high and continuing inflation. A few years ago, inflation blipped at 3 per cent. Since then, the Government have embarked on a course which has debauched the currency, debased the coinage and depreciated the pound in everyone's pocket. Inflation is now exactly 9.8 per cent. higher than the Government's objective of zero inflation—a lamentable performance by any standards. Let there be no doubt about the fact that the Government are depreciating the pound in our pockets. The Labour party will be the Government of low inflation—[Interruption.] I shall come to the technical economic reasons for that in a moment.
  Secondly, the Budget leaves the Conservative party as the party of high and continuing taxation. We have had the argument before. I see the Red Book on the Bench beside the Minister. If he cares to open it and look at the relevant tables, he will find that taxation as a proportion of gross domestic product is higher under the present Government than ever it was under a Labour

  941
  Government. If he looks into the far distant future and all the figures for the years ahead—I await the jeers of Conservative Members, but they too should read the Red Book—for 1991, 1992 and 1993, taxation will still be higher under the Conservative Government's own plans as a percentage of GDP than it ever was under a Labour Government. It is our money, as the Prime Minister says, that the Conservative Government for ever take away. That is a scandal, so let us hear no more about the Conservative party being the party of low taxation. The Labour party is the party of low taxation.
  Mr. Normant Lamont: Why has the party of low taxation voted against all the tax cuts that we have introduced? Why did the shadow Chancellor of the Exchequer say that he did not expect that a Labour Government could reduce the tax burden?
  Mr. Sedgemore: I could come to the global plans if I had more time. I could set out the macro—[HON. MEMBERS: "Answer the question."] I did not serve on the Committee. I did not discuss the reasons for the various amendments. If the Minister wants me to set out a macro-economic policy to provide lower taxation and set it against the background of how much we can and cannot borrow, I shall do so, but I fear that no other hon. Member would have the chance to speak before 10 o'clock.
  The third reason why I oppose the Finance Bill is that it contains nothing to suggest that the Government have a coherent exchange rate policy. I remember a couple of years ago when we shadowed the deutschmark. The pound rose to DM3·25. That was a disaster, and it started a recession which was part of the lunacy of the previous Chancellor of the Exchequer, from whom we have had apologies for that. The Minister has said that he, too, was partly to blame. The Governor of the Bank of England has also said that he was partly to blame. From then on, we saw a rapid depreciation of the pound. I should call it a devaluation, but I understand that if the market and not the Government causes it, it is called depreciation.
  Then the pound fell to about DM2·8. Now the policy is in reverse. The Government systematically leak that we are about to join the exchange rate mechanism, so the pound is rising. It has risen to DM2·9 and it looks as though it may rise to DM3. What is this swings and roundabouts policy? The pound goes up to DM3·25, down to DM2·8 and back up to DM3. It is beginning to look as though the Government will join the ERM with an exchange rate of DM3 at the lower end. That is a deflationary policy. We shall enter the ERM throwing people out of work and losing economic growth. That is an absolute scandal.
  I am sure that the Minister has read the report of the debate that I initiated in the House a few weeks ago. I suggested that a proper exchange rate at which the pound should enter the ERM would be DM2.6 in the middle of the band. I understand that the former Prime Minister, the right hon. Member for Old Bexley and Sidcup (Mr. Heath), who usually sits below the Gangway, has said that there should be a huge
  942
  devaluation. He talked about DM2·4. It certainly cannot be DM3. If that happens, I forecast with absolute certainty and confidence that either there will be a grave recession in Britain or within 12 months the Government will return to a policy of devaluation.
  On the grounds that the Government have a silly inflationary policy, a silly high taxation policy and a lunatic exchange rate policy, we should all oppose the Government in the Lobby tonight.
  9.33 pm
  Mr. Tim Smith: After that rather tiresome tirade from the hon. Member for Hackney, South and Shoreditch (Mr. Sedgemore), which had more to do with a modern version of "Through the Looking Glass" than anything else, I shall return to the Finance Bill.
  My hon. Friend the Member for Eastbourne (Mr. Gow) said that, as we dealt with the Third Reading, we were approaching the end of the annual ritual which had started on Budget day. In fact, it starts much earlier than that because, soon, someone senior in the Inland Revenue will send out an internal memorandum asking members of staff to put forward suggestions for next year's Finance Bill. When my right hon. Friend the Chief Secretary has completed his difficult task of sorting out next year's public spending round, he will, in November, turn his attention to next year's Finance Bill. It is right to pay tribute to the work done by the Inland Revenue on the Finance Bill throughout the year and to my right hon. and hon. Friends on the Front Bench. A great deal of work goes into preparing the Finance Bill before the Budget sees the light of day.
  When the Finance Bill was published it had 107 clauses, 16 schedules and ran to 156 pages. I was rather encouraged by that because, a few weeks previously, I had raised on the Adjournment the subject of tax simplification when I complained about the size of recent Finance Bills. This year's Bill is one of the smallest for some years, but since its publication it has, unfortunately, grown to 132 clauses, 19 schedules and 189 pages. I am sorry to say that, as a result of my efforts, we even added another clause yesterday on entertainers' expenses.
  I do not for one moment suggest that the Government are entirely responsible for all the growth in tax legislation, but we should hold an inquiry into simplifying that legislation. Given its complicated nature, the time has now come to consider that. Complaints were rightly made in Committee about one of the schedules which was almost unintelligible.
  I agree with my hon. Friend the Member for Ludlow (Mr. Gill) that we should be sceptical about introducing new tax reliefs because we should try all the time to broaden the tax base. I am glad that the number of new tax reliefs in the Bill is relatively insignificant. We should be aware that one man's tax relief is another man's tax increase. We should always be sceptical about introducing new reliefs.
  The provisions that have been introduced in VAT will be of enormous help and will result in a much fairer system for VAT traders, especially because of the new arrangements for registration and bad debts. Previously I suggested that Customs and Excise had not done enough to publicise cash accounting to VAT traders and

  943
  I was glad to discover that a note was included in the VAT returns sent out recently to VAT traders to draw to their attention that if they notified Customs and Excise they could switch to cash accounting, which could be to their benefit.
  I also welcome the provisions for charities, to which my hon. Friends have already drawn attention. The increase in allowances for payroll giving from £480 to £600 and the important changes made to encourage donations by individuals and companies are welcome. It is sometimes said that by introducing a new tax relief the Government suggest to people what they believe to be the right thing to do. Mortgage interest relief, for example, is designed to encourage owner-occupation. After all the changes that the Government have introduced in relation to charities no one need be in any doubt about what the Government hope to achieve. They should achieve their goal as a result of the substantial increases in charitable giving. In the past 10 years there have been similar substantial increases, but, by any standards, the changes introduced in the Bill are major and should greatly benefit charities.
  I also welcome the changes designed to encourage further personal savings and the fact that TESSAs are designed to encourage those with the smallest amount to save. The abolition of composite rate tax will also help those people. Personal equity plans have been improved and I hope that my right hon. and hon. Friends will listen to some recent pleas to allow individuals to operate their own personal equity plan rather than having to go through a plan manager. If one truly believes in individual direct ownership of equities, that option should be available.
  I also greatly welcome the increase in the premiums allowable for tax-exempt policies to friendly societies from £100 to £150 a year. That may not sound very much, but the policies are designed for the benefit of small savers—friendly societies have always helped such savers. In the next Session I hope that the Treasury will introduce a friendly societies Bill based upon the Green Paper that it published recently.
  Clause 80 is also welcome because, in future, it will be possible for institutional investors to deal on the London International Financial Futures Exchange without fear of being taxed. That should lead to a large increase in business and ensure that LIFFE retains its predominant position as the leading market in Europe for futures and options.
  Another change which will ensure that London remains an attractive place in which to do business is the abolition of stamp duty, which will ultimately benefit individuals whether their investments are made directly or through the institutions. I also welcome the undertaking that I received in Committee on the question of stamp duty on secondary market sovereign debt. I am glad that a new clause will be introduced next year to ensure that not just that business is done in London but the paperwork is done in London. At present, the business is done in London but all the paperwork is done in New York because of the fear that stamp duty may apply.
  I welcome the change in the taxation of actors and the new clause. that was agreed to yesterday. As I explained then, it is a satisfactory compromise, although we shall want to keep an eye on how it works out.
  944
  Any Budget is a package, and this one has been an attractive package. Reference has been made to the groups to which it has been attractive. The House should support the Bill with enthusiasm.
  9.41 pm
  Mr. Gerald Howarth: My hon. Friends have alluded to the cordial atmosphere that prevailed in Committee. It was broken on only one occasion, when I committed the folly of imagining that it was an occasion when a Back Bencher could address himself to some of the issues. Accordingly, I delivered myself of what I would describe not as a speech of extreme length but as one of modest length. I welcome this opportunity to carry on where I left off, but I shall not seize the opportunity, although I remain sceptical about the Government's view of clause 66, dealing with the restriction of tax relief on bad and doubtful sovereign risk debt.
  For the benefit of the hon. Member for Newcastle upon Tyne, East (Mr. Brown), who was uncertain about the matter, and for the avoidance of doubt, I declare my interest as a consultant and a former employee of Standard Chartered bank. I hope that that will prevent him from having any more sleepless nights—as occurred on at least one occasion in Committee—on my account. Having been bitten once, I stayed away from the Committee for a while, and I shall not delay the House unduly today.
  My hon. Friends have paid tribute to the Chancellor for the skilful way in which he introduced the Budget. It has not been an easy backdrop against which to introduce his first Budget, but he has managed in the circumstances to produce some attractive, innovative and interesting features which have appealed to hon. Members in all parts of the House.
  The United Kingdom economy simply will not lie down. I see that in my constituency, in the manufacturing heartland of Britain, where there are companies manufacturing, among other things, sports boats, garden slides, and so on. Most of them tell me that they cannot push the stuff out of their doors fast enough. The economy is not in recession, and that in some ways is making the Chancellor's task more difficult. All that is needed to get the British economy going again is an indication that interest rates are just tipping downwards. That will lead to a burst of entrepreneurial enthusiasm—it is building up in the British economy—which will get things under way again.
  Many features of the Budget have been welcomed by my hon. Friends, and I will not add to what they have said. It is only fair to say, however, that the Chancellor dealt with the question of capital limits, and the generous increase—from £8,000 to £16,000—has been widely welcomed, particularly by elderly people who put money aside during their working lives.
  In terms of basic rate tax, it was a mark-time Budget. Over the years, we have achieved a steady reduction in the basic rate of taxation—not by great leaps and bounds, but by steady progress towards the present rates. I hope that my right hon. Friends will be able to resume the onward and downward march of taxation in the coming year.
  If the hon. Member for Hackney, South and Shoreditch (Mr. Sedgemore) wishes to pretend that the Labour party

  945
  is the party of low taxation, he will have to do something about his spending policies and those of his hon. Friends, who wish to burden the British taxpayer with a vast increase in taxation that will be unsustainable by the British people. My hon. Friends warmly welcome the conversion of at least one Opposition Member to the idea of low taxation. It shows that Conservative Members have been able to penetrate the thick skulls of at least some Opposition Members.
  I wish to add my voice to those who have welcomed the abolition of stamp duty on share transactions. I should like there to be a system in this country such as that in Hong Kong, where one can look in the banks and see shares being traded in the window. I should like our banks to offer a similar facility in the United Kingdom so that we can have an easy share dealing operation here.
  I am sorry that my amendment dealing with value added tax on gold was not accepted by the Government. It would have greatly benefited the United Kingdom and the gold bullion trade and our Britannia coin if we had been able to zero-rate gold coins. Some 18 months after VAT on gold coins was introduced in 1982, sales of those coins in the United Kingdom declined virtually to nil, and London has lost business to other financial centres, which is unfortunate. I appreciate the arguments that have been advanced by my hon. Friends in the Treasury, but I should like the Britannia coin to be tax free once more, so that something called the ecu and produced by the Belgians does not become more popular than the Britannia coin. An excellent advertisement in the 25 June edition of The House Magazine headed "Rule Britannia" demonstrated beyond peradventure why we should zero-rate our own excellent Britannia coin. With that message, I warmly endorse the Bill.
  9.47 pm
  Mr. Ian Taylor: One of the great annual pleasures of Parliament is membership of the Finance Bill Committee. The highlight of that—which you, Mr. Speaker, will unfortunately be unable to share—is to take part in a Committee sitting opposite the Hale and Pace of the Labour party, the hon. Members for Islington, South and Finsbury (Mr. Smith) and for Newcastle upon Tyne, East (Mr. Brown). Year after year they come up with chirpy common sense. One of them has a good deal of Newcastle meat—or should I say, muscle—and the other often goes into flights of poetry and academic resonance, and remembers the massive tome—the 24 pages of Cornford in Microcosmographica Academica—in which he and I share a devout interest. It is the longest book that I have ever read and is, certainly, one that the hon. Member for Islington, South and Finsbury reads every night.
  The highlights of the Finance Bill Committee are those evenings when, as the twilight descends on us, we know that we have some amusement ahead of us when the hon. Member for Newcastle upon Tyne, East still has another amendment to propose. I do not want to cause any problems for my two hon. Friends—I shall call them that and break tradition on this one occasion. They are so good in Finance Bill Committees that they should continue to
  946
  lead for the Opposition for many more years to come. I am sure that the electorate will endorse that at the next general election.
  There is absolutely no doubt that the Bill has been part of a consistent strategy pursued by the Government. It is important to pay tribute to the ministerial team, particularly the Chief Secretary, who has combined, often behind the scenes, muscle and guidance to the Committee.
  I must also mention the former Financial Secretary, whose performance in Committee obviously destined him for his subsequent stardom. The Economic Secretary took us through some highly technical points. There was no question but that they composed a formidable team, well capable of standing up to the Opposition spokesmen and their colleagues who are not present now.
  I am particularly pleased about the main thrust of the Government's policy—their attempt to enable the enterprise society to create wealth, which gives this country more revenues which can be used to help those most in need. There are many elements in that process, and not all of them have to be done by the Government. Several hon. Members have referred to a range of policies designed to assist charitable giving. Too often we neglect the importance of the personal link between the donor of charitable aid and the voluntary organisation to which it is given. That often represents a personal commitment not only of a financial kind but to service to the community.
  The Government are right to be proud of their record over several years of assisting charities. The largest 200 charities have doubled their income in recent years, and the Charities Aid Foundation and many other such bodies were delighted with the latest Budget initiatives. Perhaps this area of policy distinguishes us from Opposition Members, who still have a hankering for the state to do all the work. The voluntary organisations are important and we show our belief in their work by ensuring that people are helped and encouraged to give to charities, to covenant and to give as they earn. I am sorry that more hon. Members do not appear to take advantage of this last method of helping charities.
  The release of entrepreneurial skills into the economy is the secret of this Government's success in transforming our country. We have created a vast new area of enterprise for many people in this country—that of small businesses. Despite high interest rates, there is a net growth in the number of small businesses of more than 1,000 a week. That says much for what we have achieved, and this Bill has contributed to small businesses' growth by simplyfing tax levels for them and giving them more encouragement. Many people throughout the country will be grateful for that; it underlines what the Government are trying to do—to enable people to have greater control over their own lives in the commercial and other sectors.
  I pause to pay tribute to the Under-Secretary of State for Trade and Industry who has recently made several speeches in the City about the need for wider share ownership. The ownership of property is important to everyone, which is why, under successive Governments, the tax system has encouraged people to buy their own homes. It may be argued that that is a distorting element in the economy, but behind it lies a justifiable social desire to see people invest in houses, which gives them confidence, stability and a role in society. I believe that we should extend that principle to ownership of shares

  947
  in the companies for which people work. I know that I am not alone in this. The Government have done some work in this area, and I pay tribute to Opposition Members for their work on it in Committee and elsewhere; and to Liberal Members, who have had a long-term interest in it.
  It is vital that people be given this interest, because, apart from living in a property, the most important other aspect of their lives is the work that they do, usually but not exclusively in a corporate organisation. A stake in the success of such a company brings with it more than the mere ownership of shares: it gives people a share in any increase in the company's capital—without destroying someone else's wealth to give them that capital. That is the beauty of shareholding. When the value of a company increases, everybody's stake in it rises in value and that gets away from the redistribution that was so often typified by Opposition policies. That is a constructive and worthwhile way to help people and give them the confidence that comes with an increasing amount of capital.
  Secretaries in many of the companies that started share ownership schemes now have a capital stake in them that they could never have had before. Such a stake has given employees at all levels a better belief in the capitalist system and its importance and has also given them capital that they could not otherwise have expected.
  The Bill encourages employee share ownership because it contains roll-over relief on capital gains tax for sales of shares by owners of a private company to an employee ownership trust. Hon. Members will agree that in previous Budgets the Government rightly made significant gestures to the employee share ownership movement. However, there was still not a level playing field and that was a disincentive for owners of private companies to sell to an employee trust. If they took the other route and sold for shares in a publicly quoted company, they could obtain roll-over relief. The issue caused considerable concern more than a year ago, and I pay tribute to the Chief Secretary for forcing through the regulations for roll-over relief. I hope that that will encourage many more advisers, practitioners and companies to make employee share ownership one of the dominant themes of the 1990s in the way that the pensions movement dominated previous decades.
  Pensions are a diversified portfolio of mainly shares and are therefore immune from the risks that can arise from owning shares in the company in which one works. I should like to see employee share ownership operate alongside pensions because there is a direct relationship between effort in a company and the benefit that flows from that effort. In many cases there is opportunity for capital leverage. Roll-over relief is one of the major achievements of the Bill, and I hope that the Government will now take it further.
  We have several successes on which to build, the most recent being the Companies Act 1989, and previous Finance Acts introduced important measures. We must ensure that any Government Department that is contemplating a share issue should have a significant element of employee share ownership, preferably in an employee share ownership trust. It should not just sell a few shares and offer no continuing structure.
  The Bill had a successful ride in Committee and was well steered. It is a key part of the Government's overall policy on the economy. We want to see as many people as
  948
  possible participating in Britain's increasing wealth. The Bill achieves that, and I urge hon. Members to vote for its Third Reading.
  Question put, That the Bill be now read the Third time:—
  The House divided: Ayes 258, Noes 207.

  Divison No. 299]

  [9.59 pm

  AYES

  Alexander, Richard

  Emery, Sir Peter

  Alison, Rt Hon Michael

  Evans, David (Welwyn Hatf'd)

  Amos, Alan

  Evennett, David

  Arnold, Jacques (Gravesham)

  Fairbairn, Sir Nicholas

  Arnold, Sir Thomas

  Fallon, Michael

  Aspinwall, Jack

  Favell, Tony

  Atkins, Robert

  Fenner, Dame Peggy

  Atkinson, David

  Field, Barry (Isle of Wight)

  Baker, Rt Hon K. (Mole Valley)

  Finsberg, Sir Geoffrey

  Batiste, Spencer

  Fishburn, John Dudley

  Beaumont-Dark, Anthony

  Fookes, Dame Janet

  Bellingham, Henry

  Forman, Nigel

  Bennett, Nicholas (Pembroke)

  Forsyth, Michael (Stirling)

  Benyon, W.

  Forth, Eric

  Bevan, David Gilroy

  Fowler, Rt Hon Sir Norman

  Blackburn, Dr John G.

  Fox, Sir Marcus

  Blaker, Rt Hon Sir Peter

  Franks, Cecil

  Body, Sir Richard

  Freeman, Roger

  Bonsor, Sir Nicholas

  French, Douglas

  Boscawen, Hon Robert

  Fry, Peter

  Boswell, Tim

  Gale, Roger

  Bowden, A (Brighton K'pto'n)

  Gardiner, George

  Bowden, Gerald (Dulwich)

  Garel-Jones, Tristan

  Bowis, John

  Gill, Christopher

  Boyson, Rt Hon Dr Sir Rhodes

  Glyn, Dr Sir Alan

  Braine, Rt Hon Sir Bernard

  Goodlad, Alastair

  Brandon-Bravo, Martin

  Goodson-Wickes, Dr Charles

  Bright, Graham

  Gorman, Mrs Teresa

  Brooke, Rt Hon Peter

  Gow, Ian

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

  Grant, Sir Anthony (CambsSW)

  Bruce, Ian (Dorset South)

  Greenway, Harry (Ealing N)

  Buchanan-Smith, Rt Hon Alick

  Greenway, John (Ryedale)

  Buck, Sir Antony

  Gregory, Conal

  Budgen, Nicholas

  Griffiths, Peter (Portsmouth N)

  Burns, Simon

  Grist, Ian

  Burt, Alistair

  Grylls, Michael

  Butcher, John

  Hague, William

  Butler, Chris

  Hamilton, Hon Archie (Epsom)

  Butterfill, John

  Hamilton, Neil (Tatton)

  Carlisle, John, (Luton N)

  Hampson, Dr Keith

  Carlisle, Kenneth (Lincoln)

  Hannam, John

  Carrington, Matthew

  Hargreaves, Ken (Hyndburn)

  Carttiss, Michael

  Harris, David

  Cash, William

  Haselhurst, Alan

  Chapman, Sydney

  Hawkins, Christopher

  Chope, Christopher

  Hayes, Jerry

  Clark, Dr Michael (Rochford)

  Hayhoe, Rt Hon Sir Barney

  Clark, Sir W. (Croydon S)

  Hayward, Robert

  Clarke, Rt Hon K. (Rushcliffe)

  Heathcoat-Amory, David

  Conway, Derek

  Hicks, Robert (Cornwall SE)

  Coombs, Anthony (Wyre F'rest)

  Higgins, Rt Hon Terence L.

  Couchman, James

  Hill, James

  Cran, James

  Hind, Kenneth

  Critchley, Julian

  Hogg, Hon Douglas (Gr'th'm)

  Currie, Mrs Edwina

  Hordern, Sir Peter

  Curry, David

  Howard, Rt Hon Michael

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

  Howarth, G. (Cannock & B'wd)

  Davis, David (Boothferry)

  Howell, Rt Hon David (G'dford)

  Day, Stephen

  Howell, Ralph (North Norfolk)

  Devlin, Tim

  Hughes, Robert G. (Harrow W)

  Dickens, Geoffrey

  Hunter, Andrew

  Dicks, Terry

  Irvine, Michael

  Dorrell, Stephen

  Irving, Sir Charles

  Douglas-Hamilton, Lord James

  Jack, Michael

  Dover, Den

  Janman, Tim

  Dunn, Bob

  Jessel, Toby

  Durant, Tony

  Johnson Smith, Sir Geoffrey

  Eggar, Tim

  Jones, Gwilym (Cardiff N)

  949

  Jones, Robert B (Herts W)

  Shaw, David (Dover)

  Jopling, Rt Hon Michael

  Shaw, Sir Giles (Pudsey)

  Key, Robert

  Shaw, Sir Michael (Scarb')

  Kilfedder, James

  Shelton, Sir William

  King, Roger (B'ham N'thfield)

  Shephard, Mrs G. (Norfolk SW)

  Knapman, Roger

  Shepherd, Colin (Hereford)

  Knight, Greg (Derby North)

  Shepherd, Richard (Aldridge)

  Knowles, Michael

  Sims, Roger

  Knox, David

  Skeet, Sir Trevor

  Lamont, Rt Hon Norman

  Smith, Tim (Beaconsfield)

  Lang, Ian

  Soames, Hon Nicholas

  Lawrence, Ivan

  Speller, Tony

  Lee, John (Pendle)

  Spicer, Sir Jim (Dorset W)

  Leigh, Edward (Gainsbor'gh)

  Spicer, Michael (S Worcs)

  Lester, Jim (Broxtowe)

  Squire, Robin

  Lightbown, David

  Stanbrook, Ivor

  Lilley, Peter

  Stanley, Rt Hon Sir John

  Lloyd, Sir Ian (Havant)

  Steen, Anthony

  Lloyd, Peter (Fareham)

  Stern, Michael

  Lord, Michael

  Stevens, Lewis

  McCrindle, Robert

  Stewart, Allan (Eastwood)

  Macfarlane, Sir Neil

  Stewart, Andy (Sherwood)

  MacGregor, Rt Hon John

  Stewart, Rt Hon Ian (Herts N)

  MacKay, Andrew (E Berkshire)

  Stradling Thomas, Sir John

  Maclean, David

  Sumberg, David

  McLoughlin, Patrick

  Summerson, Hugo

  McNair-Wilson, Sir Patrick

  Taylor, Ian (Esher)

  Madel, David

  Taylor, John M (Solihull)

  Major, Rt Hon John

  Taylor, Teddy (S'end E)

  Malins, Humfrey

  Tebbit, Rt Hon Norman

  Mans, Keith

  Temple-Morris, Peter

  Maples, John

  Thompson, D. (Calder Valley)

  Marland, Paul

  Thompson, Patrick (Norwich N)

  Marshall, John (Hendon S)

  Thorne, Neil

  Marshall, Sir Michael (Arundel)

  Thornton, Malcolm

  Martin, David (Portsmouth S)

  Townend, John (Bridlington)

  Mates, Michael

  Tracey, Richard

  Maude, Hon Francis

  Tredinnick, David

  Mawhinney, Dr Brian

  Twinn, Dr Ian

  Maxwell-Hyslop, Robin

  Walden, George

  Mayhew, Rt Hon Sir Patrick

  Walker, Bill (T'side North)

  Meyer, Sir Anthony

  Waller, Gary

  Miscampbell, Norman

  Ward, John

  Mitchell, Andrew (Gedling)

  Wardle, Charles (Bexhill)

  Monro, Sir Hector

  Warren, Kenneth

  Montgomery, Sir Fergus

  Watts, John

  Moss, Malcolm

  Wells, Bowen

  Mudd, David

  Wheeler, Sir John

  Nelson, Anthony

  Whitney, Ray

  Nicholls, Patrick

  Widdecombe, Ann

  Nicholson, David (Taunton)

  Wiggin, Jerry

  Parkinson, Rt Hon Cecil

  Wilkinson, John

  Patnick, Irvine

  Wilshire, David

  Raffan, Keith

  Winterton, Mrs Ann

  Renton, Rt Hon Tim

  Winterton, Nicholas

  Riddick, Graham

  Wood, Timothy

  Ridsdale, Sir Julian

  Woodcock, Dr. Mike

  Rifkind, Rt Hon Malcolm

  Young, Sir George (Acton)

  Roberts, Sir Wyn (Conwy)

  Younger, Rt Hon George

  Rossi, Sir Hugh

  Rowe, Andrew

  Tellers for the Ayes:

  Rumbold, Mrs Angela

  Mr. Tom Sackville and

  Ryder, Richard

  Mr. Nicholas Baker.

  NOES

  Allen, Graham

  Blunkett, David

  Archer, Rt Hon Peter

  Boateng, Paul

  Armstrong, Hilary

  Boyes, Roland

  Ashdown, Rt Hon Paddy

  Bradley, Keith

  Ashley, Rt Hon Jack

  Bray, Dr Jeremy

  Ashton, Joe

  Brown, Gordon (D'mline E)

  Barnes, Harry (Derbyshire NE)

  Brown, Nicholas (Newcastle E)

  Barron, Kevin

  Brown, Ron (Edinburgh Leith)

  Beckett, Margaret

  Bruce, Malcolm (Gordon)

  Beith, A. J.

  Buckley, George J.

  Bell, Stuart

  Caborn, Richard

  Benn, Rt Hon Tony

  Callaghan, Jim

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

  Campbell, Menzies (Fife NE)

  Bermingham, Gerald

  Campbell, Ron (Blyth Valley)

  Bidwell, Sydney

  Campbell-Savours, D. N.

  950

  Canavan, Dennis

  Lamond, James

  Carlile, Alex (Mont'g)

  Leighton, Ron

  Carr, Michael

  Litherland, Robert

  Clark, Dr David (S Shields)

  Livsey, Richard

  Clarke, Tom (Monklands W)

  Lloyd, Tony (Stretford)

  Clelland, David

  McAllion, John

  Clwyd, Mrs Ann

  McAvoy, Thomas

  Cohen, Harry

  McCartney, Ian

  Cook, Frank (Stockton N)

  Macdonald, Calum A.

  Corbett, Robin

  McFall, John

  Cousins, Jim

  McKelvey, William

  Crowther, Stan

  McLeish, Henry

  Cryer, Bob

  Maclennan, Robert

  Cummings, John

  McNamara, Kevin

  Cunliffe, Lawrence

  McWilliam, John

  Cunningham, Dr John

  Madden, Max

  Dalyell, Tam

  Mahon, Mrs Alice

  Darling, Alistair

  Marek, Dr John

  Davies, Rt Hon Denzil (Llanelli)

  Marshall, David (Shettleston)

  Davies, Ron (Caerphilly)

  Marshall, Jim (Leicester S)

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

  Martin, Michael J. (Springburn)

  Dewar, Donald

  Martlew, Eric

  Dixon, Don

  Maxton, John

  Dobson, Frank

  Meacher, Michael

  Doran, Frank

  Meale, Alan

  Duffy, A. E. P.

  Michael, Alun

  Dunnachie, Jimmy

  Michie, Bill (Sheffield Heeley)

  Dunwoody, Hon Mrs Gwyneth

  Michie, Mrs Ray (Arg'l & Bute)

  Eadie, Alexander

  Mitchell, Austin (G't Grimsby)

  Eastham, Ken

  Moonie, Dr Lewis

  Evans, John (St Helens N)

  Morgan, Rhodri

  Ewing, Harry (Falkirk E)

  Morley, Elliot

  Ewing, Mrs Margaret (Moray)

  Morris, Rt Hon A. (W'shawe)

  Fatchett, Derek

  Morris, Rt Hon J. (Aberavon)

  Faulds, Andrew

  Mullin, Chris

  Field, Frank (Birkenhead)

  Murphy, Paul

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

  Nellist, Dave

  Fisher, Mark

  Oakes, Rt Hon Gordon

  Flannery, Martin

  O'Brien, William

  Flynn, Paul

  O'Neill, Martin

  Foot, Rt Hon Michael

  Orme, Rt Hon Stanley

  Foster, Derek

  Parry, Robert

  Foulkes, George

  Patchett, Terry

  Fraser, John

  Pendry, Tom

  Fyfe, Maria

  Pike, Peter L.

  Galloway, George

  Powell, Ray (Ogmore)

  Garrett, John (Norwich South)

  Prescott, John

  Garrett, Ted (Wallsend)

  Primarolo, Dawn

  George, Bruce

  Quin, Ms Joyce

  Gilbert, Rt Hon Dr John

  Radice, Giles

  Godman, Dr Norman A.

  Randall, Stuart

  Golding, Mrs Llin

  Redmond, Martin

  Gordon, Mildred

  Rees, Rt Hon Merlyn

  Gould, Bryan

  Reid, Dr John

  Graham, Thomas

  Richardson, Jo

  Grant, Bernie (Tottenham)

  Robinson, Geoffrey

  Griffiths, Nigel (Edinburgh S)

  Rogers, Allan

  Griffiths, Win (Bridgend)

  Rooker, Jeff

  Hardy, Peter

  Ross, Ernie (Dundee W)

  Harman, Ms Harriet

  Rowlands, Ted

  Hattersley, Rt Hon Roy

  Ruddock, Joan

  Heal, Mrs Sylvia

  Salmond, Alex

  Henderson, Doug

  Sedgemore, Brian

  Hinchliffe, David

  Sheerman, Barry

  Hogg, N. (C'nauld & Kilsyth)

  Sheldon, Rt Hon Robert

  Home Robertson, John

  Shore, Rt Hon Peter

  Hood, Jimmy

  Short, Clare

  Howarth, George (Knowsley N)

  Skinner, Dennis

  Howell, Rt Hon D. (S'heath)

  Smith, Andrew (Oxford E)

  Howells, Geraint

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

  Hoyle, Doug

  Smith, J. P. (Vale of Glam)

  Hughes, John (Coventry NE)

  Snape, Peter

  Hughes, Robert (Aberdeen N)

  Soley, Clive

  Hughes, Roy (Newport E)

  Spearing, Nigel

  Hughes, Simon (Southwark)

  Steel, Rt Hon Sir David

  Jones, Barry (Alyn & Deeside)

  Steinberg, Gerry

  Jones, Ieuan (Ynys Môn)

  Stott, Roger

  Jones, Martyn (Clwyd S W)

  Strang, Gavin

  Kirkwood, Archy

  Straw, Jack

  Lambie, David

  Taylor, Mrs Ann (Dewsbury)

  951

  Taylor, Matthew (Truro)

  Welsh, Andrew (Angus E)

  Thomas, Dr Dafydd Elis

  Welsh, Michael (Doncaster N)

  Turner, Dennis

  Wigley, Dafydd

  Wallace, James

  Williams, Rt Hon Alan

  Wardell, Gareth (Gower)

  Williams, Alan W. (Carm'then)

  Wareing, Robert N.

  Wilson, Brian

  Watson, Mike (Glasgow, C)

  Winnick, David

  952

  Wise, Mrs Audrey

  Tellers for the Noes:

  Worthington, Tony

  Mr. Frank Haynes and

  Young, David (Bolton SE)

  Mr. Allen MacKay.

  Question accordingly agreed to.
  Bill read the Third time, and passed.

Housing
10.11 pm
Mr. Clive Soley: I beg to move,
That an humble Address be presented to Her Majesty, praying that the Housing Renovation etc. Grants (Reduction of Grant) Regulations 1990 (S.I., 1990, No. 1189), dated 5th June 1990, a copy of which was laid before this House on 8th June, be annulled.
Perhaps it will be convenient to take at the same time the motion
That an humble Address be presented to Her Majesty, praying that the Housing Renovation etc. Grants (Prescribed Forms and Particulars) Regulations 1990 (S.I., 1990, No. 1236) dated 12th June 1990, a copy of which was laid before this House on 14th June, be annulled.
Mr. Bob Cryer: On a point of order, Mr. Speaker. The notification on the Order Paper that the Joint Committee on Statutory Instruments has not yet completed its consideration of the instrument is not accurate. The Committee completed its consideration today and has placed in the Vote Office a copy of its report, approved by the Committee today, together with the Department's memorandum. We have reported the instrument to the House on the ground of defective drafting.
Mr. Speaker: I thank the Chairman of the Select Committee very much for that information. I am sure that it is valuable to the House.
Mr. Soley: The information will be valuable because I want to refer to the point that my hon. Friend the Member for Bradford, South (Mr. Cryer) has just raised.
The 24th report of the Joint Committee on Statutory Instruments made much criticism of the grant order. One should bear in mind the fact that it arises from the Local Government and Housing Act 1989—a measure which, in its own right, caused enormous problems for the House and which was badly drafted. We now have a statutory instrument arising from that Bill—now an Act of Parliament—which is itself badly drafted.
The instrument was drafted by the right hon. Member for Cirencester and Tewkesbury (Mr. Ridley), who was previously Secretary of State for Trade and Industry and before that Secretary of State for the Environment. I can only assume that he drafted the instrument himself because it was his habit to draft Bills and statutory instruments. When the right hon. Gentleman drafted this instrument, he must have been dwelling on the outcome of the second world war because it is the only way in which one can account for some of the absurdities to which the Joint Committee on Statutory Instruments has drawn attention.
Some of the defects in the drafting will cause only relatively—I emphasise that word—minor problems to the public and to local authorities. However, there are enough unusual cases to cause considerable concern. What does the claimant do who makes a claim for a grant, but who is then told that the definition—or the interpretation by the local authority—does not accord with what he understands to be the case from the order itself? Presumably he has to go to law. We know from what the Statutory Instruments Committee has said that there is sufficient imprecision about the drafting to almost
954
welcome legal cases. That means that an individual claimant has to take out a case himself with all the time, trouble and expense that that involves.
One of the most disconcerting aspects of the drafting is the reference to "voluntary body" or "voluntary organisation". When we debated this in Committee we all thought that we knew what type of organisation we were talking about. It transpires from a Department of the Environment answer to the Select Committee that "voluntary body" or "voluntary organisation" can include commercial organisations. The answer said that it does not "exclude" commercial organisations, so they must be included. That will cause considerable confusion and difficulty when people are deciding what grant level someone is eligible for.
There will also be problems over the definition of student grants and the difference between earnings and income. That was another point made by the Statutory Instruments Committee. The definition of a deed of covenant is perhaps the most clear-cut legal case. In many instances the deeds of covenant will be legally enforceable and will, therefore, determine what the income or earnings are. In those circumstances, the Department of the Environment seems to take the view that it need simply leave the matter to the discretion of the local authority. How on earth can a local authority have discretion over something decided by a court of law? If a local authority wants to avoid paying a grant, it can use its discretion and refuse to provide it. In such a case, the claimant would have to go to court. He would probably win his case, but the time and expense involved would make it more likely that many claimants would not pursue their request for a grant.
As I said, the statutory instrument arises out of the Local Government and Housing Act 1989. In the debates on that Bill the Minister gave assurances about means testing and the fact that the Government were introducing a better system for home improvement grants. I admit to the Minister that it is better as it can provide grants of up to 100 per cent. That is welcome. I was going to say that the Minister has gone badly wrong, but it would be difficult to interpret it as such. In fact, he has gone intentionally wrong by limiting the number of people who can receive such a grant much more drastically than in the past. I do not believe that it is an accident that we had Government speaker after Government speaker during the debate on the Finance Bill in order to prevent us from reaching this debate before 10 o'clock. What we are debating now will affect many hundreds of thousands or possibly millions of people who would previously have received grants to repair their houses but who will no longer receive one or will receive a reduced amount. That is a matter of serious concern.
The statutory instrument is drafted in such a way that the means test will ensure that people on relatively modest incomes and low incomes will have less opportunity for repair and renovation of their housing. People on higher incomes will also have less opportunity.
The Government's own housing conditions survey of 1986 pointed out that 500,000 properties in Britain lack basic amenities, 1 million were unfit—about 5.6 per cent. of the total housing stock—and 1.1 million were in serious disrepair. I again pray in aid my old friends and supporting colleagues, the Association of District Councils. It is a Conservative-controlled body, but it is constantly pointing out that the Government's lack of a

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housing strategy is leading to a declining state of repair of the British housing stock. That is why it says that a minimum of £35 billion and a maximum of £50 billion must be spent by the end of the century if the problem is not to escalate. The housing conditions survey, the ADC—a Conservative-controlled body—and other Conservative-controlled organisations, as well as the Labour party and almost every housing organisation in the country, are telling the Government that they have got it wrong. If the Government do not want the housing stock in Britain to continue to decline, they should take the regulations away and draft them properly. They should ensure not only that the regulations do not contain the contradictions to which the Joint Committee on Statutory Instruments drew attention but that people can obtain grants so that the state of the housing stock in Britain can be improved.
The way in which the Government have fixed the contributions means that people on low and modest incomes will have to make larger contributions than expected. That means that many people will not take up the grant. That is why I say that the number of people who obtain grants and go ahead with repairs will drop.
The Government should look again at regulation 8 and increase the figure from £20 to a minimum of £40—preferably to £60. Those figures have been calculated not just by me but by many other people. If we set the level at £60, we could prevent the housing stock from slipping into further disrepair. If the figure is below £60, the most that we shall manage to do is to mark time and to ensure that matters do not get any worse. If the figure is left at £20, the housing stock will get worse. Without going into the complicated details of the way in which the system works, I should explain that the £20 acts as a multiplier for the amount that one can obtain.
Let us take the example of a family with a net income of £8,000. Under the old regulations, which expired on 30 June this year, that family would have received a 75 per cent. grant in respect of repair costs of £8,000. From 1 July, the same family will find its grant reduced from 75 per cent. to about 53 per cent. That family will get considerably less than it would have received under the old regime which ended a few weeks ago.
Families with incomes of between £10,000 and £12,800 will receive only 1 per cent. grant in respect of a repair bill of £8,000. Are the Government seriously asking the House and the public to accept that family incomes of between £10,000 and £12,800 are sufficient to enable people to find repair costs—particularly in the south of Britain, where repairs are especially expensive—on the basis of a 1 per cent. grant? That is nonsense and the Government must know it.
The Government must also know that that will lead to a reduction in the number of repairs being done. It is not that the Government want fewer repairs to be done. They want to spend less money, but in doing that they will exacerbate the state of disrepair of the British housing stock, which will not only add to the misery of people in bad housing but will increase the bill in future. The Government's neglect of the railway and sewerage systems and the rest of the infrastructure in Britain has led to a similar decline.
A single parent would get a 100 per cent. grant on a £10,000 repair only if his or her income was below £93 a week, and no assistance whatever if he or she earned more than £191 a week. A single person without a child would
956
receive a 100 per cent. grant only if his or her income was below £50 a week. That is a further indication that the Government are not serious about the disrepair of our housing stock. The £20 figure in regulation 8 needs to be set at £60 if we are to reverse the deterioration of our housing stock.
My next point concerns the savings disregard—the amount of savings that people may have without losing grant. The means test is a big let-down, not only on the Government's proposal in the Local Government and Housing Act 1989 but on some of the commitments that they gave both to the House of Lords and to this House. During our debates on the 1989 Act, the Minister suggested that there could be a passport. In other words, if one was getting certain other state benefits and one's savings had already been taken into account, the assumption could be carried over to grants and so on; the savings disregard would be equal. But instead of sticking to that and keeping the figures the same, the Government changed them yet again. We now have a savings disregard of £8,000 for people on income support or family credit; of £16,000 for those on poll tax or housing benefit; and, now, of £5,000 for the purposes of the statutory instrument. That is despite the fact that, in Committee and in the House of Lords, the Government gave a commitment to ensure that there was passporting of a similar type to ensure that the savings disregard was kept as compatible as possible with the other benefits to make it simple.
The Parliamentary Under-Secretary of State for the Environment (Mr. Christopher Chope): I hope that the hon. Gentleman agrees that the new disregards are more generous, because they have no upper limit and the minimum disregard is £5,000.
Mr. Soley: I know that the minimum is £5,000. But if the Minister is to be consistent with what was said in Committee, he must operate the same limit as those applying to housing and poll tax benefits.
The Minister cannot say that he is going to keep it the same for the various benefits, and then, a year or so later, change it. That is what the Government have done. We were told in Committee—on the Floor of the House—that means testing would be simple and comparable with other benefits. It is not; it is quite complex. Does the Minister argue that it is a simple system now? Perhaps he will address that question in his speech.
Additional premiums are allowed for the disabled and for those over 75. However, that will be affected by the basic means test. It should be remembered that the House of Lords passed that part of the primary legislation only on the basis of Government assurances that means testing would be simple and comparable. The Minister has a duty to both Houses to clarify the matter.
I am also disappointed that the home insulation grant is to be discretionary. The Government made an amazing commitment some time ago, and only a few weeks ago the Secretary of State for the Environment emphasised again, on the Floor of the House, that Britain would reduce its CO2 emissions. Here was an opportunity to do that, and to increase expenditure on the insulation of homes. That would save energy, reduce fuel prices and often enable people to have more disposable income, thus benefiting them, the country and the environment.
With the poll tax and Government cuts, local authorities will find it difficult to give discretionary grants.

957
They will fulfil their commitment on the mandatory grants and then squeeze the discretionary grants as much as possible, not because it is in the interests of local authorities—whether Tory or Labour—but because they have no option. The alternative would be to allow the poll tax to go up again. That is the only way to pay for the grant. So much for the green credentials of the Secretary of State for the Environment.
When we compare British housing stock to that of many European countries on a similar latitude, we find that they spend much more and make a greater effort to insulate homes than we do. As a result, they have better energy savings returns that enable people on lower incomes to spend less on energy. That is of benefit to everyone. The Government's green credentials and their commitment to improve housing have suddenly begun to look a bit shaky.
I also want specifically to know what on earth we are to do about the weird time warp in which the Government have put local authorities and individuals. The old system will come to an end on 31 July, and this instrument will not come into effect for a while. For some months, people who have had emergency work to be done have got reports from surveyors saying that such work must be done immediately because, if it is not, the problem will get worse. I refer to problems such as dry rot and other things that spread rapidly in houses. Those people have gone to their local authorities and asked for a grant. Local authorities have then said, "We shall file your claim, but we cannot do anything about it because we do not know what the rules are, and we shall not know what the rules are for some time."
Mr. Ian McCartney: On 1 December last year I wrote to the Secretary of State about that matter. The Under-Secretary of State replied refusing to meet me on that point on the basis that his Department had written to my local authority giving an explanation of why changes were taking place in regard to funding for this financial year. When I saw a copy of the minutes of the discussions between the Department and my local authority it became clear that the Government had been dishonest about their intentions about the resources being provided for this financial year. He still refused to meet me to discuss the requirements of and resources for local authorities. Will my hon. Friend ask the Secretary of State why he has refused to meet Opposition Members to discuss investment in local authority contributions to the private sector and upgrading houses in the private sector while he is reducing grants to local authorities on this issue?
Mr. Soley: My hon. Friend makes an important point. It might not have escaped his notice that we have had six or seven Ministers with responsibility for housing matters in the past five years. I am beginning to lose count of them. The present Minister, I am told, will not be with the Department much longer. One of the things that strikes me when I raise such issues and examine the answers that are given is the way in which Ministers abuse the parliamentary process by refusing not just to meet hon. Members but to give clear answers to questions. Without straying out of order, the most obvious example arose during the Housing Corporation crisis. Ministers refused
958
to give figures for the next three years, even though they were obviously wrong in the Department of the Environment's expenditure White Paper.
The issue is serious. People are caught in a time warp. A local authority cannot give a grant, but, more important, it is doubly trapped. It might want to give a grant and might consider that a person was entitled to it, but, unless it can approve the work in accordance with the terms of the statutory instrument, it cannot give the go-ahead. Will the Minister allow some retrospection so that local authorities will be able to assess properly audited receipts and people who could not get a local authority grant because there is no legislation covering it can do emergency work, and allow local authorities to use their discretion and give grants, particularly mandatory grants, in such circumstances?
The matter is important. It will affect many people, in particular those who have work which needs to be done urgently and which a surveyor has said must be done urgently. I accept that that would have to be part of the evidence presented to a local authority.
An important matter for many people and for the housing stock generally is who pays. The Government are anxious to squeeze the grant system so that it spends less money, because the only way in which a local authority can pay for housing repairs and renovation is the poll tax. Local authorities will squeeze discretionary grants to keep down the poll tax, and they will give mandatory grants because they have no option. That means that matters such as energy conservation will be pushed aside as being marginal and of no great consequence, whereas they should be much more central to the Government's strategy.
We know that the Government are in financial difficulty, not just in terms of running the economy but in getting themselves out of the poll tax trap. There is no excuse whatsoever for putting on to local authorities the responsibility for getting the Government out of that mess.
The Government need to ensure that we have a grant system that improves the repair and renovation of British housing stock so that it does not continue to decline in the way in which many Conservative Members, as well as many local authorities, have been telling the Minister for years that it is declining. The Government need to do something about that today because the decline will continue until the Minister reverses these policies.
10.34 pm
Mr. Bob Cryer: As I said in my earlier point of order, Mr. Speaker, the Joint Committee on Statutory Instruments has reported the instrument to the House on the grounds of defective drafting. Although I propose to deal with this matter as quickly as possible, it is important that the House should recognise that the majority of the Government's vast legislative programme is being dealt with by means of subordinate legislation.
The House should also recognise that the Government, who claimed that they would take legislation off the citizens' backs, are producing more statutory instruments of one sort or another than the previous Labour Government. About 2,500 statutory instruments are being progressed through the House every year because of the way in which the Government are producing more

959
regulations, rather than fewer. In itself, that is not a bad thing, but it shows that the Government's claim to be taking regulations away is simply not true.
It is also important that the Government should try, to the best of their ability—and they certainly have a great number of resources on which to call—to make legislation as clear as possible. It is worth recalling that this is a negative procedure instrument which would not have been debated but for the Opposition prayer. That seems a less than satisfactory way of dealing with this matter.
Mr. Chope: Does the hon. Gentleman accept that the drafting of this instrument, in the areas that have been criticised by the Joint Committee on Statutory Instruments, is absolutely identical to the drafting of the Housing Benefit (General) Regulations 1987 which went through without any such comment and criticism from the Committee?
Mr. Cryer: I do not deny the possibility that the Committee has overlooked defects in other instruments. The Committee deals with the vast majority of the 2,500 or more statutory instruments presented to Parliament every year and I have no doubt that some defects are overlooked. Departments often argue that wording which we claim is defective has been used previously, but that is no argument in justification of the existing statutory instrument. If the Minister wants to make a criticism, it is a criticism of past Committees that have overlooked defective wording.
The Committee must take its guidance from the Counsel to you, Mr. Speaker, who is also Counsel to the Committee. If the Counsel or a member of the Committee finds that an instrument is defective in one respect, and it follows another instrument, I should have thought that the Committee was to be commended, not criticised. The Committee is quite open in saying, "Yes, we need all the help that we can get." We must recognise that the Committee meets weekly at 4.15 pm. with just one Counsel and an assistant to help it. We should have more resources, not less."
Many instruments are corrected without ever having been reported to the House because Counsel to the Committee contacts Departments to point out defects. Helpful Departments frequently say, "All right, we will withdraw the instrument—we recognise the defects and we will remedy them." I shall return to that point in a moment.
Mr. James Lamond: I am following my hon. Friend's argument as closely as possible. Is he saying that his Committee has before it on average between 60 and 70 statutory instruments at every meeting?
Mr. Cryer: Yes, that is absolutely correct. For example, after the recess we shall have more than 100 instruments before us. They will have accumulated during the recess. We agreed only today to meet on the first Tuesday we are back so as to avoid a backlog building up. We recognise that it is difficult for the Committee to take all the instruments into account. If it is difficult for the Committee, it is also difficult for the ordinary citizen. A copy of the statutory instrument with which we are dealing today costs £5.15. That does not exactly encourage the dissemination of information affecting citizens. It runs to some 35 pages, including three schedules and many
960
clauses. Without any shadow of doubt it is a complicated piece of legislation equivalent to a primary Act of Parliament. All that the Committee is saying is that several matters require elucidation. That is why we have reported it to the House.
Whether the people who use the instrument will receive the guidance from the Joint Committee on Statutory Instruments is in doubt. Perhaps as a gesture and to help people at large the Minister will agree to publish and distribute all the Committee's comments with the instrument. I have no doubt that the Minister will be keen to make a suitable response.
The report lists seven areas in which the drafting is defective. I shall not go through them all. The report is available. It was dealt with by the Committee today. We discussed it so that we could put it in the Vote Office for Members to obtain and read. For example, in the first paragraph of our report we refer to the definition of a voluntary body and a voluntary organisation. Regulation 4(2)(f) in the instrument says:
"This paragraph applies to— …
(f) a person who lives with the relevant person in order to care for him or a partner of his and who is engaged by a charitable or voluntary body (other than a public or local authority)".
The Department says that a voluntary body includes an ordinary commercial company or, at least, does not exclude such a company. The Department also says that the expressions
"properly bear their ordinary meaning".
We say that it is impossible to reconcile an ordinary commercial body with a voluntary body or organisation. Those are confusing matters for the people in local authorities who will have to use the instruments. They will have to decide who are qualifying persons. There is a real possibility that where the definition is cloudy it will be referred to a court. That is a defect in Parliament. If we allow shoddy legislation through, whether primary or delegated legislation, which has to be decided in the courts because it is defective, we shall hand over the power of decision-making to the courts. That is not what we were elected for.
Regulation 16(2) refers to
"income derived under regulations 27 and 28".
As no income can be derived under a regulation of a statutory instrument, we have drawn the attention of the House to the matter. The Department has said that it will consider the wording at the first convenient opportunity. That means that it will amend the wording in a further statutory instrument—at least, one hopes that it will—when it finds a statutory instrument which can be linked with this one in the index. That means that people will have to buy another instrument and to know the indexing in order to link it up to find the new definition. That illustrates the difficulties for ordinary people and for local authorities who use the instruments that the Government produce.
How can payments under a legally enforceable deed of covenant be treated under paragraph 13 of schedule 3 as a voluntary payment? The Department has suggested that that is reconcilable, but the Committee believes that it is doubtful that a legally enforceable deed of covenant can be regarded as voluntary. Local authorities will be called upon to decide whether compulsory payments are voluntary, but that is a complete opposite in terms and it will be a difficult task for a local authority to undertake.

961
That might also lead to a challenge in the courts, which would be a waste of everyone's time and money when we could get things right in the first place.
The Minister should consider an amending instrument to remedy the seven poor definitions, which were badly drafted in the original statutory instrument. The Committee has an obligation to report items in any instrument that it regards as badly drafted. Although the seven badly drafted definitions may make up only a small proportion of the instrument and only a small proportion of the users of the instrument will come up against them, it is worth the Department considering an amending instrument to cover those seven items. That instrument should be available free to the purchasers of the primary instrument, for which they will pay £5.15.
I have not mentioned the merits of the instrument because our Committee does not consider the merits of statutory instruments and therefore I have not gone outside the Committee's remit. Of course we want to see housing renovation carried out. That is the purpose of the housing renovation system, particularly as a large part of the stock consists of older dwellings which fall within the definition of those eligible for housing renovation grants. That is important. It is therefore also important that the legislation which defines such eligibility should be clear, succinct and transparently available to the user as well as to Ministers, hon. Members and draftsmen in the Department.
The user should see the statutory instrument not as an obstacle, but as the means of obtaining a benefit which, if it improves the housing stock, is a benefit to the nation. It is not unreasonable to ask the Minister to consider providing an amending instrument to clarify and improve the statutory instrument for free issue with it.
10.47 pm
Mr. Robert G. Hughes: I am sure that we are all extremely grateful to the hon. Member for Bradford, South (Mr. Cryer) and his Committee for the detailed work they have undertaken. It is vital that the drafting of any legislation is right. I do not think that any of us would pretend that, over the years, all the drafting of housing legislation has been as good as we wanted. I am therefore grateful to the hon. Gentleman and his Committee.
The hon. Gentleman said that the Committee was not against the introduction of such statutory instruments because we need to get on with paying improvement grants, and that is why I shall join my hon. Friends in the Lobby to support the statutory instrument. It is important that the improved scheme operates so that people can see the benefits that derive from it.
The hon. Member for Hammersmith (Mr. Soley) gave one of his normal Armageddon speeches. I just hope that he is more cheerful when he gets home as he is so downbeat when he is at the Dispatch Box. In fairness to the hon. Gentleman, tonight was a little different from the previous debate on housing because, unlike his hon. Friend the Member for Dagenham (Mr. Gould), at least he knows what he is talking about.
If, according to the hon. Member for Hammersmith, things are bad now, will he say how bad they were during the lifetime of the last Labour Government? Spending on
962
improvement grants in the last full year of Labour rule was £76 million. In the most recent full year for which we have figures, 1989, £328 million was spent on such grants, representing a 50 per cent. increase above inflation. If the hon. Gentleman wishes to be fair, he will not claim that we wish to reduce the amount spent on improvement grants.
Mr. Jeff Rooker: The vastly greater slum clearance and house building programmes operated by the last Labour Government meant that the priority for house renovation was not as great as it is now, when the Government are not clearing slums and building new houses.
Mr. Hughes: As the saying goes, if you believe that you will believe anything. Opposition Members constantly argue, whatever the subject, that the last Labour Government wanted to spend more but could not do so because there was another priority.
Mr. Peter L. Pike: If the hon. Gentleman wishes to be fair, will he accept that the most generous system that the Conservatives operated occurred in 1982, in the run-up to the 1983 general election, when there was a grants bonanza, which was brought to an end immediately the Conservatives won that election?
Mr. Hughes: Elections come and go—[Interruption.]—and if the hon. Gentleman will contain himself, another election will happen in due course and we will see what happens in the run-up to that.
In 11 years, we have spent about £4 billion on home improvements. That is the Conservative record and we can be proud of it. The system before us is more generous than the previous one, although there will be two grants subject to a test of resources, being renovation grants and disabled facilities grants. By that means we shall be directing help to those who are least able to pay for the work to be done.
We are discussing a controversial subject. When we debated the changes to the system, when the measure was proceeding through Parliament, various arguments were adduced. Some people seem to find it hard to accept, even though we know it to be the case, that too much of the money spent by the Government in recent years on improvement grants went to people who could have afforded to pay for the work themselves. Many people with higher than average incomes received grants, renovated houses and flats and made a profit on them. I do not complain about that, because it was the system, but we want to direct help to where it is needed.
Many people cannot afford to pay for renovation work, and it is wrong for the hon. Member for Hammersmith to suggest that the grants should be available to everybody. In any event, he forgot to say how much a Labour Government would spend on improvement grants in their first year in office. The hon. Member for Hammersmith is, as usual, stuck to his seat with glue because he will not say. He wants people to believe that there would be a large budget, but he does not want to tell us what it would be because he knows that he would not get his colleagues' approval for it.
Mr. George Howarth: The hon. Gentleman has overlooked the fact that we are not yet the Government, although we will be soon. Will he enlighten us: what does he think the size of the Government's budget for improvement grants will be next year?
Mr. Hughes: During the past 10 years, there has been a large increase in those budgets, and I see no sign that there will be a reduction in them. Speeches from my hon. Friends the Ministers have contained firm commitments to improving the condition of the housing stock. But we want to ensure that that money is spent where it is needed.
Mr. McCartney: My local authority has just completed a period of negotiation with the Government over such matters. There is a 20 per cent. reduction in the level of grant provided for work that the Government say it is absolutely necessary for my local authority to carry out in the next financial year. There has, in the Government's figures, been a 20 per cent. reduction. For my local authority, more than £1 million worth of grant has been lost for possible renovation in the private sector. That does not give any credence to the hon. Gentleman's argument that the Government are promoting development and putting resources into private sector housing through local authority grants.
Mr. Hughes: The hon. Gentleman comes from the Paul Daniels' school of politics where, hey presto, money can be conjured out of anywhere. The answer to the hon. Gentleman is that it is too early to say. The grants of which I am speaking are mandatory. People on low incomes will be entitled to help with up to 100 per cent. of the cost of the work, not 90 per cent. of the cost as before. Therefore, it is impossible to say how much the budget will be.
If one believed the rhetoric of the hon. Member for Hammersmith, one would assume that a Labour Government would want to ensure that such discretionary grants were mandatory. When the Opposition spokesman winds up, I would be interested to know if that is Labour policy. What will its policy be towards those discretionary grants to improve homes above the basic fitness standard? Such grants should not be mandatory grants from local authorities. Is it the Labour policy that they should, and how much money is the Labour party prepared to put behind that idea to make it a reality?
Mr. John Bowis: Is it not also a fact that there will now be mandatory grants to allow the disabled to have the necessary adaptations to their own homes to enable them to stay in them? Is not that a sign of a caring Government, and is it not a pity that the last Labour Government did not put that policy into practice when they had the chance?
Mr. Hughes: I am grateful to my hon. Friend because, for the first time, grants to disabled people to ensure that they have the facilities that they need will be mandatory. One would have thought from the rhetoric that its Members are using this evening that 11 years ago the Labour party would have thought of that, and would have put it into effect.
When we discussed the matter in Committee and considered the various options before us, we realised that there were a number of ways in which to introduce an improved scheme for home improvements. We could say that there are some spheres in which we want improvements to be made, and that beyond that people should pay for the improvements themselves. We all know the sort of area about which we are talking. We want properties to be bought up, and we do not want any of the houses or flats to be left out. The argument leading to that conclusion suggests that, if dwellings were left out, it could
964
lead to pepper-potting—there would be good houses, and unfit houses. It is an attractive argument, but I am glad that the Government did not pursue it.
I am glad that the Government chose the policy they did because I think that it is important that those people on poor incomes, living in unfit houses, and with no means or reasonable income, should be entitled to a grant paying for the whole cost of the work, as of right.
This is an important scheme. The Government were right to introduce it, and I certainly hope that my hon. Friends will support them in the Lobbies tonight.
10.59 pm
Mr. Richard Livsey: I do not possess the mastery of statutory instruments of the hon. Member for Bradford, South (Mr. Cryer), but I have grave doubts about some of the principles in the regulations.
The grants fall into two categories: mandatory grants, which, as long as the statutory requirements are met, the council is obliged to pay; and discretionary grants, when the council can decide which type of work to assist and which class of applicant to help. The percentage of such grants can be altered, too.
The retrograde principle behind the new system—it represents a major change—is that all applicants for grants will be means tested. That cannot be good. Applicants will be eligible for grant if their resources, including income and capital, are below certain thresholds. The danger lies in where those thresholds are set; on that depends which people will fail to get a grant—to say nothing of the £20 top-up.
Discretionary grants will be available for works that bring properties up to target standards. Much of the debate has centred on those targets. Mandatory grants are available on top of renovation grants provided to disabled people.
The transmission of resources to where they are most needed is desirable, but the targets in this case should apply to properties, not people. That has not been sufficiently discussed so far. In Wales, where many of the houses were built before 1919, many properties are substandard and the housing stock is in extremely bad shape, although I concede that much good work has been done to bring it up to standard. There is still, however, a long way to go.
The means tests are usually excessively restrictive and degrading, and they always throw up anomalies. The forms are long and intrusive and they represent an obstacle course for people at the bottom of the pile who have to thread their way through them. Many give up at the first hurdle. The test is modelled on the housing benefit scheme, and it may exhibit similar problems.
The proposed scheme is cumbersome and labour-intensive. It is estimated that it will increase local government's workload by at least 15 per cent. due to the administration of applications and the surveying and assessment of properties.
We believe that the £20 top-up is not generous enough. It should be at least doubled. It will certainly not cover the many necessary outgoings—over and above the usual expenses—that a household may face. High interest and mortgage rates have not even been taken into account—
Mr. McCartney: It is likely that more than 300 houses in mining villages in the area of my local authority—they are part of a ribbon development there—will need

