Sitting of 15 June 1990

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

    Disabled People (Public Transport)
    9.34 am.
    Robert G. Hughes: I wish to present a petition from Mr. Keith Armstrong of the London Dial-a-Ride Users Association and 38,000 Londoners, who petition the House as follows:
    The London Dial-a-Ride Users Association considers: That the opportunity for people with disabilities to travel on affordable public transport is a basic human right.
    That door-to-door transport sytems for people with disabilities (such as Dial-a-Ride, Taxicard, Community Transport etc.) will always have an important role to play in any public transport mix.
    Those who drew up the petition have provided much-needed transport and freedom for many people who could never venture outside their door before the advent of dial-a-ride and disabled access transport. They recognise the work that has been done, and petition the House and the Government for more to be done in the future.
    To lie upon the Table.

  EEC (Economic and Political Developments)
  9.35 am
  Brian Sedgemore: I beg to move,
  That this House considers that Britain's entry into the exchange rate machanism of the European Monetary System must be seen as a stepping stone towards the early creation of a single European currency; regrets that the Prime Minister has encouraged Her Majesty's Government to adopt a far too shrivelled and isolationist approach towards changes in the European Community; and believes that the interests of the British people will be served best in the future by the positive approach contained in Labour's new policies on economic and political developments in the European Community.
  My father died on 20 November 1939 when the German battleship, the Scharnhorst, sunk HMS Rawalpindi. Churchill spoke about it in the House. As a result of the ravages of this Europe "des patries" torn apart by war and prey to nationalism and race, I knew little about my father, but from what I have been able to glean from my mother I am sure that he would have been pleased that I am moving the motion today and seeking to set out a framework for a Europe that is prosperous, peaceful and free in which my son and his grandson can grow up. That Europe will be produced not by new weapon systems, nuclear devices on German soil or NATO reborn but by the interplay, and to some extent the interweaving, of cultural and social life inside a stable political framework.
  That framework can be provided only by the European Community. Accordingly, it is time that Left-wing Members regarded the European Community as a stunning opportunity rather than a upas tree of woe. Nothing is for ever, but I have no doubt that Britain's future in the next century will be ultimately bound up with economic and political developments in the European Community. As we awaken from our isolationist slumber and are released from our imperial past, there must be exciting prospects ahead and young people in Europe certainly expect us to seize the major opportunities for political and cultural changes that are opening up.
  Young people in Britain today have no interest in Labour's post-war corporatist approach or the callowness of modern Thatcherism. Europe is the arena in which a new kind of politics can emerge. Yes, there will be battles, some ideological; yes, it will sometimes be difficult to keep up with the pace of change; but only politicians of the past will want to opt out.
  Often in politics there is a natural dynamic that is critical to the development of ideas and actions. The politicians who serve the people of their country and parties best are those who can harness that dynamic. The others end up whistling in the wind, fumbling in the dark, or whatever metaphor one wants to use.
  In the 21st century the dynamic for Britain as regards the development of ideas and action will, I expect, be European, and within Europe the European Community is the only institution that can make the thing work. Of course, there are those who disagree and those who are afraid, particularly in the Conservative party, where the old certainties have given way to doubt and scepticism. Thus, the right hon. Member for Chingford (Mr. Tebbit), a recent chairman of the Conservative party, told us that the Deutsches Bundesbank is
  "the monetary successor to the Panzer".

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  Tory historian A. L. Rowse tells us to turn our back on Europe because the British are a practical people—
  "not theoretical like the Germans nor arrogant like the French".
  Lord Denning, a high Tory judge in despair of the European Community and the Delors report, even quotes John of Gaunt:
  "This land of such dear souls, this dear, dear land,
  Dear for her reputation through the world
  Is now leas'd out …
  Hath made a shameful conquest of itself."
  I refer to this soporific phoney Tory romanticism, not to begin on a contentious note, because that is not my nature, but to enable the Minister to repudiate, on behalf of the Government, the views of this distinguished, if unholy, trinity. It is not as though the right hon. Member for Chingford is alone in his isolationist views. They seem to be shared to some extent by the Prime Minister. I do not want to turn this into a contentious debate, but I must say that I think that an aura of arrogance clings to the Prime Minister's shrivelled view, as she blocks progress time and again in the European Community. Like a tiny minority of Labour Members, she preaches a 17th century version of sovereignty which is unhelpful if only because it preceded the rise of both socialism and capitalism. As the Prime Minister moves from false premises to false conclusions by a logic that is somewhat suspect, is it any wonder that the Government dither about when Britain will join the ERM, fulminate against plans for monetary union, or the idea of a single European currency and believe that proposals for political integration threaten the very existence of the only version of democracy that they seem to understand?
  I am sorry that my right hon. Friend the Leader of the Opposition is not in his place today. In contrast to the Prime Minister's negative approach, my right hon. Friend is to be congratulated on his support for a new European idealism. Both history and the moment, as well as perceptions of youth, are on his side. Anyone who has read Labour's policy document, "Looking to the Future"—I am sure that that means everyone here—will know that my right hon. Friend, backed by the shadow Chancellor, my right hon. and learned Friend the Member for Monklands, East (Mr. Smith), considers that joining the ERM is but a part of a developing economic and political process that should be pursued with enthusiasm.
  The Prime Minister and the Government are worried that Labour's non-misty-eyed and practical approach to the European Community nevertheless carries with it a certain amount of political glamour. Realising that, the Government are anxious to steal Labour's clothes and get Britain into the ERM, preferably later this year—I am told that the preferred date is November—and certainly before the next general election.
  I think that the Government are right to press ahead, even though they may be doing it for the wrong reasons, and until this week pressing ahead was what was being talked about, until we discovered that the Government's guru, Sir Alan Walters, had returned. Even as I speak, he may be in that study in Downing street with the Prime Minister's political advisers determining Britain's economic future. We all know that Sir Alan is opposed to entry into the ERM, and I should like the Minister to tell us
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  whether his presence back in Britain means that entry will be delayed, or even permanently postponed. What is the Government's position?
  It is possible that I have totally misread the situation. I do not know how many hon. Members have studied the works of Alan Walters, but I have read quite a bit of what he has written. Although he says that the ERM is a half-baked proposal, he believes that monetary union and a single European currency are valid theoretical and practical options. Perhaps he has been brought in to push on faster with stages 2 and 3 of the Delors report. There are signs that there has been a significant sea change in the Government's view, and perhaps I shall return to that in a moment.
  The fact that Britain will be in the ERM by the time of the next general election presents a challenge to those Back-Bench Members on both sides of the House who oppose entry. Will any of them seriously go to the electorate calling for Britain to leave the ERM?
  I hope that today we can bury the argument against Britain joining the ERM. Certainly there could be no question of the Labour party fighting the next general election on the basis of Britain leaving the ERM. To do so would be an act of supreme folly; it would be electoral suicide—akin to inviting my right hon. Friend the Leader of the Opposition to take a cyanide pill on the opening day of the next general election campaign.
  Mr. John Maples: It is refreshing to hear the hon. Gentleman talk so enthusiastically about European institutions. He said that the Labour party's policy is not ideological but practical. I do not think that anyone would have any difficulty in accepting that: the Labour party has changed its policy so many times in the past 10 years that it could not be described as anything other than pragmatic.
  A year ago, when the Opposition first cottoned on to the idea of joining the ERM as part of their policy—not so long ago Labour was campaigning, not to leave the ERM, but to leave the EEC—one of the conditions laid down by the right hon. and learned Member for Monklands, East (Mr. Smith) was that the ERM should get rid of its deflationary bias. For most of us, the purpose of joining the ERM is that it is an anti-inflationary mechanism, involving a commitment to maintaining low inflation. Can the hon. Gentleman tell us why that shift in Labour party policy has taken place and whether he still thinks that the ERM has a deflationary bias that ought to be cured?
  Mr. Sedgemore: The hon. Gentleman implies that there is something wrong with politicians changing their minds. I remember, as a barrister, appearing before the Lord Chief Justice, who said to me, "That's your bad point, Mr. Sedgemore; what's your good one?" I am all in favour of politicians dropping their bad points and developing their good points.
  I shall go into technical economics later, but one of the technical matters that I do not want to go into in great detail is the enormous difference between an anti-inflationary policy and a deflationary policy. I shall deal specifically with the question of how much deflation must be or might be involved in entering the ERM and how much would be involved in entry at any given rate. If the hon. Gentleman is unhappy with what I say, I am sure that he will intervene again.

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  I admit that in the past I have been bitterly critical of the EEC. The reason why I believe that we must take a firm stand now is that the idea of national economies controlled by national Governments is dead, and the electorate knows that. The argument today should be not about whether we should join the ERM but about when and on what terms and about what comes next.
  Big bang and the development of global markets have inevitably caused some of us to rethink our positions. I grew up in the world of theories of comparative advantage in which exchange rates were driven by current account surpluses or deficits. I now live in a world where exchange rates are often driven by capital flows and where $200 billion crosses the foreign exchange markets every day, although 90 per cent. of that money is not used to finance foreign trade but represents speculative capital flows or hedging against currency changes. The power of exchange speculators is awesome. It is not constrained by, nor does it recognise, notions of political sovereignty. It can, and does, throw Governments off course. The joining of the ERM could prove critical in helping both Labour and Conservative Governments to deal with the damaging effects of currency speculation.
  Some of my hon. Friends do not appear to accept that there is something heroically absurd in fighting currency speculators with political slogans and moral lectures. The unreconstructed Keynesians who met at the socialist conference in Sheffield told us that they were against Britain joining the ERM because they regard devaluation as part of the ark of the socialist covenant. I do not. Morever, I am aware—as they should be aware—that successful devaluations are often accompanied by deflation. That is usually the way in which a devaluation shifts resources from imports to exports. I am also aware that membership of the ERM could be a way of preventing sterling from rising too high as a result of forces beyond the control of the Government.
  We also need to tackle the problem of inflation, which is caused partly by too much money chasing too few goods but is also part of the problem of income distribution. The public believe that the current high levels of inflation created by the Government are unacceptable. People want Tory Britain to stop leading the world in sustaining high levels of inflation. My fear—it is a real fear—is that, although there are several steps that the next Labour Government could take to reduce inflation, particularly Government-induced inflation, they will find themselves forced back into a statutory prices and incomes policy if we are not in the ERM. The political consequences of a return to such a policy would be disastrous and wholly unacceptable to the general public.
  Last year I was asked at what rate Britain should enter the ERM. Answering intuitively and off the cuff, I said that we should enter at DM2.60 to the pound. I was interested to read over the weekend a discussion document by the National Institute of Economic and Social Research which came to a similar conclusion after using rather more sophisticated economic analyses.
  One wants a real exchange rate which in the medium term generates a sustainable current account on the balance of payments. In theory, it is possible to use purchasing power parities using the cost of a basket of goods in different countries. But that would throw up results that were inconsistent with the colossal balance of payments difficulties created by the Government.
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  I conclude that the only feasible solution is to use the concept of the fundamental equilibrium exchange rate. I am sure that all hon. Members are even more familiar with that concept than me. On that basis sterling could enter the ERM in 1991 at about DM2·60 to the pound on either a narrow band of DM2·50 to DM2·70 to the pound or a wider band of DM2·45 to DM2·75 to the pound. In the transitional period—this is the point that the hon. Member for Lewisham, West (Mr. Maples) made—during which the performance of the British economy adjusts to that of our European partners, there would almost certainly have to be one realignment if we are to avoid excessive deflation. I do not believe that sterling could enter the ERM next year as a strong currency unless we are prepared to accept deflation. The blame for that state of affairs rests entirely with the Government, who have made such a terrible mess of the economy resulting in both soaring inflation and a colossal balance of payment deficit.
  I hope that the Government will reject the hillbilly, wild west advice of those who argue that we should enter the ERM at an even higher rate than exists at present. Perhaps the most ludicrous suggestion has come from Credit Suisse First Boston where Giles Keating has suggested that Britain should enter the ERM at DM3·25 to the pound. That would surely be a recipe for disaster and a recession such as we experienced in the early 1980s.
  Undoubtedly, the really big decision for the Government is one which effectively they have already taken. It is the decision about joining the ERM. Thereafter the development of monetary union, the best form of which is the creation of a single European currency, should be relatively easy. If Britain joined the ERM in 1991, a single European currency could be in place by 1997. The ecu would be the currency. We would be paid in ecu, shop in ecu and business transactions would take place in ecu. Foreign exchange transactions in Europe would disappear. The Queen's head would be dropped from the currency; but no one who takes these matters seriously will worry about that. Perhaps—I should welcome it—we shall see the heads of Rembrandt, Botticelli, Voltaire, Goethe and Helen of Troy on our bank notes.
  The symbolic value for European unity in the creation of a single European currency would be incalculable. It would portend Tennyson's
  "The Parliament of man, the federation of the world."
  It would be an act of political affirmation as well as a sensible economic step to take.
  I agreed with professor David Mayes when he argued in a recent publication called "The Ecu" that the creation of a single European currency would do more to expand trade in Europe than
  "all the other modest changes now being introduced under the title '1992'".
  I would go on to argue that the creation of a single European currency would change our very way of thinking about Europe and alter the horizons of the British people. It would be a dynamo for social and political change. It could offer hope of a cultural renaissance for this little, backward, fractious island off the coast of north-west Europe with a culture close to irreversible decline.
  In more prosaic economic terms, the main advantage of a single European currency would be, first, the expansion of trade in Europe; secondly, the elimination of exchange rate risks in currency transactions within Europe and, therefore, victory over the currency speculators; thirdly, the improved stabilisation of the European economy with

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  pooled reserves used more effectively; fourthly, improved macro-economic management as a result of co-operation with our European partners; and, fifthly, currency movement in the international market would neither make British industry uncompetitive relative to Europe nor stimulate British inflation.
  The attitude of the Government is somewhat negative. It is based on the argument that macro-economic policy would be surrendered to European institutions. But a move to create a single European currency need not involve the British Government or other European Governments giving up the right to borrow and repay debts at their own risk. It need not involve economic union or the control of fiscal policy by centralised European institutions.
  Jacques Delors, perhaps the greatest living European, got this part of his report completely wrong because of his federal bias. I am sure that Professor Alan Budd and Professor Goodhart are right to assert that in both theory and practice neither monetary union nor the creation of a single European currency requires a transfer of control of national fiscal policy from individual countries to a central Community authority. Binding rules over budget deficits would be neither necessary nor desirable.
  Professor Goodhart in particular, drawing on the experience of the operation of the gold standard, has shown that the creation of a single European currency would not require the transfer of more executive powers to the European Commission in Brussels. The EC could evolve flexibly allowing other European countries such as Hungary or Czechoslovakia to join a single currency entirely free to choose whether they integrated economically or politically with the EC. For political reasons, I should like to see that integration, but the choice would be theirs. The Chancellor and I seem to be agreed on that point because we have discussed it in the Treasury Select Committee.
  Of course, the creation of a single European currency would probably necessitate the establishment of a European central bank. Such a bank would need a degree of independence in its operation, but in my view it must ultimately come under the political scrutiny of the Finance Ministers of the member states of the European Community. A delicate balance would need to be struck between a central bank maintaining monetary integrity and ultimate political accountability. I see no inherent difficulties in resolving that problem. One could say that the same problem exists between the Treasury and the Bank of England now, with a legislative backstop. Moreover, those who are worried about the growing power of the Bundesbank over economic policy in Europe ought to welcome the creation of a central European bank which would clip the wings of the Bundesbank.
  Only this week, on the issue of monetary union, Karl Otto Pal, the socialist president of Budesbank, expressed his support for the establishment of a European central bank. I see Conservative Members look at each other with unease. Karl Otto Pöhl is a socialist.
  Mr. Nigel Forman: He was.
  Mr. Sedgemore: Was? Once a socialist always a socialist.
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  Ominously for Britain, Mr. Pöal suggested the possibility of a two-speed system for joining the ERM, with Britain in the slow lane. Surely that would be disastrous for Britain. We should throw sterling to the speculators, as the Christians of old were thrown to the lions.
  What is the Government's position on the two-track approach on the creation of a central European bank? That is a serious question because the Secretary of State for Trade and Industry has suggested that we might be in the slow lane and that other European countries might go ahead with the creation of a central European Bank and Britain will be left behind. Is that view shared by the Treasury?
  Of equal concern is the worry, shared I am sure by many of my hon. Friends, that intolerable regional disparities in the level of unemployment, output and living standards might arise. To meet that possibility there would be a need for a larger Community budget—at present it is between 0·5 and 1 per cent. of Community GDP—a substantial proportion of which should be devoted to regional policies to reduce those disparities.
  I doubt whether many of my hon. Friends would cavil at the idea of regional planning inside the Community. I suspect that the economist Sir Donald MacDougall, who chaired the Marjolin group which considered the problem, massively overstated the extent to which the Community budget would have to be increased.
  Until now the Government have made it clear that they are opposed to the type of plan I have outlined. Instead they have brought forward plans for competing currencies or currency competition in the run-up to the intergovernmental conference. In the Government's scenario, strong currencies such as the deutschmark would be attractive to lenders and weak currencies to borrowers because of the differences in their rates of interest. Currency competition would almost certainly favour low inflation currencies such as the deutschmark, not high inflation currencies such as the lira or sterling. The deutschmark is already the most widely used currency, and the unification of East and West Germany could reinforce that. Under a system of competing currencies, the common currency in the long run would almost certainly be the deutschmark and Europe would become a deutschmark zone. Unless the Government drop their competing currency idea, that is where they are leading us.
  I doubt whether it is politically desirable or acceptable to other countries in the Community that we should become a deutschmark zone. The Bundesbank may not even welcome that because it would make the conduct of monetary policy in Germay even more difficult. Similarly, if sterling became the main currency, the Bank of England might not like it because the bank would have to worry first about the foreign holdings of sterling that affect interest rates and the exchange rate and, secondly, domestic holdings of sterling that affect monetary growth and domestic demand. From the point of view of the Bundesbank and the Bank of England, it would be far better to have the ecu as the single European currency.
  Mr. Nigel Spearing: I am following what my hon. Friend is saying with great interest and, surprisingly enough, with some agreement as to his prognostications. Whatever one calls the currency—deutschmark, sterling, ecu or some alternative yet to be suggested—does he not agree that the engine for that and

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  the economy that would probably dominate would be the German one? Although most of us—with the exception of a few backward people on the Conservative Benches—would agree on the idea of regional planning, where that regional planning takes place and of what it consists should not, according to most hon. Members, be centralised in a European capital across the water.
  Mr. Sedgemore: I am pleased that I am swinging my hon. Friend slowly round to some of my arguments. He must live in the world as it is; he cannot stop it and get off. My hon. Friend has said that Germany will be the engine of economic growth in Europe, but that will happen whether or not Britain joins the ERM or a single European currency is adopted. Why does he state that as though stating some fundamental objection to my idea? My hon. Friend is a man of tenacity and perspicacity on this issue the like of which I have never seen and I look forward to his speech.
  Regional policy will be about political argument and the transfer of powers in the Community—one can transfer them up or down. If my hon. Friend wants the Commission to give some of the money to the British Government and allow them to allocate it, he must use his powers of argument. He must think of new ways in which to sort out the problems, but he should not adopt the negative attitude that somehow, because Germany has a powerful economy—that is undoubted—therefore every suggestion on the Community is flawed because of that. Surely that dominance is one of the reasons for taking some of the powers away from the Bundesbank and sharing sovereignty in Europe.
  Mr. Michael Latham: Can the hon. Gentleman take us more into his confidence on the question of democratic control? He has said that his proposals would not affect sovereignty. Is he in favour of strengthening the powers of the European Parliament? If so, his hon. Friend the Member for Newham, South (Mr. Spearing) will have a heart attack.
  Mr. Sedgemore: The short answer is, yes, I am, and I hope that my hon. Friend does not have a heart attack. I believe that some other hon. Members may develop that point, but I must limit the length of my speech.
  Under the Government's competing currency proposals the situation is such that life becomes most difficult for the currency that wins the competition. It is an amazing proposal that the winner becomes the loser. The Government are apparently prepared to let sterling take the strain of that competition.
  There is, of course, one other overwhelming objection to the Government's competing currency proposals: it is hard to find anyone in Europe who thinks that they are credible or desirable. In effect, Britain risks entering the intergovernmental conference naked on this issue.
  The Financial Secretary to the Treasury (Mr. Peter Lilley): Has not the hon. Gentleman read the report of the committee of advisers to the German Ministry of Finance, consisting of 30 of the most distinguished economists in Germany, which broadly endorsed the attitude expressed in the Government's evolutionary approach?
  Mr. Sedgemore: I spend most of my time trying to contact European politicians. I have not read that report,
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  but I have heard of it. I shall willingly give way to the Minister if he can name some leading European politicians in favour of the competing currency proposals.
  Mr. Lilley: Mr. Balladur, to name but one, France's distinguished Minister of State for finances.
  Mr. Sedgemore: Would the Minister like to mention two?
  As the Minister has enticed me, let us consider the details behind this issue. It would be an unhappy state of affairs if we went to the intergovernmental conference supporting the competing currency proposals. I understand that the Government must present their proposals shortly, possibly next week. The Minister seems to be suggesting that the policy is still intact, but it' that is true, that is not the message in the Chancellor's speech to the German chamber of industry and commerce on Tuesday.
  That speech made no mention of competing currency proposals. Conservative Back Benchers, having read that speech, have been gob-smacked. He spoke about monetary union, the ecu and everything else except competing currency proposals. He spoke about moving on from stage 1 of Delors, but the only way to do that is to move to stage 2, which is a staging post for stage 3. The Chancellor seems to be talking about moving on to stages 2 and 3, and in paragraph 21 of his speech he spoke about the arrangements for stage 2 of Delors. In paragraph 24 he spoke about the ecu and said:
  "The third element might be to promote the use of the ecu. Can we help familiarise people more with the ecu? Can we develop ecu financial markets and techniques for central bank intervention in those markets?"
  Let me repeat a question put to me by a Conservative Back Bencher this morning: what conceivable reason can there be for the Chancellor talking about the development of the ecu unless he is talking about monetary union and irretrievably locked exchange rates? I cannot understand his speech unless it is considered in that way. Having spoken about stage 2 and the ecu, in paragraph 25 of his speech the Chancellor said:
  "I think that these questions and others like them must be addressed in any rational discussion on how to progress to any form of EMU. It should be possible to devise solutions that are useful in themselves, whatever the outcome of our longer term debates."
  That was a critical speech and I am sure that the Minister will wish to comment on it. There are two way of interpreting that speech. One is to accept the words for what they say, which is that there is a significant change in the Government's policy, that stages 2 and 3 are being thought about more seriously, and that the competing currency idea has been dropped. The other is the idea of the cynics. It is to say that it is classic British diplomacy—a stalling device—that it is the British trying to avoid the odium and opprobrium of our European partners at the intergovernmental conference.
  There may be some rationale in that because some Treasury civil servants are now briefing journalists fast to the effect that the Chancellor is really a big stateman and that that is what it is all about. It is a stalling device. I ask the Minister to say whether we should accept the words used by the Chancellor or accept the briefing that Treasury civil servants are giving.
  Many people will be pleased if we must accept the words that the Chancellor used in that speech because 83 per cent. of European business men questioned in a survey

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  said that they were in favour of a common currency and would like to see the ecu adopt that role. Many Governments want it, but apparently not Her Majesty's Government.
  Having taken up a lot of the time of the House, I will conclude with a political thought. When I began to rethink my views on Europe just over two years ago my starting point was economics. I was worried about the fact that the freeing up of global capital markets as well as changing trade patterns meant that some of the positions that I was taking were no longer credible. Nagging at the back of my mind was also a concern about where isolationism in Britain might take us. I concluded that the European Community had to be seen as an opportunity rather than as a threat. "A blinding flash of the obvious," some will snort. "An act of surrender," others will say.
  In the past year, events have moved on dramatically. For anyone who has been awake, the politics, more than the economics, of Europe call on us to reassess our perspectives. I have no intention today of trying to set out a blueprint for Europe. Events change so quickly that most of what one says is out of date before the breath with which it is said dries in the air. But I will end by setting out a few guiding principles and my own general philosophical approach.
  I do not want to see the people of Eastern Europe, who are enjoying new-found political freedoms, exploited by western capitalists, although I accept that they will need western capital. I do not want to see the countries of Eastern Europe become second-class Europeans and end up as associated members of the European Community, denied seats at the top table where the critical decisions are taken.
  I do want to see the countries of Eastern Europe become part of a more democratic and accountable European Community which develops new ideas on social and economic integration. I want to see them join a European Community which links global economic and environmental problems to the condition of working people in their homes and workplaces.
  Proceeding by way of economic collaboration, it should be possible to create a Europe, east and west, where wealth can be shared. It is not so much that socialists and environmentalists can join together to hijack the European Community as that the EC, despite being based on laissez faire economic principles, has a natural interventionist social and political dynamic.
  That, if one likes, is the contradiction of the EC. That, if one likes, is where the dialectic of the 21st century will be fought out. I do not see that dialectic ending up in crisis. Rather, it will be a way of dealing with practical problems that go beyond the boundaries of the nation state and the solutions of which therefore must be international.
  The task of politicians is to bring a sense of idealism and purpose to the opportunism and utilitarianism that might otherwise dominate, to widen horizons for minorities and the disadvantaged and to protect the interests of working people.
  I end where I started. Kundera once said that the struggle of the people was the struggle of memory against forgetting. Today is a day for not forgetting the awfulness of nationalism, mysticism and race—the awfulness of the Europe "des patries" followed by the awfulness of
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  Stalinism in the east. Today is a day for remembering that the future does not have to be like the past. It can be better, as Tennyson proclaimed joyously:
  "For I dipt into the Future, far as human eye could see, Saw the Vision of the world, and all the wonder that would be."
  10.13 am
  Mr. John Bowis: I congratulate the hon. Member for Hackney, South and Shoreditch (Mr. Sedgemore) on his good fortune in the ballot and on the way in which, using his usual elegant wit, he entertained us and on occasions persuaded us to agree with the odd bon mot, to borrow a European phrase, that he came up with.
  The hon. Gentleman said that once a socialist, always a socialist. I presume that that will be the motto on the frontispiece of the Labour party's manifesto at the next general election. He drew out a soupcon of debate from his hon. Friends, which persuades me rather of the truth of the adage that old socialists never die, they just feud away.
  I look forward to later contributions from the Front Benches, and I apologise to the hon. Member for Islington, South and Finsbury (Mr. Smith) that I shall not be present to hear his summing up as I must attend a constituency engagement. Also, I fear that I shall not be present to witness the seamless robe way in which the debate moves on to deal with the Church and state in the next motion.
  I perceive a few inconsistencies in the motion, no doubt not because of any failing on the part of the hon. Member for Hackney, South and Shoreditch but perhaps because of a failing on the part of his hon. Friend the Member for Islington, South and Finsbury. When I saw the reference in the motion to a single European currency and the claim that
  "the interests of the British people will be served best in the future by the positive approach contained in Labour's new policies"
  I went hot foot to examine what Labour's new policies, as contained in "Back to the Future", or whatever it is called, actually said. In that document I found not quite the hon. Gentleman's hopes as expressed in his motion. It said, in more hesitant terms:
  "Joining the ERM is no panacea for Britain's economic problems … a Labour Government will negotiate Britain's entry at the earliest opportunity on the basis of the prudent and reasonable conditions which we have frequently outlined."
  Presumably as part of wanting a European currency, the hon. Gentleman would have to have a central bank and so on, but the document continued:
  "we would oppose the proposals for an all-powerful, but unaccountable, European Central Bank, as outlined in the Delors plan … we would not advocate an independent Bank of England."
  The speech of the hon. Member for Islington, South and Finsbury should be worth waiting for, to see how he reconciles Labour's policy with the speech of the hon. Member for Hackney, South and Shoreditch, whom I congratulate on bringing this subject forward for debate, for we must examine where the European Community is going in its politics and economics.
  Those of us who have long supported the Community believe that its aims are the preservation of peace in western Europe, the bringing together of former warring nations and the furthering and advancing of prosperity through economic co-operation and harmony. I have always believed, further, that, at least in the past—perhaps

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  this is changing in the way that the hon. Member for Hackney, South and Shoreditch said—we have had the Community to protect us from some of the more expansionist threats from the east and some of the cultural threats from the west—from Moscow or from across the Atlantic. But the hon. Gentleman is right to say that Europe has been changing and that we must adapt, as must Europe and the Community also adapt.
  I am with the hon. Gentleman in his references to the ERM. I have long believed that it would be right for Britain to join as soon as possible, and for me that is sooner rather than later. The experience of France and Italy shows that it has been helpful in reducing their inflation rates to the levels of Germany. The other side of the coin, Spain, proves that such a step is not always a panacea. That country's inflation and interest rates have gone up. But on balance it would be right for us to join as soon as possible and to benefit from the stability that that would give us.
  I part company with the hon. Gentleman on the question of a single currency. I see its advantages in being simpler to manage and to trade, but the only time a single currency would be worth while would be when it was less inflationary than the strongest currency in its bounds. The strongest currency is obviously the deutschmark, as the hon. Member for Hackney, South and Shoreditch conceded. I do not believe that a single European currency would be as strong and stable as the deutschmark.
  Delors said that his system would be committed to price stability. In that, he mirrors the German experience and law, but he also reflects the fact that the German psyche has always, because of its history, been anti-inflation. That is not true of many other countries that would join that single currency and come within its control. Each country's representative would have a view on what the central policy of a central, single currency should be. Just as we have seen the trade-offs that come from the political PR systems of countries in Europe, we would inevitably see trade-offs in terms of the currency's direction rather than the benefits from the competition that exists in a multi-currency system which seeks to meet the achievements of the strongest currency, rather than drag that currency downwards.
  I wonder how much the independence of banks is a mirage. Even when the Bundesbank in Germany was considering exchange rates with the ostmark, Dr. Otto Pöhl's determination not to have parity was soon overridden by the political will of the German Government. I do not blame them for that, but I doubt whether independence really exists.
  I am looking for a Europe that is flexible. The hon. Member for Hackney, South and Shoreditch was right to raise the issue of a new and widening Europe. We have a sort of Europe of "Jeux sans frontiers". Unfortunately, that phase is too often translated not just as, "It's a knockout" but "It's a lockout" in the British view, and perhaps the socialist view, of Europe. We must ensure that we are without frontiers in our ambitions to bring in other countries when they qualify and meet our requirements of democracy and stability. We must not allow economic or political obstacles to stand in the way of that wider membership.
  We hope that East Germany will soon be within our Community. However, it is not just the Germans within the German-speaking community that we want to see in our Community. Why are we not doing more to encourage
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  Austria to meet our requirements—followed perhaps by Hungary and Norway, which might be followed by Sweden, and perhaps even Iceland and Finland? When we look further we see other countries that might one day seek to join, such as Yugoslavia, which is beginning to disintegrate as a single nation. The Boznias, Cirotias and Slovenias may all become capable of joining us, with separate seats at the table. Then we start to see the implications for the currency, the economy and the political stability of our Community.
  Sir Russell Johnston: I thank the hon. Gentleman for giving way, and perhaps I should have stood up a little earlier when he referred to Austria because I want to ask about that. Does he agree that Austria could enter almost forthwith, and that it is wrong for the Government to seek to couple Austria and Turkey?
  Mr. Bowis: The hon. Gentleman slipped in Turkey. I hope that Austria will be ready to come in sooner rather than later. I expect Austria to qualify very soon. Turkey is a different matter. We must ensure not only that it is economically stable, but that its human rights record and other democratic factors continue to improve to meet our requirements.
  Mr. Forman: Before my hon. Friend gets carried away with his largesse in opening up the Community to all and sundry, does he realise that the Community has recently decided at Foreign Minister level not to enlarge itself until 1993? That must be wise when one considers the extent of the problems and opportunities that must be dealt with between now and then.
  Mr. Bowis: I accept that 1993 may be a sensible date, but 1994 follows it. We want to ensure that we are developing a Community that enables us to look outwards and onward beyond short-term dates and the German reunification issue to how Europe's stability can be helped by that Community. It will be helped not by a closed door policy, but by being ready to be flexible and considering political structures.
  If we are to have a representive from every country in the Community, the Council of Ministers' decision-making will begin to look unwieldy. Inevitably, the European Parliament, as the hon. Member for Hackney, South and Shorditch hinted, will become more important in the supra-national decisions and debates. At the same time, because many countries that would be joining and many countries in the Community are increasingly concerned about nationalist rights and identities, so it will become inevitable that the question, "What is a supra-national issue?" will become less clear than it was a few years ago. We must continue to consider that. Europe will find its equilibrium and future if its structures are not too rigid and we do not rush into making such structures permanent.
  We must look for ways of increasing harmony and co-operation. Where it is sensible we should pool sovereignty, as we have been doing over the years. But we should not make the pooled sovereignty the goal in itself. If we bear that in mind, we shall be moving towards the right sort of equilibrium.
  I am concerned about the Commission's powers. It is the civil service of Europe, and all too often it has turned out to be the policy initiator of Europe. I would much

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  rather see policy initiation by the Council, while that is still the appropriate forum, and by the Parliaments, both of the national Governments and the European Community, rather than by the civil service—the Commission. I hope that we can consider that as we adjust the political structures.
  I question whether some of the decisions that are emerging are realistic. The present issue of the eight-hour shift being the limit right across the Community is one such decision. An eight-hour shift may be perfectly sensible for some work, but those working in mines and on buses and those on night guard patrol all have different requirements—[HON. MEMBERS: "What about here?"] I think that some of my hon. Friends are suggesting there should perhaps be an eight-hour shift for hon. Members. Perhaps, in the light of that, I should withdraw all my opposition and say that there is something in the eight-hour shift. But, in reality, it is nonsense. We can laugh about that, but the public stop laughing when they see some of the harmonisation such as the height in hands for the export of ponies and horses. The sensitivities of people in this country mean that they do not want young horses or ponies from Exmoor and the New Forest disappearing off to the dinner tables of Europe. We must bear that in mind.
  It has been suggested that there should be a veterinary check on every game bird and animal that is shot to ensure that it is fit for human consumption. The mind boggles. I believe that 3·5 million birds are shot each year—the idea of 3·5 million veterinary checks begins to make the suggestion look absurd.
  Frontier checks are being challenged. The more we can remove frontiers the better. But we should remove them only when it makes sense. Certainly, Interpol, Dutch border controls and our own police and customs are worried. Recent figures from Customs and Excise for example show that 40 per cent. of the drugs seized are found at routine customs checks, not by spot checks. That shows the importance of greater national common sense coming into some of those decisions.
  In the great debates on pollution we hear criticisms of Britain, British pollution in the North sea and the way we pollute, from people who are themselves polluters. We do not seem to have the power in our Community to adjust and sift the balance of criticism so that the countries through which the three great polluting rivers of Europe—the Rhine, the Elbe and the Meuse—flow, and which criticise Britain, are highlighted as the real polluters and that action is taken. That is largely because the Community is strong on rhetoric and weak on enforcement.
  Britain can be proud of its commitment to European initiatives. The part of the motion that refers to Britain's narrow-mindedness and isolationism is wrong. After all, Britain has been moving forward. We were the last to be criticised for our water and we were the last bar Portugal to be criticised for our beaches. Of the 79 or so directives only one has not been completely fulfilled by Britain, compared with some 50 by Italy. Sometimes also the Commission should be told, "Physician, heal thyself". I understand that the Commission has been polluting a local river in Brussels and that it is now before the Belgian courts for a breach of safety and pollution because of the
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  asbestos in its buildings, but that is not often publicised. So perhaps there should be some humility from that great building.
  Enforcement is ineffectual and we need to tighten up and make sanctions which can stick against countries that breach the agreed directives. The recent beef issue was a classic example. The only ultimate way in which Britain could achieve justice was through the European Court, but that would have been far too slow, so we had to resort to the old way of international political pressure to achieve that result. While we are on the subject of beef and the reactions of some of our colleagues in Europe, perhaps we should not be so slow to criticise some of their practices. If Italy wishes to stop our beef coming in, I suggest that we look most carefully at what goes into Italian salami. Recently it was revealed to me that at least some Italian salami contains donkey meat and the British housewife might want to know that before she dashes down the supermarket for some slices of donkey salami. Perhaps the beaches of Blackpool are threatened not only by pollution from the sea but by donkey rustlers who would collect the donkeys of Britain to put them on the dinner tables of Italy.
  Beyond the donkey, there are many ways in which the Commission has been sensible, but all too often it has not been so sensible, and that gives Europe a bad name. However, that is the downside and I do not agree with the hon. Member for Hackney, South and Shoreditch that Britain is nit-picking when it challenges some of the absurdities. Britain, the Government and the Conservative party are dedicated to membership of Europe and to forwarding the concept of Europe in a way which is to the benefit of all European peoples. After all, we are leading the way on the single market and competition policy. Our Government are promoting the global and environmental protection policies. We are leading Europe on matters such as police co-operation and the war against drugs. We have more ecu bond initiatives than any other country in the Community, we are far ahead in financial services deregulation and, most recently, we established the European bank for development and reconstruction, looking outwards beyond our borders.
  There is so much that Britain can contribute to the leadership of Europe. We need to do that in the knowledge that Europe is a dynamic community. It has not closed doors and there are opportunities for countries to join it and to develop within it. I believe in Europe as I believe in one nation. I believe in the community of nations and peoples which we have joined and are seeking to assist to develop. It is a Community which is creative, co-operative, harmonious and tolerant. If we get those concepts through, it will be a Europe that I will continue to support.
  I conclude with a note of agreement with the hon. Member for Hackney, South and Shoreditch, not in terms of his criticisms of the Government which were unfair, or in terms of his support for his party's policies, as that would be irrational, but I agree with him that we are an island and we have never been and should never be insular. We are a community which must never be isolationist. On that concordat I congratulate the hon. Gentleman on his good fortune and his choice of debate and I support little bits of what he said.
  10.34 am
  Mr. Nigel Spearing: The hon. Member for Battersea (Mr. Bowis) has made a speech of generalisation and abstraction which will appeal to many in the House and in the country. It is typical of the case that we hear time and again. Let me immediately draw his attention to two bits of nitty-gritty which show that his aspirations are not always as helpful as they appear.
  The right hon. Member for Old Bexley and Sidcup (Mr. Heath) told us that when we joined the Community the effects on our balance of payments would be substantial and positive. Of course, they have been substantial and negative to the extent of £15 billion in manufactured goods alone. The hon. Gentleman mentioned Dartmoor ponies. Is he aware that so far neither the Commission nor the Council has agreed to the maintenance of our minimum value export order? Therefore, all the fears which many of us have expressed on that humane instrument which the House passed may be swept aside.
  I congratulate my hon. Friend the Member for Hackney South and Shoreditch (Mr. Sedgemore), a fellow London Member, on his choice of topic, which demonstrates the extent to which the House is not properly dealing with these matters. My hon. Friend's motion advocates European monetary union, which is, in effect, a single currency. To my knowledge, the House has never approved such a proposal, yet when the Prime Minister went to Madrid she committed the Government, and, in effect, the House and all the citizens of the United Kingdom, to that very step. I congratulate my hon. Friend on bringing up the topic again.
  Often attendance in the House is inversely proportional to the importance of the topic, and today is an example of that. One may ask why the House has never debated such a fundamental issue—perhaps one of the most important and fundamental issues that the House has neglected to debate this century. The answer lies in the inhibiting effects of free debate of the treaty of Rome. It could have been up to the official Opposition to initiate a debate, but they did not do so, although two Committees in the House suggested that they should raise the matter.
  My hon. Friend has more in common with me than he might suppose. He referred to his father and the tragedy of the Rawalpindi. Rawalpindi house is in my constituency. It was established as a memorial to that sad event. Those of us who remember the events of 1935–36 and who survived, either in active service or as civilians, the bombardment of our towns and cities—I know that you are one, Mr. Deputy Speaker; we are a diminishing number but we are still around—join with all who want to ensure that that never happens again.
  My hon. Friend was kind enough to refer to my tenacity. I make no apology whatsoever for telling him that tenacity on this particular issue arises from an equal concern. After that terrible conflict I had the privilege of going to Hamburg and helping the Hamburg international club rebuild the Gestapo headquarters into a youth theatre. For 40 years I have had exchanges with a family in that city as a result of a school exchange.
  I hope that no hon. Member will again accuse me of being a little Englander or of operating from the wrong motives. As I hope to demonstrate, I do not think that the treaty of Rome is the way to achieve the objectives about which we often hear from my hon. Friend the Member for
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  Hackney, South and Shoreditch, the hon. Member for Battersea and even the right hon. Member for Old Bexley and Sidcup. It is not constructive in that mould.
  My hon. Friend the Member for Hackney, South and Shoreditch spoke about matters in which we share tremendous unanimity, and then he suddenly talked about the exchange rate mechanism. He says that we shall not achieve security for Europe or for the rest of the world through weaponry or threats. That is absolutely right. He rejects the tools of war and adopts the tools of finance. He is an expert in financial matters in the City and I and my hon. Friends all look to him for facts, leadership and analysis in such matters.
  When it comes to world security, partnership and real internationalism, we should not look primarily to the tools of finance or the market. That is the flaw in the treaty of Rome. It is an economic treaty which moves into political realms and places its faith in mechanisms, first in finance and the market, and automatically calls for an expansion of political institutions based on those flawed and transient foundations. That is why I oppose the treaty. It seeks international results on a foundation of sand. It is not international at all: it is supranational, and always wanted to be.
  Hon. Members who speak as individals have a great privilege. Those on the Front Bench who are constrained by corporate teamwork often have to speak in other capacities. Politicians, commentators and party members often forget that a person speaking as an individual and, quite properly, as a citizen can feel relatively unconstrained. An hon. Member who holds office or shadow office or who is the Chairman of a Committee speaks with another label. My right hon. Friend the Member for Chesterfield (Mr. Benn) often accuses people of reneging, but he should remember that people often have to speak in a corporate capacity.
  I am Chairman of the Select Committee on European Legislation and in that corporate capacity I should like to put in a footnote about the recently published White Paper dealing with scrutiny by the House of EEC legislation. That is universally criticised, and it always will be, because our debates on it are advisory only whereas many of our other debates, thank goodness, are still definitive and we have power. That automatically puts them in a different category.
  Yesterday the Leader of the House was asked whether the debate that we are expecting on this very important topic would be subject to a single vote to approve the Government's proposals en bloc. I suggested that that would not be a good procedure because Government proposals are many and varied: some are excellent and some are questionable. We should have an opportunity to debate them at large so that the Leader of the House can reflect on them. If we cannot do that, we are not proceeding in a proper and democratic manner, even when debating how to deal with advisory matters.
  I shall give a couple of examples. There is a proposal for a number of special Committees to replace the occasional Committees that now examine European documents. There are 10 motions on the remaining Order of the Day. In the proposed Committees Members should be able to question Ministers; I do not think that anybody would disagree with that principle. More questionable is the fact that the power to decide whether to have a debate on the

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  Floor of the House at a convenient hour or upstairs is to be removed from the House where Standing Orders presently place it.
  I shall now revert to my persona as an individual Member and speak on the subject that is before me. I agree with my hon. Friend the Member for Hackney, South and Shoreditch about the approach of some Conservative Members, some of whom he named. The Prime Minister's approach to international matters is to be regretted. In the right hon. Lady's past performances in defending the rights of Parliament I did not detect a great deal of concern about parliamentary democracy. I know that she was catapulted to the Front Bench at a relatively early age and perhaps that has something to do with it. However, the right hon. Lady is not the first person to come to mind when one thinks about the champions of parliamentary democracy and especially of its procedures.
  One might think differently about the right hon. Member for Old Bexley and Sidcup, and in a sense that illustrates the other side of the polarity of the Conservative party. However, even the right hon. Gentleman exhibits flaws or illogicalities when dealing with this matter. When we debated the referendum in 1975 the right hon. Gentleman assured the nation on a number of occasions that the Queen would not be affected. I had some correspondence wth the right hon. Gentleman a few months ago and dropped him a line to say that I would mention the matter again this morning. I thought that he would be here. We hear him a great deal on radio and television, and he makes great statements, but he does not always come here for debates on this topic.
  The Queen is affected, but not personally or physically. Any legislation passed in Brussels by the Council of Ministers as a directive requires this House, and perhaps another place and therefore the Queen in Parliament—because Parliament takes the powers of the monarch through our revolutions—to comply, thereby passing legislation at the behest of another legislative body. That affects the power of the monarch which resides in the Mace in this place. The regulation does not even come before us as such. It is self-enacting and does not need to be translated into a statutory instrument or an Act, although consequential legislation may be necessary. Therefore, the power of the Crown in Parliament—which is a better term than the King or Queen in Parliament—is entirely bypassed.
  For a Prime Minister of the United Kingdom to claim, albeit 15 years ago, that the position of the Queen is not affected is quite wrong. I do not know how the right hon. Gentleman gets out of that. In his reply to me, he said something about matters coming before the House in the usual way. As I have illustrated, the documents that come before us for discussion prior to decision in Brussels are for discussion only.
  In the context of the treaty of Rome and the European Community, we are talking not about co-operation, which we all want, but about the constitution and rules or order. We have to go back to the rites of any state to see how such things work. We all know that the four features of legislation, taxation, administration and adjudication are to be found in any modern state in some form or another, even in dictatorships. In our tradition we have said that representative parliamentary democracy, which was
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  achieved as recently as 1928, shall provide the House with power over all matters in statute and power to call any Government to account. Such power comes from votes and from the free citizens of this country to those of us who are here. The way in which the EEC works and some of the proposals that are now before us do not follow in that tradition.
  Let us take the question of a common currency, which should be at the centre of the debate and of economic and monetary union, to which we are apparently now committed. The power of currency is an ancient one, as it authenticates the unit of account—the head on the coin, as my hon. Friend said. In modern economies, it goes much further—for example, to the authentication of banks. I was recently talking to some City gentlemen and I asked them who decides what is a bank. They said, "The Bank of England." So, I asked, "If we get European monetary union, who will it be?", and their faces dropped.
  There are other matters, such as the control of credit institutions and the laws relating to that, the rules of exchange and the management of the currency through inflation. In other words, when one has a currency, whether it be a coinage or authentication of credit, there must be some form of central authority. In the United Kingdom, such control is, by statute, in the hands of the Bank of England, which is publicly owned, although it may not be publicly controlled. If we expand our currency into an international or supranational currency, we must transfer that authority with it. That includes authority not only for the nitty-gritty of economic exchange and the authentication of institutions and currency, but the control and management of the economy of which that currency is part. That is the two halves of the job of the Treasury, and if I am wrong, the Minister will correct me. There is much debate about both aspects, and often the Budget debates are not as good as they might be because the two get mixed up.
  On Monday, my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) made a powerful speech about a Eurofed, because a Eurofed is on the cards and in the documents. Mr. Christophersen, the Finance Commissioner, has issued a document that should be more publicly known in which he advocates that step, which will probably be debated in the intergovernmental conference in the autumn. If there is to be a Eurofed that fulfils that regulatory and management function, as it must, to whom is it to be accountable?
  My hon. Friend the Member for Hamilton (Mr. Robertson) who is the Front-Bench spokesman responsible for these matters, said in reply to my right hon. Friend the Member for Bethnal Green and Stepney that the majority of the Labour party would be in favour of a Eurofed provided that it was accountable. But it cannot be accountable to the House, so is it to be accountable to the Commissioner, to the Council or to the European Parliament? The latter was one of Mr. Christophersen's suggestions. What does "accountable" mean? Does it mean only that one can ask questions and get a reply, good or bad, or can one be dissatisfied with those answers and do something about it? Accountability means a whole range of things.
  It might be thought that this is all rather theoretical, but it is not because these are the questions being debated inside the Council of Ministers and the working parties and they will surely arise when those conferences become semi-public, at least in Italy in the autumn. Whether we

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  like it or not—the hon. Member for Battersea and my hon. Friend the Member for Hackney, South and Shoreditch appeared to like it—we are in the middle of a basic change in the management of our currency and economy. I agree with my hon. Friend that, even if these formal mechanisms do not come into play, there is the informal fact of the deutschmark and our £20,000 million deficit.
  The Prime Minister, in advocating the single market, 1992 Cockfield version, to which the hon. Member for Battersea alluded, has unknowingly added another and vital dimension. When she advocated the single market and the primacy of competition, which is part of her political philosphy and, paradoxically, the philosophy of Tory Members who most object to the treaty of Rome and who would prefer a treaty of Bruges, she forgot that the free market does not mean complete freedom. Indeed, it means almost the opposite. The concept of a market includes rules. It is like a version of a football game. It is competition within given rules—the level playing field, the flat table. Somebody has to decide what those rules are—the specifications, what happens and so on. If the rules about commerce, money and markets are to be harmonised over the whole of the European Community, one has to go into many nitty-gritty matters.
  We are concerned here not just with the money market but with specifications for many matters, from the design of a bus to the speed limits on our road and how much alcohol one is allowed to consume before driving, because without that there cannot be complete and perfect competition. So, rather than the state not being interventionist—a concept in which many Tory Members believe, as they would not have been elected as Tory Members of Parliament without that basic belief—the 1992 package, which will become more and more difficult as we go along, provides an enormous amount of intervention just to create the theoretical markets to which the Prime Minister is so much attached.
  Like the right hon. Member for Old Bexley and Sidcup, who signed the treaty of accession, the Prime Minister and her friends took us through the Single European Act into the single market and the 1992 package under majority voting without any mandate. How is that for parliamentary democracy, which she claims to defend? Can any Tory Member who was elected in 1983 say that he had a mandate for the Single European Act and majority voting on this mass of legislation? I asked the Attorney-General to tell me what the limit on majority voting on article 101A was, and he told me that we do not know. Who is the authority to decide that limit? It is not this Parliament but the Court of the European Community, so the function of adjudication is therefore of fundamental importance.
  Under the treaty of Rome, power in the European Community descends from on high. My hon. Friend the Member for Hackney, South and Shoreditch said that Jacques Delors was the greatest living European. In some curious way, he is. He bestrides the Community like a prince and his Commissioners around him are something of a court. One has only to read the speeches made in the debate on this subject last week in the other place to understand that. There is a gaggle of retired princes along the Corridor. They act out of patronage.
  Last week I was speaking to a senior industrialist—I shall not mention the industry or his company, which is a well-known household name that represents about 10 per cent. of our gross national product—and he asked me whether I was familiar with what the Commission was
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  doing about such and such, and I said, "Yes, it is drafting regulations." He told me that he had tried to see the Commissioner but that he saw only the chap who is writing it out, who is the equivalent of a senior principal—my hon. Friend the hon. Member for Hackney, South and Shoreditch will understand what that is. He said "I am not listening to you—you must wait for the draft regulations." That is almost unbelievable, but it is how the Community works.
  The right hon. Member for Old Bexley and Sidcup has said that the Commission is less important than the Scottish civil service, but the Commission alone has the power to promote legislation. We can promote legislation in the House as individuals, but even the Prime Minister cannot write a proposition for legislation in the European Community.
  Not only is the structure mistaken in terms of putting our faith primarily in financial mechanisms and, secondly, in the markets, but most of the characteristics of the political machine work not upwards from the citizen, but downwards from an emperor-like position of superiority. We are told that if we are good boys we can engage in discussion late at night, but the European Parliament may take the view that ultimately the Commission and the Council must decide. It is through Ministers alone that we have the last remaining channel of accountability to the Council of Ministers—hence the importance of both the House and the Council.
  The treaty of Rome is a unique constitution. Although at first sight it does not resemble a super-state, it expands its competence bit by bit, and becomes a unitary state stage by stage. Its powers over the economy, legislation, taxation and administration expand to match.
  My hon. Friend the Member for Hackney, South and Shoreditch described our shared wartime experiences, and he was right to do so. I, too, had relatives who were killed in the war, although they were not such close relatives as my hon. Friend's; indeed, my hon. Friend and I could also have been killed. My right hon. Friend the Member for Bethnal Green and Stepney has encapsulated today's debate in an early-day motion. What better vehicle could there be than the Order Paper of the House? The motion was tabled in a truly international spirit, recognising that the rest of the world does not stop at Europe. There is now talk of a world economy and a world society. We want to end in the rest of the world what the French and Germans between them—thank God—have largely ended in Europe.
  I shall close on a constitutional note by reading early-day motion 1052, which states
  "That this House believes that the most effective method of obtaining success in transnational endeavours is through co-operation between governments, parliaments and peoples, whether such be within the European Community, in wider Europe, or the rest of the world; and therefore calls on Her Majesty's Government to support and initiate actions that promote higher standards of environmental protection, improved standards of health and safety of employed persons and their conditions of employment by treaties and agreements that achieve their objectives without further prejudice to the rights of the House of Commons in respect of jurisdiction, legislation, and taxation which are the foundations of representative democracy in the United Kingdom."
  I do not believe that any hon. Member can dissent from such a motion without telling us why, especially my hon. Friends, because our party was formed to fulfil its objectives in, by and through the House of Commons.
  11.3 am
  Sir Richard Body: The hon. Member for Newham, South (Mr. Spearing) was right to emphasise that the question is not whether we should play a part in Europe, but whether we should do so supranationally or internationally.
  The hon. Member for Hackney, South and Shoreditch (Mr. Sedgemore) made a magnificent speech. All hon. Members who heard it enjoyed it enormously, but I warn my hon. Friends that I have known the hon. Gentleman for a long time—we were friends before we came into the House. There is only one thing wrong with him: he is a full-blooded socialist. On any issue, we can be sure that his objective is to ensure that this country becomes socialist. Although he argued attractively and persuasively for a common currency and more power for the European Parliament, my hon. Friends can be sure what his reasons were. Now that the socialist party is the largest in the European Parliament, he believes that there is a chance that power will be transferred from the House of Commons to Strasbourg. He wishes Britain to be locked inside a socialist union, and I fear that he will have his way unless my hon. Friends pay heed to what he is about.
  The hon. Member for Hackney, South and Shoreditch began his speech movingly by referring to his father. I thought then that we should prepare ourselves for an idealistic speech, but he galloped off to talk about tatty monetary matters—there is socialism for you. He spoke for some time about the exchange rate mechanism: of course, he wants monetary union. Let me remind him what Ralf Dahrendorf said a few weeks ago. No one can argue that he is not a good European—although perhaps not as good as Mr. Delors, the Prince of Europe—as he worked industriously to bring together 12 countries. He said that we should pause a while before considering monetary union in the 12—that we should wait to see how it works between East and West Germany. If it works there, he said, perhaps we can go on to consider something more ambitious. He reminded his audience that monetary unions have come and gone many times in Europe and that most have collapsed in crisis, causing great hardship to many people.
  On the question of a common currency, we are merely dealing with intrinsically worthless bits of paper until whoever creates the currency gives it authority and makes it worth something. How can that be done in a monetary union embracing 12 countries—or, indeed, 13, as Austria is in the European monetary system—unless there is a supranational authority to decide the quantity of paper to bear the symbol, that makes it the currency of the European union? It has been recognised for a long time that there must be something far superior to our own Treasury or Bank of England to make the decision.
  I suspect that the hon. Member for Hackney, South and Shoreditch has dipped into a book that came out in 1962. I recommend that all hon. Members read it during the current debates on monetary union. It is called "Britain and the New Europe", and was written by two distinguished federalists in this country. Although the book was written almost 30 years ago, the argument is still valid. They explain that we shall never achieve a united states of Europe except by stealth. They did not use that word, but that is what they mean when they went on to say that it would be necessary to take four steps. We have already taken three of them. The fourth step is a common
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  currency. As the authors of the book explain, once there is a common currency there must be a common form of government which is responsible for every decision of any consequence that is taken throughout the member states of the monetary union.
  If we on the Conservative side are honest about it, we know why our party became enthusiastic about entering the Community some 20 years ago. It was born almost entirely of fear of the Soviet Union. We feared the invasion politically, if not militarily, of western Europe. It was important, therefore, that the countries of Europe should be knitted together in some kind of union of self-protection. Nobody, mercifully, can advance that argument now. The events of the last 12 months have been exciting and have put our minds at rest. Although that threat has gone, another has taken its place. The threat that Europe as a whole now faces is potentially greater than any threat that Europe has known in the past.
  The term "environmental security" has entered the political lexicon. Our continent, and the planet as a whole, is a less secure place than it was. In the 21st century it will become a very insecure place unless this generation does something about it. We must take action now if we are to prevent the catastrophes that most certainly threaten us. Individual European countries cannot act alone to overcome the problems that face us—global warming, acid rain, pollution or any of the other issues that add up to environmental insecurity.
  We have to ask ourselves how the countries of Europe can deal with these problems. We need urgently some kind of institutional structure that will enable the countries of Europe to work together on environmental issues. We need to ask ourselves whether the European Community as it is is now constituted is sufficiently well equipped to fulfil that task. There are three reasons why I fear that the Community as it is now constituted is ill-equipped to fulfil it.
  First, the European Community has decided to admit no new members until 1993. Even then, only Austria and Turkey may be admitted; the others will have a long and tedious wait before they can be admitted. We cannot refer just to 12 countries as, by themselves, constituting Europe and able to cope with issues of staggering importance for future generations. We can no longer speak of the European Community as Europe. Some of us like to call it Europe. Even the hon. Member for Hackney, South and Shoreditch made a slip when he referred to the European Community as Europe. The European Community consists of only 12 out of some 35 European countries. Therefore it is too small, too narrow, too isolationist even, to fulfil that task.
  Secondly, the European Community insists upon regarding the Twelve as a homogeneous entity, yet the environmental problems that we face are not one and the same throughout the Community. My hon. Friend the Member for Battersea (Mr. Bovis) referred to the pollution of the rivers. He will agree that the Rhine flows through one country that is not a member of the European Community. No one, I hope would suggest that Greece or Portugal should make a financial contribution towards the cost of cleaning up the pollution of the Rhine. Why should the countries of southern Europe be called upon to pay the vast sums of money that will be needed to deal with the problem caused by acid rain? The European Community, consisting of 12 countries, is the wrong shape and the wrong size to cope on its own with the environmental

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  problems. There is not just one circle of interest; there are a number of overlapping interests. It would be harsh and unfair to expect each Community country to make a financial conribution towards solving the problems within each of those circles of interest and therefore to be part of the same common policy and the same common programme of action.
  The third defect—
  Mr. Ivan Lawrence: My hon. Friend speaks with enormous authority on these matters. He referred, tantalisingly, to the federalising effect of taking monetary union to its logical conclusion. Then he moved on to talk about other matters. He is now about to go even further away, and out of orbit. is not monetary union the central problem that we ought to be addressing? How does one stop the de facto centralisaton of monetary control around the most powerful monetary force in Europe, the Federal Republic of Germany, from slipping into a formalised structure of monetary union that will lead to the federalising effects against which my hon. Friend so rightly warns? What is my hon. Friend's solution to that problem? I am interested in his answers because I share his anti-federalist feelings.
  We need to come to grips with the alternative of formalisation along monetary union lines when we are faced with the stark reality that when the Bundesbank says today that interest rates must go up by 1 per cent. we have to fall overselves and follow, or our own monetary systems fall into decline.
  Sir Richard Body: As Nye Bevan said, why ask the monkey when the organ grinder himself is here? The Financial Secretary to the Treasury is to reply to the debate. He, I suspect, will give a valid, coherent and persuasive explanation in answer to my hon. and learned Friend's question.
  Mr. Lawrence: No, he will not.
  Sir Richard Body: Oh yes, he will. He gave us a little soupcon of it earlier this morning.
  Mr. Lawrence: All he will say is that monetary union is not federalization.
  Sir Richard Body: Despite being tempted by my hon. and learned Friend, I repeat what Ralf Dahrendorf said—that is wise advice which this country ought to take.
  The third reason why I believe that the European Community, as it is constituted now, is ill-equipped to deal with these environmental issues that are of such huge and growing importance for the whole of Europe is its supranational nature. Every common policy or programme of action that it adopts is supported by laws and taxation—because invariably, both are required—that are supranationally decided. We know that they are decided in accordance with a democratic deficit, as it is commonly called, by the Council of Ministers. If all the countries of Europe are to accept and enforce the laws that will be required to make the necessary environmental changes, those laws must be welcomed, understood and wholeheartedly supported.
  Unfortunately, some parts of the Community take a rather cavalier view of Community legislation. A friend of mine, the editor of the New European, was recently in Italy and found himself talking to a distinguished Italian politician. My friend asked, "Why do you like so many of
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  your laws being made in Brussels?" The politician replied, "It's excellent. The further away from Italy our Government is, the better it is for us." That is the attitude taken by a large part of Europe. Other countries do not take the Community's laws quite so seriously as we do.
  The sad part is that if laws are made supranationally and not by national Parliaments, they will not be taken so seriously. When laws are made by national Parliaments, the Governments of those countries have a direct interest in making sure that they are enforced, because they have the imprimatur of the people concerned and are supported by their will. Sadly, that is not the case in the Community, and that is why there is a desperate need to reconstitute it.
  I believe, as I am sure does the hon. Member for Newham, South, that all laws should be made by national Parliaments, and taxes likewise levied by them and not supranationally. As long as we hold fast to the supranational approach, we cannot have democracy. The hon. Member for Hackney, South and Shoreditch had a vision of western Europe embracing central and eastern Europe, as we would want to see the Community do—but how can he then argue that that will be democratic?
  I do not know whether the hon. Member for Hackney, South and Shoreditch agrees with Abraham Lincoln's three elements of democracy, but I have no doubt that he tries very hard to understand the hopes and fears of the people in Hackney. I do not doubt either that he does that very well—up to a point, anyway. But how on earth can any man or woman represent half a million people? How can any man or women be accountable to half a million people? If one imagines a European Parliament as a supranational authority over some 500 million people throughout all Europe, how many Members of Parliament would it have? It would have one Member of Parliament for every 1 million people. How could that be democratic? How could there be any sense of accountability? How could there be any real communion between a Member and an electorate as vast as that? We talk of a democratic deficit, but that would be the real democratic deficit—a European Parliment making 80 per cent. of our laws, yet with representation as inadequate as that.
  Sir Russell Johnston: Does the hon. Gentleman agree that the President of the United States is democratically accountable?
  Sir Richard Body: I wish that the hon. Gentleman would have a word with someone who knows rather a lot about that matter, who is seated only a few feet behind him. I refer to the hon. Member for Newham, South. I must try not to be patronising, but I must explain that we are moving towards a unitary megastate, not a federal union. The United States has a constitution with numerous checks and balances, but even then, how many people vote when there is a presidential election? It is less than half the electorate. Even in the United States there is a feeling among millions of people that it does not matter very much whom they vote for. It is sad that in a great democracy such as the United States, with all its checks and balances, and with a well thought-out and constructed constitution, there is a feeling that it does not matter much who is elected to the White House.
  Those are the reasons why I believe we must urgently reconstitute the European Community, to make it an international not supranational body.