965
renovation just to stop them being demolished. At £8,000 a house, that will cost nearly £2.5 million. Another 9,000 houses have been designated by the Government and the local authority as requiring initiatives to prevent them from being demolished. My local authority has had a 20 per cent. reduction in its grant for dealing with those issues. Having recognised the problem, the Government then decide to reduce—
Madam Deputy Speaker (Miss Betty Boothroyd): Order. Is the hon. Gentleman making a speech or an intervention? If it is an intervention, I hope that he will conclude it at once.
Mr. McCartney: It is an intervention, Madam Deputy Speaker, but if you wish me to make a speech I shall do so. I always abide by your rulings, Madam Deputy Speaker. Local authorities and the Government have identified the problem. However, the Government have reduced the resources needed by local authorities to deal with it.
Mr. Livsey: The hon. Gentleman makes a telling intervention, which could be described by some as a telling speech. Areas such as those represented by the hon. Gentleman and other hon. Members have problems with housing stock. The hon. Gentleman has rightly said that considerable resources are required to tackle those problems. Councils are struggling to put right housing that is falling down around them.
The proposal to disregard £5,000 of savings is not generous enough for people such as the elderly and the disabled who may rely on their life savings to supplement their income. Some people have no prospect of replacing their savings. Perhaps people such as the elderly and the disabled should be totally exempt from the means test. I object in principle to such a test and a cogent case against it can certainly be made for the elderly and the disabled. Its removal would reduce the work load on local authorities and lift a burden from people's shoulders.
The loans test is applied across the board whether or not a person is considered to be a good risk, and many elderly, disabled and other people may find that loans are denied to them. That is unfair. In theory, the scheme has potential for good, especially for the elderly, because it holds out the prospect of a 100 per cent. grant. However, without adequate funds the system, or part of it, may grind to a halt, and I fear that that will happen to the renovation grants scheme.
The scheme will limit the number of people who are eligible for grant and its complex system of means testing will exclude people in need. It is a cynical exercise in cost saving at the expense of poor people. Apart from the problems that face people, many properties are in need of renovation in their own right. The housing stock will continue to deteriorate because assistance will be available for fewer properties. The regulations are inappropriate, mainly because of their element of means testing. The regulations are also unfair and will not tackle a serious social problem.
11.8 pm
Mr. George Howarth: I shall deal first with the questions posed by the hon. Member for Harrow, West (Mr. Hughes). We welcome the provision for discretionary grants and we shall extend it in
966
legislation. Obviously, I am not prepared to say what a Labour Government would be able to afford in two years. Neither the hon. Gentleman nor the Government know what next year's Budget will be and would not tell us if they did. Over time, we would want the home insulation grant to become mandatory.
My hon. Friend the Member for Makerfield (Mr. McCartney) highlighted the position of his constituents in Wigan, and of people in the north-west, as a result of the statutory instrument and the legislation.
My hon. Friend the Member for Bradford, South (Mr. Cryer), through the Select Committee on Statutory Instruments, made some trenchant criticisms about the sloppy drafting of the measure and its defects. It is all of a piece with this Government and the way in which they deal with housing. It is a long-standing series of incompetent measures, all of which have been compounded by the regulations and orders that have followed. It is sad, although not surprising, that again the Government have missed the opportunity to do something useful.
My hon. Friend the Member for Hammersmith (Mr. Soley) cited figures from the 1986 house condition survey and its conclusions on properties lacking in basic amenities or in fitness, or which were in serious disrepair. More than 14 per cent. of the properties covered by the survey fall into one or other of those categories. That is bad enough in itself, and it gives a clear picture of the problems with the housing stock.
My hon. Friend described the effects of the statutory instrument and noted that those on a net income of between £8,000 and £12,800 would suffer a grant reduction of, in the former case, from 75 per cent. to 53 per cent. and, in the latter case, to 1 per cent. on an £8,000 repair.
If we juxtapose those figures with the figures in the 1986 house condition survey, 20 per cent. of the households that need one or other of the categories of major repair will be caught within the trap of this measure. Many households—not large-income, but low-income households—will fall outside the scope of eligibility for assistance with necessary works.
Even the capital cut-off in the measure is at odds with other areas of Government policy. In this case, it becomes operative at £5,000; it is £8,000 for income support and family credit and £6,000—we all know the background to this—for housing benefit and the poll tax. There is a series of different capital cut-off points applying to different areas of benefit. That will inevitably put many more people outside the rules within which they can apply for grant to carry out essential works.
Mr. Chope: Does the hon. Gentleman accept that there is no cut-off point for the new renovation grants?
Mr. Howarth: I shall check that, but it is not my understanding of the measure. Perhaps the Minister can tell me where it makes that point clear.
Mr. Chope: The £5,000 is a starting point, and it is a more generous starting point than under housing benefit. There is no cut-off point. There is a sliding scale right up the capital range.
Mr. Howarth: That is not my reading of it. I shall check and, if the hon. Gentleman is right, I shall write to him.
Schedule 1 to the reduction of grant regulations allows for an additional premium in certain circumstances. In

967
particular, these premiums apply to the disabled, to those designated as higher premium pensioners—those over 75—and to certain other disadvantaged people. The regulations allow for an additional premium to be paid to certain categories, which, in effect, increases the home improvement grant payable to the disabled.
All these premiums relate to the basic principle of means testing. Therefore, unless those basic principles are set out fairly, the corresponding premiums will be affected by the anomaly of the basic means test. For that reason, it is important to try to overturn the two requirements identified, but there is an added argument in relation to the knock-on effect that this will have on the disabled and other disadvantaged persons.
Ministers gave particular assurances about the disabled to both Houses of Parliament, and only after assurances in the House of Lords was the primary legislation for the means-testing principle passed. I do not believe that the regulations as laid meet those assurances. For that reason, they are unsatisfactory.
The Government have been making soothing noises to local authorities, telling them that £54 million is available for supplementary bids so that extra work can be carried out. As I understand it, the local authorities in my area alone, Merseyside, would need to take up £14 million of that money. By extrapolation, we see that that money will not be adequate to cover the shortfalls. The Government should again consider the amount that they are soothingly telling local authorities to apply for.
I started by saying that this incompetence built upon inactivity is all of a piece with this Government. My hon. Friends have referred to the sloppy drafting of the regulations. The Statutory Instruments Committee pointed that out at some length and in great detail. The system must be altered soon because it does not meet the country's needs. It will be changed—by a Labour Government—and the sooner the better.
11.17 pm
The Parliamentary Under-Secretary of State for the Environment (Mr. Christopher Chope): I commend the regulations to the House. They are the basis of a much improved system. There has been some criticism of the drafting of the regulations. As I pointed out, they are drafted in line with the housing benefit regulations. It is easy to criticise them and say that the drafting is inadequate, but I am sure that the Government would be equally criticised if they were to have detailed regulations covering a matter similar to housing benefit and were to have inconsistent language.
The Government have consistency in these regulations. That does not mean that the drafting of regulations can never be improved. The points made by the hon. Member for Hammersmith (Mr. Soley) will be taken into account in further drafts of these and the Housing Benefit (General) Regulations 1987. The criticism of the drafting of these regulations is particularly ill-placed and harsh.
Mr. Rooker: I just left the Chamber and posted the regulations, including the one with the prescribed forms, to Roger Clarke, the manager of the urban renewal section in my constituency. I told him that the Department of the Environment can be quite proud of these regulations, because they will bring any decent urban renewal scheme to a halt.
968
I should like the Minister to explain to the House how he expects ordinary citizens—landlords, tenants and owner-occupiers—to get round the prescribed form regulations in time for new schemes approved by his Department to start next April. If the Minister cannot give a guarantee that that will happen, it is gross deceit on the part of the Department. The Minister knows what is happening in the centre of Birmingham. If the schemes are not put in and approved by September or October this year, they will not start next year. Thousands of people will be bitterly disappointed because they will have been led up the garden path by the Minister and his colleagues.
Mr. Chope: That was a long intervention as the hon. Gentleman did not take the opportunity to make a speech during the debate. His point is unnecessary scaremongering and is based on a misunderstanding of the true position. The facts are set out clearly in the circular of guidance and in the booklet, two million copies of which have been made available for ordinary people who wish to take advantage of the new and far more generous system of renovation grants.
Throughout the debate there has been a misunderstanding by the Opposition of the rules about capital disregards. Regulation 37 provides for a tariff income to be calculated in respect of capital in excess of £5,000 only. That is more generous than under the housing benefit regulations. There is no cut-off point. Reference has been made to the cut-off points of £8,000 and £16,000, but there is no cut-off point under the regulations. That is why I can say, fairly, that they are more generous.
Mr. Soley: Inasmuch as I originally used the phrase "cut-off", the Minister is correct. It is not a cut-off; it is a taper. This is important, as the Minister will know, because, first, one could use the same base as one does for other capital starting points and, secondly, and more importantly, the regulation tapers off—if the Minister prefers that phrase—the amount until the point where one gets only 1 per cent. towards the grant when one is still on a very low income. I gave the example of a person on £191 a week who would receive only 1 per cent. grant.
Mr. Chope: That would not apply to a person on a very low income or to a person who has very low capital resources. The new system will give 100 per cent. grants to people, which was not possible under the old system. That is why the new system is properly targeted to those in greatest need. Unlike the old system, under which people could receive only a 90 per cent. grant up to a maximum amount for the works, the new system has no limit on the maximum amount of works that can be carried out. Thus, for example, a person on a low income who had low capital might be able to obtain £20,000 as a 100 per cent. grant for works that were carried out. There are many worked examples that show just how generous the new system will be. It is rather odd that the Opposition should try to suggest that the system is other than generous.
Under the new system, there is also minor works assistance which will be available especially for the benefit of the elderly. That will be available to help with insulation work, about which the hon. Member for Hammersmith was concerned. The new system takes account of that. However, it does not—and I do not think it should—give every person 100 per cent. grant, as of right, for insulation work. Under the new system, people can receive grant assistance if they are in particular need, and I should have

969
thought that that was a far fairer and more sensible way in which to distribute scarce resources belonging to the taxpayer.
The Labour party has throughout been rather against means testing. Tonight, the only outright opposition to means testing was from the hon. Member for Brecon and Radnor (Mr. Livsey). However, just in case there are people who still belong to the Labour party who think that the Labour party is against means testing and, by implication, against means testing for renovation grants, I should remind the House that the hon. Member for Dagenham (Mr. Gould) told the Institute of Housing conference a few weeks ago that the Labour party still supported means testing and that all it was thinking about was "rejigging the means test". That is the expression that the hon. Gentleman used. He looks puzzled; perhaps he does not read his own speeches. That points to a further area of confusion in the Labour party's policies. It will try to make everybody believe that 100 per cent. grants will be available for everybody without any means test, but it is clear that it recognises that it is much fairer to have a system of means testing.
As my hon. Friend the Member for Harrow, West (Mr. Hughes) made clear during his important contribution to the debate, the Government's record on improving the nation's housing stock is exemplary and stands comparison with the record of any previous Labour Government. My hon. Friend understated the position. He said that there had been a 50 per cent. increase in real terms in the resources put into home renovations last year compared with 10 years ago. In fact, there has been a 100 per cent. increase in real terms in the money put into home improvements. That is why in the legislation we have been able to extend the categories and definitions so that more properties can be defined as unfit. In that way we can further improve the quality of the housing stock.
I predict that it will not be long before Opposition Members suggest that there has been a dramatic increase in the number of unfit properties during the lifetime of the Government. Opposition Members are nodding already. The numbers will have increased because we have widened the criteria and, thereby, improved the standards. That shows the way in which—dare I say it—the Opposition are prepared to resort to a form of cheating in their selective use of statistics.
Since 1979 more than £4 billion has been spent on more than 1.2 million grants to help people improve and renovate homes in the private sector. Spending has increased significantly. One of the most important parts of the new regulations is the major new assistance they provide for the disabled. The elements of the grants for the disabled have been widely recognised and accepted as being helpful to the disabled. They fit in well with the Government's policies on care in the community and enabling people to stay in their own homes. I am sorry that during the debate no Opposition Member has praised the new system and given credit where it is due.
It is worth pointing out that a newspaper that is not normally very generous in its support for Government policies carried an article last month with the heading, "Home improvement grants better". It said:
970
"A more generous system of home improvement aid to be launched on July 1 features mandatory grants of up to 100 per cent. of repair and renovation costs for both the low-paid and the disabled.
Housing experts have welcomed the new system as a distinct improvement".
I do not know whether that journalist will continue in employment with The Guardian after writing that article. If The Guardian thinks that the new system is better, it is churlish of the Opposition not to be prepared to accept the major improvements that have been introduced.
I commend the regulations to the House. I hope that hon. Members of both sides of the House will support them in the Lobby. As there are a couple of minutes left, I shall tell the House of a fully worked example which shows how generous the new system is. An elderly couple aged over 60, one of whom is disabled and receives an attendance or mobility allowance and with a net weekly income of £130—totalling about £6,779 a year—would be able to obtain a grant of £18,285 for works costing £20,000. That is generous in anybody's language. I commend the regulations to the House.
Question put:—
The House divided: Ayes 131, Noes 182.

Division No. 300]

[11.30 pm

AYES

Allen, Graham

Gould, Bryan

Alton, David

Graham, Thomas

Archer, Rt Hon Peter

Griffiths, Nigel (Edinburgh S)

Armstrong, Hilary

Griffiths, Win (Bridgend)

Ashdown, Rt Hon Paddy

Heal, Mrs Sylvia

Ashton, Joe

Hinchliffe, David

Barnes, Harry (Derbyshire NE)

Home Robertson, John

Barron, Kevin

Hood, Jimmy

Beckett, Margaret

Howarth, George (Knowsley N)

Beggs, Roy

Hoyle, Doug

Blunkett, David

Hughes, John (Coventry NE)

Bradley, Keith

Hughes, Robert (Aberdeen N)

Brown, Gordon (D'mline E)

Hughes, Simon (Southwark)

Buckley, George J.

Jones, Barry (Alyn & Deeside)

Caborn, Richard

Jones, Martyn (Clwyd S W)

Callaghan, Jim

Lamond, James

Campbell, Menzies (Fife NE)

Leadbitter, Ted

Campbell-Savours, D. N.

Livsey, Richard

Canavan, Dennis

Lloyd, Tony (Stretford)

Carr, Michael

Lofthouse, Geoffrey

Clark, Dr David (S Shields)

McAllion, John

Clay, Bob

McAvoy, Thomas

Clelland, David

McCartney, Ian

Clwyd, Mrs Ann

McFall, John

Corbett, Robin

McKelvey, William

Corbyn, Jeremy

McLeish, Henry

Cousins, Jim

McNamara, Kevin

Crowther, Stan

McWilliam, John

Cryer, Bob

Madden, Max

Dalyell, Tam

Maginnis, Ken

Darling, Alistair

Mahon, Mrs Alice

Davies, Ron (Caerphilly)

Marek, Dr John

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

Marshall, David (Shettleston)

Dewar, Donald

Marshall, Jim (Leicester S)

Dixon, Don

Martin, Michael J. (Springburn)

Dunnachie, Jimmy

Martlew, Eric

Eastham, Ken

Meale, Alan

Evans, John (St Helens N)

Michael, Alun

Ewing, Harry (Falkirk E)

Michie, Bill (Sheffield Heeley)

Ewing, Mrs Margaret (Moray)

Mitchell, Austin (G't Grimsby)

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

Molyneaux, Rt Hon James

Flynn, Paul

Morgan, Rhodri

Foster, Derek

Morley, Elliot

Foulkes, George

Murphy, Paul

Fyfe, Maria

Nellist, Dave

George, Bruce

O'Brien, William

Gilbert, Rt Hon Dr John

O'Neill, Martin

Godman, Dr Norman A.

Parry, Robert

Golding, Mrs Llin

Patchett, Terry

971

Pike, Peter L.

Steel, Rt Hon Sir David

Powell, Ray (Ogmore)

Steinberg, Gerry

Prescott, John

Strang, Gavin

Primarolo, Dawn

Taylor, Mrs Ann (Dewsbury)

Quin, Ms Joyce

Turner, Dennis

Redmond, Martin

Vaz, Keith

Reid, Dr John

Wardell, Gareth (Gower)

Rogers, Allan

Wareing, Robert N.

Rooker, Jeff

Watson, Mike (Glasgow, C)

Ross, Ernie (Dundee W)

Welsh, Michael (Doncaster N)

Ross, William (Londonderry E)

Wilson, Brian

Rowlands, Ted

Winnick, David

Salmond, Alex

Wise, Mrs Audrey

Shore, Rt Hon Peter

Young, David (Bolton SE)

Skinner, Dennis

Smith, Andrew (Oxford E)

Tellers for the Ayes:

Snape, Peter

Mr. Frank Haynes and

Soley, Clive

Mr. Allen McKay.

Spearing, Nigel

NOES

Alexander, Richard

Fishburn, John Dudley

Alison, Rt Hon Michael

Forman, Nigel

Amess, David

Forsyth, Michael (Stirling)

Amos, Alan

Forth, Eric

Arnold, Jacques (Gravesham)

Fox, Sir Marcus

Arnold, Sir Thomas

Franks, Cecil

Atkins, Robert

Freeman, Roger

Atkinson, David

French, Douglas

Baker, Rt Hon K. (Mole Valley)

Garel-Jones, Tristan

Baldry, Tony

Gill, Christopher

Batiste, Spencer

Glyn, Dr Sir Alan

Beaumont-Dark, Anthony

Goodlad, Alastair

Bellingham, Henry

Goodson-Wickes, Dr Charles

Bennett, Nicholas (Pembroke)

Gorman, Mrs Teresa

Benyon, W.

Gow, Ian

Bevan, David Gilroy

Greenway, John (Ryedale)

Boscawen, Hon Robert

Gregory, Conal

Bowden, A (Brighton K'pto'n)

Griffiths, Peter (Portsmouth N)

Bowden, Gerald (Dulwich)

Grist, Ian

Bowis, John

Ground, Patrick

Braine, Rt Hon Sir Bernard

Grylls, Michael

Bright, Graham

Hague, William

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

Hamilton, Hon Archie (Epsom)

Bruce, Ian (Dorset South)

Hamilton, Neil (Tatton)

Buck, Sir Antony

Hampson, Dr Keith

Burt, Alistair

Hanley, Jeremy

Butcher, John

Hannam, John

Butterfill, John

Hargreaves, Ken (Hyndburn)

Carlisle, John, (Luton N)

Harris, David

Carlisle, Kenneth (Lincoln)

Haselhurst, Alan

Carrington, Matthew

Hawkins, Christopher

Carttiss, Michael

Hayes, Jerry

Channon, Rt Hon Paul

Hayhoe, Rt Hon Sir Barney

Chapman, Sydney

Hayward, Robert

Chope, Christopher

Hicks, Robert (Cornwall SE)

Clarke, Rt Hon K. (Rushcliffe)

Hind, Kenneth

Coombs, Anthony (Wyre F'rest)

Howard, Rt Hon Michael

Cran, James

Howarth, G. (Cannock & B'wd)

Currie, Mrs Edwina

Howell, Ralph (North Norfolk)

Curry, David

Hughes, Robert G. (Harrow W)

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

Hunt, Sir John (Ravensbourne)

Davis, David (Boothferry)

Hunter, Andrew

Day, Stephen

Irvine, Michael

Devlin, Tim

Jack, Michael

Dorrell, Stephen

Janman, Tim

Douglas-Hamilton, Lord James

Jessel, Toby

Dover, Den

Johnson Smith, Sir Geoffrey

Dunn, Bob

Jones, Gwilym (Cardiff N)

Durant, Tony

Jones, Robert B (Herts W)

Evennett, David

King, Roger (B'ham N'thfield)

Fairbairn, Sir Nicholas

Knapman, Roger

Fallon, Michael

Knight, Greg (Derby North)

Favell, Tony

Knowles, Michael

Fenner, Dame Peggy

Knox, David

972

Lang, Ian

Spicer, Michael (S Worcs)

Lawrence, Ivan

Stern, Michael

Lester, Jim (Broxtowe)

Stevens, Lewis

Lightbown, David

Stewart, Andy (Sherwood)

Lord, Michael

Stradling Thomas, Sir John

MacGregor, Rt Hon John

Summerson, Hugo

MacKay, Andrew (E Berkshire)

Taylor, Ian (Esher)

Maclean, David

Taylor, John M (Solihull)

McLoughlin, Patrick

Temple-Morris, Peter

McNair-Wilson, Sir Patrick

Thompson, D. (Calder Valley)

Malins, Humfrey

Thompson, Patrick (Norwich N)

Mans, Keith

Thorne, Neil

Martin, David (Portsmouth S)

Thornton, Malcolm

Maude, Hon Francis

Townend, John (Bridlington)

Mawhinney, Dr Brian

Tracey, Richard

Mayhew, Rt Hon Sir Patrick

Twinn, Dr Ian

Meyer, Sir Anthony

Walden, George

Mitchell, Andrew (Gedling)

Walker, Bill (T'side North)

Moss, Malcolm

Waller, Gary

Nelson, Anthony

Ward, John

Nicholls, Patrick

Wardle, Charles (Bexhill)

Nicholson, David (Taunton)

Warren, Kenneth

Norris, Steve

Watts, John

Raffan, Keith

Wells, Bowen

Renton, Rt Hon Tim

Wheeler, Sir John

Riddick, Graham

Whitney, Ray

Ridsdale, Sir Julian

Widdecombe, Ann

Rifkind, Rt Hon Malcolm

Wilkinson, John

Roberts, Sir Wyn (Conwy)

Winterton, Mrs Ann

Rossi, Sir Hugh

Winterton, Nicholas

Rowe, Andrew

Wood, Timothy

Sackville, Hon Tom

Woodcock, Dr. Mike

Shaw, David (Dover)

Yeo, Tim

Shaw, Sir Giles (Pudsey)

Young, Sir George (Acton)

Shelton, Sir William

Younger, Rt Hon George

Shephard, Mrs G. (Norfolk SW)

Shepherd, Colin (Hereford)

Tellers for the Noes:

Smith, Tim (Beaconsfield)

Mr. Irvine Patnick and

Speller, Tony

Mr. Nicholas Baker.

Question accordingly negatived.

PETITION

  Post Office, Porthcawl
  11.41 pm
  Mr. Win Griffiths: I beg to ask leave to introduce on behalf of 2,000 of my constituents in Porthcawl a petition that sheweth
  That it is proposed to downgrade the Crown Post Office in John Street, Porthcawl in the Borough of Ogwr to that of an Agency Office, and that we, the undersigned, vigorously protest at this proposed downgrading of our local Crown Post Office particularly because Post Office Counters Ltd. cannot guarantee that the Agency Post Office will simply take over the Crown Post Office, and provide for the foreseeable future all of the services currently provided there with staff who are employed on nationally agreed rates of pay and conditions of work. Furthermore, Post Office Counters Ltd. admit the likelihood of the people of Porthcawl losing the experienced, well trained, friendly and efficient staff now in their Crown Post Office whose replacements would not receive the same levels of training as given in Crown Post Offices. Thus the loss of the Crown Post Office and its replacement by an Agency Post Office will not be in the long term interests of the people of Porthcawl.
  Wherefore your petitioners pray that your honourable House do urge the Secretary of State for Trade and Industry to intervene in the proposal to downgrade the Porthcawl Crown Post Office to an Agency Office.
  And your petitioners as in duty bound will ever pray.
  To lie upon the Table.

  Hospital Services (Thurrock and Basildon)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Goodlad.]
  11.42 pm
  Mr. Tim Janman: I am grateful for this opportunity to bring to the attention of the House some strong concerns in my constituency about proposals being put forward for the reorganisation of the delivery of acute services by my local health authority. You will be aware, Madam Deputy Speaker, that my hon. Friend the Member for Billericay (Mrs. Gorman) would also like to make a few comments before my hon. Friend the Under-Secretary of State for Health responds to the debate.
  The proposals essentially involve the delivery of acute services from the two general hospitals in our health authority area, Orsett and Basildon. The proposals are to centralise accident and emergency care, intensive care, coronary care and general medicine at Basildon, and to centralise all day care surgery and planned surgery at Orsett. The proposals give rise to four particular concerns.
  The first is that Orsett, which is currently a general hospital that is held in the highest esteem and affection by my constituents, will become a cold surgery hospital rather than a full general hospital because under the health authority's proposals all warm surgery and general medicine will be centralised in Basildon.
  Secondly, the centralisation of all accident and emergency services at Basildon will mean that the 88 per cent. of non-emergency attenders at Orsett from my constituency—many thousands of people every year—will have an extra seven or eight miles of hassle and inconvenience travelling to Basildon, often accompanied by either a young or elderly relative with a fairly serious injury. The irony is that the worst rates of social deprivation in the health authority area are, on the whole, in my constituency—yet those are the people who will have an extra seven or eight miles to travel, often facing severe traffic jams on the A13 at the main roundabout just below Basildon. That is causing a great deal of concern.
  It is worth noting that only nine district health authorities in England with a similar or greater population than that of Basildon and Thurrock attempt to provide all their accident and emergency services on one site. Of those nine, only four have a population greater than that which will be attained by the borough of Thurrock and the district of Basildon combined by the end of the current decade.
  From the A and E statistics, one can make a case for saying that the borough of Thurrock—that is, my constituency and part of that of my hon. Friend the Member for Billericay—should be its own district health authority. According to a written answer of 24 May, if one takes a ratio of the number of A and E units and the populations of each of the English district health authorities, one discovers that 119 English district health authorities have a population to A and E unit ratio of less than 129:1, which represents the ratio of the population of the borough of Thurrock set against having one A and E unit still maintained at Orsett.
  The third major concern about the proposals is the lack of a full intensive therapy unit at Orsett, given that major planned surgeries will be carried out there under the DHA's proposals. When the proposals were first advanced, many consultants in the district health
  974
  authority were concerned about that point. It is fair to say that they have been mollified to some degree by some amendments that the DHA has now made to its own proposals, but there will only be a 24-hour intensive therapy unit at Orsett under those proposals. That, again, is a matter for concern.
  The fourth major concern is the centralisation of general medical and coronary care at Basildon despite the fact that the five wards with the highest premature death rate for circulatory system diseases are all in my constituency, as are the three highest rates of schaemic heart disease in the district. The three highest rates on a ward by ward basis in the health authority area for this type of heart disease are also in my constituency. Therefore, under the local health authority's proposals the part of the district with the highest percentage of people likely to be needing that care will have to use a hospital that is further away.
  The key question is why Basildon and Thurrock district health authority has put forward these proposals. Apparently, it is to save money. Yet Sue Jennings, the acute unit manager for the DHA, has said that if the DHA were to get the extra £1 million tomorrow, which is the amount by which it will be over budget in this financial year, and in all future years henceforth in real terms, she would not want to withdraw the health authority's proposals, but would want to do more planned surgery, such as hip replacements, and to expand other services.
  My hon. Friend the Member for Billericay and I have submitted a response to the health authority, which will have arrived there earlier this week, ready for the meeting this Thursday, suggesting that if the proposals of the Basildon and Thurrock health authority are motivated mainly by the desire to get into budget, we feel that a combination of pruning excessive management posts allowing the private sector to utilise spare facilities—hence providing more revenue—and the implementation of the community health council's organisational recommendations, to which I shall turn later, represent a superior methodology for achieving that objective than that proposed by the DHA. Of course, substantial reductions in the number of administrative and clerical staff could also be achieved to that end.
  If, on the other hand, the primary objective is to improve service provision, we recommend that the district health authority should agree with the community health council a joint proposal that will find a new consensus among the population and will carry public support, provided that it has the consensus of opinion behind it.
  What if the health authority is motivated mainly by the desire to get into budget? My hon. Friend the Member for Billericay and I have examined some aspects of the health authority in some detail. We have examined its management organisation charts. From our experience in business and industry, we believe that 10 posts are superfluous to requirement in the management structure. That is particularly the case in the community care unit. The analysis has been backed up by comments that have been made to us by nurses who work in the unit and by the community health council. We believe that a saving of £300,000 could be made if the 10 posts were axed.
  We agree with the community health council that the promotion of 18 staff to neighbourhood managers within the community services unit should be indefinitely postponed. It is our guestimate that that would save a further £75,000.

  975
  Between April 1984 and March 1989, the administrative and salary costs for my district health authority rose by 34·8 per cent. Over the same five-year period, the accumulated increase in the retail prices index was only 26·7 per cent. If we compare the numbers of admin staff in the authority with various measurements of patient throughput, we obtain some interesting facts. Using figures that my hon. Friend the Minister gave in a written answer to my hon. Friend the Member for Billericay only last week, in 1985 the number of deaths and discharges in the health authority was 33,300. That rose to 33,710 by 1988—an increase of 1·2 per cent. Over the same period, the number of administrative and clerical staff rose by 6·1 per cent., from 490 to 520. In the period 1988–90, by the health authority's own measurement of throughput, the number of in-patients and day cases at Orsett and Basildon hospitals increased from 38,170 to 39,222—an increase of 2·76 per cent. Yet the number of admin and clerical staff—admittedly, across the whole health authority and not just in the two main hospitals—increased from 520 to 560·72, an increase of 7·8 per cent.
  I have used 1985 as the base year—a year well beyond the major boundary changes in district health authorities in the early 1980s. If the number of admin and clerical staff had increased by the same percentage as the throughput in patients from 1985 to 1990, which would give a zero productivity increase, instead of increasing from 490 to 560.72, the number would have increased to only 510.
  I am willing to accept that our figures are based on a certain degree of guestimate—neither of us is expert in the matter—but we hazard a guess that 50 posts in the admin and clerical staff could be lost. If those heads went, that would save £400,000. Even with the possibility of some double counting of the management posts to which I referred earlier, it is clear that there are opportunities for considerable savings in the health authority. Certainly, the authority could save more than the £260,000 which the authority said that it would save in the first year under its own proposals. My hon. Friend the Member for Billericay intends to talk about that in a little more detail.
  If the motivation behind the proposals is not to get into budget, and if that is being used as a smokescreen simply to reorganise as the authority wants to but which it knows will be unpopular with my constituents, it should make new proposals after holding discussions with the community health council and the family practitioner committee. With those two bodies it should formulate a consensus approach that will carry the population with it. I hope that my hon. Friend the Minister will take note—I am sure that I shall visit him with my CHC on the matter—that my CHC has put forward alternative proposals that include keeping a non-emergency casualty unit at Orsett and centralising general medicine and coronary care at Orsett, not Basildon, but keeping a high dependency unit at Basildon to support the centralisation of emergency admissions at Basildon.
  My hon. Friend the Member for Billericay and I support the alternative proposals of the community health council because they are realistic and will maintain, if not improve, the service to the entire area, but especially our respective constituents. That improvement will not be achieved through the DHA proposals. As my hon. Friend the Member for Billericay rightly wishes to speak, I do not have time to say any more about the CHC's counter-proposals, except to emphasise that I support them.
  976
  I must strongly reiterate to my hon. Friend the Minister that there is considerable local opposition to the DHA proposals. I respect, of course, its desire to get into budget. In the past five years there has been a consistent real terms increase in the amount of funding that it has received. I find it difficult to believe that that total amount of funding is the problem. Whatever the motivation behind the specific DHA proposals, there is considerable local opposition to them. Nearly 20,000 people have now signed the petition that one of my local newspapers, the Thurrock Gazette, has organised. My hon. Friend should use his powers to put pressure on the DHA to withdraw its proposals and to assess properly its efficiency and its efforts to get administration under control. It should not reduce service provision to my constituents. It should make cuts in the other areas that I have mentioned rather than in the core services.
  It would be much better if my hon. Friend could use his influence to bring pressure to bear on Basildon and Thurrock district health authority to withdraw its proposals. It should work with the CHC and the family practitioner committee to decide upon an acceptable way forward that is within budget.
  Some of the controversial DHA proposals are supported by medical opinion—for example, the centralising of emergency services provision at Orsett. The CHC has accepted that medical opinion is right in that respect and as a politician I do not think that it is right that I should argue against that opinion.
  There are some aspects of the proposals that the CHC and I can accept, but the complete withdrawal of accident and emergency facilities in the borough of Thurrock, particularly in my end of the borough, is unacceptable. The package of proposals is not acceptable and I hope that my hon. Friend will bring pressure to bear to get them withdrawn.
  11.57 pm
  Mrs. Teresa Gorman: I thank my hon. Friend the Member for Thurrock (Mr. Janman) for allowing me time to speak in his Adjournment debate. I also welcome the presence of my hon. Friend the Member for Basildon (Mr. Amess).
  My constituency straddles the two main hospitals of Thurrock and Basildon. Those large district hospitals are relatively close together, so that, on paper, one might reasonably ask why we need two main hospitals to service the area. The Thurrock half of my constituency, however, points to the river and is distinct from the other side of my constituency which is on the other side of Basildon, the town in the middle of it. The people in that part of the constituency relate to the Basildon hospital and think quite differently about themselves. Although the two hospitals are geographically close, there is a major motorway between them that must be crossed. At busy times of the day—increasingly that means all day—the motorway is heavily congested. The people of Thurrock view with great concern the prospect of going to Basildon hospital for accident and emergency treatment.
  Many people living in the area of Thurrock district have modest incomes and do not have motor cars. Public transport between that part of Thurrock and Basildon hospital is not good, and it is worrying those people that they will have to go to Basildon for accident and emergency treatment.

  977
  There has been a great upsurge of concern in the area and I sometimes think that we neglect the fact that the institutions about which we are speaking exist for the people of the area, not for the administrators who wish to make things neat and tidy on paper.
  I praise my hon. Friend the Member for Thurrock for the work he has done in looking into the problem, including the detailed financial analysis that he has made. Although it was said that the initial savings would be about £1 million—the figure of £800,000 was mentioned—it would seem in the final analysis that the actual savings as a result of this major change of policy would be little more than £250,000. I am sure that that sum would be dissipated when the changes came into effect, through the provision of new beds and the extra facilities that would have to be provided at Basildon hospital. Those expenses would soon gobble up any money that was saved.
  I have talked to the nurses on both sides. They assure me that there are far too many chiefs and not enough Indians—that, as my hon. Friend said, there are too many administrators. Thurrock has one of the fastest growing populations in the country, with a 10 per cent. increase a year, which is five times the national average.
  In the Thurrock part of the constituency we have Tilbury docks, one of the major docks, where the chances of accidents happening are relatively high. The accident and emergency unit should be retained in Thurrock. We have Shellhaven and Mobil, the two largest oil terminals in the country, for which accident and emergency services are vital. We also have the development of the Thurrock-Dartford bridge to supplement the tunnel, the development of an enormous shopping centre and a new town of almost 8,000 dwellings, the Chafford Hundreds.
  For all those reasons, the facilities for accident and emergency treatment should be retained in the Thurrock part of the constituency. We have in the past agreed to amalgamate gynaecological services. We have discussed the prospect of the people of Basildon having to go to Thurrock for what is known as cold surgery, which is a curious term for long-term surgery. We have the prospect of people needing emergency surgery having to go all the way from Thurrock to Basildon. That is not the way to treat people, remembering that this is their health service.
  We want to keep the people of Thurrock safe with their own accident and emergency service. I hope that the Minister will respond positively to that request.
  12.2 am
  The Parliamentary Under-Secretary of State for Health (Mr. Stephen Dorrell): I wish at the outset to congratulate my hon. Friends the Members for Thurrock (Mr. Janman) and for Billericay (Mrs. Gorman)—but particularly my hon. Friend the Member for Thurrock—on raising this issue and on expressing clearly the concerns of their constituents about the proposals that have been put forward by the health authority.
  My hon. Friend the Member for Thurrock has a reputation—it was drawn to my attention soon after taking up my present duties—as an assiduous advocate of his constituents' interests. There could be no better illustration of that than the detailed presentation—my hon. Friend the Member for Billericay will not mind my saying that, for while both my hon. Friends signed the
  978
  presentation, it reflects the detailed work that has been done by my hon. Friend the Member for Thurrock—that he has made as background to the representations that he has been making on behalf of his constituents as a result of the concern that they have expressed about the proposals.
  My hon. Friend has taken up these matters in private, as well as in the House tonight, and because I regret to say that I doubt whether what I shall say tonight will conclude the matter, I confidently expect my hon. Friend to continue to pursue his campaign in the coming weeks.
  As my hon. Friend said, the reason for this debate is that the health authority issued a consultation document this April and is currently out to consultation on the proposals contained in it. I shall not weary the House with a recital of the document's contents, but I should observe at the outset of my speech that if the objections that have so far been maintained by the community health council are maintained throughout the system, the proposal will land on Ministers' desks. Therefore, I hope that both my hon. Friends will appreciate that I am constrained in what I can say about the merits of particular proposals because they seem to be set fair to land on Ministers' desks and I must not prejudge the outcome of that decision-making process. If it comes to that, I am sure that both my hon. Friends will wish to put their views again, and I shall ensure that there is ample opportunity for them to do so.
  I must emphasise that the drift of health service management in recent years—this is not unique to the health service—has consistently been to try to delegate decisions further down the line. When, in the health service or anywhere else, one tries to delegate decisions, those at the top of the service must recognise that occasionally the managers to whom decisions are delegated will make decisions with which those at the top may disagree.
  In those circumstances, the burden of proof placed on anyone wishing to encourage a Minister to overturn the decisions taken by a delegated manager is, rightly, heavy. My hon. Friends must show not only that if I were in that manager's position I should do as my hon. Friends advocate, but that their arguments are so weighted that they should overturn my natural preference for a delegated system of management and support their propositions.
  My hon. Friends have been elegant in expressing the concern about the proposal within their constituencies. But there is no proposal to close Orsett hospital. On the contrary, there is a proposal to change its role in a way that my hon. Friends and their constituents find unsatisfactory, and their reasons for doing so were expressed by my hon. Friends. It is important for everyone to understand that there is common ground between the health authority and my hon. Friends, and their constituents, about the importance of maintaining hospital facilities, both at Basildon and at Orsett, which is not in dispute.
  There is an obvious worry that the residents of the Thurrock district will have to travel to the Basildon end of the health authority district. As both my hon. Friends stressed, when considering whether that is an appropriate arrangement, the health authority and, ultimately, perhaps Ministers will have to bear in mind that there is a concentration of disadvantaged areas in the Thurrock end of the district. As my hon. Friend the Member for Billericay stressed, there is also a concentration of industrial plants that might give rise to industrial

  979
  accidents. Those factors undoubtedly have to be taken into account, principally by the health authority and, if necessary, by Ministers, when reaching decisions.
  Without prejudicing what we as Ministers might conclude if the proposal reached our desks, I shall say a few words about the basic arguments that my hon. Friends advanced against the health authority's proposal. First, there are financial arguments. I am glad that it is common ground between both my hon. Friends and me that the health authority has a clear obligation, which it must discharge, to ensure that its financial affairs are properly managed and its budgets are properly balanced. That is the only basis on which we can achieve a proper distribution of resources throughout the health service, and it is an entirely proper discipline for health service managers at all levels to insist upon.
  It is also worth remembering that Basildon and Thurrock health authority has closed the gap between its spending level and the national target defined by RAWP; the gap was 11 per cent. seven years ago, but today the authority is on its RAWP target. That shows that there has been effective management of resources.
  My hon. Friend the Member for Thurrock emphasised what he felt to be the scope for savings on administrative and clerical staff, suggesting that 50 heads could be saved at a total saving of £400,000. I do not dismiss that argument. If the issue came to Ministers' desks, we would carefully consider it.
  My hon. Friends should also recognise that when the health service recruits additional managers, it does so in the belief that the extra management effort contributed by administrative and clerical staff will release resources for better use elsewhere in the service. That can arise in two ways: by clerical staff taking over administrative functions previously carried out by clinicians, with the result that a
  980
  higher proportion of clinicians' time is available for patient contact; and by ensuring that other resources are more effectively managed and that any management posts created should achieve a considerable improvement in the effective use of resources in the service. It has been one of our purposes since 1979 to ensure that health service resources are more effectively used. One manifestation of that is the extra investment that we have made in management.
  The second leg of my hon. Friend's argument was that, whatever the arguments about budgetary balance, the health authority may believe that these changes are necessary anyway. He stressed the advantages of looking for a consensus with the CHC. It undoubtedly has a role to play in this; I welcome the fact that it is involved in constructive dialogue on the way forward for the health authority.
  Ultimately I am sure that my hon. Friends will recognise that it is for the managers of the authority to decide how best to provide patient care and proper financial discipline in the health authority's area.
  It seems that the case may well come to Ministers. I can assure my hon. Friends that we shall carefully weigh the arguments that they have advanced tonight. We shall provide ample opportunity for them to develop them in private, and I am sure that they will take up that offer. Our objective will be to ensure that the health authority maintains proper financial standards and disciplines; and, much more importantly, that the resources used by the health authority are used to clinical effect in its area.
  The motion having been made after Ten o'clock, and the debate having continued for half an hour, MADAM DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at twelve minutes past Twelve o'clock.

NATIONAL FINANCE

  Civil Service Pensions
  Mr. Alfred Morris
  To ask the Chancellor of the Exchequer, pursuant to his reply to the right hon. Member for Manchester, Wythenshawe on 4 July,Official Report, column 577, if he will now state to what extent, either implicitly or explicitly, pensions were taken into account in each of the years from 1960 onwards in determining home civil service pay; and if he has a precise figure for the extent that pensions were taken into account for any particular year.

  Mr. Major
  Civil service pensions are an important part of the total remuneration package and are fully taken into account in setting pay levels. Assessments of the value of the civil service pension scheme have been made for the purposes of pay negotiations under the previous pay comparability arrangements and under the pay determination framework introduced as part of the new flexible pay arrangements. In 1980, the last year of the earlier arrangements, the reduction in pay levels averaged over men and women to take account of civil service pensions was 7.9 per cent.

  VAT
  Mr. Gregory
  To ask the Chancellor of the Exchequer, what are the value added tax rates in each European Community state in respect of hotel accomodation and restaurant meals; and if he will make a statement.

  Mr. Ryder
  [holding answer 16 July 1990]: The information requested is contained in the publication "VAT in Europe", published by the International Bureau of Fiscal Documentation, a copy of which is located in the economic affairs section of the House of Commons Library.

HOME DEPARTMENT

  Firearms Certificates
  Mr. Wiggin
  To ask the Secretary of State for the Home Department if he will list by police area the number of firearms certificates and shotgun certificates which were in force in England and Wales on 31 December 1989.

  Mr. Peter Lloyd
  The information requested is not yet available. The latest information, for the number of firearms certificates and shotgun certificates on issue at 31 December 1988, is shown by police force area in tables 2 and 4 of the Home Office statistical bulletin 18/89, a copy of which is in the Library.

  Working Men's Clubs
  Mr. Vaz
  To ask the Secretary of State for the Home Department how many representations he has received from organisations in England and Wales in relation to police right of entry to working men's clubs.

  Mr. Peter Lloyd
  I have received 31 such representations, all from working men's clubs.

  Mr. Vaz
  To ask the Secretary of State for the Home Department if he has any plans to seek to amend the law relating to police right of entry to working men's clubs.

  Mr. Peter Lloyd
  We have no plans to amend the law in this respect.

  Prisons (Suicides)
  Mr. Harry Greenway
  To ask the Secretary of State for the Home Department whether, pursuant to his answer on suicides by prison officers in Brixton prison,Official Report, 3 July, column 485, he will give the figures for suicides in other local and trainer prisons in 1989.

  Mr. Mellor
  The table gives, for each prison service establishment, the number of inmates who died by their own hand in 1989 and, of these cases, the number in which verdicts of suicide were returned at coroners' inquests.

  Before 1 January 1990 no central record was kept of the causes of deaths of prison officers. That information is therefore not readily available and could not be obtained except at disproportionate cost.

  Deaths of inmates of Her Majesty's prison service establishments at their own hand in 1989

  Establishment

  Suicide verdicts

  Other verdicts

  Total self-inflicted deaths

  Acklington

  —

  —

  —

  Albany

  —

  —

  —

  Aldington

  —

  —

  —

  Ashford

  —

  —

  —

  Ashwell

  —

  —

  —

  Askham Grange

  —

  —

  —

  Aylesbury

  —

  —

  —

  Bedford

  —

  —

  —

  Birmingham

  —

  —

  —

  Blantyre House

  —

  —

  —

  Blundeston

  —

  —

  —

  Bristol

  1

  —

  1

  Brixton

  2

  6

  8

  Brockhill

  —

  —

  —

  Buckley Hall

  —

  —

  —

  Bullwood Hall

  —

  —

  —

  Camp Hill

  —

  —

  —

  Campsfield House

  —

  —

  —

  Canterbury

  2

  1

  3

  Cardiff

  —

  1

  1

  Castington

  —

  1

  1

  Channings Wood

  —

  —

  —

  Chelmsford

  —

  —

  —

  Coldingley

  —

  —

  —

  Cookham Wood

  —

  —

  —

  Dartmoor

  1

  —

  1

  Deerbolt

  —

  —

  —

  Dorchester

  —

  —

  —

  Dover

  —

  —

  —

  Downview

  —

  —

  —

  Drake Hall

  —

  —

  —

  Durham

  2

  —

  2

  East Sutton Park

  —

  —

  —

  Eastwood Park

  —

  —

  —

  Erlestoke

  —

  —

  —

  Exeter

  1

  —

  1

  463

  Establishment

  Suicide verdicts

  Other verdicts

  Total self-inflicted deaths

  Featherstone

  —

  —

  —

  Feltham

  —

  —

  —

  Finnamore Wood

  —

  —

  —

  Ford

  —

  —

  —

  Foston Hall

  —

  —

  —

  Frankland

  1

  —

  1

  Full Sutton

  —

  —

  —

  Garth

  1

  —

  1

  Gartree

  —

  —

  —

  Glen Parva

  1

  —

  1

  Gloucester

  —

  1

  1

  Grendon

  —

  —

  —

  Guys Marsh

  —

  —

  —

  Haslar

  —

  —

  —

  Hatfield

  —

  —

  —

  Haverigg

  —

  —

  —

  Hewell Grange

  —

  —

  —

  Highpoint

  —

  —

  —

  Hindley

  1

  —

  1

  Hull

  —

  —

  —

  Huntercombe

  —

  —

  —

  Kingston (Portsmouth)

  —

  —

  —

  Kirkham

  —

  —

  —

  Kirklevington Grange

  —

  —

  —

  Lancaster

  1

  —

  1

  Latchmere House

  —

  —

  —

  Leeds

  2

  —

  2

  Leicester

  —

  —

  —

  Lewes

  1

  —

  1

  Leyhill

  —

  —

  —

  Lindholme

  —

  —

  —

  Littlehey

  1

  —

  1

  Liverpool

  2

  —

  2

  Long Lartin

  1

  —

  1

  Lowdham Grange

  —

  —

  —

  Low Newton

  —

  —

  —

  Maidstone

  —

  —

  —

  Manchester

  4

  —

  4

  Morton Hall

  —

  —

  —

  The Mount

  —

  —

  —

  New Hall

  —

  —

  —

  Northallerton

  —

  —

  —

  Northeye

  —

  —

  —

  North Sea Camp

  —

  —

  —

  Norwich

  —

  —

  —

  Nottingham

  —

  —

  —

  Onley

  —

  —

  —

  Oxford

  —

  —

  —

  Parkhurst

  —

  —

  —

  Portland

  —

  —

  —

  Preston

  —

  —

  —

  Pucklechurch

  —

  —

  —

  Ranby

  —

  —

  —

  Reading

  —

  —

  —

  Risley

  —

  2

  2

  Rochester

  1

  —

  12

  Rudgate

  —

  —

  —

  Send

  —

  —

  —

  Shepton Mallet

  1

  —

  1

  Shrewsbury

  —

  —

  —

  Spring Hill

  —

  —

  —

  Stafford

  1

  1

  2

  Standford Hill

  —

  —

  —

  Stocken

  —

  —

  —

  Stoke Heath

  —

  —

  —

  Styal

  —

  —

  —

  Sudbury

  —

  —

  —

  Swaleside

  —

  —

  —

  Swansea

  1

  —

  1

  Swinfen Hall

  —

  —

  —

  Thorn Cross

  —

  —

  —

  Thorp Arch

  —

  —

  —

  Usk/Prescoed

  —

  —

  —

  The Verne

  —

  —

  —

  Wakefield

  —

  —

  —

  464

  Establishment

  Suicide verdicts

  Other verdicts

  Total self-inflicted deaths

  Wandsworth

  1

  —

  1

  Wellingborough

  —

  1

  1

  Werrington

  —

  —

  —

  Wetherby

  —

  —

  —

  Whatton

  —

  —

  —

  Winchester

  2

  —

  2

  Wormwood Scrubs

  1

  —

  1

  Wymott

  —

  —

  —

  TOTALS

  33

  15

  48

  1 An inquest is yet to be held on one of the two inmates who died by their own hand at Rochester in 1989.

  Re-entry Visas
  Mr. Vaz
  To ask the Secretary of State for the Home Department when he proposes to move the re-entry visa section from Petty France to Lunar house; and if he will make a statement.

  Mr. Peter Lloyd
  We are keeping the arrangements for the readmission of visa nationals under review. But no plans have been made to move the re-entry visa section at the London passport office to Lunar house.

  Mr. Vaz
  To ask the Secretary of State for the Home Department what is the average length of time for the processing of a re-entry visa for each of the offices in the United Kingdom.

  Mr. Peter Lloyd
  Information is not available in precisely the form requested. The table shows the maximum processing times for straightforward, non-urgent applications as at 11 July 1990:

  Office

  Working days

  Glasgow

  2

  Liverpool

  5

  London

  8

  Newport

  5

  Peterborough

  6

  Lunar House, Croydon

  1—

  Belfast

  2—

  1Same day service for counter applications.

  2 Following initial processing in Belfast applications are dealt with in London.

  Passport Offices
  Mr. Vaz
  To ask the Secretary of State for the Home Department how many persons are employed at the(a) passport office and (b) re-entry section in each office in the United Kingdom for the years (i) 1970, (ii) 1975, (iii) 1980, (iv) 1986, (vi) 1987, (vii) 1988, (viii) 1989 and (ix) at present.

  Mr. Peter Lloyd
  The information is not available in precisely the form requested. Table (a) shows the number of permanent and casual staff in post at each office on 31 May for each year since 1984 when the Home Office assumed responsibility for passport issuing in the United Kingdom. Table (b) shows the number of staff employed on re-entry visa work in the London passport office on 31 May for each of the years 1985 to 1990. In other passport offices re-entry visa applications are handled by staff whose main function is the issue of passports. The staffing resources required for re-entry visa work in such offices cannot be identified separately.
  465

  Table A

  Passport Office staff in post

  Location

  1985

  1986

  1987

  1988

  1989

  1990

  London

  281.5

  283.5

  289

  286

  208.5

  230.5

  (+25)

  (+31)

  (+27)

  (+54)

  (+66)

  (+16)

  Liverpool

  196

  197

  201.5

  197.5

  190

  249.5

  (+30)

  (+34)

  (+45)

  (+62)

  (+103)

  (+74)

  Peterborough

  156

  164

  162.5

  163

  164.5

  204.5

  (+27)

  (+38)

  (+42)

  (+60)

  (+90)

  (+63.5)

  Newport

  160

  168

  165

  166.5

  165.5

  208.5

  (+19)

  (+24)

  (+39)

  (+51.5)

  (+86)

  (+55)

  Glasgow

  76

  82.5

  82

  84.5

  164.5

  201

  (+9)

  (+14)

  (+15)

  (+38)

  (+52)

  (+60)

  Belfast

  15

  14

  17.5

  15

  14.5

  49.5

  (+4)

  (+5)

  (+3)

  (+5)

  (+7)

  (+9.25)

  Notes:

  1.The figures are as at 31 May each year.

  2. The first figures represent permanent staff and the bracketed figures casual staff (employed to assist with peak demand).

  3.The London figure includes Headquarters staff, but not staff located at Hayes.

  Table B

  Staff employed on re-entry visa work London Office on 31 May each year

  Year

  Number

  1985

  11.5

  1986

  11.5

  1987

  11.5

  1988

  11.5

  1989

  10.5

  1990

  10.5

  Mr. Vaz
  To ask the Secretary of State for the Home Department what measures he has introduced to help with stress-related illnesses for the workers at the passport offices.

  Visas issued by passport office since 1985

  1985–86

  1986–87

  1987–88

  1988–89

  1989–90

  1990–912

  Total

  London

  53,086

  49,247

  43,816

  47,958

  52,516

  17,007

  263,630

  Liverpool

  5,729

  5,527

  5,063

  5,831

  6,139

  2,299

  30,588

  Peterborough

  3,280

  3,296

  3,177

  3,774

  4,705

  1,919

  20,151

  Newport

  2,815

  2,331

  2,285

  2,542

  2,877

  915

  13,765

  Glasgow

  2,236

  2,029

  1,885

  2,121

  2,845

  889

  12,005

  Belfast1

  0

  0

  0

  0

  0

  0

  0

  Total

  67,146

  62,430

  56,226

  62,226

  66,237

  22,140

  340,139

  1 Following initial processing in Belfast, applications are dealt with in the London office.

  2 The figure for 1990–91 is for April to June 1990.

  Brixton Prison
  Mr. Harry Greenway
  To ask the Secretary of State for the Home Department whether any temporary limit has been placed on the admission of prisoners to Brixton prison.

  Mr. Mellor
  Prison officers voted in June to take national industrial action over staffing levels and overcrowding. The local branch of the Prison Officers Association at Her Majesty's prison Brixton, together with other branches, took industrial action between noon on 6 July and noon on 9 July. This took the form of reducing the prison population to its certified normal accommodation level by refusing admission of prisoners. As a result of this action at Brixton, 40 prisoners were accommodated in police cells overnight on 6 July and 43 prisoners overnight on 7 July.
  466
  Mr. Peter Lloyd
  Internally mounted management courses for Home Office managers contain an input on the management of stress and passport office managers attend such courses. All staff also have access to staff welfare facilities. I am not, however, aware that staff in passport offices are particularly prone to stress-related illnesses.

  Mr. Vaz
  To ask the Secretary of State for the Home Department how many visas have been issued from each passport office in the United Kingdom from 1985 to the present.

  Mr. Peter Lloyd
  The information requested is shown in the table for the financial years 1985–86 to the present:

  Mr. Harry Greenway
  To ask the Secretary of State for the Home Department what is the present establishment for(a) prison officers and (b) all staff at Brixton prison; and what plans there are to increase it.

  Mr. Mellor
  There are at present 916 in post at Brixton prison of whom 718 are prison officers (including principal and senior officers and specialists). The target officer-in-post figure set by regional management for 31 March 1991 is 720.

  Video Cassettes
  Mr. Hanley
  To ask the Secretary of State for the Home Department what role he envisages for the Broadcasting Standards Council in commenting upon the suitability of programme material distributed via video cassette rental.

  Mr. Mellor
  Although we have not included the video industry within the statutory functions of the Broadcasting Standards Council in the Broadcasting Bill, the council's
  467
  general remit extends to video on a non-statutory basis. We understand that the British Board of Film Classification, in discharging its function under the Video Recordings Act 1984, will take account of the council's code of practice on the portrayal of violence and sex and standards of taste and decency and that the council will consult the board, among others, when drawing up or revising the code.

  Security Industry
  Mr. Cousins
  To ask the Secretary of State for the Home Department when he expects to finalise his views on the recommendations of the report on the self-regulation of the security industry, submitted to him in July 1989.

  Mr. John Patten
  I refer the hon. Member to the reply given to a question from the hon. Member on 3 May at column 666.

  Immigration
  Mr. Cartwright
  To ask the Secretary of State for the Home Department how many refugees from Somalia and their dependants have so far been granted leave to remain in the United Kingdom; how many applications have been refused; and how many are awaiting a decision.

  Mr. Peter Lloyd
  The information requested for years from 1979 to 1988, including the number of Somalian applications for refugee status and asylum awaiting a decision at the end of 1987 and 1988, is published in Home Office statistical bulletin "Refugee Statistics, United Kingdom, 1988", a copy of which is in the Library. Revised figures, including provisional figures for 1989, will be published shortly in the bulletin for 1989 and are given in the table. Figures for the number of applications outstanding especially at the end of 1989 overstate the position because of under-recording of decisions made earlier.

  Revised and more up-to-date information on applications received for refugee status or asylum from Somalian citizens

  11987

  11988

  21989

  Grants of refugee status or asylum

  57

  346

  1,170

  Grants of exceptional leave

  385

  73

  305

  Refusals of exceptional leave or refugee status

  389

  9

  10

  Applications outstanding at end of year

  3600

  580

  1,820

  1Revised figures.

  2Provisional figures.

  3These figures are unaltered.

  Mr. Darling
  To ask the Secretary of State for the Home Department what is the average time taken by his Department to investigate cases referred from overseas posts in order to assess whether the maintenance and accommodation requirements of the immigration rules have been met.

  Mr. Peter Lloyd
  [holding answer 16 July 1990]: The information is not available in the form requested. But the estimated average time taken by the immigration service to deal with all categories of cases deferred by entry clearance officers during the past 12 months was about 60 days.

  Mr. Vaz
  To ask the Secretary of State for the Home Department how long it takes for a decision to be made on 468
  a case of (a) naturalisation, (b) registration, (c) immigration, (d) eastern European casework and (e) asylum and related casework from the opening of the letter.

  Mr. Peter Lloyd
  [holding answer 10 July 1990]: The available information relates to the average times taken from the date of receipt of applications to their completion. Applications for naturalisation and registration completed in June 1990 took 30 months and 22 months respectively. After-entry immigration applications, applications from eastern European nationals and applications for asylum completed in the first quarter of 1990 (the latest period for which information is available), took 102 days, 108 days and 9.5 months respectively.

  Pet Theft
  Mr. Corbett
  To ask the Secretary of State for the Home Department what recent discussions he has had with the Association of Chief Police Officers concerning reports on pet theft given to him by the national Petwatch organisation; and with what result.

  Mr. Peter Lloyd
  We have not discussed this with the Association of Chief Police Officers, but we sent material provided by National Petwatch to the association which then circulated it to all chief constables in England and Wales. The investigation of alleged thefts is a matter for the police to whom all incidents should be reported.

  RAF Greenham Common (Sentences)
  Sir Michael McNair-Wilson
  To ask the Secretary of State for the Home Department whether he will initiate the process to have the sentences of those persons prosecuted under the Ministry of Defence's bylaws at RAF Greenham Common, which were the subject of the House of Lords ruling of 12 July, reviewed or quashed; and if he will make a statement.

  Mr. John Patten
  We are currently considering the terms of the House of Lords ruling of the RAF Greenham Common byelaws and will of course consider any representations made by those who have been convicted under those byelaws.

  Prison Overcrowding
  Sir John Wheeler
  To ask the Secretary of State for the Home Department what proposals he has to reduce overcrowding in prisons; and if he will make a statement.

  Mr. Waddington
  The Government are tackling the problem of overcrowding by policies designed to ensure that imprisonment is not used in the case of persons who can be adequately punished in the community, and by a massive prison building programme. On 13 July there were 45,483 people in prison or temporarily held in police cells. This is the lowest July figure since 1984.

  Under the prison building programme, eight prisons have been completed since 1979, and 12 are under construction, with more planned to follow. Between now and March 1992 the programme will produce over 5,000 new places, and this figure will rise to nearly 7,000 by March 1993. The new establishments are being built to a high standard, and places in them will have integral sanitation; and with their completion, the number of

  469
  places available to the prison service of category B standard will rise by one third. Over 5,000 of the new places will be used for prisoners in local prisons or remand centres, thus relieving directly the areas of greatest pressure.

  There is also a substantial programme of projects producing places at existing establishments. Over the next three years 3,000 places with integral sanitation will come into use at existing establishments. About half these places will be in local establishments.

  I concluded towards the end of last year that the distribution of the prison estate needed attention. In particular, with the welcome fall in the young offender population, young offender accommodation was not full, while the adult system remained under considerable strain. A review has been carried out of the prison estate as a whole with the aim of providing the necessary places through the most cost-effective and efficient mix of establishments, in particular by examining what scope and options exist for changes and adjustments to the young offender estate and to the role of establishments in order to bring planned capacity and expected population levels more closely into line. The prime purpose was to seek ways of relieving the burden of overcrowding in the adult estate, where the need is for good quality and secure accommodation.

  The main proposals which have emerged from the review are as follows. First, three large young offender institutions will become adult prisons for category C prisoners. Her Majesty's prison Wellingborough, which has accommodated with success the bulk of the Grendon population while building work has been going on there, will continue as an adult prison when Grendon returns to operation during the autumn. Her Majesty's young offender institution The Mount will become an adult establishment (the purpose for which it was originally built) before the end of the current financial year, and Her Majesty's young offender institution Castington similarly in 1992–93. While some security work will be necessary to make them fully suitable for their new role, all three establishments offer modern and secure accommodation and will be most valuable additions to the adult estate. Secondly, a number of establishments will change their functions in whole or in part so as to provide a resource more fitted to the expected population. This may involve the provision of local, training or young offender places as required in the particular area. In some areas, these changes will help to move young offenders on remand out of adult local prisons. For example, part of the existing young offender institution at Everthorpe has been redesignated as a prison to enable it to hold such offenders and to give immediate relief to Her Majesty's prison Hull. In 1992, it is intended that Her Majesty's prison Thorp Arch should take young offender remand prisoners so as to reduce or even eliminate the young offender population in Her Majesty's prison Leeds.

  It was always clear that as we sought to develop plans for the better use of the estate, the possibility could not be ruled out of closing establishments, particularly young offender establishments, where their accommodation was uneconomic, poorly located, or in other respects below standard. It is proposed that HM young offender institution Campsfield House and HM young offender institution Lowdham Grange should close by the end of the current financial year, and HM young offender institution Eastwood Park and HM prison Northeye by
  470
  the end of 1992–93. Campsfield House offers no more than 70 places with low security. To fill this up with prisoners not suitable for these conditions would be to put the public at risk. The establishment could discharge any alternative and secure function only following virtual rebuilding at high cost and considerable delay. Similar considerations apply to Eastwood Park and Northeye. Lowdham Grange is an open young offender establishment which has for some time been only partly occupied as the young offender population has fallen. Inmates suitable for open conditions can be accommodated elewhere within the system. Staff, trade unions and boards of visitors will be consulted on the basis of these proposals.

  These initiatives will produce a more efficient prison estate in which accommodation is better located, better fitted to its tasks, and with better facilities than now exist.

  Rape
  Dame Jill Knight
  To ask the Secretary of State for the Home Department what action has been taken since 1987 to tackle the crime of rape.

  Mr. John Patten
  The Government continue to attach a high priority to action against rape, including the detection and punishment of offenders; the provision of help and support to victims; and the development of prevention policies.

  The enhanced police response to rape allegations is reflected in the increases in the recorded crime statistics. Victims of rape have been encouraged to come forward. Changes in police practice have meant that a higher proportion of rape allegations have been recorded as crimes. A high percentage of recorded rapes are cleared up by the police (71 per cent. in 1987 and 74 per cent. in 1989) and the police now have their disposal improved detection methods such as DNA fingerprinting with which to provide the courts with evidence of guilt. The maximum penalty for attempted rape was increased to life imprisonment in 1985. In 1986 the Court of Appeal gave guidance on sentencing in rape cases in R v Billam. Since 1987, over 70 per cent. of convicted rapists have received sentences of five years or more.

  In line with Home Office guidance issued in October 1986, the police are increasingly alert to the special needs of rape victims. Rape examination suites have been set up where distressed victims can be examined in comforting surroundings and by a woman doctor wherever possible; interviews with victims are usually also conducted by women police officers. The aim is to treat victims sensitively and to provide them with full information about medical, support and counselling services after their ordeal.

  Anonymity for rape victims was strengthened in the Criminal Justice Act 1988. It is now an offence to publish or broadcast the name or address or a still or moving picture of a woman after an allegation has been made that she has been the victim of a rape offence, if that is likely to lead members of the public to identify her as the alleged victim. The prohibition applies during the whole of the woman's lifetime, unless the courts make a specific direction to the contrary, and it applies whether proceedings follow or not; if they do, it applies in relation to civil as well as criminal proceedings.

  The Home Office is providing £4.5 million this year towards the cost of local victim support schemes. These now cover over 94 per cent. of the population of England

  471
  and Wales and are helping increasing numbers of victims of serious crime, including rape victims. Improved understanding of the nature of crimes is desirable as a basis for developing prevention policies. In February 1989, we published two important research studies about rape, "Changes in rape offences and sentences" (Home Office Research Study 105) and "Concerns about rape" (Home Office Research Study 106). Among other findings, the studies suggest that women are more likely to be raped by someone they know than by a stranger, and that more rapes take place indoors than in public places. The reports are in the Library.

  The latest edition of our crime prevention handbook "Practical Ways to Crack Crime" encourages women to take common-sense precautions to reduce the risk of attack.

  Arrangements for the treatment of sex offenders in prison custody and their treatment and supervision in the community are being reviewed by a prison service working party and by Her Majesty's inspectorate of probation. This work should contribute to the development of improved provision for the treatment of offenders, so that they are less likely to re-offend.