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  Assuming that we are concerned about environmental issues, why is not greater use made of the one institution of Europe that was the first by many years to raise the important issues that concern us all now? As long ago as 1957, the Economic Commission for Europe, which now has 35 member states, was bringing together the countries of eastern and western Europe to deal with issues such as the environment, trade, agriculture, and so on. It dealt with some 14 different issues. It is sad that our Government have for some years not put their weight behind the commission. It is well-equipped to formulate common policies and programmes of action for the nations of Europe that feel that they have a problem in common and want to act together to overcome it.
  The Economic Commission has proved its ability to fulfil that role. A long list of conventions has been prepared as a result of intergovernmental conferences and have been put into effect in this country, as in others throughout Europe. They have not necessarily been implemented in every country, because even if one supports the Economic Commission, one is not bound by every convention but can choose to adopt or not adopt according to whether one's interests coincide with those of one's neighbours. That is a more sensible approach to some of the issues that confront us.
  I am all in favour of the European Community dealing with a wide range of issues, provided that it drops its supranational pretensions. The lesson of the past 30 years is that there have been very few occasions when agreements have been reached without friction and disharmony. Those of us who have studied the machinations of the common agricultural policy over many years know that a great deal of fraud has also been involved. In any event, I hope that the hon. Member for Hackney, South and Shoreditch will yet come round to the view that the supranational approach is undesirable. He should be a good internationalist like the hon. Member for Newham, South and help to make progress towards genuine co-operation throughout the whole of Europe, not just with part of it.
  11.29 am
  Sir Russell Johnston: The hon. Member for Holland with Boston (Sir R. Body) is a decent and fair-minded man, but my disagreement with him is so wide that if I were to attempt a rebuttal I would not have time to say anything else.
  Mr. Spearing: Have a little go.
  Sir Russell Johnston: I will have a little go on the way.
  Like other hon. Members, I welcome the initiative of the hon. Member for Hackney, South and Shoreditch (Mr. Sedgemore) in introducing the motion, and I very much welcome the way in which he did so. If I am too fulsome about it, he may regard it as an unfriendly act. As a Liberal, I found many of his words and phrases old familiar friends. Nevertheless, it was pleasing to hear them falling from his lips.
  When I joined the Liberal party in 1954—it was not exactly a high time; in fact, there have not been many high times—the party's commitment to developing European integration was a major factor in my decision. I thought that liberalism was an individually based philosophical
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  concept and that one's responsibilities did not stop at the national borders. I remember being proud when the small parliamentary Liberal party divided this House in 1959 on whether Britain should apply forthwith for membership of the European Community.
  Strangely and sadly, the arguments against such a course of action that were paraded 31 years ago are still to be heard. It was most welcome to hear them so effectively and fluently debunked from the left of the Labour party. Many of them are atavistic and emotional and have little to do with economic disputation. Although we are supposed to be talking about economics and alternative economic theories, many of the views come much more from the guts than the head. They rest on a complex of beliefs which are held, I say to the hon. Member for Holland with Boston, almost as a matter of religious faith by many in the United Kingdom. They believe that we are better and more efficient and that we have better laws. The hon. Member for Holland with Boston said that the Italians are good at making ice cream but not at keeping the law.
  Mr. John Marshall: Does the hon. Gentleman agree that Italy has had to be taken to the European Court more frequently than the United Kingdom and that it is not particularly good at implementing its judgments? The record shows that the United Kingdom is speedy in implementing judgments that are adverse to it.
  Sir Russell Johnston: There are differences between one country and another in the European Community, but I would not generalise about that.
  I do not accept the idea we are better than everybody else, but nor do I say that we are worse than everybody else. [Interruption.] The Minister is muttering into his non-existent beard; I did not catch what he said.
  Listening to the right hon. Member for Bethnal Green and Stepney (Mr. Shore) on Monday, when he spoke of exchange control as though it were a holy object, one realised that his basic objections were not economic objections but were based on the belief that we can do things better within our own borders. I no longer accept that argument. The hon. Member for Hackney, South and Shoreditch dispensed with part of it when he talked simply of the plain fact that so many economic matters cannot be confined within borders.
  The hon. Member for Newham, South (Mr. Spearing) delivered a passionate defence of the Bank of England, the the Treasury, my God, as if they were the last bastions of civilisation about to be overwhelmed by the visigoths of Brussles and Frankfurt.
  Mr. Spearing: Will the hon. Gentleman give way?
  Sir Russell Johnston: I thought that might excite him.
  Mr. Spearing: It is not accurate or fair to attribute words to me that I did not utter. I was not endorsing the attitudes, policies or habits of the Bank of England and the Treasury but illustrating the fact that, because of Ministers' accountability to the House, we have some influence or control over what they do, right or wrong, wise or unwise.
  Mr. Sedgemore: Over the Bank of England?
  Mr. Spearing: I said attitudes. If my hon. Friend becomes Chancellor of the Exchequer, he may have a good go at that. The transfer of powers and responsibility to Eurofed would diminish or extinguish the House's powers.
  Sir Russell Johnston: The hon. Gentleman's intervention was effectively dealt with from a sedentary position by the hon. Member for Hackney, South and Shoreditch. I shall deal with Eurofed in a minute and say how in practice—although democratic control of such matters is somewhat attenuated—we can exercise as much, if not more, control over it as we currently exercise over the Bank of England.
  The Community was established in 1957. It is most interesting to read the discussions that took place at that time at the top of the Conservative party and within the Foreign Office. They were profoundly wrong because they believed that the European Community would not last a year or two. Since that time, Britain has not prospered comparatively. We have improved many things, but comparing the indicators with countries such as France Germany and even Italy, whose individual gross national product now exceeds ours, shows that we have not done well. I was too young to be in the war, but I was not too young for national service. In Berlin in 1958 I was getting DM12·5 to the pound. What is the rate now? That is a comparative example. The Government took office dedicated to conquering inflation, and 10 years later they are still dedicated to doing so. The comparative decline makes me doubt whether we have the capacity to conquer the problems, and I am quite prepared to consider other ways of doing so.
  Mr. James Hill: The hon. Gentleman has noticed that the mere rumour that we may be joining the European regulatory mechanism has not only boosted the pound but has been welcomed by the City—the engine room of the economy—because it redirects investment, which is what we all want to see. From my understanding, by the end of the year we may be a member of the European monetary system and the regulatory system. That will help to deal with the problem of inflation and perhaps will help interest rates.
  Sir Russell Johnston: I do not propose to become involved in arguments about engine rooms, although I entirely agree with the hon. Gentleman's basic argument that the rumours of imminent entry—how imminent is a matter for dispute; the hon. Member for Hackney, South and Shoreditch suggested that November is now the preferred time—have had their effect. Experience of the operation of the EMS has shown that, in other countries, it has introduced an external discipline that has produced significant reductions in inflation. It has moved countries away from stop-go economic policies and, in some cases, pulled down interest rates.
  Mr. John Marshall rose—
  Sir Russell Johnston: No doubt the hon. Gentleman wishes to intervene to give the classic opposite argument, but I do not think that it would get us very far if we became involved in a tennis match. The effects of the EMS can be observed, and although what I have said may not yet be true for Spain and certain other countries, it is certainly demonstrably so in France, the Federal Republic of Germany and even in the Republic of Ireland.
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  I propose to deal now with the political aspects of the motion. The words "federal" and "federalism" cause many people to experience a frisson. I am not sure why people are so afraid of the words. Contrary to what the hon. Member for Holland with Boston said, federalism does not mean a unitary state or a centralised system; it means a decentralised system, a tiered system. It accepts the concept of subsidiarity in which activities are pushed downwards. The nature of a federation is established and written down in a constitution that entrenches the powers not only of the federal government but of the state components of the federation. The erosion of power of our local administrative structure of government in the United Kingdom would not be possible in a federation because the law would prevent it.
  Sir Richard Body: I agree wholeheartedly with what the hon. Gentleman has just said. But we are not moving towards a federal union. That is perhaps our complaint. We are moving towards a unitary megastate, which is essentially different.
  Sir Russell Johnston: All that I can say to the hon. Gentleman is that I see no evidence of moves towards a unitary megastate. All the politicians whom I meet in the European Community—not just Liberals but Socialists, and I do talk to Socialists from time to time—are in favour of a federal solution of some kind.
  Mr. Spearing: It is not federal.
  Sir Russell Johnston: They are in favour of a federal solution of some kind—in other words, a division of powers. There are many different ways in which that can be achieved, but that is what they are about—collecting at the centre only those matters that are best dealt with at the centre. There is no general proposal from Socialists, Christian Democrats or Liberals in the Community that power should be concentrated for matters that can be dealt with effectively by the existing nation state components of the Community.
  Mr. William Cash: The hon. Gentleman and I have crossed swords on these matters on a number of occasions. Is he aware of the platform of the European People's party? Is he aware that Alber and Egon Klepsch have continuously and repeatedly called for a single Government and a single Parliament in Europe? He knows that that is so. Would he be good enough to tell me how he can claim that they are not asking for the inclusion of such ingredients in a new Europe?
  Sir Russell Johnston: A European federation would certainly have a Government and a Parliament which would cover the whole of the Community, but that does not mean that all power would be concentrated in those institutions any more than it would in any other federation. Of course, a federation has a central federal authority. I do not think that Egon Klepsch, whom I used to know reasonably well when I was in the European Parliament, would argue for a unitary state. All the Germans whom I have met, of all political persuasions, are much attached to their own federal system, which works exceedingly well and avoids the undue concentration of power that exists in countries such as ours, which have a less dispersed form of government.
  Mr. Hill: Let me bring hon. Members, up to date. The political strategy of Europe is now shifting to the CSCE,

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  and America and Canada are part of that process and the concept has gained tremendous credence over the past few months. Does not the hon. Gentleman realise that Europe is moving towards centralised political union in the CSCE and will move further and further away from EEC trading practices, which I suppose we shall have to have but which will slowly diminish in importance?
  Sir Russell Johnston: The hon. Gentleman is right in saying that in most federations the federal Government deal with foreign affairs and international relations and with defence matters. That would also be inevitable in a federation of the European Community. But that is very much a question for the future.
  I regard the European Community as more of a friend to the regions than the existing national Governments. Many of Europe's regions are neglected because their national Governments have neglected them. While I was in the European Parliament, I felt that there was as much concern in Brussels as in London about the highlands of Scotland, Scotland generally and the regions of England. There was a general concern to disperse—
  Mr. Hill indicated assent.
  Sir Russell Johnston: The hon. Gentleman is nodding. When he and I were in the European Parliament, he was the chairman of its regional committee. He did the job very effectively. I think that he would agree that there was a common view that the wealth of the Community should not be allowed to become concentrated at the centre but should be fairly dispersed. I suppose that it is inevitable that a centralised country such as ours should fear centralisation, but, in my view, our fear is misplaced.
  While we are discussing political democratic models, I must refer briefly to our electoral system, which is unique in Europe and which is not often thought about. It profoundly affects our political style and the way in which we do things. Let me cite one statistic to illustrate my point. When there was a presidential election in Chile [Interruption.] The hon. Member for Holland with Boston does not look very keen on presidential elections, but they had such an election in Chile. When Mr. Pinochet was roundly defeated, everyone thought that it was a good demonstration of democracy. But Mr. Pinochet got 42 per cent. of the vote, which is exactly the percentage of the vote that the Government received at the last general election, which gave them a majority of 100. They are two rather different concepts of democracy. Is the Minister muttering again?
  Mr. Lilley: Can the hon. Gentleman tell us any country which runs its presidential elections on anything other than the first-past-the-post system? It is hard to envisage proportional representation in a presidental election.
  Sir Russell Johnston: The Minister has completely missed my point. Of course, one cannot have a presidential election on anything other than a first-past-the-post system. I was simply saying that the failed candidate in Chile received the same proportion of the vote as the Government of the United Kingdom, who have a majority of 100. That is not an encouraging comparison. Every other country in the Community has some form of proportional representation, and all of them use it in the European elections. The unrepresentative nature of the
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  system is not the only important thing; it produces in British politics a profoundly non-consensual approach. Perhaps that is one reason why, although everyone says that the British are good at compromise, we are not, in fact, very good at it and are often out-manoeuvred in the Community councils.
  Most of the speech of the hon. Member for Hackney, South and Shoreditch was on economic matters, and, to conclude, I should like to make a few remarks on economics. He spoke. about the development of the ecu. I hope that the ecu will become a common currency in time. As I said on Monday, that would be welcomed by ordinary individuals when changing money because at present they pay 12 or 15 per cent. commission every time to no point. Also it would unquestionably give the Community much greater weight in international monetary discussions and place us collectively on a par with the dollar and the yen. As a single European currency, the ecu would be in heavy international demand as a medium of exchange and a unit of account. It would be a financial asset for the private sector and a reserve asset for foreign central banks.
  Developments in eastern Europe increase the pressure for a common European currency to be established quickly. Otherwise eastern European countries will use the deutschmark or the dollar. As 1992 approaches, we should ponder the fact, and perhaps the Minister should do so, that there are no examples in the world of open internal markets which are not also monetary unions.
  Mr. Lilley: What about the United States and Canada?
  Sir Russell Johnston: One could argue in that way, but I do not accept that those countries act absolutely as one open internal market, despite recent changes introduced by Mr. Mulroney.
  The arguments for the United Kingdom joining the ERM have been subsumed in the matter of currency union because unless we join the ERM—I believe that we shall—we shall not become party to economy monetary union.
  The hon. Member for Hackney, South and Shoreditch also mentioned the question of a European central bank. The great attraction of that would be its independence from both national and community authorities. The Bundesbank model is necessary, in political terms, to secure the agreement of Germany to the proposition. But it is also an objective requirement in itself.
  As many hon. Members have said already, one cannot have an independent institution with such vast powers completely outside democratic control. That would be against the general thrust of making the Community more democratic—despite what some hon. Members have said, democracy does exist in the EEC—and it would be dangerous in itself. Therefore, the answer might be to distinguish between the operation of the bank and its overall accountability, to refer back to what the hon. Member for Newham, South said.
  The bank should conduct its operations on its own responsibility without interference, and be seen so to do. However, it should be accountable for its actions to the Community's only democratic body, the European Parliament. In practical terms, that would mean that the Governor of the bank would have to present an annual report to Parliament and submit to questioning in debates.
  In addition, members of the governing body who are not governors of the national central bank and the

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  president of the bank should be elected by Parliament or, following the United States model, be confirmed by Parliament.
  I finish by again congratulating the hon. Member for Hackney, South and Shoreditch on tabling the motion. Against a background of a much more hopeful, but still highly unpredictable, world situation, it is essential not only for our several advantages of belonging to the European Community but for the stability of the world that the EC quickly comes together more effectively. I welcome the debate and the terms in which it has been introduced.
  11.53 am
  Sir David Mitchell: Like other hon. Members, I congratulate the hon. Member for Hackney, South and Shoreditch (Mr. Sedgemore) on his well-timed selection of this subject. I wish to cover three matters—political developments, the exchange rate mechanism, and communications within the European Community, with particular reference to the statements made by my right hon. Friend the Secretary of State for Transport yesterday on the high-speed link.
  On political developments, when we had the referendum on our membership of the EEC, the case that I put to my constituents was that our standard of living depended on Britain having markets with which to trade. That is a clear factor and one with which few would argue.
  In the past we had a privileged trading position in the Empire and Commonwealth. Our competitors were locked out and Empire preference gave us a huge advantage. We then moved to a disprivileged position in which the Empire and Commonwealth markets increasingly locked us out by various forms of protectionism in order to protect their local industries, local employment and other factors.
  The European Community provided us with an opportunity for a fair and equal trading position in which we were neither disprivileged nor especially privileged. That was certainly a substantial advantage over our disprivileged position resulting from the loss of priority within our Empire markets.
  I wholly support taking the necessary steps to ensure continuity of equality and fairness in our trading opportunities in the marketplace of the EEC. I accept the need for wider EEC control over matters that extend beyond national boundaries, such as pollution. I agree with what my hon. Friend the Member for Holland with Boston (Sir R. Body) said. He put his finger on the importance of that factor.
  I do not accept that to secure the benefits of a wider free market for our people we need to submerge the United Kingdom in a United States of Europe. I do not accept the concept of a unitary state in Europe and I do not accept that the EEC should decide matters that can properly be decided within the internal institutions of EEC member states.
  It is a matter which the House should find curious that a Frenchman, Jacques Delors, is leading the concept of a more unitary state in Europe with the Delors plan. For France is the frontrunner in any competition for the most nationalistic state in Europe which applies and uses the EEC for its national advantage at every opportunity.
  Mr. Lawrence: It is a socialist state.
  Sir David Mitchell: My hon. and learned Friend refers to the political persuasions of those who are in a majority in the European Parliament and the EEC.
  I agree with my hon. Friend the Member for Battersea (Mr. Bowis) that we should recognise the changes that have taken place in Europe and not become locked into yesterday's thinking at a time when Hungary and other east European countries are knocking on the door. We should not move to a unitary state approach which will result in those countries being locked out and unable to become early, full and effective members of the EEC.
  I make two pleas. One is in connection with the various proposals that will be debated by Ministers through the autumn on the next stage of the Delors approach. The question of what powers, decisions and responsibilities move from this country to be settled elsewhere should be debated fully and clearly on the Floor of the House. We should have a clear blueprint of exactly what is proposed rather than find it dribbling out later in bits and pieces as the House comes to realise that we have let ourselves in for rather more than we anticipated. If we allow ourselves to push ahead at a pace that is unacceptable to our people there will be a backlash against the concept of European co-operation and progress.
  The ERM is seen by many as a panacea. The National Farmers Union and manufacturers continually ask us to join it. Importers want us to join it. They would then be saved the forward purchase of currencies to cover purchases abroad. We should recognise, however, that there is a downside to joining the ERM. It does not provide an easy, soft option. In fact, it requires us to run our economy in such a way as to keep our currency in line with its given slot among other European currencies. The practical reality is that we could find a clash between what is in the interests of our internal economy and our commitment to maintaining that currency link.
  The Treasury and the Government are walking a tightrope in their management of the economy as they try to get inflation under control without plunging us into a recession. Suppose that such fine tuning did not work as hoped and we moved into a recession more quickly than expected and unemployment rose dramatically in the next 12 months. If we were members of the ERM we might, because of inflationary reasons, be forced to increase interest rates at the very time that the internal economy required us to reduce that rate.
  So we must recognise that the ERM is not a panacea and there is a downside to it. I believe, however, that the benefits of membership of the ERM will, on balance, outweigh the downside, but before we join we must ensure that our inflation and our economic growth is in line with other European countries. If we achieve that, the balance will be in favour of our joining the ERM.
  The Conservative Government can live with the ERM, as they believe in the monetary disciplines that it would enforce, but what price would be paid if we had a Labour Government? The Opposition plan to give more resources to every pressure group in the country and that means that our rate of inflation would increase and the value of our currency would fall. In line with that, interest rates would have to soar. The threat of such soaring interest rates will hang over and discipline any future Government who want to indulge in a spending spree.
  Mr. Hill: I know that my hon. Friend is a man of great honesty in politics and all else. He would be the first to say

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  that there should have been some mechanisms to regulate some of the decisions taken by former Chancellors. For a while we ran out of control. My hon. Friend has already said that our inflation must be in line with that of other European countries before we join the ERM, but one of the problems is that we do not use the same index as other European countries to assess our inflation. Does my hon. Friend agree that a controlling mechanism on decisions reached and a similar index to measure inflation as that used by our European partners would also count towards the upside of joining the ERM?
  Sir David Mitchell: I do not want to prolong the debate on that issue except to say that whatever form European co-operation may take, transport will be a key element in it.
  I agree with Opposition Members who have said that we must not put Britain even more on the periphery of Europe than geography has already ensured. In that connection, it is important to consider the high-speed rail controversy which has arisen as a result of the statement by my right hon. Friend the Secretary of State for Transport yesterday. We need a rail link through the tunnel that will compete successfully with ferries and air travel as an alternative means of getting to and from Europe. For those who use the channel tunnel trains three criteria must be met—convenience, comfort and time.
  If one goes from Waterloo to Paris or Brussels by train one does not have to fight through the traffic to get to Heathrow, stand around at the airport waiting for the plane, one's luggage and all the rest of it. Nor does one end up at Charles de Gaulle airport miles outside the centre of Paris. The rail connection is more convenient, comfortable and causes less harassment than travelling by air or by ferry.
  Is it important to shave 20 minutes off the journey time when one can reach Brussels in two and three quarter hours and Paris in three hours under the proposed timetable? The important thing is not whether the journey is 20 minutes shorter or longer, but how the proposed British Rail timetable compares with the alternatives in terms of convenience, comfort and time. In competitive terms where does that timetable place the tunnel in the market? In terms of comfort, convenience and being faster than the competition, the proposals for a terminal at Waterloo and bypass services through Olympia to the north are perfectly adequate, without a high-speed link, to compete successfully for the pure rail share of traffic that the tunnel is designed to carry.
  An important question relates to capacity. At some stage more capacity will be needed than can be provided by the services through Waterloo and Olympia on to the north. British Rail is satisfied that that additional capacity will not be needed until the end of the century. Where is that capacity? I had the privilege of chairing a committee in Kent made up of members of the county council and the district councils. It was known at one stage as the Mitchell committee, but it was a Kent consultation committee that looked into the problem of capacity.
  That committee found not that there would be insufficent capacity to cope with the requirements of the channel tunnel trains, but that there would be a problem of capacity for the Kent commuter services running at the same time as those trains. If one examines the slots that
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  will be required for the trains running to and from London and the tunnel, one discovers that slots will become available when, for example, there is no boat train going to Dover. In the morning there is no problem because the peak of trains arriving from the continent occurs after the rush hour has ended in London. The boot pinches in the afternoon services, when channel tunnel trains due to leave London coincide with the commuter pressure of afternoon trains for Kent.
  There will be three to five trains in the afternoon about which real problems will arise. But those problems could be offset in part by longer commuter trains, longer platforms and faster commuter trains, and I welcome what the Secretary of State said about the investment of £400 million in commuter services to Kent, for which he has already given investment approval.
  I agree, reluctantly, with the Secretary of State that it would not be right to spend not £190 million but £1,900 million of taxpayers' money on providing a high-speed link to cope with that relatively small level of dislocation to our Kent commuter services resulting from the afternoon trains.
  The economics of a new fast rail link are at present a bridge too far. Just as in 1974 a channel tunnel could not be built commercially and viably by the private sector whereas 10 years later it could, and is being built, and will prove to be successful, so in 1989–90 it is not possible to build a fast link to that tunnel that is economically viable.
  I have little doubt that by the end of the century it will be, and for that reason it is vital for the Government regularly to re-evaluate the likely level of revenue to come from the provision of a high-speed link, and on that basis to consider when it might be commercially viable for such a project to go ahead.
  The subject of freight was raised in questions to the Secretary of State yesterday. The most important aspect arising from the channel tunnel from the point of view of the north of Britain is the need to ensure that freight links and terminals are scattered across the country in such a way that all the major freight requirements going to the continent can be met by the tunnel freight services. What the Secretary of State said yesterday about a high-speed link had nothing to do with freight, which was never intended to go on the high-speed link.
  I am glad to have had the opportunity to make those comments, for I wanted at the earliest time to make a contribution to the debate on the communications and transport aspect of our European economic future in the light of what was said yesterday by the Secretary of State.
  12.13 pm
  Mr. Tom Cox: When, with great eloquence, my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Sedgemore) opened the debate, he could little have thought that the discussion would have included that speech—I do not dispute its importance—by the hon. Member for Hampshire, North-West (Sir D. Mitchell). That the hon. Gentleman was able to make that speech is to the credit of my hon. Friend, who framed his motion in such a way that we have opportunities to range wide and raise what are crucial issues affecting the economic and political development of the European Community.
  It is clear from events in central and eastern Europe in the past year that many changes will continue to occur in the Community. Some of them are likely to be dramatic.

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  I am a member of the Council of Europe and vice-chairman of the British group of the IPU. Hon. Members will be ware of the role that the British group is playing in meeting representatives from countries in eastern Europe. Many politicians from emerging parties in those countries are anxious to visit Britain and other western nations. Indeed, this week we received representatives of all the major parties in the new East German parliament, and later I will comment on the views that they expressed to us.
  As a Council of Europe member and an officer of the British group of the IPU, I have been privileged to visit many eastern European countries and to meet their leading politicians. It is clear that they are anxious to have a closer association with the EC.
  Members of the Council of Europe who are present this morning will recall the major speech made by Mr. Gorbachev to the council in Strasbourg in which he spoke of one Europe of the future. That is coming. Within the next five to 10 years there will be close, ongoing relationships between the countries of east and west Europe. That is clear, as members of the Council of Europe will be aware, from our contacts with representatives of central and eastern European countries. Regular delegations from those countries attend discussions in Strasbourg, and various committees of the Council of Europe hold meetings in their countries.
  Much has been said about the single market in 1992 and the changes that that will bring about. In considering those changes, we must take into account—although a vital issue, it does not receive the media coverage of other, more immediate, issues—the future role of the United States and its trading opportunities in Europe. Those who attend meetings in Europe are aware of the regularity with which delegations of American senators and congressmen and women who visit Europe and—not forgetting the business interests that they represent—seek closer opportunities to trade in Europe. Likewise, the Japanese are making similar efforts in east and west Europe.
  That aside, the newly emerging democracies of eastern Europe are vital in the long term for the development of the European Community. It is sad to witness events in Romania. Those who have visited that country recently must he filled with sorrow at the brutality that has occurred there in the last 48 hours. The heroic people of that country having thrown off one tyranny must now be questioning whether they are witnessing the birth of another evil tyranny.
  Mr. Tony Banks: None of us can view with comfort the events that are currently taking place in Romania, but perhaps my hon. Friend is taking it too far. After all, there was an election in Romania which was viewed by international observers and was adjudged, in terms of the mechanics of the election, to have been fair. Perhaps my hon. Friend should pause before he compares the current regime in Romania with the Ceausescu tyranny.
  Mr. Cox: I take my hon. Friend's point. The British Inter-Parliamentary Union group sent two hon. Members to observe the elections in Romania, and I chaired the discussion of the report of those observers, which showed that there was not a great deal to complain about in in terms of the elections. However, there was a great deal to complain about in the run-up to them.
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  The point that I wish to make, as I believe would the people of this country of whatever political party, is that when there are elections, one hardly thinks that a few days later such brutality will take place on the streets of a country that says it believes in democracy. Who are those people and what support have they, and from whom, for the brutality in which they have been involved? We shall watch developments during the next two or three weeks. What I have seen on the television and read in the press fills me with concern.
  Sir Russell Johnston: Does the hon. Gentleman accept that both the Romanian Liberal party and the Peasants party offices have been sacked and gutted by a group of people who were called into central Bucharest by President Iliescu?
  Mr. Deputy Speaker (Sir Paul Dean): Order. I hope that the hon. Member for Tooting (Mr. Cox) will remember that it would not be in order to go in detail into the internal affairs of east European countries. But as long as his answer is linked to the EEC it will be perfectly in order.
  Mr. Cox: I take your point, Mr. Deputy Speaker. As we are talking about a wider Europe and, in time, one Europe, it was appropriate to have made such comments, and I shall leave it at that.
  We know that, sadly, countries in eastern and central Europe have little going for them economically at present. At a recent meeting I was told that there were only two countries in that part of Europe—Hungary and Czechoslovakia—that seemed to have a reasonably bright future and hopes of making fairly quick economic progress. The general feeling among the rest of them was that the road to change and improvement would be difficult.
  Therefore, in this Chamber, and in the wider EC context, we must start to ask what the role of the Community or its member states will be in those changes. Earlier in this debate, reference was made, I think by the hon. Member for Battersea, to Austria. What will be the role of the general agreement on tariffs and trade? Austria, one of its leading members, has clearly stated that it is seeking membership of the European Economic Community. All the political parties in Austria support that and the general feeling is that it will happen around 1993.
  However, what will be GATT's future after that? Does it have a long-term future? If not, what will be the involvement of those countries that are presently GATT members from Europe? They will look for a much closer association with, and possible membership of, the Community. Therefore, we are looking at a Community in 10 or certainly 20 years' time with many more members than the present 12. Today, we have the chance to start to discuss that.
  I shall confine my remarks to the role of the countries of eastern Europe.
  Mr. Cash: The hon. Member has referred to GATT several times. I have just the slightest suspicion that he perhaps meant the European Free Trade Association, but I am not certain. Will the hon. Gentleman enlighten me?
  Mr. Cox: I was talking about those members that belong to GATT from within EFTA.
  I and others see the trade, currency, finance and general industrial developments in central and eastern Europe.

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  Surely, at this early stage of development in those countries, we cannot believe that there can be industrial, economic development in one part of Europe that will in no way affect another part of Europe with which we are becoming more closely associated. We must give closer consideration to that.
  We all realise that when economic change occurs, there are problems. We have suffered problems as economic changes have taken place. Many areas of this country have been depressed and still suffer severely from the industrial changes that took place. The changes that some eastern European countries face are starting to cause problems.
  In Poland there have been high price rises and increased unemployment, with the social unrest that that will cause. The same sort of problems are starting to occur in the Soviet Union. When the Minister replies, will he say how this country, as one of the leading members of the European Economic Community, can work alongside those countries of central and eastern Europe that will have to face those changes? At the same time, I want to know how we are going to help them to overcome the changes without causing the sort of social unrest that I mentioned.
  There has been some comment in this debate about future exchange rates between East and West Germany, and there is much concern about their possible effects. There is also much concern about a united Germany which includes eastern Germany. One goal of West German politicians in the months since the wall came down was to try to keep as many East German people as possible living and remaining in East Germany. We know of the social unrest and unemployment that could be caused. What will happen as a united German comes into being?
  What will be the position of guest workers who, at present, work in West Germany, and have been there for many years? Under West German laws, their status is often open to much question. It is interesting that in this country this week, under the auspices of the British IPU, we have received a group from East Germany. One of their fears was that they were going to be swallowed up in that united Germany. They have concerns about some of the developments in their country. They expressed one fear that, despite the appalling conditions under which they have had to live, they would be used as a cheap labour force. They were concerned that West German industrialists would come into East Germany buying up plant that is no longer productive and turning it into means of production that will have a dramatic effect on East Germany. If it has a dramatic effect there, the repercussions will be felt in other parts of eastern and central Europe.
  I know that other Members wish to speak so I shall make only two more brief points. I and other hon. Members have commented on the changes in central and eastern Europe. Those countries urgently need help in developing their education systems. I and other hon. Members who are present today know about the know-how fund, but education stretches much wider than that. It would be interesting to know—if the Minister cannot tell us today perhaps he will think about it and possibly write to me—the Government's thinking on developing educational opportunities in Britain for talented men and women from central and eastern
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  European countries who could benefit from a knowledge of our education system which might help the development of their countries. In some countries people know little about trade, marketing and the pricing of goods. We in Britain have a great deal of knowledge about those skills which people taking responsibility in those countries need. The Government cannot stand on the sidelines and say that it is up to the respective business organisations to develop contacts and bring interested groups together. The Government must have an up-front on-going involvement in that. I shall be interested to hear the Minister's comments.
  I support the changes that will inevitably come about. They will be difficult, and we need to have the will and the understanding that we as a developed country must help those countries that are not so far away—we can get anywhere in central and eastern Europe in a couple of hours, so we are not talking about vast travelling distances Britain and other countries the Community must commit ourselves to helping those countries to a future within a wider Europe.
  Finally, I congratulate my hon. Friend the Member for Hackney, South and Shoreditch on introducing the debate and on the wideness of his motion which allowed us to raise these issues today.
  12.31 pm
  The Financial Secretary to the Treasury (Mr. Peter Lilley): I join other hon. Members in congratulating the hon. Member for Hackney, South and Shoreditch (Mr. Sedgemore) on securing today's debate and choosing the subject. It is a particular pleasure for me to respond to the hon. Gentleman because when I made my maiden speech he had the misfortune to speak immediately after me and, as is the custom in the House, he was kind enough to make gracious and flattering remarks, and I am always susceptible to flattery. This is the first opportunity that I have had to tell him that I have enjoyed every speech that he has made in the House that I have heard, and none more so than today, when he was characteristically lucid, robust, poetic and idiosyncratic.
  The hon. Gentleman spoke movingly of his father. We all join in paying tribute to his father, who was lost in the war and to all those who sacrificed their lives in preserving the freedom of Britain to govern itself. Like the hon. Gentleman, we are determined that Europe should never be riven by war again.
  However, I do not believe that Britain's retention of the right to govern itself through its own institutions constitutes a threat to peace in Europe. That is the implication of all those who say that we must abandon it for that reason. On the contrary, I believe that the peace of Europe is being built not by subordinating our institutions to others, but by freeing our people to have greater intercourse in trade, travel, living, exchanging and moving around our continent, building up a network of friendships and common interests that is surely the basis of freedom and prosperity throughout our continent.
  Before I return to the hon. Gentleman's motion and his speech, let me mention some of the excellent speeches by my hon. Friends and by Opposition Members. My hon. Friend the Member for Battersea (Mr. Bowis) who has apologised to the House and to me for having to leave, spoke with measured wisdom that I am sure will carry him far. I was struck by his remark that we should not make