TRANSPORT

  M3 (Compulsory Purchase)
  Ms. Ruddock
  To ask the Secretary of State for Transport, pursuant to his reply of 12 July to the hon. Member for Lewisham, Deptford, when he expects the remaining part of the compulsory purchase order relating to the Bar End-Compton section of the M3 will be made.

  Mr. Atkins
  A date for making the compulsory purchase order for the Bar End-Compton section of the M3 has not yet been fixed.

  Toxic Materials (Rivers and Estuaries)
  Mr. Flynn
  To ask the Secretary of State for Transport if he plans to introduce new regulations for the control of the transport of toxic materials on rivers and estuaries.

  Mr. McLoughlin
  The existing Merchant Shipping (Dangerous Goods) Regulations 1981, as amended, which govern the transport of toxic materials on rivers and estuaries within the United Kingdom, will be revised to take account of recent internationally agreed conditions for the transport of marine pollutants by ships.

  Collisions (River Usk)
  Mr. Flynn
  To ask the Secretary of State for Transport how many collisions and other accidents involving ships in the River Usk, Gwent have taken place in the past three years; and how many of these involved ships carrying toxic wastes.

  Mr. McLoughlin
  Records show that there have been two accidents involving ships in the River Usk in the past three years. The details are:

  Date of accident

  Name of vessel

  Type of accident

  13 November 1989

  Hargevan

  Grounding

  24 April 1990

  Bell Ranger/Morias

  Collision

  472
  The Bell Ranger was carrying, among other items, a container of drums of chemical waste. The chemical is classified as a toxic substance. Hargeven and Morias were both carrying cargoes of steel.

  Mr. Flynn
  To ask the Secretary of State for Transport, pursuant to his answer of 6 July to the hon. Member for Newport, West,Official Report, column 737, if he has any additional information (a) on the condition of the containers and (b) the severity of the collision.

  Mr. McLoughlin
  I have no information on the condition of the containers as commissioned for use but none was damaged in the incident in question.

  As to the severity of the collision, both vessels sustained only minor damage.

  Bus Lanes
  Mr. Cox
  To ask the Secretary of State for Transport (1) what discussions his Department has had with the Metropolitan police about the case for ensuring a stronger enforcement of regulations as to the illegal use of bus lanes by other motor vehicles; and if he will make a statement;

  (2) what discussions he is having with London councils about an extension of the present provision of bus lanes within the Greater London area; and if he will make a statement.

  Mr. Atkins
  The provision of bus lanes and the enforcement of the regulations applying to them are being considered with the development of our proposals for improving traffic management and parking control in London set out in "Traffic in London". Discussions are under way with the Metropolitan police and the local authorities concerned in connection with the priority route pilot scheme planned in north and east London.

  Mr. Cox
  To ask the Secretary of State for Transport what discussions his Department has had with the Metropolitan police about the removal of any existing bus lanes in central London; and if he will make a statement.

  Mr. Atkins
  My Department has had no recent discussions with the Metropolitan police on this subject.

  Roads, Cumbria
  Mr. Jopling
  To ask the Secretary of State for Transport what road improvements are pending between Cumbria and the A1 in the light of the proposed upgrading of the A1; and if he will make it his policy that the upgrading of the A66 will be completed before the A1 upgrading is completed.

  Mr. Atkins
  On the A66 between Penrith and Scotch Corner there are three improvement schemes planned. Works are expected to begin in September on a dual carriageway scheme between the Bowes bypass, in Durham, and the Cumbria border.

  The two other schemes are in preparation. These are between Stainmore and Banksgate and at Temple Sowerby and works are planned to start from mid-1992.

  The trans-Pennine study, now being carried out by consultants commissioned by the Department, will consider the need for further improving the road links across the Pennines, including the A66.

  As my right hon. Friend the Secretary of State explained in his announcement on 3 July 1990, the

  473
  upgrading of the A1 from London to Tyneside will inescapably be spread over a number of years. Within this period and with the outcome of the trans-Pennine study the future needs for the A66 trunk road will become more defined.

  Merchant Ships
  Sir John Farr
  To ask the Secretary of State for Transport what is the average age of British merchant ships; and what information he has on the world average age.

  Mr. McLoughlin
  As at 31 March 1990, the average age of United Kingdom-registered trading vessels was 13.7 years: the average age of all world trading vessels was 12.7 years.

  UK Airports and Airspace
  Mr. Haselhurst
  To ask the Secretary of State for Transport if he has yet received the Civil Aviation Authority's advice on United Kingdom airport and airspace capacity, which was commissioned for his Department in July 1988; and if he will make a statement.

  Mr. Parkinson
  The Civil Aviation Authority is publishing today its advice on airport and airspace capacity. Copies of the report are being placed in the Library.

  The CAA's work has had two main elements: first, an examination of what additional runway capacity appears to be needed to serve the south-east; and, secondly, an analysis of the technical feasibility, in airspace and air traffic control terms only, of the options for providing that capacity.

  The CAA has reassessed its traffic forecasts. It has reached the view that extra runway capacity to serve the south-east will be required around the year 2005.

  The authority looked at eight options for further development at existing airports. At my request, it did not consider green field sites. Sir Christopher Tugendhat, the chairman of the CAA, has noted in his covering letter to me that the Government will need to take account of many wider factors before making a choice. He has also acknowledged that the wider view might lead us to reject some locations which, from an airline or air traffic control viewpoint alone, might appear favourable.

  The Government are in no way committed to any of the options identified by the CAA. I am acutely aware of the impact of airport development on the environment, on employment, and on local infrastructure. These matters will need to be thoroughly addressed and there will be no question of any major new runway development taking place without full public consultation and a public inquiry into any objections.

  As the next step, I propose to establish a working group to examine these factors, and to make recommendations. Representatives from bodies representing local and environmental interests, from airport and airline operators, from the tourism and travel industry, and from Government Departments, will be invited to participate.

  In their 1985 White Paper on airports policy, the Government expressed their view that a second runway should not be built at either Stansted or Gatwick. The considerations which led to that view remain compelling.

  I shall be reminding the working group of the undertakings which have been given in the case of Gatwick
  474
  and Stansted and of the acute environmental problems which gave rise to the views which the Government expressed on those airports in the 1985 White Paper. Obviously, the wider considerations the chairman referred to are no less relevant at Heathrow.

  In its advice, the CAA has said that it believes that traffic at regional airports will continue to grow rapidly, but that this will not be an effective substitute for additional London area capacity. I shall be asking the working group to assess this conclusion most carefully and to gauge the extent to which regional airports can play a part in meeting the overall growth in demand, into the next century.

  Orange Badge Holders
  Ms. Ruddock
  To ask the Secretary of State for Transport how many orange badge holders were registered in England and Wales for the year 1988; and what is his Department's projected figure for 1991 under the new proposals.

  Mr. Atkins
  [holding answer 13 July 1990]: According to information supplied by local authorities, whose task it is to administer the scheme, about 930,000 badges were in circulation in England and Wales in March 1988.

  Changes currently proposed to the regulations are designed to ensure that badges are issued only to those people who most need them. The scheme is not being modified with any specific target in mind for the number of badge holders.

  Bedford (Traffic Flows)
  Sir Trevor Skeet
  To ask the Secretary of State for Transport (1) what are the most recent traffic flow figures for the A428 and the A6 in Bedford and of the number of vehicles passing over the Prebend street, High street and Newnham street bridges;

  (2) what is his Department's estimate of the traffic expected to be taken off the A428 at Bedford following the upgrading of the A45 and the completion of the southern route through Elstow to the M1.

  Mr. Atkins
  [holding answer 16 July 1990]: The most recent traffic flows are shown in the table together with the anticipated reduction at the opening of Bedford southern bypass. These figures allow for a transfer of traffic from Bedford to take account of the improvements along the A45 and the completion of the M1-A1 link route.

  16 hour Annual Average Weekday Traffic (all vehicles)

  Location

  1989

  Predicted reduction1

  A428 West of Bedford

  21,000

  6,500

  A428 East of Bedford

  18,000

  11,500

  Longholme Way/Newnham Avenue Bridge

  29,000

  15,000

  A6 North of Bedford

  20,000

  —

  A6 Town Bridge (High Street)

  29,000

  —

  Prebend Street Bridge

  27,000

  —

  1 On opening of Bedford southern bypass.

  Sir Trevor Skeet
  To ask the Secretary of State for Transport what estimates he has made of the cost to Bedford for failure to tackle the traffic problems in the town.

  Mr. Atkins
  [holding answer 16 July 1990]: The net present value (NPV) of the proposed road improvements,

  475
  using my Department's standard cost-benefit analysis method, gives a guide to the overall cost. The proportions of value/cost accruing to Bedford alone are not calculated. The NPV of Bedford southern bypass has been estimated at between £33 million and £85 million (at 1988 cost and prices), depending on the rate of economic growth assumed over a 30-year period. The NPV of a proposed improvement to the west of Bedford has not yet been estimated.

  Benefits may also accrue from the proposed town centre improvements which are the responsibility of Bedfordshire county council as the local highway authority.

  Polegate Bypass
  Mr. Gow
  To ask the Secretary of State for Transport when he expects to make a decision about the route of the proposed Folkington link on the A27/A259 trunk road which is part of the proposed Polegate bypass.

  Mr. Atkins
  [holding answer 16 July 1990]: My right hon. Friend hopes to be able to make an announcement about the A27 Folkington link extension of the proposed Polegate bypass later this year.

  Bypasses
  Sir Trevor Skeet
  To ask the Secretary of State for Transport how many towns in the south-east of the size of population of about 80,000 remain to be bypassed.

  Mr. Atkins
  [holding answer 16 July 1990]: The towns in the south-east of the size of population of about 80,000 outside the M25 ring, on trunk roads, that do not have a bypass are:

  Town

  Progress

  Bedford/Kempston

  At planning stage

  Norwich

  Construction of the southern bypass has recently started

  Dunstable

  At planning stage

  Hastings Bexhill

  At planning stage

  Brighton and Hove

  Bypass under construction

  Worthing

  At planning stage

  *St. Albans

  *Milton Keynes

  *Luton

  *Southend

  Although through traffic passes through the towns marked with an asterisk, the Department has no proposals for a bypass.

  Road schemes are not planned around the size of populations, but to assist economic growth by reducing transport costs, to improve the environment by removing through traffic from unsuitable roads in towns and villages and to enhance road safety.

  A1
  Sir Trevor Skeet
  To ask the Secretary of State for Transport whether he has any proposals for linking developments(a) at Thurleigh and (b) at Poddington airfields with the A1.

  Mr. Atkins
  [holding answer 16 July 1990]: No.

  Mr. Beith
  To ask the Secretary of State for Transport at how many points the A1 between Newcastle and the 476
  border is currently reduced to one-way operation during roadworks; and at how many points it is expected to be restricted to one-way operation during the forthcoming Scottish and English bank holiday weekends.

  Mr. Atkins
  [holding answer 16 July 1990]: There are three points on the A1 between Newcastle upon Tyne and the border which are currently reduced to one-way operation for roadworks. These are at adjacent locations on the Alnwick bypass to allow for road maintenance and the provision of marginal strips, and on the Berwick bypass.

  There will be no one-way operation on this section of the A1 during the forthcoming Scottish bank holiday. Maintenance works are to start south of Scremeston in August. Consideration will be given to the possibility of removing one-way operation for the forthcoming English bank holiday weekend.

  M20/M2 Improvements
  Mr. Nicholas Winterton
  To ask the Secretary of State for Transport what steps he is taking to ensure that major road improvements on the M20, junctions 3 to 5 and 5 to 8, and the M2, junctions 1 to 3, will be completed before the channel tunnel is due to open.

  Mr. Atkins
  [holding answer 16 July 1990]: The proposed widening of the M20 between junctions 3 and 5 was added to the roads programme in the May 1989 review. My Department's consultants are investigating possible options with a view to the announcement of a preferred scheme in autumn 1991.

  Proposals to improve the M20 between junctions 5 and 8 were considered at a public inquiry earlier this year. Subject to the completion of the statutory procedures it is hoped to start work next summer for completion by the time the channel tunnel is planned to open in 1993.

  The timing for the proposed widening of the M2 between junctions 1 and 3 is being reviewed following the addition to the roads programme earlier this year of a scheme to improve the motorway between junctions 3 and 4.

  Trunk Roads
  Mr. Boswell
  To ask the Secretary of State for Transport whether proposals for upgrading trunk roads to motorways are subject to public inquiry procedure.

  Mr. Atkins
  [holding answer 16 July 1990]: In all cases we will publish orders under section 16 of the Highways Act 1980. If any statutory objections are received we will undertake a public inquiry.

  Mr. Boswell
  To ask the Secretary of State for Transport whether, in bringing forward proposals for upgrading trunk roads to motorways, he will give consideration to the need to offer alternative road arrangements or compensation to users of agricultural and other vehicles prohibited from using such roads for local journeys.

  Mr. Atkins
  [holding answer 16 July 1990]: In developing proposals to upgrade trunk roads to motorway the Secretary of State is required to consider the requirements of local planning and agriculture before making a scheme under section 16 of the Highways Act

  477
  1980 authorising a motorway. An order cannot be made under section 18 of that Act appropriating an existing road as part of a motorway unless the Secretary of State is satisfied that either another reasonably convenient route is available for prohibited traffic or that no such route is reasonably required for any such traffic. In the case of non-prohibited traffic he would of course also consider making alternative arrangements for persons undertaking local journeys which would formerly have involved the road to be upgraded but which could not in future be made.

  Entitlement to compensation is governed by statute and will depend on the circumstances of each case.

  Newly Qualified Drivers
  Mr. Colvin
  To ask the Secretary of State for Transport if he will consider the introduction of P-plates to indicate that a motor vehicle is driven by a newly qualified driver; and if he will make a statement.

  Mr. Atkins
  [holding answer 16 July 1990]: Yes, I am in the process of so doing.

AGRICULTURE, FISHERIES AND FOOD

  Frans Buitelaar (Farms) Ltd.
  Mr. Matthew Taylor
  To ask the Minister of Agriculture, Fisheries and Food if he has made an assessment of the animal welfare and human health implications of the intensive husbandry practices associated with the use of feedlots at Frans Buitelaar (Farms) Ltd. premises at Claygate farm in Lincolnshire; and if he will make a statement.

  Mr. Maclean
  The Farm Animal Welfare Council has examined the feedlot system. Its conclusion was that it does not present a welfare risk as long as certain sensible precautions are taken. The state veterinary service has inspected the farm referred to and found no evidence of any unnecessary pain or unnecessary distress in contravention of the Agriculture (Miscellaneous Provisions) Act 1968. I am not aware of any human health risk associated with the feedlot husbandry system.

  Live Animals (Travel)
  Mr. David Shaw
  To ask the Minister of Agriculture, Fisheries and Food what is the Government's current policy in relation to EEC proposals to restrict the time that live animals may be required to travel without rest; and if he will make it his policy to support a reduction below 12 hours.

  Mr. Maclean
  The Government will support proposals to fix maximum intervals for the transport of animals without rest, food and water. These must relate to the welfare requirements of individual types of animal rather than be set at a fixed period to cover all animals.

  Live Animals (Export)
  Mr. Matthew Taylor
  To ask the Minister of Agriculture, Fisheries and Food if he will invoke article 36 of the treaty of Rome to prevent the export of live animals where those animals are likely to suffer transportation and slaughter conditions inferior to those operating in this country; and if he will make a statement.
  478
  Mr. Maclean
  I am advised that article 36 of the treaty cannot be invoked where, as in this case, there are Community measures on the subject in question. The Government however already prohibit the export of live animals for slaughter or for further fattening to countries which do not implement standards equivalent to those laid down in Community directives on the protection of animals during international transport and on the pre-slaughter stunning of animals.

  Caribbean Bananas
  Mr Andrew Smith
  To ask the Minister of Agriculture, Fisheries and Food, pursuant to the letter of 25 June to the hon. Member for Oxford, East, concerning banana exports from the Caribbean after 1992, whether price guarantees are included in his assurance of preferential access arrangements for Caribbean banana exporters.

  Mr. Curry
  Our objective is an effective preferential arrangement after 1992, which will enable a continuing flow of bananas from the Caribbean into the Community market, in line with our commitments under the Lomé convention. Current preferential access to the United Kingdom for Caribbean bananas does not guarantee prices. Commission proposals for post-1992 banana trade have not yet emerged. We cannot predict the mechanism by which preferential access will be protected.

  Food from Devon
  Mr. Speller
  To ask the Minister of Agriculture, Fisheries and Food if his Department has considered an application for an exhibition relating to food from Devon to be displayed in the Upper Waiting Hall.

  Mr. Curry
  Yes. I understand the exhibition will be on display for one week from 5 November.

  Animal Welfare
  Mr. Simon Hughes
  To ask the Minister of Agriculture, Fisheries and Food, pursuant to the answer to the hon. Member for Southwark and Bermondsey,Official Report, 10 July, column 109, when he expects to be content that welfare-related problems will have been eliminated from the emerging alternative systems and that these systems are commercially viable.

  Mr. Maclean
  Some alternative systems are already being installed successfully. The proposals now under discussion in the Council of Ministers provide for the Commission to report by 1 January 1993 on the welfare of sows kept in different degrees of confinement or in groups, and to submit appropriate proposals. I am hopeful that any remaining problems with alternatives to stall and tether systems will have been resolved by that time.

  Mr. Simon Hughes
  To ask the Minister of Agriculture, Fisheries and Food, pursuant to the answer to the hon. Member for Southwark and Bermondsey,Official Report, 10 July, column 109, whether he will phase out the existing stall and tether systems if the alternatives prove not to be commercially viable.

  Mr. Maclean
  I have made it clear that legislation requiring major changes to husbandry systems should be adopted on a Community basis. The action to be taken, should the Community not agree to the phasing out of stall and tether systems, would need to be considered at the time.

  Fur Farms
  Mr. Ron Davies
  To ask the Minister of Agriculture, Fisheries and Food what action he intends to take regarding the recommendations made by the Farm Animal Welfare Council on 4 April 1989 concerning mink and fox farming.

  Mr. Maclean
  The Farm Animal Welfare Council recommended that Agriculture Ministers should require that the state veterinary service carry out effective monitoring of standards of management on these farms. This is being done.

  Farm Woodland Scheme
  Mr. Boswell
  To ask the Minister of Agriculture, Fisheries and Food whether he will amend the rules of the farm woodland scheme to permit farmers to make more than one application per holding.

  Mr. Gummer
  Existing participants in the farm woodland scheme have shown interest in increasing their plantings under the scheme. The rule limiting them to one application per holding is preventing that. Agriculture Ministers have therefore decided from today to abolish the rule and to permit additional applications to be made up to the limit of 40 hectares per agricultural unit. I am pleased with the continuing interest in this innovative scheme which should bring environmental benefits for future generations.

PRIME MINISTER

  Official Visits
  Dr. Godman
  To ask the Prime Minister if she has any plans to pay an official visit to Scotland in the near future.

  The Prime Minister
  I hope to visit Scotland later this year.

  Mr. Cryer
  To ask the Prime Minister when she next expects to make an official visit to the Channel tunnel site.

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

  Defence Review
  Mr. Cohen
  To ask the Prime Minister what consideration has been given to the role of the security services in her Government's present options for change review; and if she will make a statement.

  The Prime Minister
  The options for change studies are concerned with the future structure and deployment of our armed forces.

  Bed-and-Breakfast Hotels
  Mr. Corbyn
  To ask the Prime Minister what action she is taking to ensure that children in bed-and-breakfast hotels are living in safety and in receipt of full-time education when of school age.

  The Prime Minister
  Local authorities have considerable powers to control safety standards of houses in 480
  multiple occupation, which include bed-and-breakfast hotels. These powers have recently been strengthened. Responsibility for ensuring that all children of compulsory school age receive a proper education, including those in bed-and-breakfast accommodation, rests, under the Education Acts, with parents, schools and local education authorities. The Government are concerned to reduce the need for local authorities to use unsatisfactory bed-and-breakfast hotels and are making available, over the next two years, £250 million to local authorities and housing associations in London and the south-east, specifically to get homeless families out of such accommodation and into permanent homes.

  Afghanistan
  Mr. Ron Brown
  To ask the Prime Minister if she will meet the President of Afghanistan to discuss renewal of diplomatic relations between the two countries; and if she will make a statement.

  The Prime Minister
  I have no plans to meet General Najibullah. Diplomatic relations between Britain and Afghanistan have not been broken.

  Data Protection
  Mr. Cohen
  To ask the Prime Minister how many subject access requests under the terms of the Data Protection Act her office has received; what was her estimate of the number of requests that would be received; what consideration she is giving to the subject access fee charged by her office as a result; and whether she will make a statement.

  The Prime Minister
  The total number of subject access requests received by my office is one. No specific estimate on the number of requests expected was made at the time as the amount of information held on computers in my office was small. The subject access fee charged was minimal to cover the cost of the work involved. The fee is set by the Cabinet Office, which has the responsibility for Data Protection Act matters for my office.

  Natural History Museum
  Mr. Dalyell
  To ask the Prime Minister if she will publish in the Official Report her response to the letter of 15 June from Dr. Peter Jung and expert colleagues in minerals, molluscs and entomology of the naturhistorisches museum in Basel, about whether major collections can be actively cared for under proposals such as those for the natural history museum in respect of expert staff; and what action she proposes to take to discharge obligations in respect of scientists' work in building up collections to the benefit of smaller museums throughout the world.

  The Prime Minister
  I understand that my right hon. Friend the Minister for the Arts will shortly be placing a copy of the Government's response to Dr. Peter Jung's correspondence in the Library of the House.

  The Minister for the Arts has asked the Government's chief scientific adviser, who is in discussion with the natural history museum, to keep him informed of the museum's position in relation to the United Kingdom science base. The Minister for the Arts will also be meeting the chairman and director of the museum to discuss the corporate plan and the wider issues.

  British Airways
  Sir Richard Body
  To ask the Prime Minister whether she will raise at her next meeting with the President of the Commission of the European Community his officials' search of the private offices of the chairman and chief executive of British Airways and examining of their private papers and personal bank statements.

  The Prime Minister
  I am advised that the visit was made by prior arrangement with the company and a legal representative of British Airways vetted documents (for relevance to the investigation and for possible legal privilege) before the Commission officials read them.

  Engagements
  Mr. Pike
  To ask the Prime Minister if she will list her official engagements for Tuesday 17 July.

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

ATTORNEY-GENERAL

  Crown Prosecution Service
  Mr. Andrew Mitchell
  To ask the Attorney-General if he will make a statement concerning the use by the Crown prosecution service of lawyer agents in magistrates courts.

  The Attorney-General
  In the long term, as and when lawyer strength permits, it would be the aim of the Crown prosecution service (CPS) to employ agents to cover only 5 to 10 per cent. of court sessions.

  The number of sessions (half days) in magistrates courts undertaken by counsel and solicitors in private practice on behalf of the CPS in 1989–90 was 138,000. This represented 38 per cent. of all sessions undertaken by the CPS in the magistrates courts. The information given in annex 9 of the CPS evidence to the Home Affairs Committee was incorrect: the data had been wrongly interpreted. The percentage of court sessions covered by agents has remained at 38 per cent. for both 1988–89 and 1989–90. The revised figures are:

  (a) Court sessions covered by agents

  National totals

  1988–89

  130,643

  1989–90

  138,066

  (b) Percentage court sessions covered by agents

  Per cent.

  1988–89

  38

  1989–90

  38

  (c) Expenditure on agents fees

  £

  1988–89

  14,793,896

  1989–90

  16,473,527

LORD PRESIDENT OF THE COUNCIL

  Order Paper
  Mr. Allen
  To ask the Lord President of the Council what proposals he is considering to review the format of the Order Paper.

  Sir Geoffrey Howe
  It is understood that, once the decisions have been taken on the recommendations contained in the Procedure Committee's report on oral questions, the Accommodation and Administration Sub-Committee will be prepared to consider a review of the format of the Order Paper. The hon. Member and any others with a contribution to make on this issue should send their comments to the Sub-Committee Chairman.

  Procedure Committee
  Mr. Allen
  To ask the Lord President of the Council if he will list the reports of the Procedure Committee, published since 1983–84, which have yet to be dealt with on the Floor of the House; and when he expects them to be brought forward for decision.

  Sir Geoffrey Howe
  The following are the reports from the Procedure Committee, published since 1983–84, which have neither been debated on a substantive motion nor "tagged" as relevant to a general debate on procedure: First Report (1988–89) HC 290 ("Conduct of Members in the Chamber and the Alleged Abuse of Parliamentary Privilege"); First Report (1989–90) HC 379 ("Oral Questions"). I hope to be able to give the House an opportunity in the near future to reach a decision on the report on oral questions. There are no immediate plans for a debate on a substantive motion on any of the reports from the Procedure Committee on which the House has not yet reached a specific conclusion.

NORTHERN IRELAND

  North Eastern Education and Library Board
  Mr. Beggs
  To ask the Secretary of State for Northern Ireland how many officers of the Royal Ulster Constabulary were assigned to investigate allegations of irregularities in North Eastern education and library board contracting from June 1986 until August 1987; what was the level of qualification and experience within the Royal Ulster Constabulary of each officer involved in this investigation; how many man-hours were spent by each investigating officer on the assignment; how many witnesses were interviewed by Royal Ulster Constabulary officers; how many miles were travelled by Royal Ulster Constabulary officers investigating the allegations from June 1986 until 31 March 1987; and whether, in the period 1 April 1987 until August 1987, the investigating officers completed reports on hours worked, miles travelled and so on, throughout the period of the investigation.

  Mr. Cope
  The Chief Constable has informed me that two officers from the RUC's serious crime squad were assigned to this investigation assisted as necessary by other officers and that all the officers involved were appropriately qualified for their work. I regret that the other particulars requested are not readily available.

OVERSEAS DEVELOPMENT

  UNESCO
  Mr. Wells
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will give details of expenditure of funds saved by United Kingdom withdrawal from the United Nations Educational, Science and Cultural Organisation and figures of how these funds were used in the main area of United Nations Educational, Science and Cultural Organisation activity for the financial years 1987–88, 1988–89 and 1989–90; and if he will ensure that the United Nations Educational, Science and Cultural Organisation's savings will continue to be spent in the same manner until Her Majesty's Government decide to return to membership of the United Nations Educational, Science and Cultural Organisation.

  Mrs. Chalker
  Figures for expenditure of funds saved by United Kingdom's withdrawal from UNESCO for 1987–88 and 1988–89 are:

  1987–88 £

  1988–89 £

  Overseas Development Administration (ODA) technical co-operation training programme

  1,772,848

  1,773,033

  English language training courses

  600,300

  593,920

  ODA shared scholarship schemes

  320,000

  320,000

  Foreign and Commonwealth Office (FCO) scholarships and awards schemes

  640,000

  640,000

  ODA cultural projects

  100,000

  92,000

  Public expenditure survey transfer to FCO for cultural projects

  100,000

  100,000

  Chinese student scholarships in the United Kingdom

  950,000

  950,000

  Distance learning project in Commonwealth countries

  100,000

  Nassau fellowships

  650,131

  743,368

  Commonwealth media development fund

  150,000

  150,000

  Royal Society

  112,000

  116,000

  Research in arid Commonwealth Africa

  300,000

  300,000

  Inter-governmental Oceanographic Commission

  80,864

  78,000

  Man and the Biosphere/International Hydrological Programme/International Association of Hydrological Sciences

  200,000

  200,000

  Dissemination of results of research

  200,000

  200,000

  Total

  6,276,143

  6,256,321

  Figures for 1989–90 are not yet available.

  My hon. Friend may rest assured that in planning our aid programme priorities we will continue to take full account of the appropriate allocation of the funds saved by our withdrawal from UNESCO.

  Epidemics
  Mr. Butler
  To ask the Secretary of State for Foreign and Commonwealth Affairs what support the Overseas Development Administration has given to setting up a global early warning system for new epidemics at the London School of Hygiene and Tropical Medicine.

  Mrs. Chalker
  None; responsibility for global monitoring of notifiable diseases rests with the World Health Organisation. The London School of Hygiene and 484
  Tropical Medicine is an international centre for epidemiology and public health, and works closely with the WHO. The ODA has recently agreed a package of assistance (£11 million over the next five years) for nine new research and training programmes in public health and tropical medicine at the school. These programmes will strengthen the school's (and the ODA's) capacity to provide practical advice to international agencies and Governments in developing countries on all aspects of international health policy.

  Nicaragua
  Mr. Tom Clarke
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he will be in a position to make a decision in respect of further bilateral technical aid to Nicaragua.

  Mrs. Chalker
  No further decisions are needed. The modest technical co-operation programme which I announced on 2 April in a reply to the hon. Member for Brent, South (Mr. Boateng) at column 415 will be a continuing one.

  Rain Forests
  Mr. Tom Clarke
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether he has any plans to link British aid packages to agreements with the recipient Governments to limit the destruction of the rain forests.

  Mrs. Chalker
  While specific environmental conditions will often be appropriate at the project level, we do not favour conditionality based on a country's overall environmental record. We believe institution building and strengthening capacity to care for the environment and support for activities which help recipient countries limit rain forest destruction are more likely to be effective.

  Women
  Mr. Tom Clarke
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list in ranked order the top 10 countries making financial contributions to the United Nations development fund for women.

  Mrs. Chalker
  The 10 highest Government pledges of financial contributions to UNIFEM in 1990 were:

  1. Finland

  2. United States of America

  3. Netherlands

  4. Federal Republic of Germany

  5. Sweden

  6. Italy

  7. Australia

  8. United Kingdom

  9. Denmark

  10. Belgium

  Mr. Tom Clarke
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the work of the Overseas Development Administration towards achieving the aims of the Nairobi "Forward Looking Strategies for the Advancement of Women" declaration.

  Mrs. Chalker
  ODA's policy is to take account in all its activities of the role of women as agents and beneficiaries
  485
  of development aid. Our efforts focus on designing projects to ensure that these benefit women in developing countries; finding ways of increasing the numbers of women participating in training programmes both in the United Kingdom and in developing countries; trying to overcome constraints to the recruitment of women on ODA contracts in developing countries and improving ODA staff's understanding of women-in-development issues.

  The ODA encourages aid recipient Governments to adopt policies which would fulfil the aims of the Nairobi forward-looking strategies and has encouraged other donor agencies, including the World bank and the European Commission, to improve their performance on women-in-development issues. Britain plays an active role in the OECD's development aid committee women-in-development expert group and has contributed over £900,000 to the United Nations development fund for women ( UNIFEM) since it was established.

  Mr. Tom Clarke
  To ask the Secretary of State for Foreign and Commonwealth Affairs what percentage of nominations by developing countries under the technical co-operation training programme to study in Britain were for women in each year since 1980.

  Mrs. Chalker
  No central record is kept of the number of nominees for awards for women under the technical co-operation training programme (TCTP) but the number of women arriving to take up awards in this country since 1985 (earlier figures are not available) and as a percentage of the total is as follows:

  Financial year

  Woman TCTP arrivals

  Total percentage of TCTP arrivals

  1985–86

  698

  14.5

  1986–87

  964

  16.7

  1987–88

  1,065

  17.0

  1988–89

  1,122

  17.8

  1989–90

  1,115

  19.2

  Mrs. Clwyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs, pursuant to the answer of the Minister for Overseas Development of 9 July,Official Report, column 20, what is the number and percentage of women participating in Overseas Development Administration training programmes in developing countries.

  Mrs. Chalker
  In 1988, the latest date for which analysed figures are available, 2,665 women students and trainees were on courses financed directly or indirectly by the ODA, excluding some in-country training. This was 19 per cent. of the total.

  Uganda
  Mr. Tom Clarke
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether the Minister for Overseas Development holds regular discussions with the Government of Uganda.

  Mrs. Chalker
  The Minister for Overseas Development and her officials have regular discussions with President Museveni, Ugandan Ministers and officials on all aspects of our aid relationship.

  Forestry
  Mr. Tom Clarke
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many forestry projects have been agreed with Latin American, Caribbean, African and Pacific countries.

  Mrs. Chalker
  Bilateral forestry projects, research projects and projects financed by ODA under the joint funding scheme in the regions named are as follows:

  Number

  Latin America

  17

  Caribbean

  5

  Africa

  59

  Pacific

  7

  Vietnam
  Mr. Tom Clarke
  To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions he has had with the European Economic Community regarding aid to Vietnam.

  Mrs. Chalker
  We have regular contacts with our European Community partners at both ministerial and official level on the question of aid to Vietnam.

TRADE AND INDUSTRY

  Trade Sanctions
  Mr. Tony Banks
  To ask the Secretary of State for Trade and Industry what factors he takes into consideration when considering the circumstances in which it is appropriate to apply trade sanctions against any country.

  Mr. Redwood
  The imposition of trade sanctions is a matter for the Community as a whole. In considering whether such action is appropriate, the Government must have regard not only to the reasons why sanctions may be necessary but also to their likely impact and effectiveness and to the response of others. In addition, we need to consider the broader implications for our foreign, trade and competition policy.

  Post Office Users National Council
  Mr. John Marshall
  To ask the Secretary of State for Trade and Industry what response he proposes to make to the latest report by Post Office Users National Council and if he will review the Post Office monopoly as it may be affected by its recommendations.

  Mr. Forth
  I have noted with interest the comments contained in the annual report of the Post Office Users National Council and I have written to the chairman thanking him for the valuable work done by POUNC on behalf of all postal users. The Post Office's letter monopoly is kept under review, but no decisions have been taken.

  Management Training
  Mr. Blair
  To ask the Secretary of State for Trade and Industry what is the amount of money spent by his Department on the management charter initiative for management training and the anticipated amount to be spent in each of the next three financial years, in real terms.
  487
  Mr. Forth
  My Department agreed in principle in 1988 that we should offer support of up to a total of £2.5 million over a period of up to five years to cover the setting up of the management charter initiative (MCI). Funding for each financial year is the subject of separate negotiation. In the first financial year 1988–89 £500,000 was spent and in 1989–90 £500,000 was spent. The Government are presently considering MCI's business plan for 1990–91 and beyond, and a decision on future funding will be made shortly. Responsibility for this funding will be transferred to the Department of Employment from 1 April 1991.

  Textiles
  Mr. Pike
  To ask the Secretary of State for Trade and Industry when he next proposes to meet representatives of the textile industry.

  Mr. Douglas Hogg
  My right hon. Friend's predecessor met representatives of the textile industry on 12 June. No date has been fixed for a further meeting, but Ministers and officials are in regular contact with the industry.

  Accounting Practices
  Mr. Cousins
  To ask the Secretary of State for Trade and Industry what representations he has received(a) on the open marketing of off-balance sheet financing schemes and (b) calling for the curbing of such schemes; and from where.

  Mr. Redwood
  I replied to questions from the hon. Member for Great Grimsby (Mr. Mitchell) about off-balance sheet finance in April, but have not received any subsequent representations. The extension of the definition of a subsidiary undertaking in the Companies Act 1989 will bring on to the balance sheet a number of schemes which would previously have been off-balance sheet. The issue of off-balance sheet finance is also being addressed by the Accounting Standards Committee, which published an exposure draft in May entitled "Reflecting the substance of transactions in assets and liabilities".

  Mr. Cousins
  To ask the Secretary of State for Trade and Industry what representations he has received on the different treatment of(a) research and (b) development expenditure in company accounts.

  Mr. Redwood
  The issue of disclosure of research and development expenditure was discussed during the passage of the Companies Bill last year. I am not aware of any representations since then on the treatment of such expenditure in company accounts.

  EC-Gulf Trade
  Mr. McCartney
  To ask the Secretary of State for Trade and Industry if his Department plans to make an assessment of the effects on the United Kingdom petrochemical industry of a free trade agreement between the European Community and the states of the Gulf Co-operation Council.

  Mr. Redwood
  The Government have consulted widely with industries interested in the forthcoming negotiations, including the petrochemical industry, and remain ready to consider further views.

  Fur Products
  Mr. Ron Davies
  To ask the Secretary of State for Trade and Industry what was the value of fur and fur product exports from Britain in(a) 1987–88, (b) 1988–89 and (c) 1989–90; and what proportion in each case was accounted for by re-export.

  Mr. Redwood
  [holding answer 16 July 1990]: The available information is in the table. Data on re-exports could be made available only at disproportionate cost.

  United Kingdom exports of fur and fur products

  Year

  Value (£ million)

  1 April 1987—31 March 1988

  130.3

  1 April 1988—31 March 1989

  99.4

  1 April 1989—31 March 1990

  86.8

  Sources: Industrial Economics Indicator (IEI) Database Overseas Trade Statistics of the United Kingdom (March 1990).

  Classification: Standard Industrial Classification (SIC 80)—Activity Heading 4560.

  Definition: Sorting, dressing and dyeing furs and the manufacture of fur apparel and other fur goods.

  Financial Services
  Mr. Cousins
  To ask the Secretary of State for Trade and Industry if he will list the names of all companies or firms investigated or suspended since the implementation of the Financial Services Act.

  Mr. Redwood
  [holding answer 16 July 1990]: Statistical information on investigations is included in the report of the Trade and Industry Select Committee on company investigations and the annual report of the Securities and Investments Board also includes similar information on the use of their enforcement powers. Suspensions by SIB and the SROs are made public by these bodies. Investigations are confidential, as they may reveal that the firm or persons being invesitgated is innocent and publication of suspicion would be damaging.

  Mr. Cousins
  To ask the Secretary of State for Trade and Industry if he will list all the reports published on investigations carried out under the Financial Services Act.

  Mr. Redwood
  [holding answer 16 July 1990]: Only reports of inspectors appointed under section 94 of the Financial Services Act can be published. No such reports have been published. The Secretary of State's powers under section 94 have been transferred to the Securities and Investments Board.

  Auditors
  Mr. Cousins
  To ask the Secretary of State for Trade and Industry what is the number of cases since 1980 when his Department has taken court action against auditors criticised in Companies Act inspection reports.

  Mr. Redwood
  [holding answer 16 July 1990]: None. Copies of initial reports are passed to the auditors' professional body for consideration.

EDUCATION AND SCIENCE

  National Curriculum
  Mr. Robert Banks
  To ask the Secretary of State for Education and Science when examples of test papers under the new curriculum for mathematics, science and English will be made available to teachers.

  Mrs. Rumbold
  Prototype standard assessment tasks (SATs) were piloted in a sample of primary schools this summer. In the light of the evaluation of that pilot, SATs for the purpose of statutory assessment will be developed and made available to teachers in spring 1991.

  Mr. Robert Banks
  To ask the Secretary of State for Education and Science when the guidelines for making reports to parents in assessments under the new curriculum for school reports will be available.

  Mrs. Rumbold
  The Education (Individual Pupils' Achievements) (Information) Regulations 1990 were laid by my right hon. Friend on 10 July and come into force from 1 August 1990. Copies are available in the Library.

  Primary Schools (Admissions)
  Mr. Dover
  To ask the Secretary of State for Education and Science if he will make a commencement order in respect of admissions to primary schools in accordance with sections 26 to 32 of the Education Reform Act 1988.

  Mr. Alan Howarth
  My right hon. Friend has not yet reached a decision on when the more open enrolment provisions of the Education Reform Act 1988 should be extended to primary schools. When a decision has been reached, a commencement order will be made as necessary at the appropriate time.

  School Closures
  Mr. Bill Michie
  To ask the Secretary of State for Education and Science what representations he has received about the closure of four comprehensive schools in the borough of Wandsworth.

  Mrs. Rumbold
  None. I understand that the authority is to consult locally on school reorganisation proposals which include the closure of four secondary schools.

  Student Loans
  Mr. Andrew Smith
  To ask the Secretary of State for Education and Science if students training to qualify as physiotherapists and other vocational qualifications registered under the Professions Supplementary to Medicine Act 1960 are eligible for a student loan.

  Mr. Jackson
  The Education (Student Loans) Act, together with the regulations recently approved by Parliament, make the loan available to full-time students who meet the personal eligibility requirements and who attend courses of the type prescribed by schedule 1 of the Act at educational institutions receiving support from public funds. At other institutions such courses would have to be specifically designated.

  Universities and Polytechnics
  Mr. Andrew Smith
  To ask the Secretary of State for Education and Science, pursuant to his reply to the hon. Member for Leeds, North-West (Dr. Hampson),Official Report, 10 July, column 164, if he will list the distinctive characteristics in respect of universities and polytechnics.

  Mr. Jackson
  The distinctive characteristics of polytechnics compared to universities include a greater emphasis on: teaching compared to research; applied research rather than other research; vocational, professional and industrially based courses; sub-degree and part-time courses; provision for a broader range of students; and meeting the particular needs of local and regional employers.

  Higher Education
  Mr. Win Griffiths
  To ask the Secretary of State for Education and Science if he will give details of all visits made to independent institutions of higher education by Her Majesty's inspectors, including accompanied visits, showing the name of the institution, the circumstances by which the visit came to be made, the purpose of the visit, its results, its cost and by whom this was borne, for the period 1986 to date.

  Mr. Jackson
  To answer the hon. Member's question would involve a scrutiny of some 2,600 HMI diaries for each of the past four years. This information can be provided only at disproportionate cost.

  Information Technology
  Mr. Win Griffiths
  To ask the Secretary of State for Education and Science what is his policy in respect of the recommendations of the expert group on information technology in initial teacher training, which reported in March 1989.

  Mr. Alan Howarth
  The recommendations of the expert group which were for action by the Government have been implemented. The revised criteria for the accreditation of initial teacher training courses, published last November, require that initial teacher training institutions should provide all students with a specified minimum IT capability. In addition, we commissioned the Universities Funding Council and the Polytechnics and Colleges Funding Council to undertake a survey of the IT resources available to initial teacher training institutions. The survey was carried out at the end of last year and the results are being analysed. A number of institutions have commented on the expert group's report, at the Department's invitation. The Council for the Accreditation of Teacher Education and Her Majesty's inspectorate will be monitoring the action taken by institutions in response to the revised criteria and the recommendations of the report.

  Crookham Court School (Sexual Abuse)
  Sir Michael McNair-Wilson
  To ask the Secretary of State for Education and Science what consideration he has given to the result of the case concluded at Reading on 12 July concerning sexual abuse at Crookham Court school in Berkshire; and if he will consider the introduction of new legislative provisions governing the operation of private schools.
  491
  Mr. Alan Howarth
  Under new provisions to be introduced by virtue of the Children Act 1989, section 71 of the Education Act 1944 will be amended to provide an additional ground for complaint with respect to independent schools. This additional power will be brought into effect where there is failure by a proprietor of an independent school to safeguard and promote the welfare of any child provided with accommodation by the school. The Act will also enable local social services departments to enter and inspect independent schools to determine whether the proprietor is fulfilling his welfare duties. These provisions of the Children Act will be implemented in October 1991.

SOCIAL SECURITY

  Public Opinion Surveys
  Mr. Peter Griffiths
  To ask the Secretary of State for Social Security how many representations he has received regarding unsolicited telephone calls requesting personal information made to members of the public by companies authorised by his Department.

  Mrs. Gillian Shephard
  The Department has received only one representation regarding unsolicited telephone calls requesting personal information.

  Mr. Peter Griffiths
  To ask the Secretary of State for Social Security if he will list the topics of interest to his Department which were regarded as suitable for commercial public opinion surveys by means of unsolicited telephone calls.

  Mrs. Gillian Shephard
  Topics considered suitable for commercial public opinon surveys by means of unsolicited telephone calls in the last three years were:

  Calls to employers:

  1. Employers' sick pay and disability pension.

  2. Maternity rights survey (a).

  3. Awareness of the social security advice line to employers.

  4. Awareness of national insurance and statutory sick pay information materials.

  5. Check of receipt of 1989 national insurance tables.

  Calls to the general public:
  Awareness and opinions of households in Berkshire of people with disabilities.

  Note: Survey jointly sponsored by DSS, Department of Employment and the Equal Opportunities Commission.

  Mr. Peter Griffiths
  To ask the Secretary of State for Social Security how many surveys based on unsolicited telephone calls have been commissioned by his Department in the last three years; how many commercial organisations were engaged; and at what cost.

  Mrs. Gillian Shephard
  Details of surveys based on unsolicited telephone calls commissioned by the Department in the last three years are contained in the table.

  £000

  Number of surveys

  6

  Number of commercial organisations involved1

  6

  Total cost2

  274.5

  1 Includes "not for profit" organisations.

  2 The cost is the total cost of the study of which the survey was a part.

  Mr. Peter Griffiths
  To ask the Secretary of State for Social Security what advice he will give to a member of the 492
  public who receives an unsolicited telephone call from a commercial company claiming it was authorised to collect personal information on behalf of his Department on how to deal with that call.

  Mrs. Gillian Shephard
  Commercial companies authorised by the Department to conduct telephone surveys among the general public are required to give a telephone number which people may ring to check the validity of the research. A member of the public who has any reason to doubt the validity of a call should report the fact to the Department. Additionally, they have the right not to take part in any survey.

  Transitional Payments
  Mr. Cousins
  To ask the Secretary of State for Social Security how many claimants were receiving transitional additions in April 1988, 1989 and 1990; how many of these were pensioners; and how many were receiving income support for mortgage interest payments.

  Mrs. Gillian Shephard
  The table shows the number of income support claimants receiving normal statutory transitional additions immediately after the introduction of income support in April 1988 and the uprating in April 1989, together with the number of pensioners, and of claimants receiving income support for mortgage interest which are included in those totals. Corresponding figures, but excluding boarders and those living in residential care and nursing homes, immediately after the uprating in April 1990 are estimates based upon the results for 1988 and 1989 and estimated changes since then.

  May 1988

  May 1989

  May 1990

  (a) Claimants receiving a transitional addition

  1,587,000

  497,000

  130,000

  (b) Claimants included in (a) receiving a pensioner, enhanced pensioner or higher pensioner premium

  710,000

  241,000

  64,000

  (c) Claimants included in (a) with housing costs including mortgage interest

  138,000

  25,000

  5,000

  These figures are derived from the Annual Statistical Enquiries of May 1988 and May 1989, copies of which are in the Library.

  Student Loans
  Mr. Andrew Smith
  To ask the Secretary of State for Social Security how many full-time students in receipt of discretionary awards, who do not qualify for a student loan, will lose entitlement to social security and housing benefits.

  Mrs. Gillian Shephard
  There are estimated to be some 48,000 discretionary award holders, but not all such students are excluded from receipt of a student loan.

  It is not possible to estimate the number of discretionary award holders currently receiving benefit as the social security data collected do not differentiate between types of student claimant. However, those students in vulnerable groups, including students with

  493
  dependent children, disabled students and those students in further education under the age of 19, will retain entitlement to income support and housing benefit.

  Those full-time discretionary award holders who lose entitlement to income support, unemployment benefit and housing benefit will be able to turn to the access funds for further financial assistance.

  Elderly People (Funding)
  Mr. Roy Hughes
  To ask the Secretary of State for Social Security if he has any proposals to increase the funding of support for the elderly in their homes especially for those living alone.

  Mrs. Gillian Shephard
  All benefit levels are considered for uprating each year and final decisions for next April will be taken in the autumn.

  Pensions
  Mr. Roy Hughes
  To ask the Secretary of State for Social Security (1) if he has any proposals to increase the basic state pension to one third of average male earnings for a single person, and one half of average male earnings for a couple where the partner's pension is dependent on her husband's contributions;

  (2) if he has any proposals to introduce a basic non-means-tested state pension of not less than one third and one half of national male earnings for a single person and married couple, respectively.

  Mrs. Gillian Shephard
  The Government have honoured their commitment to maintain the value of the state retirement pension in line with prices. A link with earnings is not the key factor in improving pensioners' incomes. What matters most to pensioners is the value of their total income, from whatever source. The success of our policies is demonstrated by the over 31 per cent. real terms growth in pensioners' average total net income between 1979 and 1987.

  OPCS Reports
  Mr. Harris
  To ask the Secretary of State for Social Security what progress has been made to date in reproducing the Office of Population Censuses and Surveys' survey reports in braille.

  Mr. Scott
  I can confirm that work on reproducing the OPCS survey reports in Braille is continuing and that the report entitled "Financial Circumstances of Families with a Disabled Child" will be available shortly. A copy will be placed in the Library and additional copies can be obtained from Social Survey Division, OPCS, St. Catherines House, 10 Kingsway, London WC2B 6JP. As each braille report is published, a copy will be placed in the Library.

  Widows' Benefits
  Mrs. Beckett
  To ask the Secretary of State for Social Security what would be the cost of repealing those parts of the overlapping benefits regulations which prevent the payment of other benefits to widows receiving(a) a widowed mother's allowance and (b) a widow's pension; and what would be the cost if the repeal were limited to the payment to widows of sickness, invalidity and unemployment benefit.
  494
  Mrs. Gillian Shephard
  [holding answer 2 July 1990]: The cost in relation to widowed mother's allowance is estimated to be approximately £4.3 million and in relation to widow's pension £63.7 million. Were the repeal to be limited to payment of sickness, invalidity and unemployment benefit, the cost in relation to widowed mother's allowance is estimated to be approximately £1.9 million and in relation to widow's pension £9.7 million.
  Note: Widow's pension is not payable beyond age 65. Widows aged 65 and over receive either a widow's retirement pension or a pension based wholly or partly on their own contributions.

FOREIGN AND COMMONWEALTH AFFAIRS

  Antarctic
  Mr. Simon Hughes
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he will announce his proposals to protect the Antarctic environment for the special Antarctic treaty consultative meeting to be held in November in Santiago.

  Mr. Maude
  When consultations with our Antarctic treaty partners have been completed.

  Mr. Simon Hughes
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is the purpose of the liability protocol meeting on the minerals convention.

  Mr. Maude
  To explore and discuss all proposals relating to article 8(7) of the convention on the regulation of Antarctic mineral resource activities.

  Mr. Simon Hughes
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will now support the proposal of the New Zealand Government for an environmental protocol to the Antarctic treaty.

  Mr. Maude
  We favour an environmental protocol to the Antarctic treaty.

  The Prime Minister of New Zealand has said that New Zealand will work with Antarctic treaty partners on a draft of such a protocol for presentation to the Santiago meeting in November. We look forward to seeing the draft.

  Mr. Tony Banks
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has received from non-governmental organisations calling for Antarctica to be declared a wilderness reserve.

  Mr. Maude
  We have received representations from the World Wide Fund for Nature, from Wildlife Link and from the Women's Institute.

  Mr. Tony Banks
  To ask the Secretary of State for Foreign and Commonwealth Affairs what information he has regarding New Zealand's decision to set aside ratification of the convention on the regulation of Antarctic mineral resource activities; if Her Majesty's Government will reconsider ratifying the convention; and if he will make a statement.

  Mr. Maude
  We are aware of the New Zealand Prime Minister's press statement of 6 July. We continue to support the Antarctic minerals convention as a means of ensuring protection for the Antarctic environment.

  Mr. Tony Banks
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will give
  495
  consideration to the establishment of a long-term legally binding moratorium on minerals mining in Antarctica; and if he will make a statement.

  Mr. Maude
  The Antarctic minerals convention provides for a binding moratorium on mineral exploration and development which would remain in force until such time as the convention's commission decided otherwise by consensus. We fully support such a moratorium and therefore the early entry into force of the convention.

  Gifts
  Mr. Simon Hughes
  To ask the Secretary of State for Foreign and Commonwealth Affairs, pursuant to the answer to the hon. Member for Southwark and Bermondsey,Official Report, 9 July, column 47, how many gifts received from foreign powers in 1989 (a) were placed on the inventory of a British mission, (b) were placed on the inventory of his Department, (c) were given to external institutions, (d) were retained by Ministers, (e) were retained by civil servants, (f) were bought by Ministers, (g) were bought by civil servants and (h) were sold at public auction.

  Mr. Maude
  The disposal of gifts received from foreign powers in 1989 is as follows:

  Number

  (a) Were placed on the inventory of a British mission

  2

  (b) Were placed on the inventory of his Department

  7

  (c) Were given to external institutions

  3

  (d) Were retained by Ministers

  22

  (e) Were retained by civil servants

  13

  (f) Were bought by Ministers

  10

  (g) Were bought by civil servants

  9

  (h) Were sold at public auction

  None

  This does not include gifts of a minor nature.

  Cambodia
  Mrs. Clwyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs (1) what information he has concerning the validity of reports that Pol Pot is currently inside Cambodia;

  (2) what information he has concerning the current whereabouts of Pol Pot.

  Mr. Maude
  There are no reliable reports of Pol Pot's whereabouts.

  Mrs. Clwyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether he will instruct Her Majesty's Government's representative at the United Nations to oppose recognition by the United Nations of any Cambodian delegation that includes members of the Khmer Rouge.

  Mr. Maude
  I refer the hon. Member to the reply given by my hon. Friend the Under-Secretary of State for Foreign and Commonwealth Affairs to the hon. Member for Warrington, North (Mr. Hoyle) on 11 July.

  Political Parties (Funding)
  Mr. Allen
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the information available to him on the systems of state funding for political parties in the Group of Seven countries.
  496
  Mr. Maude
  The following is a summary of information currently available:

  (a) Canada
  The Treasury reimburses registered political parties 22.5 per cent. of allowable election expenses and parliamentary candidates 50 per cent. of expenses up to a maximum of 50 per cent. of the total permitted, subject to certain conditions of expenditure incurred and votes received. Political contributions to candidates and political parties benefit from income tax credits. Parties in Parliament receive funds for research staff budgets, office supplies and certain support services.

  (b) France
  Under new legislation parties will receive funding for legislative and presidential election campaigns, subject to conditions of parliamentary representation, contesting at least 75 constituencies and opening their accounts to scrutiny. Funds will be allocated proportionate to the number of seats held in Parliament and the number of votes won in the first rounds of the most recent legislative elections.

  (c) FRG
  At general elections each party is reimbursed DM 5.00 per eligible voter voting for it, subject to its publishing its accounts. The reimbursement may not exceed half a party's revenues, but under certain conditions deductions may be made from the next reimbursement, and parties may receive advances of reimbursement. Similar arrangements apply to elections to the European Parliament and in the Federal Laender.

  (d) Italy
  Subject to certain conditions of parliamentary representation or votes received at the most recent general election and to opening their accounts, parties receive an annual subvention. The amount is calculated by complex rules reflecting recent electoral performance. In 1990 the largest grants were to the Christian Democrats (25.7 million lire), Communists (17.8 million) and Socialists (11.6 million).

  (e) Japan
  There is no formal state funding of political parties but political groups represented in the Diet receive a monthly sum of 605,000 yen per Dietman.

  (f) United States
  For presidential elections, a voluntary public financing system provides, subject to certain conditions, matching funds to candidates in primaries and to party nominees in the general election and flat grants to parties for their nominating conventions. (In 1988 the national spending limit for pre-nomination campaigns within which matching funds were available was 23.1 million dollars plus 4.6 million dollars for fund-raising; the maximum subsidy for the two major parties' nominating conventions was 9.2 million dollars; and the maximum subsidy for the general election (subject to no additional funds being raised or spent by the candidate) was 46.1 million dollars. As for congressional elections, until recently no public funding was available, but some states are beginning to experiment with a matching fund system. Some states and cities provide public funding for state and municipal elections; others do not.

  Kenya
  Mr. Boateng
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations have been made to the Government of Kenya about human rights in that country, and the recent arrest without charge of Mr. Kenneth Matsla and Mr. Charles Ruha.

  Mr. Waldegrave
  There are real causes for concern including the detention of critics of the Government which are bound to worry the friends of Kenya. The Kenyan Government are well aware of our views on these matters.

  Gulf Co-operation Council
  Mr. McCartney
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he next plans to meet representatives of the Gulf Co-operation Council; and what matters he will discuss.
  497
  Mr. Waldegrave
  My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs expects to meet representatives of the Gulf Co-operation Council in the margins of the UN General Assembly in New York in September. He last met such representatives at an EC/GCC ministerial meeting in Muscat on 17 March 1990. Among the matters discussed were the implementation of the EC/GCC first-stage agreement and forthcoming negotiations for a second-stage agreement, as well as regional and international issues.

  Mr. McCartney
  To ask the Secretary of State for Foreign and Commonwealth Affairs if his Department has seen the text of the European Parliament's resolution on a possible free trade agreement between the European Community and the states of the Gulf Co-operation Council; and if he will make a statement.

  Mr. Maude
  We have seen the text of a resolution adopted by the European Parliament on 13 July concerning a possible free trade agreement with the Gulf Co-operation Council.

  The Commission will shortly begin negotiations with the GCC for a second-stage EC/GCC agreement, based on a free trade arrangement. We have consulted widely with United Kingdom industries interested in these negotiations and believe that the Commission's negotiating mandate takes into account essential United Kingdom interests.

ENERGY

  Community Insulation Projects
  Mr. Dunn
  To ask the Secretary of State for Energy how many homes were insulated by community insulation projects in 1988 and 1989.

  Mr. Peter Morrison
  The number of homes treated by the projects in 1988 and 1989 were some 159,000 and 134,000 respectively.

  Energy Efficiency
  Mr. Knapman
  To ask the Secretary of State for Energy how much was spent on the promotion of energy efficiency(a) in 1979 and (b) in 1989; and if he will make a statement.

  Mr. Peter Morrison
  Expenditure by my Department on energy efficiency programmes in 1979–80 was £2.4 million. The provision for expenditure by the Energy Efficiency Office in 1989–90 was £15 million.

  EC-Gulf Trade
  Mr. Doran
  To ask the Secretary of State for Energy if his Department has made any assessment of the effects on the United Kingdom offshore sector of a free trade agreement between the European Community and the states of the Gulf Co-operation Council.

  Mr. Peter Morrison
  Assessment of the effects of a free trade agreement between the European Community and Gulf Co-operation Council is a matter for my right hon. Friend the Secretary of State for Trade and Industry. However, any agreement is expected to have little effect on the United Kingdom offshore sector.

  Electricity Supply
  Mr. Morgan
  To ask the Secretary of State for Energy when he expects to review the upper limits on direct sales to large electricity consumers by the present generating companies.

  Mr. Baldry
  This is a matter for the Director General of Electricity Supply.

  Mr. Morgan
  To ask the Secretary of State for Energy if he will list those companies which have been given second-tier licences as electricity suppliers.

  Mr. Baldry
  The Director General of Electricity Supply has a statutory responsibility for maintaining the register of all licences granted.

  Standing Charges
  Mr. Roy Hughes
  To ask the Secretary of State for Energy if he will seek powers to abolish standing charges on domestic electricity supplies for all old age pensioners.

  Mr. Baldry
  No. Pricing decisions are a matter for the regional electricity supply companies.

ENVIRONMENT

  Bathing Waters
  Mr. Gareth Wardell
  To ask the Secretary of State for the Environment by which date all designated beaches will be prohibited from having untreated sewage discharged into their bathing waters.

  Mr. Heathcoat-Amory
  My right hon. Friend the Secretary of State announced on 5 March at column 452 that in general all substantial discharges of sewage should be treated at a sewage treatment works and that this investment programme should be completed as soon as practicable. Discussions are now being held with the water industry about implementation of this policy.

  Mr. Fearn
  To ask the Secretary of State for the Environment what plans he has to bring all Britain's beaches up to European Community blue flag level; and by what date he hopes to achieve this.

  Mr. Heathcoat-Amory
  My right hon. Friend the Secretary of State for the Environment announced on 5 March at column 452 that, in general, sewage will be treated before discharge. The cost of doing this was estimated to be £1.5 billion. The programme, which is being integrated with the £1.4 billion investment programme to bring the remaining bathing waters up to the directive's standards, is expected to last for 10 years. It will be for local authorities and other proprietors of beaches to capitalise upon this and bring their beaches up to the requisite standards.

  Local Government Finance
  Mr. Burns
  To ask the Secretary of State for the Environment when he last met leaders of local authority associations to discuss alternatives to the community charge.

  Mr. Portillo
  My right hon. Friend and I last met the leaders of the local authority associations on 5 July at the
  499
  Consultative Council on Local Government Finance. The leaders did not raise the question of alternatives to the community charge.

  Mr. Cryer
  To ask the Secretary of State for the Environment what is the average reduction in poll tax per head for each additional £1 million support for each local authority in England and Wales.

  Mr. Portillo
  [holding answer 12 July 1990]: The effect on community charges of an extra £1 million of support for an area depends upon the budget decisions of the local authorities in that area. Prudent authorities would pass the support on to their charge payers in the form of reduced community charges. Others might increase spending, giving no benefit to charge payers in their area.

  Nitrogen Oxides
  Mr. Simon Hughes
  To ask the Secretary of State for the Environment if he will list the research which he has commissioned into the control of nitrogen oxides technologies; what reports he has received; and if he will place copies in the Library.

  Mr. Trippier
  My Department commissioned a report on acid emission abatement technologies from the Fellowship of Engineering, a major part of which deals with technologies for reducing emissions of nitrogen oxides. The report was placed in the Library. As part of its work for my Department, the Warren Spring laboratory is making a study of technology for reducing emissions of nitrogen oxides from cars and its report will be placed in the Library.

  My Department recently commissioned an evaluation of NOx abatement technologies for large combustion plant. A draft report has been received and is being considered.

  National Rivers Authority
  Mr. Janman
  To ask the Secretary of State for the Environment (1) what grant in aid the National Rivers Authority is receiving for its laboratory investment programme; what assessment has been made of the impact of running costs in such a programme as against contracting out these services; and what is his policy towards funding such work;

  (2) what cost-benefit analysis was undertaken before the National Rivers Authority reversed the original intention of contracting out analytical requirements; and if he will make a statement.

  Mr. Heathcoat-Amory
  The National Rivers Authority may claim grant in aid in respect of that part of its laboratory investment programme which is not financed by cash transfers from water and sewerage undertakers. The total net cost of the programme is not yet known, but amounted to some £2 million in the period 1 September 1989 to 31 March this year.

  In those regions where water authorities transferred one of their laboratories to the authority a full cost-benefit analysis was not thought appropriate. In those regions where new laboratories were to be provided and where contracting services were, or might have been, available a comparative cost analysis was carried out to assess whether building new laboratories was the best way of providing the required capability.
  500
  I am satisfied with the decisions reached on the authority's ownership of its own independent laboratory facilities and that grant in aid should support their provision.

  Mr. Janman
  To ask the Secretary of State for the Environment what is the estimated cost of new laboratory facilities at Reading for the National Rivers Authority; and what is the estimated annual revenue cost of undertaking analysis in-house as against contracting out.

  Mr. Heathcoat-Amory
  The estimated capital cost of the National Rivers Authority's new Reading laboratories is £3.62 million. The estimated annual revenue cost of using it to undertake analysis in-house is £1.02 million, compared with a contracting-out cost of £1.31 million.

  Mr. Janman
  To ask the Secretary of State for the Environment whether the National Rivers Authority is able to compete for and perform any third-party work.

  Mr. Heathcoat-Amory
  Section 145 (2) of the Water Act 1989 gives the National Rivers Authority power to carry out work for other public bodies. It also has general powers to do anything which, in the opinion of the authority, is calculated to facilitate, or is conducive or incidental to, the carrying out of the authority's functions.

  Gas Emissions
  Mr. Andrew Smith
  To ask the Secretary of State for the Environment what information his Department collects on the emission of gases damaging to the ozone layer from(a) aircraft, (b) road vehicles and (c) other sources; and what the most recent statistics indicate in respect of such emissions.

  Mr. Trippier
  The approach of the Montreal protocol, and that of the European Community, is to control the supply to the market, rather than the emission, of ozone-depleting substances. We do not therefore need to collect data on emissions.

  Avon Dam
  Mr. Steen
  To ask the Secretary of State for the Environment what is the current water volume stored by the Avon dam; and what is his current projection of when the volume will drop to 600 megalitres.

  Mr. Heathcoat-Amory
  South West Water Services Ltd. has recently reported that the current stored-water volume in the Avon reservoir is 1,232 megalitres and that the reservoir is 96 per cent. full. The projection requested is not held centrally.

  Radioactive Waste
  Mr. Tony Banks
  To ask the Secretary of State for the Environment what efforts are made by his Department to quantify the total amounts of low-level radioactive waste being dumped in London.

  Mr. Trippier
  Radioactive waste may be disposed of only if an authorisation has been issued by HMIP under the Radioactive Substances Act 1960. The Department does not maintain a central record of the quantities of low-level radioactive waste disposed of through local disposal routes nor of specific disposal locations.
  501
  However, a condition of authorisation requires waste producers to keep proper and detailed records relating to their disposals. These records as well as the premises or sites concerned are subject to scrutiny by HMIP inspectors to ensure compliance with the terms of the certificates of authorisation.

  Mr. Tony Banks
  To ask the Secretary of State for the Environment what conclusions he has reached in respect of the purity of water supplies in London arising from the study sponsored by his Department on the disposal of low-level radioactive waste; and if he will place a copy of the report in the Library.

  Mr. Trippier
  Her Majesty's inspectorate of pollution has a national programme for checking the levels of radioactivity in drinking water sources. This shows that the levels of radioactivity in the Thames are extremely low and the levels in drinking water supplies are below the guideline values for potable water recommended by the World Health Organisation. The research study commissioned by my Department and being carried out by St. Bartholomew's hospital medical college will not be completed until March 1991. A first draft report was received by my Department this month and is currently being reviewed. The report will be published in due course and copies will be placed in the Library.

  Mr. Tony Banks
  To ask the Secretary of State for the Environment (1) if he will list all those organisations authorised by Her Majesty's inspectorate of pollution to dispose of low-level radioactive waste; and if he will make a statement.

  (2) if he will give the number and names of organisations in Greater London area permitted to dispose of low-level radioactive waste.

  Mr. Trippier
  I refer the hon. Member to the Department's "List of Premises in England and Wales currently authorised under the Radioactive Substances Act 1960 to dispose of radioactive waste", a copy of which is in the Library of the House.

  Radon
  Mr. Mans
  To ask the Secretary of State for the Environment whether, following the Government's announcement of 19 January that the recommended action level for radon in houses was to be halved, he plans to issue any advice to householders.

  Mr. Heathcoat-Amory
  A second edition of the Department's publication, "The Householders' Guide to Radon", was published today, and copies have been placed in the Library of the House.

  The guide comprises a general first section describing what radon is and where it comes from, how it can affect

  £

  Rendel Palmer and Tritton

  1 April 1987 to 30 September 1989

  60,666

  Cipfa Services (latterly CSL)

  1 August 1987 to 30 September 1989

  1,050

  Meredith Hewson

  1 October 1987 to 30 September 1989

  200

  Kingham Knight Architects

  1 October 1987 to 30 September 1989

  6,479

  E. C. Harris and Partners

  1 October 1987 to 30 September 1989

  5,200

  Gillespies

  1 October 1987 to 30 September 1989

  1,908

  Dove and Hodd

  1 November 1987 to 30 September 1989

  1,540

  Povall Worthington

  1 February 1988 to 30 September 1989

  Nil

  Warrington-Runcorn Property Services (latterly Eileen Bilton Partnership)

  1 March 1988 to 30 September 1989

  917

  Business Environment Planning

  1 April 1988 to 30 September 1989

  1,326

  502
  people, how it gets into homes, the ways of finding out if a house has a high level of radon, and what to do if measurements show radon concentrations above the action level. The second section gives practical advice on ways of reducing the level of radon indoors in various types of houses, and on how to get the work done and paid for. The third section answers some more questions which are commonly asked about radon. Sources for further information and advice are also given.

  The new edition takes account of the reduction of the action level from 400 to 200 becquerels per cubic metre announced by my hon. Friend the Minister for the Environment and Countryside on 19 January this year. The section on reducing the level of radon in houses has been extended, and incorporates the latest findings of the Government-funded research programme currently being carried out by the Building Research Establishment.

  The second edition of "The Householders' Guide to Radon" will be widely distributed, especially in those areas of the country where high levels of indoor radon are most prevalent. The document is available free of charge from the Department by writing to:
  "Householders' Guide to Radon"

  Room A518

  Romney House

  43 Marsham Street

  London

  SWIP 3PY.

  Warrington and Runcorn Development Corporation
  Mr. Hoyle
  To ask the Secretary of State for the Environment if he will list the business ventures that made use of Warrington and Runcorn development corporation property; how long each of them used the property rent-free; and how much in each case was eventually deducted from fees paid by the corporation to take into account the use of its property.

  Mr. Chope
  [holding answer 12 July 1990): Although Warrington and Runcorn development corporation did not at the outset charge business ventures directly for the use of its property, the fees which the corporation paid to business ventures were exclusive of accommodation costs. This ensured that the costs incurred by the corporation were no greater than if the work of business ventures had been retained in-house. The absence of a direct rental charge to business ventures did not represent a subsidy. After the first year the development corporation reduced the fees it paid to business ventures to reflect the use they made of its accommodation in carrying out work for other clients. The period over which each business venture used corporation property and the fee reduction in respect of work for other clients are as follows:
  503

  £

  Mainmet

  1 August 1988 to 30 September 1989

  Nil

  Dixon Webb

  1 October 1988 to 30 September 1989

  Nil

  Mr. Hoyle
  To ask the Secretary of State for the Environment whether business ventures supported by the Warrington and Runcorn development corporation paid the bills covering rates, heating and lighting(a) during the period they used corporation property rent-free and (b) after the corporation had started to make deductions for the use of its property.

  Mr. Chope
  [holding answer 12 July 1990]: Since the fees paid by Warrington and Runcorn development corporation to business ventures were exclusive of accommodation costs, it would not have been appropriate for the business ventures to have paid bills covering rates, heating and lighting. However, these items were taken into account in the adjustment to fees paid to business ventures to reflect the use they made of corporation accommodation in carrying out work for other clients.

  Mr. Hoyle
  To ask the Secretary of State for the Environment what savings were made as a consequence of the privatisation of Warrington and Runcorn development corporation services; what records were kept to show what savings had been made; and whether the contracts awarded to these business ventures will be offered for competitive tender when they come up for renewal.

  Mr. Chope
  [holding answer 12 July 1990]: Business ventures were established on the basis that they should cost Warrington and Runcorn development corporation no more than the cost of retaining the work in-house. Budgetary controls were used, and appropriate records kept, to ensure that this objective was achieved. It is the normal policy for the Commission for the New Towns to let contracts on the basis of competitive tender.

  Tenancies
  Ms. Richardson
  To ask the Secretary of State for the Environment if he will bring forward legislation to ensure that live-in carers have the right to succeed to a tenancy in the event of the death of the person they care for; and if he will make a statement.

  Mr. Michael Spicer
  [holding answer 16 July 1990]: No. If the carer is a spouse or is living with the tenant as a husband or wife, and the tenant is not already a "successor", he or she has the right of automatic succession to a secure tenancy (granted by local authorities and, before 15 January 1989, by housing associations) or an assured tenancy (new tenancies granted by housing associations and by some private landlords).

  If the carer is a close relative and has lived with the tenant for at least a year, he or she has an automatic right to succeed to a secure tenancy and may be able to negotiate to succeed to an assured tenancy by agreement with the landlord.

  In other cases it is open to these landlords to grant a joint tenancy, secure or assured as appropriate, to the live-in carer.

  Women's Safety
  Mr. Soley
  To ask the Secretary of State for the Environment if he will issue guidelines to local authorities concerning the improvement of street lighting and the use of resident caretakers on housing estates in the interests of the safety of women; and if he will make a statement.

  Mr. Michael Spicer
  [holding answer 16 July 1990]: Street lighting is a matter for my right hon. Friend the Secretary of State for Transport, but I understand that recommendations for local authorities are covered in British standard 5489 part 3, relating to lighting of subsidiary streets, which my right hon. Friend reissued last year after extensive consultation.

  Guidance on the use of resident caretakers on housing estates can be found in the priority estates project guide to local housing management issued by my Department in April 1987. In addition, the estate action programme encourages a local management presence and the use of concierges, where appropriate, for the benefit of all residents.

  My right hon. Friend has no plans to issue further guidelines.

  Heathrow Airport
  Mr. Wilshire
  To ask the Secretary of State for the Environment what services are provided on behalf of the Government by local authorities at Heathrow airport.

  Mr. Heathcoat-Amory
  [pursuant to his reply, 13 July 1990, c. 350]: No local authority acts as agent for the Government in providing services at Heathrow airport: such functions as they discharge there are their own responsibility.

  I understand, however, that staff of the London borough of Hillingdon are employed in support of medical inspectors of immigrants at Heathrow airport. The council also negotiates the rental of the health control unit premises at the airport.

WALES

  Maternity Services
  Ms. Harman
  To ask the Secretary of State for Wales what research his Department has funded to assess the safety or comparative costs of delivery in(a) district general hospitals, (b) general practitioner maternity units and (c) at home; and if he will give the conclusions of each project funded.

  Mr. Grist
  No research directly assessing the safety and comparative costs of delivery has been funded by the Department. The hon. Lady may, however, wish to note the conclusions of the Wales perinatal mortality initiative 1984–86 and the report on perinatal intensive care services in Wales. Copies are available in the Library.

  Teachers
  Mr. Gareth Wardell
  To ask the Secretary of State for Wales what information he has on education authorities in Wales seeking to limit the number of applicants for teaching posts by stipulating a criterion that applicants should have been educated at some stage within that county.

  Sir Wyn Roberts
  None. The employment and deployment of teachers is a matter for local education authorities and schools.

  Schools
  Mr. Barry Jones
  To ask the Secretary of State for Wales how many local education authority schools in Wales have voted to opt out of local education authority control.

  Sir Wyn Roberts
  Two.

  Mr. Barry Jones
  To ask the Secretary of State for Wales (1) how many local education authority(a) nursery schools, (b) infant schools, (c) primary schools and (d) secondary schools there are in each of the counties of Wales;

  (2) how many private (a) nursery schools, (b) infants schools, (c) primary schools and (d) secondary schools there are in each of the counties of Wales.

  Sir Wyn Roberts
  The information requested is available in "Statistics of Education in Wales: Schools No. 3", table 1.02. Independent schools are not classified by sector.

  Mr. Barry Jones
  To ask the Secretary of State for Wales how many local education authority(a) nursery schools, (b) infant schools, (c) primary schools and (d) secondary schools he has visited in Wales.

  Sir Wyn Roberts
  As the Minister with direct responsibility to my right hon. Friend for education matters in Wales I am a frequent visitor to schools throughout the Principality.

  Mr. Barry Jones
  To ask the Secretary of State for Wales if he will make a statement on the impact of recent legislation on school governing bodies in Wales.

  Sir Wyn Roberts
  Recent education legislation provides governors with the statutory powers to make decisions about school priorities, and about the needs of individual children. The governing bodies of schools with delegation under local management of schools are now directly responsible for their budget spending and for taking decisions about staff appointments.

  River Pollution
  Mr. Michael
  To ask the Secretary of State for Wales what are the causes of the decrease in the percentage of consented discharges achieving a minimum of 80 per cent. compliance with conditions for discharge into rivers in the Welsh Water Authority area as reported in table 2.10 of Environmental Digest for Wales No. 4 for 1988–89; and what action his Department has taken to tackle this trend.

  Mr. Grist
  One of the general duties of the National Rivers Authority, which was established last year, is to 506
  monitor and improve the quality of rivers and other controlled waters. Since its establishment, the authority has increased monitoring of rivers and effluents, is applying stricter conditions and prosecuting a greater proportion of offenders for consent failures. In 1989–90 the performance recorded reversed the trend suggested in 1988–89 and continued the improvements shown in the preceding years. The reasons why the performance overall of discharges of trade effluent should deteriorate in any particular year are unknown.

  EC-Gulf Trade
  Mr. McCartney
  To ask the Secretary of State for Wales (1) if his Department will make any assessment of the effects on the petrochemical and allied industries in Wales of a free trade agreement between the European Community and the states of the Gulf Co-operation Council;

  (2) if his Department will make any assessment of the effects on employment in the petrochemical and allied industries in Wales of a free trade agreement between the European Community and the states of the Gulf Co-operation Council.

  Mr. David Hunt
  I have no plans to do so. The Government have already consulted widely interested industries.

  Health Authorities
  Mr. Michael
  To ask the Secretary of State for Wales whether he will make it his policy that public access to the information and documents of health authorities in Wales should be on the same basis as for local authorities in Wales.

  Mr. Grist
  No. There is already considerable openness in health authority affairs. They continue to be subject to the Public Bodies (Admission to Meetings) Act 1960.

  Non-departmental Public Bodies
  Mr. Morgan
  To ask the Secretary of State for Wales, pursuant to his answer of 10 July,Official Report, column 147, if he will list how many collective meetings his Department had with the non-departmental public bodies in Wales in each year since 1979.

  Mr. David Hunt
  The available information is as follows:-

  Year

  Number of meetings

  1984

  3

  1985

  2

  1986

  0

  1987

  1

  1988

  2

  1989

  2

  1990 (to date)

  1

  Reliable information on the number of meetings held in the earlier years is not available.

  Community Health Councils
  Mr. Michael
  To ask the Secretary of State for Wales what consideration he has given to each community health council in Wales covering the area of one district council with a mechanism for all the community health councils in a health authority's area to meet on a representative basis.

  Mr. Grist
  I refer the hon. Gentleman to the reply given to my hon. Friend the Member for Cardiff, North (Mr. Jones) on 13 July by my right hon. Friend the Secretary of State for Wales.

  National Health Service
  Mr. Michael
  To ask the Secretary of State for Wales whether he has made any announcement in the past week on the financial resources available to the national health service in Wales.

  Mr. Grist
  At a meeting of district health authority and family practitioner committee chairmen my right hon. Friend was delighted to be able to announce his endorsement of the strategic intent which will provide the management target for the National Health Service in Wales into the next century.

  In so doing my right hon. Friend drew attention to the record level of funding being provided by the Government for the service in Wales: over £1.5 billion this year—£500 million more in real terms than in 1979–80.

  My right hon. Friend was also pleased to announce separately his decision to make available the necessary resources to enable Project 2000 courses to be introduced in south-east Wales from spring 1992, at the same time as in west Wales.

  General Practitioner Budgets
  Mr. Win Griffiths
  To ask the Secretary of State for Wales, pursuant to his reply of 9 July,Official Report, column 69, if he will make it his policy to ensure that the necessary software will be available to enable those general practitioners who wish to be responsible for their budgets, and the practice funding scheme, to start on 1 April 1991.

  Mr. Grist
  I refer the hon. Gentleman to my reply of 9 July 1990.

  Bypasses
  Mr. Roy Hughes
  To ask the Secretary of State for Wales when the bypasses planned for Llanymynech Pant and Welshpool will be completed.

  Sir Wyn Roberts
  The A483 Pant/Llanymynech scheme is in Shropshire; its timing is a matter for my right hon. Friend the Secretary of State for Transport. The A483 Welshpool relief road scheme is included in the "Roads in Wales" short-term programme to start before April 1991, and will take about two years to complete.

  Unfit Housing
  Mr. Michael
  To ask the Secretary of State for Wales what is his Department's latest estimate of the total cost that would be involved in bringing all unfit housing(a) in Cardiff and (b) in Wales as a whole up to a fit standard.

  Mr. Grist
  Information in the form requested is not available centrally.

  Myodil
  Mr. Michael
  To ask the Secretary of State for Wales whether he will undertake a review of problems which have arisen for patients in Wales as a result of the use of Myodil; and if he will make a statement.

  Mr. Grist
  I refer the hon. Gentleman to my letter of 27 April, a copy of which is in the Library of the House, to which there is nothing I can usefully add.

  Renewal Areas Scheme
  Mr. Michael
  To ask the Secretary of State for Wales how much money has been provided to local authorities in order to develop the renewal areas scheme for older housing in Wales(a) so far this financial year and (b) prior to April 1990; and for what purposes this money was provided.

  Mr. Grist
  Renewal areas were introduced under the provisions of part VII of the Local Government and Housing Act 1989 with effect from 1 April 1990. Credit approvals of £1 million are being held by the Department to meet local authorities' proposals for renewal areas in the current financial year.

  North-south Dual Carriageway
  Mr. Roy Hughes
  To ask the Secretary of State for Wales what proposals he has for a dual carriageway road link between north and south Wales.

  Sir Wyn Roberts
  Our proposals for selective improvements are clearly set out in "Roads in Wales: Progress and Plans for the 1990s".

  Mr. Roy Hughes
  To ask the Secretary of State for Wales if he has made any estimate of what the effect on tourism of a dual carriageway road link between north and south Wales would be.

  Sir Wyn Roberts
  The selective improvements planned, together with improvements to the motorway and trunk road network throughout Wales, will greatly improve the potential for growth in tourism and leisure-based industries.

  A55
  Mr. Roy Hughes
  To ask the Secretary of State for Wales when the final improvements to the A55 between St. Asaph and Holywell will be completed.

  Sir Wyn Roberts
  Work on the Rhuallt Hill scheme started in May and is expected to take two years to complete.

  A470 and A483
  Mr. Roy Hughes
  To ask the Secretary of State for Wales what are the current traffic flow figures for the A470 and the A483; and what estimates there are of the future traffic flow on these roads.

  Sir Wyn Roberts
  Annual average daily traffic flows on the A470 range between 42,300 north of Cardiff and 2,500 in mid-Wales; and on the A483 between 19,800 in Clwyd and 2,000 in mid-Wales.

  The latest national road traffic forecasts indicate that between 1988 and 2025 traffic is expected to grow by between 83 per cent. and 142 per cent.
  509
  Mr. Roy Hughes
  To ask the Secretary of State for Wales what improvements have been made to the A470 and A483 during the last 10 years.

  Sir Wyn Roberts
  Since 1979, 21 schemes on the A470 and nine schemes on the A483 have been completed, at a cost of over £100 million and £52 million respectively.

  Mr. Roy Hughes
  To ask the Secretary of State for Wales what improvements are currently under way on the A470 and the A483; and what future improvements are planned.

  Sir Wyn Roberts
  Twenty-eight schemes are under construction or planned on the A470, at a cost of over £73 million; six schemes are under construction or planned on the A483 at a cost of some £30 million.

  Mr. Roy Hughes
  To ask the Secretary of State for Wales what plans he has for accelerating planned improvements to the A470 and the A483.

  Sir Wyn Roberts
  The timing of schemes is determined by the satisfactory completion of engineering and statutory procedures, and the availability of finance.

  Bangor-Cardiff Road
  Mr. Roy Hughes
  To ask the Secretary of State for Wales what plans he has for having improvements to sections of road with bad bends and steep hills between Bangor and Cardiff added to the roads programme.

  Sir Wyn Roberts
  Our policy is to continue to undertake schemes to improve safety and reduce journey times. Schemes will be added to the programme as the need for them is identified.

  A487
  Mr. Roy Hughes
  To ask the Secretary of State for Wales what plans he has to improve the conditions on the Caernarfon-Maentwrog section of the A487.

  Sir Wyn Roberts
  The case for improving the A487 between Caernarfon and Maentwrog is under consideration. It is too soon to say what proposals will emerge.

  Heads of the Valleys Road
  Mr. Roy Hughes
  To ask the Secretary of State for Wales what stage of development has been reached in the provision of a dual carriageway on the heads of the valleys road.

  Sir Wyn Roberts
  The case for upgrading the A465 is being reviewed as part of the South Wales traffic study which is scheduled for completion later this year.

  Bypasses
  Mr. Roy Hughes
  To ask the Secretary of State for Wales what plans he has to add bypasses to settlements not currently planned for bypassing to the road programme.

  Sir Wyn Roberts
  Work is continuing to identify towns and villages where bypasses are desirable and the cost can be justified. Schemes will be added to the programme as appropriate.

  Alzheimer's Disease
  Mr. Michael
  To ask the Secretary of State for Wales what level of funding his Department has provided to the Alzheimer's Disease Society(a) in Wales and (b) in each country of Wales in each of the past five years; and what level of finance he intends to provide (i) to maintain and develop the present work of the society and (ii) to provide facilities and support to carers following the transition to care in the community.

  Mr. Grist
  [holding answer 9 July 1990]: No funding was provided by the Department to the Alzheimer's Disease Society before 1987–88. The following amounts have been given for local and national purposes since that year:

  £

  1987–88

  5,741

  1988–89

  24,607

  1989–90

  91,009

  1990–91

  124,641

  1991–92

  130,025

  1992–93

  130,025

  1993–94

  122,525

  1 Projected allocations.

  The county breakdown of central funding for local projects is:

  Gwent (£)

  South Glamorgan (£)

  1987–88

  5,741

  —

  1988–89

  11,936

  12,671

  1989–90

  13,096

  77,913

  1990–91

  16,800

  95,341

  Any bid for additional resources in future years would be considered on its merits.

  The development of facilities and services for users and carers is a matter for the local health and social services authorities and other organisations working within the framework of the White Papers "Working for Patients" (Cmnd. 555) and "Caring for People" (Cmnd. 845) and other policy guidance, including the all-Wales mental illness strategy.

  Forests (Recreational Activities)
  Mr. Michael
  To ask the Secretary of State for Wales what are the factors which led to a drop in public recreational activities provided by the Forestry Commission between 1986 and 1989 as reflected in table 1.4 of the environmental digest for Wales No. 4 1988–1989.

  Mr. David Hunt
  [holding answer 10 July 1990]: The fall in the numbers of listed picnic places, forest walks and forest nature trails is a reflection of the Forestry Commission's policy of channelling resources into improving those facilities most used by the public. The Commission's objective is to attract more visitors and to offer them better value.

  Consultants
  Mr. Michael
  To ask the Secretary of State for Wales if he will list for each of the financial years from 1985–86 to 1989–90, how much was spent on the work of outside
  511
  consultants by (a) his Department, (b) each district health authority in Wales, (c) each family practitioner committee in Wales and (d) any other public body or assisted body in respect of the work of the national health service.

  Mr. Grist
  [holding answer 10 July 1990]: (a) I refer the hon. Gentleman to the reply which I gave to the hon. Member for Caernarfon (Mr. Wigley) on 8 June for expenditure in respect of district health authorities. Additional expenditure by the Department in each of the past five years on the work of outside consultants relating to other aspects of the work of the national health service was as follows:

  Year

  Number

  1985–86

  15,000

  1986–87

  31,441

  1987–88

  Nil

  1988–89

  93,662

  1989–90

  148,222

  (b) and (c) Comprehensive information in respect of expenditure by health authorities and family practitioner committees in Wales is not held centrally.

  (d) Expenditure was incurred by one outside body directly responsible to the Department as follows:

  Welsh National Board for Nursing Midwifery and Health Visiting

  Year

  Number

  1985–86

  Nil

  1986–87

  Nil

  1987–88

  2,128

  1988–89

  Nil

  1989–90

  14,447

HEALTH

  Elderly People
  Mr. Andrew Bowden
  To ask the Secretary of State for Health if he will list the organisations providing for elderly people to which his Department makes grants under section 64 of the Health Services and Public Health Act 1968.

  Mr. Dorrell
  The Department provides funding under section 64 of the Health Services and Public Health Act 1968 to a large number of voluntary bodies, many of which undertake provision for elderly people as part of their overall role. I refer my hon. Friend to the the reply my hon. Friend the Parliamentary Under-Secretary of State gave my hon. Friend the Member for Billericay (Mrs. Gorman) on 24 April 1990 at columns 160–64. Voluntary organisations working wholly or predominantly with and for elderly people, which are receiving funding under section 64 in 1990–91, are as follows:

  Age Concern England

  National Osteoporosis Society

  Extend

  512

  Age Exchange Theatre Company

  New Horizons Trust

  Contact

  Jewish Welfare Board

  British Association for Services to the Elderly

  Mr. Andrew Bowden
  To ask the Secretary of State for Health if he will list the programmes run by the Health Education Authority which make express provision for the health education needs of elderly people.

  Mr. Dorrell
  Express provision is made in the "Look After Your Heart" campaign. Relevant advice is also given in other programmes, including those on smoking, alcohol, nutrition and cancer.

  Persons Needing Care and Attention
  Mr. Andrew Bowden
  To ask the Secretary of State for Health (1) on how many occasions section 47 of the National Assistance Act 1948 was invoked by each local authority in England and Wales in each of the last five years for which figures are available;

  (2) what steps his Department is taking to monitor the use by local authorities of section 47 of the National Assistance Act 1948;

  (3) what guidance he issues to local authorities in respect of their responsibilities under section 47 of the National Assistance Act 1948.

  Mr. Dorrell
  Information about the use made by local authorities of section 47 of the National Assistance Act 1948 is not collected centrally. This is a matter for local authorities and the courts and no central guidance has been issued.

  Cancer
  Mr. Gareth Wardell
  To ask the Secretary of State for Health if his Department has any information on the protection offered by selenium against carcinogens in humans.

  Mr. Dorrell
  Some reports in the scientific literature suggest that the risk of developing cancers of the lung, colon and bladder decreases as the consumption of vegetables with a high selenium content increases. However, other reports suggest that the risk of developing cancers of the stomach and liver and, in contradiction of the aforementioned reports, of the lung increases as the blood level of selenium increases.

  Selenium is one of a number of substances that appear to inhibit the development of cancer. The mechanism whereby such substances exercise inhibitory effects are not clear and, for the present, no firm conclusions can be drawn. It is important to note that an excess of selenium can cause acute illness and it is inadvisable for anyone to take selenium supplements other than under medical supervision. Eating a well-balanced diet will ensure, for most people, an adequate intake of selenium.

  If further data become available they will be carefully considered.
  513
  Mr. Gareth Wardell
  To ask the Secretary of State for Health (1) if he is aware of any studies which point to a possible role for calcium ingestion in the prevention of cancers in humans;

  (2) if his Department has any information on studies which have demonstrated a possible link between nutrition and pre-cancerous intestinal lesions;

  (3) if his Department holds any information on studies of links between diet and cancers of the pancreas and bile ducts.

  Mr. Dorrell
  No such studies have been drawn to our attention.

  Mr. Gareth Wardell
  To ask the Secretary of State for Health if his Department holds any information on studies which demonstrate a possible relationship between nutrition, alcohol consumption and breast cancer.

  Mr. Dorrell
  We are aware of a number of studies investigating such links.

  Mr. Gareth Wardell
  To ask the Secretary of State for Health if he has yet received the report of the International Agency for Research on Cancer on the control study relating to the links between nutrition, lifestyle and the incidence of breast and colon cancer in the European Community.

  Mr. Dorrell
  No.

  Creosote
  Mr. Colvin
  To ask the Secretary of State for Health what evidence he has of any carcinogenic risk to humans from the use of creosote as a wood preservative.

  Mr. Dorrell
  There are case reports published in the United Kingdom and reports to Her Majesty's inspector of factories of skin cancers among workers treating timber with creosote, handling creosote in storage and using creosote as a releasing agent for brick moulds. These indicate that repeated and prolonged contact with the skin over many years may result in skin cancer. The WHO International Agency for Research on Cancer (IARC) has, on the basis of these reports and the results of experiments on laboratory animals, classified creosote as a probable carcinogen. However, there is no evidence to indicate that occasional contact with creosote would be likely to give rise to cancers.

  Alzheimer's Disease
  Ms. Walley
  To ask the Secretary of State for Health what are the projections of those suffering from Alzheimer's disease and related dementias for the periods(a) 1985 to 1990, (b) 1990 to 1995 and (c) 1995 to 2000; and what assumptions these projections are based on.

  Mr. Dorrell
  Such projections are not produced.

  Vehicle Emissions
  Mr. Simon Hughes
  To ask the Secretary of State for Health if he has made an assessment of the possible impact of(a) burnt hydrocarbon gases from diesel engine exhausts, (b) nitrogen dioxide and (c) sulphur dioxide on the potency of pollen grains and the consequences for public health; and if he will make a statement.
  514
  Mr. Dorrell
  Reports in the scientific literature of interactions between pollen and a range of air pollutants from motor vehicle or other fuel-burning sources have been examined in relation to their possible effect on the occurrence of asthma, but no clear conclusions have emerged. The matter is being kept under review.

  GP Budgets
  Mr. Cousins
  To ask the Secretary of State for Health what payments are projected to general practitioners to(a) work up and (b) operate practice budgets.

  Mrs. Virginia Bottomley
  Eligible practices are able to claim an allowance of up to £16,000 to help meet the costs of the preparatory work necessary in order to become fund holders. From 1 April next year fund-holding practices will be able to claim an annual management allowance of up to £32,000 to help meet the costs incurred in running the fund. In addition, practices which commit themselves formally to participation in the scheme will be able to claim an extra 25 per cent. of the cost of purchasing, leasing or upgrading their computer systems in accordance with a scale to be published in the statement of fees and allowances. This is in addition to the allowance of up to 50 per cent. which all GPs can claim.

  Embossed Literature Service
  Mr. Ashley
  To ask the Secretary of State for Health (1) if he will list the amount awarded by his Department to fund the embossed literature service for each of the last 10 years for which figures are available;

  (2) what steps he is taking to encourage greater provision of materials in braille;

  (3) what would be the current value of the embossed literature service grant had it been increased in line with inflation since 1979;

  (4) what discussions he has held with the Royal National Institute for the Blind on the embossed literature service grant.

  Mr. Dorrell
  The table shows the amounts awarded, under section 64 of the Health Services and Public Health Act 1968, to the Royal National Institute for the Blind's (RNIB) embossed literature service, for each of the financial years 1981–82 to 1990–91. The amount awarded in 1978–79 (£165,000) would be worth £411,341 at 1990–91 prices. Officials met a number of senior representatives of the RNIB in February this year to discuss the future funding of this service, which produces embossed literature to meet a wide variety of social, cultural, educational and technical needs. As a consequence of this meeting, a number of suggestions have been offered to the RNIB for generating new sources of income for the service. My right hon. Friend the Minister for Social Security and Disabled People has also initiated discussions between his officials and the RNIB about producing social security information in braille at an agreed cost which would be met by funds from the Department of Social Security.

  Year

  Amount (£000)

  1981–82

  355

  1982–83

  235

  1983–84

  240

  1984–85

  250

  515

  Year

  Amount (£000)

  1985–86

  250

  1986–87

  250

  1987–88

  250

  1988–89

  250

  1989–90

  250

  1990–91

  200

  Pro Plus Tablets
  Mr. Rhodes James
  To ask the Secretary of State for Health whether he has received any representations on Pro Plus tablets; and if he will make a statement.

  Mrs. Virginia Bottomley
  We have received one letter from my hon. Friend.

  Self-Governing Trusts
  Mr. Robin Cook
  To ask the Secretary of State for Health if he will place in the Library on a daily basis applications received by his Department by units for self-governing trust status.

  Mrs. Virginia Bottomley
  No. However, my right hon. and learned Friend the Secretary of State will direct the relevant regional health authority to consult on each application for trust status. The region will seek the views of local Members of Parliament as part of this process. If the hon. Member wishes to see individual applications, he should contact the relevant regions.

  Heart Drugs
  Mr. Cousins
  To ask the Secretary of State for Health what were the budgets set aside for heart drugs in each regional health authority for 1990–91; and what were these budgets, expressed as an expenditure figure per head.

  Mrs. Virginia Bottomley
  Health authorities are responsible for setting their own budgets for particular items of expenditure. Details are not held centrally.

  National Health Service and Community Care Act (Publicity)
  Mr. Robin Cook
  To ask the Secretary of State for Health (1) if he will break down the £2.75 million being spent on publicising the National Health Service and Community Care Act, giving the amount spent on(a) design, (b) production and (c) distribution of the booklet; and if he will give the timetable for distribution;

  (2) if work done on the design of the booklet to publicise the National Health Service and the Community Care Act was done by an outside agency; whether tenders were invited for (a) the design and (b) the production of the booklet; and when the decision was taken to produce and distribute 20 million booklets.

  Mrs. Virginia Bottomley
  The estimated costs for the booklet "The NHS Reforms and You" are:

  £

  (a) Design costs

  24,000

  (b) Production costs

  1,400,000

  (c) Distribution costs

  800,000

  2,224,000

  516
  These costs are for the English version only. The remainder of the £2.75 million will be required for the production and distribution of the shorter version being produced in nine ethnic minority languages for fulfilling requests for further copies of the English version and the "Look After Your Heart" insert. The distribution begins in the week comencing 16 July and is scheduled for completion in the week commencing 13 August. Ninety-two per cent. of households should receive a copy in the first week.

  The decision to produce and distribute the booklet was taken on 15 March 1990.

  The booklet was designed by an outside agency appointed by tender. The production of the booklet was commissioned by Central Office of Information and HMSO using suppliers approved by them and appointed on their ability to deliver a quality product, on time, at a competitive price.

  Herbal Medicines
  Mr. Simon Hughes
  To ask the Secretary of State for Health what steps he is taking to ensure the continued availability of herbal medicines; and if he will make a statement on the progress of European Community deliberations in respect of controls on herbal medicines.

  Mrs. Virginia Bottomley
  There are no new initiatives in Europe exclusively or explicitly affecting herbal medicines. There are currently under consideration European Community proposals which apply to all medicinal products, including herbal products, and which have implications for their wholesale distribution, legal status, labelling, advertising and future licensing. There are also proposals for a directive to regulate homoeopathic medicines.

  None of these proposals implies any change to the general availability of herbal medicinal products, and none is planned.

  Colin Jago
  Mr. Andrew Mitchell
  To ask the Secretary of State for Health when he received a report from the Nottingham health authority on the death of Colin Jago; what conclusions he has reached; and whether he will make a statement.

  Mr. Dorrell
  We received a report from Nottingham health authority in late June. Having read the report, we have concluded that Mr. Jago received a proper level of care from the Nottingham health authority.

  Hazardous Substances
  Mr. Gareth Wardell
  To ask the Secretary of State for Health if the production and use of(a) 2-Naphthylamine and its salts, (b) 4-Aminobiphenyl and its salts, (c) Benzidine and its salts and (d) 4-Nitrodiphenyl is permitted in Britain.

  Mr. Nicholls
  I have been asked to reply.

  Regulation 4 and schedule 2 of the Control of Substances Hazardous to Health Regulations 1988 (COSHH) prohibit the manufacture and use for all purposes, and the importation into the United Kingdom,

  517
  of 4-aminodiphenyl, 4-nitrodiphenyl, benzidine, 2- naphthylamine, their salts and any substance containing any of these compounds in a total concentration exceeding 0.1 per cent.

  Mr. Gareth Wardell
  To ask the Secretary of State for Health if he will publish in the Official Report a list of the carcinogenic substances that have already been classified by directive 67/548/EEC.

  Mr. Nicholls
  I have been asked to reply.

  The list of carcinogenic substances is included in part 1Al of the third edition of the "Authorised and Approved List—information approved for the classification, packaging and labelling of dangerous substances for supply and conveyance by road", published by the Health and Safety Commission. A copy of this is available from the House of Commons Library.

SCOTLAND

  TVEI
  Mr. Allan Stewart
  To ask the Secretary of State for Scotland whether he is carrying out any current evaluation of the educational impact of the technical and vocational education initiative.

  Mr. Lang
  A report by Her Majesty's inspectors of schools on TVEI pilot projects, "Learning and Teaching in TVEI in Scotland", was published in November last year. A series of evaluation studies has also been undertaken as part of the initiative itself. The need for further work is kept under review.

  Playground Supervision
  Mr. Sillars
  To ask the Secretary of State for Scotland what is the latest position on his playground supervision initiatives.

  Mr. Lang
  The Schools (Safety and Supervision of Pupils) (Scotland) Regulations 1990, which place a duty on education authorities to provide playground supervision for most primary and all special school pupils under their charge, came into force on 1 April 1990.

  Waste Incinerator, Scotstoun
  Mr. Sillars
  To ask the Secretary of State for Scotland if he has received an appeal against Glasgow district council's decision to refuse planning permission for a medical waste incinerator in Scotstoun.

  Lord James Douglas-Hamilton
  My right hon. and learned Friend has not received such an appeal.

  Court Proceedings
  Mr. Wallace
  To ask the Secretary of State for Scotland if he will state, in respect of each procurator fiscal office, the number of police reports received in 1989 and the actual number and percentage marked no proceedings.

  Lord James Douglas-Hamilton
  The number of reports submitted by the police and other reporting agencies to procurators fiscal which were marked "no proceedings" in each procurator fiscal office for 1989 is as follows:
  518

  Reports

  No Proceedings

  Percentage

  Aberdeen

  14,411

  820

  5.69

  Airdrie

  9,295

  768

  8.26

  Alloa

  3,226

  306

  9.49

  Arbroath

  2,644

  152

  5.75

  Ayr

  11,953

  1,175

  9.83

  Banff

  1,140

  59

  5.18

  Campbeltown

  803

  78

  9.71

  Cupar

  3,288

  274

  8.33

  Dingwall

  1,969

  179

  9.09

  Dornoch

  660

  44

  6.67

  Dumbarton

  9,137

  602

  6.59

  Dumfries

  7,073

  288

  4.07

  Dundee

  13,812

  2,261

  16.37

  Dunfermline

  8,395

  615

  7.33

  Dunoon

  1,463

  185

  12.65

  Duns

  1,388

  93

  6.70

  Edinburgh

  41,411

  4,029

  9.73

  Elgin

  4,956

  530

  10.69

  Falkirk

  11,329

  1,606

  14.18

  Forfar

  3,403

  125

  3.67

  Fort William

  1,804

  118

  6.54

  Glasgow

  82,948

  19,066

  22.99

  Greenock

  7,573

  406

  5.36

  Haddington

  4,785

  466

  9.74

  Hamilton

  28,404

  2,486

  8.75

  Inverness

  6,593

  625

  9.48

  Jedburgh

  1,872

  138

  7.37

  Kilmarnock

  14,099

  1,164

  8.26

  Kirkcaldy

  9,443

  517

  5.47

  Kirkcudbright

  1,411

  35

  2.48

  Kirkwall

  664

  56

  8.43

  Lanark

  5,254

  1,194

  22.73

  Lerwick

  1,007

  137

  13.60

  Linlithgow

  9,928

  457

  4.60

  Lochmaddy

  244

  13

  5.33

  Oban

  1,174

  74

  6.30

  Paisley

  12,935

  921

  7.12

  Peebles

  1,126

  61

  5.42

  Perth

  8,908

  1,211

  13.59

  Peterhead

  2,731

  273

  10.00

  Portree

  586

  35

  5.97

  Rothsay

  373

  58

  15.55

  Selkirk

  2,280

  228

  10.00

  Stirling

  7,623

  422

  5.54

  Stonehaven

  3,119

  202

  6.48

  Stornoway

  1,027

  20

  1.95

  Stranraer

  2,336

  243

  10.40

  Tain

  1,464

  163

  11.13

  Wick

  1,218

  114

  9.36

  Total 1989

  374,685

  45,092

  12.03

  EC-Gulf Trade
  Mr. Doran
  To ask the Secretary of State for Scotland if his Department will make any assessment of the effects on employment in the petrochemical and allied industries in Scotland of a free trade agreement between the European Community and the states of the Gulf Co-operation Council.

  Mr. Lang
  The Government have consulted widely with industries interested in these forthcoming negotiations, including the petrochemical industry and remain ready to consider further views. Employment in Scotland will be one of the issues to be considered.

  Mr. Doran
  To ask the Secretary of State for Scotland if his Department will make any assessment of the effects on the offshore industry in Scotland of a free trade agreement between the European Community and the states of the Gulf Co-operation Council.
  519
  Mr. Lang
  Assessment of the effects of a free trade agreement between the European Community and the Gulf Co-operation Council is a matter for my right hon. Friend the Secretary of State for Trade and Industry. However, any such agreement is expected to have little effect on the offshore sector in Scotland.

  Interval (in weeks) between pleading and trial diets A. Sheriff Courts

  Quarter ended

  Sheriff Court

  31 December 1988

  31 March 1989

  30 June 1989

  30 September 1989

  31 December 1989

  31 March 1990

  Aberdeen

  19

  14

  18

  22

  20

  17

  Airdrie

  14

  10

  14

  12

  11

  12

  Alloa

  16

  23

  14

  9

  6

  8

  Arbroath

  12

  10

  8

  11

  15

  9

  Ayr

  17

  16

  18

  16

  11

  12

  Banff

  10

  9

  13

  11

  10

  10

  Campbeltown

  12

  10

  14

  14

  12

  8

  Cupar

  14

  12

  13

  9

  11

  9

  Dingwall

  8

  10

  8

  8

  13

  12

  Dornoch

  10

  10

  12

  9

  12

  12

  Dumbarton

  21

  19

  19

  19

  19

  18

  Dumfries

  17

  15

  15

  12

  10

  10

  Dundee

  8

  8

  6

  6

  5

  5

  Dunfermline

  7

  7

  9

  9

  8

  10

  Dunoon

  11

  12

  10

  11

  15

  16

  Duns

  6

  7

  8

  5

  6

  7

  Edinburgh

  20

  19

  20

  19

  20

  20

  Elgin

  7

  7

  12

  7

  7

  9

  Falkirk

  7

  11

  12

  11

  10

  10

  Forfar

  7

  11

  6

  6

  6

  7

  Fort William

  12

  12

  8

  12

  12

  12

  Glasgow

  10

  11

  12

  12

  14

  12

  Greenock

  20

  16

  15

  16

  20

  17

  Haddington

  26

  6

  7

  6

  7

  9

  Hamilton

  16

  13

  11

  12

  18

  20

  Inverness

  8

  12

  14

  12

  12

  11

  Jedburgh

  6

  7

  8

  8

  8

  10

  Kilmarnock

  17

  17

  13

  12

  12

  11

  Kirkcaldy

  10

  11

  14

  8

  11

  12

  Kirkcudbright

  17

  14

  6

  9

  12

  11

  Kirkwall

  7

  7

  7

  8

  8

  9

  Lanark

  5

  8

  11

  8

  11

  10

  Lerwick

  8

  10

  16

  11

  12

  11

  Linlithgow

  10

  11

  6

  9

  9

  14

  Lochmaddy

  12

  12

  8

  8

  8

  12

  Oban

  10

  10

  12

  16

  14

  12

  Paisley

  22

  21

  20

  19

  15

  13

  Peebles

  10

  4

  12

  9

  11

  10

  Perth

  8

  7

  8

  6

  8

  7

  Peterhead

  16

  13

  16

  17

  12

  10

  Portree

  12

  12

  8

  16

  8

  4

  Rothesay

  6

  10

  12

  10

  9

  18

  Selkirk

  6

  7

  11

  4

  5

  10

  Stirling

  13

  11

  14

  13

  13

  8

  Stonehaven

  10

  12

  12

  9

  9

  10

  Stornoway

  14

  14

  12

  12

  10

  12

  Stranraer

  8

  11

  14

  14

  11

  10

  Tain

  6

  6

  8

  6

  8

  7

  Wick

  7

  7

  10

  8

  6

  8

  Interval (in weeks) between pleading and trial diets B. District courts

  District court

  Quarter ended

  31 December 1988

  31 March 1989

  30 June 1989

  30 September 1989

  31 December 1989

  31 March 1990

  Aberdeen

  15

  11

  14

  17

  22

  20

  Airdrie

  12

  11

  12

  13

  16

  18

  Alloa

  19

  16

  15

  8

  6

  11

  Arbroath

  4

  4

  8

  8

  8

  8

  Court Delays
  Mr. Wallace
  To ask the Secretary of State for Scotland what information he has regarding the delay in weeks between pleading and trial hearings in(a) each sheriff court and (b) each district court in Scotland for the quarters ended (i) 31 December 1988, (ii) 31 March 1989, (iii) 30 June 1989, (iv) 30 September 1989, (v) 31 December 1989 and (vi) 31 March 1990.

  Lord James Douglas-Hamilton
  The information is set out in the tables:
  521

  District court

  Quarter ended

  31 December 1988

  31 March 1989

  30 June 1989

  30 September 1989

  31 December 1989

  31 March 1990

  Ayr

  12

  14

  15

  20

  19

  18

  Banff

  0

  2

  9

  9

  7

  6

  Campbeltown

  8

  8

  8

  8

  8

  8

  Cupar

  7

  10

  14

  11

  14

  9

  Dingwall

  8

  4

  4

  4

  4

  4

  Dornoch

  10

  10

  10

  10

  10

  10

  Dumbarton

  22

  16

  16

  16

  14

  14

  Dumfries

  20

  13

  12

  12

  12

  12

  Dundee

  6

  6

  7

  7

  12

  13

  Dunfermline

  20

  25

  17

  16

  15

  22

  Dunoon

  4

  4

  8

  8

  8

  8

  Duns

  4

  4

  4

  4

  4

  4

  Edinburgh

  11

  12

  15

  16

  16

  26

  Elgin

  12

  9

  14

  11

  11

  16

  Falkirk

  16

  13

  20

  15

  21

  18

  Forfar

  16

  16

  12

  16

  17

  13

  Fort William

  4

  6

  6

  6

  6

  8

  Glasgow

  21

  21

  20

  14

  13

  14

  Greenock

  6

  13

  16

  16

  9

  8

  Haddington

  48

  45

  15

  14

  10

  11

  Hamilton

  20

  11

  13

  12

  10

  13

  Inverness

  7

  10

  6

  10

  7

  7

  Jedburgh

  7

  6

  6

  6

  6

  6

  Kilmarnock

  7

  8

  11

  8

  8

  8

  Kirkcaldy

  12

  20

  12

  10

  13

  12

  Kirkcudbright

  10

  10

  10

  10

  10

  10

  Lanark

  6

  6

  9

  9

  9

  7

  Linlithgow

  14

  14

  20

  13

  14

  14

  Oban

  8

  10

  12

  12

  4

  8

  Paisley

  27

  23

  22

  23

  12

  14

  Peebles

  8

  8

  8

  8

  8

  8

  Perth

  3

  10

  12

  7

  5

  6

  Peterhead

  7

  14

  18

  15

  18

  24

  Portree

  4

  8

  8

  8

  4

  4

  Rothesay

  0

  4

  8

  4

  0

  8

  Selkirk

  6

  6

  6

  6

  6

  6

  Stirling

  10

  10

  8

  10

  15

  12

  Stonehaven

  12

  13

  11

  11

  11

  13

  Stornoway

  10

  10

  10

  10

  10

  10

  Stranraer

  13

  18

  18

  17

  4

  4

  Tain

  6

  6

  8

  8

  12

  7

  Wick

  8

  8

  4

  4

  4

  4

  Labour Statistics
  Mr. Worthington
  To ask the Secretary of State for Scotland (1) how many people were made redundant in Scotland in each of the past five years and in each month of 1990;

  (2) how many manufacturing jobs have been lost in each of the regions of Scotland since 1979; and what percentage this is of the manufacturing jobs in existence in 1979.

  Mr. Lang
  There are no comprehensive statistics on redundancies. The number of redundancies involving 10 or more workers confirmed to the Department of Employment: the Training Agency as having occurred in Scotland since 1985 is set out in the table:

  Year

  Redundancies

  1985

  23,892

  1986

  32,882

  1987

  22,833

  1988

  14,311

  1989

  15,350

  1990

  January

  336

  February

  1,428

  March

  1,968

  April

  667

  522

  Year

  Redundancies

  May1

  1,573

  June1

  2,079

  1 Confirmed redundancies in the latest 2 months are provisional and may be subject to revision.

  Information on employment for Scottish local authority regions is obtained from the censuses of employment. There was no such census undertaken in 1979 and the latest census results relate to 1987. The change in manufacturing employment in the Scottish regions between June 1978 and September 1987 is set out in the table:

  Change in employees in employment in manufacturing between June 1978 and September 1987

  Region

  1Thousands

  2Per cent.

  Borders

  -2.0

  -14

  Central

  -12.2

  -35

  Dumfries and Galloway

  -0.9

  -8

  Fife

  -10.3

  -24

  Grampian

  -3.1

  -8

  Highland

  -3.7

  -29

  Lothian

  -12.7

  -18

  Strathclyde

  -136.7

  -41

  Tayside

  -14.5

  -32

  Orkney

  +0.2

  +40

  523

  Region

  1Thousands

  2Per cent.

  Shetland

  -0.2

  -17

  Western Isles

  +0.3

  +33

  1 Change in manufacturing employment between June 1978 and September 1987.

  2 Change as a percentage of manufacturing employment in June 1978.

  Source: Census of Employment.

  Students
  Mr. Worthington
  To ask the Secretary of State for Scotland how many Scottish students attained university entry qualification level in each of the years 1979 to 1989.

  Mr. Lang
  The available information was published by the Scottish Education Department in its statistical bulletins "Higher Education Projections for Scotland" (No. 7/J1/1988) and "Higher Education Projections for Scotland 1990" (No. 8/J1/1990) which are available in the Library.

  Mr. Worthington
  To ask the Secretary of State for Scotland how many Scottish students went to British universities outside Scotland in each of the years 1979 to 1989.

  Mr. Lang
  The figures are given in the table:

  Scottish domiciled undergraduate entrants1 to British universities outwith Scotland

  Figures as at 31 December

  Number

  1979

  662

  1980

  716

  1981

  655

  1982

  676

  1983

  696

  1984

  704

  1985

  730

  1986

  724

  1987

  795

  1988

  775

  1989

  n/a

  1 Full-time and sandwich students.

  Service Station, Nether Abington
  Mr. Hood
  To ask the Secretary of State for Scotland (1) when he intends to announce his decision to site the new service station to replace the existing station at Nether Abington; and if the proposed fast-link road from the M8 to the M74 will influence the decision;

  (2) if he will make a statement on the provision of a service station on the M74 when upgraded to replace the existing station at Nether Abington;

  (3) if he will list the representations he has received on the siting of a new service station to replace the existing station at Nether Abington.

  Lord James Douglas-Hamilton
  [holding answer 12 July 1990]: The Government's policy for the provision of motorway service areas in Scotland was given in my reply on 4 April to my hon. Friend the Member for Tayside, North (Mr. Walker) at columns 661–62.

  In accordance with this policy, consultants will be advising on the location of a new motorway service area in the general vicinity of Millbank and Nether Abington. Their recommendations are awaited. Consideration of the
  524
  best location for a new facility will require to take account of all proposed developments, including the M74/M8 fast link, should this proceed. In any event, no decision can be made until road orders for the section of new M74 between Nether Abington and Elvanfoot are confirmed.

  Written representations on the siting of the new motorway service station have to date been received from Clydesdale district council and the Scottish tourist board.

  Health Visitors
  Mr. Dunnachie
  To ask the Secretary of State for Scotland how many people were recruited as health visitors in Scotland in 1988, 1989 and 1990 to date; and if he will make a statement.

  Mr. Michael Forsyth
  [holding answer 13 July 1990]: Information on health visitor recruitment in Scotland is not held centrally, and could be provided only at a disproportionate cost.

  Nitrogen Dioxide
  Mr. Watson
  To ask the Secretary of State for Scotland what action he intends to take to reduce levels of nitrogen dioxide in both Edinburgh and Glasgow city centres.

  Lord James Douglas-Hamilton
  [holding answer 16 July 1990]: The levels of nitrogen dioxide in city centres are almost entirely due to emissions from motor vehicles, the reduction of which is a matter for my right hon. Friend the Secretary of State for Transport. Plans for the reduction of emissions are contained in the written answer given by my hon. Friend the Under-Secretary of State for Transport on 8 June 1990 at column 722.

  Mr. Watson
  To ask the Secretary of State for Scotland what information he has on the levels of nitrogen dioxide in Edinburgh and Glasgow city centres; what are the relevant European Community air quality standards; and what recent representations he has received on this.

  Lord James Douglas-Hamilton
  [holding answer 16 July 1990]: On the basis of the results obtained from a nationwide survey of ambient nitrogen dioxide concentrations in 363 urban areas in the United Kingdom, one continuous monitoring station, operating in accordance with the requirements of the Council directive of 7 March 1985, was established in Glasgow. The results obtained have been satisfactory and are below the directive limit value.

  The relevant limit and guide values in the Council directive of 7 March 1985 on air quality standards for nitrogen dioxide are for the 98th percentile calculated from the mean values per hour or per period of less than an hour recorded throughout the year:

  Limit Value

  200 micrograms per cubic metre

  Guide Value

  135 micrograms per cubic metre.

  No representations have been received.

  Milk Marketing
  Mr. Allan Stewart
  To ask the Secretary of State for Scotland what consultations he intends to have on the report by the Department of Agriculture and Fisheries on the Aberdeen and district milk marketing board's commercial operations.

  Lord James Douglas-Hamilton
  [holding answer 16 July 1990]: The Department of Agriculture and Fisheries for

  525
  Scotland published a report on 7 June 1990 on the relationship between the Aberdeen and district milk marketing board's producer activities and its commercial division. The Aberdeen and district milk marketing board and the Scottish Dairy Trade Federation have been invited to consider the report and its conclusions and to submit their views to the Department by 1 October 1990.

  School Closures
  Mr. Alex Carlile
  To ask the Secretary of State for Scotland how many schools in Scotland of fewer than 50 pupils closed in(a) 1975, (b) 1980, (c) 1985 and (d) 1989; and if he will make a statement.

  Mr. Lang
  [holding answer 16 July 1990]: The Scottish Education Department does not maintain records of school closures by size of school.

  Industrial Fishing
  Mr. Salmond
  To ask the Secretary of State for Scotland what arrangements have been made to police industrial fishing vessels to prevent them from catching significant proportions or amounts of small sile; if he will give details of these arrangments; and if he will make a statement.

  Mr. Lang
  [holding answer 16 July 1990]: The industrial fishery is regulated by licence and European Community legislation lays down the minimum mesh size of net to be used and the maximum percentage of species which may be retained as a by-catch. This is enforced by sampling the catch either on boarding the vessel or at the time of landing.

  Mr. Salmond
  To ask the Secretary of State for Scotland if he will give details of the calculation of estimates of the proportion of shoals caught by industrial fishing fleets for the production of soap and animal feed; and if he will make a statement.

  Mr. Lang
  [holding answer 16 July 1990]: The quantities estimated to have been landed in direct industrial fisheries using small-mesh trawls in the North sea for the years 1985–89 are given in the table together with the officially reported landings of all fish:

  (thousand tonnes)

  (a)

  (b)

  Estimates landings in industrial trawl fishery

  Reported landings of fish used for all purposes

  1985

  1,033

  2,428

  1986

  1,140

  2,495

  1987

  1,106

  2,552

  1988

  1,349

  n/y/a

  1989

  11,483

  n/y/a

  1Preliminary estimate.

  n/y/a = not yet available.

  Source: (a) Report of the Advisory Committee on Fishery Management of the International Council for the Exploration of the Sea, May 1990; (b) Bulletin Statistique des Peches Maritimes.

  The figures given in the table indicate that a minimum of 42 to 46 per cent. of fish landed from the North sea in the years 1985–1987 were caught in directed fisheries for reduction to meal and oil. The estimates of industrial fish landings, however, do not include quantities of herring and mackerel caught in other fisheries and landed for reduction. For example, large quantities of herring and mackerel are sold for reduction in Norway.
  526
  United Kingdom fisheries are primarily for human consumption and the United Kingdom strongly supports the European Community ban on fishing for herring for industrial purposes.

  Sandeels
  Mr. Salmond
  To ask the Secretary of State for Scotland if he will give details of any scientific evidence he has relating to the depletion of North Sea sandeel stocks by seals and by small herring; and if he will make a statement.

  Mr. Lang
  [holding answer 16 July 1990]: Sandeels are preyed on by many predators in the North sea including, seals, seabirds and numerous other species of fish.

  Published estimates for the total North sea indicate that the annual consumption of sandeels by grey seals was in the order of 35,000 to 40,000 tonnes in 1984 and 1985. An unpublished estimate for 1989 is 27,500 tonnes. There are no comparable estimates for common seals.

  A rough estimate of the annual consumption of sandeels by both species of seals in the Shetland area of the North sea is in the order of 8,000 to 9,000 tonnes, which is over twice as much as the quantity taken in the fishery in 1989 and more than three times the 1990 catch.

  Herring are known to prey on small sandeels at times. Research is currently being carried out by the Department of Agriculture and Fisheries for Scotland on the possible role of predation and other factors in controlling sandeel recruitment. At present, however, any link between the decrease in sandeel recruitment at Shetland and herring predation is purely speculative.

EMPLOYMENT

  Equestrianism
  Mr. Harry Greenway
  To ask the Secretary of State for Employment to what extent the United Kingdom has been involved in the European Year of Tourism to date; and what plans he has to promote the United Kingdom's equestrianism during the European Equestrian Month in November.

  Mr. Nicholls
  The British Tourist Authority has taken the lead in co-ordinating the United Kingdom's participation in the European Year of Tourism. It has launched a number of campaigns to promote the interest and active involvement of the United Kingdom tourism industry and many events are taking place across the country throughout 1990. Thirty-nine United Kingdom projects have been accepted for co-funding by the European Commission.

  A number of suggestions has been made for equestrian events during European equestrian month in November. The British Tourist Authority would be delighted to hear from the hon. Member if he has any specific ideas he wishes to put forward.

  Union Assets (Sequestration)
  Mr. Butterfill
  To ask the Secretary of State for Employment what assessment he has made of the importance of the sequestration of union assets as a means to enforce employment legislation.

  Mr. Nicholls
  Sequestration is a penalty that may be imposed by the courts, where appropriate, for any
  527
  contempt of court. As such, it is necessary to ensure that trade unions are not able to flout the law, including employment law, with impunity.

  Child Care
  Mr. McCartney
  To ask the Secretary of State for Employment what assessment he has made of whether the new single unit cost per training place system encourages training managers to discriminate against trainees with child care requirements; and what options have been considered as to how such trainees should be funded under the new contract.

  Mr. Nicholls
  My right hon. and learned Friend has no evidence that lone parents are being denied access to employment training. Arrangements for funding child care are for negotiation between individual training managers and the training and enterprise council or Training Agency area office concerned.

  Training Managers
  Mr. McCartney
  To ask the Secretary of State for Employment what transitional funding he proposes to offer to training managers to cover the shortfall between their contractual cost commitments to existing trainees and the unit cost per trainee they are receiving under the new contract.

  Mr. Nicholls
  Funding arrangements for employment training, including any transitional arrangements, are for negotiation between training managers and the local training and enterprise council or area office concerned.

  Mr. McCartney
  To ask the Secretary of State for Employment if he will list the number of contracted training places awarded to training managers in each of the(a) private, (b) local authority and (c) voluntary sectors; and what were the comparable figures under the old contract.

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

  Clothing Industry
  Mr. Canavan
  To ask the Secretary of State for employment how many jobs have been lost in the clothing industry over the past two years.

  Mr. Nicholls
  The number of employees in employment in the clothing industry including hats, gloves and fur goods, in Great Britain fell by 6,000, or 2.9 per cent. between December 1987 and December 1989.

  Construction Industry
  Mr. Andrew F. Bennett
  To ask the Secretary of State for Employment what new steps he intends to take to reduce accidents in the construction industry.

  Mr. Nicholls
  The prime legal responsibility to bring about improvements rests with the industry itself. As part 528
  of a continuing process to promote longlasting change in the industry, the Health and Safety Commission is to take forward proposals for new legislation to strengthen the legal requirements relating to the management of health and safety on construction sites.

  The Health and Safety Executive is continuing to target inspection activity where it will be most effective. That is on the more hazardous activities such as roof work and demolition, and on the quality of site management and its ability to manage health and safety. Inspectors continue to pursue inquiries and enforcement action to the highest levels in companies which do not measure up to the standards expected to them and are also vigorously enforcing the Construction (Head Protection) Regulations which came into force on 30 March 1990.

  Labour Statistics
  Mr. John Marshall
  To ask the Secretary of State for Employment if he will make a statement on trends in employment since 1981.

  Mr. Nicholls
  In December 1989, the latest date for which information is available, the work force in employment in the United Kingdom was 27,082,000, the highest level ever. This represents an increase of 2,759,000, or 11 per cent., since June 1981.

  Sunday Trading
  Mr. Rathbone
  To ask the Secretary of State for Employment what he estimates the effect of the present Sunday trading laws is on employment.

  Mr. Nicholls
  No such estimates are available.

  Disabled People
  Ms. Short
  To ask the Secretary of State for Employment if he will publish details for Great Britain of the number and percentage of people with disabilities of working age who are unemployed.

  Mr. Eggar
  The most recent estimate is that there are about 285,000 people with disabilities who are economically active and want but are not in work. This is 22 per cent. of the total. This information was obtained in summer 1989 during a survey commissioned by my Department into the numbers and characteristics of people with disabilities in the labour market. The figure is compiled on a basis different from that used to produce the monthly claimant-based statistics, so is not exactly comparable with general unemployment figures.

  Ms. Short
  To ask the Secretary of State for Employment if he will publish details for Great Britain and for the west midlands region, for each year from April 1986 to the most recent date, of the number and percentage of YTS leavers who on leaving YTS were unemployed(a) in total and (b) with disabilities.

  Mr. Nicholls
  The information is as follows:
  529

  All leavers

  Disabled leavers

  West mid-lands

  Great Britain

  West mid-lands

  Great Britain

  April 1986 to March 1987

  Number

  2,739

  19,761

  73

  761

  Percentage

  25.0

  26.6

  42.7

  40.8

  April 1987 to March 1988

  Number

  4,542

  42,478

  339

  2,804

  Percentage

  12.2

  14.6

  36.0

  32.9

  April 1988 to March 1989

  Number

  2,853

  27,381

  186

  1,738

  Percentage

  11.6

  14.0

  31.4

  30.6

  April 1989 to January 19901

  Number

  2,358

  22,521

  126

  1,346

  Percentage

  11.6

  13.1

  25.0

  28.6

  1 Subject to revision.

  Source: Respondents to YT Follow-Up Survey.

  Mr. Redmond
  To ask the Secretary of State for Employment what information he has as to what percentage of the work force employed by British Coal registered as disabled.

  Mr. Eggar
  As at 1 June 1989, 0.4 per cent. of the work force of British Coal were registered disabled, as published in the Employment Gazette in February 1990.

  Political Funds
  Mr. Allen
  To ask the Secretary of State for Employment if he will list those unions which have voted on the establishment of a new political fund since 1984 with the full result in each case.

  Mr. Nicholls
  Information on the establishment of political funds is contained in the annual reports of the independent certification officer for trade unions and employers' associations. Copies of the reports are available from the Library. The table lists those unions which were qualified to operate political funds for the first time between January 1984 and the end of December 1989 —the latest date for which that information is available. The full results of relevant ballots are provided in confidence to the certification officer by the unions concerned.

  Union having political fund rules approved.

  Amalgamated Society of Textile Workers and Kindred Trades.

  Broadcasting and Entertainment Trades Alliance.

  Communication Managers Association.

  Inland Revenue Staff Federation.

  Clerical Group of National Communications Union (Engineering and Clerical Groups).1

  National Union of Hosiery and Knitwear Workers.

  Association of Her Majesty's Inspectors of Taxes2.