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  the pooling of sovereignty an end in itself. There is a danger that some people see that as an end rather than as occasionally a necessary means.
  The hon. Member for Newham, South (Mr. Spearing) was right to re-emphasise the role of the House in exercising scrutiny and ensuring accountability. In so doing he is being thoroughly European and running with the tide of current European thought. In some countries, such as France, Spain and Greece, the Parliaments are taking measures to re-establish their powers and to re-examine the way in which they exercise scrutiny over Community affairs. It is right for us to do likewise.
  My hon. Friend the Member for Holland with Boston (Sir R. Body)—I do not normally think of him as associated with any country but this one—was right to distinguish between the pursuit of a unitary megastate and what is called federalism. I drop the word federalism when I remember to do so and talk more of Euro-nationalism as the ambition of some and Euro-co-operation as the ambition of the Government and, I think, of the House. My hon. Friend was also right to say that supranational-ism or Euro-nationalism appeals to the hon. Member for Hackney, South and Shoreditch because it provides an opportunity for the hon. Gentleman to breathe life back into socialism. As the hon. Gentleman said, once a socialist always a socialist.
  The hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) said that some hon. Members and some of our people think of themselves as superior and criticise foreigners. There is no danger of the hon. Gentleman ever being accused of doing anything such as that. In his speech, as in all his speeches, when he drew a comparison between the British people and foreigners, the advantage went to the foreigners. When he drew a comparison between British institutions and those abroad, the British institutions came out worse and ought to be swept aside. When he compared the Government's policies with those of our partners he concluded that we were to abandon ours and adopt those of our partners. I imagine that that is the sort of thing that people in the Liberal party think.
  My hon. Friend the Member for Hampshire, North-West (Sir D. Mitchell) was right to point to the incompatibility of Labour's policies with membership of the exchange rate mechanism. A Government who are committed, as the Labour party is committed, to increasing public expenditure and to the higher taxes that would follow from that, to resorting to borrowing as Labour has promised to do and to a premature reduction in interest rates, would be unable to stick by the discipline of the exchange rate mechanism, whatever prior conditions were attached to membership. My hon. Friend the Member for Hampshire, North-West made a valuable contribution, as he is well able to do, on communications. His judgment that the balance of advantage is not yet in favour of a fast link with the continent, although he said that we should keep it under review, carries great weight. No doubt my right hon. Friend the Secretary of State for Transport will attach weight to his words, which I shall draw to his attention.
  The hon. Member for Tooting (Mr. Cox) made a valuable contribution when he emphasised the importance of countries in central and eastern Europe and in the European Free Trade Association that are not yet part of the European Community. He asked about the help that the Government were giving to those countries. I was in Warsaw last week and it was volunteered to me that the
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  help that we were giving through the know-how fund was better, more speedily delivered and better targeted than that of any other Government. I was told that they were still waiting after a year for help from the Community. I shall ask my colleagues in Government to look at the point about the use of the know-how fund for education.
  The debate follows a major debate on the subject that we had in the autumn. In the same way, this debate emphasises that with few exceptions this is a consensus subject. Although the hon. Member for Hackney, South and Shoreditch seems to be unaware of it, the Government and Opposition, although they disagree profoundly on many things, are united on many aspects of the approach to European monetary union. Both parties support stage 1 of the Delors proposals, which begins formally on 1 July. Both parties support entry into the exchange rate mechanism during stage 1, albeit on different conditions. Both parties reject stage 3 of Delors, with its proposals for an unaccountable single central bank and currency, and centralised control of economic policy. Both parties reject them for essentially the same reasons—that they rely on an unaccountable bureaucracy, that they reflect abstract blueprints rather than a practical approach that is congenial to the British approach to politics and that, on the central issues of economic and monetary policy, they would deprive this country of the ability to govern itself through this Parliament.
  I was struck by the similarity of our approaches when I read through the latest policy document produced by the Labour party and the document that we produced on the evolutionary approach to European monetary union. I ask the House to guess which of the following phrases came from which document. The first is:
  "we would oppose the proposals for an all-powerful, but unaccountable European Central Bank, as outlined in the Delors plan for Economic and Monetary Union."
  The second states that the authors
  "strongly criticised the proposal that the European Commission in Brussels should control the budgetary policies of member countries."
  The third is:
  "Instead of trying to impose blueprints on the economic and monetary development of Europe, we should build on the experience of the Single Market process and on the operation of the Exchange Rate Mechanism."
  The fourth is:
  "the EC is not a unitary state and we do not believe that further progress towards European unity will or should, lead to a European superstate."
  Those quotations all come from the Labour party document, but none of my hon. Friends would have any difficulty with them.
  None the less, there are differences between the two parties even within the topics covered by the motion. For example, on the European exchange rate mechanism, we differ as to conditions. Last year, in Madrid, my right hon. Friend the Prime Minister agreed that Britain would join the ERM as part 1 of stage 1 of EMU. She also set out clearly the conditions that must be satisfied before we join. We have stood by those conditions and we have not wavered, and we shall join when they are met.
  In "Looking to the Future", the Labour party document, we are told that a Labour Government would negotiate Britain's entry into the ERM at the earliest opportunity, on the basis of prudent and reasonable conditions, which Labour has previously outlined. The Labour party is rather coy about repeating those conditions and at a recent hearing of the Select Committee

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  on Treasury and Civil Service, the hon. Member for Hackney, South and Shoreditch is reported as claiming that he was told by the shadow Chancellor that three of the four conditions laid down by the Labour party were either irrelevant or idiotic. Inasmuch as they seem to involve devaluation and reflation, they would undermine the basis of the ERM. I should be grateful if the hon. Gentleman elaborated on that conversation. Which of the conditions are idiotic and which are irrelevant? Has he followed up that matter?
  Mr. Sedgemore: If the hon. Gentleman read my questioning of the Chancellor in that Select Committee, he would know that the main thrust of it was that most of the conditions put forward by the Government and the Opposition are artificial political hurdles, and that there are no real economic reasons why Britian should not have an early entry into the ERM. The Chancellor did not agree with that, but I am sure that I am right.
  Mr. Lilley: I hope to hear more about this famous conversation, but the hon. Gentleman is too canny to be drawn. The central thesis of his motion is that Britain's entry into the ERM must be seen as a stepping stone towards creation of a single European currency. I know that some of my hon. Friends who are opposed to entry into the ERM—wrongly, in my view—are opposed because they see that inevitable progress towards a single currency, but I believe that both are mistaken.
  Pegged exchange rates do not automatically lead to currency union. There have been other fixed rate systems—Bretton Woods, the gold standard and the sterling area to mention but three—and none led to a single currency. That is not the inevitable consequence. Nor does a fixed exchange rate involve the loss of sovereignty. The decision that it is desirable—both for the stability of exchange rates and as an anti-inflationary discipline and framework—to fix a country's exchange rate is a sovereign decision for each state to take or not to take, as it chooses.
  However, such decisions cannot be taken wholly unilaterally. If one country wants to fix its exchange rate at I to 1 with its neighbour while that neighbour wants to fix the rate at 1·1 to 1, the two are incompatible. An agreement must be reached. The purpose of the EMS and the ERM is to provide a way to establish a compatible system of exchange rates and build a framework in which monetary and exchange policies can be operated. That is sensible, and should not cause my hon. Friends concern.
  By contrast, the proposal to establish a single currency and a single central bank goes to the heart of sovereignty and self-government. Virtually every state has, and has always had, its own currency. There are clear reasons why states have found it essential to issue and control their own currencies. First, a currency is a symbol of the state's authority. Secondly, it is a source of revenue, because of the seigniorage that results from issuing a currency whose value exceeds the cost of production. After all, it costs far less than £5 to print a £5 note, and the right to print it is therefore valuable. Thirdly, it is necessary to have the ability to issue money in order to act as lender of last resort to the banking system—which requires Government regulation to maintain its stability, as the hon. Member for Newham, South pointed out. Fourthly, monetary policy has a profound effect—at least in the short term—on
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  economic activity. For all those reasons, states have found the benefits of having their own currency to exceed any disadvantages that their citizens may face through not being able to do business in the same currency when they trade or travel abroad.
  From time to time, currencies have been merged into a single currency when states have merged into a single state: we see that happening as the two German states merge into one state with a single currency. With the arguable excepion of Belgium and Luxembourg—and, possibly, west Africa, with the CFA—two or more states have never successfully shared a currency. In the foreseeable future, there is not the remotest possibility of all the European states merging into a single state under a single Government, and without a single Government it is almost inconceivable that they will be able or willing to manage a single currency. None the less, there is every reason why we should co-operate to manage our monetary policies in the most beneficial and mutually compatible way.
  The hon. Member for Hackney, South and Shoreditch asked me whether the Government's views had any counterparts on the continent. I am surprised at the extent to which my remarks were mirrored in a speech that Mr. Balladur sent me. He said:
  "Let us be clear, a single currency … presupposes a level of political integration and abandonment of sovereignty on the part of the member states which is incompatible with the present situation of Europe, and, in my view, unacceptable to France … Both symbolically, and at a practical level, currency is an essential attribute of sovereignty. There is no example of sovereign countries which have given up their currencies. Let us leave this dream world! Who thinks for a moment that Germany is ready to abandon the deutschmark, or Britain the pound sterling? No one says so, but everybody knows. In these circumstances, it makes more sense to put aside these illusions, and instead think of solutions which have a chance of coming to something."
  Mr. Cash: My hon. Friend has given us an interesting insight into his own thinking—and, therefore, the Government's thinking—on such matters. Can he tell us what is going on in the mind of the other member states on the question of defining terms such as economic, monetary and political union? He has just given us an insight from France; would it be possible for him to give us an idea of what is happening in the other countries?
  Mr. Lilley: My hon. Friend is as well informed as any hon. Member about what is happening in other countries. I hope that he will excuse me if I do not take up his invitation to digress from my speech and give a dissertation on what they are doing. I hope that Europe will reach a consensus on the practical way forward.
  There are already good signs that it is possible to reach agreement on those issues. For example, the original Delors report on the economic arrangements within Europe stated that it would be necessary to have control over the budgetary policies of the member states. We pointed out that even close-knit federal states such as the United States and Canada exercise no central control over state budgets, so there can be no reason for leaving less power in the hands of the sovereign Parliaments of the European states.
  I am happy to say that the argument has swung in our direction. The Commission has published a new paper that appears to accept our point of view. Britain's proposal—that market forces should be reinforced by members agreeing not to bail out profligate member states and to abstain from the monetary financing of deficits—is

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  becoming common ground. I hope that my hon. Friend welcomes the fact that we are joining constructively in the discussions and that we are having success in certain areas.
  The recently published Labour party policy document goes so far as to claim that the result of that change of thinking in Europe is due to the arguments that it has advanced. That is a little bit of hyperbole, but in essence the Labour party is putting forward much the same case as we are.
  The hon. Member for Hackney, South and Shoreditch refers at the end of his motion to wider issues. Division re-emerges as soon as we leave the question of economic and monetary union and consider the position of the two parties in the House. The Labour party backs wholeheartedly the social charter. I understand why the Opposition may find that some of the policies outlined in the social charter are congenial to them as socialists. If so, they should seek a majority for those policies in the House and in the country.
  Mr. Tony Banks: What the Minister says is true up to a point, but the social charter also seems to be attractive to capitalists in France, West Germany and other parts of the European Community. How does he square that with what he has just said?
  Mr. Lilley: I did not say that the social charter does not appeal to other people; what I say is that it appeals to socialists. Therefore, the socialists in the House, who believe in the importance of this House, should seek a majority in the House and in the country for those policies. What I cannot understand is why they feel that those policies must be imposed by central diktat—possibly by means of a majority in the rest of the continent against a minority in this country. I do not see the point of that. The document argues implicitly for that point of view: that if the country were to pursue those policies unilaterally, they would make our industries uncompetitive, so we should follow them only on a Europe-wide basis and then all of us would be equally uncompetitive. That is an unattractive argument. Europe is not the world. If Europe makes its industries and economies uncompetitive, it will lose out against its competitors elsewhere in the world. If those policies do not stand up in their own right and are incompatible with competitive industry, we should not pursue them, either unilaterally or collectively.
  Mr. Banks: That argument will not be lost on the industrialists of West Germany, France and Italy. They are as acutely aware of the need for competitiveness as the Minister and the British Government. Does he not accept, however, that the social charter is the obverse of the Single European Act and that the two must be taken together?
  Mr. Lilley: No, I do not accept that argument. A number of countries believe that it would be attractive to apply those measures throughout Europe. They have already introduced them and found that they have made their industries less competitive than they would otherwise be; therefore they would like the industries of other countries to be burdened by them as well. Therefore, we did not sign the social charter, but we look constructively at any proposals for specific measures that are well argued and justified.
  This has been a first-rate debate, and I refer again to the opening contribution made by the hon. Member for Hackney, South and Shoreditch, which set a high standard
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  and provided an opportunity to raise many important issues. I thank him for that, and I look forward to the contributions of other hon. Members as the debate proceeds.
  12.54 pm
  Mr. Chris Smith: I join other right hon. and hon. Members on congratulating my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Sedgemore) on his choice of an extremely important topic, and on the eloquence with which he made his case. Sadly, the same degree of clarity cannot be said to have emerged from the speech of the Financial Secretary to the Treasury. On the question of where precisely the Government stand on Britain's potential membership of the exchange rate mechanism, we are as confused now as we were before the Minister's speech began.
  The most recent definitive statement from the Government came in the speech made by the Chancellor of the Exchequer to the German Chamber of Industry and Commerce in the United Kingdom on 12 June, when he said:
  "I think no one has any doubt now that the Government is committed to joining the exchange rate mechanism; and we have set out the conditions under which that will be possible. A good deal of progress has been made on a number of these conditions, but they have not yet all been met."
  That is the most definitive recent statement by a Minister on the Government's intentions concerning sterling's participation in the ERM. However, it provides no guidance as to when the Government intend to take that step and in what circumstances they are prepared to commence discussions with our European partners.
  Today, the Minister reiterated the Madrid conditions, which are freedom of capital movement throughout the European Community, restrictions on free competition to be lifted—the completion of stage 1 of the Delors process—and that Britain's rate of inflation must fall to the European average.
  Which of those conditions do the Government regard as having now been fulfilled? I shall address inflation in a moment. As to the others, there were two interesting exchanges during the consideration by the Treasury Select Committee of this year's Budget. When the Governor of the Bank of England appeared before that Committee on 28 March, he was asked by the hon. Member for Berwick-upon-Tweed (Mr. Beith):
  "Would it be your advice to us and the Government that all the Government's conditions except that relating to inflation have now been largely satisfied?"
  The Governor of the Bank of England replied unequivocally:
  "Yes, I think so."
  He went on to identify one or two minor issues of free capital movement that remain to be resolved, but said that they were not important.
  On 3 April, the hon. Member for Berwick-upon-Tweed, who is tenacious in these matters, asked the Chancellor the same question:
  "Have the conditions, other than inflation" for British membership of the Exchange Rate Mechanism been met, apart from the details?"
  The Chancellor's answer was in sharp contrast with the Governor's:
  "No, but they are moving towards being met."
  Within six days, the Governor of the Bank of England said that the conditions, other than inflation has been met, but

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  the Chancellor said that they had not. We are entitled to ask the Government which of those views represents the considered view of the Government.
  Sir Richard Body: I thought that the hon. Member for Berwick-upon-Tweed (Mr. Beith) asked whether the conditions had largely been met, which is different from "having been met". It was not inconsistent with what the Chancellor said.
  Mr. Smith: The hon. Gentleman ignores the question that the Chancellor was asked:
  "Have the conditions, other than inflation for British membership of the Exchange Rate Mechanism been met."
  The Chancellor's answer—no—was a clear answer to that question.
  Mr. Cash: The hon. Gentleman will be aware that the Governor of the Bank of England signed the Delors report. It therefore perhaps would not be entirely surprising, given that the Opposition do not agree with stages two and three of the Delors report, for there to be a considerable difference in emphasis between the answers given by the Bank of England, the Chancellor and hon. Members.
  Mr. Smith: As the Government have asserted clearly several times in the House the accountability of the Governor of the Bank of England to the Government, the hon. Gentleman's comment is somewhat surprising. Of course there may be differences of view between the Governor and Chancellor, but we are entitled to know exactly what is the Government's position. Every time I have asked the Government whether the conditions, apart from inflation, have been met, I have received no answer.
  Mr. Maples: At some length, the hon. Gentleman has taken us through the Government's conditions for entering the exchange rate mechanism, which at least have stayed the same for about 18 months, whereas the Opposition's views are constantly changing. It would be helpful to know a little more about them. Last year, the right hon. and learned Member for Monklands, East (Mr. Smith) laid down the condition that the exchange rate mechanism should lose its deflationary bias, which for our purposes is almost the sole reason for its existence. In an interview in The Daily Telegraph in January he is quoted as talking about a competitive exchange rate, but the deflationary bias has been dropped. Will the hon. Gentleman enlighten us about the importance of the delationary bias of the exchange rate mechanism, as his party sees it, and what did the right hon. and learned Gentleman mean by a competitive exchange rate?
  Mr. Smith: The hon. Gentleman is a little over-eager. I shall deal with those points in a moment, but I wish first to finish dealing with the Government.
  Leaving aside the conditions other than inflation, let us consider inflation itself. We know from the answer that the Chancellor gave during Treasury questions recently that, as their measure of whether inflation has been reduced sufficiently to allow British entry, the Government are using what they like to call the underlying rate of inflation, rather than the retail prices index. We know that, because that was the answer that the Chancellor gave. But we have had no guidance from the Government on the meaning of
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  the strange word "proximate", which has been used frequently by the Chancellor in relation to the gap between our level of inflation and the European average when the Government come to make up their mind. What precisely does "proximate" mean? It could mean anything from a very considerable gap between the two rates of inflation to an identical convergence. But when we have pressed the Government on the issue or asked them precisely what "proximate" means, they have refused to tell us. The picture that is emerging is one of continuing confusion and the Government have not told us exactly when and in what circumstances they envisage the Madrid conditions being met.
  There are sound economic reasons for Britain to join the exchange rate mechanism—on that I entirely concur with my hon. Friend the Member for Hackney, South and Shoreditch. A number of advantages flow from ERM membership. First the ERM will provide stability of planning for British industry, which will then be able to assume a stable exchange rate policy in relation to its overseas trade. It is significant that in January, when Financial Weekly conducted a survey of businesses in Britain, 97·2 per cent., of the companies polled in terms of market capitalisation, and 91·8 per cent., in terms of the number of companies, said that they believed that Britain would benefit by ERM membership. Many of those companies gave as their reason the benefits of a stable exchange rate. They found sterling's volatility against the deutschmark and the dollar to be one of the most telling problems facing British firms abroad. The stability brought to our exchange rate policy by ERM membership would be a significant benefit.
  Secondly, we must realise that much of our supposed independence of action as a country has already gone. When, last October, the Bundesbank raised its interest rate, it took the British Chancellor and Prime Minister half a hour to decide that they had to do the same. We must realise that the economies of Europe are becoming increasingly interlinked and interconnected, whether we like it or not. It is surely important for us to be part of a forum—that is what the exchange rate mechanism is—which will make joint collective decisions about the future of Europe, rather than having to respond unilaterally to decisions that are made elsewhere.
  Thirdly, exchange rate mechanism membership provides protection from excessive speculation against any individual currency in the mechanism.
  Fourthly, exchange rate mechanism membership provides a counter-inflationary discipline within the domestic economy. Clearly it is not an easy ride. It does not have benefits without potential disadvantages, but the counter-inflationary discipline that it could bring would act on balance for the benefit of the British economy.
  On all the points that I have raised, we urge the Government to commence discussions with our European partners to join the ERM immediately. We do not urge the Government to wait until some unspecified rate of inflation or fulfilment of the Madrid conditions is attained. We urge them to commence discussions now.
  Of course, we want the Government to discuss with the members of the ERM the issues which the Opposition have consistently urged the Government to discuss. Here I can answer the hon. Member for Lewisham, West (Mr. Maples). Those issues include the rate at which we should join—any Government would have to engage in a discussion about that—the swap arrangements between

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  the central banks to protect against speculation, the need for an enhanced regional policy to counter the imbalances which already exist within the European Community and the need for co-ordinated policies for growth across the European Community.
  Mr. Lilley: Can the hon. Gentleman estimate how long it would take to negotiate a strengthening of the regional support system as in the document, and which he referred to, as a necessary precondition of entry to the ERM? How long would it take to negotiate? The document says:
  "Entry to the ERM must also be accompanied by effective collaboration between the central banks of the EC countries."
  It says that that would involve further development of the Basle-Nyborg agreement on swaps.
  How long will it take to negotiate a system involving closer monetary and fiscal co-operation designed to maintain steady economic growth? Are we talking about this century or the next?
  Mr. Smith: I am afraid that the Minister is grossly out of step with current thinking in Europe on the matter. I shall come to regional policy in a moment. The one Government in Europe who do not believe in strengthening regional policy across the EC is the British Government. Other countries and Governments in Europe are keen to see regional policy develop, including the Government and the political parties of West Germany. As East Germany comes in to join with West Germany, that argument will become even more powerful for the German Government and people.
  Sir Richard Body: Is not there an obvious reason for this? Who will pay for the regional fund? There are only two paymasters in the Community—Britain and West Germany. It is easy for the Greeks, Italians and others to clamour for a regional fund because they will pull the money out. Who will put the money in?
  Mr. Smith: The hon. Gentleman ignores the fact that while Britain has done reasonably badly—I entirely accept that—out of the agricultural support mechanism of the EEC, we have done well out of other EC structural funds which give support to British regions. The hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) is well aware of that. The point made by the hon. Member for Holland with Boston (Sir R. Body) does not hold good.
  This debate is about not just Britain's membership of the ERM, important though that is, but the possibility of a wider process of monetary integration and ultimate monetary union. On two points alone we are on all fours with the Government. First, we do not accept the Delors proposal for central European determination of the fiscal policies and budgetary deficits or surpluses of individual member states. There is no necessity why such central control should exist even if the process of monetary integration proceeds apace. Secondly, we do not accept Jacques Delors' vision of a totally independent central bank determining, in an unelected fashion, the monetary policies of Europe. We do not believe in unelected bankers exercising an independent control over the major items of economic policy.
  Mr. Cash: Does the hon. Gentleman appreciate that that contradicts exactly the point he was making earlier about the significance and importance that he attaches to the statement on the ERM by the Governor of the Bank
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  of England before the Treasury Select Committee? The hon. Gentleman should take that into account, as that was the burden of my earlier intervention.
  Mr. Smith: The hon. Gentleman clearly does not appreciate that the structure of the Bank of England is more heavily controlled and more accountable than that of most of the central banks in Europe. Because of that, the words of the Governor of the Bank of England must be deemed to carry some governmental authority.
  The Government seem to be somewhat confused and unclear about the potential process of monetary union. My hon. Friend the Member for Hackney, South and Shoreditch was right to point out that, on 12 June, the Chancellor made no reference to the idea, supposedly all the rage just six months ago, of a system of competing currencies—the so-called evolutionary approach to monetary union. Is the competing currency idea still Government policy? On 12 June the Chancellor spoke about the possibility of the parallel use of the ecu alongside existing currencies—a different mechanism towards achieving monetary union. Is that new Government policy? We simply do not know, because neither the Government nor the Financial Secretary have told us. What is the Government's policy on competing currencies or the parallel use of the ecu? What will the Government argue when they go to the intergovernmental conference later this year?
  If we are to move towards closer monetary integration in Europe three points must be emphasised about the shape that such union may take. First, it must retain the essential principle of democratic accountability for the making of monetary policy. Any system of central banks that might emerge must be democratically accountable.
  Secondly, in such circumstances, the crucial question will concern the remit of any such central bank. If a central bank is told to concentrate—without any other factors being taken into consideration—only on the issue of price stability, one set of decisions will come from that central bank. But if it is told, as it should be told, to concentrate on the need for price stability but to do that within the context of the need for balanced sustainable growth across the overall European economy, a different set of decisions will emerge. The latter would be a more sensible remit to achieve.
  Thirdly, any moves towards European monetary union must be seen in the context of improved regional policy, a subject to which I have referred. If there is to be monetary union—if individual nations are to find that the levers of exchange rate mechanism and interest rate decisions are removed from their armoury—there must be other and wider mechanisms to ensure that imbalances within the overall European economy can be addressed, and regional policy presents that opportunity.
  Mr. Peter Shore: The House is listening with interest to my hon. Friend's elaboration of the conditions that he thinks are reasonable for further moves towards economic and monetary union. He has not commented on proposals for the permanent fixing or locking of exchange rates. That, after all, is the essential feature of stage 3 of the Delors report and is an important component of stage 2, when any changes in exchange rates are virtually outlawed, or are to be taken only in the most exceptional circumstances. Has my hon.

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  Friend considered that, and may we be assured that in no way are we prepared to accept permanently fixed and locked exchange rates?
  Mr. Smith: My right hon. Friend speaks with authority on matters relating to the European Community. I do not always agree 100 per cent. with what he says on these issues, but there is always a good amount worth considering in what he says, and the point he raises is extremely important in relation to any prospects for economic and monetary union. The whole idea of monetary union that some people are advocating would entail a common currency and a central monetary authority, and inevitably that would include a gridlocked exchange rate system.
  As I have been explaining, our view is that if steps are to be taken in that direction, we must ensure that a number of extremely strong protective measures are taken, including the three that I outlined—democratic accountability, a remit that includes economic growth and a much stronger regional policy. Those must be part of any steps that may be taken in the direction that my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) suggested.
  By contrast, the Government have not outlined their view on this issue with anything like the same clarity. There has been a lack of any truly constructive approach from the Government on the exchange rate mechanism membership and any developments towards monetary integration between the countries of Europe.
  We should be discussing constructively and in detail with our European partners, helping to shape the nature of those discussions, and then making judgments about what part we should like to play in any such process. The Government are not doing that; they are sitting on the sidelines. There is a danger that a two-track Europe will be created that will leave us in the second, rather than the first, league of economic development, growth and prosperity in the European Community.
  Mr. Spearing: I am grateful to my hon. Friend for giving way because in answer to my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) he said—with his label as Front-Bench spokesman on his forehead—that we would not rule out fixed exchange rates given certain conditions. My hon. Friend nods his head. One such condition was regional policy. Nobody is against regional policy, but I am sure that he agrees that where regional distress is caused by competition—competition is one of the aims of the treaty of Rome—it is difficult to accept that relief of that distress should be given in hand-outs decided in Brussels. Is the regional policy to which my hon. Friend referred that sort of policy or the dispersal-of-industry policy engaged in by the post-war Labour Government?
  Mr. Smith: Truly effective regional policy can be achieved only on a democratic and decentralised basis. My hon. Friend is right to identify that as an issue. The ways in which regional policy funding decisions are arrived at is an important issue for us to discuss, as is the size of the regional fund.
  My hon. Friend has correctly identified our view that we would not for ever rule out in principle the possibility of a common currency, a common monetary policy and a
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  gridlock of exchange rates in the European Community. But we want to know the exact nature of the animal before we accept it without question. That is why it is absolutely essential that the conditions that I outlined are met, the issues addressed and discussions held with our European partners before we make any unqualified commitment to European monetary integration.
  Sir Russell Johnston: I wish to make a quick intervention while the hon. Gentleman is talking about regional policy. Is the Labour party committed to the principle of additionality?
  Mr. Smith: The hon. Gentleman will have to content himself with my answer that it depends on the circumstances. It entirely depends on the purposes of the principle of additionality in any particular respect. That is the best response that I can give the hon. Gentleman.
  There is a danger at present because the Government are not committing themselves in a constructive spirit to the discussions now taking place, whether the Government like it or not, between our European partners about movements towards closer integration. Because the Government are taking such a stand-offish attitude, there is a real danger that the rest of Europe will go charging ahead without us in years to come. That danger is inherent in the Government's dithering approach to joining the exchange rate mechanism and to any wider discussion that may be taking place in Europe.
  That danger will certainly be visited upon us if the Government continue to evince the confusion and doubt that currently persist in their policy on our entry into the exchange rate mechanism. They have got it wrong and they ought to think long and hard about the need to get it right.
  1.30 pm
  Mr. Nigel Forman: We have just listened to a long and rather engaging speech from the hon. Member for Islington, South and Finsbury (Mr. Smith), containing metres, or perhaps even kilometres, of Front-Bench flannel. I sympathise with him in his difficulties, but a slightly more succinct presentation of his party's position might have stood him in better stead. He can be sure that in future weeks and months we shall be studying closely what he said and using it effectively against him and his party. On the EMU and the ERM the hon. Gentleman was making a valiant but hopeless attempt to square the circle.
  Like other hon. Members, I congratulate the hon. Member for Hackney, South and Shoreditch (Mr. Sedgemore) on his good fortune in being able to introduce the debate and on his elegant and amusing speech, which was full of thoughtful and almost revolutionary points and which will repay reading. I was amused by his references to Sir Alan Walters. The way in which Sir Alan Walters seems to crop up time and again probably means that any Ministers choosing to resign in future may well have to come to the House and say that they wish to spend more time with friends of the family. That is probably the way in which British politics is moving.
  I was also interested to hear the hon. Gentleman concede that the age of socialism is over. That is a realistic statement on which I commend him. He also said that the age of Labour corporatism is over and is inappropriate to modern conditions. It is clear that, although his colleagues

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  on the Labour Front Bench may not have learnt a great deal about the changing conditions of the 1980s and 1990s, he at least has put his time to good use. I agreed with him when he said that the European Community is now the most appropriate framework for so much of our economic policy in Britain.
  We have had a useful debate—and I have listened to it all—as it has given the House another opportunity to explore and examine much of Labour's policy on the European Community. As my hon. Friend the Member for Lewisham, West (Mr. Maples) said in an intervention, there is no doubt that the Labour party has come a long way towards common sense in the development of its European policy. However, it is clear from the drift of the debate and the speeches by Opposition Members that there is a terrific amount of inherent inconsistency in the position that they would take. It is not at all clear whether the hon. Member for Hackney South and Shoreditch speaks for his party, but I suspect that I know the answer to my own rhetorical question.
  For example, one wonders whether a future Labour Government—if there were to be one—would be prepared to follow the necessary supporting policies in the conduct of economic and monetary union of monetary discipline and a balanced budget in order to make a system based on fixed exchange rates really work as intended. I very much doubt whether a future Labour Government would be able to do that. Equally, I wonder whether a future Labour Government would accept the need for real operational and institutional independence for a central bank or a European system of central banks. It is clear not only from the quotations of my hon. Friend the Financial Secretary to the Treasury from the Labour party document, but from the speech of the hon. Member for Islington, South and Finsbury that the Opposition are not enthusiastic about the idea of statutory accountability or independence of any kind for our central bank.
  If the crunch came, and if we had a Labour Government formed by the modern new-look Labour party, a Labour Chancellor and Prime Minister would fall back upon the old protectionist socialist impulses of the Labour party. The hon. Member for Hackney, South and Shoreditch rightly criticised the whole idea of socialism in one country. Those socialist impulses would be largely in response to the defensive pressures that would be put upon that party by its trade union supporters and others behind the party who would feel unable to cope in the new world of super-competition, which is undoubtedly the world into which we are moving in the 1990s.
  I agree with the hon. Member for Hackney, South and Shoreditch that Britain should join the exchange rate mechanism. As the Government have frequently made clear, we shall do so as soon as the Madrid conditions have been met. That bland familiar phrase will entail important political judgments about the appropriate timing. I stress the words "political judgments" because the matter is not capable of resolution with some fine econometric calculations. It is important to join in circumstances and conditions which can be defended in the markets and sustained in terms of market credibility.
  The hon. Member for Hackney, South and Shoreditch was also right to say that, once in the mechanism, Britain should stay in it. That means following all the appropriate supporting policies on monetary discipline and responsible tax financing of our public expenditure commitments. If Britain's public expenditure commitments were financed
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  to any significant degree by public borrowing, it would undermine not only the integrity of the policy but, more important, in a world without exchange controls—and I understand that the Opposition have no intention of returning to exchange controls—the flight of capital which would ensue and which is all too easy to effect, would change a future Labour Government's policy whether they liked it or not.
  I hope that my right hon. Friend the Chancellor, who is not here today, will be able to take the decision to go into the exchange rate mechanism towards the end of this year or perhaps early next year at a time of a relatively strong exchange rate in relation to the deutschmark. That is where I disagree with the hon. Member for Hackney, South and Shoreditch. It should be done in wide bands initially, because the experience of Italy and Spain suggests that that is a good phased way to do it.
  I hope that Britain's approach to the future development of the Community will be positive and will recognise that it is now an anachronism to try to practise either conservatism or socialism in one country. Those days are gone. We should recognise that our partners—and that means critically the French and the Germans—are now determined to press ahead on a fairly speedy time scale towards economic and monetary union. We should deal with that reality, and our policies should take full account of the facts.
  I use the word "facts" deliberately, because in an important speech on Monday my right hon. Friend the Foreign Secretary said that there would always be tension inside the Community between the Europe of phrases and the Europe of facts. He said that we, and he suspected most of our people, have a strong preference for the Europe of facts. I agree with that view. Of course it is one thing to say that we prefer the Europe of facts and another to act in the light of that preference and to be absolutely honest about it. Let us take an unblinkered look at some of these facts.
  First, the most critical fact is that it is the private, not the public, sector that is leading the process of European integration, notably via the decisions of large multinationals, based here, in Holland or anywhere else. and the decisions of leading financial institutions. Many of these have their headquarters in Tokyo or New York, but are treating the single market and the opportunities that it gives much more positively than those based in European countries.
  Secondly, our partners in the Community are determined to press ahead quickly towards economic and monetary union, if necessary leaving behind those member states that cannot or will not join in. This should be a warning to my right hon. and hon. Friends on the Front Bench. I hope that they will bear this in mind over the coming months, so that we do not repeat the errors of previous British Governments, notably in 1950 with the Schuman plan and 1956 with the Messina conference. It would be a case not of third time lucky but of third time fatal. It is vital that my right hon. and hon. Friends understand that.
  The third reality, which occurs to all of us, is that the single market is being constructed even as we speak, day by day and week by week. It is essentially a process of ever-closer economic integration, driven by the private sector and now driven, ever more decisively and speedily, by the recent introduction of qualified majority voting under the Single European Act. Even Ministers have made

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  it clear that this has been of assistance to us in knocking down the unnecessary and indefensible barriers that still exist in some of the countries that preach most about free trade—for example, the Federal Republic of Germany—but practise a degree of protectionism.
  I shall give an outline of the policy approach that we should take to these realities and facts. The first principle of our policy should be to take the necessary decisions to enable us to participate fully in every aspect of the future development of the Community. In the immediate future, this must mean deciding to join the ERM in time for us to have a real influence on the deliberations of the intergovernmental conference due to start in December.
  Secondly, we should continue to throw our full weight behind all those in the Community—there are not yet enough of them—who wish to maintain an open trading Community in relation to the opening up of the combined market of 320 million people, especially in air travel, insurance and road transport, which are inexcusably still protected by some of our Community parners. This should apply also to the trade and investment flows between the Community and the rest of the world, from which this country has benefited disproportionately as compared with other Community member states, notably in attracting inward investment from Japan.
  Thirdly, we should give our support to the development of a much more effective central banking and supervisory role for the Bank of England and later on for the emerging European system of central banks. The best way for us to contribute to this process would be to legislate, probably not in this Parliament but in the first Session of the new Parliament, to put the Bank of England on a new basis of statutory accountability to Parliament, just as in future there will be a Eurofed, which will have to be statutorily accountable to a more powerful and more competent European Parliament.
  I do not have time to go in detail into the advantages of such a structure, but I shall perhaps be able to do so on another occasion. Briefly, they would be, first, much greater market credibility for the monetary policy both of such a national central bank and, ultimately, of a European system of central banks, and, secondly, more effective day-to-day management of monetary policy, thanks to such an institution being given a clear overriding statutory mission to counter inflation above everything else. That relates to the point made earlier by the hon. Member for Islington, South and Finsbury.
  Thirdly, and importantly, there must be some institutional compatibility between the arrangements that we put in place and those emerging in other European countries. It is significant that even Holland, France and Spain, all of which have had central banks that were, in varying degrees, close to their Ministries of Finance, are now moving quite deliberately towards a more independent role for their central banks because they have learnt from the experience of the Bundesbank and from the Federal Reserve in Washingon.
  Fourthly, we should try to establish a more logical division of labour between national Parliaments—such as ours—and the emerging European Parliament, which must supervise and hold to account the activities of the Commission and the Council of Ministers.
  Mr. Cash: May I take up my hon. Friend's point about the independence of the central bank? Does he agree that, according to articles 3 and 12 of the basic law, although the Bundesbank exercises a degree of significant independence in regard to currency stability, that independence is nevertheless subject to the overall political control of the Federal Government? That is vital to the argument, as it shows that the bank is not really independent, as it is often alleged to be.
  Mr. Forman: I welcome my hon. Friend's intervention, which gives the opportunity to make some more general observations. It has been a characteristic of today's debate, and of debates in previous years, that both sides have put up straw men and then knocked them down. That is not helpful to a mature and quiet understanding of the truth.
  My hon. Friend is right to say that there are clauses in the Grundgesetz in Germany which mean that ultimately the Federal Government, rather than Mr. Pöhl, exercise the authority. The key point is the degree of independence that any central bank has, and the market perception of that independence. That is why I stress market credibility as an agreement for the course that I favour.
  Much has been said about the principle of subsidiarity, and that principle will help us to establish an effective division of labour between the institutions of government.
  It should, however, apply equally to all levels of government. That is the shape of the future: in time the Community will go in that direction. Those things that can most appropriately be done at supranational level such as environmental and trade matters, should be dealt with by the Community institutions, acting in the traditional manner. Equally, taxation and bugetary policy should be kept at a national level, and should be decided and voted upon in this House and other national Parliaments. There is, of course, one notable exception—the VAT revenues for the European Community.
  Increasingly, in the European Community of the future, the sub-national level of government—local government in all its forms—will come into its own much more, and rightly so. That is the basis on which the Germans have encountered such success in the Federal Republic, and views in the Community—including a great deal of political opinion in France—are moving in that direction. Britain is now the last bastion in the Community of the idea of the unitary state. One day, politicians on both sides of the House will realise the error of their ways in that respect.
  There is a vital difference between the notions of competence, sovereignty and identity, although they are invariably merged, rather sloppily. They have vital but distinctive parts to play. Competence in governmental matters should be allocated to the level at which it can be most effectively exercised. I have given examples: trade policy at Community level, taxation policy at national level and perhaps education policy at local level.
  Sovereignty, on the other hand, is a legal and constitutional idea which is both theoretical and practical. We should be unsentimental and clear-eyed when thinking about it.
  The United Kingdom Parliament has a well-established claim to what we choose to call parliamentary sovereignty, but I ask the House to ponder what that means in practice in the 1990s. Essentially, it is the right to be informed, although we are not always informed first. Invariably the gentlemen in the Press Gallery get to know things before

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  we do. It is also the right to criticise and the right to influence the Government of the day and seek to hold them to account. That is an aspect of power, but it is not brutal power or the real core of power. Increasingly in the modern world the real core of power is passing from this House to—
  Sir Richard Body: My hon. Friend describes sovereignty in exactly the same way as our continental friends, but the English-speaking world looks upon sovereignty in a rather different way. If my hon. Friend were to read "Dicey", he would realise that that famous book homes in on two essential principles that are at the core of sovereignty: the making of laws, and the levying of taxation. Neither applies to what my hon. Friend has said.
  Mr. Deputy Speaker (Mr. Harold Walker): Order. I remind hon. Members that interventions are made at the expense of the time of other hon. Members who are waiting to contribute to the debate.
  Mr. Forman: I do not dispute the two points that my hon. Friend has just made. I, too, have read "Dicey", albeit when I was much younger. My hon. Friend is absolutely right when he says that those are two essential attributes of the traditional view of parliamentary sovereignty. However, "Dicey" was writing in the latter part of the 19th century and reflected parliamentary circumstances that were more applicable to the period between 1832 and 1867 than to the 1990s.
  If we consider again the extent of the powers of national Parliaments, we must remember that the right to dismiss Governments lies not with us, except in the most exceptional circumstances of a hung Parliament, but with the electorate. The right to create the decisive facts of life lies increasingly not with national Governments but with other political actors, with transnational pressure groups and, critically, with the private sector, such as the large financial institutions. I suggest that today Nomura has more power than many a nation state. We have to wake up to that reality, otherwise we shall find that events pass us by.
  Identity is a feeling in the hearts of people throughout, the world. It is a balance of feeling that is capable of change, according to political and psychological circumstances. If I were a Scot, like the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston), I have no doubt that I should be greatly tempted to feel Scottish first in my sense of national identity, European second, and, maybe, British third. That may be uncongenial to many hon. Members, but that is the way things are moving and that is the way a sense of identity is formed. If one visits Bavaria, Brittany or Catalonia, one finds exactly the same kind of feeling in the air.
  That is the direction in which the European Community is moving. That does not alarm me. Some hon. Members may be terrified by the prospect, but I do not feel threatened by it. I suggest that other hon. Members should not feel threatened by developments of that kind. The ultimate human objective of European unity—institutions exist only to serve human purposes—is, as Sir Winston Churchill once said, that we as European citizens should be able to move freely throughout our community of proud European nations and, wherever we go in that community, should be able to say that"
  "here we truly feel at home."
  1.53 pm
  Mr. Tony Banks: I wholly agree with much of what was said by the hon. Member for Carshalton and Wallington (Mr. Forman). He caught the imaginative mood of my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Sedgemore). I join other hon. Members in congratulating my hon. Friend on tabling his motion and providing us with an opportunity for a wide-ranging and interesting debate. That is not a mere genuflection in the direction of parliamentary politeness. I, too, am beginning to adopt a somewhat different attitude towards the European Community. That is not to say that the view that I held in the past was wrong, but it was formed in the circumstances that existed at that time.
  As all right hon. and hon. Members have acknowledged, and although it may be a humdrum observation, the world has changed dramatically very recently. Any politician must re-examine the position and decide whether current attitudes and policies are fitting for today's changed circumstances. That is a sign not of weakness but of strength.
  The only residual dread that I have in making such remarks is that they will eventually reach the ears of Bolsover. I might at an early stage seek the security of the greater bulk of my hon. Friend the Member for Hackney, South and Shoreditch when my very good hon. Friend the Member for Bolsover (Mr. Skinner) gets round to reading Hansard next week.
  I am under no illusions about the original aims and objectives of the European Community, which was essentially devised as a political entity based on western capitalism confronting the east, both politically and economically. For many, that remains the EEC's central tenet. However, the events that are changing the map of eastern Europe are altering also the role of the EEC, and with them must go changes in the attitudes of people such as myself.
  As to negative attitudes towards those changes, the Prime Minister has done wonders in heightening the attraction of the EEC, although I suspect that that was not her original intention. It is also true that progressive capitalists in Europe now recognise the need for market regulation. I exchanged a few words on that issue with the Financial Secretary during his speech. As we see more regulation within the market, we hear verbal opposition from the Prime Minister—but the deregulation pursued by the Government, and the attacks made on the rights of workers in the workplace, have enhanced the appeal of the social charter. That charter remains a fairly mundane document. It contains a lot of wishful thinking and does not go half way far enough, but given the backward steps made in workplace rights in this country since 1979, the charter is looking remarkably progressive. Everything must be judged in the context of its own time.
  The attitudes held in this country stem largely from the petty nationalism of the Prime Minister, who in my opinion—which is shared by many people in this country—is out of sympathy with sentiment both here and abroad. She almost makes any supranational institution seem very attractive. As has been said by right hon. and hon. Members in this debate and on other occasions. 'there is a grave danger that we shall be politically isolated and on the margin of events, and left standing on the sidelines

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  whingeing and observing—incapable of making any major changes ourselves but having to go along with them in the end. And go along with them we must.
  When one is confronted by the inevitable, it is far better to go along with it willingly than wait to be dragged along unwillingly when any opportunity of helping to shape the future has been lost, as is happening in this country now. It would be foolish to be reactive, and, simply because the Prime Minister is taking a narrow and blinkered view, to take the opposition position in an unthinking and unfeeling way. That would be stupid and short-sighted.
  We are watching the map not only of eastern Europe but eventually of all Europe being redrawn peacefully for the first time in living memory, not in the aftermath of victory or defeat but in a way that must encourage us all. The enabler of those historic events is President Gorbachev. We are watching the Warsaw pact and COMECON crumbling, but that does not give us the opportunity to say, as some Conservative Members do, "Ha, ha we have won the cold war and capitalism is winning," which is not happening. We are witnessing major historic events, which will cause realignment throughout east and west Europe.
  That will give us a chance to break out from the narrow base of the EC in western Europe. We are no longer confronting the east. The vision of Europe stretching from the Atlantic to the Urals, the common European home of which Mr. Gorbachev spoke in a speech I heard at the Council of Europe in Strasbourg, has stopped being a wild dream and has started to become a realistic objective.
  The excitment of what is going on is hard to grasp. Events have moved so fast, almost by the day, that everybody has been caught short. None of those great think tanks, expensive civil servants or university chairs predicted any of this. We are all starting equal again and everybody's judgment is as good as everybody else's. No hon. Member can predict what will happen with the certainty that politicians like to bring to their speeches.
  German unification will undoubtedly add impetus to political and monetary union in Europe, and it will be very much encouraged by President Mitterrand and Chancellor Kohl. The United Kingdom cannot simply stand aside and watch that happen. We do not have the power to stop those developments and we have little ability to delay them. Political and monetary union is inevitable. We cannot ignore such inevitability.
  We are not exerting our political potential in Europe or the wider world. The Prime Minister should have far more credibility on the world stage, given that she is the longest-serving political leader in the west. She is not doing so because she cannot match the events that are taking place. She cannot grasp the idea of the common European home that President Gorbachev has been discussing. She sits in Downing street, with gates covering the entrance to Downing street and to her mind. She is not responding to those enormous events with the same boldness as Gorbachev, Mitterrand or Kohl.
  Mr. Lilley: The Prime Minister first voiced the sentiments that the hon. Gentleman so much admires from the mouth of President Gorbachev in her Bruges speech and did more to bring about the changes that he now welcomes in eastern Europe than any other western leader.
  Mr. Banks: I realise that the Financial Secretary is a loyal Minister, but he has demonstrated that his contact with reality simply does not match his loylaty. He will say, almost like the Prime Minister herself, that she discovered Mikhail Gorbachev and that he is her creation. That is absolute nonsense. Of course the Prime Minister is prepared to say "These are exciting events." Everyone says that; one would have to be dead not to recognise that these are exciting events, but we should ask the Prime Minister what she intends to do, particularly on defence. Gorbachev is running risks that the Prime Minister cannot even contemplate. She is saying, "There are dangers here; he could fail." We all know that. But because he might fail, it is argued that we must remain tooled up to the chin. If the Prime Minister had her way on defence expenditure, she would not even melt down a bullet. I do not need lectures from the Financial Secretary about the Prime Minister's role because it has been a minor role indeed. Frankly, she does not have the wit, the imagination or the depth to match the events that are unfolding in eastern Europe.
  Mr. Lilley: Will the hon. Gentleman give way?
  Mr. Banks: I shall give way to the hon. Gentleman again.
  Mr. Lilley: My speech was one of the shortest in the debate.
  The Prime Minister certainly does not indulge in the personal abuse that the hon. Gentleman makes his speciality.
  I was merely reiterating the views pressed on me from all sides when I was in eastern Europe. The eastern Europeans paid great tribute to the role of the Prime Minister in inspiring them, in standing up to the Communist regimes when they were in place and in offering the model on which many of them base their economic policies.
  Mr. Banks: I have noticed that the Prime Minister is considerably more popular in Moscow than she is in London, and I am quite surprised that she did not stay there. [HON. MEMBERS: "What about Gorbachev?'] Yes. It is interesting to note that those two are far more popular abroad than they are in their own countries. I am surprised that they did not discuss a job swap when they last met; they might both have enjoyed it.
  Clearly, the Financial Secretary does not share my opinion that the Prime Minister is not a major player. Of course she has to be taken into account because she is the leader of one of the major European powers but, in my view, she does not perform in the way that her position as a politician who has led a country for 11 years warrants or justifies. That is why she cannot match those events. The Financial Secretary may call it common abuse; I call it objective observation. It is all a matter of one's position and opinion.
  I was about to say that I understand that there are great dangers in what is happening in the east at the moment. Realignment is causing an upsurge in very dangerous nationalism. There are two responses to nationalism. One can say, "Go your own way; let us have a Balkanisation of eastern Europe; let us fracture along old historic lines." That is the most dangerous option available and any rational or responsible politician must reject it. The other way of dealing with the upsurge in nationalism is to press

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  ahead for a speedy and wider European unity based on the willingness of all the peoples involved. Such unity can dilute nationalism.
  My hon. Friend the Member for Hackney, South and Shoreditch referred to the future of the nation states and I have heard him say some interesting things about that subject in the past. I happen to be one of those who believe that the days of the European nation state are as numbered as the days of the European city state once were. Historically, sovereignty moves towards the larger unit. The United Kingdom evolved from tribes, through kingdoms, towards a unitary state, and that process will continue across Europe as a whole. We shall be contemplating a federal Europe—a United States of Europe. I believe that that is inevitable and, like the hon. Member for Carshalton and Wallington, I am not frightened by the prospect. Already, economic and political power are haemorrhaging away from Britain and from this Parliament. That is why we need to find other ways of restoring power to the people of Britain and of Europe. We are talking not about a wider, larger bureaucracy but about a wider, accountable democracy. We are talking about finding institutions that can match the great events that surround us.
  My hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) said that one of the conditions of European monetary union must be democratic accountability. That is absolutely true. Democratic accountability is rather lacking in the EEC today. As we move towards more integration in Europe, we need to strengthen and, in certain cases, to create, democratic institutions—especially over international capitalism. In some ways, I am glad that my hon. Friend the Member for Newham, South (Mr. Spearing) has departed to the Tea Room at this point because he will not like what I am about to say: I think that we should give far greater powers to the European Parliament and its Members. That does not frighten me either. The day is not far off when, rather than Members of the European Parliament seeking seats in this House, the process will be the other way round. Many hon. Members of this House will realise that power has inevitably left this place. It will reside in the Parliament in Europe and that will be the place to be, because if a politician wants to be at the centre of power he must always seek it out. We all recognise that this House is no longer the centre of power. That is why many hon. Members on both sides of the House will undoubtedly seek a seat in the European Parliament in future.
  I look forward to a socialist United States of Europe. I realise that it will be a long and arduous journey to such a state of heavenly peace. But even the longest journey starts with a single step. Along with my hon. Friend the Member for Hackney, South and Shoreditch and many more in the Labour party, I am more than ready to take that step now.
  2.10 pm
  Mr. John Marshall: I congratulate the hon. Member for Hackney, South and Shoreditch (Mr. Sedgemore) on his good luck in the ballot and his wisdom in choosing this subject for debate. I also congratulate the hon. Member for Newham, North-West (Mr. Banks) on his resignation speech. We all look forward to his standing for the European Parliament. Some of us might even be willing to canvass for him to get him out of our hair.
  Mr. Tony Banks: You do not have much hair.
  Mr. Marshall: I am not sure whether that remark was directed to you, Mr. Deputy Speaker, or to me, but it was unkind in whatever direction it was made.
  It is clear that the hon. Member for Hackney, South and Shoreditch is a member of the new model Labour party. Unlike his hon. Friends the Members for Bradford, South (Mr. Cryer) and for Bolsover (Mr. Skinner), he is not an unreconstructed Bennite. He is willing to unsay most of the things that the Labour party has said historically. However, I was surprised to read in his motion about the positive approach of the Labour party towards Europe.
  You will remember, Mr. Deputy Speaker, that the late Mr. Hugh Gaitskell said that he preferred a thousand years of history to the opportunities within the European Community. He was succeeded by Lord Wilson whose meanderings on Europe made the vicar of Bray appear a model of consistency. More recently, in 1983 the Labour party said that it would take Britain out of the European Community. Throughout the time that I was a Member of the European Parliament, the Labour group there was dominated by anti-marketeers. One of the most frequent speakers in the European Parliament was the hon. Member for Bradford, South, who never once said a kind word about the European Community.
  Mr. Latham: He has not done so since he came back.
  Mr. Marshall: Indeed, he repeats the record. All I can say about the record is that it sounded better through simultaneous interpretation than it sounds in the House.
  There is no doubt that the Labour party is willing to score points when it feels that to be anti-European is worth a point or two in the opinion polls. The veneer of Europeanism is skin deep. The Labour party would quite happily revert to its previous posture if it thought that that would benefit it one iota. The Labour party merely acts as an unprincipled barometer of British public opinion. Labour Members currently stand forward in the House as supporters of the EEC, not out of conviction but because they believe that there is a modest vote or two to be won from doing so.
  We heard a most interesting speech from the hon. Member for Islington, South and Finsbury (Mr. Smith). When he was asked a straight question by his hon. Friend the Member for Newham, South (Mr. Spearing), he would not say yes and he would not say no. He would not tell the House what the policy of the Labour party was. His speech was riddled with economic illiteracy. He told us, for example, that if we joined the ERM we would get rid of currency speculation. That is just not true. I suggest to the hon. Gentleman that he looks at the experience with the franc between 1981 and 1983. As he knows, the franc was devalued five times during that period. That happened because the then socialist Government were unwilling to follow sensible economic policies.
  If the hon. Member for Islington, South and Finsbury was part of the Treasury team and he carried out a programme of spending an extra £19 billion—or is it £50 billion?—that would guarantee that, within the ERM, sterling would be the victim of massive speculation. A fixed rate exchange rate system encourages speculation as it presents a one-way bet—one knows that one cannot lose, but one also knows that one can win an awful lot if one gets it right. The hon. Gentleman looks surprised, but he

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  does not realise that if we joined the ERM and followed the policies to which he is committed there would be immediate massive speculation against the pound. The hon. Gentleman would be forced either to raise interest rates far above their present or to devalue the pound. I suspect that the hon. Gentleman is intelligent enough to know that, but not honest enough to tell the country.
  Mr. Chris Smith: The hon. Gentleman is speaking a great deal of economic nonsense. He said that a stable set of exchange rates encourages speculation, which was the point about which I was registering surprise. Quite the reverse is true.
  Mr. Marshall: The hon. Gentleman has confirmed that what I said is correct. If one has a so-called fixed rate the risk in speculation is almost negligible, whereas the opportunities for profit out of such speculation may be substantial.
  The hon. Gentleman should consider what happened in 1967 prior to the devaluation undertaken by Lord Callaghan. There was a great deal of speculation against sterling because the speculators knew that the risks they ran were almost negligible but that substantial profits could be gained. The same would happen under the ERM. If we joined that mechanism and followed the policies advocated by the hon. Gentleman, one could guarantee that the speculators would make a bomb against the pound.
  We are being asked to join the ERM as though it were an easy option. The right hon. and learned Member for Monklands, East (Mr. Smith) has led us to believe that it would lead to lower inflation, lower interest rates and faster economic growth. That would happen only if we pursued the correct economic policies. If we did that we would secure those objectives without joining the ERM. To present the ERM as a panacea is a dangerous philosophy. Too often, we have thought that we could adopt a panacea and forget about the need to pursue correct economic policies. We all remember the days when indicative economic planning was the great panacea, but all it produced was disaster. We remember when we were told that the prices and incomes policy would solve all our problems, but it merely magnified them.
  If we were to join the ERM and follow the spending policies of the Labour party we would suffer a devaluation in a short time. President Mitterrand had to devalue the franc five times within two years and I believe that the right hon. and learned Member for Monklands, East would be equally successful. Historically, we have seen the danger of subordinating monetary policy to exchange rate policy. If we joined the ERM the difficulites resulting from the 1988 policies would be magnified many times over.
  We are told that if we joined the ERM somehow or other our growth rate would accelerate, but let us consider the growth rate of Britain in the 1980s. During that time, it was greater than that of Belgium, Germany, France, the Netherlands and the other member states. Surely that demonstrates how false it is to say that if we join the ERM that will guarantee us faster economic growth. Why, if that is the case, did we manage to grow more quickly than West Germany or France, which were within the ERM, when we were outside it?
  Mr. Sedgemore: Under a Labour Government.
  Mr. Marshall: The hon. Gentleman makes the shrewd observation that we had faster economic growth in the 1980s than socialist France and West Germany because of the Government. I congratulate him on that far-sighted intervention. He has left the Bennite group to join the new model Labour party. Soon he will leave that to join the Conservatives. We look forward to his imminent conversion.
  We are told by some who support our joining the ERM that somehow it would automatically lead to lower interest rates. Those who hold that philosophy should examine the experience of Spain. Since joining the ERM, there has been in that country, according to one commentator:
  "a generally rising trend in short-term interest rates."
  In other words, far from leading to lower interest rates, Spain's membership of the ERM has led to higher rates. So I warn those populist optimists who say, "If we join the ERM all our economic problems will disappear," to examine the records of other countries that have been within the mechanism and have found that without the right economic policies, there are high rates of inflation, high rates of interest, speculation against one's currency and devaluation.
  To suggest that joining the ERM would be a guarantee of currency stability is naive in the extreme. In the foreign exchange markets one cannot buck the market for long. One may do so for a limited period but not for long, and it is misleading for the Labour party to suggest that joining the ERM would somehow enable us to afford Labour's expensive policies.
  One must also examine the competitive position of British industry relative to industry in other countries. Were we to join the ERM now, with the current exchange rate situation, extreme pressure would be placed on some of our exporting industries. Relative costs between German and British industry in the last two years are not necessarily fully reflected in the exchange rate today between the deutschmark and the pound. To join now, with current exchange rates, could represent the same mistake as was made in 1926, when we rejoined the gold standard at the wrong rate of exchange.
  Mr. Sedgemore: That was under Churchill.
  Mr. Marshall: Even the great Churchill made the odd mistake. Were we to make the same mistake, unemployment would go up and our exporting industries would suffer.
  Many people outside the United Kingdom who ask us to join do so not because of the alleged economic advantages of joining the ERM but because it is an act of political symbolism. But we have no need to indulge in such an act to show our commitment to the European Community. The use by the hon. Member for Hackney, South and Shoreditch of the phrase "shrivelled and isolationist" in his motion is offensive and inaccurate. Since 1979, the British Government have taken the lead in the European Community in many of the changes that have taken place.
  In 1979 the Prime Minister started the campaign to secure an element of fairness in the European budget. Did she have any support from the Labour party? She received criticism and was told that she was looking at the affairs of Europe as if she were a housewife, not a Prime Minister. But as a result of her approach to the European

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  Community the budget is fair and this country has received substantial refunds from the European Community.
  One of the earliest speeches I made in the European Parliament related to the common agricultural policy. Someone came up to me at the end and said, "You must not say things like that. This is one of our common policies and you must not be critical of it." I replied that I criticised it because I thought that it was indefensible.
  The cut in milk output occurred not because of the altruistic benevolence of the French or Germans, or because of the foresight of the Irish, but because of the determination of the British Government and Prime Minister. There has been a cut in the excessive production of cereals. No one can say that the cut occurred because the cereal farmers of the continent lobbied their farm Ministers and told them to cut the surpluses because they found them repugnant. The only reason those surpluses are being cut and we have enjoyed a sensible reform of the common agricultural policy is because of the leadership of this country and successive British Agriculture Ministers and the Prime Minister's determination. That is not being "shrivelled and isolationist".
  The reform of the common agricultural policy was essential for the future of Europe. We heard from the hon. Member for Islington, South and Finsbury about the need for a greater regional policy. Until we reformed the common agricultural policy, there was no scope for greater regional or social policy. or greater expenditure on any of those desirable objectives. The common agricultural policy was simply eating up so much of the budget that no other policies could be usefully expanded. That great change is the result of the Prime Minister's determination. That was not a "shrivelled and isolationist" approach, but the approach of a Government and Prime Minister committed to the future development of the European Community.
  The most exciting development in the European Community at present is the 1992 programme. Which Government and which Prime Minister made it an essential policy objective to ensure that the treaty of Rome
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  became a reality? Were the German Government determined to ensure that German brewers faced competition? Did the German Government say that they must allow competition with the German insurance industry? Of course not. Once again, constant pressure from the British Government ensured that the 1992 programme became a reality. The Prime Minister's wisdom and foresight ensured that that was a major policy issue and that Lord Cockfield was the Commissioner in charge of starting that programme.
  Our pressure for the liberalisation of the transport industry made a reality of the European idea that individuals should travel throughout Europe at more reasonable fares. All the pressure to make the transport industry of Europe more realistic, liberal and European has come from the British Government rather than the Governments of France or Italy. The desire to make the European air industry more competitive has come from British Airways rather than the overmanned and overpaid staff of Alitalia and Air France. Some of our colleagues in the European Community are terribly strong on rhetoric, but we in the United Kingdom have recognised the truth of Sir Walter Scott's phrase that
  "Fine words butter no parsnips."
  We have adopted the old stock exchange adage, "Dictum meum pactum", which I shall define for those who received a comprehensive education, as meaning my word is my bond. When the British Government make a commitment within the European Community, they enter into that commitment with the intention of keeping it. Some of our European partners use very fine rhetoric, but when they are asked to keep a particular commitment they are not so European. We saw over the BSE issue how European the Germans and the Italians were. They were not concerned for a moment about the health of their fellow citizens; they were concerned only with sheer, naked, nationalistic protectionism. They were merely concerned to protect their own farmers.
  It being half-past Two o'clock, the debate stood adjourned.

Orders of the Day

  SEXUAL OFFENCES BILL
  Order read for resuming adjourned debate on Question—[11 May]—That the Bill be now read the Third time.
  Hon. MembersObject.
  Mr. Deputy Speaker (Mr. Harold Walker): Debate to be resumed what day?
  Mr. Ken Livingstone: Never.
  Mr. Deputy Speaker: No day named.
  Mr. John Marshall: On a point of order, Mr. Deputy Speaker. Was it the hon. Member for Brent, East (Mr. Livingstone), the founder of the GLC women's committee, who objected—
  Mr. Deputy Speaker: Order.

  RADIOACTIVE MATERIAL (ROAD TRANSPORT) BILL
  Order for consideration, as amended, read.
  Mr. Deputy Speaker: Consideration what day?
  Mr. David Amess: Now, Sir, on the instructions of the hon. Member in charge of the Bill.
  Hon. Members: Object.
  To be considered on Friday 22 June.

  SAFEGUARDS FOR RESIDENTS IN REGISTERED HOMES BILL
  Order for Second Reading read.
  Hon. Members: Object.
  Second Reading deferred till Friday 6 July.

  ADOPTION (AMENDMENT) BILL
  Order for Second Reading read.
  Hon. Members: Object
  Second Reading deferred till Friday 6 July.

  DOGS BILL
  Order for Second Reading read.
  Hon. Members: Object.
  Second Reading deferred till Friday 6 July.

  PRIVATE SECURITY (REGISTRATION) BILL
  Order for Second Reading read.
  Hon. Members: Object.
  Second Reading deferred till Friday 6 July.

  RAOUL WALLENBERG (MEMORIAL) BILL
  Order for Second Reading read.
  Hon. Members: Object.
  Second Reading deferred till Friday 22 June.

  HARE COURSING (ABOLITION) BILL
  Order for Second Reading read.
  Hon. Members: Object.
  Mr. Deputy Speaker: Second Reading what day? No day named.
  Mr. Harry Cohen: On a point of order, Mr. Deputy Speaker. May I point out for the official record that it was the hon. Member for Congleton (Mrs. Winterton) who objected to the Hare Coursing (Abolition) Bill?

  CHLOROFLUOROCARBONS (CONTROL) BILL [Lords]
  Order for Second Reading read.
  Hon. Members: Object.
  Second Reading deferred till Friday 22 June.