  Civil and Public Services Association.

  Civil Service Union.

  National Union of Lock and Metalworkers.

  Society of Civil and Public Servants.

  Educational Institute of Scotland.

  Health Visitors Association.

  Institution of Professional Civil Servants.

  National and Local Government Officers Association.

  National Association of Teachers in Further and Higher Education.

  National Union of Insurance Workers.

  Retained Firefighters Union.

  Union of Democratic Mineworkers.

  Association of Agricultural Education Staffs.

  530

  National Association of Schoolmasters and Union of Women Teachers.

  Association of Her Majesty's Inspectors of Taxes3.

  1The National Communications Union (Engineering and Clerical Groups), which already had approved political fund rules in relation to its Engineering group, had further rules approved in 1986 for its Clerical group.

  2The Association of Her Majesty's Inspectors of Taxes, which had political fund rules approved in 1987, ceased to exist with effect from 1 January 1989 when it transferred its engagements to the Association of First Division Civil Servants.

  3In 1989, a body was created within the Association of First Division Civil Servants called the Association of Her Majesty's Inspectors of Taxes which became listed in its own right as a trade union and which voted to adopt a political fund.

  Note.—The information set out above is obtained from the Annual Reports of the certification officer for trade unions and employers' associations.

  Natural History Museum
  Mr. Dalyell
  To ask the Secretary of State for Employment when the Health and Safety Executive last inspected the natural history museum.

  Mr. Nicholls
  The Health and Safety Executive last inspected the natural history museum on 14 February 1990.

  Data Protection
  Mr. Cohen
  To ask the Secretary of State for Employment how many subject access requests under the terms of the Data Protection Act his Department has received; what was his estimate of the number of requests that would be received; what consideration he is giving to the subject access fee charged by his Department as a result; and whether he will make a statement.

  Mr. Eggar
  The Department of Employment Group, comprising the Employment Department, the Employment Service, the Advisory Conciliation and Arbitration Service, the Health and Safety Executive, and the Training Agency has received a total of 383 subject access requests under the Data Protection Act. Before the subject access date of 11 November 1987, it was not possible to make any firm estimate of the number of requests which would be received. We are currently reviewing subject access fee charging policy in the Department of Employment Group.

  EC-Gulf Trade
  Mr. McCartney
  To ask the Secretary of State for Employment if his Department has any plans to make an assessment of the effect on employment in the United Kingdom of a free trade agreement between the European Community and the Gulf Co-operation Council states.

  Mr. Eggar
  My Department has no current plans for such an assessment. However, the Government have consulted widely industries interested in the forthcoming negotiations and remain ready to consider any further views.

  Adjudication Officers
  Mr. Nellist
  To ask the Secretary of State for Employment (1) what steps he is taking to introduce effective adjudication training for adjudication officers; and what progress has been made in incorporating an indicator for adjudication in his Department's quality control system;

  (2) how many (a) adjudication officers, (b) sector adjudication managers and (c) regional adjudication officers there are in each employment service region; and if he will make a statement on their functions, particularly with respect to the changes brought in with the Social Security Act 1989;

  (3) how many regional co-ordinators have been appointed and in which regional adjudication office sections, to develop expertise in the Social Security Act 1989; and if he will make a statement on the problems which they have identified;

  (4) what arrangements exist for regional adjudication officers to assist adjudication officers regarding guidance on individual cases of particular difficulty.

  Mr. Eggar
  The Employment Service became an executive agency on 2 April 1990. Mr. Mike Fogden, the Employment Service Agency's chief executive, will be replying in writing to the hon. Gentleman.

  Young Travellers
  Mr. Fearn
  To ask the Secretary of State for Employment if he has any plans to encourage the provision of low-price accommodation for short-term travellers.

  Mr. Nicholls
  The English tourist board, which receives funds from my Department, actively encourages the provision of all forms of accommodation, including budget accommodation, to meet the needs of the market. The ETB's forthcoming "Guide to Good Practice In Rural Accommodation" will further encourage the development and upgrading of accommodation suitable for young people.

  Employment Service
  Mr. Flynn
  To ask the Secretary of State for Employment whether he will take steps to ascertain whether the present arrangements regarding answers to questions relating to the employment service are acceptable to hon. Members on both sides of the House.

  Mr. Eggar
  I refer the hon. Gentlemen to the assurances I gave to the House during the Adjournment debate on 532
  executive agencies on 21 May, Official Report, columns 145–152, and to my written replies to questions from the hon. Members for Liverpool, Broadgreen (Mr. Fields) and Bristol, South (Ms. Primarolo) on 9 and 10 July respectively, Official Report 9 July, column 102 and 10 July, column 144.

  Uniform Business Rate
  Mr. Fearn
  To ask the Secretary of State for Employment what plans his Department has to reduce the impact of the uniform business rate on the hotel trade.

  Mr. Nicholls
  I have no such plans. The transitional arrangements introduced by my right hon. Friend the Secretary of State for the Environment will ensure that no existing business will face an annual increase of more than 20 per cent. in real terms. This phasing-in will last until 1995, and there is scope for it to be continued thereafter, should that prove to be necessary. My noble Friend Lord Strathclyde will continue to keep in touch with the hotel sector on this issue.

  Tourism
  Mr. Fearn
  To ask the Secretary of State for Employment what plans he has to provide grants towards improving the appearance of major tourist attractions.

  Mr. Nicholls
  There are no such plans.

  Employment Training
  Mr. Worthington
  To ask the Secretary of State for Employment why there are variations in regional targets for output-related funding under the employment training scheme.

  Mr. Nicholls
  There are variations in regional targets for achievement of positive outcomes on employment training because of differences in regional labour markets.

  Training Credits
  Mr. Worthington
  To ask the Secretary of State for Employment how much of the funding of training credits will come from the Training Agency budget and how much from local authorities for 1991–92, 1992–93 and 1993–94.

  Mr. Eggar
  Funding for training credits will come from three sources: planned resources for youth training; additional funding from Government of £12 million in 1991–92 and £25 million in 1992–93; and thereafter and transfer of the relevant portion of rate support grant provision for part-time courses for 16 to 18-year-olds.

  The rate support grant provision is estimated at approximately £5 million in 1991–92 and £15 million in 1992–93. Figures have not been produced for 1993–94.

  "TEC Director"
  Mr. Worthington
  To ask the Secretary of State for Employment what is the annual cost of producing the publication "TEC Director".

  Mr. Eggar
  The estimated production costs for "TEC Director" during the financial year April 1990 to March 1991 are £99,440.88.

DEFENCE

  Soviet Disarmament
  Mr. Steinberg
  To ask the Secretary of State for Defence what recent assessment he has made of the defence implications for the United Kingdom of Soviet disarmament measures in Europe.

  Mr. Parry
  To ask the Secretary of State for Defence what recent assessment he has made of the defence implications for the United Kingdom of Soviet disarmament measures in Europe.

  Mr. James Lamond
  To ask the Secretary of State for Defence what recent assessment he has made of the defence implications for the United Kingdom of Soviet disarmament measures in Europe.

  Mr. Archie Hamilton
  We are examining options for change in the structure and deployment of our armed forces in the light of changing international circumstances, including the withdrawals of Soviet forces from eastern Europe and Soviet unilateral force reductions. We continue to attach high importance to reaching agreement in the conventional forces in Europe negotiations in Vienna to eliminate the continuing significant Warsaw pact superiority over NATO in conventional arms.

  Expenditure Reductions (Scotland)
  Mrs. Margaret Ewing
  To ask the Secretary of State for Defence what reductions in his Department's expenditure in Scotland he proposes arising out of the reduction in tension between NATO and the Warsaw pact countries.

  Mr. Sillars
  To ask the Secretary of State for Defence what reductions in his Department's expenditure in Scotland he proposes arising out of the reduction in tension between NATO and the Warsaw pact countries.

  Mr. Archie Hamilton
  It is too early to say what financial savings for the defence budget as a whole might be consistent with the outcome of the first stages of CFE and changes in eastern Europe. Defence expenditure is not accounted for on a regional basis.

  Trident
  Mr. David Evans
  To ask the Secretary of State for Defence if he will make a statement on the latest progress made to replace the Polaris strategic nuclear deterrent with Trident.

  Mr. Alan Clark
  The programme to replace Polaris with Trident is on time and within budget and continues to make satisfactory progress towards its in-service date of the mid-1990s.

  Dr. Moonie
  To ask the Secretary of State for Defence whether any consideration has been given to the Trident nuclear submarine in his review of options.

  Mr. Turner
  To ask the Secretary of State for Defence whether any consideration has been given to the Trident nuclear submarine in his review of options.

  Mr. Hinchliffe
  To ask the Secretary of State for Defence whether any consideration has been given to the Trident nuclear submarine in his review of options.
  534
  Mr. Madden
  To ask the Secretary of State for Defence whether any consideration has been given to the Trident nuclear submarine in his review of options.

  Mr. Tom King
  As I informed the House on 18 June, we believe it is essential to keep our independent nuclear deterrent; that means that we intend to proceed with the replacement of Polaris with Trident. As the London summit declaration made clear, we believe nuclear weapons have a crucial role to play in the prevention of war.

  Military Co-operation
  Mr. Gill
  To ask the Secretary of State for Defence what assessment he has made of the scope for military co-operation with states applying to join the European Community.

  Mr. Archie Hamilton
  Applications to join the EC have been made by Turkey, Austria and the Republic of Cyprus. We already have close defence links with Turkey through our joint membership of NATO. The scope for defence co-operation with Austria and the Republic of Cyprus is more limited, but we maintain appropriate links with them.

  United States Defence Secretary
  Dr. Thomas
  To ask the Secretary of State for Defence when he last met his United States counterpart; and what matters were discussed.

  Mr Tom King
  The position is as I set out earlier for the hon. Member for Liverpool, Broadgreen (Mr. Fields).

  Ms. Primarolo
  To ask the Secretary of State for Defence when he last met his United States counterpart to discuss weapons development and deployment.

  Mr. Flannery
  To ask the Secretary of State for Defence when he last met his United States counterpart to discuss weapons development and deployment.

  Mr. Tom King
  I refer the hon. Members to the reply I gave earlier today to the hon. Member for Liverpool, Broadgreen (Mr. Fields).

  NATO
  Mr. Menzies Campbell
  To ask the Secretary of State for Defence if he will make a statement on the implications for the defence policy of the United Kingdom as a result of the NATO summit in London.

  Mr. John Hughes
  To ask the Secretary of State for Defence if he will make a statement on the defence implications of decisions taken at the NATO summit on 5 and 6 July.

  Mr. Tony Banks
  To ask the Secretary of State for Defence if he will make a statement on the defence implications of decisions taken at the North Atlantic Treaty Organisation summit on 5 and 6 July.

  Mr. Squire
  To ask the Secretary of State for Defence if he will make a statement on present considerations on the future of NATO.

  Mr. Tom King
  I refer the hon. and learned Member, the hon. Members and my hon. Friend to the reply I gave earlier to the hon. Member for Barnsley, West and Penistone (Mr. McKay).

  "Options for Change"
  Mr. Bradley
  To ask the Secretary of State for Defence if he will make a further statement about his "Options for Change" review.

  Mr. Cox
  To ask the Secretary of State for Defence if he will make a further statement about his "Options for Change" review.

  Mr. Michael Welsh
  To ask the Secretary of State for Defence if he will make a further statement about his "Options for Change" review.

  Mr. Tom King
  I refer the hon. Members to the answer I gave earlier today to the hon. Member for Sheffield, Attercliffe (Mr. Duffy).

  Service Personnel
  Mr. Colin Shepherd
  To ask the Secretary of State for Defence what is his estimate of the numbers of armed forces personnel which will be required for the Royal Navy, Army and Royal Air Force in 1995.

  Mr. Archie Hamilton
  Manpower plans are updated as part of our normal reviews of the defence programme under the long-term costing process. It would not be appropriate to give details of long-term manpower plans.

  Over-the-Horizon Radar
  Mr. Ron Davies
  To ask the Secretary of State for Defence what recent representations he has received about the proposed over-the-horizon radar, to be built at St. David's in Pembrokeshire and Blakehill in Wiltshire.

  Mr. Nicholas Bennett
  To ask the Secretary of State for Defence how many representations he has received about the proposed over-the-horizon radar at St. David's airfield, Pembrokeshire.

  Dr. Kim Howells
  To ask the Secretary of State for Defence what recent representations he has received about the proposed over-the-horizon radar, to be built at St. David's in Pembrokeshire and Blakehill in Wiltshire.

  Ms. Walley
  To ask the Secretary of State for Defence what recent representations he has received about the proposed over-the-horizon radar, to be built at St. David's in Pembrokeshire and Blakehill in Wiltshire.

  Mr. Alan Clark
  I refer the hon. Members to the answer I gave the hon. Member for Caerphilly (Mr. Davies) on 19 June. Since then I have received further representations.

  Soviet Force Withdrawals
  Mr. Maples
  To ask the Secretary of State for Defence what assessment his Department has made concerning the unilateral withdrawal of Soviet nuclear and conventional forces from eastern Europe over the last year.

  Mr. Burns
  To ask the Secretary of State for Defence what assessment his Department has made concerning the unilateral withdrawal of Soviet nuclear and conventional forces from eastern Europe over the last year.

  Mr. Archie Hamilton
  The Soviet Union has carried out the initial phase of its unilateral withdrawal of ground 536
  forces from eastern Europe on schedule. However, it has suspended the removal of further troops from East Germany in part pending the outcome of the two plus four talks on the future status of Germany. We do not expect the two Soviet divisions in Poland to withdraw in the immediate future.

  The majority of Soviet nuclear-capable short-range ballistic missile launchers appear to have been withdrawn from Czechoslovakia and probably all from Hungary. Nuclear-capable artillery is still in the process of being withdrawn and some will probably remain in Czechoslovakia until the last divisions leave.

  The Soviet Union has carried out, and probably exceeded, its stated intention to withdraw 300 combat aircraft from eastern Europe; some of the aircraft would have been capable of both nuclear and conventional operations. Some air defence surface-to-air missile forces have been withdrawn from Hungary, East Germany and Poland.

  Nuclear Tests
  Mr. Lewis
  To ask the Secretary of State for Defence what nuclear tests have been carried out by NATO countries and France in the current year; and for what purpose.

  Mr. Doran
  To ask the Secretary of State for Defence what nuclear tests have been carried out by NATO countries and France in the current year; and for what purpose.

  Mr. Buckley
  To ask the Secretary of State for Defence what nuclear tests have been carried out by NATO countries and France in the current year and for what purpose.

  Mr. Archie Hamilton
  I refer the hon. Members to the reply I gave earlier today to the hon. Member for Sheffield, Central (Mr. Caborn).

  Cruise Missiles
  Mr. Roy Hughes
  To ask the Secretary of State for Defence what recent agreements have been reached regarding sea-launched cruise missiles; and what are the implications for the United Kingdom.

  Mr. Dunnachie
  To ask the Secretary of State for Defence what recent agreements have been reached regarding sea-launched cruise missiles; and what are the implications for the United Kingdom.

  Mr. Ron Brown
  To ask the Secretary of State for Defence what recent agreements have been reached regarding sea-launched cruise missiles; and what are the implications for the United Kingdom.

  Mr. Archie Hamilton
  I have nothing to add to the answer I gave on 22 June at column 723.

  Mr. Cryer
  To ask the Secretary of State for Defence if he will make a statement on the progress of removal of cruise missiles from the United Kingdom, and the alternative use of the sites.

  Mr. Archie Hamilton
  I refer the hon. Member to the answers which I gave to the hon. Members for Newham, North-West (Mr. Banks) and for City of Durham (Mr.
  537
  Steinberg) on 6 February at column 591, in respect of RAF Greenham Common, and to my hon. Friend the Member for Cambridgeshire, South-West (Sir A. Grant) on 11 January at columns 691–92, in respect of RAF Molesworth.

  Mr. Andrew F. Bennett
  To ask the Secretary of State for Defence if he will make a statement about cruise missiles and their deployment in the United Kingdom and within United Kingdom waters.

  Mr. Archie Hamilton
  With the exception of the remaining ground-launched cruise missiles based at RAF Greenham Common, which are due to be removed by the end of May 1991 under the terms of the INF treaty, there are no nuclear cruise missiles deployed on land in the United Kingdom.

  Vessels of the United States navy visit ports and facilities in the United Kingdom. Like the Royal Navy they neither confirm nor deny whether they are carrying nuclear weapons.

  Germany
  Ms. Short
  To ask the Secretary of State for Defence what recent discussions he has had about the future defence role of Germany.

  Mr. Ray Powell
  To ask the Secretary of State for Defence what recent discussions he has had about the future defence role of Germany.

  Mr. Wareing
  To ask the Secretary of State for Defence what recent discussions he has had about the future defence role of Germany.

  Mr. Tom King
  I refer the hon. Members to the reply I gave earlier today to the hon. Member for Gateshead, East (Ms. Quin).

  Territorial Army
  Mr. Bowis
  To ask the Secretary of State for Defence if he has any plans to increase the strength of the Territorial Army.

  Mr. Archie Hamilton
  The work in hand on examining options for change is of a broad policy nature. While it is therefore not possible to be specific at this stage, there is no doubt that the Territorial Army will continue to play a vital role in the future.

  Mr. Evennett
  To ask the Secretary of State for Defence what is the total number of serving members of the Territorial Army; and what was the comparable figure 10 years ago.

  Mr. Archie Hamilton
  The total strength of the Territorial Army, at 31 May, was 72,705. The corresponding figure 10 years ago was 62,989.

  Aeroplane and Armaments Experimental Establishment
  Mr. Key
  To ask the Secretary of State for Defence what action he has taken to(a) screen personnel and (b) assess hazard in additional buildings, following the discovery of brown asbestos in offices at the Aeroplane and Armament Experimental Establishment at Boscombe Down, near Salisbury.
  538
  Mr. Neubert
  Following the discovery of a trace of amosite, or brown asbestos, at the Aeroplane and Armament Experimental Establishment Boscombe Down, staff have been given a medical briefing by the occupational hygienist and the offer of an individual consultation. If, following such a consultation, members of staff wish to be given an appropriate medical screening, the establishment has offered to arrange for it to be provided free of charge.

  The dust sample containing the trace of amosite came from a single building with inner and outer cladding of white asbestos sheeting. Extensive tests of the air in, and the fabric of, this building and eight others of a similar age and construction have, however, all proved to be negative.

  Chemical and Biological Weapons
  Mr. Day
  To ask the Secretary of State for Defence what evidence his Department has concerning the proliferation of chemical and biological weapons.

  Mr. Archie Hamilton
  We have received reports from time to time on the development of chemical and biological weapons by other countries. However, it is not our normal practice to comment on the detailed information available to the Government on such matters.

  Civilian Personnel
  Mr. Flynn
  To ask the Secretary of State for Defence what retraining will be given to civilian personnel no longer required by his Department.

  Mr. Murphy
  To ask the Secretary of State for Defence what retraining will be given to civilian personnel no longer required by his Department.

  Mr. Bill Michie
  To ask the Secretary of State for Defence what retraining will be given to civilian personnel no longer required by his Department.

  Mr. Alan Clark
  Reductions in civilian manpower numbers will, so far as possible, be handled through natural wastage.

  Nuclear and Chemical Weapons
  Mr. Watson
  To ask the Secretary of State for Defence if he will make a statement on the defence implications of the proliferation of nuclear and chemical weapons.

  Mr. Corbyn
  To ask the Secretary of State for Defence if he will make a statement on the defence implications of the proliferation of nuclear and chemical weapons.

  Mr. Graham
  To ask the Secretary of State for Defence if he will make a statement on the defence implications of the proliferation of nuclear and chemical weapons.

  Mr. Archie Hamilton
  We keep all potential risks under continuous review. We also aim to prevent the proliferation of nuclear and chemical weapons by providing strong support for arms control agreements and associated regimes, such as the non-proliferation treaty, the missile technology control regime, the proposed chemical weapons convention and the Australia group.

  RAF Parachute Training Establishments
  Mr. Ashley
  To ask the Secretary of State for Defence on how many occasions in 1989 safety inspectors visited Royal Air Force parachute training establishments.

  Mr. Archie Hamilton
  Safety inspections are regularly carried out at all parachute training establishments, but it is not possible to say how many such visits took place in 1989.

  Aldermaston A90 Building
  Mr. McCartney
  To ask the Secretary of State for Defence what changes to the original programme of work has been made during the construction of the Aldermaston A90 building.

  Mr. Neubert
  Changes to the programme of work for the A90 building at AWE Aldermaston were made as a result of the Government's decision to purchase the Trident system and in response to subsequent programme slippage. I refer the hon. Member to appendix 4 of the July 1987 report by the Comptroller and Auditor General—"Control and Management of the Trident Programme" —HC27. The construction of A90 is now complete and equipment installation is proceeding within the scheduled time scale for Trident.

  Weapons Development
  Mr. Ronnie Campbell
  To ask the Secretary of State for Defence when he last met his French counterpart to discuss weapons development.

  Mr. Norman Hogg
  To ask the Secretary of State for Defence when he last met his French counterpart to discuss weapons development.

  Mr. Tony Lloyd
  To ask the Secretary of State for Defence when he last met his French counterpart to discuss weapons development.

  Mr. McAvoy
  To ask the Secretary of State for Defence when he last met his French counterpart to discuss weapons development.

  Mr. Alan Clark
  My right hon. Friend last met M. Chevenement to discuss co-operative weapons development among other topics on 4 May. The press release has been placed in the Library.

  Reserve Forces
  Mr. Andrew Mitchell
  To ask the Secretary of State for Defence whether he is considering enhancing the role of reserve forces in view of the changing situation in eastern Europe.

  Mr. Archie Hamilton
  We are considering the structure of our armed forces, including the reserves, as part of the work on options for change.

  Conventional Forces in Europe
  Mr. Cohen
  To ask the Secretary of State for Defence what decisions he has made about the role of the Army following a possible conventional forces in Europe agreement.

  Mr. Darling
  To ask the Secretary of State for Defence what decisions he has made about the role of the Army following a possible conventional forces in Europe agreement.
  540
  Mr. Archie Hamilton
  I refer the hon. Gentleman to the answer I gave to the hon. Member for Manchester, Blackley (Mr. Eastham) earlier today.

  Mr. Barry Field
  To ask the Secretary of State for Defence what progress is being made in the conventional forces in Europe negotiations; and what are the prospects for achieving a conventional forces in Europe treaty on the size and disposition of forces in Europe during the current year.

  Mr. Thurnham
  To ask the Secretary of State for Defence whether he will make a statement on progress on conventional forces disarmament.

  Mr. Archie Hamilton
  The conventional armed forces in Europe talks which opened in Vienna in March 1989 are making good progress. Agreement has been reached on definitions for tanks, armoured combat vehicles and artillery, and is close for combat helicopters. Agreement has also been reached on ceilings for all these categories except artillery. Significant differences remain on the treatment of combat aircraft, and there is much detailed work still to do on verification. As was made clear in the NATO summit declaration of 6 July, we attach great importance to the successful conclusion of these negotiations this year. We understand that the USSR shares that aim.

  Tornado
  Mr. Douglas
  To ask the Secretary of State for Defence if he will make a statement on the progress of discussions between his Department and British Aerospace in relation to the recently announced cancellations of Tornado aircraft.

  Mr. Alan Clark
  I have nothing to add to the answer I gave to the hon. Member for Clackmannan (Mr. O'Neill) on 2 July at column 466.

  Mr. Hind
  To ask the Secretary of State for Defence if he will make a statement on his proposals for a midlife update for Tornado aircraft.

  Mr. Alan Clark
  Contracts for the development and production investment phases of the Tornado GR1 midlife update programme have been placed with Panavia, the Tornado prime contractor.

  Mr. Lofthouse
  To ask the Secretary of State for Defence on what grounds he took the decision not to proceed with the eighth batch of Tornado aircraft; and if he will make a statement.

  Mr. Nigel Griffiths
  To ask the Secretary of State for Defence on what grounds he took the decision not to proceed with the eighth batch of Tornado aircraft; and if he will make a statement.

  Mr. Alan Clark
  I have nothing to add to the announcement which I made during the defence debate on 18 June at columns 770–71.

  RAF Wattisham
  Mr. Yeo
  To ask the Secretary of State for Defence what representations he has received regarding the use of RAF Wattisham by civilian aircraft.
  541
  Mr. Archie Hamilton
  A limited number of civil flights already take place from RAF Wattisham. An outline proposal has been put forward for increased civilian use of RAF Wattisham if the existing civil airport at Nacton road, Ipswich closes.

  Arms Conversion Agency
  Mr. Clelland
  To ask the Secretary of State for Defence whether he has received any representations to set up an arms conversion agency.

  Mr. Battle
  To ask the Secretary of State for Defence whether he has received any representations to set up an arms conversion agency.

  Mr. Alan Clark
  I would refer the hon. Members to the answer I gave earlier to the hon. Members for Newcastle upon Tyne, North (Mr. Henderson) and for Leeds, Central (Mr. Fatchett).

  Departmental Land
  Mr. French
  To ask the Secretary of State for Defence what factors he takes into account in deciding whether to release land currently held by his Department.

  Mr. Archie Hamilton
  It is Government policy that the defence estate should be no larger than necessary to satisfy the requirements of the armed forces and we are continually seeking opportunities for rationalisation and release of surplus land. As well as considering operational requirements, rationalisation studies take into account economic factors such as potential disposal receipts and savings in running costs.

  Mr. Canavan
  To ask the Secretary of State for Defence how much land his Department owns throughout the United Kingdom; and if he will make a statement about Her Majesty's Government policy on such land ownership.

  Mr. Archie Hamilton
  At 1 April 1990, Ministry of Defence landholdings in the United Kingdom, including freehold and leasehold land and foreshore, stood at 240,613 hectares. The defence estate exists to meet the services' needs for operational bases, training areas, accommodation and support facilities and it is our policy that the size of the estate is the minimum necessary to meet these requirements. Since 1979, more than 12,000 hectares of land have been sold and we are continually seeking further opportunities to rationalise and reduce our landholdings.

  Type 23 Frigates
  Mr. Loyden
  To ask the Secretary of State for Defence whether the command and control system for the type 23 frigate fully works yet.

  Mr. Neubert
  The type 23 frigate command system is currently under development and is planned to enter service in the mid-1990s.

  Low Flying
  Mr. Beith
  To ask the Secretary of State for Defence what changes he anticipates will be necessary in the low-flying training programe as a result of changes in the United Kingdom's defence requirements following recent developments in eastern Europe.
  542
  Mr. Neubert
  The nature and amount of low-flying training carried out by the RAF will naturally reflect future operational requirements.

  Mr. Foulkes
  To ask the Secretary of State for Defence what recent representations he has received on the subject of low flying; and what action he proposes to take.

  Mr. Neubert
  During June 1990, the Ministry of Defence received 742 inquiries or complaints about military low-flying training in the United Kingdom. My Department will continue to seek to ensure that the disturbance caused by low flying is kept to the minimum consistent with meeting essential training requirements.

  Mr. Bellingham
  To ask the Secretary of State for Defence what recent representations he has received in connection with low-flying aircraft in north-west Norfolk.

  Mr. Neubert
  During June 1990 the Ministry of Defence received six inquiries or complaints from north-west Norfolk about military low-flying training.

  Mr. Kirkwood
  To ask the Secretary of State for Defence whether he has received a copy of the report published by the Western European Union on low flying; and if he will make a statement.

  Mr. Neubert
  My Department has received a copy of this report. As my right hon. Friend the Minister of State, Foreign and Commonwealth Office stated in his answer to the hon. Member on 12 June 1990, at column 122, a formal response to the recommendations of the report is the responsibility of the Western European Union Permanent Council.

  Air-to-Surface Missiles
  Mr. Martlew
  To ask the Secretary of State for Defence if he will make a further statement on the proposal to deploy tactical air-to-surface missiles in the United Kingdom.

  Ms. Ruddock
  To ask the Secretary of State for Defence if he will make a further statement on the proposal to deploy tactical air-to-surface missiles in the United Kingdom.

  Mr. Patchett
  To ask the Secretary of State for Defence if he will make a further statement on the proposal to deploy tactical air-to-surface missiles in the United Kingdom.

  Mr. Archie Hamilton
  I have nothing to add to the reply I gave on 15 June at column 379.

  Soviet Weapons and Shipping
  Mr. Paice
  To ask the Secretary of State for Defence what is his latest information on the output of conventional weapons and naval shipping by the Union of Soviet Socialist Republics.

  Mr. Archie Hamilton
  The Soviet Union continued to produce large numbers of conventional weapons in 1989, although in certain categories, especially tanks and fighter aircraft, we believe output was significantly reduced from the previous year's level. On the naval side, six major combatants and nine submarines were completed.

  Royal Navy
  Mr. Viggers
  To ask the Secretary of State for Defence if he is yet in a position to announce what changes to the Royal Navy will result from his review of defence commitments.

  Mr. Archie Hamilton
  I refer my hon. Friend to the answer I gave to the hon. Member for Clackmannan (Mr. O'Neill) on 14 June 1990 at columns 329–30.

  Ministry Personnel (Employment)
  Mr. Skinner
  To ask the Secretary of State for Defence when he last considered the rules relating to senior MOD personnel with procurement responsibilities subsequently working for United Kingdom defence contractors.

  Ms. Armstrong
  To ask the Secretary of State for Defence when he last considered the rules relating to senior MOD personnel with procurement responsibilities subsequently working for United Kingdom defence contractors.

  Mr. Frank Cook
  To ask the Secretary of State for Defence when he last considered the rules relating to senior MOD personnel with procurement responsibilities subsequently working for United Kingdom defence contractors.

  Mr. Alan Clark
  The rules and standards relating to the acceptance of business appointments by former Crown servants are drawn up by the Cabinet Office and apply equally to all Crown servants, including civilian and service personnel in the Ministry of Defence. The basis of the current rules was laid down in 1937 and has been subject to regular review, the latest in 1989.

  Defence Commitments
  Mr. Macdonald
  To ask the Secretary of State for Defence if he will make a further statement on progress on the review of United Kingdom defence commitments currently being undertaken by his Department.

  Mr. Tom King
  I refer the hon. Member to the answer I gave earlier today to my hon. Friend the Member for Beverley (Mr. Cran).

  Disarmament Conferences
  Mr. Conway
  To ask the Secretary of State for Defence what contribution his Department is making to conferences on disarmament.

  Mr. Archie Hamilton
  I refer my hon. Friend to the answer I gave to my hon. Friend the Member for Warrington, South (Mr. Butler) on 13 July 1990 at columns 370–71.

  NATO Secretary-General
  Mr. Cartwright
  To ask the Secretary of State for Defence when he next plans to meet the Secretary-General of NATO; and what will be discussed.

  Mr. Archie Hamilton
  My right hon. Friend has regular meetings with the Secretary-General of NATO. Their next scheduled meeting is in the autumn. A range of defence issues will be discussed.

  Regiments
  Mr. Allen
  To ask the Secretary of State for Defence which regiments will be amalgamated or disbanded.

  Mr. Archie Hamilton
  I refer the hon. Member to answer I gave earlier today to my hon. Friend the Member for Devon, North (Mr. Speller).

  Royal Marines School of Music
  Mr. David Shaw
  To ask the Secretary of State for Defence whether he has completed his consideration of the report of the board of inquiry into security at the Royal Marines school of music at Deal; and whether he will make a statement.

  Mr. Archie Hamilton
  My right hon. Friend has now completed his consideration of the report and forwarded to the House of Commons Select Committee on Defence a memorandum summarising its principal findings. An unclassified version of this memorandum has been placed in the Library.

  Willsworthy Firing Range
  Mr. Steen
  To ask the Secretary of State for Defence what was the level of live firing at the Willsworthy range in Dartmoor national park for each of the last six months; and what is the proposed increase in the level of live firing.

  Mr. Archie Hamilton
  The actual levels of live firing at Willsworthy range over the period in question were as follows:

  Month

  Days

  January

  6

  February

  8

  March

  10

  April

  6

  May

  10

  June

  15

  Actual firing at the range fell short of planned levels, due mainly to adverse weather conditions, particularly in the early part of the year. There are no plans to increase live firing at Willsworthy range above currently permitted levels.

  Royal Marines Reserve
  Mr. Stern
  To ask the Secretary of State for Defence how many people are currently members of the Royal Marines Reserve; and how he expects that number to change in the next five years.

  Mr. Archie Hamilton
  The strength of the Royal Marines Reserve as at 31 May 1990 was 1,135. In 1983 we announced plans to increase the strength of the RMR by 400 men, to about 1,580 men in total, and the RMR continues to recruit towards this manpower target.

  Iraq
  Mrs. Clwyd
  To ask the Secretary of State for Defence what assistance is provided by the resident military attaché to United Kingdom companies seeking to export military equipment to Iraq.

  Mr. Alan Clark
  Assistance is offered by the resident military attaché in Baghdad in conformity with the
  545
  guidelines on the export of defence equipment to both Iran and Iraq announced by my right hon. and learned Friend the then Foreign and Commonwealth Secretary on 29 October 1985 at column 450.

  RAF Greenham Common
  Sir Michael McNair-Wilson
  To ask the Secretary of State for Defence what action he proposes to take in respect of the bye-laws at RAF Greenham Common following the House of Lords ruling of 12 July.
  546
  Mr. Archie Hamilton
  We have received a copy of the House of Lords' judgment and are urgently considering its implications. My noble Friend the Under-Secretary of State for the Armed Forces will write to my hon Friend when the position is clearer.

Preamble
The House met at half-past two of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Southwark): The LORD CHANCELLOR on the Woolsack.
Lord Lane of Horsell
Sir Peter Stewart Lane, Knight, having been created Baron Lane of Horsell, of Woking in the County of Surrey, for life—Was, in his robes, introduced between the Lord Trefgarne and the Lord Sanderson of Bowden.

Her Majesty The Queen Mother: Humble Address
The Lord Privy Seal (Lord Belstead)The Lord Privy Seal (Lord Belstead) rose to move, That an humble Address be presented to Her Majesty the Queen as follows:
Most Gracious Sovereign,
We, Your Majesty's most dutiful and loyal subjects, the Lords Spiritual and Temporal in Parliament assembled, beg leave to associate this House most warmly with the congratulations offered to Her Majesty Queen Elizabeth the Queen Mother on the occasion of Her forthcoming 90th Birthday:
To assure Your Majesty of the gratitude of this House for the many years of service which Her Majesty Queen Elizabeth the Queen Mother has dedicated to Your Majesty's subjects and to record the deep affection in which She is held by this House and by the Nation and the Commonwealth:
To express the hope that Her Majesty Queen Elizabeth the Queen Mother may long enjoy health and happiness.
The noble Lord said: My Lords, both the Motions standing in my name on the Order Paper represent your Lordships' formal contribution to the flood of congratulations and good wishes from throughout the nation, the Commonwealth and indeed the world on the occasion of the forthcoming 90th Birthday of Her Majesty Queen Elizabeth the Queen Mother.
I say "formal" for it is a solemn duty to move an humble Address to Her Majesty the Queen and to move that a message be conveyed to Her Majesty Queen Elizabeth the Queen Mother. But this is more than a formal moment, for the Monarchy and the Royal Family personify so many of the things that we cherish most. In offering our congratulations to the Queen Mother we celebrate an example of tireless service and devotion to duty. In admiring Her Majesty's life we accept that we are, each one of us, challenged by her example.
The story of that life has been told many times, and in many ways it is the story of this country and this century. By all accounts Her Majesty's childhood was
750
the epitome of the halcyon days of the Edwardian era. How violent then must have been the shock of the First World War.
Then, in the uncertain 1920s and 1930s as Duchess of York, Her Majesty found a secure and happy family life only to be called on to face the unlooked-for challenge of the Monarchy at the most testing time of crisis which this country has ever faced. And there have been the years of the present reign—years, one must remember, of widowhood for Her Majesty when she has continued to uphold her own matchless standard of warm encouragement and gentle compassion, graceful determination and a wonderful zest for life.
Few lives have been so public. Her Majesty's hobbies, her tastes, her patronage of so many good causes—all have been subject to public scrutiny. And few lives have withstood such scrutiny so triumphantly. Her Majesty's life is indeed, in her 90th year, a source of pride for herself, for the Royal Family and for the nation as a whole. We wish Her Majesty a very happy birthday and health and happiness in the years to come.
Moved, That an humble Address be presented to Her Majesty the Queen as follows:
Most Gracious Sovereign,
We, Your Majesty's most dutiful and loyal subjects, the Lords Spiritual and Temporal in Parliament assembled, beg leave to associate this House most warmly with the congratulations offered to Her Majesty Queen Elizabeth the Queen Mother on the occasion of Her forthcoming 90th Birthday:
To assure Your Majesty of the gratitude of this House for the many years of service which Her Majesty Queen Elizabeth the Queen Mother has dedicated to Your Majesty's subjects and to record the deep affection in which She is held by this House and by the Nation and the Commonwealth:
To express the hope that Her Majesty Queen Elizabeth the Queen Mother may long enjoy health and happiness.—(Lord Belstead.)
Lord Cledwyn of Penrhos: My Lords, it is a pleasure and a privilege to follow the noble Lord the Leader of the House in his felicitous tribute to Queen Elizabeth the Queen Mother on the occasion of her 90th birthday. She has earned her place as one of the best-loved public figures of this century and her service to Britain and the Commonwealth has earned her the gratitude and admiration of us all.
She seems to me to have three qualities in abundance; namely, charm, courage and common sense. Most of us here can confirm that her charm has remained constant since we first became aware of her presence all those many years ago. It is not a superficial charm because it relates to her genuine interest in the many thousands of people she has met both here and abroad over the last seven decades. Her insistence in maintaining contact with the people of London throughout the war and comforting them personally created a strong and lasting bond between her and the people of these islands.

751
Her Majesty's courage is of course legendary. She has known great tragedies and overcome them with a calm fortitude which inspired everyone. This country was fortunate when she became Queen in 1936 and there is no doubt that the part she played in sustaining her husband contributed to the stability and popularity of the Monarchy in this country. It was indeed a historic contribution.
I note that in her tribute on Friday, the Prime Minister pointed out that Queen Elizabeth the Queen Mother became the first person of English and Scottish parentage to be the Consort of our Sovereign. That is of course true; but perhaps I may remind this House that she is also a descendant of the Welsh patriot, Owain Glyndŵr. That gave Her Majesty the extra sparkle. We still recall her grief at the premature death of King George in 1952. So great a blow at the end of a testing period would have crushed most people but she emerged from that tragedy to play a new role which increased her stature and the affection in which she is held.
Finally, the common sense she so clearly possesses and which she shares with Her Majesty the Queen has been a contributory element in the stability which Britain continues to enjoy in a changing and uncertain world. The Queen Mother reflects the ethos and the aspirations of the British people and it is for all those reasons that we pay her our warmest tribute and wish her health and happiness for many years to come.
Lord Jenkins of Hillhead: My Lords, I associate my noble friends with the Motion which has been so excellently moved. I notice, looking back at the Official Report of similar proceedings in 1980 in your Lordships' House, that all three noble Lords who made the party speeches—Lord Soames, Lord Peart and Lord Byers—are no longer with us. But Her Majesty the Queen Mother has triumphantly survived, though certainly not by sparing her devotion to royal duties. On this 90th occasion we salute a life which has been of such inestimable benefit to the state and the nation.
Increasingly as the years have gone by it has been the Queen Mother's radiance as the senior member of the Royal Family which is most prominent in the minds of all of us. However, it is also desirable to cast our minds back, as did the noble Lord, Lord Cledwyn, to the crucial part which she played—perhaps more than any other Queen Consort for several centuries—during the 15 years of the reign of King George VI.
The circumstances of the succession and the looming war did not make the inheritance an easy one in 1936. Her contribution to overcoming those dangers was a considerable one. For example, there were few royal visits which were more beneficial to Britain's true national interest than that which she and King George paid to the Roosevelts at Hyde Park in the summer of 1939. Much more recently, I have had experience in my Oxford capacity of the great benefit of having the Queen Mother as patron of our development campaign. It so happens that my wife is chairman of the National Trust and she also has had the privilege of the Queen Mother as her president.
752
I therefore have fairly direct experience of the infusion of enthusiasm and commitment which the Queen Mother brings to two disparate organisations. We express our deep affection and respect. We hope that she may continue to enjoy life and that we may continue to enjoy the immense benefit of her service and inspiration to the nation for many years to come.
Baroness Hylton-Foster: My Lords, the Cross-Bench Peers are both proud and happy to be associated with the message of congratulation to Queen Elizabeth the Queen Mother on the occasion of her forthcoming 90th birthday. The Cross-Bench Peers are especially anxious to support all the expressions of congratulation, gratitude and affection as we are honoured to have some of her family on our Benches—that is to say, her eldest grandson and two nephews.
Many on these Benches know of the Queen Mother's interest in every part of national life. Perhaps we may suggest that the Commonwealth is her second family where she is affectionately and informally known as the "Queen Mum". We wish Her Majesty every happiness on her birthday and hope that she will shortly enjoy her family holiday in Scotland.
The Archbishop of Canterbury: My Lords, I wish to associate myself from these Benches warmly and wholeheartedly with the terms of the Motion proposed by the noble Lord the Leader of the House. The gratitude owed in this nation and throughout the Commonwealth to Her Majesty Queen Elizabeth the Queen Mother is beyond all measure. From the years of the First World War when she worked as an orderly in a military hospital to the present time, she has consistently chosen a life of service rather than one of retirement. The quality of that service is apparent in every visit, every smile and every gesture. No wonder that in the evocative words of the late Sir John Betjeman,
"waves of goodwill go racing to meet her".
At the heart of this unique and greatly loved lady is a deep and sturdy, if unparaded, Christian faith, looking not at the things which are seen but at the things which are unseen. From this faith have flowed the stability that she has offered in a century of breathtaking change; the enrichment she has given to the concept of family; the human face that she has put on the operations of government; the encouragement that she has brought to those in many kinds of deprivation and the confidence she has shown in the future and the rising generations. She has the kind of faith which never seems to exclude but only to enlarge the embrace of human sympathy. She has a spontaneity and zest for life which turns duty into a delight, but never delight into a duty. We thank God for her and pray that she may long give what we all still so much need.
On Question, Motion agreed to, nemine dissentiente: and it was ordered that the said Address be presented to Her Majesty by the Lords with White Staves.

Her Majesty The Queen Mother: Message
Lord Belstead: My Lords, I beg to move the second Motion standing in my name on the Order Paper.
Moved, That a Message be conveyed to Her Majesty Queen Elizabeth the Queen Mother as follows—
Your Majesty,
We, the Lords Spiritual and Temporal in Parliament assembled, beg leave to offer to Your Majesty the congratulations of this House on the occasion of Your Majesty's forthcoming 90th Birthday:
To assure Your Majesty of the devotion and affection for Your Majesty which is felt in the hearts of this House and of the Nation and the Commonwealth:
To wish Your Majesty health and happiness in the years to come—(Lord Belstead.)
On Question, Motion agreed to, nemine dissentiente: and it was ordered that the said Message be conveyed to Her Majesty by the Archbishop of Canterbury, the Lord Chancellor, the Lord Privy Seal, the Lord Aberdare, the Baroness Hylton-Foster, the Lord Cledwyn of Penrhos and the Lord Jenkins of Hillhead.

Katyn Massacre: General Soprunenko's Role
2.55 p.m.
Lord Bethell Lord Bethell asked Her Majesty's Government:
Whether they have requested the Soviet Government to investigate the role of General Piotr Karpovich Soprunenko in the mass murder of more than 15,000 Polish officers at Katyn and other sites in 1940, with a view to his possible prosecution as a war criminal.
The Minister of State, Foreign and Commonwealth Office (Lord Brabazon of Tara): My Lords, the Soviet authorities' recent admission that the NKVD were responsible for the massacre at Katyn was very welcome. In view of the longstanding concern in this country over the Katyn massacre, we will be asking the Soviet authorities whether the allegations against General Soprunenko are well-founded, and whether they intend to pursue them.
Lord Bethell: My Lords, I am extremely grateful to my noble friend for that very gratifying reply. Is he aware how particularly pleasing that will be to the Polish community in this country, many of whom lost relatives during the Katyn massacre? Does the Minister know how anxious they are that justice should be done in this terrible matter albeit 50 years after the event? I ask my noble friend or his right honourable friend to point out to Soviet representatives that a war crime is a war crime whether authorised by Hitler or Stalin, and that if we in Britain
754
are expected to bring war criminals to justice, the Soviet Union must also look to those who committed atrocities and war crimes under Stalin's orders.
Lord Brabazon of Tara: My Lords, I shall certainly take note of my noble friend's suggestion and bring it to the attention of my right honourable friend. I shall also draw to the attention of the Soviets the concern that is felt in your Lordships' House this afternoon.
Lord Cledwyn of Penhros: My Lords, does the noble Lord agree that admission of this monstrous crime against humanity is a credit to President Gorbachev's policies? Is he further aware that there are reports of a massacre having taken place near Kharkov? Can the Minister say whether the Government are aware of that, whether there is any truth in it, and whether steps are being taken to reveal this matter as well?
Lord Brabazon of Tara: My Lords, the fact that the Soviets have admitted to the crime at Katyn after so many years is a tribute to the openness of the policies adopted by President Gorbachev. We all welcome that. I am not aware myself of a possible massacre at Kharkov, though that does not mean that the Government are not aware of it. I shall certainly look into that matter.

EC Directives: UK Implementation
2.59 p.m.
Lord Rodney Lord Rodney asked Her Majesty's Government:
How the United Kingdom compares with other member states in its record of implementing EC directives.
Lord Brabazon of Tara: My Lords, our record of implementation of measures in the single market programme is, along with Denmark, the best in the Community.
Lord Rodney: My Lords, does my noble friend not agree that this confirms the commitment of Her Majesty's Government to Europe? Does he not hope that this will be acclaimed by all sides of the House?
Lord Brabazon of Tara: My Lords, it proves our commitment to Europe. It also proves that whereas some indulge in a good deal of rhetoric about what good Europeans they are, we actually get on and implement the measures we have to.
Lord Clinton-Davis: My Lords, can the noble Lord indicate how many breaches of environmental directives are subject to proceedings already in the European Court against the United Kingdom; how many are currently being investigated; and how many complaints to his knowledge have been registered in relation to bathing water and drinking water directives?
Lord Brabazon of Tara: My Lords, statistics are not kept centrally by the Commission for breaches of directives other than under the single market measures to which I referred in my original Answer. The noble Lord asked about dirty beaches. As noble Lords will be aware, we have a £2.9 billion programme under

755
way to implement the directives. We are proceeding as fast as we possibly can. The Commission list of offending beaches was based on out of date statistics.
Lord Cledwyn of Penrhos: My Lords, is the Minister aware that we are glad that the Government are moving as fast as they possibly can, especially when one takes account of the fact that the directive in question was accepted by governments 15 years ago? Does he agree however that this country is in the process of being prosecuted for pollution of 140 beaches? Is that not the case? Is it not further the case that we are bottom of the league in that area?
Lord Brabazon of Tara: My Lords, as I said in my recent answer, we believe that the list of offending beaches was based on out of date statistics. We have a very large programme to improve the quality of our beaches. The noble Lord said that the directive was accepted 15 years ago. Certainly not much was done about it in the first five years of those 15 years.
Lord Nugent of Guildford: My Lords, is it not a fact that the monitoring of beaches and coastal waters depends on the monitoring of the individual states concerned? Is not the Commission's information entirely dependent on that? Can my noble friend say whether there is adequate monitoring of, for instance, the Mediterranean states? Is he aware that, whereas we have committed ourselves to this huge capital expenditure of nearly £3 billion. which will weigh heavily on our economy, it seems more than likely that some of our partners in the European Community have not committed themselves in any way to a similar programme for cleaning up their waters?
Lord Brabazon of Tara: My Lords, my noble friend may well be right. I am afraid that I do not have figures regarding the beaches of other countries. What we favour is an extension of Commission monitoring and reporting on implementation to all fields of European Community legislation. My right honourable friend has proposed this to M. Delors and to the President of the European Parliament. That remains under consideration.
Lord Jenkins of Hillhead: My Lords, reverting to the original Question, which may be a slight relief to the Minister, I accept that it is a good thing that we should be top of the table with Denmark. Germany is third. However, will the Minister accept—I tried to deal with these infractions for four years—that the poor performance of countries such as Italy is due much more to a traditionally weak infrastructure of government than to ill will or hypocrisy and that it is on the whole desirable that we would show a certain understanding of such problems?
Lord Brabazon of Tara: That may well be the case, my Lords. We believe that our record of implementation is good across the board. We take pride in honouring the obligations that we take on in the Community. It is a fact that, along with Denmark, we have only 13 directives unimplemented of the 95 single market measures which are due to be completed. Italy is bottom of the table at 55.
Lord Dormand of Easington: My Lords, does the fact that we are one of the two best countries in this respect mean that we have implemented the directives in full and without equivocation?
Lord Brabazon of Tara: My Lords, the figures I have given represent the single market measures implemented in full.
Baroness Phillips: My Lords, is the Minister aware that many of us are glad that once again the British are shown to be considering their problems and can stand with their heads held high in the Common Market?
Lord Brabazon of Tara: My Lords, I very much agree with the noble Baroness.
Lord Wyatt of Weeford: My Lords, will the Minister consider publishing the details of all the other countries instead of one at a time?
Lord Brabazon of Tara: My Lords, the Commission has already published the figures for the single market measures to which I have referred. I am certainly happy to place a copy of the table in the Library.
Lord Mackie of Benshie: My Lords, is the Minister aware that the House and perhaps his noble friend who asked the Question expected a rather more stirring endorsement from him of the European idea?
Lord Brabazon of Tara: My Lords, I am not quite sure what the noble Lord had in mind. It is for my noble friend who asked the Question to say whether he was pleased with the Answer, not the noble Lord.

NHS Expenditure
3.5 p.m.
Lord Gridley Lord Gridley asked Her Majesty's Government:
What is the projected National Health Service expenditure for the financial year 1990–91.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Hooper): My Lords, the projected National Health Service expenditure in the United Kingdom for the financial year 1990–91 is £29.1 billion.
Lord Gridley: My Lords, I thank my noble friend for that Answer. Does not the figure represent in real terms provision of more than £500 per head for the population of Great Britain?
Baroness Hooper: Yes, indeed, my Lords. We spend more than £500 per head on the National Health Service each year compared with £360, at today's prices, when we came to power. That is almost £10 a week for each and every one of us.
Lord Molloy: My Lords, does the figure include money which will be set aside for much needed modernisation of many hospitals and for the construction of new ones in various parts of the country where they are urgently needed?
Baroness Hooper: Yes, my Lords, they are figures for total expenditure.
Lord Grimond: My Lords, does the figure include propaganda and advertisements? If so, can the Minister tell us what the costs will be? I notice that The NHS Reforms and You cost £3 million.
Baroness Hooper: My Lords, it cost almost £3 million but each booklet works out at less than 10p for each household which receives it. If one considers £10 per head of expenditure each week, 10p per household is a very modest sum for getting the correct information across to people about how their National Health Service works.
Lord Ennals: My Lords, is it not clear to everyone that with a steadily ageing population and with improved but more costly medical treatment the objective must be to spend a higher proportion of gross domestic product on our National Health Service, as does almost every other industrialised country? If we were, for instance, to spend 7 per cent. of GDP instead of 6.1 per cent.—still a much lower percentage than the United States, France or Germany—roughly how much would that cost?
Baroness Hooper: My Lords, it is always extremely difficult to make accurate comparisons when methods of financing health care and clinical practices vary so considerably and when medical costs are much higher in some countries. It is also misleading when a number of the figures quoted are based not only on public spending but also on private sector spending. I emphasise that what matters is the level of resources available, the efficiency with which they are used and, above all, the outputs that are delivered. Those have risen substantially. For example, since 1978–79 acute in-patient services are up by 20 per cent.; acute day cases are up by 80 per cent.; maternity in-patient cases are up by 20 per cent.; geriatric in-patient cases are up by 80 per cent.; and geriatric out-patient cases are up by 60 per cent.
The Earl of Shrewsbury: My Lords, can my noble friend say how much of this expenditure is channelled towards the hospice movement?
Baroness Hooper: No, my Lords; I am afraid I cannot provide that information without prior notice.
Lord Mellish: My Lords, the figures which the Minister has given are very exciting. However, is she aware that no matter how much money is spent, it will never be enough?
Baroness Hooper: My Lords, I tend to agree with the noble Lord, Lord Mellish, as is so often the case. Spending on the National Health Service has never been higher. However, we recognise the challenge and we shall always be running behind the opportunities for more spending.
Earl Russell: My Lords, will Her Majesty's Government consider the possibility that they might have fewer unexpected shortfalls as regards the funding of the National Health Service if they were to base Funding on the actual inflation figure of the previous year rather than on forecasts of inflation for the coming year which almost invariably prove to be optimistic?
Baroness Hooper: My Lords, my reply to that question must be that the National Health Service is not under-funded.
The Viscount of Oxfuird: My Lords, is my noble friend aware that morale in an organisation like the National Health Service does not necessarily depend
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upon funding but to a very large degree on job satisfaction? Having recently been in hospital, I went back to visit the surgeon and asked him what was the rate of recovery of those in intensive care. He told me that 30 per cent. of people who went into intensive care units did not come out, other than in an unfortunate state. The main factor seemed to be that there were teams of people working very hard who never received any thanks from the people whose lives were, in many cases, saved by them. It is rather a discouraging situation.
Baroness Hooper: My Lords, my noble friend has made an important point based on his own recent experience. Therefore, I take this opportunity to acknowledge the very valuable service carried out by the employees—that is, the doctors, the nurses and the many others involved—of the National Health Service.
Viscount Tonypandy: My Lords, will the noble Baroness also express her gratitude to the countless people who are raising money because they realise, as pointed out by the noble Lord, Lord Mellish, that there never will be enough money for the health service? For instance, people in the valleys of South Wales are raising great sums of money for scanners and for other ancillary purposes connected with hospitals.
Baroness Hooper: My Lords, I am very happy to be able to acknowledge the individual contributions made by many people in this area. At the same time, I take the opportunity to acknowledge the fact that many people have more money available to give in this way as a result of the Government's excellent economic policies.
Lord Leatherland: My Lords, may a 92 year-old Member of your Lordships' House be allowed to suggest to the Government that there should never be any tampering with the National Health Service? It is one of the best services ever placed on the statute book.
Baroness Hooper: My Lords, we wholeheartedly agree with the views of the noble Lord; that is why we are aiming to improve the service.

ERM: Discussions on UK Membership
3.12 p.m.
Lord Stoddart of Swindon Lord Stoddart of Swindon asked Her Majesty's Government:
Whether they will apply the Prime Minister's principle of following "the democracy of the people" rather than the "diktat of government" (NATO Summit, 5th July) to the decision to join the exchange rate mechanism of the European monetary system.
The Paymaster General (The Earl of Caithness): My Lords, the subject of UK membership of the exchange rate mechanism of the European monetary system has been discussed on several occasions in both this House and another place. The Government are committed to

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join the exchange rate mechanism when the well-known conditions set out clearly after the Madrid Summit have been met.
Lord Stoddart of Swindon: Yes, my Lords; but I am not sure whether that response answers the Question. Is the noble Earl aware that when I heard the ringing tones of Mrs. Thatcher saying that matters must be decided not on the "diktat of government" but by "the democracy of the people", I believed that she actually meant what she said and that the words were not merely empty rhetoric?
Is the noble Earl also aware that whether we join the exchange rate mechanism is a very important question as it will affect the jobs and the standard of living of the people of this country? Is he further aware that they deserve to be consulted in the same way as the banks, people in the City, the CBI and, indeed, even the Governor of the German Bundesbank, Herr Pöh1? Can he say whether there are any means by which the British people can be consulted and not be mere onlookers in this important matter?
If noble Lords will kindly listen, we shall proceed much quicker. I can assure the House that the question is coming. If the Government are able to send out to every household an explanation of their health service reforms, why can they not do the same in the matter of joining the ERM, which is infinitely as important, if not more so?
The Earl of Caithness: My Lords, I think that it would be helpful to the House if I were to quote the exact words used by my right honourable friend the Prime Minister. She said:
"We know that it is the existence of NATO and its sure defence which have helped to change the direction of Eastern Europe and the Soviet Union from the diktat of government towards the democracy of the people".
That is not quite the sense in which the noble Lord, Lord Stoddart of Swindon, transposed it to suit his Question.
As regards employment, which was one of the many questions asked by the noble Lord, I am sure that he will agree that membership of the ERM will reinforce anti-inflation policy, which will be to the benefit of the economy and employment.
Lord Jenkins of Hillhead: My Lords, does the noble Earl agree that the Government can be accused of many things in relation to the ERM but hardly of the diktat of government; rather the total confusion and disarray of government?
The Earl of Caithness: My Lords, I agree with the noble Lord in that it is not diktat by government. There has been an enormous amount of consultation and the terms upon which we shall enter have been clearly set out.
Lord Bruce of Donington: My Lords, pending the explanation that Her Majesty's Government may or may not be prepared to give to the people of this country about the implications of joining the ERM, will the noble Earl give the House an assurance that they will not enter it with the exchange rates at the grossly inflated level that they are at present?
The Earl of Caithness: My Lords, we shall enter at the appropriate time.
Lord Grimond: My Lords, can the Minister tell us what would persuade the Government in regard to Scotland to get away from the diktat of government and embrace the democracy of the people? In Scotland they hold a very small vote and there is a very large majority against them.
The Earl of Caithness: My Lords, that is a most interesting question. If the noble Lord were to table it, I think it would be appropriate to answer it at that time.
Lord Ezra: My Lords, as the noble Earl has reiterated the Government's policy with regard to the ERM—namely, that the Madrid conditions must be met—does he agree that the question of inflation in this country is probably one of the most important? In that connection, is he satisfied that the way in which we calculate inflation in this country and the way in which it is calculated in the other countries of the Community are sufficiently comparable to enable a valid conclusion to be reached?
The Earl of Caithness: My Lords, the noble Lord is right to say that inflation is one of the key ingredients of the Madrid conditions. The way we calculate headline inflation in this country is totally different from the way in which our partners in Europe do so. For that reason we seek to take out the mortgage interest payments and the community charge so as to put us on a more level playing field.
Lord Peston: My Lords, will the noble Earl reflect further upon the Question of my noble friend Lord Stoddart of Swindon? I speak as someone who is in favour of joining the ERM; indeed, I would have joined some time ago. Nonetheless, does he agree that this is not just a matter for technical economic analysis? Surely, as my noble friend said, this is a situation in which we must take the people of this country with us. Further, can the noble Earl give us guidance as to what the Government have done in this connection? I am not aware of any effort on their part to persuade the people of this country, in exactly the form put forward by my noble friend, of the desirability—as some of us believe it to be—of joining the ERM.
The Earl of Caithness: My Lords, the debate on joining the ERM has continued for many years. The Government have always encouraged open discussion on it. I agree with the noble Lord in that it is not a matter for high economic theory; it is a matter for everyone in the country. That is why we have sought to involve everyone.
Lord Bruce of Donington: My Lords, the noble Earl said that it was government policy to change the way in which the inflation rate was calculated. Can he tell us whether that is official policy? I ask that question because to the best of my knowledge the Government have endorsed the recommendations of previous committees as regards the present method of calculating the rate of inflation.
The Earl of Caithness: My Lords, I did not make a statement of the type of which the noble Lord accused

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me. I apologise if I misled the noble Lord and the House. I was explaining to the House in answer to the noble Lord, Lord Ezra, that, to reach a common basis with our partners in Europe, those were the matters that we had to take out of the headline rate of inflation.
Lord Stoddart of Swindon: My Lords, will the Minister at least give me the assurance that we will not join the ERM during the parliamentary Recess?
The Earl of Caithness: My Lord, the decision as to when we join the ERM is one that my right honourable friends the Chancellor of the Exchequer and the Prime Minister will make when the time is right for the benefit of the United Kingdom.
Baroness Nicol: My Lords, does the departure of Mr. Nicholas Ridley remove one of the obstacles to our joining the ERM?
The Earl of Caithness: My Lords, I am a little surprised at the noble Baroness's question.

Penzance South Pier Extension Bill
3.21 p.m.
Read a third time, and passed, and returned to the Commons with amendments.

Smith Kline & French Laboratories, Australia, and Menley & James, Australia Bill [H.L.]
Read a third time, and passed, and sent to the Commons.