  Sixth Form Education (Wickford)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Patnick.]
  2.32 pm
  Mrs. Teresa Gorman: I have a very sorry tale to tell about the fate of two good secondary schools—one in Wickford in my constituency and one in Basildon. I am pleased to see that my hon. Friend the Member for Basildon (Mr. Amess) is here to support me. It is a tale that exposes some fundamental flaws in the new education legislation as well as a great deal of what is wrong with local government nowadays. It is a nightmarish web of red tape and duplicity, in which the wishes of parents, democratically expressed, were completely ignored by Essex county council.
  The story is rooted in the poor academic standards of the secondary schools in Basildon and Essex council's decision to open a tertiary college there to try to improve the standards of tertiary education. In order to justify the expenditure of about £12 million, the council had to look around for more students from further afield to justify opening that college. It lit upon two schools in my constituency—Bromford school and Beauchamps school. Those two schools had flourishing sixth forms, one with almost 100 pupils, and between them they offered more than 30 subjects. They were told that they were likely to be drafted into the new tertiary college. The parents were furious, a petition was raised and 2,500 parents wrote or signed the petition begging the authority and the Government not to close the sixth forms. They could have saved themselves the bother because Essex county council went ahead with the college, even though many of the parents did not want the college to open or at least they did not want their sixth forms to be sacrificed to its creation.
  The Under-Secretary of State for Education and Science, my hon. Friend the Member for Stratford-on-Avon (Mr. Howarth), who is extremely perspicacious, agreed with us that those schools had an excellent case for keeping their sixth forms. He wrote to us saying that he was minded to allow the sixth forms to remain. For whatever reason, my right hon. Friend the Secretary of State for Education and Science overruled that inclination and decided that the tertiary college should go ahead and that the sixth forms should be closed. My hon. Friend the Member for Basildon and I were bemused by that decision and have never been given a satisfactory explanation.
  Many disgruntled parents in my constituency are asking why a Conservative Government, a Conservative Member of Parliament and Conservative-controlled Essex county council cannot deliver what the Government promised them—parental choice about the education of their children. They are infuriated by the decision and have looked at alternatives to see what they can do. They contemplated opting out of the control of Essex county council because the council is clearly not listening to what they want. They considered going for grant-maintained status, and that reveals the first flaw in the Education Act. A school that goes for grant-maintained status has to remain the same for five years after being allowed to opt out of the system. That seems patently absurd because even if my schools adopted that course, they would not be able to retain their sixth forms and that is the whole point of the exercise.
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  The teacher body in my two schools is not greatly in favour of grant-maintained status. It would do nothing to assist the parents in going for that status even though the teachers regret losing the sixth forms—my hon. Friend the Member for Basildon has a happier story to tell and will have an opportunity to tell it. That revealed another problem, because if parents want to adopt a certain course to which teachers and the head teacher and possibly the governing body are opposed, the parents will have all that authority resisting them. That is exactly what happened in my constituency.
  It is difficult for parents with no resources to organise letters and to communicate with perhaps 700 or 800 homes, to ask whether 20 per cent. of the parents will agree to ask for a ballot on grant-maintained status. It is the parents versus authority. The experience of my hon. Friend the Member for Basildon has taught me that the local education authority, the unions and Essex county council will write to those parents and urge them not to take that course of action. The parents are completely bewildered and do not know whether what they are proposing is right or wrong. One or two keen parents have the difficult task of organising the ballot.
  The second matter to which I should like to draw the attention of the House and which arises from our sorry experience is that there is no point in giving parents democratic rights without the means to exercise them. The Government should seriously consider putting money into an organisation. One such organisation exists—Choice in Education, which was previously called the Grant-Maintained Schools Trust. Such organisations help parents who want to go down the path of grant-maintained status. I approve of that path and think it an excellent idea.
  The Prime Minister often talks about grant-maintained status as "independent state schools", but what price independence if one is not free to adopt the type of school that one wants, which means keeping the sixth form, or making other decisions about the future of the school? Therefore, the second thing that I want from the Minister is his assurance that he will consider putting resources behind organisations that help parents, because that help is essential when their will is opposed by the head and the teaching body of a school.
  The third factor that has emerged from this unhappy experience is that one of the heads said to me, "We quite like the idea of grant-maintained status, but, quite honestly, it is a lot of work for us. What is in it for us? What are the incentives for us to assist the parents in such circumstances?" My hon. Friend the Minister should seriously consider bringing out literature, or even introducing new incentives, which make it clear to the people who are running the school that there are terrific advantages to grant-maintained status. Even though in this case the schools cannot in the short term retain their sixth forms, such help would mean that there is still the hope that, if they go along that path, at a later stage parents will have the schools that they want. It is no good giving people democratic rights if they are not also given the wherewithal to exercise those rights.
  Sadly, the wheels of bureaucracy having ground on and consent for the tertiary college having been given, it will be built but the students in Wickford will not be at it. For historical reasons, Wickford hates Basildon. Its residents are always petitioning for separate district council status. Between Wickford and Basildon there is a barrier that is,

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  for those in Wickford, as high as the Himalayas. A major road, the A127, which has dual carriageway on both sides, which is about to be widened into a three-lane motorway, and which has enormous amounts of traffic flowing from Southend to London all day and every day, divides the two. There are no trains or buses to link the two sides. If young people are to go to the tertiary school in Basildon, transport must be laid on for them. However, they will not make the journey and that college will be an expensive white elephant costing £12 million, but having only a tiny handful of children from the Basildon area. The pupils in my area will go down towards Southend and use the tertiary college there. They may go west and east to colleges at Chelmsford, Rayleigh and Brentwood. They may go to other schools with sixth forms in Billericay itself.
  Already, the rot has set in for those two previously good schools. Parents are not choosing to send their children to those schools because there will be no sixth form by the time their children reach that stage, so they are opting for neighbouring schools. Parents whose children are coming up to sixth form age do not want their children to go into a sixth form that will be in decline as older children leave, so they are looking for new schools. The destruction of two good schools with viable sixth forms and an excellent range of subjects is occurring because of a bureaucratic decision of Essex county council that has not been overruled by the Secretary of State.
  That is not what the Conservative Administration is about. We won three elections by pledging to people that we would give them freedom from bureaucracy, from having their wishes ignored and from being dictated to by local councils and education departments. Essex council's action overrides those policies; it would be better placed in the 1970s, when the Labour party was in power and such treatment of individuals' wishes was taken for granted. Conservative Members do not think like that.
  I cannot understand the attitude of Essex county council; having said that, however, I ask the Government to re-examine the legislation that has allowed those unhappy circumstances to come about, and to give some hope, if not to my students in Wickford, at least to other schools that might decide to opt for grant-maintained status.
  Mr. David Amess rose—
  Mr. Deputy Speaker (Mr. Harold Walker): Has the hon. Member for Basildon (Mr. Amess) the leave of the Minister and the hon. Member for Billericay (Mrs. Gorman) to speak? I see that he has.
  2.46 pm
  Mr. David Amess: I congratulate my hon. Friend the Member for Billericay (Mrs. Gorman) on securing the Adjournment debate. I also congratulate her on the tenacity that she demonstrated so clearly in putting the case of children attending the school in Wickford in her constituency, and that of their parents.
  I agree with the general thrust of the arguments that my hon. Friend deployed so skilfully. I would take issue only with what she said, on behalf of the people of Wickford, about my constituency. It will not come as a surprise to the House when I say that I love Basildon: I live there, and our
  662
  children are educated at the excellent local primary school, St. Anne Line. We are currently running a campaign called "I love Basildon". It is a fine town, and we are proud of our achievements there.
  None the less, I understand the feelings of my hon. Friend's constituents about how they are treated by the local authority. In the seven years that I have been the hon. Member for Basildon I have been privileged to see educational standards in my constituency rise; I am sure that my hon. Friend will join me in paying a warm tribute to teachers and parents, and to the general commitment of local people to the standards of education that we have enjoyed. However, the reorganisation of sixth forms in my area—and that of my hon. Friend—has not run smoothly.
  I am blessed to have in my constituency some excellent secondary schools: Barnstable, Fryerns, Nicholas Laindon and the Catholic school of St. Anselm, which is funded partly by the local education authority. I pay tribute to them all. I come from an era when people preferred schools to retain their sixth forms, but I appreciate that, because of the increase in numbers and for reasons of choice concerning the syllabus, there is a demand for a sixth form college to be included in Basildon college of further education. However, when the reorganisation of sixth forms was discussed, we were—as my hon. Friend said—disappointed and confused by the eventual decision.
  The governors at Chalvedon school decided to seek grant-maintained status. Grant-maintained schools are excellent for many reasons. I am in favour of choice, and I believe that we should listen to what parents want from education. We knew that the Labour party would be against grant-maintained schools; indeed its representatives delivered leaflets to that effect through the doors of local houses. However, it was a shock to my hon. Friend and me when Essex county council—prior to the first ballot—delivered a letter to every parent with children at Chalvedon school. It said:
  "The LEA does not want its schools to opt out—we believe there are good reasons for staying within the support and structure of a large LEA like Essex."
  There should be no duplicity. Conservative-controlled Essex county council—it has been Conservative—controlled only since last May—says clearly that it is against grant-maintained status. I am as shocked as my hon. Friend the Member for Billericay by that statement. Only 36 per cent. of the parents voted in the first ballot, which narrowly went against grant-maintained status. I am proud, however, to be able to say that the second ballot went the other way: 56 per cent. of parents voted in that ballot and the majority, albeit small, was in favour of Chalvedon school being considered for grant-maintained status. I look forward to hearing the Minister's response.
  2.50 pm
  The Parliamentary Under-Secretary of State for Education and Science (Mr. Alan Howarth): I congratulate my hon. Friend the Member for Billericay (Mrs. Gorman) on her persistence in pursuing a cause in which she believes so strongly. She has already written to my right hon. Friend the Secretary of State for Education and Science about the issue on a number of occasions and has pursued her campaign with characteristic energy and bravura.
  I congratulate also my hon. Friend the Member for Basildon (Mr. Amess) on the eloquence and determination with which he, too, has sought to uphold his constituents'

  663
  interests. He has represented with great determination the interests and concerns of both Chalvedon school and Barstable school. I pay full tribute to him for the work that he has done on behalf of his constituents. I was pleased to see that he offered an olive branch to my hon. Friend the Member for Billericay. Let us hope that today marks an improvement in the relations between the communities of Wickford and Basildon, with their two Members of Parliament fighting shoulder to shoulder.
  I, too, am a very strong believer in parental choice in education. That is what the Education Reform Act 1988 is all about. The Act extends parental choice by providing for more open enrolment, which increases the ability of parents to send their children to schools of their choice; city technology colleges—new beacons of excellence; and grant-maintained schools which enable parents to take their school out of the control of a local education authority and run it entirely themselves.
  I note in passing that Chalvedon school has decided to exercise the option to apply for grant-maintained status. I welcome the fact that parents with children at Chalvedon school have chosen to exercise their democratic right to vote in a ballot on the future of the school. It would have been open to Beauchamps school to exercise that right at any stage before or after the final decision was made on Essex's proposals. It chose not to do so.
  Good education requires however, not just that we provide parents with a range of options. We must do all that we can to ensure that the options on offer are the best possible options.
  The exercise of those choices is made within a framework of local accountability and control. We have a 100-year tradition of local education authorities, democratically elected. It is they who are responsible—and accountable to their electorate—for the organisation of schools. It is not for my right hon. Friend to direct authorities in those matters. Local education authorities, as befits locally accountable, democratically elected bodies, make proposals to my right hon. Friend, on which he decides.
  Thus, it is not for me, as a Minister, to say what pattern of education should be provided in Basildon and Wickford. It was rightly up to Essex local education authority—with a Conservative majority—to make proposals. It has been concerned for some time about the relatively low post-16 staying on rate in the Basildon and Wickford area. In recent years, the largest sixth forms in the area have contained no more than about 80 pupils on average, and many have tended to drop out without taking A-level examinations. By way of example, only 25 pupils sat A-levels last year at Beauchamps school in Wickford. Inevitably, small sixth forms limit choices for pupils. That militates against wider educational choices for pupils and parents alike.
  We are all rightly concerned to encourage more pupils to remain in education after the age of 16. If we are to compete with our EC neighbours after 1992, and if we are to make the most of the technological opportunities that will be open to us in the years ahead, clearly we will need a well-educated work force. I do not believe there is any disagreement about that. In the Basildon and Wickford area there is an added incentive for pupils to stay on. Not far away, on a direct line into London, is the London Docklands development area, and the opportunities there for youngsters from Basildon and Wickford will be particularly attractive if they have shown, by their
  664
  achievements at school or college, that they are likely to be able to cope with the new challenges that are emerging there.
  Essex therefore considered alternative forms of sixth-form provision, with a view not only to persuading more pupils to stay on, but to providing parents and pupils with a considerably wider range of options, including the less academic and more vocationally oriented courses. It was also particularly concerned, as it always ought to be, to make the best use of the available resources, whether in the form of school buildings or teachers.
  Essex looked at what had happened in other areas, such as Harlow, engaged in all the required processes of consultation, and eventually proposed that the school sixth forms in the Basildon and Wickford area should be replaced by a new tertiary college, to be located in the existing college of further education in Basildon. In doing so, it decided to leave untouched the thriving sixth forms in the neighbouring Billericay secondary schools.
  Clearly, though the schools in Basildon and Wickford had done their best to provide a good sixth-form education for their pupils—I am thinking in particular of Barstable, Chalvedon and Beauchamps—they had only limited success in persuading pupils to stay on in sufficient numbers. The small size in the resulting sixth forms necessarily limits the range of options that can be provided, in a way that puts children at a disadvantage in facing the demands of a modern technological society.
  My hon. Friends argued that it would have been possible to retain sixth forms at Beauchamps and Chalvedon schools, and still establish a tertiary college. I confess that my right hon. Friend and I were attracted to the same idea when we first considered the proposals, but after we had consulted the Essex LEA further, as we were required to do under the terms of the Education Act 1980, and looked more closely at the additional data that it provided, we were persuaded that retention of the sixth forms at two of the schools involved would not have been desirable
  Fragmenting sixth-form provision in an area in which the total number of sixth formers is currently not much more than 400 would clearly not have made best use of the resources available. Teachers at the schools and the college would frequently have had to deal with very small groups of pupils, and the total number of options available would inevitably have been limited—as would the facilities for any new, less academic courses.
  We were impressed by the increased staying-on rate that followed the establishment of a tertiary college in Harlow and of a sixth form college in Colchester in the same county. And we had to bear in mind that a major reason for establishing a tertiary college in the first place was to create a focal point to attract pupils who have traditionally seen themselves as adults at 16—happy, perhaps, to attend college but not to stay on with the kids at school. At a total estimated capital cost of £491,000—much less than half the price of a small primary school—the tertiary college proposal also represented particularly good value for money.
  Finally, and very important, we were assured by Essex that places would still be available for pupils who wished to complete their school education at schools in Billericay, Brentwood and Southend—all of which are within manageable reach of Basildon and Wickford. My right hon. Friend and I would not have approved a scheme unless we were satisfied on that point.

  665
  Whenever major changes in educational provision are proposed, it is natural that some will be in favour and others against. It is also natural, and indeed desirable—it is a strength of our democratic system of government—that those who are opposed to a line of action should seek to oppose it by whatever lawful means are available to them.
  Mrs. Gorman: Will my hon. Friend give way on that point?
  Mr. Howarth: If my hon. Friend will excuse me, I have little time and should like to get through what I have to say.
  The opponents of Essex's proposals in Basildon and Wickford have been splendidly served by my hon. Friends the Members for Billericay and for Basildon. I gladly pay tribute to their tenacity and hard work on behalf of their constituents, but I must remind them of the limits of the powers that my right hon. Friend and I have in these matters. As I said earlier, it is not for us to substitute our judgment for that of the democratically elected local education authority. It is outside my right hon. Friend's legal powers—I ask my hon. Friends to understand this—to make substantial changes to proposals submitted by an authority. The options open to us, therefore, were either entirely to reject Essex's proposals, proposals that had the support of many of those affected and had been approved by an education committee in which members of our party were the majority, or to approve them as they stood.
  I hope that my hon. Friends and the constituents whom they represent will, now that the decision has been made, and in the true spirit of democracy, do their best to ensure that the new tertiary college is given every chance to
  666
  succeed. With the right parental encouragement, I have no doubt that the 16 to 18-year-olds of Wickford and Basildon will take full advantage of the many new opportunities that the college will offer.
  My hon. Friend the Member for Billericay criticised Essex county council for seeking to influence parents not to exercise their right of choice to hold a ballot on the future of Wickford school. It is for local education authorities to ensure that they do not infringe the terms of the code of recommended practice on local authority publicity. We have repeatedly said that local education authorities should not attempt to obstruct the opportunity provided in statute for parents to ballot on whether they want their school to seek grant-maintained status, and I deplore any attempt by LEAs to dissuade or frustrate parents from exercising their democratic right to vote in such a ballot and so exercise a full measure of control over its affairs.
  My hon. Friend also said that we should give more support for parents and schools that want to become grant maintained. We provide booklets which are widely available. The one entitled "Grant-Maintained Status: Questions Parents Ask" is proving popular and has already been reprinted. We have published a factual booklet for governors entitled "How to become a Grant-Maintained School", which is in its second edition. Copies of those booklets have been sent to all schools in England elibible to apply for grant-maintained status and further copies are available on demand so that more people will become aware of the magnificent opportunity that grant-maintained status provides for schools to control their education policy and finances.
  The motion having been made after half-past Two o'clock and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at two minutes past Three o'clock.

EDUCATION AND SCIENCE

  School Closures
  Mr. John D. Taylor
  To ask the Secretary of State for Education and Science how many schools were closed in each of the last five years within the Norfolk local education authority area.

  Mr. Alan Howarth
  The number of schools which were closed in each of the past five years in the Norfolk local education authority area is as follows:

  Number

  1989

  12

  1988

  15

  1987

  11

  1986

  14

  1985

  25

  Examinations
  Mr. Pike
  To ask the Secretary of State for Education and Science how many children took the GCE O-level and CSE examinations in Lancashire in 1989; and what results were achieved.

  Mrs. Rumbold
  Information for 1989 is not yet available. Of the 17,500 maintained school leavers in Lancashire in 1988 who had attempted at least one GCSE, O-level or CSE examination, 5,610 achieved five or more results at grade A to C1 at GCSE (or equivalent), 5,020 achieved between one and four results at grade A to C and 6,760 achieved at least one result at another grade.
  1 Including O-level grade A to C and CSE grade 1.

  Ms. Katharine Sharkey
  Sir Barney Hayhoe
  To ask the Secretary of State for Education and Science if he will make a statement on the progress being made in dealing with the appeal under section 8(6) of the Education Act 1981 in respect of Katharine Sharkey; and when he expects the appeal to be decided.

  Mr. Alan Howarth
  The Hounslow local education authority is currently considering a further letter from the parents of Katharine Sharkey in support of their appeal. My right hon. Friend expects to make a decision when he has received the authority's response to that letter.

  Pupils (Ethnic Minorities)
  Mr. Marlow
  To ask the Secretary of State for Education and Science in how many schools the pupil population is in excess of 90 per cent. of any one ethnic minority(a) in the public sector and (b) in the private sector; and if he will make a statement.

  Mr. Alan Howarth
  The information requested is not available centrally, but my right hon. Friend has 354
  announced in circular No. 16/89 that ethnic statistics will be collected by local education authorities from schools maintained by them as from September 1990. Aggregated local education authority returns will be submitted to the Department annually from June 1991.

  National Curriculum
  Mr. Marlow
  To ask the Secretary of State for Education and Science if he will make a statement on the means by which the national curriculum is to be monitored in private sector schools.

  Mr. Alan Howarth
  It is for independent schools to decide whether to adopt the national curriculum. Her Majesty's inspectors, in the course of their normal programme of inspecting independent schools, are monitoring the schools' intentions with regard to adopting this and the extent to which they are implementing it. My right hon. Friend is pleased that many are choosing to do so

  Computing Equipment
  Mr. Matthew Taylor
  To ask the Secretary of State for Education and Science (1) how many applications were received by the Science and Engineering Research Council in respect of its initiative of March to provide computing equipment to universities and polytechnics incorporating parallel and novel architectures;

  (2) how many of those applications received by the Science and Engineering Research Council in respect of its initiative of March to provide computing equipment to universities and polytechnics incorporating parallel and novel architectures were alpha-rated;

  (3) how many of those applications received by the Science and Engineering Research Council in respect of its initiative of March to provide computing equipment to universities and polytechnics incorporating parallel and novel architectures were funded.

  Mr. Jackson
  There were 75 applications of which 47 were alpha-rated. The number of applications to be funded has not yet been determined.

  Foreign Students
  Mr. Alex Carlile
  To ask the Secretary of State for Education and Science if he will estimate the number of foreign students studying in London this summer without accommodation; and if he will make a statement.

  Mr. Jackson
  This information is not available centrally. The accommodation needs of students from abroad, as of home students, are a matter for the institutions they are attending.

TRANSPORT

  Public Inquiries
  Mr. Cartwright
  To ask the Secretary of State for Transport if he will list the venues south of the River Thames which his Department considered as alternatives to Stratford old town hall for the preliminary meeting of the inquiry into the east London river crossing and London City airport on 9 May; and if he will give the reason why each venue was unsuitable.
  355
  Mr. Atkins
  The information is as follows:

  Venue and reason for rejection

  Woolwich Town Hall—Inadequate supporting accommodation.

  Greenwich Borough Hall—Unsuitable supporting accommodation.

  West Greenwich House—Inadequate capacity.

  Thames Polytechnic—Restricted availability.

  Charlton House—Inadequate supporting accommodation.

  Shewsbury House—Inadequate capacity.

  Clockhouse Community Centre—Inadequate capacity.

  Crayford Town Hall—No supporting accommodation.

  Blackheath Concert Halls—In need of refurbishment.

  Royal Military Academy—Inadequate capacity.

  Welling Bingo Hall—Not available.

  Woolwich Waterfront Leisure Centre—Inadequate sup-porting accommodation.

  Danson Road Sports Centre—Not available.

  Thamesmead Lakeside Restaurant—Inadequate supporting accommodation.

  Plumstead Sports Centre—Not available.

  Bexleyheath Council Chamber—Inadequate supporting accommodation.

  Greenwich Royal Naval College—Not available.

  Westwood Masonic Hall, Welling—Inadequate capacity.

  Maritime Museum, Geenwich—Not available.

  Falconwood Community Centre—Inadequate capacity.

  Crest Hotel, Bexley—Not available.

  Orchard Theatre, Dartford—Not available.

  Flamingo Club, Woolwich—Not available.

  Bromley Court Hotel—Inadequate supporting accommodation.

  Edge Parkinson Memorial Hall—Inadequate capacity

  St. John's Church Hall, Catford—Inadequate capacity.

  Clarendon Hotel, Blackheath—Inadequate supporting accommodation.

  Honor Oak Community Centre—Inadequate supporting accommodation.

  Civic Suite, Catford—Inadequate capacity.

  W. G. Grace Community Centre, Nottingham—Not available.

  St. Mary's Centre, Ladywell—Inadequate supporting accommodation.

  St. Peter's Centre, Brockley—Inadequate supporting accommodation.

  Crofton Leisure Centre—Not available

  Lewisham Theatre—Not available.

  St. Lawrence Church Hall, Catford—Not available.

  St. Margaret's Church Hall, Lewisham—Restricted availability.

  Azelia Hall, Beckenham—Not available

  Clockhouse Methodist—Inadequate capacity.

  Church Hall, Beckenham—Not available.

  Holy Trinity Church Hall, Penge—Not available.

  St. Andrews Church Hall, Mottingham—Inadequate capacity.

  St. Andrews Church Hall, Bromley—Inadequate supporting accommodation.

  St. Barnabas Church Hall, Beckenham—Inadequate capacity.

  United Reformed Church Hall, Beckenham—Not available.

  Robert Whyte Memorial Hall, Bromley—Inadequate supporting accommodation.

  Beckenham Leisure Centre—Inadequate supporting accommodation.

  United Reformed Church Hall, Bromley—Not available.

  Methodist Church Hall, Bromley—Not available

  Anerley Methodist Church Hall, Penge—Restricted
  availability.

  Council Chamber, Bromley—Inadequate capacity.

  Manchester Airport
  Mr. Alfred Morris
  To ask the Secretary of State for Transport when he expects the current negotiations on access for United States carriers to Manchester airport to be concluded; and if he will make a statement on the progress of the negotiations.

  Mr. McLoughlin
  The current negotiations are being carried forward as speedily as possible, but no timetable has been set for their completion. It would not be appropriate for any further statement to be made now.

OVERSEAS DEVELOPMENT

  Development Assistance
  Mr. Burns
  To ask the Secretary of State for Foreign and Commonwealth Affairs what percentage of gross national product was allocated to net official development assistance in 1989.

  Mrs. Clwyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs, pursuant to the answer to the hon. Member for Manchester, Withington (Mr. Bradley), of 2 April,Official Report, column 412, if he will announce the figure for the percentage of gross national product pent on official development assistance in 1989.

  Mrs. Chalker
  Net official development assistance in 1989 as a percentage of GNP is provisionally estimated at 0·31 per cent.

  Mrs. Clwyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs what percentage of gross national product was spent on official development assistance in 1988.

  Mrs. Chalker
  The percentage of gross national product spent on official development assistance in 1988 was 0·32 per cent.

ENVIRONMENT

  Protection of Birds
  Mr. Simon Hughes
  To ask the Secretary of State for the Environment if he plans to designate further sites to protect birds under the special protection areas scheme or the Ramsar convention; and if he will make a statement.

  Mr. Trippier
  The Government's aim is to designate those sites which are necessary to meet the conservation objectives of the convention and the directive.

  My right hon. and learned Friend the Secretary of State for Scotland, with whom rests responsibility for the designation of sites in Scotland, recently announced the designation of four special protection areas, one Ramsar site and three sites with dual designation, bringing the Great Britain totals to 40 special protection areas and 43 Ramsar sites.

  A number of proposals are currently being considered and the next designation will take place as soon as the necessary consultations have been satisfactorily completed.

  Desalination
  Sir Neil Macfarlane
  To ask the Secretary of State for the Environment what studies his Department has made of methods of desalination both for overseas markets and for the United Kingdom; what research funds have been made available; and if he will make a statement.

  Mr. Heathcoat-Amory
  A study was made by the Water Resources Board and published as "Desalination 1976". This concluded that desalination was not economical in the United Kingdom when other sources could be exploited. My Department has made no further studies and none is planned.

  Sir Neil Macfarlane
  To ask the Secretary of State for the Environment if he will review the possible need for desalination units in the United Kingdom with the water companies and other interested organisations.

  Mr. Heathcoat-Amory
  No. It is for the private water companies and interested organisations to determine the potential for desalination units.

  Metal Detectors
  Mr. Bowis
  To ask the Secretary of State for the Environment if he will bring forward proposals to regulate further the use of metal detectors to discover items of historical or archaeological interest; and if he will make a statement.

  Mr. Trippier
  My noble Friend the Parliamentary Under-Secretary of State announced on 13 December 1989, in another place, the Government's intention to amend at a suitable opportunity the Ancient Monuments and Archaeological Areas Act 1979 so as to make it an offence to remove, without consent, any item of historical or archaeological interest from the site of a scheduled ancient monument, and to consider less formal measures relating to finds made on unscheduled sites. The unauthorised use of metal detectors is already prohibited on scheduled sites. My right hon. Friend the Secretary of State has no plans to further regulate the use of metal detectors.

  Foxes
  Mr. Alex Carlile
  To ask the Secretary of State for the Environment (1) if he will make a statement concerning the disposal of captured urban foxes;

  (2) if he will seek to make it a criminal offence to release foxes captured in urban areas into the countryside; and if he will make a statement;

  (3) if he will give an estimate of the number of foxes captured in urban areas each year and released into the countryside;

  (4) if he will make it his policy to introduce stiff penalties for persons releasing foxes captured in urban areas into the countryside.

  Mr. Trippier
  I will write to the hon. and learned Member.

  Homelessness
  Mr. Alex Carlile
  To ask the Secretary of State for the Environment if he will make a statement concerning his proposals to combat homelessness in the Greater London area.
  358
  Mr. Michael Spicer
  I refer the hon. and learned Gentleman to the reply given by my right hon. Friend the Prime Minister to the hon. Member for Islington, North (Mr. Corbyn) on 8 May at column 15.

  Management and Computer Consultancy Contracts
  Mr. Tim Smith
  To ask the Secretary of State for the Environment how much his Department expects to spend on management and computer consultancy contracts in 1990–91.

  Mr. Chris Patten
  [holding answer 13 June 1990]: My Department's current budget (including Property Services Agency services) for management and computer consultancies in 1990–91 is £27·3 million.

  Nuclear Accident, Greenwich
  Mr. Simon Hughes
  To ask the Secretary of State for the Environment what plans or studies have been made or commissioned by his Department to assess measures that would have to be taken in the event of contamination by airborne plutonium resulting from a nuclear weapons accident aboard a Royal Navy ship docked at Greenwich.

  Mr. Trippier
  [holding answer 12 June 1990]: This is a matter for the Ministry of Defence and I refer the hon. Member to the reply given by my hon. Friend the Minister of State for the Armed Forces on 12 June at column 142.

  Advertising Costs
  Mr. Hoyle
  To ask the Secretary of State for the Environment what has been the total cost of advertisements for the community charge; in which daily and Sunday newspapers have advertisements been placed; and if he will list papers and cost of advertisements placed in each newspaper.

  Mr. Portillo
  [holding answer 13 June 1990]: No advertisements for the community charge have been placed by the Department. We did, however, sponsor a campaign in January and February designed to inform people of the availability of community charge benefit and transitional relief. The total cost of the advertisements in this campaign in various media was just under £4 million. Of this the cost (excluding VAT) of placing advertisements in daily newspapers was just under £1·05 million, made up as follows:

  Daily Mirror

  338·3

  The Sun

  325·0

  Daily Star

  58·2

  Daily Mail

  61·5

  Daily Express

  40£0

  Today

  18·4

  The Times

  36·0

  The Independent

  33·7

  The Guardian

  36·6

  The Daily Telegraph

  99·0

  In addition, design costs were incurred, but these are not easily separable from the design costs of the advertisements in other media. No advertisements were placed in Sunday newspapers.

  The Department of Social Security has subsequently taken newspaper advertisements publishing the increased

  359
  savings limits for community charge benefit announced in the Budget, and reminding people of the time limit for making backdated claims for benefit and of the level of income likely to entitle people to benefit.

ATTORNEY-GENERAL

  Immigration
  Sir Bernard Braine
  To ask the Attorney-General how many cases of Filipino wives of British subjects seeking admission to the United Kingdom whose applications were submitted to the Immigration Appellate Authorities up to the end of March are still outstanding; when the application of Mrs. Nancy Barrera Sanderson will be decided; what are the reasons for the delay in processing such applications; and whether he will take urgent steps to end the distress caused by the delays to lawfully married couples.

  The Attorney-General
  The information requested in the first part of the question is not available, as the Immigration Appellate Authorities (IAA) does not record information separately about appeals from Filipino citizens.

  The IAA has now sent the case papers of Mrs. Nancy Barrera Sanderson's appeal to her representatives in the United Kingdom. When the representatives indicate to the IAA that they are ready to proceed to the hearing before the independent adjudicator, a hearing will be set down within four to six weeks.

  Delays in processing appeals at the IAA have been caused by the unexpectedly high rise in the volume of appeals in 1988 and 1989. There was a 60 per cent. rise in 1988; a 30 per cent. rise in 1989; and a further 40 per cent. rise is expected over the next 18 months.

  Significant additional resources were provided to the IAA last year, which resulted in a 50 per cent. rise in disposal rates. However, the increased workload has been so great that the backlog of appeals still remains high, but the situation is being kept under review.

HOME DEPARTMENT

  Metropolitan Police
  Mr. Spearing
  To ask the Secretary of State for the Home Department if he will tabulate, in the Official Report, the amount of precept levied by the Metropolitan police on each of the local authorities within its area, distinguishing those wholly within the Greater London area, for the years 1989–90 and 1990–91 respectively, together with their respective adult populations for each year and the amount contributed per head for both years, together with the percentage increase or decrease in the two per capita contributions.

  Mr. Peter Lloyd
  The funding arrangements for local authorities which came into operation this year mean that it is not meaningful to compare on a per capita basis the amounts levied by precept by the receiver for the Metropolitan police in 1989–90 and in 1990–91. This is because the precept in 1989–90 was not a per capita charge, but expressed as so many pence in the pound of rateable value; because it included rates on commercial properties in the area concerned, while moneys raised through the 360
  new uniform business rates are redistributed to local authorities on a national basis; and it did not include block grant, which is paid to the receiver directly, while revenue support grant which replaces block grant is paid into the collection funds on which the precept is levied.

  Football Licensing Authority
  Mr. Pendry
  To ask the Secretary of State for the Home Department what stage has been reached in making appointments to the Football Licensing Authority; and if he will make a statement.

  Mr. John Patten
  Appointments to the Football Licensing Authority are still under consideration. My right hon. and noble Friend has already written to the hon. Member to tell him that the Government intend to appoint the authority as soon as possible. He has also written to the Football League to make clear the Government's view that it is not necessary for football clubs to wait for the authority to be set up before starting to make the improvements to football grounds which were recommended in Lord Justice Taylor's final report on the Hillsborough tragedy.

  Prisoners (Police Cells)
  Mr. Cox
  To ask the Secretary of State for the Home Department how many(a) men and (b) women were held in police cells in England and Wales on 4 June.

  Mr. Mellor
  On Monday 4 June there were 1,080 prisoners, all of them male, held in police stations in England and Wales.