Landlord and Tenant (Licensed Premises) Bill
3.22 p.m.
The Minister of State, Department of Trade and Industry (Lord Trefgarne): My Lords, I beg to move that the Report be now received.
Moved, That the Report be now received.—(Lord Trefgarne.)
The Lord Williams of Elvel The Lord Williams of Elvel rose to move, as an amendment to the Motion that this Report be now received, at end to insert "notwithstanding the failure of Her Majesty's Government to honour the undertaking given by the Minister for Trade, Department of Trade and Industry, on the Second Reading that an amendment would be brought forward to provide for special arrangements for compensation to tenants of licensed premises during a transitional period. (H.L. Deb., 22nd March 1990, col. 413)"
The noble Lord said: My Lords, the amendment is not directed at the Minister of State for Trade and Industry, the noble Lord, Lord Trefgarne, personally ad hominem—if I may use that expression; it is directed at the Government, which is why the amendment has been appropriately framed. However, convention demands that Ministers take responsibility
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for the acts of their department, and they also take credit for the acts of their department. Therefore, if I phrase some of my arguments in a personal manner directed at the noble Lord, I hope that the House will not believe that it is a personal attack. As was said in St. John's Gospel:
"Can there any good thing come out of Nazareth?"
I would say that there can be nothing bad that comes from Landrindod Wells, which is the noble Lord's birthplace, as he vouchsafed to us the other day.
The history of the Bill has been complicated. It arose out of the MMC's report on the brewing industry. It was one of the recommendations of the report that tenants of licensed premises should have greater security than they have at the moment. The Government introduced the Landlord and Tenant (Licensed Premises) Bill to meet that recommendation.
When the Bill was in another place, a number of amendments were allowed under the procedures of another place. They were discussed in Standing Committee and on Report. When the Bill came to us for Second Reading, we discussed those amendments and the territory that had been mapped out by the discussions in another place. We were then told that under our procedures much of that territory was out of order. It was outside the scope of the Bill.
Lord Denham: My Lords, relevance.
Lord Williams of Elvel: My Lords, relevance or system—if the Government Chief Whip would allow me to continue. We were told that those amendments were not in order, but we spent a great deal of time on Second Reading discussing their content. During the course of his speech, the Minister referred to an amendment which had not even been taken in another place. As the Table advised that it was not in order even under the procedures of another place it was decided that it could not be taken. That was an amendment to provide compensation for tenants of licensed premises who were to be deprived of their tenancy during the period of transition between Royal Assent to the Bill and the commencement of the subsequent Act; in other words, there was a two-year period, approximately, during which the Act would not apply, but during which brewers could, if they wished, deprive their tenants of their tenancies and bring those licensed premises under management.
The Minister said:
"I can announce that after further consideration the Government intend to bring forward an amendment which will recognise that special arrangements for compensation should apply during the period of adjustment to a more open market. The amendment will provide that for a transitional period, additional and separate compensation will be payable to tenants of on-licensed premises to which the Landlord and Tenant Act 1954 Part II will apply because of the Bill, and where the landlord wishes to use them as on-licensed premises himself".—[Official Report, 23/3/90; col. 413.]
That was a clear undertaking.
It was no surprise to the Opposition when we tried to table the amendments that had been discussed in another place that we were advised that that was not in order. If was even less of a surprise to hear the Minister say in Committee:

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"I wish to make it quite clear that I had every intention of tabling an amendment, and instructed my officials so to do. When they arrived at the Public Bill Office, they were told that the amendment was not within the scope of the Bill and could not therefore be tabled in accordance with their advice".—[Official Report, 23/4/90; col. 354.]
That again, as I have said, was no surprise. The position at that point was clear. There was a Government undertaking to the House. It was an undertaking that could not, under procedures as advised by our Public Bill Office, be fulfilled within the scope of the Bill.
I have no doubt that in replying to my amendment the noble Lord, Lord Trefgarne, will apologise to the House. That is standard procedure. I have no doubt that it will be a handsome apology. I have no doubt that he will much regret the fact that the Government gave that undertaking and find themselves unable to fulfil it. However much we should welcome such an apology—indeed, such is the generosity of your Lordships' House that we would accept it—the matter cannot be left there. The Government have given a clear undertaking. We support the thrust of that undertaking. We would have argued in favour of the Government if they had met that undertaking.
There is, and must be, a general principle that when governments give undertakings to your Lordships, or indeed to another place, they should seek to meet them. There is a perfectly possible method—and I offer this to the noble Lord—of meeting the undertaking. It was described by the noble Viscount, Lord Falkland, in Committee. It is a one-clause Bill with the appropriate title and the appropriate text, which would pass through your Lordships' House in no time at all. I give an undertaking to the noble Lord that the Opposition—and I dare say the noble Viscount will speak for the Benches on my right—will give it a fair wind. Furthermore, I speak for my right honourable and honourable friends in another place in saying that they will give it a fair wind there and will not seek to debate or amend the Bill or otherwise obstruct its passage.
I move my amendment for these two reasons: first, there must be a general principle that if the Government give an undertaking to your Lordships' House it should be met; and, secondly, there is a perfectly feasible way of meeting this undertaking. All that the noble Lord, Lord Trefgarne, has to do now is accept my invitation and I shall immediately beg leave to withdraw my amendment. If he does not, I may be forced to other conclusions. However, I shall wait to hear what he says before I arrive at them. I beg to move.
3.30 p.m.
The Viscount of Falkland: My Lords, we on these Benches find it unfortunate—I am quite sure that the Minister agrees—that we should have reached this point, particularly with a Bill that we on these Benches largely support. At the Committee stage I wished to table one amendment. However, I discovered that the constraints of the Long Title of the Bill made my amendment not relevant to the Bill, as the noble Lord the Chief Whip said. I assume that the Minister
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discovered that himself or his advisers advised him that what he had undertaken would not fit within the parameters of the proposed legislation.
It has been well expressed by the noble Lord, Lord Williams, that what bothers us is that in this House there is a delicate balance between Parliament and the Executive, which works so well in your Lordships' House that we have a measure of understanding and trust that runs through all our deliberations. We find it unfortunate—I am sure that the Minister agrees—that we should have arrived at a point where he is unable to meet an undertaking that he made on behalf of those who advise him.
As the noble Lord, Lord Williams, said at Committee stage, I suggested that a No. 2 Bill could be introduced into your Lordships' House to deal with the matter of compensation during the interim period. As he suggested, it would be relevant to this Bill. I agree with and wish to support what the noble Lord, Lord Williams of Elvel, said. We would strongly welcome it if the Minister could give the undertaking that he has been invited to give. We on these Benches will make every effort to support anything he can do to meet the request of the noble Lord, Lord Williams.
Lord Trefgarne: My Lords, in rising to respond to the noble Lord, Lord Williams, I should like to say right at the outset that I fully accept that I gave an undertaking that an amendment would be brought forward and that I have not met this undertaking. Your Lordships are entitled to an explanation.
In my speech moving the Second Reading of the Bill on 22nd March I said that the Government recognised the case for special arrangements for compensation to apply during the period of adjustment in this industry to a more open market. I stated that the Government intended to bring forward an amendment to take account of this.
I can assure your Lordships that this commitment was made in good faith and that although the detailed drafting of such an amendment had not at that stage begun the department's officials believed it would be possible. This was understandable, since amendments had been tabled and accepted for debate in another place which went wider than what was now proposed. However, when my amendment came to be tabled DTI officials were advised by the House authorities that it was outside the rules of relevance with regard to the Bill. It was also clear then that any other amendment dealing with similar subject matter would probably also be outside the rules of relevance.
When faced with this difficulty, I was concerned to see whether there was any means by which the undertaking I gave could nevertheless be met. I have therefore considered with colleagues whether there were alternative courses of action.
The first possibility I explored with the House authorities was whether the procedures of your Lordships' House would allow the amendment to be debated notwithstanding the rules of relevance. While I understand that it might in theory have been possible to invite your Lordships to agree to debate the amendment, this would have been quite contrary to

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the procedures we are accustomed to follow and has not been done within living memory. The House has long regarded such advice as binding and I of course accept it.
The second possibility which was mentioned by the noble Lord, Lord Williams, when this Bill was considered in Committee would have been to abandon the Bill and reintroduce it in a form in which the amendment could be made. I do not believe that this would be in the interests of the great majority of licensed tenants. The Government are anxious to ensure that the protection of the Landlord and Tenant Act is available as soon as possible to those who have agreed tenancies since July 1989.
Withdrawal of the Bill would delay such protection and at this stage in the parliamentary Session such a delay might be lengthy. In practice it would mean a new Bill, presumably in the next Session. Since it is not open to any Minister to anticipate the contents of the Queen's Speech, the extent of the delay would be uncertain and the risks of such a course considerable.
The third possibility referred to again today by the noble Lord, Lord Williams, appeared to be to introduce a separate Bill, simply to provide for the additional compensation. I am advised that this too would be extremely difficult to accommodate within the legislative programme. The measure that was proposed was in essence transitional. Any delay in implementing it undermines its purpose. Furthermore, the limited nature of the change we had proposed would make it difficult to press the case for such a Bill since it could only be done at the expense of other equally important legislative priorities.
I acknowledge that the noble Lord, Lord Williams, said that for their part—and I presume that he committed his noble and honourable and right honourable friends—they would be prepared to give such a Bill a fair passage. However, the noble Lord is unable to bind all parts of the House any more than I am.
In the light of the difficulties with all three of the options, the Government have regretfully come to the view that it is not possible to honour the undertaking I gave. For this I must apologise unreservedly to your Lordships and to the House. In my speech to your Lordships on 23rd April I said I regretted that it was not possible then to table the amendment. I know that the noble Lord, Lord Williams, has been made aware of our difficulties through the usual channels. I hope he will be sympathetic. I should like in particular to say how much I regret that we are unable to extend a degree of extra support to tenants of certain licensed premises. However, I believe the most important thing now is to see that the protecton which we are aiming to provide to pub tenants is made available without further delay.
Notwithstanding the difficulties over additional compensation, the Bill as originally proposed constitutes a valuable and welcome increase in the security of tenants of licensed premises. I know that tenants of licensed premises will be disappointed that we have been unable to bring forward the proposed
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amendment to the Bill to provide for a period of enhanced compensation. I hope that they too will understand our predicament. I hope that they will agree that as the changes in the brewing industry in response to the Government's other measures gather pace it is important that the protection available under the Bill is provided and that the position is secured soon. In all those circumstances, it follows that I can only accept the amendment moved by the noble Lord, Lord Williams of Elvel.
Lord Nugent of Guildford: My Lords, I wish to say a few words on the procedural point which is an important aspect. My noble friend made a serious procedural error; but the narrowness of that procedural error deserves comment. The noble Lord, Lord Williams, has tabled a Motion. I must confess that in the 24 years that I have been in this House I have never seen such a Motion on the Order Paper. The noble Lord put down the Motion in order to deal with this procedural point. That is a serious thing to do as it amounts to a vote of censure on my noble friend Lord Trefgarne.
The procedural error that my noble friend committed in wishing to move an amendment that was outside the Long Title of the Bill is an error of minute proportions. It would be not unnatural to expect that an amendment that sought to deal with the transitional benefit for tenants would fall within the Long Title of a Bill which was entitled the Landlord and Tenant (Licensed Premises) Bill. However, when one studies this small Bill, one finds that the Long Title simply states that the Bill is intended to repeal Section 43(1) (d) of the 1954 Act. It is quite exceptionally narrow.
As I look around these crowded Benches, I think it is true to say that few noble Lords are au fait with all the mysteries of our procedure. I often see even my noble friend the Chief Whip asking the Clerk of the Parliaments to show him the Companion to the Standing Orders so that he may look up a point of order in the course of a debate. Few of us are really au fait with problems of procedure and what is or what is not in order. I have had some experience of this problem myself when I have tried to amend Government Bills dealing with road safety and even obscenity. Sometimes I have been successful and other times I have not been successful. The procedure of the House is a mystery to most noble Lords. For my noble friend to think that his amendment would be in order in a Bill which is entitled the Landlord and Tenant (Licensed Premises) Bill seems to me a reasonable mistake to make.
My noble friend gave an undertaking to the House when he said he would bring forward an amendment. It is a serious matter when he finds that such a provision is outside the Long Title of the Bill and is therefore out of order and cannot be made. My noble friend informed the noble Lord, Lord Williams, that he had made an error and that he was sorry about that. My noble friend has repeated all that publicly and has made a full apology. He has also explained why it would not be possible to introduce a one-clause Bill to put the matter right.

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As regards the undertaking that was given, I feel that the Motion is a heavy-handed way to deal with that. If every Minister on either side of the House was taken to task in this way for making a procedural error of this kind, this would be an uncomfortable House to live in. I am the first to admire the style of the noble Lord, Lord Williams of Elvel, in the House. Normally I would congratulate him on his elegant finesse; but that finesse has not appeared on this occasion. I regret that this matter should have to be settled in such a heavy-handed way. It is quite obvious that my noble friend has accepted the amendment. He has apologised and no doubt the House as a whole will accept that apology. Nevertheless, I feel it is worth mentioning that the error which has been made covers a narrow procedural point which few noble Lords would have understood. My noble friend is not being charged with a debt of honour but with a small procedural fault. He should see it that way.
Lord Hughes: My Lords, I am tempted to intervene on this matter because the noble Lord, Lord Nugent of Guildford, said that not many noble Lords understood the mysteries of our procedure in this House. I am very much in that position. I do not understand why the amendment we are discussing was said to be out of order as it did not come within the Long Title of the Bill. As I understand the position, when we start the Committee stage of the Bill we start on the basis that the Long Title should be postponed.
On a recent Scottish Bill (which incidentally caused a lot of problems for another Bill), the noble and learned Lord the Lord Advocate introduced material which required the Long Title of the Bill to be altered to include the matters that had been dealt with. Why therefore was it not possible in the case of this Bill for the amendment to be moved and for the Long Title to be extended beyond the narrow point to which the noble Lord, Lord Nugent, referred? Are there circumstances in the procedure of your Lordships' House where the Long Title of a Bill can never be altered?
The Earl of Perth: My Lords, I cannot address your Lordships on this narrow and difficult procedural point. However, the noble Lord, Lord Williams of Elvel, put forward a proposal on a single-clause Bill. He said the Opposition would give such a Bill their backing and that he believed the Liberals would also give it their backing, in so far as they were able. However, there are others in this House; namely, those on the Cross-Benches. There are over 200 of us. There is no certainty as regards which way we would go. Nor is there any certainty that the Back-Benchers of all parties would back such a Bill. That proposal in no way represents a simple solution.
Lord Colnbrook: My Lords, compared with almost all your Lordships in the House this afternoon, I am a very new Member of the House. I confess to a degree of surprise that we should be considering this Motion. In spite of what the noble Lord, Lord Williams of Elvel, sought to say, the Motion is critical of my noble friend the Minister. Parliament has always been understanding and sympathetic to people who admit
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to making mistakes. I have not yet had to admit to a mistake in this House although no doubt that will happen one day. However, I have had to admit to a mistake in another place as a Minister. I had to stand up and apologise for having misled the House. The House could not have been more sympathetic and understanding. The matter was left there. However, in your Lordships' House, although there has been sympathy and understanding, the matter has not been left there.
One of the things that distinguishes our Parliament from almost every other and which is the source of a great deal of admiration is our understanding and our sympathy for people who make mistakes—we all make mistakes—and admit to them. The noble Lord, Lord Williams of Elvel, is wholly entitled to pursue his amendment, and to ask for it to be accepted, as the noble Lord, Lord Trefgarne, has said it will be. However, if he does that, will he advance, in descending order of importance, the reputation of Parliament, of your Lordships' House and of himself?
Lord Williams of Elvel: My Lords, I am grateful to noble Lords who have taken part in this debate. I agree with much of what the noble Lord, Lord Trefgarne, said about the protection available to tenants in licensed premises. He was simply stating what both sides have agreed previously. The terms of my amendment are such as not to oppose the Bill on Report. In other words, we wish the Bill to go forward, even though the noble Lord is unable to meet his undertaking.
I am surprised at the remarks made by the noble Lord, Lord Nugent of Guildford. I thought he understood the procedure of this House better than almost anybody. He has great experience and he knows as well as I do that the Long Title of a Bill defines the scope or relevance of a Bill, depending on which expression one wishes to use. I have been advised that it is now the "system" of the Bill. Although the Long Title may be amended in Committee in our House it can only be so amended if an amendment has already been passed which is within the relevance, scope or system of the Bill. Therefore, unless we adopt procedures which have now fallen into desuetude, we cannot amend that Title in Committee other than consequent on amendments which are within the ambit, scope or relevance of the Bill. I should have thought that the noble Lord, Lord Nugent, would have understood that.
We are not talking about whether or not the noble Lord, Lord Trefgarne, has made a mistake. It is a question of the Government making a mistake. It has something to do with the noble Lord, Lord Trefgarne, but, as I said in my earlier remarks, the Minister only takes responsibility because it is a tradition of parliamentary debate that Ministers take responsibility for what happens in government. To say that the officials were told when they arrived at the Public Bill Office on 23rd April that the amendment was out of order is to imply that they did not consult the Public Bill Office in our House before the noble Lord gave his undertaking. If they had done so I am sure that the

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Public Bill Office would have given the noble Lord's officials the same advice as it gave when they eventually arrived on its doorstep.
The noble Lord, Lord Nugent of Guildford, complained that I was being heavy handed. If the Government give an undertaking to your Lordships' House I am entitled to be heavy handed in asking the Government to meet that undertaking. It is a very simple matter. Were we in government and had we given such an undertaking I can assure your Lordships that on all sides of the House noble Lords would be standing up and saying how terrible our Government was.
The noble Earl, Lord Perth, said that the noble Viscount's proposal for a No. 2 Bill would not meet the situation. I can undertake that this side of the House would support such a Bill. I give that commitment on behalf of my colleagues on the Benches behind me and my right honourable friends in another place. I take it that if the Government introduced such a Bill they would give an equal undertaking on behalf of their supporters in this House and in another place. With such undertakings—with the support of my party and the support of the party opposite—I have no doubt whatsoever that such a Bill would go through without difficulty.
The problem is that the noble Lord cannot guarantee the support of his own party. I can guarantee the support of mine. There are many noble Lords sitting behind the noble Lord, Lord Trefgarne, who would say: "We do not want that undertaking. We do not want the amendment". The noble Lord, Lord Kimball, said so quite flatly in Committee. That is the real problem that the Government face.
That is why I am being somewhat heavy handed. It is not a question of the personal honour of the noble Lord, Lord Trefgarne. It is a question of whether or not the Government will face up to the Brewers' Society. It is on that basis that I shall press the amendment.
On Question, amendment agreed to: Report received.

The Defence Estimates 1990
3.55 p.m.
The Parliamentary Under-Secretary of State, Ministry of Defence (The Earl of Arran)The Parliamentary Under-Secretary of State, Ministry of Defence (The Earl of Arran) rose to move, That this House takes note of the Statement on the Defence Estimates (Cmnd. 1022).
The noble Earl said: My Lords, with your Lordships' permission, I shall speak to the other Motion standing in my name on the Order Paper when winding up and then move it formally at the end of this debate.
We ought to remind ourselves that it was only in the summer of last year that the great and historic changes in Eastern Europe began. No one could foresee that those quite extraordinary events were to take place and few were prepared to guess that the trickle of reform that perestroika had prompted in Eastern Europe would turn into a flood to sweep away the
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"ancient regime". The outcome was dramatic and exhilarating as the peoples of old, totalitarian regimes reached out for a new and better way of life, with generations of former harshness and helplessness clamouring to be replaced with a new world of hope and help. It was both incredible and fascinating to watch—indeed, almost frightening—for fast upon the heels of rapid change there lurks inevitably the uncertainty of the future.
Still, today, that pace of dramatic and historic change in Europe does not abate. As a result of free speech, as a result of being allowed to choose whom they wish to govern them, as a result of democratic elections, most of the countries of Eastern Europe now have new governments in power. The Soviet Union itself has agreed to withdraw its troops from Hungary and Czechoslovakia—and it may not be too long before there is a similar agreement with Poland. There is now the declared aim to withdraw all forces from Eastern Europe by the mid-1990s. In short, the Warsaw Pact as we knew it is today no longer a credible military organisation.
The economies of both East and West Germany have been united, and political union is fast approaching. The Soviet Communist Party has just completed a painful re-examination of the direction in which it wishes to go, while perestroika continues to make slow progress. The break-up of the Soviet Union remains a potential outcome of the strains affecting that country; indeed, we have almost become accustomed to continuous radical change in the countries of the Warsaw Pact.
We very much welcome President Gorbachev's acceptance yesterday of a united Germany's sovereign right to choose which alliance it belongs to, and his acceptance that, in his words:
"Whether we like it or not, the time will come when a united Germany will be in NATO if that is what it chooses."
That is a major and very welcome breakthrough. President Gorbachev indicated clearly that NATO's willingness to adapt, indicated in the London Declaration issued after the NATO summit, had been a helpful factor in bringing that about. We also welcome the agreement that Soviet forces will withdraw from the German Democratic Republic over three to four years.
The terms of the Kohl/Gorbachev accord are a clear vindication of NATO's patient and reasoned approach to the issue of continuing German membership of the alliance and the fact that NATO has all along emphasised that it wishes to take account of Soviet security concerns and not to extract unilateral advantage from the unification of Germany or the developments in Western Europe.
The North Atlantic alliance, by its steadfastness and cohesion, by its patience, by its determination, has done much to bring about those changes. With that same determination and cohesion we in the West are responding positively to the new and welcome political landscape in Europe. However, we need to retain strong defences: history has not come to an end, and no one can suppose that either the Soviet Union, whose forces continue to be modernised, or, in the

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wider world, instabilities and risks will not threaten our security. The NATO alliance is committed to building on its longstanding political activities while retaining its primary role of preserving our security. It recognises the need in the future to place greater emphasis on its longstanding political role as it moves towards enduring and constructive peacebuilding in Europe. It was towards that very objective that the NATO summit meeting last week made significant progress.
That summit declaration will be seen as a milestone in the creation of a stable peace in Europe. Newspaper billboards in London after the the summit carried the message,
"NATO declares peace on the Warsaw Pact".
I am sure most people in West and East will indeed see it as a document which matches the diverse but nevertheless difficult challenges that now face us. We hope that the member states of the Warsaw Pact will join the West in a joint and open declaration that no longer do we consider ourselves adversaries, no longer foes. To that effect we look forward to President Gorbachev accepting NATO's invitation and becoming the first Soviet leader to address the North Atlantic Council. In addition, we wish to establish closer links between West and East by encouraging Warsaw Pact countries to seek and build regular diplomatic liaison with NATO.
The alliance has undertaken to review its force structure and strategy in the light of the reducing risk of sudden attack on Europe. We welcome the endorsement of multinational units building on NATO's experience with formations like the Allied Command Europe Mobile Force and the Standing Naval Force Atlantic and reflecting our belief that our Armed Forces in Europe are part of a collective endeavour, dedicated to preserving the peace.
NATO's military strategy will continue to encompass a mix of nuclear and conventional weapons to underpin deterrence and the presence of British, United States and other forces in Germany, but it will alter to take account of the changes in train in Europe and the changes in armaments. The alliance has always sought the lowest and most stable level of weapons, both conventional and nuclear, needed to maintain its objective of preventing all war. This is not new. Nuclear weapons will continue to be required to fulfil the alliance strategy of preventing all war in Europe by ensuring that there are no circumstances in which nuclear retaliation was ruled out. But we have also made it clear that nuclear weapons are for the prevention of war, not for fighting wars, and that after change in Europe is consolidated we shall need fewer of them, especially those of shorter range.
It is worth remembering that this year has already seen Presidents Bush and Gorbachev sign an outline treaty to make substantial reductions in strategic nuclear weapons. It is intended that the full START treaty should be signed by the end of the year. They also agreed to cease production of chemical weapons and to destroy most of their existing stocks. That destruction is to begin in 1992. We continue our efforts
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at the United Nations Conference on Disarmament to negotiate an effective convention banning chemical weapons worldwide. The changed relationship between West and East will find its most meaningful expression in the successful conclusion of the negotiations on conventional forces in Europe.
The CFE talks in Vienna are making good progress. Before the end of the year we are hopeful of completing the negotiations allowing the treaty to be signed at the summit meeting of the Conference on Security and Co-operation in Europe. By implementing the CFE treaty the massive Soviet superiority in key categories of offensive arms in Europe will be removed—something that has given profound anxiety to the Western world for four decades.
President Gorbachev showed great understanding and vision in recognising the validity of Western security concerns and agreeing the principle of asymmetric cuts in the Soviet offensive arsenal, while in response to Soviet concerns the NATO summit agreed that a commitment will be given on the manpower of the forces of a united Germany when the CFE treaty is signed.
After the current talks we want to move on further to discuss additional measures to promote security in Europe, including limits on manpower. We fully support the proposal that negotiations should begin between the United States and the Soviet Union on the reduction of short-range nuclear forces. When those negotiations have begun NATO will offer the elimination of its nuclear artillery shells from Europe in return for reciprocal action by the Soviet Union.
The Conference on Security and Co-operation in Europe will grow in importance as an instrument for improving the security of that continent. CSCE can help develop structures for co-operation within an undivided Europe. It will continue to perform the role that it has successfully filled over recent years of bolstering confidence and promoting human rights. While the very establishment of the CSCE process will add to its strength, we must be careful at the same time to ensure that it does not thereby lose the flexibility and balance that have been its hallmarks.
An expanded role for the CSCE can make a valuable addition to the range of institutions that are the foundations on which security in Europe is based—those foundations of the European Community, the Western European Union, the Council of Europe and NATO. CSCE cannot take the place of any of those existing institutions and it certainly cannot take the place of NATO which will continue to be the ultimate guarantor of Western security in a continent whose future, I make no apology for saying again, remains uncertain despite the many hopeful signs.
As a result of this changed security situation, we now have the opportunity to re-assess our requirement for military forces in the light of the receding military threat. It is in this context and against this background that the Options for Change study is considering our defence commitments and future political developments. I have stressed many times in your Lordships' House that this is an important and

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complex study and decisions cannot and will not be rushed. They deserve careful and considered thought, for from them will evolve the future size and structure of our Armed Forces—service men and women who must not only have the ability and mobility, if required, to defend our interests abroad but whose numbers and professionalism must also serve as a deterrent to possible hostile action against the United Kingdom or its allies. At the same time let me equally stress that we are very well aware of the need to end this period of uncertainty as soon as we can responsibly and sensibly do so.
Turning now to foreign fields, while our defence efforts will rightly remain concentrated in the European area, we still have defence commitments worldwide. Those commitments reflect the wider considerations of our foreign policy and make a substantial contribution to stability and security in other parts of the world. Such stability is of extreme importance to the United Kingdom because of our involvement in overseas commerce. It is important to the West because many of our major trading partners and allies also rely on overseas markets and imports of fuel and many other raw materials. Not least, regional stability is vital if the many thousands of British citizens who live and go about their daily business abroad are not to be put at risk.
However much the threat of war in Europe recedes, the world remains a dangerous stage. We have to face the fact that, despite the efforts of the international community, a number of developing countries either possess or are developing ballistic missiles. The Gulf War graphically demonstrated the havoc that they can cause when equipped with only conventional, high explosive warheads. If chemical or nuclear warheads are fitted, the threat that they represent multiplies enormously. We are therefore committed to supporting and strengthening the missile technology control regime in its aim to stop proliferation of ballistic missile technology. The spread of these weapons to areas of tension can only be viewed as a serious development.
The continuing proliferation of CW remains a matter of fundamental concern. In common with 19 other Western nations in the Australia Group the Government have imposed export controls over key precursor chemicals used in the production of chemical weapons and have issued to industry a warning of other chemicals of concern. We are also making every effort to ensure that industry does not unwittingly supply equipment or even whole plants which could be misused for CW purposes by would-be proliferators.
Elsewhere the United Kingdom has a long tradition of providing a valuable contribution to international peacekeeping forces such as the United Nations force in Cyprus and the multinational force of observers in Sinai. The most recent of these was the British contingent to the United Nations Transition Assistance Group to Namibia, whose role came to an end in March of this year. UNTAG, as it is known, was successful in its objective of assisting with the organisation of free and fair elections in Namibia and
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allowing that country to move to full independence. The part played by the British servicemen was outstanding, and your Lordships will, I am sure, wish to join with me in congratulating them on a job well done.
We are also helping the Namibian Government to establish a defence ministry and to create a Namibian defence force to defend its long borders. This assistance, which involves integrating elements of the South West Africa defence force and a guerrilla army, is important in helping Namibia to establish itself successfully as an independent country and the newest member of the Commonwealth. Our experience and success in helping to form and train the Zimbabwean National Army, following the Lancaster House agreement, will be invaluable in ensuring that our objectives in Namibia are achieved.
These initiatives, together with the other military training which we provide to other countries in Southern Africa, serve as a strong symbol of the Government's continuing commitment to the security and stability of the region. More generally, they are a good illustration of how military assistance overseas can help improve the effectiveness and self-sufficiency of the armed forces of friendly nations beyond the NATO area.
The Royal Navy has also provided protection and assurance for shipping in the Gulf for more than nine years through the Armilla Patrol. It is an impressive statistic that at the height of the Iran/Iraq conflict the patrol accompanied over 1,000 vessels, more than all the other western navies put together. Now, with the welcome reduction in tension in the Gulf, we have been able to adopt greater flexibility in the operating patterns of our ships in the Armilla Patrol, thus improving availability for other tasks.
Looking further to the West, we maintain a garrison in Belize at the request of its Government to defend the independence of our former colony. We also have a permanent naval presence in the Caribbean area, which includes five of our remaining dependent territories, in the form of the West Indies guardship whose primary task is to support the Belize garrison. The guardship also undertakes joining anti-drug patrols with the United States Coastguard, providing surveillance and monitoring assistance. We believe these patrols make an important contribution to countering the threat posed by international drugs trafficking and we are looking at ways of increasing the Royal Navy's contribution to anti-drugs operations in the Caribbean.
The United Kingdom has obligations under the Five Power defence arrangements with Australia, New Zealand, Malaysia and Singapore. United Kingdom forces regularly participate in land, sea and air exercises with the other FPDA nations. This year that included the deployment in March of ground attack and air defence Tornados and HMS "Charybdis" to Malaysia to take part in an air defence exercise: and in the autumn, elements of 5 Airborne Brigade will deploy to Malaysia for exercise "Suman

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Warrior". In addition, HM ships from the Armilla Patrol and patrol craft from Hong Kong have taken part in FPDA naval exercises.
Of all our overseas commitments, Hong Kong has perhaps attracted the greatest attention following last June's events in China. The Government fully recognise their responsibility for Hong Kong's security until 1997. The garrison will continue to play a vital role in support of the Hong Kong police in countering smuggling and stemming the flow of illegal immigrants into the territory; and in demonstrating HMG's sovereignty over the territory. Plans for the eventual withdrawal of the garrison by 1997 will be carefully tailored to ensure that our ability to carry out these tasks satisfactorily is not impaired.
Our defence effort in all these areas is crucially dependent on our greatest asset of all—our men and women in the Armed Services. I have travelled far in the past year and wherever I have gone, whether it be here or abroad, I have seen at first hand the professionalism and the total commitment of our Armed Forces in whatever theatre they are serving. I cannot speak too highly of the skills and dedication of our servicemen and women and their civilian support. Above all, we praise the courage and dedication of our Armed Forces in countering the threat from terrorists. The Services' major national operational commitment remains support for the Royal Ulster Constabulary. This year has seen tragic events in Northern Ireland, on the mainland of Britain and abroad. Innocent men and women have been killed and maimed in cowardly and brutal attacks. In recent weeks two members of the RUC were murdered in cold blood in central Belfast. I am sure your Lordships would wish to join me in expressing our sympathy to the families of those policemen. Bombs also exploded at RAF Stanmore, without causing casualties, and at the Carlton Club. We all wish the noble Lord, Lord Kaberry, and the others injured in that attack a speedy and complete recovery.
Such acts demonstrate the continuing callous nature of the terrorists. No democratic society can tolerate these violent criminals and never, ever will we give in to their blackmail. Our efforts will continue, in close co-operation with other nations until they are brought to justice.
I close in the same vein as that in which I began—the dramatic and welcome changes in Eastern Europe. The map of Europe is being re-drawn; and when the process is complete we have a right to be optimistic that we will find ourselves in a continent from which the ghosts of the past have been exorcised. But such a happy result is not predestined: it requires a patient, careful and clear-headed approach from all of the Governments involved if the insecurity of the cold war is not to be replaced by the insecurity of a fragmented and unstable Europe. It is with this clear and unequivocable objective in view, that our country, the United Kingdom, is determined to play its role as a constructive and leading participant in the difficult days that unquestionably lie ahead. I beg to move.
Moved, That this House takes note of the Statement on the Defence Estimates (Cmnd. 1022).—(The Earl of Arran.)
4.17 p.m.
Lord Williams of Elvel: My Lords, the House will be grateful to the noble Earl, Lord Arran, for introducing his Motion. I much look forward to the maiden speeches of the noble Baroness, Lady Park, and the noble Lord, Lord Inglewood.
It is usual for noble Lords speaking from this Dispatch Box to say that debates are opportune. However, I have to say to your Lordships that this debate is somewhat inopportune in that the options for change studies are—as we understand from the press—tomorrow being studied by a Cabinet committee and an announcement will be made some time in the future, either before or just after the Summer Recess. In those circumstances, we do not really know what the Government are doing and where they will lead us. Therefore, all I can do is to follow the noble Earl in reviewing some of the matters that he reviewed and assessing the implications for our defence planning.
I wish also to extend the debate a little to assess the implications of what is happening in central Europe at the moment, to the United Kingdom economy, and the effects that it might have on our defence contractors. I shall then wish to put some questions to the noble Earl to which he will no doubt be able to reply when he winds up the debate.
The London declaration of the NATO summit was undoubtedly one of the historic documents of our time, as the noble Earl said; and we agree with him. It is worth recalling the main provisions of that declaration. NATO has asked the Soviet Union and its Warsaw Pact allies to sign a joint peace declaration committing all signatories to non-aggression. NATO has invited President Gorbachev and other East European leaders to address its top decision-making body and to set up offices in Brussels to liaise with NATO. Manfred Wöirner, secretary-general, visited Moscow on 14th July to brief President Gorbachev. Nuclear arms will be weapons of last resort, moving away from the doctrine of flexible response, and the US will withdraw all nuclear artillery shells from Europe if the Soviet Union does the same.
Once a treaty is signed on conventional forces in Europe NATO will commit itself on troop levels in a united Germany and seek talks on further cuts. It will move from a strategy of forward defence and develop smaller and more mobile multi-national units. NATO wants the Conference on Security and Co-operation in Europe (CSCE) to have a secretariat to service regular high-level consultations, a mechanism to monitor elections, a centre for the prevention of conflict and a parliamentary assembly of Europe. That certainly is a historic declaration.
We must now ask ourselves the question: what on earth is the point of NATO? It was set up to fight an enemy. If there is no enemy, what is the point of NATO? We should not be caught in a timewarp of strategic planning, saying simply that if there is no

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enemy we must invent one in order to keep our weapons systems up to date and to give employment to generals and our defence contractors. The point of NATO now is to become more political, to become more of an alliance of allies having certain defence requirements but more political requirements, but with the security of the alliance kept in force during a transitional period about which I shall talk in a moment.
The second fact to which I wish to draw your Lordships' attention is the declaration of independence by the Ukraine. The Ukraine Parliament passed a resolution declaring that Ukraine laws were superior in jurisdiction to Soviet laws; that it no longer accepted that the Soviet Union had right of sovereignty over the Ukraine; and that the Ukraine could create separate armed forces and a separate currency. Noble Lords who have studied history will be aware of the consequences of the break-up of the Ottoman Empire. As we go forward—and daily there are more declarations from various republics of the Soviet Union that they wish to be independent—we increasingly appear to be witnessing what is equivalent to the pre-1914 break-up of the Ottoman Empire. That involves ethnic and nationalist governments which create danger. They created danger at the turn of this century and they may well do so again.
The state of the Soviet Union politically is poor. However, the state of the Soviet Union economically is a disaster. That is why Chancellor Kohl was right in doing a deal with Mr. Gorbachev by offering him as yet unrevealed sums in return for a concession from the president that a united Germany could be part of NATO.
There is no conceivable way in which the Soviet Union, in any form in which it may emerge politically in the near future, could mount a serious military offensive against the West. To do so requires not only the military hardware but the economic back-up; you cannot fight a major war unless your economy is in good shape. It is all very well for the G7 summit to declare that the IMF and the European Community will look at the Soviet economy. They will find exactly what the Bundesbank found when it investigated the East German economy. There was nothing there; no statistics and no facts on which to base any conclusion. That is the state of the Soviet economy at the moment. We must put that in its proper defence context. The Soviet Union is flat on its back. There is no way in which any country which is flat on its back will constitute a military threat.
Given that position in central Europe, we must look at the implications for our defence posture and that of our NATO allies. However, the noble Earl was right to remind us that we must not ignore events outside central Europe. After all, there is Hong Kong and the whole China question. There is the unresolved problem in the Middle East. There is the resurgence of a militant Islam which will pose threats in the future. There is the Northern Ireland problem which remains unresolved. Therefore, we have a position in which central Europe looks hopeful but the rest of the world is rather more doubtful.
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What are the implications for our defence planning? Let us accept the argument that there will be no massive attack from the East and that the 200 Russian divisions which were going to roll across the Elbe simply are not there. If they are there they will have no food and no petrol for their tanks because their supply lines are so inefficient. Let us assume that during the next few years the words of the London declaration will come about and that the CSCE—which, I remind your Lordships, does not have a telephone number let alone a secretariat—will develop into something more elaborate. Let us further assume, as we must, that the development of the CSCE will involve the Soviet Union in whatever form it finally emerges; whether it is a commonwealth of nations including the Ukraine, Georgia, the Baltic republics, the Russian Federation, Uzbekistan and others, or whether it is a more federal union such as we have learned to live with up to date. We must now assess what we do in this country about our defence planning.
The noble Earl rightly said that a CFE agreement is much more likely as a result of events during the last few months. The NATO summit was right in saying that we should go further. This is the time to look for further and deeper cuts in conventional armaments. However, those cuts must also be negotiated; we cannot cut unilaterally. Having assumed all that, there will still be a period of transition and instability before we can be certain that central Europe has overcome the problems that result from the break-up of an empire.
Turbulence exists in Poland, Czechoslovakia, Hungary, and now the Ukraine, the Baltic republics and elsewhere. It is leading to political and economic instability. If we have learnt from history we will know that those two forms of instability lead to military instability. Therefore, we must pass the period of transition, and keep up our guard while we are going through it, and should not take too much for granted.
The role for NATO will still be security even on a reduced basis. However, there will also be a role for NATO in negotiating, implementing and verifying disarmament agreements. If all turns out for the best—and we hope that it will—there will be every prospect of a reduction in the level of defence spending. Generally, our armed forces should be smaller and better equipped. No doubt that is a task to which the Government will address themselves. For instance, it could mean a British army which, instead of consisting of approximately 140,000 personnel, might be reduced to 75,000, with reduced procurement of tanks and other support material. This process has already started. After all, the Government have announced a few one-off cancellations of defence contracts: 33 Tornado aircraft and the "smart" bomb. Those are but a start.
When I said that I wished to discuss the impact on the United Kingdom economy I was very serious, because if the Government are going to take us in the direction in which I think we ought to go, of reduced defence expenditure because of the greater promise in central Europe, the defence industry and defence

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contractors need to start planning their diversification into civil manufacturing now. We cannot allow the free market to operate in this sector.
Noble Lords with very long memories will remember demobilisation after the First World War, which was chaos. Those with memories such as mine will recall demobilisation after the Second World War, which was well planned. There will have to be a measure of demobilisation after the end of the cold war. That has to be planned too. We cannot to run the risk of obliterating major industries in our country without a properly planned partnership. After all, 90,000 jobs in the defence industries have been lost over the past decade. Many more will be lost if there is a reduction in defence spending of the kind that is being envisaged, unless it is planned properly.
Here we have something to learn from the French. The relationship between the French Government and French defence industries and trade unions is much closer than ours. They plan matters much better than we do. The nexus is much more tightly drawn. I should like to see the Government learning from the way in which the French operate in this regard, appreciating that there is a major problem here with which we have to deal.
Now I come to the questions that I should like to put to the noble Earl. First, can we be sure that once the Options for Change studies are published there will be a coherent government policy on security and defence procurement which all Ministers support? After all, various Ministers seem to have circulated documents about various possibilities. Can we be sure that the Government will have made up their mind and that all Ministers will support their view?
Secondly, will we then see an end to the one-off announcements about cancellation of this or that contract which seriously destabilise relationships between the Government and defence contractors—announcements apparently made randomly as political occasion demands?
Thirdly, what proposals have the Government to cushion the effect on contractors of reduced defence procurement? Are they going to rely on the free market or are they prepared to adopt a more rational attitude?
Only when we know the answers to those questions will we be able to form a judgment on whether the Government are leading us down the right track.
We must accept that there is a delicate balance to be struck between maintaining proper security for ourselves and our allies and taking full advantage—both in terms of a vision of prolonged peace, such as the noble Earl talked about, and in terms of economic benefit—of the opportunities that are now open to us.
Nobody would deny that the prospect is exciting, but we have to cross the period of transition with possible turbulence ahead. That turbulence will not be confined to central Europe. The noble Earl quite rightly mentioned the Middle East problem which is still unresolved, Islam; and even now looming on the horizon we can see the prospect of what will happen
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in China. Tiananmen Square was only a harbinger of what will come sooner or later. It is time to move forward with imagination, but not yet a time to lower our guard. That is the delicate task which lies before us.
4.36 p.m.
Lord Mayhew: My Lords, a great deal of what the noble Lord, Lord Williams, has said would be acceptable on these Benches, although I was surprised by a few of the matters that he raised. He said that we knew nothing about Options for Change. Has he not been reading the newspapers? Or does he think that the leaks are not to be believed? On the contrary, the leaks happened simultaneously; they were co-ordinated and detailed. We know all about Options for Change. We know what Mr. King stands for and we know what Mr. Clark has been fighting for. We learned from the papers this morning that Mr. King has the support of the Prime Minister and that Mr. Clark has been defeated. If the noble Lord, Lord Williams, does not believe that, how is he going to inform himself about British defence policy? Is he going to listen to statements of Ministers and read the White Papers? I recommend him to read the Independent and The Times of this morning.
Before I come to the points of agreement with the noble Lord, I should like to raise another matter. He spoke most eloquently and convincingly about the absence of a conventional threat, and what he said seemed to be very true; but when we are trying to assess threats we have to distinguish between possible future conventional threats and nuclear threats. I find it hard to believe that a time will not come when this country might be open to the threat of nuclear blackmail, either by a new regime in the Soviet Union or by another country.
Despite the vast improvement in international relations, we on these Benches hold to the view that this country should maintain its strategic nuclear deterrent. The Trident was never our choice of weapon system, but I will not go into that now. However, things being what they are, we think the Trident programme should be completed. We feel that for a fully viable fleet there should be four submarines instead of three.
That raises a point on which the Government can be challenged. The hitting power of the fleet depends on the number of missiles carried and the number of warheads on each missile in each submarine. In our view, the hitting power should, if necessary, be sufficient to inflict unacceptable damage on any challenger. We consider more than that to be superfluous. The Government's view is different. The White Paper says:
"Even after a START Treaty involving reductions in US and Soviet arsenals of the size now under discussion in Geneva had been implemented, our Trident force would still represent a smaller proportion of Soviet strategic nuclear warheads than did Polaris when it entered service. Reductions in US and Soviet strategic arsenals would have to go much further before we could even consider including the British deterrent in any future negotiations".
In other words, whether we negotiate about Trident depends, in the view of the Government, on the

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proportion of our warheads to Soviet warheads. But since, even after the START Treaty, the Russians would have a vast overkill capacity, this would land us with more nuclear warheads than we need.
Ironically, this week the Commons Select Committee on Defence reported as follows:
"There is now a significant risk that some elements of the warhead programme may fail to meet their scheduled delivery date".
It may be ironical that the failure to produce warheads will actually compel the Government to adopt a more reasonable attitude to the necessary hitting capacity of the Trident fleet.
If we cannot altogether rule out the possibility of future threat of nuclear blackmail, it is hard to imagine this country being threatened by conventional attack within the foreseeable future. The Soviet Union is withdrawing its forces from Eastern Europe and Eastern Germany. It is unilaterally disarming. As the noble Lord said, it is desperately divided. It is bankrupt. That means that for the foreseeable future a conventional Soviet attack through the new democracies into NATO territory is not merely difficult to imagine but so improbable that NATO can now safely make substantial reductions in its conventional forces.
Judging from the White Paper, the noble Earl's speech and the leaks in the newspapers, the Government are still hesitant about that. Despite what the noble Earl said at the start of his speech, the Government have for years underestimated and misjudged the significance of the changes in the Soviet Union. The Gorbachev revolution is now more than five years old. I am glad to say that the old Liberal Party is on record as recognising from the start its significance, including its significance for German reunification.
However, years passed before the Government began to recognise even tentatively that things were changing. The 1988 White Paper said:
"We are now at last beginning to see signs of change in the Soviet Union … but these are early days and we shall be looking for hard evidence, in the form of actions not words, that the 'new thinking' represents a genuine and lasting shift in Soviet policy".
The 1990 White Paper was equally behind events. It said:
"We cannot rely for our security on the public pronouncements of the current Soviet leadership".
It went on to announce with evident pride:
"The defence budget will rise by about £1 billion in each of the years 1991–1992 and on current inflation projections there will therefore be real growth in the budget over these years".
That was last year. On 17th January this year we held a debate and the misjudgments were admitted rather bravely by the noble Lord, Lord Brabazon, winding up the debate. He said:
"We have witnessed dramatic changes in Eastern Europe. Even six months ago we had little inkling of what was in store. In October [last year] … German unification seemed a virtual impossibility or at least a prospect so remote that there was little point in devoting much time to it".—[Official Report, 17/1/90; col. 675.]
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However, many observers, including some on these Benches, are on record as saying at the beginning of the Gorbachev revolution that it made German unification inevitable.
That record of the Government is not a record of caution; it is a record of serious misjudgment. It is one reason why the Government have found themselves at odds with their allies on a number of vital subjects in recent months: for example, on the subject of German reunification; on deployment of nuclear weapons in Europe; on the need or otherwise for a tactical air-to-surface nuclear weapon. It is a reason why the Prime Minister acted in the role of a wet blanket at the NATO summit and it explains the decision reported in today's paper that they are not about to make substantial cuts in the defence budget.
As the noble Lord, Lord Williams, said, it is true that Mr. King last month cancelled 33 Tornadoes and called for a moratorium on defence procurement, but why so late? Why not months before? Why not give the defence industries more time to adapt? The Times this morning said that Mrs. Thatcher and Mr. King are waiting,
"until a clear picture emerges about political change, particularly in the Soviet Union".
That suggests strongly that future cuts will also be too limited and too late.
The Government's slowness to react also means that they give us no guidance about the future organisation of defence in Europe. The London Declaration of the NATO summit was admirable in many respects. It proposed excellent initiatives in relations with the Soviet Union and Eastern Europe. It proposed excellent initiatives on conventional and nuclear disarmament and on conventional and nuclear deployment, but it did not address itself to the increasingly relevant question of its own future.
NATO has been such a brilliant success and has achieved its objective with such remarkable completeness that it is only natural that its members should see the future as sticking together and taking on new tasks. I believe—and I think that my noble friends will agree with me—that that is a mistaken view which emerged quite plainly from the noble Earl's speech this afternoon. In the new Europe, it is not only the size, balance and deployment of NATO forces which are wrong, but its membership, structure and purpose have already become anomalous. The presence of Soviet forces in Eastern Germany is already an anomaly. By the time they have left in three or four years, according to that admirable agreement recorded yesterday between the Germans and the Russians, the presence of United States forces in West Germany will also appear wholly anachronistic and anomalous and will appear so particularly to the German electorate.
NATO was suitably constituted for the task of resisting aggression from the Warsaw Pact, but for what other tasks is it suitably constituted? With the United States in and the Russians out, is it suitably constituted to handle threats to security in Eastern Europe? Obviously not. Is it suitably constituted to handle threats to security in the Middle East?

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Obviously not. Can it find some new role—perhaps take on an economic role linking the United States with Europe? Obviously not, because there are other organisations which could do that better.
Surely the main task of NATO must now be to work for its own replacement by a defence organisation more suited to the new Europe. The noble Lord, Lord Williams, and the noble Earl mentioned that admirable body, the CSCE. Plainly, it can and should expand its security role in the future. It can develop institutions for monitoring, for mediation and even for peace-keeping.
However, as a NATO replacement, we must look not for an organisation of common security, but for an organisation of pooled defence, which is a different matter and one surely beyond an organisation like the CSCE with its 35 members, all sovereign, all veto-wielding and including the Soviet Union and the United States.
A more realistic proposal is being put forward. I believe that one of the protagonists may be the noble and gallant Lord, Lord Carver. I am not sure, but we look forward to hearing him speak in the debate. A more realistic proposal would surely be to develop the existing Western European Union into a European defence community on the lines of the existing European Community. In due course, other European countries could join and eventually perhaps the two communities could merge. That line of approach is surely worth studying. I hope that, despite the fact that the discussions are secret, the Government are discussing those longer-term projects for a situation in Europe which is rapidly changing in the most fundamental way and which will produce problems that must be resolved before long.
Finally, by definition, long-term objectives are not immediately practicable, but that does not mean that they are useless. They can provide momentum and a sense of direction to the peace process, but in their European policy, in defence and in many other respects, the Government's policy has lacked all sense of direction. They have simply reacted belatedly to changes which, more often than not, they entirely failed to foresee.
4.50 p.m.
Baroness Park of Monmouth: My Lords, everything that I have to say has already been said much better from both sides of the House, but I hope noble Lords will bear with me. I have chosen to speak in this debate because of my deep concern lest, out of a mixture of natural euphoria and our national tendency to hope for the best, we should lower our guard too soon. Why am I playing Cassandra when all the world is rejoicing? It is because leopards do not change their spots overnight.
I have served in three countries ruled by communist regimes: the USSR, just after Stalin's death, North Vietnam during the Vietnam war between 1969 and 1970, and Mongolia. I admired, and still admire, the courage of their people as much as I hated the regimes themselves. I cannot but recognise in Mr. Gorbachev's
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repeated signals to the West, through such fluent spokesmen as Gennadi Gerasimov, that we must make concessions if he is to survive and carry out his policies—the tactics so successfully used by the North Vietnamese to win concessions from the Americans. The doves with the politburo would win, they said, if only they could demonstrate a victory—that they were capable of securing some advantage or other. The doves wanted to beat swords into ploughshares, but they needed help. But there were no doves and hawks—only a united politburo whose view of negotiation was not ours.
The North Vietnamese leaders, to quote a party directive of November 1970, regarded the diplomatic offensive—that is, negotiations—as designed to change the balance of forces between them and the enemy but not as a step towards a peaceful solution. For them, negotiation was not a bargaining process involving concessions from both sides and leading to an eventual compromise solution. When Mr. Gorbachev says in effect "If you do not do what I ask I shall be overthrown" he is using a very old tactic. Even Stalin is said to have told a Western visitor that he had to contend with a hard-line old guard who, he implied, restrained his more liberal tendencies.
Khrushchev and Brezhnev told much the same tale from time to time. Mr. Gorbachev must undoubtedly have some disgruntled generals on his hands. Resettling all those troops at home cannot be easy. But the front line units are being re-equipped with the most modern equipment. Take, for instance, land-based strategic missiles with nuclear warheads in place and on stream. Of the SS24 (rail-mobile and silo), each missile carries ten Merv warheads. Ten were in place in 1988, 30 in 1989 and 60 so far this year. Of the SS25, road-mobile only, carrying a single nuclear warhead, 100 were in place in 1988, 165 in 1989 and 225 so far today. I am indebted to the London-based International Institute for Strategic Studies for those statistics. Will the Soviet army really present Mr. Gorbachev with any problems?
Not least, military coups are not in the Russian tradition. They have recently acquiesced that the armed forces should continue to be politicised. Army, party and KGB stand together. The party was created to wield totalitarian power. It shows little sign of renouncing its right to control every aspect of Soviet life. Mr. Gorbachev has just reinforced its mandate and said that the Communist Party will live. We are therefore still dealing with a communist regime which thinks in the communist way, and Mr. Gorbachev draws his power from that base. He needs the KGB if he is to know sooner than the other leaders what is happening inside the Soviet Union. It is not too difficult to believe that he could have struck a bargain with both the army and the KGB before he ever launched glasnost and perestroika and his initiatives with the West. He is, after all, a man who came up through the system. In return for a leaner, meaner army and a measure of free speech he would charm NATO into laying down arms which it would be far

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harder for the West, under pressure from a euphoric public opinion, to take up again in the face of any future renewed Soviet threat or even pressure.
Like Khrushchev, he may have underrated the stubborn resistance of the nomenclatura to the economic reforms which I am sure he genuinely wishes to put through. Like Khrushchev in 1956 with the Poles and the Hungarians, he probably underestimated the passionate innate rejection of communism which has characterised the Eastern bloc outside the Soviet Union and made it most difficult to turn the clock back again.
The salient point is that whether he survives or falls we have still to reckon with a party power base whose members' interests do not necessarily make them good Europeans; who do not necessarily cease to constitute a threat—if only to their former satellites—which is best held in check. If that power base falls apart and disintegrates under the pressure of dissident nationalism from within Soviet central Asia where fundamentalism is a further threat—the Ukraine, the Baltic states—chaos will also be dangerous and the situation volatile. Either way, we do the world a service by retaining our shield and guaranteeing some stability.
At best, we are dealing with an experienced and battle hardened man who will exploit our weaknesses and contradictions, who appears to have put the genie back in the bottle—just—in Soviet central Asia and the Caucasus, and to have pushed the Baltic states into a nice quiet dark corner knowing that we prefer not to ask awkward questions. If and when he needs something more from the West he may uncork the bottle just a little. He may genuinely lose control. In that case a volatile and destabilised Soviet Union will be a loose cannon which will be dangerous indeed unless we have retained the means to contain it and to provide stability.
I fear that what I have had to say will be only too obvious to many whose experience is far greater than mine. To some it may seem an ungenerous and even destructive approach to the remarkable events of the past year. I rejoice over them, but I feel strongly that the young in our country and in Europe on both sides of what used to be the Iron Curtain, including the many who were so recently part of the Soviet empire, must not lose their chance to grow up free simply because we forgot the Prague spring and its outcome—the thousand flowers that bloomed and then had their heads cut off.
Anatoly Shcharansky was amazed when in Oxford in 1988 he was told that of course the Jews would no longer need to apply for visas to leave. Public opinion in the new world of glasnost would surely not tolerate any further restrictions on freedom of movement. He replied that in the Soviet Union the tap is turned on and off at the top. No sensible man would count on the KGB having heard of the power of public opinion.
In Khrushchev's day, I remember that he let many out of the camps and rehabilitated them after the famous secret speech on Stalin at the 20th Congress in 1956. The West believed then that the party would
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have to listen to the technocrats because, by our standards, Russia desperately needed to improve its economy, as it does today. There followed the Brezhnev years, Andropov, and Chernienko. It could happen again, despite the truly amazing manifestations that we see daily.
Finally, we have to remember that the people of the Soviet Union, unlike the Poles and the Czechs, have had little practice in making choices and are only now exercising their democratic muscles. Some former members of the Viet Cong, who had defected and to whom I was talking in 1970 about party doctrine, once complained to me bitterly that in the West no one told them what to think: not what to do—what to think. How could they know what to think when they had no directives?
I greatly respect and value the spirit of wisdom and broad tolerance which characterise the proceedings of this House, and I would not wish noble Lords to think that I approach life in a wholly negative way. I believe that the countries recently freed deserve both our practical help and protection. I know that there are many among those diverse peoples who make up the Soviet Union who, by their courage in what seemed hopeless circumstances for so many years, equally deserve our help. But I believe that those people too, like Sakharov, would warn us to be careful and not to believe in miracles too soon. We should be quite sure that we are communicating to Mr. Gorbachev and his government a message of qualified support which looks for deeds, not words.
During the war, at one time I had to instruct a number of Polish officers. After a day or two they came to me and said, "We are very far from home. Nobody ever speaks Polish in our hearing. Could you not say something in Polish to us every day?" I thought that rather touching, forgetting that they spoke in Polish to each other all the time. I said, "Of course", and they taught me how to say good morning in Polish. Every day I used to go in and say good morning to them in Polish, and that clearly gave them a lot of innocent pleasure. However, one day a Polish general came to the camp. I said good morning to him in Polish. I was taken aside: it was explained to me that I had not been saying good morning!
I told your Lordships that story because it shows how important it is to know what message you are communicating when you communicate it. That is why I want us to be very clear in what we say. The Secretary of State has described defence as our insurance policy. Let us keep up the payments.
5 p.m.
Lord Braman: My Lords, I begin by congratulating on behalf of the whole House the noble Baroness, Lady Park of Monmouth, for her excellent and, if I may say so, very wise speech. The noble Baroness brings great experience of the international scene, having served in the Soviet Union, Africa and Asia. We are fortunate to have the benefit of her wisdom at a time when there are apparently so many changes in the international scene. We look forward to hearing from her in the future.

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To listen to some of the kite flying in the media on the subject of defence cuts one might think that it was highly desirable, if not essential, that many of the British Armed Forces should be done away with as quickly as possible whereas the position is to the contrary. The sensible, if rather bland, statement on defence makes clear that it is very much in the national interest to maintain efficient, respected armed forces which can be relied upon to act effectively and professionally if important national interests are ever threatened, as they were in the Falklands, and which can be trusted to act within the law if the civil power requires support as it has done for over 20 years in Northern Ireland and seems set to do for some time yet.
When Europe's borders are open after 1992 I can see some of our security problems increasing. I believe most noble Lords would agree (indeed, the Minister implied) that there are very few national institutions which have so well preserved their reputation and integrity in the eyes of the public as the Armed Forces of the Crown. Their contribution to our national life and to peace is recognised as one of the steadier and more consistent influences in our democratic society. Their future must therefore be of great concern to us all.
That contribution has not come about by accident. It has been nurtured over many decades. It will certainly not be helped if, by exaggerating sensible reductions for the future, we were to drive out of the Armed Forces so many who are worth keeping in, or if we were to cut the forces so dramatically that they were left with virtually no operational capability to speak of. The government statement gives no hint of that, but it is not clear what lies behind the words. One recalls what happened in the 1920s when, over-optimistic about the prospect of peace in our time, we effectively put paid to any modernisation of equipment or to any consideration of professional military thought in our forces and all but left them at the mercy of the German juggernaut when, only 15 years later, mortal threat stared us in the face. That is proof, if needed, that once you turn off the tap to any marked degree, the Treasury is most unlikely to allow you to turn it on again until it is virtually too late.
We hope that history will not repeat itself. We should have learnt some lessons about reading the warning signs. Attitudes to the use of force have certainly moderated, at least in Europe, where the fear of nuclear involvement is most marked and where economic domination can be so much more effective than armed aggression. For the moment a new spirit appears to be abroad. However, ideological uncertainties and ethnic problems and rivalries still exist in Eastern Europe and even in the Soviet Union, as they did when governments like the Weimar Republic were also struggling with unfamiliar democracy. Therefore, we cannot be that comfortable and confident about the longer term future. In fact, Europe as a whole, despite the rhetoric, is probably more unsettled than it has been for 40 years.
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Therefore, I hope that there will not be excessive parliamentary and public pressure on Ministers to make disproportionate savings on defence and to take unnecessary risks in search of a quick peace dividend. Insatiable pressure from the Treasury, of course, goes without saying. However, having said that, no one in his right senses wants to pay a higher insurance premium—which is what defence expenditure often amounts to—than is really necessary. The chiefs of staff will be appreciating that as well as Ministers. I was therefore very glad that the Secretary of State for Defence confirmed in another place that rumours that the chiefs of staff were somehow seeking to obstruct or thwart Ministers on what they wanted to do—whatever that may be—were totally without foundation. It is not within their constitutional position to do so and, in my experience, it is not their style. I have no doubt that they would positively welcome some firm political assumptions and parameters about the size and shape of our forces so that more detailed military planning can take place and harmful uncertainty removed.
What the chiefs of staff are paid to do as a body is to take part in robust dialogue to ensure that the so-called options for change are examined professionally—not only bureaucratically and financially—and that any attendant risks are properly spelt out. I hope, specifically, that they will be pleading with the Government not to compromise on a properly considered blueprint for the future, which must take a bit of time, by being forced into a virtual moratorium on accessible short term expenditure which can be so damaging for the morale, motivation and professionalism which we need more than ever to retain. I say that particularly as the shortage of cash to meet an agreed programme has not been brought about by incompetence on the part of the Ministry of Defence, which has actually kept its inflation below the national average, but only by a manifestly false estimate of inflation by the Treasury to which the Ministry of Defence found itself bound. If Ministers do not take a robust line over that, they could wrong-foot themselves for sensible and comprehensive savings later.
What are the relevant factors which genuinely indicate that we can make significant savings in our defence expenditure and which will govern what we want our Armed Forces for? Of course, there are still missing—or there were until yesterday when Mr. Gorbachev and Chancellor Kohl seemed to have wrapped the whole thing up, come what may—a number of important pieces of the European jigsaw. Who will come out on top in the Soviet Union? What progress will be made on mutually balanced force reductions? Is a united Germany really going to be part of a recognisable NATO, despite what has been said? If so, what, if any, foreign forces will Germany need to, want to, or be allowed to, keep on its soil? What other security arrangements will eventually emerge, transforming NATO or putting something else in its place, which will guarantee frontiers and territorial integrity of interested states and stand the

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test of time, in contrast to the toothless treaty of Locarno which was supposed to do just that in the late 1920s and the 1930s?
Without answers to those questions it would be all too easy to take a wrong decision. On the other hand—here I agree with the noble Lord, Lord Williams—there are at least two facts which can be recognised without much argument. First, the Warsaw Pact on which the Soviet Union has had to depend for its communications and support for any early, and certainly any surprise, military action is now meaningless. Secondly, although the Soviet armed forces—are still immensely powerful and up to date—I am sure that we have not heard the last of them as a force to be reckoned with—they do not for the moment, because of the preoccupation with economic and political problems at home, pose a credible immediate threat across the Elbe. That should allow us, without any risk in the shorter term, to make some savings in numbers, and therefore costs, in our instant readiness forces on the Continent.
We can particularly get ourselves off the hook of forward defence on the inner-German border, which has always imposed an intolerable strain on our mobilisation measures. Then, whatever our interpretation of flexible response, mentioned again in the statement, it need no longer extend to battlefield nuclear weapons which have become an increasing anachronism and an embarrassment to our allies. In fact, the Germans will not have them. We can therefore safely follow the example of the United States and save money on their modernisation and replacement. In a unified Germany, with its capital presumably Berlin, it is difficult to see what the forces of four allied powers would do in that city, and Chancellor Kohl seems to agree. Therefore, there must be savings to be made there.
Since NATO must be looked on increasingly as a political and general security organisation, there must be some scope for the culling of the many allied and national headquarters whose only real justification is command in battle and which to some extent duplicate each other and overlap. All these possibilities, which will fundamentally affect the size of our forces, will first have to be discussed in some detail by what one might call the four and two, but, watching what is going on in Germany, perhaps one should call them the two and four and, watching what is going on in Moscow, perhaps one should say the one and one. If we are sensible, these measures should take place in the context of balanced reductions on both sides. It will take Mr. Gorbachev a very long time to honour all his promises.
What ever finally emerges will have to bring France more into Europe's collective security, maintain the United States' interest and involvement in Europe, though not necessarily in a dominant role, and assuage the legitimate fears of the Soviet Union who suffered so appallingly last time when Germany was strong and unified. The last thing that anyone should want is a vacuum, uncertainty or a Germany unlinked to any wider political or security responsibilities. For the time being NATO may provide better assurances
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on all these points for both West and East than anything else that has yet been devised. I have a suspicion that Mr. Gorbachev realises that too.
Therefore, savings will be made in central Europe although, with alternative accommodation to be provided in the United Kingdom in the event of redeployment, and perhaps redundancy payments to be made if the early disbandment of units is to be preferred, the financial dividends may not be as immediate as some may hope. Moreover, even when central Europe was perceived as the largest and most urgent threat, it was always the uncertainties and instabilities on the flanks of NATO and further afield that were more likely to require the deployment of military forces in some form of prophylactic, pre-emptive or even reactive way. These requirements have certainly not diminished. The substantial Soviet maritime strength on the northern flank, with 118 submarines alone, requires no assistance from the Warsaw Pact to turn a latent into an actual threat at short notice if things went wrong.
NATO's southern flank marches on the highly volatile Middle East which may explode at any moment and where, with our experience in Oman, Sinai, the Lebanon, the Red Sea and the Gulf, it is not too difficult to envisage scenarios in which Western forces might again be needed in some capacity to counter or balance a pervading threat. We would expect to find other forces in the area equipped with very modern and sophisticated weapons. This is not just a question of meddling in affairs which do not concern us or trying, above our station, to act as the world's policeman. History has shown that we get involved only because we perceive that our interests are very much affected and because the option of not doing so is, in the long term, likely to be more serious still. You do not have to be a best-seller writer to envisage tense situations developing in the Far East as 1997 approaches, calling for our forces (perhaps reinforced) to be deployed and on the alert. So potential savings in central Europe must be mitigated to some extent by even deeper concerns about the peripheral areas.
The Government's statement makes a shot at assessing what kind of forces we really need in this changing but still dangerous world. I generally agree with what is said in general terms. First, in contrast to the 1920s and 1930s, our forces need to be modern and up-to-date in thought, weapons and equipment. Once you lose that, it takes too long to recover. Perhaps that is what some official propagandist meant by "leaner and meaner" though "meaner" is a particularly unfortunate and inappropriate word. Orders for equipment may have to be slipped or reduced in numbers: belts and braces, certainly in communications, will have to be dispensed with. But there must remain a sufficiency of modern weaponry, ships, aircraft and formations, to keep alive and develop up-to-date techniques as well to meet any existing commitments that require a finite number of units if the commitment is not to reoccur too often.
Secondly, our forces need to be flexible and all-purpose in attitude and equipment. They need to

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be capable of providing, as Europeans, some contribution to any long-term or future Continental balance to which, however much we have tried to avoid it in the past, we have always been forced back. Equally, with the same forces, there is need to react on a European or even an Atlantic basis to any of the quite sophisticated threats which, with so much weaponry now on the international market, could in future affect the West from quite unusual directions.
It would be nice to see some of our specialist units earmarked—in association with both our European partners and with the Soviet Union—for worldwide disaster relief for which they are so well equipped and suited. Apart from the humanitarian aspect, it would be very good for the forces' training and morale. It would also help symbolically the binding process which is so necessary between NATO and the USSR.
Finally, and perhaps above all, the forces need to be those of which the country can be proud. That means trying, as the statement says, to maintain morale that only comes with full manning, confidence and self-respect. Good employer measures, particularly as regards pay and housing—both very disappointing of late, particularly the latter—will be more important than ever. The Army will be even more dependent on what is loosely described as the regimental system which is the envy of the world and which so many other countries wish they had. It proved itself yet again in the Falklands. The fierce pride that exists in closely knit units was a mainspring of loyalty and motivation. It produced the determination not to accept failure and contributed so much to winning a difficult campaign so far from home.
This esprit de corps, so valuable in battle, is perhaps even more necessary in peace to motivate and inspire at a time when the threat is less obvious, when public support is perhaps less enthusiastic and when so many other factors such as financial restraints may actually be working in the reverse direction. The regimental system need not be totally inflexible, nor need the subject periodically degenerate into bitter public rows as to whether this or that regiment should retain its identity. The system has been adjusted and modified many times since the Cardwell reforms of 1881, and even before that, without disastrous results. Indeed, even some of the most recently formed regiments have provided the strongest motivation and loyalty as well as the maximum effectiveness.
So when the time comes, as I believe that it is bound to, when we have to reduce a number of our armoured and infantry units, let us by all means use any palliatives to ease the problem by giving regiments training roles and linking regimental names to units of the cost-effective and indepensable Territorial Army. Essentially, let us try to design a system that will meet any future vagaries whether it be further contraction or, if the unexpected turns up, renewed expansion. There should be a widening of the scope of the system, always providing that what is left is still definable and has a natural ethos of its own and in terms of historical pedigree, regional loyalties or professional specialisation.
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As the Army Board realised back in the 1960s but never had the courage of its convictions to pursue, I believe that what is required are larger groupings that are big enough to be viable, but small enough to have a name that means something. If necessary, older, smaller regiments can submerge themselves in those larger groupings, bringing with them deeds, traditions and distinctions for the greater collective glory of the new whole. In that way you will not be so much losing regiments which will have passed the torch, but gaining new ones with their roots in the past but their sights on the future.
It will not be easy but it can be done. It will need courage. Once it has happened, everyone, particularly the young who are serving, will concentrate on the new identity and many of them will not even notice the change that has taken place. The future is bound to be a period of change and challenge in the Armed Forces. I hope that those inside them will face up to that period positively and constructively. I hope that they will realise that there are also opportunities for modernisation and greater flexibility as well as the inevitable disappointments and frustrations. I hope that those outside the services will show understanding, recognising the human problems involved and appreciating the part that the Armed Forces play in peace time in the employment and training of young people and in the economic life of the country. I hope that it will be realised that, with the mistakes of the 1920s in mind, there will be achieved a proper, secure and lasting structure for the future defence of the realm which, in the longer term, is more important than trying to reap a quick, perhaps politically convenient financial bonus, which in any case may be fairly illusory.
5.20 p.m.
Lord Inglewood: My Lords, I continue to be surprised that in the euphoria surrounding the developments in Eastern Europe since November last year sufficient recognition has sometimes not been given to the fact that it is we who have won the Cold War. For my entire life Europe has been divided by an Iron Curtain across which ideologies confronted each other, supported with arms. On our side in the West, our citizens supported the military; while on the other side, those armed forces doubled up to suppress the citizens of Eastern Europe.
Let us not forget that it was the military who preserved our liberties and will no doubt continue to do so in different ways in the future. But they did not win that war. For it was the way in which our economy and political institutions performed which rendered our opponents' military postures finally unsustainable. We now see our erstwhile European adversaries wishing to emulate our economic and political systems. In my view it is essential to the long-term peace and stability that they succeed in doing so.
The condition of the Eastern European economies is unfortunately measured in differing degrees of badness. It is of paramount importance that we do not let the pendulum swing back so that hunger and economic anarchy turn the people of those countries

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away From the democracy which they currently espouse. Both financial and technical aid, whether provided at a national level or at a collective level through the European Community, are in their own way just as important as direct military expenditure to our future security.
It seems to me that the history of post-war Europe shows the need to underpin these economic and political changes with forms of political guarantee. That is why it is so important for East Germany to become a member of NATO, which is itself evolving, and in due course for some of the other newly free Eastern European democracies to do so if they and us both want it. At present no other satisfactory institutional framework is available to provide this stability.
I also believe that this is well appreciated in the East. In the middle of March I was privileged to spend a couple of days campaigning for Chancellor Kohl's Alliance for Germany. On one occasion I recall speaking for Gunther Krause, one of the successful CDU candidates. Our meeting was held on the steps of the Rathaus at Pasewalk, which is about 30 miles west of Stettin. I remember looking out into the acrid, lignite-smoke filled night at an audience of 300 to 400 people—probably one of the first political meetings held there for about 50 years. The comment that received the most enthusiastic reception from the audience was my hope that East Germany would become part of NATO. They will have been aware more than most people of the overriding reality that freedom must be combined with the commitment to protect it even with force if that becomes necessary.
5.23 p.m.
Lord Pym: My Lords, it is a great honour for me to speak after the noble Lord, Lord Inglewood, and to congratulate him on his maiden speech. It was very authoritative, well informed and attractively made. I am sure that every noble Lord looks forward to hearing him again. He is a man of wide experience and will be able to contribute to our debates on a whole range of issues. We look forward to that very much.
I am glad to say that I find myself very much in sympathy with what he was saying. The revolutions in central and Eastern Europe make it possible at last to remake Europe once again. We have waited a long time for this opportunity, which historically is a very rare occurrence. Obviously, we want to make the very most of it. If we are to do that we must comprehend the nature and scale of the problems that must now be faced. They are political, economic and military, and they must all be thought about together because they inter-relate.
This debate on the Defence Estimates is of course concerned with the military aspect, but the military aspect has no meaning except in the context of the political and economic scene. The change we have seen in the past year is so dramatic that previous thinking on this subject is no longer relevant. What has been needed during the past year or so, and still is, is a new language for NATO, taking account of the revolutions and the end of the Warsaw Pact. The
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phrase "We must retain NATO" is confusing to people unless there is explanation of what it means. The Cold War is over, so the purpose of NATO, as understood by the electorates of all our countries, no longer exists. So what do we want it for? The answer is three-fold.
First, its role has always been and remains to deter war, and the need for that is not diminished in any way. The aim now is to build a permanent peace in Europe and to build a new system of collective security appropriate to the new circumstances. NATO is an obvious starting point and foundation for that. Secondly, the Soviet Union is still a very formidable military power with large conventional forces, sophisticated weapons and highly developed nuclear weapons. It would be extraordinarily foolish to turn a blind eye to that, even though the Soviet Union is bankrupt economically, while we are negotiating a whole range of disarmament agreements. However hopeful we may be about those agreements, they have not happened yet. Thirdly, it is a practical way—perhaps the only way—of keeping the Americans involved in Europe.
The language about NATO must describe and explain these new objectives which clearly call for caution in making changes in our defence capability. Indeed, we must see what progress is made year by year and respond accordingly. I find the phrase "peace dividend" a typical populist cliché which glosses over the deep uncertainties and complexities of the present situation and implies that the problems are over. The problems have become entirely different and much less horrendous than those we have been dealing with for 40 years, but they still have to be surmounted before a permanent peace can be declared.
The problems that have to be faced include the sheer difficulty of building a democratic system in countries that have little or no experience of it. Democracy is a simple concept, particularly to us, but it is complicated in practice until everyone is used to it. It takes a long time to get it firmly established. Then there is the poverty of the economies of central and Eastern Europe, which my noble friend Lord Inglewood mentioned, and the enormous debts with which they are burdened. It is impossible to transform those economies quickly, except in the case of East Germany where the West Germans will be of enormous assistance to them.
People in the other countries will expect things to get better quickly; but they will not get better quickly, which may lead to disappointment and even to some disillusionment. That carries security implications. I do not think that I would describe the unification of Germany as a problem although there are anxieties about it. It has always been inevitable and in my view it is actually desirable. The economic needs of central and Eastern Europe are so great that the rest of us must maximise our economies so that we are able to provide the help which they so desperately need.
What does matter is the European context into which a unified Germany fits. There it is crucially important for us to see that a proper balance is achieved between this one very powerful country and

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the rest. That means three things; first, a stronger degree of co-operation and unity between Britain and France as a deliberate act of strategy; secondly, a greater degree of cohesion in Western Europe, leading in time to such cohesion applying throughout the whole of Europe; and thirdly, retaining the strategic commitment of the United States in Europe for which NATO seems to be the ideal vehicle. We know that we are not capable of maintaining the balance of power in Europe without the United States. The Soviet Union will want guarantees of peace. However, they are not likely to accept such undertakings from the Germans—only the Americans can do that. I believe this to be true, even if the Germans provide the Soviet Union with a package of economic aid.
The final problem I should like to mention is the uncertainty of what will happen in the Soviet Union. No one knows what will happen. Will the reform programme continue reasonably peacefully or will there be disruption, or even disintegration or conflict? We shall have to wait and see. However, of one thing I am sure: it will remain a major military power for the foreseeable future, and that must be taken into account by all of us.
All those problems and others, for which there is no time available for me to mention, relate to the needs of security in Europe and our requirements. However, faced with that situation, and looking at it broadly, what should our response be? First, in principle, I think that we should understand and accept the urgency of the needs of the countries of central and Eastern Europe, especially their economic needs. We must then take whatever action is practical to help them in the short and in the long term. But I believe that we should also combine that with the understanding that, in the sweep of history, we are dealing with a huge strategic change which encompasses not only the balance of world power and of European power, but which also encompasses the daily lives of millions of people whose emotions are inextricably bound up with whatever happens and who are trying to create new forms of democracy and new institutions starting from scratch. Therefore, patience is also a vital necessity. There is an urgency for help and a need for patience which requires strong leadership and a sense of confidence. Fortunately, we in this country, and those in Western Europe as a whole, have those qualities to a strong degree.
On that basis we should respond in three ways. Politically—I shall not dwell long on this aspect of the matter—the ultimate objective is a Europe of free democratic and independent countries working together for the benefit of all. The first stage is to formulate the peace treaty which should have happened in 1945, but did not. As we know, that is already well underway leading to the CSCE meeting later this year. I regard that meeting as being of critical importance, both for the immediate and the long-term future. I hope that the 35 nations will set themselves a severe programme of work with regular meetings; that they will monitor together the progress of events on a continuing process; and that they will work towards a
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form of pan-European structure, even perhaps contemplating linking the Community in some way to NATO.
This group of nations is ideally suited to carry forward the astonishing political achievements of the past year. Our response on the economic side must be as comprehensive as possible to the countries of central and Eastern Europe. I think that the Soviet Union is a different case and I agree with the line taken at the Texas summit by our own Prime Minister and by the United States and Japan. However, what these other countries need—as does the Soviet Union—is technology, managerial skills, investment and trade. Everything the West can do in terms of entrepreneurial activity should have top priority. The private sector has a major contribution to make, but governments and international institutions must all be involved. Although all this was discussed at that summit, I must say that for my part I wish I could feel that more importance and more urgency was being given to the matter.
The third element of our response with our allies is the provision of a new security system for all European countries. Such a system will inevitably take time to establish and, in the meantime, uncertainty will remain. The threat of war, with which we have lived for so long, has disappeared for the moment; but we cannot tell how events will unfold in the future. Therefore, the present period is one of transition from the virtual certainties of the Cold War to an unknown future. In that situation, the right course is to reassess the changing and changed strategic scene, which the Government are doing, and ascertain what the new changes might be; to retain our collective strength at a somewhat lower level than before, reflecting the reduced threat; and to decide the precise level of our forces for the next three years or so, by which time the future may be clearer. I must say that in my view the noble and gallant Lord, Lord Bramall, gave a brilliant description of the requirements for our forces in this situation.
The decision about our forces must be taken on defence grounds and not be driven by the entirely different needs of the Treasury whose natural and proper obsession with money can sometimes force wrong defence decisions to be made. Indeed, the noble and gallant Lord, Lord Bramall, pointed out that that happened between the wars, and I believe that there have been some instances of it since that time.
There is an urgency for this decision because uncertainty in the forces creates a morale problem. Many regiments and units are wondering whether they will be needed—and nothing can be worse for morale than such a situation. Therefore, I hope that my noble friend on the Front Bench, his colleagues, the Ministers in the defence department, and the chiefs of staff are now approaching agreed decisions on the size of our forces which they can announce very soon.
After 40 years of NATO and the policy of containment, at last we have the prize of this hard-won opportunity to build a permanent peace in Europe. The prospects look favourable. However, it

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will take all our ingenuity, imagination and patience to achieve it. Nevertheless, we shall not let the future down.
5.36 p.m.
Lord Hatch of Lusby: My Lords, the debate has been a mixture of the depressing and the hopeful. It has been depressing as regards those noble Lords who spoke in voices of the past—of course we were brought up to believe in the essential element of the military arm of the country—and hopeful as regards those who have seen that on the horizon we are faced with possibly the greatest watershed in human history, if we take advantage of it. Whether we do so depends to a considerable extent upon our attitude towards what is commonly called defence but what I prefer to call the military.
As my noble friend Lord Williams vividly portrayed in his opening speech, there is here a tremendous glittering opportunity for a new kind of world. It will not happen automatically; it will happen only through effort and imagination. However, the opportunity is there. The first part of the opportunity is surely that we no longer have an enemy in the world.
So far as concerns this country, we cannot say that any other country today is our enemy. If that is so, perhaps I may use—I hope that this does not include an unparliamentary expression; but in any event it is not mine—a quotation from John Le Carré's most recent book entitled The Russia House in which the American interrogating has this to say:
"How do you peddle the arms race when the only asshole you have to race against is yourself?".
That seems to be relevant to today.
However, there is another side to the situation. It is not just negatively that we have no enemy; there is now the opportunity for a positive peace. Peace is not merely the absence of war. Was the 40 years of peace that is frequently talked about on the other side of the House, and which was referred to by the noble Lord, Lord Pym, a peace? It may have seemed so from this country's comfortable armchairs; but it did not seem so in Suez, the Falklands, Korea, Vietnam, Afghanistan, Czechoslovakia, Nicaragua, Rhodesia, Namibia, Mozambique, Angola, the Middle East or South Africa. That was not a peace which was developed as a result of our experiences in the Second World War. It was not a peace created by that imaginative organisation which followed the Second World War, the United Nations.
Today there is at least an opportunity of a positive peace for those of us who are prepared to see the vision without fear. There are two obstacles to our achievement of that form of positive peace. The first was mentioned by my noble friend Lord Williams. I should like to emphasise the point, and I hope that the Minister will answer it when he replies. There are the arms manufacturing industries. They used to be called the merchants of death. Governments—not just ours—have supported them. There is an organisation known as the Defence Export Services Organisation
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which encourages the export of arms from this country. Those industries will inevitably resist the change from the climate of war to the climate of peace.
Secondly, there is what I spoke about in our debate of 16th May—the inevitable war defence psychosis with which we have all been brought up and by which we have all been affected, not just in this century but from the beginning of civilisation. It is difficult to get rid of that psychosis. There are signs today of more people ridding themselves of such a psychosis than ever before.
I challenge the noble Lord, Lord Pym. It is not NATO's victory which has produced the upheavals in Eastern Europe; it has been the people of Eastern Europe themselves who have overthrown the tyranny under which they lived, and who have overthrown it not to return to the assumption that life can be lived on our planet only on the basis of national confrontation and preparation for war. If anything has struck the minds of people of this generation it is that war today is suicide.
I was also disappointed by the reference of the noble Lord, Lord Pym, to the so-called peace dividend. That is the kernel of the opportunity that we have to build a positive peace. To give one example: if this country were to reduce its military expenditure to the average of that of other members of the European Community—say, from 5 per cent. of GDP to 3 per cent.—£8 billion would be released annually to be used for constructive purposes.
When considering the Defence Estimates and the future of this country's defence industry, we should be concentrating upon a defensive rather than an aggressive posture. We should forget the claims that we are still a global power. We are not. I agree with the Minister and fully endorse what he said in his opening speech about the valuable use to which British forces have been put in Namibia and other parts of southern Africa where they have been helping to train for the future. But that must be done through the United Nations. If we try to play a global part, and try to recreate the concept of imperial greatness, we shall not merely be destroying our opportunity but we shall be creating great dangers abroad.
Of course if we cut military forces and expenditure it will be necessary, as my noble friend Lord Williams correctly emphasised, to retrain and redeploy to avoid unemployment resulting from a reduction in arms manufacture and military personnel. That is essential. It should be planned now. We should know now what the Government are doing to transform trained military personnel so that they use their training for civilian purposes, and to transform the machines which are now machines for the production of destruction into machines which can help to provide for the needs of mankind.
Surely in today's world we cannot turn our backs upon the opportunity to use those resources constructively. Over the past two years we have debated for many hours in the House the needs of the environment and the threat that the destruction of the environment will lead to the destruction of the human

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race. Time after time we are told that the money is not available. Even the Americans say that they do not have the money, and that the burden is too large to help people in the developing countries to avoid destroying the environment in the way that the industrialised countries have done.
It is a positive contribution to peace to divert a large percentage of military expenditure to rectify the destruction of the environment that we have already begun. I wonder how many noble Lords have this week read the world development report of the World Bank. It is obscene that we in this country can talk complacently about where we shall find our new car, what new house we should look for, or say, as has so often been said, "Yes, I realise all that, but I have to look after my family. Charity begins at home".
The World Bank report this week tells us that over 1 billion people in the developing countries live on less than 60p. a day. Tens of millions of children die from treatable diseases including starvation. We know that the free health and medical facilities which many of the former colonial countries developed are now being destroyed simply through lack of resources. Unemployment is growing at a massive rate. Here are the crying needs for a positive peace for mankind, not just the privileged èlite of Europe.
The World Bank report states that 300 million people could be pulled out of poverty during this decade if policies were followed which would enable them to develop their own resources. But the interest on capital which comes to the West from the developing countries is greater than the totality of the loans and aid that we send to them.
What has happened to our profession when about 20 years ago we said that we would devote 0.7 per cent. of our GDP to help developing countries? There was supposed to be an economic boom in the second half of the 1980s. What happened to our help to people who are dying? Now we have the added competition of the needs of the people of Eastern Europe. Here is where the peace dividend can not only save lives through charity; it can also help to build a genuinely peaceful world. This is the opportunity which is open to us now if we will be positive. However it will not recur if it is rejected by the destructive and anachronistic mentality of those who think only in terms of national confrontation, military expenditure and arms manufacture.
5.52 p.m.
Lord Holderness: My Lords, I hope that I am not too late to add my congratulations to the two maiden speakers to whom we have had the pleasure of listening this afternoon. I was particularly glad to hear the speech of my noble friend Lord Inglewood. Although it makes me feel even more ancient than usual, it reminded me of the close working relationship which I used to enjoy with his father. I hope that we shall hear more from him and at greater length. I was just enjoying his speech when he sat down.
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I made a speech at the beginning of this Session expressing the hope which has been echoed by a number of noble Lords this afternoon. It was that the then recent startling changes in Eastern Europe would before long make possible some lightening of the burden of expenditure on armaments. I suggested that such a relief and reward had been richly earned by the vigilance of the NATO nations over the past 40 years. In my mind such a hope today remains undiminished. The recent accord among those nations strongly reinforces it.
However, the simultaneous realism of the alliance is a necessary discouragement of hasty conclusions or an unseemly rush to dismantle Western defences. As my noble friend Lord Inglewood said, I have always claimed that those defences were largely responsible for the dramatically changed world of the 1990s. We have just heard a speech from the noble Lord, Lord Hatch. From time to time he and I have found our views diverging but today I was encouraged by his view of the positive peace. I suggest to him that in order to achieve the positive peace, a vigorous collective effort among all nations is still necessary in the future. Many will suggest that we should lower our guard, but I pray that those counsels will not prevail.
I was encouraged by the words not only of my noble friend Lord Arran but also of the noble Lord, Lord Williams, who said in different words that a grave threat has been lessened but vast uncertainties remain. I distrust the judgment of any who confidently predict the world's immediate conversion to lasting peace and unshakeable stability in the closing years of this century. However great the change in the position of NATO, this defensive alliance still provides the best guarantee of the world's peace and collective security. Whatever the changes, NATO must continue to possess military strength. Without it the alliance would add nothing to the desire and hope for a greater security.
I have rarely taken part in debates on defence particularly in your Lordships' House because of the manifestly superior knowledge and greater military wisdom of many noble Lords. Today, marching close behind one field marshal and directly in front of another, my courage is even more shaken. It is only relieved by the fact that the field marshal behind is used to marching rather more closely than the field marshal in front.
My only excuse is that for many years I have enjoyed a close connection with and developed a vast admiration for the voluntary forces, especially the Territorial Army. It was a particularly laid back volunteer who produced the little song that some of us have sung at annual camps:
"I'm only a weekend soldier, I'm always home in time for tea".
Not only is it wildly inaccurate but it is a poor reflection of the desire of thousands of these volunteers to play an even more important part than they have in the past. I would like to be sure that the enthusiasm on their part is matched by the enthusiasm of Her Majesty's Government to make the fullest possible use of them.

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The first volume of the White Paper states that the voluntary reserves provide a major part of the defence capability of the United Kingdom. It goes on to emphasise the immense contribution of the Territorial Army. However the opportunity of that army to reach its full potential must remain in doubt without continued and energetic efforts by the Government to lessen the familiar obstacles to its maintenance and growth, to say nothing of what I would call the social contribution made by volunteers in this way. As I am sure my noble friend agrees, it remains very much in the Government's interests to do so because of the superb value for money that the volunteers offer.
Her Majesty's Government can rightly claim credit for seizing the opportunity in the 1980s of increasing the size of the Territorial Army. Indeed, 41 infantry battalions are no mean contribution to the Army's strength; that is over one-third for a relatively tiny cost. Those who now think that the possible or probable reduction in the size of the Regular Army will lead naturally to an increase in the size of the Territorial Army seem likely to be disappointed.
Even now the Territorial Army is unable to recruit to its present establishment. If recruiting is not easy, retention remains as difficult as it ever was. The Territorial Army is subject to a constant drain of staff. We know that such a drain is experienced by all kinds of voluntary organisations. There seems therefore little point in commanding officers expending a vast amount of time and effort in search of a recruiting figure that is much higher than recent experience suggests is the level that the system will find. I should have thought it was realistic and reasonably optimistic to continue to aim for a percentage figure of between 70 to 80 per cent. of the present establishment.
My next point hardly needs to be said. I am sure that my noble friend Lord Ridley will emphasise it, if no one else does. Employers are of vast importance in this connection. Mr. Tommy Macpherson and his committee have done splendid work in everyone's opinion in persuading employers of the importance of releasing volunteers. I hope he will be allowed to continue his work when his liaison committee reaches the end of its present term in 1993. However necessary, sacrifices are significant, and in many cases grievous for employers, especially small employers. We have often talked of incentives. I hope that Her Majesty's Government, either tonight or one day, can give us hope of a tax bonus or other inducement which would be a real reward for public spirited employers.
In the meantime, I find that the volunteers remain cheerful. If they ever looked downhearted I should begin to be really worried. The camps abroad to which the volunteers go from time to time are important both for recruiting and for morale. I hope that my noble friend will be able to tell us that some attractive alternative can be found if some of those camps have to be dispensed with.
My noble and gallant friend Lord Bramall—I hope that I may dare to call him that—touched on the subject of a moratorium. Short-term savings on really insignificant repairs may be necessary, but they are terribly difficult for ordinary soldiers to understand,
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particularly when a minor breakdown puts a soldier's vehicle off the road at an important time. But the main issue, which I am afraid will remain for some time, is uncertainty. I suspect that there is speculation in every mess throughout the country, whether it is an officers' mess, a sergeants' mess or a corporals' mess. There will be speculation about numbers, and doubts will be expressed about the future of the regimental system. However, above all, there will be a clouding of that clear vision which first called those volunteers into the drill halls.
Ever since the Second World War volunteers have thought that they could discern an enemy by lifting up their eyes and looking beyond the Harz mountains. We are not asking Her Majesty's Government tonight to produce a new enemy, or even to reply to all these uncertainties. But if they have not already begun to do so, we ask them to think clearly about the definition of a new role for the volunteers. We ask the Government to give a reason for the future existence of the volunteers which will continue to bring them into the drill halls and will keep them in the drill halls when they arrive there.
6.4 p.m.
Lord Carver: My Lords, I, too, wish to add my congratulations to the maiden speakers. Throughout her career the noble Baroness has made enormous contributions to the security of this country. It is valuable to receive her advice here. I have personal reasons for wishing to congratulate the noble Lord, Lord Inglewood. His father was not only a relative of mine by marriage, but also a war-time comrade and a personal friend over many years. He was always a valuable source of information to me on the Territorial Army. He was also much respected in this House, particularly on anything to do with internal security and the police. In the noble Lord, Lord Inglewood, we have a Member of the European Parliament. I can think of nothing more valuable to the House than to have someone who travels from either Strasbourg or Brussels to contribute to our debates.
I endorse almost everything that my noble and gallant friend Lord Bramall has said. I do not propose to cover the same ground myself. I strongly endorse his remarks on the way in which it is perfectly possible, in forming larger groupings, to preserve all the spirit and the traditions of the past while making the organisation concerned more viable for the future and therefore better for the present. The regiment of the noble and gallant Lord, the Royal Green Jackets, and the Light Division of which it forms part, are a shining example of that. However, I do not propose to discuss any part of the defence White Paper other than the sections on pages 17 and 18 entitled Defence and Security in a Changing World. All the rest has been overtaken by events, and indeed is being overtaken by the study of the Ministry of Defence entitled Options for Change.
Incidentally, I was disappointed to learn from the noble Earl, in answer to a question of mine the other day, that that study was an entirely in-house study within the Ministry of Defence. When, as Chief of the

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Defence Staff, I was involved in the 1974 defence review under the guidance of the then Defence Secretary, the noble Lord, Lord Mason of Barnsley, the body which conducted that review, all the way up to the Defence and Overseas Policy Committee of the Cabinet, was an interdepartmental one. It involved the Cabinet Office, the Foreign Office and the Treasury as well as the Ministry of Defence. That had the great advantage that many of the arguments and differences were resolved before they reached ministerial level. That reduced the danger that, after all the work involved, the result would be a head on clash between Secretaries of State in the Cabinet. That procedure had in fact been established by the preceding Conservative Administration under Mr. Heath when his Defence Secretary, the noble Lord, Lord Carrington, had been at loggerheads over defence expenditure with the Chancellor of the Exchequer, who is now the noble Lord, Lord Barber.
The future structure of our Armed Forces must depend to a large degree on what may evolve as the future security structure for Europe. That will depend on its political structure and development. That must be very uncertain until we can see far more clearly than we can today how things are going to develop within the Soviet Union. The noble Lord, Lord Williams of Elvel, should be careful as regards believing that the economic situation of the Soviet Union means that it could not wage war. I remind the noble Lord that a gentleman called Norman Angell wrote a book before the First World War in which he asserted that the economic situation made a long war impossible.
It is right therefore in that uncertainty for NATO and the Government to be cautious at this stage and to rely on existing structures and institutions. As I see it, those existing structures and institutions are primarily the European Community in the political and economic field and NATO in the military field. It is through those bodies, under the light shade of the umbrella of the Conference on Security and Co-operation in Europe, that the immediate problems must be handled, especially those arising out of the unification of Germany. At this stage it would be imprudent to make major changes in the structure of our own Armed Forces. Risks can be taken and economies made by cancellation or deferment of major equipment production programmes, and by accepting a degree of undermanning if recruiting lags. In the near future a radical reorganisation should be avoided.
However, we must look further ahead and begin to develop plans on the assumption that events in Europe will develop in such a way that the threat which NATO was established to meet will disappear; that is, the threat of the Soviet Union attempting to establish domination over Germany, and Western Europe generally, by force.
On that assumption what sort of security organisation should we need? In my view, nothing like NATO; not an integrated military structure providing a command organisation from the north of Norway to
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the Caucasus, dominated by the Americans, developing operational plans involving the use of nuclear weapons to counter a massive Soviet attack on Western Europe and the North Atlantic. So long as that threat existed we needed such an organisation, and it was right that we should accept American domination. However, in the longer term and the more optimistic scenario that I have posited, I suggest that that is neither appropriate nor acceptable. The recent NATO summit communiqué itself stated:
"As Europe changes, we must profoundly alter the way we think about defence".
It is ironic that the first paragraph of that communiqué stated:
"Europeans are determining their own destiny",
Yet it was clear that the initiative came overwhelmingly from the United States, in some collusion, perhaps, with Germany. I suggest that in the longer term we must escape from a situation in which the security needs of Europe are determined bilaterally between the United States and the Soviet Union.
What will those needs be? Reassurance and security against three potential threats. First, deriving from its sheer size and geographical position, the potential threat to its neighbours from the Soviet Union—or, if that breaks up, from the Ukraine, Byelorussia and Russia; secondly, the fear of a resurgence of German ambitions that all German-speaking peoples in Europe should be under one sovereignty; thirdly, and perhaps the most difficult to deal with, revival of all the ancient historical animosities that have plagued Europe down the centuries, the signs of so many of which are already evident today.
What form should a security organisation to meet those threats take? Where will it stand in the scale between, at one extreme, NATO today—designed to fight a war on a huge scale, with or without nuclear weapons, against an enemy with vast military resources—and, at the other extreme, something like a United Nations peace-keeping force? The answer will possibly be somewhere in between; perhaps national forces, depending primarily on reserves, like the Swiss, the Swedes and the Finns, contributing also to a standing European peace-keeping fire brigade, acting under the umbrella of a strengthened CSCE. If that were the pattern, should the USA and the Soviet Union contribute to such a European security fire brigade force? I suggest not, but that they should have a treaty relationship with it which would govern the circumstances in which either could maintain facilities for the deployment of their forces into Europe, west of the Soviet Union, at the request of any member of the European security organisation.
If something like that is what we should aim for, how should we approach it? Should we approach it in one step, from NATO and the Warsaw Pact as some people suggest, or in stages? I am inclined to favour the latter. One of the first priorities, which nobody has mentioned, is to involve the French armed forces directly. The French will never join a military structure dominated by the Americans, as NATO is with its two American supreme commanders.

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I suggest that the first step would be to try to arrange a marriage between that almost defunct old gentleman, the Western European Union, which after all preceded NATO, and the European Community which cannot sensibly in my opinion handle European political and economic affairs without taking into account security matters. As the European Economic Community develops its relations with the countries of Eastern and Central Europe it could also help to develop the future European security organisation under the umbrella of the CSCE. I know that I shall be told that there would be great political difficulties in that, but they would not be as great as those met and overcome in setting up the EC itself.
As that is done, if it is done, the standing forces of European NATO countries based in Western Europe could be transformed into truly European armed forces, national units being at a much lower level than any international corps at present being discussed. I hope that eventually those would form the European security fire brigade force of which I spoke, and that the North Atlantic alliance would by then have been transformed into the treaty relationship between the European security organisation and the United States and Canada, while the Warsaw Pact would have been transformed into a treaty relationship with the Soviet Union or its successors.
One of the principal political risks in that is that the United States might abandon its interest in supporting the security of Europe and that an organisation dominated by the United States would be replaced by one dominated by Germany. It follows from what I have said that I do not favour NATO being given a greater political role, because I believe that that would be a move in the wrong direction. The White Paper itself, on page 17, states that:
"Defence arrangements therefore cannot sensibly be made the leading agent of political change, the instrument through which Western nations express their best hopes and happiest aspirations".
If, and it is a very big "if", political developments in the Soviet Union make it appropriate to move in the direction I have indicated, the effect on our own forces would be radical. In previous ages when we withdrew our Army from the Continent it returned to its traditional role of defending the Empire. Apart from the Falklands and, for a few years, Hong Kong, that role will no longer exist. A major reduction in the size of the Regular Army and a greater reliance on reserves seems to be inevitable. I fully endorse the point of the noble Lord, Lord Holderness, about the problem of creating and maintaining those reserves if they are to be on a voluntary basis.
The effect on the Navy would not perhaps be so radical, but we should treat with caution attempts to justify major expeditionary forces by the idea that we need to defend our interests all over the world by military action. We must also bear in mind that the pattern of our sea-borne trade has changed fundamentally since 1945. The great majority of both exports and imports cross the Channel or the North Sea and not the great oceans—I believe that the figure is about 75 per cent.
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The effect on the Royal Air Force is less easy to judge. Much depends on what kind of security force is developed for Europe and what kind of air threat to this country is envisaged. For various reasons, partly technical, which I have explained previously, I have come round to the view that the Navy should reassume responsibility for all air operations in maritime warfare. If it was to do so, and if the regular forces of the Army and the rest of the Royal Air Force were to be significantly reduced in numbers, I doubt whether it would be either economic or efficient to retain them as two separate services with all the overheads and complications in command that that involves. I believe that a proper, objective study of that should be carried out.
I sympathise keenly with the Government in the dilemma with which they are faced. Men and women in the Armed Forces, as well as those who supply them with equipment, would like to know their future as certainly and as soon as possible. However, given the uncertainties that I have discussed, the Government would be wrong to commit themselves now to a radical future organisation based on the assumption that events would develop in the way we all hope. The danger is that, in the search for a peace dividend with which to buy themselves out of both their economic difficulties and the pit they have dug for themselves with the poll tax, they will make ad hoc reductions to the existing structure. That would result in the forces being inefficient, unsatisfactory to serve in and subject to constant uncertainty about further changes—in other words, they would suffer from planning blight. That could deal a fatal blow to the Armed Forces of which the nation is rightly so proud.
My advice is that the Government should plan for a radical, long-term structure on the basis of the type of suggestions that I have made, designing a series of intermediate steps at which progress towards that structure could be halted if events did not develop in the way we had hoped and if we found that we needed to preserve the capability to fight a classic type of major campaign.
Nuclear weapons, apart from their value as an existential threat to anyone attempting to engage in such a war, are, in my opinion, largely irrelevant to the issue. Negotiations to reduce their numbers and types to those required only to provide that threat should as far as possible be conducted separately. I wholeheartedly support the statement in the NATO summit communiqué:
"We seek the lowest and most stable level of nuclear forces needed to secure the prevention of war".
I also endorse the final sentence of the section of the defence White Paper which I have been discussing. It states:
"Provided that we do not rush or slip, but prepare the road wisely, we may during the coming decade and beyond find ourselves able to move forward a very long way".
If one is to move forward, one has to know which way to go. I have tried to suggest the direction in which that move might be made.
Viscount Ridley: My Lords, there is common agreement that we face the most fundamental

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upheaval in the structure of our forces probably since 1919. I am sure that all those involved, many of whose careers must now look rather bleak, are ready to be told what the future holds for them. But the greatest need must be to get the answers right; to take decisive decisions and make them work as well as possible.
Everyone realises the immense problems facing the Government, but I hope that we shall soon see some indication of what they require so that everyone can work constructively to that end. Prolonged uncertainty is very damaging and as much consultation as possible will be helpful.
In this context I wish to speak tonight, not for the first time, about the reserve forces. Their future place in the order of battle is bound to be very important, particularly in view of their relatively cheap cost; for example, out of the 1988–89 defence budget of £19 billion, the Territorial Army costs some £400 million, which is just under 3 per cent. of the total; yet it forms 40 per cent. of the Army at this time. To put it another way, a Territorial Army soldier costs about one-ninth of his Regular Army equivalent.
There is then an obvious danger; namely, that we shall rely too much on part-time forces. But a look at page 28, Volume 2, of the Estimates will show that the figure of about 90,000 volunteers for all the services which we have at the moment seems to be the ceiling beyond which we are unable to go. Even that figure may be too ambitious and we may well fall back in numbers quite quickly with the disappearance of the perceived threat from the Warsaw Pact. I believe that just as damaging is the recent cut of £5 million in the recruiting budget. It is already being reflected in the figures and will, I think, be counter-productive. I hope that the Government, at least until they know the future, will try to restore the cut and keep the momentum.
Another great change, I am sure, will be that the wartime role of a large part of the Territorial Army will be drastically changed and its part in the British Army of the Rhine will disappear. It is not something that everyone will regret. There was always a faint unreality in the assumption that they could get there in time in modern warfare, even if they did it so very well indeed in 1914 and 1939. Things have changed. The abandonment of this policy must in itself save a lot of money and effort, but we have to decide what to put in its place.
The volunteers of all the four services—in which I include the Marines—may well be able to reassume their original historic role of the militia which has gone on for hundreds of years in this country; that is to say, to be mobilised in times of national emergency, to provide a military presence when the Regular Army cannot do so, but not be expected to be fully trained for immediate warfare. They need to defend our shores against anything, provide guards of honour for visiting dignitaries and—dare I hope?—entertain the Lord Lieutenant to dinner from time to time. If that is to be done, perhaps we may be able to remake the historic links between our cities, counties and regiments which have been such a feature of our
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history. As the noble and gallant Lord, Lord Bramall, spoke at length and eloquently on the subject, I shall say no more than that I thoroughly endorse his remarks. There is a further possibility that some regimental names may face the chop. A battalion in the future may consist of one company of regular soldiers, one of reservists and one of the Territorial Army, perhaps not even wearing the same cap badge. Let us hope that where possible local sentiment will be consulted before any decision is taken.
A further possibility which I believe should be explored vigorously is the greater use of volunteers in our planning for emergencies in the future. Lockerbie springs to mind. Volunteers will be far more widespread throughout the country than the Army is now or ever will be; they know their home ground very well and can provide much skilled and disciplined manpower quickly. They have facilities for such things as catering, bedding, clothing, medical, transport and good wireless communication. They are quickly and relatively cheaply available. They could save lives and help the local services considerably. An example of that was the magnificent work done by the Third Battalion volunteers of the Royal Welch Fusiliers who did so well at the floods in Towyn earlier this year, in a situation in which, I understand, apart from one general and his staff there was no Regular Army at all in the whole of the Principality. This would give them a sense of purpose and mission which could help justify their sacrifice of weekends and evenings now that the terrorist and greenhouse effects can be seen to be a greater threat than the Red Army. Of course there will be problems of releasing men in employment for emergency work, and we must be careful not to invoke any more Peterloo situations.
There will also be a cost, and legislation may well be needed. Volunteers need to be built into the emergency planning process. I hope that the Government will seriously consider these suggestions when they come to look at the review. I remind noble Lords that in the United States, when Hurricane Hugo hit the Carolinas, no fewer than 4,000 national guardsmen were mobilised that night and played a very big part in saving lives the next day. It is a classic case of not beating a sword into a ploughshare but using a sword as a ploughshare. I hope that the national employers' liaison committee—about which the noble Lord, Lord Holderness, spoke so eloquently—can continue. It is bearing fruit and it would be a tragedy if it were to stop. It helps to save turnover and so may be very cost effective. As the noble Lord spoke so well on this subject, I shall say no more about it.
I should like to say a little about the cadet forces. I do not think that they have ever been mentioned in a debate on defence. Certainly they are seldom mentioned at all in the Defence Estimates. In a sense, they could regard themselves as at the bottom of the heap. Nonetheless they are the seed corn of our nation. They are run now by the Navy, the Marines, the Army and the Air Force. At the moment about 140,000 young people in the 14 to 18-year age bracket belong voluntarily to them. Their aim is by no means purely military, though many boys and some girls

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later join the forces. It seeks to provide some kind of a challenge and to promote good citizenship, often in the least attractive inner cities. The cadets have a fine record. Those dedicated people who look after them, very often in draughty and chilly wooden huts, make a significant contribution to combating juvenile problems. I hope that they can be fully supported. Any cuts in the very small cost of those cadet forces would destroy a fragile animal. Perhaps I may urge that they be exempt, if at all possible, in what may come.
We all fear that in making the necessary economies it will be argued by the Treasury that every single part of the defence empire must take its share of the cuts. That is the extension of the "one Army" concept. But it is not one Army when costs are considered. To enforce an equality of sacrifice policy on the volunteers will simply destroy all our carefully built structures since they were rebuilt after 1970—efforts to which this Government have given such genuine and massive support for the past 10 years or more.
There is no organisation that cannot tighten its belt a little, but to ask volunteers to do it too often merely succeeds in annoying them and saves derisory sums of money. To some extent, as the noble and gallant Lord, Lord Bramall, said, the current moratorium on things like ammunition and petrol is already having its effect. When this happens, volunteers simply walk out and do not return. Furthermore, one never even gets back the army boots with which they were issued when they joined. As regards volunteer reserves, we must decide what size of force is necessary, for what tasks, and then se., that it is properly equipped, paid properly and helped to do its job.
In conclusion, perhaps I may ask the Government, when they decide and make some Statement on the future of our forces, that the future of volunteers and cadets can, if at all possible, be included in that Statement.
6.30 p.m.
Lord Glenarthur: My Lords, I should like to deal with one fairly narrow subject which I hope will form part of the consideration now being given to the future shape Of the Armed Forces. It has been argued by some—and I tend to share the view—that difficult though it might be to predict the final outcome of events unfolding now in Europe, one factor seems pretty clear: we shall require efficient, well equipped and, above all, flexible forces for the future. They will be forces which can react to any threat in Europe or worldwide. Therefore instead of placing reliance so heavily on armour, tracked artillery and so on, much more suited to the European theatre, we should in future place more emphasis on airborne, airmobile and amphibious forces. It is to the airborne and airmobile elements that I should like to address my remarks this afternoon.
While the United States, the Germans, the French and the Soviets have excellent airmobile capability, we have sadly lacked it. Where we have it, unlike others, we split the responsibility between the Army and the Royal Air Force, which is not nearly as efficient as it
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might be. Yet we have an airmobile brigade—24 Brigade—which is not as airmobile as many claim it should be. At present its supporting helicopter squadron consists of 12 mixed Gazelle light helicopters and the rather larger Lynx helicopter. A further 22 Lynxes have been promised—I think by 1992—but even that only gives a lift capability of about one company at a time. That is for an entire airmobile brigade.
I understand that in theory the Royal Air Force Puma and Chinook helicopters—about 60 in all—would be available to fill the gap. But what of the myriad of other tasks which they might be called upon to perform? Would they in fact be available when it became necessary to deploy 24 Brigade under any circumstances in any part of the world?
I do not consider it an exaggeration to say that 24 Brigade's air mobility is at present nothing more than wishful thinking. What can be done about it? I suggest that there are three elements to a solution. The first would be confirmation of the orders for 25 Utility EH 101 helicopters. That is the much larger helicopter which is under development by Westland at the moment both for the Navy and indeed one hopes for a Utility version also. They were foreshadowed, not promised, by the then Secretary of State for Defence in 1987. That would be a solution only in part. Perhaps my noble friend can say what the status of the MoD's consideration of that order is when he winds up.
The second element is to allow the Army Air Corps Lynx helicopters to revert to the role for which they were originally designed many years ago; that is, utility work and transporting soldiers and their equipment to and around the battlefield. However, in order to achieve that we need to find an answer to the third element: how to provide helicopter-borne anti-armour weapons—the so-called attack helicopter, which has grown in importance over the years as technology has allowed and which stands to complement the traditional role of the tank.
I know that the Ministry of Defence is still considering the size and capability of a helicopter to meet that role. Should we buy the European A-129 anti-tank helicopter or the United States Apache? How should we arm either of them? Those are very difficult and expensive questions. However, it seems that at least one consideration raised by the Select Committee in another place fairly recently may have been met. It is that the need for a capability to defeat armour in direct combat in Northern Europe is much reduced.
I should like to suggest to my noble friend that if we can pursue that theme, the manning of those extra helicopters in that role could be made possible by a transition—phased over a number of years no doubt—by some of the existing cavalry regiments, perhaps even some of the Territorial Army's cavalry regiments referred to by the noble Viscount, Lord Ridley. Those regiments are already the anti-armour experts. It may be history but on the whole they made the transition from horses to armour pretty well before the last war, if not always in some cases very willingly. They even

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took to the air with considerable enthusiasm and skill when light helicopters were introduced to them in the 1960s. They could and they would do the same again in an enhanced role. Such a change might reduce the need for more or further amalgamation and disbandment. As my noble friend Lord Pym hinted, that is a continuing and indeed debilitating worry which understandably is having a direct impact on morale at present.
I hope that my noble friend will give some thought to this suggestion and will indicate so far as he can—I appreciate that he may not be able to go far when he winds up—where the MoD stands in its consideration of the future shape of the Armed Forces.
6.35 p.m.
Lord Jenkins of Putney: My Lords, in a previous contribution to this annual ceremony I used the text of a remarkable article in The Times by the noble Lord, Lord Chalfont for my sermon. The article was headed "Force de Frappe or French farce". It is understandable that the noble Lord, with his present responsibilities, may not be able to be here this evening. However, I informed him of my intention to make a further reference to this seminal piece that he wrote some time ago.
Arguing that the French decision to develop a nuclear striking force was triggered off by the British Government's earlier decision to manufacture a hydrogen bomb, the noble Lord, Lord Chalfont, in 1973 went on to perceive that the outcome was that in both countries,
"the dreadful logic of the nuclear arms race begins to take the place of rational thinking".
It is that dreadful logic which has caused the present Government to embark on Trident, for example. It may be that dreadful logic which has caused the Labour Party leadership to abandon the total and immediate nuclear disarmament to which it was previously committed in favour of hanging on to "nuclear nurse". The trouble with that policy is that now there is nothing worse. A nuclear war—"nuclear nurse"—could easily destroy all her children. It therefore seems to me that in the plan so interestingly outlined by the noble and gallant Lord, Lord Carver, there is no place for nuclear weapons. He suggested that they were irrelevant and should be put on one side for separate negotiation. I shall say another word about that before I sit down.
This year's Statement on the Defence Estimates makes it clear that in spite of the disappearance of a convincing and threatening enemy, the dreadful logic continues to hold sway over the Government. I quote, as did the noble Lord, Lord Mayhew, earlier, from the Statement:
"Reductions in US and Soviet strategic arsenals would have to go much further before we could even consider including the British deterrent in any future negotiations on strategic nuclear weapons".
There is the dreadful logic perceived by the noble Lord, Lord Chalfont, all those years ago in all its mad and blind consistency. It should be said that the
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Foreign Office seems to be rather less taken over by the dreadful logic than the Ministry of Defence and Downing Street. Both of those seats of influence and power seem entirely lost to rational thought on nuclear matters. Therefore, our hopes for survival should not be raised too much by the relative sanity of the FCO.
Nevertheless, attention should be drawn, for example, to the Foreign Office background brief on the Nuclear Proliferation Treaty which I have in my hand. It was issued in a revised form last month in preparation for the fourth review conference of the treaty due to take place in Geneva during August and September. The FCO briefing reminds us that the United States, the Soviet Union and this country share the special responsibility of having brought into being this most widely adhered to arms control treaty. Furthermore, in view of the recent ravings of Mr. Ridley, it is worth pointing out that both Germanies are parties to the treaty. However, France rejects the rationality which used to be its hallmark by refusing to join 58 other states and, together with China, remaining free to develop and spread the power of nuclear destruction to its inevitable end.
Incidentally, I believe that instead of holding loony meetings at Chequers, exchanging outdated saloon bar clichés about national character, the Prime Minister would do well to be more introspective and ask other experts to what extent her own thinking has been replaced by the dreadful logic foreseen by the noble Lord, Lord Chalfont, as the inevitable accompaniment of nuclear weaponry.
The Foreign Office briefing confirms that the main aims of the Nuclear Proliferation Treaty are:
"the prevention of proliferation of nuclear weapons and other nuclear explosive devices",
and,
"the cessation of the nuclear arms race, nuclear disarmament and a treaty on general and complete disarmament".
That may be a long-term aim but it exists. I repeat, "nuclear disarmament". That is our aim and the Foreign Office confirms it. However, the Ministry of Defence and Downing Street do not even pay lip service to nuclear disarmament. Neither did the noble Earl, Lord Arran, but I hope that in reply he will have better news. As was pointed out by the noble and gallant Lord, Lord Carver, it may be that the statement is out of date and that further government consideration may have taken place. Perhaps in the light of developments since the publication of the statement they will have better news.
We are approaching the fourth review of the treaty which, as the FCO briefing points out, will be the last conference before the question of the extinction of the treaty is addressed in 1995. It may be too much to say that the fate of mankind will be decided in these coming months but certainly it will be influenced for good or ill as a result of the review conference. Therefore, it is tragic that our Government and the United States have hitherto seemed determined to veto a total ban on nuclear testing. That is the essential preliminary to nuclear disarmament.

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I hope that we shall hear from the noble Earl that if, as is likely, the Soviet Union has stated that it is prepared and ready to have a total ban on nuclear testing the answer will be more accommodating than it has been in the past. If the noble Earl could go that far it would be most helpful. I shall leave that point and not rub it in as I had intended. That really is the dreadful logic of the noble Lord, Lord Chalfont, taken to its mad conclusion. The International Medical Campaign Against Nuclear Weapons pleads for us not to veto a comprehensive test ban treaty. All the indications are that it will renew the plea and I hope that it will be heard.
There are still some people who believe that a nuclear holocaust cannot be avoided and that we are too far into the nuclear scene to get out. Among them is the Colombian Nobel prize-winner, Gabriel Garcia Marquez. He wrote his gloomy article some time ago. Just as I hope that the Government are moving in the direction of ensuring that the so-called continual extension and improvement of nuclear weapons is unnecessary, so it will be that those of us who in the past saw no way out of a nuclear holocaust will see more hope in the present situation. Perhaps there already exists some movement in both areas of consideration.
Some of us still believe that nuclear disarmament remains the first priority. Above all else it is what matters most. We are seeking the removal of what Marquez sees as a Damoclean sword suspended above mankind and still threatening a horrible end to all our hopes. I believe that the situation is more hopeful and I hope that the Government also see it as such. Just as those of us who saw a sticky end to mankind may begin to feel that we are now wrong, I hope that the Government too will say, "Perhaps we were wrong and perhaps we do not need Trident and the great development of nuclear weapons at this time. We are prepared to think again about that".
6.48 p.m.
Baroness Strange: My Lords, I apologise to your Lordships for being unable to attend the whole of the debate. I am deeply sorry. I am also sorry that I missed two excellent maiden speeches made by my noble friends Lady Park and Lord Inglewood. I look forward to reading them tomorrow in Hansard. I hesitated to speak at all, especially in such company, surrounded by Prime Ministers, Foreign Secretaries, admirals and field-marshals—at least I was surrounded by field-marshals. However, having been granted the extraordinary privilege of visiting Her Majesty's forces in Cyprus, Ulster, Belize and the Falklands during the past year I felt it only right that I should say something on the matter.
I wise to make only three points and I shall be brief. First, we were impressed by the fact that in four different areas with differing problems high morale existed among all our forces. In Cyprus and Ulster we visited mainly Army and Royal Air Force units. In Belize we were lucky enough to land on the West Indian guardship. When I first read in our schedule that we were to land on WIGS and go to a cocktail party in WIGS I thought that I had not brought the
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right clothes. We found HMS "Alacrity" between assisting the United States in catching a haul of drug runners and helping after Hurricane Hugo the week before. In the Falklands we were able to land on HMS "Leeds Castle" in the Falkland Sound; so we met a selection of all three forces. Not only was high morale evident everywhere but so also was the high calibre and professionalism of the officers and men and women. On HMS "Norfolk", a new Type 23 frigate in the channel, we met two of the first sea-going WRNS. In Cyprus the control tower at Akrotiri was run by a woman, and on all our visits we were entertained by women Army officers. Some of the men in our party did not always recognise them later when they appeared in evening dress.
My second point is that many of the recommendations for improving conditions which we made on our return were promptly taken up and implemented by Her Majesty's Government.
My third point concerns NATO. When I go out I usually take an umbrella, not because I want it to rain, not because I expect it to rain, and if I am all tidy I certainly do not. Weather forecasts can be dicey things, like opinion polls, and if it does rain I do not want to get wet.
The amazing revolution, voltes-faces, in the past year in Europe have been marvellous, challenging and exciting. We all want them to work. We want a Europe composed of friendly, co-operating democracies. We all want to be friends with the Soviet Union. Indeed, we are fairly certain that we are friends with her while Gorbachev is in charge. However, in the last year we have seen how apparently immutable things can change. We have had some very nice surprises, but there is the opposite kind too, so to carry an umbrella while wearing a summer dress is not so silly as it might seem.
Of course I am not directly comparing NATO to an umbrella, although the noble and gallant Lord, Lord Carver, did mention the word. They have similar functions, however, in that while they both protect us from sudden squalls, on a good day an umbrella can double as a sunshade. It is important that it is there—in case. For 40 years NATO has kept peace and security in Europe. Not a scattered shower has penetrated our umbrella. Now the sun has come out and NATO can convert to becoming a sunshade. Its functions are different and the chances of rain are receding. Mistral, the Provençal poet, wrote:
"Gai lézard, rejouie du soleil, Demain it pleura peutêtre".
We must not forget that Russian arms continue to be manufactured at the same rate as before and that, though older pieces are being taken out of circulation, new and better ones are replacing them. Supposing that there should be a change to some less friendly leader; supposing that the new leaders wished to distract attention from the economic situation inside the Soviet Union, where would they look? North leads to Siberia and the North Pole; east leads to China with its 1,000 million inhabitants; south involves the Muslims, and there are already sad memories of Afghanistan. The only direction left is west.