  Astley Bridge Police Station
  Mr. David Young
  To ask the Secretary of State for the Home Department if he will call for a report on what factors were responsible for the escape of a category A prisoner, from Astley Bridge police station, Bolton.

  Mr. Mellor
  An investigation into the escape of Alan Lord, a category B prisoner, from Astley Bridge police station, Bolton, is being undertaken by Greater Manchester police. I will write to the hon. Member when the investigation is completed. Alan Lord was recaptured at around 11 o'clock last night in Liverpool.

  Mr. David Young
  To ask the Secretary of State for the Home Department what was the cost of building Astley Bridge police station, Bolton.

  Mr. Peter Lloyd
  The final cost is not yet available but is expected to be about £1,295,000.

  Category A Prisoners
  Mr. David Young
  To ask the Secretary of State for the Home Department how many category A prisoners are held(a) in prisons and (b) in police stations; what instructions are given about the secure holding of prisoners held in police stations; and, if he has any plans for changes.

  Mr. Mellor
  At present 418 prisoners are confirmed as category A and all are held in prison accommodation.

  Steps taken by the police to ensure the security of prisoners held in their custody are a matter for the chief

  361
  officer of police. Reciprocal arrangements exist between the prison service and the police for the exchange of information relevant to the custody of prisoners who are transferred from the one to the other. Such arrangements are subject to review in the light of particular incidents.

  Advertising (Overseas Voters)
  Mr. Madden
  To ask the Secretary of State for the Home Department what is the total cost of the newspaper and other advertising campaign about overseas voting registration(a) in the United Kingdom and (b) in other countries; and if he will make a statement.

  Mr. Peter Lloyd
  The cost is £750,000 this year, of which £136,400 is being spent on advertising in the United Kingdom (including advertising in publications which also have some overseas circulation) and £510,700 on various forms of advertising or publicity overseas. The remaining £102,900 is for leaflets, posters and production costs, or has not yet been allocated.

TRADE AND INDUSTRY

  Cat Skins
  Mr. Atkinson
  To ask the Secretary of State for Trade and Industry if he has received any recent representations on the export of cat skins to West Germany; and if he will make a statement.

  Mr. Redwood
  My Department has received a number of letters referring to the export of cat skins from the United Kingdom. Several of these letters have mentioned West Germany as a destination for these exports.

  My Department is aware of a limited trade in cat skins from the United Kingdom which is legitimately carried out by a small number of companies. Cat skins are not subject to export controls, and, because of the limited level of trade, cat skin exports are not recorded under a separate heading in the Customs tariff.

  The worrying issue of cat thefts is for the Home Office.

  Debt Advice
  Mr. Cohen
  To ask the Secretary of State for Trade and Industry what plans he has to increase spending on debt advice work.

  Mr. Forth
  None. My Department does not specifically fund debt advice much of which is provided by citizens advice bureaux, as part of their general service. DTI grant in aid to the National Association of Citizens Advice Bureaux and Citizens Advice Scotland, which provide the support services for individual citizens advice bureaux, will amount to more than £11 million in 1990–91, compared with some £10 million last year. Individual bureaux are funded mainly by local authorities.

  Advice Agencies
  Mr. Ron Davies
  To ask the Secretary of State for Trade and Industry what assessment his Department has made of the implications of the poll tax on the workload of the citizens advice bureaux and other advice-giving agencies.

  Mr. Forth
  No such assessment has been made. Independent advice on matters related to the community 362
  charge will be given by local citizens advice bureaux which are primarily funded by local authorities. My Department provides funding to the National Association of Citizens Advice Bureaux (NACAB) and Citizens Advice Scotland (CAS), which provide support services to individual citizens advice bureaux including training and information materials. The Department of the Environment has agreed to provide £36,000 to NACAB this year to help with the costs involved in providing training for bureaux workers on the community charge and the Scottish Office has given CAS £36,000 over the last two years for the same purpose.

  Desalination
  Sir Neil Macfarlane
  To ask the Secretary of State for Trade and Industry what funds his Department makes available for research into desalination both for(a) the United Kingdom and (b) overseas markets.

  Mr. Forth
  I launched my Department's "Wealth from the Oceans" advanced technology programme in April 1989 with a budget of £9,000,000 to encourage firms to carry out more pre-competitive collaborative research into the ocean technologies, including desalination. Some £6,000,000 remains uncommitted and is available to match those sums advanced by industrial consortia whose proposals for longer-term research in this area satisfy the programme's rules.

  Alternatively, firms wishing to collaborate with companies located in one or more of 18 other countries in Europe to investigate desalination can apply for EUREKA status and support, which is made available on a case-by-case basis.

  Competition Act 1980
  Mr. Irvine
  To ask the Secretary of State for Trade and Industry whether he intends to make a further reference of a public sector body to the Monopolies and Mergers Commission under section 11 of the Competition Act 1980.

  Mr. Redwood
  A reference has today been sent to the Monopolies and Mergers Commission to investigate the efficiency and costs of, and the service provided by, Northern Ireland Railways Ltd. and its subsidiaries in providing passenger, freight and other services. A copy of the reference has been placed in the Library.

ENERGY

  Management Consultants
  Mr. Allen
  To ask the Secretary of State for Energy if he will list the studies conducted inside his Department by management consultants over the last 10 years, naming the consultancy, the cost, the subject and the outcome in each instance.

  Mr. Wakeham
  The information from 1985 onwards is as follows:

  Management Consultants with Subject and Outcome

  Stuart McKechnie Ltd—Management Training—

  Design of a training and development programme

  TDA Consulting Group Ltd—Management Training—

  Design of a training and development programme

  Information on contracts before 1985 could be provided only at disproportionate cost. The cost of individual contracts is commercially confidential.

  Nuclear Research
  Mr. Dobson
  To ask the Secretary of State for Energy (1) if he will list the major nuclear research projects being undertaken by the Atomic Energy Authority, together with the dates they commenced and the objectives of each project at the time they were originally initiated;

  (2) if he will list the major nuclear research projects being paid for by his Department together with the dates they commenced and the objectives of each project at the time they were originally initiated.

  Mr. Wakeham
  The objectives of the nuclear R and D programmes currently funded by the Department and carried out by UKAEA are described in chapter 5 of the

  Scenarios of future United Kingdom generation by fuel type (TWh)

  1990

  2005

  2020

  CL

  CH

  CL

  CH

  CL

  CH

  Coal

  209

  208

  205

  230

  62

  358

  Oil

  8

  8

  10

  10

  10

  10

  Gas

  0

  0

  105

  58

  399

  86

  Nuclear

  66

  66

  77

  77

  43

  43

  Hydro

  3

  3

  3

  3

  3

  3

  Imports

  13

  13

  4

  13

  4

  13

  Renewables

  0

  0

  0

  4

  5

  8

  Total

  299

  298

  405

  397

  525

  520

  Scenarios of future United Kingdom capacity by fuel type (GW)

  1990

  2005

  2020

  CL

  CH

  CL

  CH

  CL

  CH

  Coal

  43

  43

  37

  37

  12

  55

  Oil

  14

  14

  16

  16

  9

  9

  Gas

  0

  0

  21

  19

  82

  38

  Nuclear

  12

  12

  13

  13

  7

  7

  Hydro

  1

  1

  1

  1

  1

  1

  Imports

  2

  2

  2

  2

  2

  2

  Renewables

  0

  0

  0

  1

  1

  1

  Total

  72

  72

  91

  89

  114

  114

  Notes: CL = Central growth, low price scenario.

  CH = Central growth, high price scenario.

  Mr. Dobson
  To ask the Secretary of State for Energy if he will give for both coal-fired and nuclear plant, in GW, TWh and Mtoe, the assumed gross loss of old plant and the assumed gross gain in new plant, during both 1990 to 2005 and 2005 to 2020 assumed in tables 4.10 and 4.11 of his Department's "Evaluation of Energy Related Greenhouse Gas Emissions".

  Mr. Wakeham
  The gross gains and losses of coal and nuclear capacity underlying tables 4.10 and 4.11 in energy paper No. 58 are shown in the table. Comparisons are meaningful only on this GW basis. The figures relate to purely illustrative scenarios which used International Energy Agency fuel price assumptions.

  Capacity retired and new capacity built (GW)

  1990 to 2005

  2005 to 2020

  CL

  CH

  CL

  CH

  Coal

  Capacity lost

  6

  6

  28

  46

  New capacity

  0

  0

  3

  46

  Net change

  -6

  -6

  -25

  +18

  364
  1990 public expenditure White Paper (Cm 1005). Details of UKAEA's programmes are contained in its annual reports which are laid before Parliament.

  Greenhouse Gas Emissions
  Mr. Dobson
  To ask the Secretary of State for Energy if he will give for each type of plant the assumed GW and TWh of generation in 1990, 2005 and 2020 in the central growth, low and high price scenarios set out in table 4.10 and 4.11 of his Department's "Evaluation of Energy Related Greenhouse Gas Emissions".

  Mr. Wakeham
  Capacity and generation for 1990, 2005 and 2020 underlying the central growth with low and high price scenarios of energy paper No. 58 are given in the table. The figures relate to purely illustrative scenarios which used IEA fuel price assumptions.

  1990 to 2005

  2005 to 2020

  CL

  CH

  CL

  CH

  Nuclear

  Capacity lost

  4

  4

  6

  6

  New capacity

  5

  5

  0

  0

  Net change

  + 1

  + 1

  -6

  -6

  CL = Central growth, low price scenario.

  CH = Central growth, high price scenario.

  Mr. Dobson
  To ask the Secretary of State for Energy on what grounds the baseline scenarios in his Department's "Evaluation of Energy Related Greenhouse Gas Emissions", assume an annual rate of reduction in the energy ratio of between 0·5 per cent. and 0·8 per cent. compared with an average annual rate of 1·9 per cent. between 1978 and 1988.

  Mr. Wakeham
  The baseline scenarios in energy paper No. 58 represent projections of demand equations, estimated on past behaviour, and do not contain explicit assumptions about energy efficiency per se. The projected
  365
  changes in the energy ratio reflect the assumed economic background and, in particular, the energy price scenarios, which were provided by the International Energy Agency.

PRIME MINISTER

  Child Abuse
  Mr. Allen
  To ask the Prime Minister, further to her reply to the hon. Member for Nottingham, North of Tuesday 12 June, if she will list the members of the interdepartmental group on child sexual abuse.

  The Prime Minister
  The interdepartmental group on child abuse is chaired by an under-secretary in the Department of Health and comprises senior officials and professional staff from that Department's social services inspectorate and medical, nursing and research management divisions; senior officials from the Department of Education and Science and a member of Her Majesty's inspectorate of schools; senior officials representing the police and probation departments at the Home Office and senior officials from the Scottish Education Department, the Welsh Office and the Department of Health and Social Services (Northern Ireland). Additional members are co-opted to discuss specific issues as necessary.

  Mr. Allen
  To ask the Prime Minister, further to her reply of Tuesday 12 June to the hon. Member for Nottingham, North, if she will set out in tabular form the actions taken by the Government as a result of the deliberations of the interdepartmental group on child sexual abuse.

  The Prime Minister
  The role of the interdepartmental group on child abuse is to facilitate the exchange of information about the work undertaken by various

  Mr. Brooke

  Mr. Cope

  Lord Skelmersdale

  Dr. Mawhinney

  Mr. Needham

  Mr. Bottomley

  September 1989

  10

  10

  18

  6

  3

  14

  October 1989

  9

  8

  14

  6

  9

  11

  November 1989

  10

  12

  15

  5

  7

  12

  December 1989

  10

  10

  15

  7

  5

  7

  January 1990

  4

  13

  17

  13

  8

  8

  February 1990

  9

  10

  12

  9

  8

  10

  March 1990

  10

  13

  16

  8

  5

  9

  April 1990

  4

  4

  16

  6

  7

  7

  May 1990

  8

  12

  13

  9

  9

  9

SCOTLAND

  Graeme Stewart and John Allan Milligan
  Mr. Dalyell
  To ask the Secretary of State for Scotland, pursuant to his reply of 11 June, relating to Graeme Stewart and John Allan Milligan, what criteria are used to decide whether to institute proceedings under section 1 of the Official Secrets Act 1911.

  Mr. McFall
  To ask the Secretary of State for Scotland, further to his reply to the hon. Member for Dumbarton of 11 June relating to Graeme Stewart and John Allan Milligan, what criteria are used when deciding whether to prosecute under section 1 of the Official Secrets Act 1911.

  Lord James Douglas-Hamilton
  [holding answer 14 June 1990]: When deciding whether or not to institute criminal proceedings in any case reported to him, the public
  366
  Government Departments in the field of child protection and to develop consistent policies across the range of Government responsibilities. Examples of issues in respect of which officials have taken account of the group's discussions in advising Ministers include:

  (i) guidance on child protection which was issued to all agencies in July 1988 as part of the Government's response to the Butler-Sloss report;

  (ii) training;

  (iii) implications of the Children Act;

  (iv) research, and

  (v) management and treatment of perpetrators of child sexual abuse.

  Aid (USSR)
  Mrs. Clwyd
  To ask the Prime Minister what plans the Government have to provide aid to the Union of Soviet Socialist Republics.

  The Prime Minister
  We are already offering bilateral technical assistance to the Soviet Union in areas such as management, banking, and agriculture. Such help can make a significant contribution to the process of economic reform.

NORTHERN IRELAND

  Ministerial Duties (Nights)
  Mr. John D. Taylor
  To ask the Secretary of State for Northern Ireland how many nights each of the Ministers of the Northern Ireland Office spent in Northern Ireland during the months of September, October, November and December 1989 and the months of January, February, March, April and May 1990.

  Mr. Cope
  The information requested is in the table:

  prosecutor in Scotland considers (a) whether the known facts and circumstances disclose a crime at common law; (b) whether he has jurisdiction in the case; (c) whether there is sufficient evidence to justify the institution of proceedings; (d) whether the matter is of sufficient substance and importance to merit criminal proceedings; or (e) whether it is otherwise in the public interest.

WALES

  National Parks
  Mr. Ron Davies
  To ask the Secretary of State for Wales what was the number of planning appeal decisions(a) allowed, (b) dismissed, (c) withdrawn and (d) undetermined in each of the Welsh national parks in each

  367
  of the last two years for which figures are available; and if he will express the numbers allowed and dismissed as a percentage of those determined.

  National Park

  Year

  Allowed

  Per cent.

  Dismissed

  Per cent.

  Withdrawn

  Undetermined

  Snowdonia

  1989

  9

  36

  16

  64

  3

  4

  11990

  4

  21

  15

  79

  1

  13

  Brecon Beacons

  1989

  4

  27

  11

  73

  5

  1

  11990

  4

  19

  17

  81

  3

  20

  Pembrokeshire Coast

  1989

  6

  35

  11

  65

  3

  4

  11990

  3

  19

  13

  81

  2

  19

  1 January 1990 to date.

  Myodil
  Mr. Michael
  To ask the Secretary of State for Wales what assessment he is now able to make of the number of people in Wales who are complaining of side-effects and after-effects arising from the use of the drug Myodil.

  Mr. Grist
  I refer the hon. Gentleman to the reply I gave him on Thursday 14 June 1990.

  Pupil-teacher Ratios
  Mr. Alex Carlile
  To ask the Secretary of State for Wales what is the average pupil-teacher ratio at secondary schools in Wales of(a) fewer than 100 pupils, (b) 100 to 200 pupils and (c) 200 plus pupils, respectively; and if he will make a statement.

  Mr. Roberts
  The information as at September 19891 is as follows:

  Pupil-teacher ratio3

  100 to 200 pupils2

  10·6

  200 plus pupils

  15·3

  There are no secondary schools in Wales with fewer than 100 pupils.

  1 Provisional data.

  2 Refers to one recently opened school.

  3 Based on teachers within schools.

  Mr. Alex Carlile
  To ask the Secretary of State for Wales what is the average pupil-teacher ratio at primary schools in Wales of(a) fewer than 100 pupils, (b) 100 to 200 pupils and (c) 200 plus pupils, respectively; and if he will make a statement.
  368
  Mr. Roberts
  The table sets out the information relating to 1989, the first year for which separate records were kept, and to the period from January 1990 to date:

  Mr. Roberts
  The information as at September 19891 is as follows:

  Pupil-teacher ratio2

  Fewer than 100 pupils

  18·2

  100–200 pupils

  22·1

  200 pupils

  23·6

  1 Provisional data.

  2 Based on teachers within schools.

  Statutory Health Bodies
  Mr. Alan Williams
  To ask the Secretary of State for Wales whether membership of(a) health authorites, (b) family practitioner committees, and (c) community health councils, has been extended; and if he will make a statement.

  Mr. Grist
  Those members of district health authorities whose periods of office were due to terminate on 31 July 1990 have been invited to serve until 31 July 1991. Members of family practitioner committees are due to serve until 31 March 1991 or later. In both cases the membership will cease at an earlier date should Royal Assent be obtained to the National Health Service and Community Care Bill. The periods of office of some of those members of community health councils appointed by the Secretary of State are due to expire on 30 June 1990 and invitations in respect of those positions have recently been issued.

  Local Management of Schools
  Mr. Alex Carlile
  To ask the Secretary of State for Wales if he will make a statement concerning the implementation of local financial management of schools in Wales, and how it affects(a) schools of fewer than 100 pupils and (b) schools of 100 pupils or more.

  Mr. Roberts
  Schemes for the local management of schools have been approved for each of the local education authorities in Wales and they came into force on 1 April. Accordingly all primary and secondary schools are being formula-funded subject to LEAs' transitional arrangements. The delegation to secondary and larger primary schools of responsibility for managing their budgets is being phased in over the next three years.

  The position of small schools was carefully considered before formal approval to the schemes was given. The budgets of schools with fewer than 100 pupils and of the majority of primary schools with 100 pupils or more may benefit from additional LEA funding to protect them against disproportionately high salary costs and to ensure that the requirements of the national curriculum can be met.

  Mr. Alex Carlile
  To ask the Secretary of State for Wales what change there has been in the pupil-teacher ratio in Wales since implementation of local financial management; what were the comparable figures for the previous three years; and if he will make a statement.

  Mr. Roberts
  Schemes for local management of schools were introduced by local education authorities in April 1990. No information on pupils or teacher numbers has been collected since that date.

HEALTH

  Community Care
  Mr. Andrew Bowden
  To ask the Secretary of State for Health how it is proposed that the level of funds made available to local authorities in respect of community care services will take into account the proposed closure of hospitals for patients with mental handicap and mental illness.

  Mr. Dorrell
  Local authority expenditure on community care will continue to be funded in the same way as other local authority expenditure. Additional funds are made available to local authorities by district health authorities as a result of local agreements to support mentally handicapped and mentally ill patients discharged from hospital to live in the community. A specific grant is proposed to facilitate community care for people with a mental illness.

  Women Workers
  Mrs. Gorman
  To ask the Secretary of State for Health how many women have children between the ages of five and 16 years; and how many of these women work(a) part time and (b) full time.

  Mr. Dorrell
  Table 1 shows that in 1987, the latest year for which these data are available, 22 per cent. of all women of working age had at least one child aged five to 15 years. Table 2 gives the percentages of these women 370
  who were going out to work full time and part time. The data are taken from the general household survey, which obtains information from a sample of private households, and are therefore subject to sampling error.

  Table 1 Great Britain

  1987 (per cent.)

  Percentage of women with child(ren) aged 5–15 years

  22

  Base = 100 per cent, (women aged 16–59)

  7,656

  Table 2 Great Britain

  1987 (per cent.)

  Percentage of women, with children aged 5–15 years, who went out to work:

  Full time

  21

  Part time

  47

  Total going out to work1

  68

  Base = 100 per cent, (women aged 16–59 with child(ren) aged 5–15)

  1,694

  1 Includes a few cases for which hours of work were not given.

  Child Sex Abuse
  Mr. Allen
  To ask the Secretary of State for Health (1) what progress has been made on child sexual abuse since the statement by the Parliamentary Under-Secretary of State on 15 May 1989,Official Report, columns 145–48;

  (2) if he will provide a table of recent, current and proposed research funded by each Government Department relevant to child sexual abuse in each of the years since 1979, listing (a) projects under consideration, with earmarked funding, (b) projects in progress, (c) projects completed, (d) broad themes identified for research, and the actual and projected cost in each case; and if he will make a statement.

  Mrs. Virginia Bottomley
  The information requested has been placed in the Library.

  Mr. Maclennan
  To ask the Secretary of Slate for Health, pursuant to the answer of 2 May,Official Report, column 548, whether all local authorities in England have now incorporated the recommendations of the Butler-Sloss report in the guidelines they issue to those of their social workers involved in cases of alleged child abuse.

  Mrs. Virginia Bottomley
  The Department does not routinely see all local guidance issued to social workers. However, the social services inspectorate as part of its inspection work looks at social work practice and local guidance.

  General Practitoners' Budgets
  Mr. Sheerman
  To ask the Secretary of State for Health who will be responsible for paying for drug addicts to attend drug dependency units when general practitioners have their own budgets.

  Mrs. Virginia Bottomley
  The National Health Service and Community Care Bill provides for GP practices which volunteer to do so, and which meet the eligibility criteria, to run their own practice funds. From 1 April 1991, practice funds will enable GPs to purchase a specified range of hospital services for their patients. The practice
  371
  funding arrangements will cover all initial out-patient referrals made by GPs—but not those made by other health professionals—and certain in-patient or day case procedures, primarily in the area of elective surgery. The cost of treating patients referred by GP fund holders to drug depedency units on an out-patient basis will be met from the practice fund, whereas the cost of referrals by other agencies (such as social services), self-referrals and of in-patient care will not be a charge on the fund. These patients will be covered (as will the patients of non-fund holders) by the contracts which district health authorities place on behalf of their resident population.

  Eye Tests
  Mr. Michael
  To ask the Secretary of State for Health how many people with glaucoma and diabetes received free eye tests in each district health authority area in England(a) in each quarter in 1988–89 and (b) in each quarter in 1989–90.

  Mrs. Virginia Bottomley
  Statistics prior to 1 April 1989 were not broken down by patient group. Since then family practitioner committees have collected data on sight tests paid for under the general ophthalmic services on a six-monthly basis. District health authorities do not collect such information. The table gives estimated numbers by patient group and regional health authority for the period in question.

  NHS sight tests paid for during April–September 1989:

  RHA

  Diabetics/Glaucoma sufferers

  Northern

  5,410

  Yorkshire

  8,900

  Trent

  15,660

  East Anglia

  3,200

  North West Thames

  6,700

  North East Thames

  9,700

  South East Thames

  11,900

  South West Thames

  6,450

  Wessex

  8,290

  Oxford

  5,250

  South Western

  8,750

  West Midlands

  10,200

  Mersey

  3,940

  North Western

  9,830

  These figures are based on a 2 per cent. sample of national health service sight test application forms processed by family practitioner committees. They do not take into account sight tests paid for after 1 April 1989 but conducted before that period.

  NHS Reform
  Mr. Cartwright
  To ask the Secretary of State for Health what discussions officials of his Department have undertaken about the possibility of any part of the health service in the Greenwich district opting for self-governing status.

  Mrs. Virginia Bottomley
  None.

  Health Services, Greenwich
  Mr. Cartwright
  To ask the Secretary of State for Health (1) whether his Department has been involved in any discussions about the establishment of a new district general hospital at the Memorial hospital, Woolwich;372
  (2) what discussions or correspondence his Department has had with officers of the Greenwich health authority about the future of acute services in Greenwich during the past 12 months.

  Mrs. Virginia Bottomley
  The Department has not been involved with these issues in the past 12 months. Greenwich health authority is to produce a strategy document for acute services for consideration which should address all options.

  Steroids
  Sir Michael McNair-Wilson
  To ask the Secretary of State for Health when his Department first became aware that high dosages of steroids had serious and lasting side-effects; and what action was taken to make this information known to general practitioners and hospitals.

  Mrs. Virginia Bottomley
  A number of serious diseases require long-term treatment with steroids. The side-effects of long-term treatment have been well known for many years, and the British National Formulary sent to all prescribers by the Department free of charge, has carried warnings to this effect since 1966. Licensing of medicinal products under the Medicines Act started in 1971, and companies promoting medicines to doctors are required to provide individual product data sheets which include appropriate information on warnings, contraindications and side-effects.

  AIDS
  Mr. Alex Carlile
  To ask the Secretary of State for Health what further proposals he has to eliminate the spread of AIDS through(a) blood transfusions, (b) dirty syringes and (c) sexual transmission; and if he will make a statement.

  Mrs. Virginia Bottomley
  We are firmly committed to taking effective action to minimise the spread of HIV infection.

  All blood donations are tested for HIV antibody and people who may have been exposed to HIV are asked not to donate blood. As a consequence, the risks of infection with HIV through blood transfusion in this country have been reduced to the lowest level currently possible.

  We recognise the grave potential for spreading HIV through the use of infected injecting equipment by drug users. To counter this threat we have asked agencies working with drug users to maximise the number of users they are in contact with and to make HIV prevention activities a key part of their work. Advice has been issued on the establishment of syringe and needle exchange schemes, and on cleaning injecting equipment. We are also considering the role pharmacists have to play in the provision of injecting equipment in the light of the recent report of the addiction research unit, a copy of which is in the Library.

  Sexual transmission of HIV remains the major threat: national and local action has been set in hand to meet that threat. Nationally, the Health Education Authority runs mass media campaigns and back-up activities aimed at the general public, with targeted work directed at groups at particular risk. Locally, health authorities have been asked to develop HIV prevention initiatives, in collaboration with local authorities and voluntary bodies, paying particular attention to HIV prevention services in genito-urinary medicine clinics.
  373
  This year health authorities are receiving £128 million specifically for HIV and AIDS-related work, local authorities have been allocated a £9·8 million support grant, and we expect to make grants of £1·8 million to voluntary bodies working in this field.

  We expect action on all aspects of HIV prevention will have to be sustained for the foreseeable future, and the need for further action will be kept closely under review.

  Drugs
  Sir Michael McNair-Wilson
  To ask the Secretary of State for Health whether his Department monitors the number of persons who show serious side-effects after a long period of drug therapy; and what action is taken both in informing manufacturers and advising the medical profession.

  Mrs. Virginia Bottomley
  The Committee on Safety of Medicines (CSM) carefully monitors all issues of drug safety. Suspected adverse reactions to medical products are reported on a voluntary basis by doctors and dentists under the yellow card scheme, and there is a statutory requirement for pharmaceutical companies to submit reports. This applies to patients receiving treatment over short and long periods. The CSM recommends that manufacturers carry out post marketing surveillance studies for new drugs likely to be used for widespread long-term use, in order to identify any side-effects associated with treatment. In addition the CSM closely monitors worldwide epidemiological studies investigating the long-term effects of medicines.

  Information on potential problems is sent regularly to all prescribers by means of CSM's "Current Problems" bulletin; in the case of major drug safety hazards the professions are alerted by means of a letter from the chairman. Drug prescribing information and guidance is also available from a number of other sources, for example the British National Formulary, which the Department issues free to all doctors twice yearly.

  The pharmaceutical industry is regularly supplied with information on adverse reactions received by the CSM. In addition it is involved in receiving and providing information in relation to drug safety problems for its licensed products.

  Blood Transfusion Service
  Mr. Cousins
  To ask the Secretary of State for Health what were the costs of operating the blood transfusion service in each national health service region for the latest available year; and if he will express those costs in terms of cash, cash per head, and cash per litre of blood product supplied.

  Mr. Dorrell
  [holding answer 23 May 1990]: The revenue costs of operating the blood transfusion service for 1988–89 (the latest year available) are shown in the table along with the cost per head of population resident in each regional transfusion centre's area. Information is not held centrally to calculate the cost per litre of blood product supplied.
  374

  Revenue expenditure

  Region

  On the Blood Transfusion Service (£)

  Per head of population in RTC area1

  Northern

  4,011,374

  1·33

  Yorkshire

  5,626,860

  1·79

  Trent

  6,453,730

  1·31

  East Anglia

  2,990,940

  1·47

  North West Thames

  6,483,135

  1·76

  North East Thames

  5,043,480

  1·43

  South East Thames

  9,149,746

  1·35

  South West Thames

  Wessex

  3,077,056

  1·35

  Oxford

  3,332,335

  1·24

  South Western

  4,934,100

  1·37

  West Midlands

  6,663,586

  1·28

  Mersey

  3,899,912

  1·43

  North Western

  6,753,782

  1·48

  Total

  68,420,036

  1 1986 population.

  Tuberculosis
  Mr. Gareth Wardell
  To ask the Secretary of State for Health what is the correlation coefficient between the incidence of HIV infection and the incidence of tuberculosis in England over the period 1980 to 1990.

  Mrs. Virginia Bottomley
  [holding answer 7 June 1990]: The reported number of people with HIV infection has increased during the 1980s in England and Wales and in a small proportion of those who have progressed to develop AIDS, tuberculosis has occurred. However, no evidence of a correlation between the HIV epidemic and the overall incidence of tuberculosis has been identified so far in England and Wales.

  Tuberculosis incidence, as measured by notifications, has been declining by approximately 5 per cent. per year in recent decades, but the rate of decline varies from year to year. Total notifications for England and Wales in 1988 (5,161) were 1·5 per cent. higher than the total in 1987 (5,086), but such small annual increases have been seen from time to time (in 1973, 1975, 1978 and 19860 with a subsequent resumption of the downward trend. The small increase that was seen in 1988 occurred mainly in the younger females and the elderly age group.

  Alcoholism
  Mr. Bowis
  To ask the Secretary of State for Health if he will list the organisations in receipt of funds from his Department that provide post detoxification residential care, indicating the amount received and the number of beds provided.

  Mr. Dorrell
  [holding answer 11 June 1990]: There is no central register of the number of beds provided for detoxification, nor of the funding specifically used for the provision of these facilities.

  The Department does not allocate earmarked moneys for the provision of post detoxification residential care for alcohol misusers. The Department does, however, make available to regional health authorities earmarked funding, which this year totals £15·5 million, for the provision of drug services locally. Post detoxification residential care may be funded from these allocations.

  COMARE
  Mr. Dobson
  To ask the Secretary of State for Health, further to the Minister of State's answer of 7 June,Official Report, columns 674–75, when COMARE originally recommended a study of any possible health effects on the offspring of parents occupationally exposed to radiation; for what reason the recommendation was not then adopted; and when the studies will commence.

  Mr. Dorrell
  The Committee on Medical Aspects of Radiation in the Environment (COMARE)'s original recommendation for epidemiological studies to consider any possible health effects on the offspring of parents occupationally exposed to radiation was made in COMARE's second report (June 1988). The Government accepted this recommendation and research proposals were invited. COMARE subsequently broadened the scope of this recommendation in its third report (June 1989). The Government also accepted this recommendation and, following consultations with COMARE, have invited more detailed proposals. These proposals are currently undergoing the usual refereeing procedure and research should be commissioned later this year.

SOCIAL SECURITY

  Income Support
  Ms. Short
  To ask the Secretary of State for Social Security what the earnings disregards are for all single or married income support claimants who are required to be available for work; what earnings received by a claimant are not counted for income support purposes; what expenses can an income support claimant deduct from their gross earnings when calculating their benefit; and if he will make a statement.

  Mr. Scott
  The main disregards and provisions in income support for people with weekly earnings who are required to be available for work are:

  Couples aged under 60 years who have been continuously in receipt of income support for two years or more—£15 per couple.

  Couples receiving, or with underlying title to, the disability premium—£15 per couple.

  All other couples—£5 each member.

  Single people—£5

  Earnings from employment which ceased before the claim for income support was made are ignored, with the exception of royalties and, for people below pension age, holiday pay, pay in lieu of notice or remuneration, and retainer fees.

  Deductions are made from gross earnings in respect of income tax, social security contributions and one half of any contribution towards an occupational or personal pension scheme. In addition, where earnings are from self-employment deductions may be made for certain expenses wholly and exclusively defrayed for the purposes of that employment.

  Mr. Maxton
  To ask the Secretary of State for Social Security how many single-pensioner households in Scotland are in receipt of income support or have been in receipt of income support or supplementary benefit for each of the past five years, expressed as a percentage of all single-pensioner households and as a numerical total.