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So we are enjoying the sunshine but if we have our umbrella, still with us, still in place, we need have no fears of submersion in future rainstorms. It is very important for us all, for Europe and the world, that NATO should continue.
6.53 p.m.
Lord Hill-Norton: My Lords, I agree with other noble Lords who have said that the pace of change recently has been such that the statement on the estimates which we are debating today is no longer very relevant, even though it was published but a few months ago. I do not intend to spend much time on the text, although there are three matters in it to which I wish to refer.
After the London Declaration, clearly the management of defence involves other much more important matters, to which I shall turn in a moment. I have frequently been critical about the Government's treatment of, feelings and general attitude to, the merchant fleet. The few words devoted to it in the statement have removed none of my anxieties. I am not alone in disagreeing with the claim on page 30 that the merchant fleet was adequate for our defence requirements. On the contrary, it is in dreadful trouble. The Parliamentary Maritime Group has published figures showing that at the time the statement was written we were actually 350 hulls short out of a requirement of 1,300. That is quite apart from the appalling decline from 36 million to 15 million deadweight tonnes and from 80,000 to 21,000 officers and ratings over the last decade. Nobody could congratulate the Government on that. The General Council of British Shipping has estimated that this has cost the Government and the country not less than £140 million in every year.
There are two other matters, referred to in paragraph 312, which are apparently still undecided. The first concerns the future of the assault ships. It is said that this has been under study for five years. I have spoken about it in your Lordships' House in every one of those five years. When the Minister replies I hope that he will be able to tell us what the future will be. The second critical matter concerns the production of the new Merlin EH101 helicopter, referred to by the noble Lord, Lord Glenarthur. Both are clearly required, and in the changed circumstances, with greater reliance to be placed on reinforcement, both will have even higher importance than they had before.
I turn to the present and to the future, although I shall focus on a nearer term than my noble and gallant friend Lord Carver, who looked further ahead than I wish to do today. I might add that I agree with just about everything he said. We all know that there is a fundamental defence review in progress, and it would be criminally negligent if there were not. It is absurd to use any other word to describe the process, whether it be resource-led or policy-led. I am at a loss to understand why the Government and Ministers are so afraid of using the proper word, creating a totally artificial distinction such as the one I have just
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mentioned. I hope that it is being conducted in the certainty that—to use the words in the statement of the Secretary for Defence—
"Our approach to defence must be based on being able to respond to a range of possible outcomes, not just the one we hope to see".
That is the acid test by which the results of the review must and will be judged.
The point of departure for any formulation of defence policy worthy of the name must be a careful evaluation of all the potential threats, and following that the creation of a military structure that will deter them or, if that fails, defeat them. Too often in our history politicians and academics especially have started at the wrong end, by choosing some entirely arbitrary financial ceiling and then inviting the professionals to suggest how much Navy, Army and Air Force they can buy with it. I pray that that mistake, which has cost us dear in the last few hundred years, will not be repeated now.
I should like to refer to some background considerations to a realistic assessment of the threat, and mention a few of them. The first is that capability must always weigh more heavily than intention. That can change overnight. We can all accept without difficulty today that there is no longer any real possibility of a surprise attack on NATO in Europe; but from the point of view of a UK defence policy, as was said in the other place recently, today NATO is the only game in town. It has never been a purely military alliance, as the noble Lord, Lord Williams, seemed to suppose, it has always had an equal political dimension. Its most crucial role in the months to come is to manage the changes that are happening in Europe now that it is being formally declared that the Cold War is over.
Perhaps surprisingly, that is also the Soviets' view. They have declared their interest in preserving the Alliance, including its nuclear weapons, and have recognised that Western solidarity—and probably only Western solidarity—could help to prevent unmanageable chaos developing in Europe.
I hope that Western reconsideration of the future of NATO will demand that France and Spain rejoin and join respectively the integrated military structure so long as that may be required. Europe and the Atlantic cannot possibly or properly be defended without those two countries. The expectations of the United States Government that Europe will gets its defence act together at long last must be at the front of all our minds during the exercise.
The political effects of any reductions—and there will be reductions—that we make in our European presence will have to weigh heavily in the military scales if our already slender political influence in Europe is not to decline further. There are awesome domestic, economic and social consequences to the quite large reductions in our military posture which seem certain. I shall say more about them in a moment.
Finally, there is the need to carry public opinion with all the proposals to be made. I have heard no other noble Lord refer to that point today. If public

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support is to be forthcoming—and without it no policy will run—we need above all a clear articulation of our interests and a convincing presentation of our defence policy to safeguard those interests. Governments have not been notably successful at that ever since the last war.
The reality of the present circumstances in Europe, in spite of a great deal of media hype, is that the ending of the Cold War has released political forces which have been frozen for 40 years. Nationalism, ethnic strife and border disputes will come to the surface, as my noble and gallant friend Lord Carver said. All those dire possibilities must be seen against the background of large, heavily armed forces, including nuclear arms, with the control of them weakened and suspect, still in place East of the former Iron Curtain. I quote again from page 17 of the statement:
"the Soviet Union remains an enormous military power, with a massive nuclear armoury … with a long indoctrination of hostility to Western interests and values, a recent history of much international trouble-making",
Of this the noble Baroness, Lady Park, reminded us. It continues:
"defence planners must … approach cautiously … political shifts can happen … much faster than defence provision can be changed, run down or re-built".
I hope that the same defence planners will also bear in mind that hardly any significant reductions have yet been made in the Soviet order of battle, nor in the rates of production of the most advanced weapons systems for all three branches of the Red Army, despite the promises publicly made. Nor has there been any perceived reduction in Soviet support for their surrogates in Afghanistan, Angola and Eritrea. If the promised reductions are put in hand, as we must all hope, they cannot be completed in under five years and they will be attended by the most intractable problems of employment and housing, some of which, on a lesser scale, we shall share. Nor would it be at all prudent to base any of our plans on the certainty that the old guard, and particularly the Red Army, will accept the pace of change proposed by Mr. Gorbachev.
The threats—dangers perhaps—to British interests outside the NATO area cannot be forgotten. The Minister reminded us of that. We have been involved, almost invariably unexpectedly, in countless armed conflicts outside the NATO area since 1945. It is more than likely that that will happen in the future. Moreover, given the proliferation of advanced weapons systems—nuclear, biological and chemical—among third world countries with highly unstable governments, it may well be that the chance of major conflicts with which the West—effectively the NATO nations—may have to deal together has much increased.
As I said earlier, having evaluated the potential threats that face us in the future, defence planners must decide on the appropriate force structure to meet them. It is often forgotten, especially by amateurs, that that exercise is sharply constrained by history. The planners have not just arrived from Mars with a clean sheet of paper. They inherit the forces that we have today and the weapons in the development
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pipeline. It would be foolish for me to suggest here what our order of battle might be like in five years' time, but it is certainly possible to make some educated guesses about shape and size. Perhaps I may repeat here the Defence Secretary's wise words that forces can neither be run down quickly nor built up quickly. It is quite certain that modern weapons are now so complex that they cannot be improvised, nor can the old-fashioned notion of a levée en masse to man them any longer be considered a viable option.
Perhaps I may deal first with nuclear weapons in order to get rid of them quickly. I have no personal doubt that, for as far ahead as can be foreseen, the UK should maintain an independent, strategic nuclear deterrent. I am glad to hear that the party of the noble Lord, Lord Mayhew, agrees with that principle. All the expert advice, with which I agree, is that to maintain one Polaris or Trident boat on station, you must have a force of four. I hope that press reports that the Government are considering only a force of three will prove to be quite untrue. I agree with those who advocate giving up battlefield and short-range nuclear weapons. However, a distinction must be drawn between them and nuclear depth bombs for the Royal Air Force and the Royal Navy, which will be required for some time yet.
In considering the reductions that can safely be put in hand now—although, if they are to be managed without catastrophic damage to our domestic, social, industrial and economic interests, they will take several years—it is of the highest importance to keep in mind the viability of each of the services and of the defence industries. There is for each service and for each arm or branch in that service a size below which it ceases to be viable. Overheads, such as the provision of training, weapons and equipment, become quite out of scale to the sharp end if a force is too small. That applies with equal force to infantry and armour, signals and engineers for the Army; for fighter, ground attack, reconnaissance, ECM, maritime, strike and transport aircraft for the RAF; for destroyers/frigates and carriers, for submarines and mine counter-measures, for amphibious ships and the RFA for the Royal Navy. None of those could be quickly rebuilt in the face of a new danger, as we found to our cost in 1938. It would be infinitely more difficult and take much longer today.
Those considerations make it likely that the shape of our Armed Forces will stay very much as it is today, certainly for about the next 10 years. Size will undoubtedly be much reduced and it seems probable that the major part of the reductions will be borne by the Army. In that connection, I hope that Ministers will not be carried away by the politically attractive idea of multinational formations. Certainly, below corps level, that would be a military nightmare. It will not surprise noble Lords to hear me say that I do not believe it would be wise to reduce the fleet by anything like the same proportion. I was delighted to hear my noble and gallant friend Lord Carver say much the same thing. I would guess that the minimum viable number for the destroyer/frigate fleet is 40, and that

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would be cutting it fine. It is not difficult to support a much bigger number by totting up the jobs to be done, the roulement and training needs.
I should like to take the bait dangled before me regarding the Royal Navy taking over maritime air operations. However, I am just old enough to remember the uproar that occurred before the Inskip award was finally made, so I will not do so today.
The process of making big reductions will require careful management, as the noble Lord, Lord Williams, said most clearly. The problems of demobilisation, both in the services and defence related industries, will be very awkward and expensive. If the proposal in the London Declaration to put greater reliance on reinforcing smaller front-line forces is adopted, men—especially those brought home from Germany with families—will want barracks and houses, training areas, schools, hospitals and jobs; all in this country. There are around 2 million people employed in the defence related industries. Both the industries and those people will require conversion and re-training. It will be very difficult and in some circumstances impossible.
Those considerations alone make it certain that the process will be a long one, measured in years rather than months. For those reasons it is idle to suppose that there will be some instant peace dividend. My personal guess is that nothing very useful financially will come to hand for at least five years. When it does it will not suddenly pay for more hospitals, schools or better railways, badly as all those are required. As usual, it will be quietly pocketed by the Treasury.
All those difficulties can and certainly must be overcome. A golden opportunity has been presented by the current defence review. I am sure that other noble Lords share my hope that it really will be policy-led and not resource-led; we shall not get another chance in our lifetimes.
7.12 p.m.
Earl Fortescue: My Lords, I shall be brief, particularly as most of what I have to say has already been said. This debate certainly comes at a time following great change in Europe. I was surprised that some noble Lords, particularly earlier in the debate, reproached the Government for not foreseeing these changes and for not having made savings in our defence expenditure already. Other noble Lords, including myself, believe that it would be a great mistake to take any major steps even now in the way of disarming unilaterally.
One is given to understand that the production of Russian tanks, Russian aircraft and Russian submarines continues at the same rate as it has for the past several years. I do not understand why it does not follow that if Russian equipment is not being increased it must at least be being improved and modernised.
One can only guess as to what Soviet policy will be over the next five or 10 years. One can only guess as to whether Mr. Gorbachev will still be running the country or whether he will be replaced by someone
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whose policies are very different. For those reasons I suggest that we keep up a high level of defence and urge our allies to do likewise as a sound form of insurance. I hope it will not be considered facetious if I say that one does not reduce the insurance on one's house or its contents simply because police statistics indicate a temporary drop in the number of burglaries and thefts.
Apart from our commitment to NATO, we have interests all over the world which we must be prepared to protect. A careful review of our overall defence is badly needed. I ask that those who conduct this review consider the following points among the many others made. First, as many of our interests are located a long way from home, are our navy and merchant fleets adequate for the task of protecting them? I suggest that both fleets need to be increased. I understand from the speech of the noble and gallant Lord, Lord Hill-Norton, that he agrees. I am glad that he reinforces what I, as a layman on naval matters, believe.
Secondly, I ask whether we need a new British battle tank. Apart from the German plain, where can one contemplate their use, even if we had the necessary shipping capacity to carry them many hundreds of miles? If we are to have a new battle tank I suggest that we buy one from our allies or make their tanks under licence. As a nation we may have invented the first tank, but frankly we are not good at designing or building them. Over the years our tanks have almost always had inferior armour and an inferior gun compared with those belonging to our enemies, either actual or potential. Also, the mechanical reliability of our tanks leave a lot to be desired, even today.
Thirdly, are not modern aircraft such as the Tornado and its crew far too valuable to be used to drop free-fall bombs? I suggest that a stand-off bomb be developed as a matter of urgency. I hope that my terminology is correct. I am speaking of a bomb which is released when the aircraft is at a considerable and, I hope, safe distance from the target, something like a mini air-launched cruise missile.
On most of the other occasions when I spoke in defence debates in your Lordships' House, I made chemical warfare my main theme. Ten or 12 years ago chemical weapons were rarely discussed and few people appreciated their significance. I have nothing new to add to what I have already said about those horrible weapons, but I am glad that their production and use are now frequently discussed at international disarmament talks.
Finally, I intended to make a point which I now rather regret. It is that if the Government decide to take the easy way of saving money by reducing the size of the army I hope that they will not repeat the past error of disbanding some regiments and amalgamating others. Other noble Lords, including two noble and gallant Lords and my noble friend Lord Ridley—who know more than I about the extent of the savings that we must make—would not agree with me on that point. However, I believe that the regimental

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spirit is of the greatest importance and very valuable. It should be affected as little as possible by such amalgamations or disbandments.
7.20 p m.
Lord Lyell: My Lords, I first add my congratulations to the two outstanding maiden speakers we have heard. Indeed, I follow one or two of the witty remarks of the noble Lord, Lord Inglewood. I believe he said that he was in a town not far from Stettin. Who could have imagined that my noble friend would be making a speech and carrying out political work in what we used to regard as East Germany; or, as the Germans said themselves d'ruben—over there.
A year ago, perhaps less, when my right honourable friend the Secretary of State was fresh in his appointment as Secretary of State for Defence, I recall that he used some wire cutters to cut away a piece of barbed wire from the border fence between Austria and Hungary. It was symbolic at the time—the possibility of a crack or a chink in what, for all my life, had been regarded as the Iron Curtain. What do we have today? We have virtual freedom of movement. Fifteen days ago the deutschmark became the legal currency—indeed, the only currency—in East Germany. Could that have been foreseen by any of us when we last discussed the defence estimates in this House? I very much doubt it. Indeed, there is always that great motto, "You never know what to expect". We carry on that motto from year to year as we discuss what we might need to do to defend ourselves, this nation and our freedom.
This evening I intend to touch on three aspects, all of which are contained in Chapter 2 of Volume I of the estimates. My first point concerns what is classified as the defence of the United Kingdom. In no way does this arise from my proximity to the Royal Air Force at Leuchars which gives me an excellent display of low flying at all hours of the day and night. Indeed, I have come to admire the pilots and I am extremely curious to see how much lower the planes can fly. Sadly, my noble friends Lord Glenarthur and Lord Trefgarne are not in the Chamber. It was only 10 years ago that the RAF staged a mock low-level attack on my house from a height of just over the maximum of 250 feet. I shall not regale your Lordships with the fate of one of my noble friends. Certainly, I have come to admire the professionalism of the Royal Air Force at Leuchars.
During the past 12 months, together with several other noble Lords, I have been fortunate to have attended one or two defence displays. I have come to admire and learn a great deal about the working of Type 42 destroyers and two separate Type 22 frigates. There is no question in my mind but that the Royal Navy has exceptional and modern equipment in its first class ships. The Royal Navy also has first class and outstanding personnel from captains right down to the lowest ratings, all of whom display considerable professionalism and ability.
I was fortunate enough to attend an exercise in the NATO area less than one month ago. There are references to some realistic exercises on page 19, paragraph 202, of the estimates. Some exercises are
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realistic in the extreme. It would be an experience for your Lordships to feel one of the more powerful mines exploding in the water one kilometre away. Unlike my noble friend Lord Mottistone I have not been under fire, but I suggest to your Lordships that the shock wave striking the hull of a Type 42 at that distance is not dissimilar to the reception that my noble friend on the Front Bench receives on occasions during Questions. There was also a singularly realistic air attack on the Type 42. Together with several noble Lords I was able to see the excellent response by every member of the crew and, indeed, every member of the course.
I make one plea to my noble friend, and if he cannot reply tonight perhaps he will take the point on board. I refer to the Royal Naval Reserves, referred to on page 28 of Volume II of the estimates. The figures show that the total strength of the RNR is between 31,000 and 32,000. I understand that the RNR's main duties in the current scenario are in such areas as mine hunting and clearing and mine laying. Perhaps those duties could be widened to provide slightly greater integration into such areas as fishery protection or the happy acronym of STANA VFORCHAN. That stands for Standing Naval Forces in the Channel.
It has been suggested to me that if one or two units of the RNR could be integrated into fishery protection or the forces in the Channel there would be an enormous advantage not just for the Royal Navy but also to the RNR by preparing it for its putative action role in time of emergency. I come back to the watchword of this debate and every other debate on defence estimates—you never know. Your Lordships will remember that it was just over eight years ago on a Saturday morning that we had the debate in this House after the Falkland Islands had been invaded. We can never know.
There is one further point that I should like to have considered. I refer to paragraph 203 of Volume I. After 20 years Northern Ireland still looms large in any defence discussion. Your Lordships may remember that 1968 saw the student uprisings in Paris and the incredible demonstrations in Grosvenor Square against the Vietnam war. Who could have imagined that minor student marches in Northern Ireland would have given rise to an emergency which, 20 years later, is still with us?
There are 19 major units in Northern Ireland. Those are the cold terms in which it is classified in the defence estimates. There are six resident battalions, four roulement battalions, and nine battalions of the Ulster Defence Regiment. It is to the nine battalions of the UDR that I devote two minutes of your Lordships' time. I hope noble Lords will agree that adequate equipment and training, and above all training areas and opportunities, should be available and continue to be available to those battalions.
Every time we hear on the radio, read in the newspaper, or perhaps see something on television, of an incident in Northern Ireland I remember the friends and families of 6,200 men and women who are resident in the Province who have yet another worry. I also think of the families of all the members of the

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Royal Ulster Constabulary, let alone all the families of the Army, Royal Navy and Royal Air Force who are serving in and around Northern Ireland. However, it is to the UDR and its members that I direct my remarks this evening. Members of the UDR carry out their duties day and night, week after week, month after month and, as has been proved, year after year amid horrifying risks. They are at risk for the whole of their lives. There has been a rise in indiscriminate terrorism. When it strikes them or their families it is regarded as just another incident. Paragraph 205 of the estimates gives the cold fact that,
"the security forces … pay a price in the fight against terrorism".
They do.
In the past year 11 regular soldiers have lost their lives in Northern Ireland and two members of the Ulster Defence Regiment. Let us not forget that on this side of the water, 80 miles from where we stand, 11 Royal Marine bandsmen were murdered last summer. One staff sergeant was particularly seriously injured. Let us never forget that the personnel and families of the defence forces are targets but so also are any of us. Any member of the public is a target of this manifestation of 20th century terrorism. We do not forget Guildford, Woolwich, Birmingham, the La Mon restaurant in Northern Ireland or the Drop In Well in Ballykelly. We certainly do not forget Roermond in Holland where two Australian gentlemen were done to death just because they had a British car with British number plates. That is the horrific example of what I stressed at the outset: you never know what emergency will arise and what might be needed. I believe that your Lordships will agree that the men and women of the Ulster Defence Regiment bear a heavier burden of risk in their duties and daily lives. I salute them tonight.
There is one further point that I wish to raise briefly in connection with paragraph 215. Will my noble friend be able to take on board the points that are raised concerning housing? They are of particular interest to members of the Armed Forces who have spoken to me and, I believe, other Members of your Lordships' House when when we have paid visits overseas. Last autumn various members of the infantry regiments in Germany complained to me about the efficacy of the SA80 rifle. Various points were made and we were told that the problems had been overcome. It may not surprise your Lordships or my noble friend that last Friday I was on the ranges at Bisley. One of the sharpshooters, a most distinguished marksman in the Royal Marines, was halted during the competition for the Methuen Cup because—guess what?—the return spring on the trigger of his SA80 had broken. According to the rules of the competition all repairs had to take place on the range.
There was a particularly competent Royal Marines' armourer on the range who managed to effect a repair. In Scottish terms, I "hae me doots". I hope that return springs are available and that the SA80 will have 100 per cent. availability at all times especially in view of
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the immense risks that are taken by members of the Armed Forces and, above all, the Royal Marines, throughout the world.
We have had an opportunity today to examine, discuss and consider the fascinating facts, figures and details of the Defence Estimates. We have been able to study details of all the equipment and the hardware that is spelt out in Volumes 1 and 2. But let us never forget that none of this equipment or hardware will work without the effort, skills and talents of the men and women of the Army, the Royal Navy and the Royal Air Force. I also remember the Royal Marines. To them, their families and their relatives, we give our best wishes and our thanks tonight and every night.
7.34 p.m.
Lord Gladwyn: My Lords, what we are eventually to spend on defence surely depends on the agreements with the Soviet Union on arms limitation which we hope to arrive at during the next year or so. Success in these negotiations has obviously now been practically assured by the spectacular accord arrived at in the Caucasus yesterday by President Kohl and Mr. Gorbachev. However, there are a few resultant conclusions which we shall probably have to accept in the fairly near future and they are as follows.
In the first place, the flexible response as a strategic conception is dead and its death should now be officially confirmed. It never did make much sense. But the idea that we could ever check a now almost inconceivable Soviet advance into Western Europe by employing short-range nuclear weapons which would inevitably kill large numbers of Germans, Czechs or Poles, is an obvious absurdity.
It follows that all such weapons should shortly be withdrawn from Germany in agreement with the Russians. Such agreement should not be made dependent on anything else. It should take place as soon as possible. It looks as though, from Herr Kohl's agreement with President Gorbachev, that this will be the wish of the German people after the coming European elections. It is ultimately for the Germans to decide.
Neither do the Germans want to have on their territory the new stand-off bomb known as TASM—the tactical air-to-surface missile—which should now be preferably completely abandoned. For, once used, this weapon would certainly involve the elimination of Berlin or Cologne. If it is not to be based on Germany, it could be based on the United Kingdom. But then it would be virtually indistinguishable from the British nuclear deterrent which, along with the French Force de Frappe, we must clearly retain as long as the Russians have a strategic nuclear capability. That is the case even if (and more especially if) the Americans ever withdraw their own nuclear cover from Europe.
But what can such deterrents actually deter? They can only deter the use, or the threatened use, of nuclear weapons by Russia or any other power, against our two countries. That is all they can do. I suggest that it follows that no first use of nuclear weapons, and not their possible use as a last resort,

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should indeed now be the declared policy of all the nuclear powers provided that they are assured—as the Americans, the Russians, the French and ourselves are assured—that their own nuclear forces are immune from a first strike by another nuclear power. In that case, all can be reduced without any loss of security.
But would that mean, as is so often alleged, that Europe would be at the mercy of a Russian conventional attack? It would not. It must be obvious that Western Europe, including a united Germany still a member of NATO, with some 350 million people, must be capable of organising a credible conventional defence—perhaps, as the noble and gallant Lord, Lord Carver, suggested, based essentially on the WEU—even against a Soviet Union of about 250 million people run by rebellious generals. That is all the more so if, as can be assumed, the Americans stay in such circumstances. Schemes for a forward defence are in any case quite unnecessary.
Finally, the possible invasion of Western Europe by Russian hordes is now only a Cold War nightmare. It should no longer figure prominently in Western plans for European defence. The Soviet Union may collapse giving rise to grave problems, but not to an invasion of Western Europe. Happily, and more probably, some more or less democratic Russian confederation may emerge which, perhaps protected from any conceivable attack by the West by a cordon of so-called neutral states, extending from Riga to Constanza with no foreign troops on their territory, could well find itself co-operating with the West in containing some Pan-Islamic bloc that might even comprise the present Soviet Central Asian republics.
With such developments on the horizon, should the American army remain in Europe? For so long as the Russians have troops in Eastern Germany, they should of course remain, though no doubt in greatly reduced numbers. But if as the result of a German settlement the Russians, as now seems almost certain, all go back in a few years' time to Russia, there is no longer any logical reason for the Americans to stay. A token force is all that would be required giving expression to a continuing North Atlantic alliance, the flanks of which—the Finnmark and Turkey—still being protected, we should hope, by American naval power.
I suggest that the explicit and willing acceptance by the West of these possible results of the Kohl-Gorbachev agreement would do more than most things to bring about those arms limitations agreements which we all want. It is no doubt only when this happens that we can establish a long term post-Cold War settlement that is likely to endure. Frankly, I doubt whether any such settlement can be based uniquely on the Conference on Security and Co-operation of 35 sovereign states, which, though it will certainly assist, in co-operation with the Council of Europe, in dealing with the various matters listed in the recent NATO communiqué, is, by its nature, not qualified to deal with defence.
As I see it, the end of the Cold War should result in major reductions in the armaments, both nuclear and conventional, of the major powers, relations between
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whom will be such as to make war between themselves unthinkable. These powers, or rather power centres, may well be, by the end of the century, North America, Western Europe, some Russian confederation (separated from the latter by a band of neutral states), China, and presumably Japan. They will all have at least one major common interest, other than maintaining peace in Eastern Europe; namely, to contain some Middle East explosion, perhaps involving the Indian sub-continent. They will also need some centre for settling any differences as between themselves.
Where could this be but New York? The charter is a completely workable document given only that agreement between the permanent members of the Security Council is possible. Under our thesis, it will not only be possible but likely. So let the United Nations, wrecked by Stalin, now come into its own! Admittedly, it is unlikely to be restructured. For instance, it will be some time before Western Europe is represented by one person in the Security Council, if it ever is. But there is no reason why a common policy should not be pursued there in agreement with the Germans. I therefore urge the Government, besides being prepared for the likelihood of future developments in the field of defence, not to neglect the United Nations in their long-term plans for the preservation of peace.
7.45 p.m.
Lord Ironside: My Lords, anybody who has read this year's Statement might on first thoughts feel very bullish about the state of affairs, with cash plans firmly in place for the next three years, but the bearishness of the Secretary of State's introduction casts a shadow over the whole Statement, or most of it anyway. But it is still opportune to have this debate because the Government will be able to listen to what we have to say at this moment in this Chamber.
The collapse of the Soviet empire and what that will lead to in terms of defining the threat and our new defence posture has created uncertainties in all our minds which will take time to resolve. I have read the debates in the other place on the Army, Navy and Air Force and the annual two-day debate on the Statement. I think that they reflect the wide support there is for our Armed Forces—and that is good. But what I find disturbing is that in some quarters not enough value is placed on ensuring that they are properly armed so that they can continue deterring. The ability to deter, above all else, is what prevents war. I welcome the retention by NATO of the nuclear deterrent in the last resort.
The potential enemy, or what is left of him, may no longer have the same smile on his face but he still has the same muscle in his arm and his factories are still churning out as many sophisticated platforms and weaponry which are a match for any of ours used directly, or by others in support of alien causes—in other words, through Soviet sales and cast-offs to other countries. So while the case for force level reductions can be anticipated and pre-emptive action taken, I very much support the Secretary of State's

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resolve to sustain modern and well equipped forces which are adequate for meeting our security needs for the future within and without NATO.
Speaking from the point of view of someone with an active interest to declare, I hope that the House will bear with me if I draw attention to some of the factors which I think are relevant to getting our new defence posture right. The White Paper covers the threat and the forces' make-up. The rest of it—about one-third or some 20 pages—is devoted to procurement and management of what some would say amounts to the enemy within. I shall talk about this because of the rapid swing from quantity to quality made more noticeable by the wholesale scrapping of out-of-date defence equipment by the Soviets. If it was said that we were once in an arms race, we are definitely not any longer; we are now in a quality race. In fact quality has become an obsession.
For some years now users have been making severe criticisms of equipment reliability, the cost of support services and project overruns. The Estimates only touch on these matters under the cover of saying that a director of reliability is now in place and that the final steps of the new management strategy will be introduced by April 1991, to be followed by the next steps initiatives to deliver services more efficiently. Perhaps those are to some extent last year's arguments, but quite frankly I do not think enough emphasis is being put on them to show that the Ministry of Defence really means to get its house in order. Value for money is not any longer just a policy goal; it has become a vital necessity.
Underlying the Estimates are the recent reports, a variety of them from the Comptroller and Auditor General and the Select Committee on Defence of another place. Some of them are not very complimentary. They are about beefing up reliability and sharpening up support costs and about the shortcomings of what looks like a new winning class of warship—the Type 23 frigate. If I read correctly, HMS "Norfolk" goes into her sea trials without the EH 101 Merlin helicopter, without the planned command and control system and with a vertical launch Sea Wolf system which has suffered phase skipping and reduced effectiveness.
Moreover, this is not the only system which has suffered in that way. As the most recent report goes on to say, it would be the last straw if the new Type 23 Duke class frigates cannot adequately be supported at sea by the new Fort Victoria Class AOR or one-shot supply ships which are an integral part of the new anti-submarine warfare support system. In other words, can my noble friend assure the House that AOR ordering is keeping in step with frigate ordering and the start fabrication times to ensure that the 22s and the 23s have what was described at the AOR launching as their floating supermarket support? Can he remove all doubts by saying when AOR 3 and 4 will be ordered?
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There are many lessons to be learnt from these reports and they appear to be rather expensive ones. Nevertheless, I hope that they are lessons which will be quickly learnt.
In the march towards quality the ongoing relationships between the controllerates and industry are, I think, very good; but it would be naive to think that equipment expenditure will remain at the present high levels. Therefore, I wonder whether industry will be so ready to come forward and share development risks if it foresees that projects will not go on to completion. The MoD may still remain the biggest customer but in lesser volume terms. I also wonder whether industry will be so ready to compete without greater incentives from the customer and much larger up-front spending by him. In the case of the EH 101 Merlin helicopter, Westland sees a major civil market spin-off. But what about air-independent propulsion systems for submarines, where the Royal Navy may have a future need but where there is at present no civil outlet beckoning? I believe that if developments go forward in this field the MoD will have to bear many of the risks and spend much money getting such developments under way.
The growth in foreign sourcing may help to contain costs, but the argument that it is healthier for British firms to be exposed to more open competition needs qualifying. Contracts bulletins from IEPG countries provide more opportunity for competitive bidding for UK companies. But what is true for UK companies is equally true for foreign companies. As I understand it, the new management strategy intends to bring defence support services into the competition ring. I recognise that there is a great deal further to go on developing better support services where as much as £1 billion per annum is to be saved; but in opening up the market across the frontiers we must remember that in the IEPG framework there are no offset constraints in play as is the case with the USA.
The Anglo-French agreement has some constraints but the playing field is still far from level. In my view, there is a need for constraint on the part of the top level budget holders and perhaps also on the part of high level budget holders working with the fledgling defence works services in the support services field. For example, will the C-in-C Naval Home Command be allowed to invite bids from French Companies to maintain cranes in the Portsmouth naval base? Further, after 1992, will there be anything to prevent the new Commander British Forces in Gibraltar inviting tenders from Spanish firms? Incidentally, the Bulletin des Marchés says that Spain is the odd man out who does not yet publish a contracts bulletin.
As a member of the all-party defence study group, I visited Gibraltar at the end of June and was able to see defence installations there at first hand. I was also able to hear directly about the effects of force level reductions. When the 3rd Royal Green Jackets are pulled out next year, the Gibraltar Regiment, born out of the Gibraltar Defence Force set up in 1939, will step into their shoes. If we are to be faced with a regimental squeeze in the British Army, and this looks highly likely—indeed, the noble and gallant Lord, Lord

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Bramall, said that he was convinced that this would happen and suggested ways in which it could happen—I am happy to see that the Gibraltar Regiment will be the only regiment in the British Army expanding its size and role and looking forward to a bright future with a regular company. Incidentally, the event will be marked by a fantasia of fireworks at the military tattoo in Gibraltar from 27th to 29th September. That is what people will see if they visit Gibraltar at that time. I wish its members well when it becomes the resident battalion on the Rock, which remains a vitally important point in our security net.
While I was in Gibraltar I visited HMS "Chatham", which is the latest and the last of the Type 22 frigates—a stretch 22, with 280 crew. If the Type 23 can be crewed with 140 men, I think that that is a good sign that the Royal Navy is beating the demographic trough. I hope that this class will turn out to be a winner and that the future frigate now being planned will also follow on successfully as the progeny of the Dukes—perhaps it may even be named as the "Fitz" class.
Whatever the uncertainties and whatever the outcome of Options far Change, I hope that the new management strategy will take effect rapidly.
7.55 p.m.
Lord Rea: My Lords, noble Lords will be pleased to know that as I have listened to the debate I have gradually scratched out more and more of my speech as my points have been progressively and better made by other speakers. It has been most interesting but not unexpected to hear so many noble Lords and some noble Baronesses tell us not to be lulled into a sense of false security, as does the review, by events in the USSR and in Eastern Europe.
It is very difficult to readjust to the loss of one's enemy. Indeed, a real certainty in life has gone. At least two of the very high ranking noble and gallant Lords who spoke in the debate have realised that the situation is no longer the same. In fact, the noble and gallant Lord, Lord Carver, said that the threat for which NATO was created has disappeared. As the noble Lord, Lord Gladwyn, said, the USSR has just agreed with Germany to withdraw its forces in three or four years. Even now, as the knowledgeable military men among us have pointed out, it would be very difficult for the Soviet Union to fight a war with its supply runs as precarious as they are at present, running as they do across Poland and Czechoslovakia.
Of course there are other reasons why the Government may be reluctant to move as fast as many of us feel they should in cutting military expenditure. These have been very well described by the noble Lord, Lord Williams, and also by the noble and gallant Lords who have spoken. It is clear that a proportion of savings from a reduced defence budget must go to re-equipping and helping the defence related industries to diversify and towards retraining and resettling members of the armed forces. I very much hope that the Government will not adopt the measure of encouraging an increase in arms exports as a means of cushioning the effect of reduced
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government expenditure on defence. In this connection I think that we should take an example from Czechoslovakia, which, despite a sizeable arms export trade up until now and with a great need to gain hard currency, has declared its aim to phase out arms exports.
An important reason for getting on with this job quickly is that we have for too long overspent on arms in relation to our gross national product. Until this year at least, we have spent more on arms than any country in NATO except the United States, but we rank only fifth in GNP. Let us hope that the long drawn out anomaly in which we have shouldered more than our share will end. That heavy expenditure must be recognised as a major contribution to our post-war economic ills. In yesterday's Guardian Will Hutton, its economic editor said:
"In the British case there is little doubt that had defence expenditure been lower as a proportion of gross domestic product the economic story of the last 30 years would have been different".
There is no doubt that sooner or later defence expenditure must drop drastically and the so-called peace dividend will be with us (although, as the noble and gallant Lord, Lord Hill-Norton, said, we must be careful that it is not immediately swallowed up by the Treasury and used for purposes that cannot be traced). As I implied earlier, the first step must be to use some of the former defence budget to reintegrate the industrial and human resources which at present are being tied up unproductively in defence.
At the same time, there will be claims for the released resources from every side. Everyone has his or her favourite list of worthy recipients. I believe, like my noble friend Lord Hatch, that the developing world of the South should take first place. Those resources should be used on measures to phase out external debt as quickly as possible so that those countries can re-enter the world market on fair terms, to the lasting benefit of their populations. Well-chosen aid programmes should be expanded. We might reach the magic UN target of 0.7 per cent. of our GNP. At present it runs at about 0.3 per cent.
As a member of the Parliamentary Population and Development Group, I suggest that that aid should be devoted to health and family planning projects. It has been suggested that if every woman who wished to control her fertility could be supplied with modern contraceptives fertility would be reduced by 28 per cent. at a cost of £5 billion. That might result in the world population being 1 billion or 2 billion lower by the time it stabilises at the end of the next century. That is a sum which this country alone could achieve through a 30 per cent. cut in defence expenditure. The United States could provide that sum by a 3 per cent. cut. The target is easily achievable and would help towards preventing the environmental disaster which will occur if we do not ensure that our population levels off at as low a level as possible.
Finally, I should like to turn to nuclear weapons. Compared to their destructive power they are of course relatively cost-efficient. I am sorry that the Government intend to continue relying upon that

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weapon of mass destruction. As my friend Lord Jenkins pointed out, there is a real need for the nuclear weapon states to move much faster towards a reduction of nuclear weapons so as to make the nuclear non-proliferation treaty a reality. Too many states, as the defence review points out, now have intermediate range missile capacity.
It is in all our interests that those countries should be discouraged from developing nuclear weapons. That will be easier if the nuclear non-proliferation treaty is seen to be a going concern at the next review which takes place later this year. The nuclear non-proliferation treaty will be much more credible if the nuclear weapon states are seen, as one of the articles in the original protocol states, to be making strenuous efforts towards reducing their arms. The first step could well be, as my noble friend Lord Jenkins said, the drawing up and signing of a comprehensive nuclear test ban treaty. The Soviet Union has offered that, and has already demonstrated its serious intent by its unilateral ban which lasted 15 months two years ago.
Verification problems have now been overcome. Verification will become easier now that there is a freeing up of and easier access to the former Iron Curtain countries. We should get on with that treaty so that, if we cannot eliminate it, we can work towards eliminating Gabriel Garcia Marquez's "Sword of Damocles" which has hung over us for 45 years.
8.5 p.m.
Lord Mottistone: My Lords, the noble Lord, Lord Rea, said that some of us might find it difficult to adjust to the loss of an enemy. I believe that the problem is that some of us are adjusting too quickly to the loss of an obvious enemy. I thank my noble friend the Minister for a clear exposition of the Government's current thinking on defence with which I broadly agree. I hope that they will stick to it.
Times like this are special. As on other occasions in the past, some noble Lords such as the noble Lords, Lord Hatch and Lord Rea, will be tempted to say increasingly in the coming months and years that there is no longer a need for a strong defence capability. "Let us economise. Let the forces gradually waste away to a minimum". Something similar happened after the Napoleonic wars, and 40 or so years later we were threatened by Napoleon III. Happily, we then had Palmerston. I cannot see Palmerston appearing from the Benches opposite. He counteracted strongly afloat and ashore, and built a successful deterrent. Things are different now. Ships, weapons and fortresses could then be built quickly and the country was the most prosperous in the world. Today it takes 10 or more years to develop a new weapons system, as several noble Lords have said. In the past 40 years we have also learnt of the incalculable value of the credible deterrent to prevent war or the threat of war. That vital truth must be the cornerstone of our present thinking.
The noble Lord, Lord Hatch, said that we have no enemies now; but without a deterrent, we could easily
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acquire some enemies, as we have in the past. We are not as relatively prosperous as before, but we cannot afford—if we are to maintain the present peace for the foreseeable future—to let our armed forces waste away. That was said by the three noble and gallant Lords from the Cross-Benches who spoke with great expertise. They gave good reasons for their belief. I shall touch on that point briefly.
Our forces must be kept at peak efficiency, updated as necessary, in order to continue to provide a credible deterrent. Of course we hope that NATO will continue, modified as necessary over the years, for the foreseeable future. We have heard a great deal this evening about how NATO sees its future which on the whole is encouraging. However, NATO must continue in its present form, modified but little, until we are certain that the Soviet forces have diminished to a defensive size only. We must be certain that all parts of the Soviet empire have settled down to a stable, democratic, free trading state. My noble friend Lord Ironside said something similar.
Although other noble Lords believe it may be sooner, I guess that it may well take 10 years before we can be assured of stability and a decrease in the enormous strength of the Soviets. We must also be assured that at some time the Soviet armed forces—like many other armed forces in the world—will not say, "Stop! We can't bear this any more, we must take over". They would then present the threat which everyone hopes will never again arise. We must be sure of that.
However, what is to happen thereafter? Who can tell? History has taught us that all guesses as to the fate of nations are wrong. Let us look at the facts. It seems certain that we shall continue to need a strategic nuclear deterrent for the foreseeable future. If we no longer need it to provide a diversion deterrent against the Soviets in NATO in the next century, we shall almost certainly need it to deter new nuclear armed countries in the Middle East and elsewhere. I was delighted to hear the Minister give an indication that he too thought that that was a possibility.
My noble friend considered, as I do, that another certainty is the need always to have forces of all arms to deter others from threatening these islands. In addition, we shall always need naval forces to deter threats to British shipping. I entirely agreed with what the noble and gallant Lord, Lord Hill-Norton, said about the disaster to British shipping over the past years. Much though I support the Government, they have been singularly blind to what has happened to the merchant navy recently. Now that we have it, it must be able to do its job. The Armilla patrol in the Persian Gulf has been mentioned as an example.
We shall also need naval forces, including an amphibious capability, and soldiers, to deter threats to overseas possessions and communities as well as to countries outside the NATO area with which we have treaty obligations. By the year 2000, most of these will be in the North and South Atlantic although they will be outside easy range of this country. We must not

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forget, for example, Pitcairn Island at the far end of the Pacific, even if the Navy has never seemed keen on defending it and its people for historical reasons.
There is a clear need for a defence capability of roughly the present shape and size until the end of the century. Thereafter, there will be an obligation as well as a need to maintain a deterrent which must always be credible in the pattern of the time. Our grandchildren will suffer if we do not hand on to them the ability and strategic understanding to deter threats of conflict.
I am fully confident that the present Government understand all this. However, I am concerned that the ever-glowing demands for social welfare—and I am one who contributes currently to some of those demands—will serve to distort the vision of future governments and their advisers. It may persuade them that the deterrent is an old hat idea no longer needed. From some of the speeches I have heard from the opposite Benches, I hope that those noble Lords will not provide a future government for a long time to come, at least until they have learnt these essential truths.
The solution to this conundrum about how to share out the cash can only be provided by our industry and services being increasingly competitive in the world market. Every effort to help them do so must be made by the government of the day, as is being made by this Government.
In conclusion, at the forefront of our vision must be that a firm, even if relatively expensive, shield can nearly always deter the sword. That must be the ultimate priority. To maintain that shield, we not only require resolution and vision by governments, clearly understood by the public, but also an appreciation by the officers, the men and the women of our defence forces that they are truly needed for now and always. On those people ultimately depends the peace of the world.
8.15 p.m.
Lord Graham of Edmonton: My Lords, as we have come to expect, our defence debates provide a constant reminder that in your Lordships' House are gathered noble Lords representing a quite unique repository of talent and experience in every field and never more so than in the field of defence. Those like myself who have attended debates in recent years know that we have our regular performers. Their contributions enliven and illuminate our debates, as they have done today. Noble Lords always speak wisely and I do not undervalue any of them.
Today we welcome two newcomers to our defence debates, the noble Baroness, Lady Park, and the noble Lord, Lord Inglewood. I say to the former, "Good morning", and hope that I shall not be misunderstood as apparently she was when she was taught that phrase in Polish some years ago. I am glad to have had the opportunity from this Front Bench to say how delighted we have been not only with her performance today but with our perception from her regular attendance that she will be an active participant in our debates. She told the House of her experiences in
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Russia, North Vietnam and Mongolia, which has whetted my appetite to know more about her. She demonstrated to me a grasp not only of defence but also of the political realities which must be understood if one is to make a good defence spokesman.
I was also pleased to hear the noble Lord, Lord Inglewood. As he told us, he brings much experience to us through having campaigned for the Chancellor from the "Kohl" face. We thoroughly enjoyed what he had to say and look forward from our Benches to hearing both newcomers soon and often.
Much of my speech will be about our responsibilities for the future. That future will be less preoccupied with defence expenditure than with peacetime expenditure. First, however, I wish to take up some points on speeches by other noble Lords. I remind the House that about four hours ago my noble friend Lord Williams drew a parallel between the break-up of the Ottoman Empire, the reasons for its break-up and what happened subsequently with what is happening before our eyes: the trauma and turmoil inside and on the edge of Russia. He was quite right to point out that this is not merely a break-up of a business; it is interwoven with ethnic, nationalist and traditional undertones.
We shall do ourselves a service today if, besides debating the defence of the realm, we recognise that defence has almost moved into a new dimension. Defence is not merely a matter of guns, aeroplanes or tanks, and never was. It has always been a military science. In the past five years we have learnt to appreciate that events are changing the face of our defence capability rather than that being changed by a mere reassessment of our needs. My noble friend Lord Williams of Elvel did us a service in reminding us of areas of the world which are troublesome. He drew attention to the militancy of Islam and to Northern Ireland. He touched, in almost a throw-away line, on the enormous consequences of neglecting what may happen in China. He reminded the House that we must work on a number of assumptions, and that those assumptions must be taken seriously.
First of all, we must try to imagine the final shape of the Russian empire. We must then decide what we have to do as a result of that. My noble friend reminded us of the political, economic and military instabilities that exist. He set the scene very well and his speech was thought provoking. My noble friend Lord Williams followed the Minister, who served us well and sensibly today. His speech contained no bombast or bravado. It represented a straightforward and sober assessment of the political realities that we are facing. He said that the map of Europe has been redrawn. I suggest that it has been redrawn persistently over the past five years. We cannot be certain that that redrawing has finished even yet. We must take that fact into account. The Minister said that the Warsaw Pact is no longer a credible force today.
The noble Lord, Lord Pym, made an astounding speech. He said that the military threat had not diminished in any way. We on this side of the House acknowledge that we should not make dramatic

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changes. The noble Lord, Lord Mottistone, talked about a 10-year period. We recognise that we should not drop our guard or be caught unprepared. We shall not move swiftly as regards any changes. However, the noble Lord, Lord Pym, and some other speakers suggested that in effect nothing has changed; in other words, the threat that has forced us to spend billions of pounds on defence has not diminished in any way.
I believe that was a careless phrase. We acknowledge that there is a threat, but we believe that it has changed and that it has diminished considerably in comparison with former times. The noble Lord, Lord Pym, did us a service by reminding us of our interdependence in defence with the United States. He made great play of the value of our alliance. I shall develop that point further in a few moments.
The noble and gallant Lord, Lord Hill-Norton, made an impressive speech. I hope the Minister will be able to say something positive about one of the points that the noble and gallant Lord made concerning the unprepared state of our merchant fleet. The noble and gallant Lord will reflect with pride and relief on the fact that six or seven years ago our merchant fleet saved us from considerable embarrassment, if not from a worse fate. I hope the Minister will tell us why the Government have not seen fit to ensure an adequate future for the merchant fleet. That may involve the hated intervention or subsidy processes. However, our merchant fleet is in a sad state, and it must be maintained by any means necessary. The Minister will not do us a service if he says that that matter is not the Government's responsibility.
In my view the speech of my noble friend Lord Hatch was well worth listening to. He said that when we look back on the years 1988 to 1990 we shall regard them as a watershed as regards the reshaping of the fortunes of this country, Europe and the world. We must recognise that the world has changed and that the global environmental responsibilities which we have taken on—the Government to their credit have taken on those responsibilities—must be paid for in one way or another. We should acknowledge that they have created a peace dividend which can be respent in other ways.
The noble and gallant Lord, Lord Carver, put forward some interesting thoughts on new structures that we need to look at in the light of changed circumstances. I intend to read the speech of the noble and gallant Lord with care as I believe it merits that.
Tonight speakers have understandably concentrated upon the dramatic changes that have taken place in the political as well as the security aspects of world events. We on the Labour Benches do not apologise for being as much concerned with the future as with the past. My noble friend Lord Williams reminded us how the economy at the time of the First World War was allowed to drift into a state of chaos as the world was unprepared for that war. After the Second World War, the transition from wartime to peacetime conditions was managed very well, not least due to the trojan work of Ernest Bevin. We want to hear the Minister tell us that the Government have a strategy
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for changing the shape and the product of the defence industry. We do not expect him to give us precise details.
Over the past two years I have asked the Minister half a dozen times what the Government are doing as regards the defence industry. The Minister has said that the Government do not wish to interfere in any way and that the matter is best left to the market. We on this side of the House do not think that that state of affairs is good enough. I believe my noble friend Lord Williams talked about 90,000 people being involved in the defence industry. Those people have served the nation well. They are not asking for handouts. They merely want to know in what form the defence industry is to continue. What about the people who are involved in that industry? The phrase "changing swords into ploughshares" has been used half a dozen times. The Government have a responsibility to tell us in what form the defence industry is to continue.
We on this side of the House think that this matter should not be left to market forces or even to suggestions from the Ministry. If we get into government, we shall ensure that we are involved in a positive way in the future of the defence industry. We should like to see the establishment of a defence diversification agency. That body would have the responsibility of assisting workers, communities and companies that were affected by changes in British defence policy. The agency would offer expert technical and marketing advice, channel recommendations on grants and financial aid, help in civil research and development and assist companies to tender for public contracts. Such an agency would be part of the Ministry of Defence. We do not wish to lower our guard in any way and we do not wish to leave this nation bereft of a proper and adequate defensive system. We are merely saying that it would be senseless to engage in producing weapons of war on a grand scale when the threat to this country has diminished and will continue to diminish.
No one political party in Britain can claim, or has the right to assert, that it is more patriotic or a better defender of the realm than any other. We do not make that claim and we would reject any such claim made by others. We in the Labour Party are intent on so managing the affairs of our nation that its security from attack is not in doubt. To do that we accept that in a swiftly changing world we have to be prepared to forge alliances and cement them with all nations and in every way. We shall protect our people from the horrors of modern warfare, but we pledge that we shall spend as much money and energy in preparing for the peace as have been spent on a readiness for war.
We have great respect for the Minister and his colleagues regarding the enormous burden that they carry in their day-to-day supervision of the defence of the nation. We do not envy them that burden. However, we say that if the steady progress towards disarmament is maintained it will be to the credit of all

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governments, including the present one, and to the next one, which we happen to believe will be a Labour Government.
8.30 p m.
The Earl of Arran: My Lords, perhaps at this stage I may speak to the other Motion standing in my name on the Order Paper? The Army, Air Force and Naval Discipline Acts (Continuation) Order, which was laid before this House on 5th June, will continue the three Service discipline Acts in force for a further year. As your Lordships will be aware, it is a long-established practice for the Services' disciplinary arrangements to be fully reviewed every five years through consideration of an Armed Forces Bill and for the statutory framework to be renewed annually in the intervening years. The last such Bill was in 1986, so your Lordships can expect to have a relatively early opportunity to consider Service disciplinary procedures in depth.
This has been an extremely good debate, consisting of strong and deeply held views, some controversial, others more conciliatory and measured. It has been a debate noted for two very fine maiden speeches by my noble friends Lord Inglewood and Lady Park of Monmouth.
Lord Graham of Edmonton: My Lords, will the noble Earl allow me to intervene? I am slightly confused about procedure? When will it be in order for noble Lords on this side of the House to comment on the discipline order? Is a separate Motion to be put?
The Earl of Arran: Yes, my Lords.
I believe it to be a mark of the particular significance of defence at this time that my noble friends decided to speak in this debate for the first time in your Lordships' House. We hope and trust that their views will he made known with increasing frequency in the future.
It is no surprise that so many of the thoughtful contributions to today's debate should have focused on the changes in Eastern Europe and the Soviet Union and the response to those changes by us in the West. All noble Lords have lived for the greater part of their lives with the Cold War. Many have played important roles as military men or as politicians in guiding the policies of our country and the alliance as we sought to provide a defence capability adequate to meet Warsaw Pact aggression should it manifest itself. The task we face now is the more difficult for being unfamiliar—to usher out the vestiges of the Cold War while maintaining the collective security that has guaranteed our freedom; to bring the countries of the East back into the international community as full members; and to reduce military forces while not putting our security at risk. That was a point which was brought out frequently and strongly on all sides of the House.
I should now like to turn to some of the specific points raised during the debate. Your Lordships will be aware of my inability, due to lack of time, to answer all of the questions that have been raised. I shall
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answer as many as I can as quickly as I can and on those questions which I have not answered I shall write to noble Lords.
First, I shall take the points raised by the noble Lord, Lord Williams of Elvel. He asked whether there would be coherence of policy following the options announcement. I can assure him that there will be a completely coherent defence policy. That is why an announcement cannot and must not be rushed. The options for change study is complex and important and, as I have already said, deserves careful consideration since the future size and structure of our Armed Forces will evolve from the study. The cuts recently announced are not directly related to work on the options for change study, although the picture emerging from the study has been taken into account wherever possible. The difficult decisions have to be made in determining how to deal with a large overspend for this year of some £600 million.
Lord Williams of Elvel: My Lords, before the noble Earl continues perhaps I may ask him whether he accepts the point made by the noble and gallant Lord, Lord Hill-Norton, that this is in fact a defence review. If it is a defence review why do the Government not say so?
The Earl of Arran: My Lords, I dispute the point made by the noble and gallant Lord, Lord Hill-Norton, that it is a defence review. As I have frequently said in your Lordships' House, it is a study of options for changes in policy in the light of the warming of the situation in Eastern Europe; that is what is driving us in that direction and not a need to find more money.
The third point raised by the noble Lord, Lord Williams of Elvel, which was also mentioned by the noble Lord, Lord Graham, concerned defence contractors. This is where the Government part company with the Opposition. The Government believe in allowing management in industry the freedom to use its commercial judgment in deciding what market to operate in. The Government do not intend to direct industry into any particular market. That is a matter for the commercial judgment of the companies involved. When the options for change study has been completed we shall inform industry and welcome its views. At the moment, however, it is too early to say what the implications for industry will be.
The noble Lord, Lord Mayhew, asked whether there was a future for NATO and whether there was a need for the alliance. The noble Lord correctly recognised that the Conference on Security and Co-operation in Europe is no substitute for NATO. However, he also proposed the development of the Western European Union into a defence community parallel to the EC. The WEU is certainly an admirable organisation, and that was a point made by the noble and gallant Lord, Lord Carver. It is a useful forum for debate at a time of great change and has scored some notable successes in the field of practical defence co-operation—minesweeping in the Gulf, for example. NATO's success has been founded in large measure on the North Atlantic connection. We are

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certain that continued security and stability can be guaranteed in Europe only by the maintenance of that connection. We therefore see a role for NATO not only into a transitional period but for the foreseeable future.
My noble friend Lady Park of Monmouth, who, as I said, made an extremely interesting and thoughtful maiden speech, is quite right in saying that the Soviet Union, even after the reductions in conventional forces envisaged in CFE, will remain a formidable military power. We are also aware that many in the Soviet armed forces are less than content with President Gorbachev's reform programme. Those are persuasive arguments in favour of a continued role for NATO as a guarantor of peace and stability in Europe. No one would deny, however, that there are more grounds for optimism now than there have been for many years. NATO will play its role in seeking to fulfil that optimism.
The noble and gallant Lord, Lord Bramall, made a typically robust speech. There were some points with which I tended to agree and others with which I did not agree. I can say to the noble and gallant Lord that it is too early to say anything about the future number and size of regiments. I am sure that he will understand that point. I can, however, give him an assurance that the regimental system will be retained since it preserves that fine and valuable regimental esprit de corps.
The noble and gallant Lord raised two points concerning housing and pay. I do not agree that our recent record on pay and housing has not been good. Perhaps I may dwell for a short time on both of those points. Since 1979 pay has been increased in line with the recommendations of the Armed Forces Pay Review Body, albeit with occasional staging as in the current year. We believe that the independence of the review body and our record in implementing its recommendations provide service personnel with the best possible assurance that their pay will continue to be determined fairly and will remain competitive.
With regard to service housing issues, I say very firmly that we continue to look always positively and imaginatively at a range of potential solutions to the problems of home ownership and housing for service personnel. A number of recent initiatives have been taken designed to assist both the existing home owner and the prospective house purchaser currently living in service accommodation. For instance, advances of pay for Navy personnel to assist with house purchase have been more than doubled this year. Allowances to help home owners who are required to move house on posting have been extended to all personnel aged 25 and over. Other regulations have been changed to make it easier for longer serving married personnel in the Army and the RAF to maintain a stable family home while living unaccompanied in the mess.
A joint MOD-Housing Corporation group has been established to examine a range of options involving housing associations in the provision of
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housing for service personnel, including those leaving the services. These initiatives will augment longer established schemes.
However, we are not complacent. We recognise that considerable concern is felt by service personnel and their families and the damage that this can do to our efforts to improve the retention of experienced and expensively trained personnel. Therefore we are continuing to look for ways in which to help them reconcile their aspirations towards home ownership with the high degree of mobility that the services require.
If I may say so, on this first occasion my noble friend Lord Inglewood made a most reflective and positive speech, demonstrating considerable knowledge of defence with strong but nevertheless non-controversial views. The noble Lord's experience in Germany is heartening. The historic agreement on German membership of NATO reached by Chancellor Kohl and President Gorbachev will no doubt be welcomed by him as it is welcomed by us all. For the transitional period during which Soviet forces will be present in the territory of the GDR we agree that forces assigned to NATO should not be based in the East.
However, in order to avoid drawing a distinction between parts of Germany in terms of guarantees offered, Articles 5 and 6 of the North Atlantic Treaty should apply to the whole of a United Germany.
I turn to my noble friend Lord Pym. I can assure him, as I said recently—I was questioned on this matter by the noble Lord, Lord Williams—that the Options for Change study is being driven by policy considerations and not by funding requirements. My noble friend also spoke at some length on the CSCE, which will have an important role to play in future European security structures. I remind my noble friend that my right honourable friend the Prime Minister has outlined United Kingdom objectives for the CSCE summit.
I shall mention four of those objectives: agreement to a set of principles governing the rule of law and human rights specifically enshrining the UK-US proposal on free elections; meetings of the 35 at Foreign Minister level to take place twice a year with agreement to a procedure for convening extraordinary meetings in times of tension or crisis; encouragement of the development of a conciliation role for the CSCE in the settlement of disputes; the reaffirmation by the summit of the Helsinki Final Act's commitments on the inviolability of European borders.
Any future European architecture must provide for multilateral consultation, preserve links with North America and avoid isolating the Soviet Union. As I have said several times before, CSCE cannot substitute for NATO, which will therefore continue to play an essential role in security underpinning stability.
The noble Lord, Lord Hatch of Lusby, was worried about the conversion of the defence industry from arms production to other products. As I said, this is a matter for the companies themselves. The

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Government believe that the managements of companies are best placed to make such judgments for their employees and shareholders.
My noble friend Lord Holderness spoke with deep feeling and passion about the TA. He will understand that it is too early to say what our plans are for the future of the TA. However, we are confident that TA volunteers will be able to rise to the challenge posed by new battlefield conditions. The TA, along with the reserves of the other services, will continue to make a central contribution towards our defence capability but it is too early to say in what capacity until Options for Change has been announced. I shall consider seriously what my noble friend said this evening.
We consider that the TA is securing a respectable share of the available manpower. A wide variety of measures are being employed to secure improvements in recruitment and, above all, in retention. In addition to improving the quality of training, we have introduced a number of initiatives aimed at improving terms and conditions of service.
The noble and gallant Lord, Lord Carver, talked about NATO. Certainly we welcome his firm support for NATO as the cornerstone of our security in these current times of uncertainty. But we see the continuing need far significant US forces in Europe for the foreseeable future. We see an expanding role for CSCE but, as my right honourable friend the Prime Minister made clear, it will be supplementary to NATO and not a replacement for it. NATO has successfully preserved our security for 40 years. It would be precipitate folly to abandon it now.
The noble Viscount, Lord Ridley, spoke of the cadet force. I welcome his valuable comments and the suggestions that he made about the volunteers. We shall consider seriously the various points that he made. As the noble Viscount forcefully stressed, the cadets are a valuable element both in providing future Armed Services manpower and in instilling the values of duty and concern for others in those who join the cadet forces.
My noble friend Lord Glenarthur asked about the 24 Airmobile Brigade and the confirmation orders for 25 utility EH1O1s. We have already announced our intention to order an initial batch of 25 aircraft, subject to the resolution of contractual and other issues. In accordance with normal procurement practice we are considering all appropriate helicopter types and combinations of types to determine whether the utility version of the EH1O1 continues to represent the most cost effective solution. We are now analysing the results of project definition work done so far. It is taking longer than expected because we need to take into account the implications of change in Europe.
As regards a light attack helicopter, it is too early to say which helicopter we shall select. With our partners we have conducted feasibility and cost definition studies into the possible development of the Agnota A129. We are also conducting a full evaluation of other options before making any
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commitment. As regards manning, our present plans are that the helicopter should be flown by the Army Air Corps.
The noble Lord, Lord Jenkins, whose views on nuclear matters are well known, talked about the nuclear non-proliferation treaty and asked whether the Government were changing their stance towards the NPT. We are not. Since the US and the Soviet Union possess between them the vast majority of the world's nuclear weapons, prime negotiating responsibility falls to them. We fully support their efforts to achieve cuts in strategic nuclear arsenals.
Then we look forward to the successful completion of the withdrawal of an entire class of nuclear weapons—intermediate nuclear forces—by June next year. NATO has expressed its willingness to start negotiations on short range nuclear forces after a treaty on conventional forces in Europe is signed.
There are solid practical steps on which we must build rather than rushing to the Utopian vision of general and complete disarmament. Progress must be on a step-by-step basis, taking account of the world as we find it, not as we would wish it to be.
Lord Jenkins of Putney: My Lords, would the noble Earl be so good as to say a word about the comprehensive test ban treaty? As he knows, we already support a partial test ban treaty but one hopes that we are now ready to move forward to a comprehensive test ban treaty if one is proposed by the Soviet Union with suitable verification on both sides.
The Earl of Arran: My Lords, perhaps I could come to that in a moment. I am dealing with that issue under a point raised by another noble Lord.
My noble friend Lady Strange—who told me that she had to leave early—asked several questions. I wish to reply to one point concerning women in the Armed Forces. The women's services make an invaluable contribution to the Armed Forces. Women are employed in a very wide range of duties. The RAF has widened the role of women to include employment as air crew in non-combat roles and major studies by the Royal Navy and the Army will result in a further broadening of employment opportunities for women in these Services.
I am grateful to the noble and gallant Lord, Lord Hill-Norton, for pointing out that NATO has always had a political dimension. As I said earlier, we see the alliance building on that in the future while continuing to preserve our security.
The noble and gallant Lord also asked about the position on the EH 101 Merlin. Several companies have expressed interest in tendering for the Merlin contract. Bids for the prime contract are being invited this month. We expect the main contract to be placed in mid-1991.
My noble friend Lord Fortescue asked about the quality of armour, gun and mechanical reliability. I can assure him that we are fully aware of the need to ensure a proper combination of protection, fire power and mobility so that we can deal with the best in a potential adversary's infantry.

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My noble friend Lord Lyell asked about the Royal Naval Reserve. I can confirm that the number is about 31,000. The role of the reserve forces is governed by the Reserve Forces Act 1980 and their peacetime training must be related to their wartime role. The Royal Naval Reserve plays an important role in reinforcing our regular forces as well as providing maritime home defences by carrying out mine counter-measure tasks and defending key ports and anchorages against attack.
My noble friend also expressed his continuing and enduring gratitude to the UDR. We totally and completely agree with that. Perhaps I may point out that the honours awarded to Service personnel in Northern Ireland during 1989 reflect that bravery. Of 184 awards for gallantry or meritorious conduct, 29 were for the UDR.
The noble Lord, Lord Gladwyn, was concerned over the question of flexible response. As the London Declaration issued after the NATO summit made clear, the fundamental alliance strategy and the Harmel policies of dialogue and defence remain valid, although they are now being adjusted to meet the new circumstances. For example, we shall move away from forward defence where appropriate to a reduced forward presence, with greater emphasis on smaller and more mobile and flexible active forces and on multi-nationality.
My noble friend Lord Ironside was concerned about AOR. I can tell him that we originally expected the first of the new auxiliary oiler replenishment AOR vessels to be delivered this year. Following delays by the shipbuilders we currently expect delivery in 1991. Further AOR orders are planned but no decisions have yet been made with regard to their size or timing.
My noble friend also mentioned new management strategy. The Government place extreme importance on that. It is all about accountability at a lower level.
The noble Lord, Lord Rea, had the same concerns as the noble Lord, Lord Jenkins. We welcome the recent signature by the US and the Soviet Union of verification protocols for the threshold test ban treaty and peaceful nuclear explosions treaty. That is the point that I wished to make to the noble Lord, Lord Jenkins. So long as our security depends in part on the possession of nuclear weapons, there remains a continuing need to test them to make sure that they are effective and safe. A comprehensive test ban treaty must therefore remain a long-term goal.
My noble friend Lord Mottistone had the same worries as the noble Lord, Lord Mayhew. He also expressed his desire for the continuity of NATO, with which we completely agree.
The noble Lord, Lord Graham of Edmonton, mentioned the state of the merchant fleet. That raises a number of difficult issues. If your Lordships are agreeable, I shall write to him on that point. The noble Lord continued for some time about an arms conversion agency. I have to say to him again that we are not in agreement with those on his Benches on that point.
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The division of Europe is ending. The dictatorships of the past have crumbled or been overthrown. There is a brighter future in prospect where democracy and freedom extend from the Atlantic into the Soviet Union. A great deal of the credit for this situation can be ascribed to President Gorbachev. Credit is also due to the people of Eastern Europe who had the courage and determination to stand up to the hard-line regime and tell it its time had come; and credit is due to the Western allies, who were prepared to stand together and stand firm against attempts, both internal and external, to deflect us from a course of maintaining strong defences while extending the hand of friendship to the East—an approach which promises to bear so much fruit not only for our people but for those of Eastern Europe and the Soviet Union as well.
Much painstaking work remains to be done to turn our current opportunities into reality. Unbridled optimism alone will not create a safer and freer Europe. Peace can be a fragile thing so we need to provide it with structural strength to enable it to withstand the strains to which it will inevitably be subject. Our optimism must be tempered with realism and the good sense to build on our strengths rather than discard those institutions that have served us so well. By doing so we can tread a careful path, avoiding any cul-de-sacs. A very promising start has been made on the road towards one free and secure Europe and we look forward to significant early progress towards our objectives. I commend the Motion to your Lordships.
Lord Hatch of Lusby: My Lords, before the noble Earl sits down, will he clarify the answer that he gave me? He said that the Government will not interfere in the commercial interests. Does that indicate that they will continue to support the export of armaments from firms in this country?
The Earl of Arran: My Lords, that is a matter that is coming under Options for Change. All aspects that the noble Lord mentions are being currently investigated and will be duly made known.
On Question, Motion agreed to.

Army, Air Force and Naval Discipline Acts (Continuation) Order 1990
8.58 p.m.
The Earl of Arran The Earl of Arran rose to move, That the draft order laid before the House on 5th June be approved [20th Report from the Joint Committee].
The noble Lord said: My Lords, I beg to move.
Moved, That the draft order laid before the House on 5th June be approved [20th Report from the Joint Committee]—(The Earl of Arran.)
Lord Williams of Elvel: My Lords, the noble Earl has moved this Motion without speaking to it at any length whatever, although he referred to it in his speech. I listened very carefully to try to find out whether it was a matter of controversy.
The noble Earl must be aware that discipline in the Armed Forces is a matter of considerable concern.

845
There have been many cases where disciplinary proceedings have been taken. It is not entirely clear whether those have been dealt with in the civil courts or in the military courts and what the relationship is between the two. Will he very kindly tell the House, before we decide what to do about the order, what would happen if the order were not approved?
Lord Graham of Edmonton: My Lords, while the noble Earl is taking advice, can he also tell us the number of recorded incidents when actions by officers, non-commissioned officers or others led to the courts?
In preparation for the debate I sought some background information. I was horrified. I cite an article which appeared in a national newspaper. It states,
"Guards Sarge 'beat up rookie'. Bat attack on fun day".
Another example states,
"Elite paras see red over beret".
Yet another states,
"Naval bully cleared in coma case",
and another,
"Officer's convictions quashed".
Will the Minister tell the House to what extent matters which obviously are more deleterious than others make their way to the courts? Can the Minister give the House some background as regards the number of offences which call for such discipline? He may well wish to write to me in answer, but the matter should not be taken lightly.
The Minister knows that on previous occasions I have asked about the extent to which coloured servicemen have been victimised. In the Guards regiments they have been disciplined and finally have had to leave the service. There are those of distinct and separate sexual orientation who are subject to vicious activity within the Armed Services. Can the noble Earl also give the House some background and statistics on those matters and say what is the attitude of the Government? I believe that every person who is accepted into the Armed Services is entitled to the respect and dignity that he would receive were he not a member. Individuals who may be weak in one way or another are the subject not only of bullying but of campaigns and vendettas.
Lord Mayhew: My Lords, can the Minister also tell the House whether the order has been considered by the joint committee on defence and whether it made any comments? As regards the question asked by the noble Lord, Lord Williams, if we do not pass the order we shall not have an Army. Therefore, perhaps he will not divide the House.
The Earl of Arran: My Lords, acts of bullying and any kind of racial prejudice are absolutely abhorred by everyone in the Armed Forces and by society in general. Great care is taken to see that they do not occur. If and when they do happen they are dealt with quickly and in the appropriate manner as pertains at the time.
The noble Lord, Lord Graham, spoke about coloured servicemen. I believe that such incidents do not happen often in the forces and every opportunity
846
is taken to stamp them out. However, I am sure that the noble Lord will agree that such incidents easily manifest themselves in the national press and are frequently blown up out of all proportion. Unfortunately, that happens and often what we read in the press about such matters is not true. I can confirm that all acts of bullying and racial prejudice are taken extremely seriously. I cannot give the noble Lord, Lord Graham, the numbers that he requested this evening but I shall certainly write to him. I reaffirm that anything to do with bullying is abhorred and taken with considerable ill ease.
Lord Graham of Edmonton: My Lords, I have been advised about discipline/victimisation of homosexual and lesbian members of the Armed Forces, although I have no precise information. One can readily understand that it is comparatively easy to be discriminatory against people who one might or might not like. Is there a policy in respect of the treatment of individuals who are proud of their sexual orientation and who wish to be good servicemen and women?
The Earl of Arran: My Lords, I am aware that some Members of your Lordships' House are concerned that homosexual activity remains an offence under the service discipline Acts, thus setting the services apart from civilian life. Service conditions—that is where people live in closed communities, on and off duty and often under stress—are different from those in civilian life. Such conditions and the need for absolute trust and confidence between all ranks require that the potentially disruptive influence of homosexual practices should be excluded. I fully accept that argument, as did the Select Committee of the House in its report on the Armed Forces Bill in 1986.
Lord Williams of Elvel: My Lords, will the noble Earl respond to the point made by the noble Lord, Lord Mayhew; that if the order is not passed this evening there will be no Army, Air Force or Navy? If that is the case, why is the existence of the Army, the Air Force and the Navy subject to affirmative procedure every year?
The Earl of Arran: My Lords, I understand that an order is laid before the House every year in between the five-year period and that every five years there is an Armed Forces Bill. There will almost certainly be an Armed Forces Bill next year. However, in the intervening period the matter is dealt with in the form of an order.
On Question, Motion agreed to.

Hasmonean High School Bill [H.L.]
Returned from the Commons agreed to.

River Tees Barrage and Crossing Bill [H.L.]
Returned from the Commons agreed to with amendments; the amendments were considered and agreed to.
House adjourned at six minutes past nine o'clock.

  EC: INTERGOVERNMENTAL CONSULTATIONS
  EC: INTERGOVERNMENTAL CONSULTATIONS
  CONFERENCE ON SECURITY AND CO-OPERATION
  CONFERENCE ON SECURITY AND CO-OPERATION
  AIRPORT AND AIRSPACE CAPACITY: REPORT
  AIRPORT AND AIRSPACE CAPACITY: REPORT
  CYCLISTS: TRAFFIC REGULATIONS
  CYCLISTS: TRAFFIC REGULATIONS
  ATOMIC ENERGY: SAFEGUARDS REPORT
  ATOMIC ENERGY: SAFEGUARDS REPORT
  EURATOM: EC REPORT
  EURATOM: EC REPORT
  NUCLEAR INSTALLATIONS: OPERATOR LIABILITY
  NUCLEAR INSTALLATIONS: OPERATOR LIABILITY
  EMBRYOS: CONSENT FORM WORDING
  EMBRYOS: CONSENT FORM WORDING
  MAGISTRATES' COURTS SERVICE: SCRUTINY REPORT
  MAGISTRATES' COURTS SERVICE: SCRUTINY REPORT
  CHARITIES: ENLARGEMENT OF AREA OF BENEFIT
  CHARITIES: ENLARGEMENT OF AREA OF BENEFIT
  CHARITIES: CIRCULAR
  CHARITIES: CIRCULAR
  CHURCH SCHOOL CLOSURES
  CHURCH SCHOOL CLOSURES
  RADIOACTIVE WASTE: DISPOSAL AND MONITORING
  RADIOACTIVE WASTE: DISPOSAL AND MONITORING