  Mrs. Gillian Shephard
  [pursuant to her reply, 1 March 1990, c. 318–20]: I regret that the information given was
  376
  incorrect. The corrected figures, which relate to single people aged 60 and over, are in the table. The information requested is not available for single-pensioner households.

  Number of "Single" people in Scotland

  Thousands

  1983

  1984

  1986

  1987

  1988

  a. Aged 60 and over

  482

  483

  483

  484

  484

  b. In receipt of Income Support aged 60 and over

  131

  138

  135

  150

  149

  c. Percentage in receipt of Income Support

  27·2

  28·6

  28

  31

  30·8

  Note: The population figures are mid-year population estimates from the population statistics branch of the General Registry Office for Scotland. The number of benefit recipients are taken from the annual statistical enquiries (ASE) in December 1983, December 1984, February 1986, May 1987 and May 1988. No ASE was produced in 1985.

  Retirement Pensions
  Mr. Meacher
  To ask the Secretary of State for Social Security what was the 1988–89 cost of providing the national insurance retirement pension(a) including spouse additions and (b) excluding spouse additions to category A retirement pensioners (1) in total, (2) for males and (3) for females.

  Mrs. Gillian Shephard
  The costs1 as requested are as follows:

  Including Adult Dependency Additions (ADAs)2

  £ million

  Total Costs

  12,240

  To men

  7,840

  To women

  4,400

  Excluding ADAs

  Total Costs

  12,090

  To men

  7,690

  To women

  4,400

  1 Source Government Actuary Department.

  2 It is impossible to tell from Government statistics whether the ADA is paid for a spouse or a person having care of children.

  Mr. Meacher
  To ask the Secretary of State for Social Security what is his best estimate of the number of(a) male and (b) female claimants who receive a spouse addition for non-contributory benefits for the latest available year.

  Mr. Scott
  The latest available figures show that 4,966 male and 487 female claimants receive increases of non-contributory benefits in respect of adult dependants. It is not possible to separate those cases where the increase is payable in respect of a spouse.

  Mr. Meacher
  To ask the Secretary of State for Social Security, pursuant to his answer of 11 June on the cost of spouse additions, what percentage of the £800 million and £4 million relate to the retirement pension.

  Mrs. Gillian Shephard
  On male contribution records approximately 20 per cent. of the estimated £800 million figure relates to retirement pension. On female contribution records the percentage is negligible. (Note: The figures of £800 million and £4 million in the earlier answer were the estimated cost in 1988–89 of adult dependency additions, which include a small number of adult
  377
  dependants other than spouses who have care of a child or children. It is not possible to give separate figures solely for spouse additions although the amounts involved are unlikely to be significantly different.)

  Mr. Meacher
  To ask the Secretary of State for Social Security, pursuant to his answer of 24 May,Official Report, column 323, regarding the woman's half-test, what information is available.

  Mrs. Gillian Shephard
  A woman who was affected by the married woman's half-test would not have received any pension (not even a reduced one) based only on her own contributions. However, that test was abolished on 22 December 1984 for all women regardless of when they reached pension age and as a result some women became entitled to a reduced pension based on their own contributions.

  At March 1989 there were some 0·6 million women in receipt of a reduced category A pension (that is one based on their own contributions), but it is not possible to say how many of these were women who became entitled to that pension as a result of the abolition of the test.

  Housing Benefit
  Mr. Maxton
  To ask the Secretary of State for Social Security how many single-pensioner households in Scotland are in receipt or have been in receipt of housing benefit for each of the past five years, expressed as a percentage of all single-pensioner households and as a numerical total.

  Mrs. Gillian Shephard
  [pursuant to her reply, 7 March 1990, c. 679]: I regret that a correction is necessary.

  The estimate for 1988 of 250,000 single people in Scotland aged 60 or over in receipt of housing benefit represents 51·7 per cent. of the total number of Scots in this group and not 11·3 per cent. as shown in the published reply.

  Pension Ages
  Mr. Meacher
  To ask the Secretary of State for Social Security, pursuant to his answer of 24 May,Official Report, column 323, regarding pension ages, in what form the information is available.

  Mrs. Gillian Shephard
  Such information as is available is set out in my answer to the hon. Member's earlier question.

NATIONAL FINANCE

  Charities
  Mr. Dewar
  To ask the Chancellor of the Exchequer how many bodies established under the law of Scotland or managed or controlled wholly or mainly in, or from, Scotland are presently recognised by the Inland Revenue as charitable for tax purposes and are eligible for relief under section 505 of the Income and Corporation Taxes Act 1988.

  Mr. Lilley
  The Inland Revenue is in the process of transferring to computer information about bodies in Scotland which have been recognised as charities for tax purposes. The task is not yet complete, but it is estimated there may be about 15,000.

  Mortgages
  Mr. Allen
  To ask the Chancellor of the Exchequer, further to his reply of 6 March,Official Report, column 595, if he will now make provision for writing down against tax liabilities the increases in mortgage debts of individuals which were incurred because of the rise in interest rates.

  Mr. Lilley
  Increases in mortgate interest payable as a result of changes in interest rates qualify for mortgage interest relief in accordance with the normal rules. Relief is allowed for the actual interest paid on qualifying loans up to the statutory limit.

  European Bank for Reconstruction and Development
  Mrs. Clwyd
  To ask the Chancellor of the Exchequer from the budget of which Department the United Kingdom's contribution to the European bank for reconstruction and development will be paid.

  Mr. Ryder
  The United Kingdom's contribution to the European bank for reconstruction and development will be paid through the Overseas Development Administration. The contributions for the years up to 1993–94 will be additional to ODA's existing provisions. Provisions for contributions in the years after 1993–94 will be considered in future public expenditure surveys.

  Society of Chartered Accountants
  Mr. Vaz
  To ask the Chancellor of the Exchequer when he last met the Society of Chartered Accountants; and what was discussed.

  Mr. Lilley
  [holding answer 14 June 1990]: I have no knowledge of any organisation by this name.

AGRICULTURE, FISHERIES AND FOOD

  Bovine Spongiform Encephalopathy
  Mr. Marlow
  To ask the Minister of Agriculture, Fisheries and Food how the status of a BSE-free herd will be affected by(a) the purchase of calves or young stock from a herd with BSE and (b) the purchase of calves or young stock from a herd that subsequently develops BSE; and, in the second case, how the authorities and the purchasing owner will be guaranteed information of the change in circumstance.

  Mr. Maclean
  Since there is no test for BSE in the live animal it is not possible to certify that any herd is BSE free.

  Salmon
  Mr. Trotter
  To ask the Minister of Agriculture, Fisheries and Food when he expects to receive the report on the future of the east coast salmon fishery.

  Mr. Curry
  I refer my hon. Friend to the reply which I gave to my right hon. Friend the Member for Woking (Mr. Onslow) on 26 April at column 317.

  Spongiform Encephalopathy (Pets)
  Mr. Amos
  To ask the Minister of Agriculture, Fisheries and Food if he will give the latest figures for the incidences of spongiform encephalopathy in domestic pets.
  379
  Mr. Maclean
  Thirteen cats' brains have been examined at the central veterinary laboratory at Weybridge, of which three have been confirmed as having a spongiform encephalopathy. There are no confirmed cases involving dogs.

  Rabies
  Mr. Redmond
  To ask the Minister of Agriculture, Fisheries and Food what was the result of the rabies tests carried out on an eight-month-old border collie, which died in Walthamstow, east London on 15 May; and if he will make a statement.

  Mr. Maclean
  The rabies tests were all negative.

DEFENCE

  Disarmament
  Mr. Thurnham
  To ask the Secretary of State for Defence if he will make a statement on the process of disarmament.

  Mr. Archie Hamilton
  In common with our NATO allies, the United Kingdom has continued to give strong support to current arms control negotiations, and to work actively in those in which we are involved. We are now making important progress in achieveing our long-standing aim of enhancing security and stability in Europe at the lowest possible levels of forces consistent with our security needs. We intend to maintain this policy, which has proved such a success.

  Air-to-Surface Missiles
  Ms. Primarolo
  To ask the Secretary of State for Defence what information he has about the proposed sitings of tactical air-to-surface missiles.

  Mr. Archie Hamilton
  The question of the detailed sitings of tactical air-to-surface missiles has not arisen.

  Cruise
  Mr. Andrew F. Bennett
  To ask the Secretary of State for Defence if he will make a statement about sea-launched cruise missiles.

  Mr. Archie Hamilton
  I have nothing to add to the reply I gave on 5 April at column 832.

  German Unification
  Mr. Canavan
  To ask the Secretary of State for Defence what changes he envisages in Britain's defence policy as a result of the two-plus-four talks on the reunification of Germany.

  Mr. Archie Hamilton
  As my right hon. Friend the Secretary of State informed the House on 6 February, we are examining options for change in the structure and deployment of our armed forces in the light of changing international circumstances. We will also be playing a full part in the forthcoming review of NATO strategy. It is still too early to indicate any specific changes, but we will continue to maintain our commitment to NATO which provides the best guarantee of peace and security in Europe.

  Aircraft Procurement
  Mr. Jack
  To ask the Secretary of State for Defence if he will make a statement on the current state of the CFE negotiations and their possible effect on future military aircraft procurement for the RAF.

  Mr. Alan Clark
  The negotiations continue to make good progress and there are hopes that an agreement may be reached later this year. There has, as yet, been no agreement on either the definition or number of combat aircraft which might be covered by a CFE treaty. It is, therefore, not possible to speculate on the likely effects on future procurement.

  Nuclear Weapons
  Mr. Foulkes
  To ask the Secretary of State for Defence what tests of nuclear weapons have taken place in the last five years; whether they have been to test the effectiveness of the weapons or in connection with modernisation; where such tests took place; and what notification was given to any international bodies.

  Mr. Archie Hamilton
  The following joint UK-US nuclear tests have been held in the last five years:

  Kinibito—5 December 1985

  Darwin—25 June 1986

  Midland—16 July 1987

  Barnwell—8 December 1989

  All were conducted at the Nevada test site. Such tests are carried out in order to maintain the effectiveness of the United Kingdom's nuclear weapons capability. In line with standard practice, all were simultaneously announced in London and Washington 30 minutes after shot time; no specific notifications were given to any international body.

  RAF Akrotiri
  Mr. Redmond
  To ask the Secretary of State for Defence if he will list by year for the last 10 years to date, the number of times the United States U2 spy aircraft has used the facilities of RAF Akrotiri; and if he will make a statement.

  Mr. Archie Hamilton
  The USAF U2 aircraft has been permanently stationed at RAF Akrotiri since 1974 in support of middle east peacekeeping arrangements. It operates with the knowledge of all Governments directly involved.

  Biological Defence
  Mr. Simon Hughes
  To ask the Secretary of State for Defence if he has obtained for his departmental library a copy of the United States Department of Defense 1986 publication, "Biological Defense Programme"; and if he will make a statement.

  Mr. Neubert
  No. A copy is, however, on order by the relevant departmental library.

  Trilateral Air Force
  Mr. Redmond
  To ask the Secretary of State for Defence if he will make a statement in respect of the proposed plan to create a trilateral British, United States and West German air force, based primarily in the United Kingdom.
  381
  Mr. Archie Hamilton
  We have received no proposals for a trilateral British, United States and West German air force based primarily in the United Kingdom.

  Genetically Modified Organisms
  Mr. Simon Hughes
  To ask the Secretary of State for Defence what is the procedure for ensuring that the non-military potential applications of work carried out with genetically modified organisms are identified and subsequently exploited; and if he will make a statement.

  Mr. Neubert
  Scientific work leading to the development of defensive measures against chemical and biological warfare, including the limited amount of work on genetically manipulated organisms, often has nonmilitary potential. It is identified by the scientists in the course of their experiments and reviewed by the independent medical, physical sciences and life sciences committees.

  Where possible, the work is then exploited through contacts between the MOD's scientific staff and industry and scientific research organisations. The greater part of the work not disseminated in this way is published in open literature.

  Low Flying
  Mr. Cohen
  To ask the Secretary of State for Defence, pursuant to his answer to the hon. Member for Gower (Mr. Wardell) of 25 April,Official Report, column 208, on how many occasions full charges were carried on low-flying training exercises in 1989 and 1990 to date; and what forms of charges were involved.

  Mr. Neubert
  The detailed information requested is not available and could not be obtained without disproportionate cost and effort.

  Mr. Redmond
  To ask the Secretary of State for Defence if he will list the number of low-flying training sorties flown by RAF and NATO aircraft over South Yorkshire and neighbouring counties in 1989 and the proposed number in 1990; and how close any such sorties fly to Crowedge, Hazlehead, South Yorkshire.

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

  Army Structures
  Mr. Allen
  To ask the Secretary of State for Defence what proposals he has initiated to reduce public expenditure on the British Army by rationalising its regimental and property structure.

  Mr. Archie Hamilton
  It is this Government's policy to make the most cost-effective use of resources in all areas, including the organisation and infrastructure of the Army. The scope for reducing costs is kept under continuous review.

  Royal Ordnance Factory, Nottingham
  Mr. Allen
  To ask the Secretary of State for Defence if he will conduct an immediate review of security at the royal ordnance factory, Nottingham.

  Mr. Neubert
  Security arrangements at the factory are regularly reviewed by the Ministry of Defence.
  382
  Mr. Allen
  To ask the Secretary of State for Defence for what reasons Ministry of Defence police are currently employed at the royal ordnance factory, Nottingham; whether they are armed; and whether he has any plans to withdraw them.

  Mr. Neubert
  Ministry of Defence police officers are present as required by the Ministry of Defence as part of the security arrangements for the factory and there are no plans for their withdrawal. All Ministry of Defence police officers are trained in the use of firearms and may be armed if it is considered necessary for operational reasons.

  Mr. Allen
  To ask the Secretary of State for Defence how many Ministry of Defence police currently patrol the royal ordnance factory at Nottingham; and at what cost.

  Mr. Neubert
  It is not the practice to give details of numbers of Ministry of Defence police (MDP) patrolling any particular location. The estimated cost of the MDP detachment at ROF Nottingham for 1989–90 is £500,000. Final figures are not yet available.

  British Aerospace
  Mr. Allen
  To ask the Secretary of State for Defence how many Ministry of Defence police are employed at British Aerospace establishments.

  Mr. Neubert
  Currently 118 MDP officers are employed at the five ROF plc sites.

  Atomic Weapons Establishment, Cardiff
  Mr. Morgan
  To ask the Secretary of State for Defence (1) what manufacturing materials are used in increased quantities at the atomic weapons research establishment, Cardiff, following the transfer of work from the atomic weapons research establishment, Aldermaston, to the atomic weapons research establishment, Cardiff;

  (2) what increase there has been in the percentage by value of the Trident D5 warhead programme at the atomic weapons research establishment, Cardiff, by virtue of the transfer of work from the atomic weapons research establishment, Aldermaston.

  Mr. Neubert
  There has been a small increase in the non-fissile workload at AWE Cardiff associated with the Trident warhead production programme. For security reasons it would be inappropriate to quantify this in either material or cost terms.

  Ministry of Defence Police
  Mr. Allen
  To ask the Secretary of State for Defence what are the current rates of pay for Ministry of Defence police.

  Mr. Neubert
  The current rates of pay for officers of the Ministry of Defence police, from 1 September 1989 are as follows:

  Rank

  Salary £

  Constable on Appointment

  9,405

  After 1 year

  10,058

  After 2 years

  11,839

  After 3 years

  12,118

  After 4 years

  12,520

  After 5 years

  12,950

  After 6 years

  13,364

  383

  Rank

  Salary £

  After 7 years

  13,777

  After 8 years

  14,184

  After 12 years

  15,104

  After 15 years

  15,695

  Sergeant on Promotion

  15,014

  After 1 year

  15,695

  After 2 years

  16,248

  After 3 years

  16,787

  After 4 years

  17,223

  Inspector on Promotion

  17,223

  After 1 year

  17,761

  After 2 years

  18,457

  After 3 years

  19,004

  After 4 years

  19,554

  Chief Inspector on Promotion

  19,554

  After 1 year

  20,101

  After 2 years

  20,648

  After 3 years

  21,198

  After 4 years

  21,751

  Superintendent on Promotion

  26,599

  After 1 year

  27,277

  After 2 years

  27,953

  After 3 years

  28,885

  Chief Superintendent on Promotion

  29,574

  After 1 year

  29,996

  After 2 years

  30,669

  After 3 years

  31,401

  Assistant Chief Constable

  34,864

  Deputy Chief Constable

  36,608

  Chief Constable

  41,562

  Arms Control
  Mr. Ian Bruce
  To ask the Secretary of State for Defence what progress is being made in reaching arms control arrangements between Britain and the USSR.

  Mr. Waldegrave
  I have been asked to reply.

  There are no current bilateral arms control negotiations between Britain and the USSR. However, both nations participate actively in a number of multilateral negotiations, in particular those covering conventional forces in Europe, confidence and security-building measures, and a global ban on chemical weapons. Progress is being made, although complex issues remain to be resolved in all these negotiations.

FOREIGN AND COMMONWEALTH AFFAIRS

  COCOM
  Mr. Atkinson
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the outcome of the most recent meeting of COCOM.

  Mr. Waldegrave
  The high-level meeting of COCOM took place in Paris from 6–7 June. The meeting agreed a British proposal for the establishment of a "core list" of items of essential strategic significance, to be applied to all the proscribed destinations. This core list will replace the existing industrial list and will result in a new, shorter set of controls.

  The meeting also agreed to the deletion of 30 items from the existing industrial list, identified as a direct result of
  384
  work already done following the British proposal for a core list. The deletions will be implemented on 1 July. Work will continue to identify further items for deletion.

  Signifiant revisions were also agreed in the controls on machine tools, computers and telecommunications. These will be implemented on 1 July.

  The high-level meeting welcomed the establishment from 1 July of an interim export control regime for the GDR.

  Soviet Union (Exit Visas)
  Mr. John Marshall
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether he will raise with the Soviet authorities their failure to grant an exit visa to Irinia Sokolova-Lidsky of Kiev.

  Mr. Waldegrave
  The case of Irinia Sokolova was raised with the Soviet authorities during my right hon. Friend the Prime Minister's visit to the USSR, 7–10 June. We shall not let up until there is a satisfactory outcome.

  Mr. John Marshall
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether he will raise with the Soviet authorities their refusal to grant an exit visa to Emil Kunin and his family of Moscow.

  Mr. Waldegrave
  We can certainly raise the case of Emil Kunin and his family with the Soviet authorities but in order to make our representations most effective we shall need further details.

  Mr. John Marshall
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether he will raise with the Soviet authorities their failure to grant an exit visa to Boris and Eda Zolotarevsky of Moscow.

  Mr. Waldegrave
  We can certainly raise the case of Boris and Eda Zolotarevsky with the Soviet authorities but in order to make our representations most effective we shall need further details.

  Mr. John Marshall
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether he will raise with the Soviet authorities their failure to grant an exit visa to Valery Zelichenok of Kranoyarsk and his family.

  Mr. Waldegrave
  We can certainly raise the case of Valery Zelichenok with the Soviet authorities but in order to make our representations most effective we shall need further details.

  Cyprus
  Mr. John D. Taylor
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether he is now prepared to meet Mr. Rauf Denktash, President of the Turkish Republic of Northern Cyprus; and if he will make a statement about political progress following the presidential and parliamentary elections in Northern Cyprus.

  Mr. Maude
  We would consider a ministerial meeting with Mr. Denktash if it would materially assist the achievement of a comprehensive, just and lasting settlement of the Cyprus problem. That is not currently the case. We fully support United Nations efforts to reconvene the intercommunal talks.

  British Embassies
  Mrs. Clwyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list all British embassies with the number of diplomatic staff in each(a) at the present time, (b) in May-June 1989, (c) in May-June 1988, (d) in May-June 1985 and (e) in May-June 1979.

  Mr. Sainsbury
  I refer the hon. Member to the current edition of the HM diplomatic service overseas reference list, a copy of which is in the Library of the House. Actual staff levels vary from day to day, depending on leave, training and urgent operational requirements.

  The other information requested could be provided only at disproportionate cost.

  USSR—South Korea Relations
  Mr. Alex Carlile
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether, in its capacity as a member of the Security Council, the United Kingdom has been involved in recent developments concerning relations between the Soviet Union and the Republic of South Korea; and if he will make a statement.

  Mr. Sainsbury
  No. We welcome the meeting between President Roh and President Gorbachev, in San Francisco on 4 June, as an important step towards the improvement of relations between the Soviet Union and the Republic of Korea. We hope that this will also improve the prospects for peace on the Korean peninsula.

  Yemen
  Mr. Alex Carlile
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the United Kingdom's relations with Yemen.

  Mr. Waldegrave
  We enjoy good relations with the Republic of Yemen. This was reflected in messages of 386
  congratulations from the Queen and my right hon. Friends the Prime Minister and the Secretary of State for Foreign and Commonwealth Affairs on the occasion of the unification of the Yemen Arab Republic and the People's Democratic Republic of Yemen on 22 May. We wish the Government and people of the Republic of Yemen well.

  Anti-Semitism
  Mr. Alex Carlile
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on United Kingdom Government policy on the increase in anti-Semitism in eastern Europe and the Soviet Union.

  Mr. Waldegrave
  We of course deplore anti-Semitism in all its forms and will continue to do all we can to counter it. Our embassies in eastern Europe are monitoring the situation carefully. There have been some reported incidents of anti-Semitism, and the freer atmosphere has allowed it to be expressed openly, but we do not think that there has been a general increase in anti-Semitism in the area.

  Liberia
  Mr. Alex Carlile
  To ask the Secretary of State for Foreign and Commonwealth Affairs if the United Kingdom Government propose any assistance towards ending the civil war in Liberia; and if he will make a statement.

  Mr. Waldegrave
  We are following the situation in Liberia closely through our embassy in Monrovia. We hope that the talks in Freetown between the Liberian Government and opposition forces will lead to a peaceful solution for this troubled country. We are funding an eight-man UNDRO relief team at a cost of £200,000.

Preamble
The House met at eleven of the clock: The DEPUTY SPEAKER on the Woolsack.
Prayers—Read by the Lord Bishop of Lichfield.

The Disabled: Public Transport
Lord Tordoff Lord Tordoff asked Her Majesty's Government:
What steps they are taking to encourage improvements in public transport for the disabled based on the recommendations of the Which? report published by the Consumers' Association on 7th June.
The Earl of Strathmore and Kinghorne: My Lords, the Department of Transport worked closely with the Consumers' Association on the preparation of its report and is already promoting action on many of the areas covered by its recommendations. Among other initiatives the department is moving, in conjunction with other European countries, towards technical legislation to ensure better access to buses and coaches. The department is also continuing to work with British Rail, with local authorities and others on a wide range of further improvements in the provision of transport for people with disabilities.
Lord Tordoff: My Lords, I am most grateful to the noble Earl for that reply. Is he aware that in welcoming this report he is helping to give needed publicity to the problems of the disabled on public transport? I hope that he can reinforce what he said on bus and coach design bearing in mind that, to a certain extent, the slowness in the arrival of new vehicles on the road has been partly caused by the reduction in subsidy and deregulation. Are the Government prepared to contemplate legislation if the present pressure does not come to fruition fairly quickly?
The Earl of Strathmore and Kinghorne: My Lords, there is a general trend throughout Europe for modern coaches to have high floors. That makes them attractive from the point of view of offering visibility and providing plenty of luggage space, but it means that the entrance steps are steep. That creates problems not just for wheelchair users but also for many frail and elderly people for whom coach travel would otherwise be an attractive option. The Department of Transport has been working both with British manufacturers and on a Europe-wide basis to find solutions to this problem. At a recent seminar run by the European Conference of Ministers of Transport in Paris a group of technical experts came together specifically to discuss improvements in access to coaches. The clear conclusion from that seminar was that if the trend towards high floor coaches were to continue it would be necessary to move towards legislation that would require all future generations of coaches to be
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lift-equipped. Fitting lifts in coaches will not only make it possible for wheelchair users to travel for the first time but will also make coach travel easier and more comfortable for large numbers of other passengers.
Lord Gainford: My Lords, will my noble friend the Minister give any information as regards what disabled or handicapped people may expect on British Rail branch lines? On mainline stations help is often readily available but such people are discouraged from travelling on branch line trains because they feel that no assistance will be given to them.
The Earl of Strathmore and Kinghorne: My Lords, enormous progress has been made in opening up services and stations to disabled people. New InterCity trains have wheelchair accessible toilets. New station design guides on the needs of the disabled have recently been published by British Rail. I trust those improvements will also take effect on branch lines.
Lord Molloy: My Lords, is the Minister aware that on London Transport vehicles a number of seats have signs asking people to surrender them to disabled or aged people? That is not a satisfactory situation. Why cannot those seats be completely reserved for disabled people?
The Earl of Strathmore and Kinghorne: My Lords, London Regional Transport operates a number of services specifically for the disabled although the general public can use them. It has been discovered that the general public do not use those services because they have signs stating that they are for the use of the disabled.
Lord Carmichael of Kelvingrove: My Lords, we should all be grateful to the noble Lord, Lord Tordoff, for raising this matter today and for the report in Which? magazine. One gets the impression that we have been doing rather well in catering for disabled people, although we have not perhaps made progress as fast as we should have. However, it appears there has been rather a slowing down recently. I am grateful that the Minister has read out the steps that the department is taking in this regard, but I believe that we are now ready greatly to raise the level of public consciousness about the problems of the disabled. I hope that the department will do everything possible to reinforce that public awareness.
The Earl of Strathmore and Kinghorne: My Lords, I fully agree with the noble Lord's point. It should not be forgotten that 12 per cent. of the population has a mobility handicap. I shall give an example of what the Government are doing. The Government are committed to the success of London Dial-a-Ride and they have provided an extra £1 million grant for that for 1990–91. That represents an increase to £8.27 million.
Lord McCarthy: My Lords, will the noble Earl comment on a statement in the Which? report which

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asserts that one of the problems on buses is that the Government's policies of deregulation and increasing competition have meant there is much less stock, much smaller margins and a lot of pirate operators who do nothing for the disabled?
The Earl of Strathmore and Kinghorne: My Lords, on the subject of buses, approximately one in 10 of London buses have features that are included in the Disabled Persons Transport Advisory Committee specification. That amounts to more than 400 buses. The Airbus and the Carelink services provide wheelchair accessible links between Heathrow, Victoria and Euston and the mainline stations respectively.
Lord Tordoff: My Lords, does the noble Earl accept that in spite of the movement that has been made in this area the problems raised by his noble friend Lord Gainford and by the noble Lord, Lord Carmichael, still exist and need an enormous amount of pressure to overcome them? Does the noble Lord accept that we cannot be satisfied with the fact that only a tenth of London buses are of an acceptable standard nor that large numbers of people in wheelchairs who travel on trains have to go into guard's vans?
The Earl of Strathmore and Kinghorne: My Lords, again the noble Lord, Lord Tordoff, has an extremely good point. The recommendations in the Which? report are all extremely welcome and I am happy to assure your Lordships that most of them are already in hand.

European Union
11.12 a.m.
Lord Bonham-Carter Lord Bonham-Carter asked Her Majesty's Government:
Whether the speech of the Secretary of State for Trade and Industry on 5th June to the Bruges Group represents the Government's policy towards European economic, monetary and political union.
The Minister of State, Department of Trade and Industry (Lord Trefgarne): My Lords, the Government have made very clear their approach both to economic and monetary union and to political union and have had the support of Parliament in doing so. My right honourable friend's speech was, of course, in line with those policies.
Lord Bonham-Carter: My Lords, does the noble Lord agree that the implication of Mr. Ridley's speech is that the Government should repeal the European Communities Act, which committed us to economic and monetary union?
Lord Trefgarne: My Lords, no, I do not agree, as the noble Lord will not be surprised to hear. As my right honourable friend the Prime Minister said earlier this week, we hope that there will not be a two-speed Europe. However, Parliament has made
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very clear its views on Delors Stage III: that it would have nothing to do with ceding that amount of sovereignty. We hope to influence others in our direction in the course of the EMU intergovernmental conference.
Lord Tordoff: My Lords, in the light of that reply can the noble Lord explain the reference in the article on the front page of the Independent this morning that that particular section in Mr. Ridley's speech was written by the Prime Minister herself?
Lord Trefgarne: My Lords, it is no part of my duties to explain articles in one newspaper or another. However, I can assure the noble Lord that my right honourable friend the Secretary of State for Trade and Industry is fully capable of writing his own speeches.
Lord Boyd-Carpenter: My Lords, is my noble friend aware that this was a most excellent speech, setting out the position of this country with great clarity, and that I for one was very glad to read it?
Lord Trefgarne: My Lords, I am most grateful to my noble friend for that intervention, with which I happen to agree. One of the problems is that most people who have commented on the speech have not read it. Perhaps I may place a copy in the Library.
Lord Williams of Elvel: My Lords, is it not the case that all ministerial speeches on this matter have now to be cleared through No. 10? Was this speech cleared through No. 10?
Lord Trefgarne: My Lords, the process by which my right honourable friend arrives at his own personal views is a matter for him.
Lord Mulley: My Lords, will the Minister confirm that—as was certainly the case in the governments in which I had the privilege to serve—it is laid down that all Ministers, when they speak, speak on government policy, despite many signs to the contrary? Secondly, will the noble Lord bring home to his right honourable friends the great importance of our becoming full members of the economic and monetary system and the ERM well before December, when further crucial decisions are due to be made?
Lord Trefgarne: My Lords, to refer to the second part of the noble Lord's supplementary question, that is another matter. I can assure the noble Lord that the doctrine of collective responsibility is alive and well in this Administration.
Lord Williams of Elvel: My Lords, can the noble Lord very kindly explain how it is that a Cabinet Minister can speak personally?
Lord Trefgarne: My Lords, as my right honourable friend the Foreign Secretary has said recently, these are very important matters and there is a good deal of agile thinking going on in the Administration about them.
Lord Williams of Elvel: My Lords, was the noble Lord's right honourable friend the Foreign Secretary also speaking personally?
Lord Trefgarne: My Lords, all Ministers speak personally but that does not detract from the doctrine of collective responsibility.
Lord Monson: My Lords, does the noble Lord not agree that the duty of a Minister of the Crown is to propose policies that are best for Britain, in preference to any other political entity, just as French Ministers always act in the best interests of France? That being so, is not his right honourable friend to be congratulated on his speech?
Lord Trefgarne: My Lord, I believe that the views of my right honourable friend are very much in accordance with the interests of the United Kingdom and, for that matter, of the European Community as well.
Lord Clinton-Davis: My Lords, when the Secretary of State for Trade and Industry canvassed the idea of a two-speed Europe and inner and outer circles, was that really consistent with the policy as elucidated by the Secretary of State for Foreign Affairs and other Government Ministers, save perhaps for the Prime Minister? Is it not a case of the Secretary of State for Trade and Industry, like Prometheus, being totally unbound?
Lord Trefgarne: My Lords, my right honourable friend did not use the phrase "two-speed Europe" and I hope that the noble Lord will read the speech in full when he has a chance to read the copy that I shall place in the Library.
The key point that my right honourable friend made was that there should be one Europe, a wide and full single market, properly implemented and properly enforced, and without distortions from state aids, barriers to takeovers, etc.
Lord Ennals: My Lords, I ask as one who for many years spoke as a Minister in another place whether it is conceivable that a Cabinet Minister can give a personal view as opposed to a collective view of the Government? Are not the world and all of us entitled to expect that what is said by one Cabinet Minister represents the views of the Government?
Lord Trefgarne: My Lords, that depends upon the circumstances.
Lord Kennet: My Lords, does the noble Lord agree that what he said two or three answers ago—"All Ministers speak personally but that does not detract from the doctrine of collective responsibility"—will probably be food for comment and analysis on every level from the trivial and journalistic to the profound and constitutional for a few weeks to come? If so, would he like to take this opportunity of elaborating on that thought?
Lord Trefgarne: My Lords, that is probably the first time in my life that somebody, has said that
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something I have said will deserve profound and constitutional analysis.
Lord Williams of Elvel: My Lords, perhaps I may address this question to the noble Lord the Leader of the House. Does he, as a Cabinet Minister himself, support the view of the noble Lord, Lord Trefgarne, on ministerial responsibility?
The Lord Privy Seal (Lord Belstead): Yes, my Lords; I most certainly do.
Lord Rochester: My Lords, does the Minister agree that the Secretary of State's speech has served to fuel damaging newspaper speculation such as that in the Independent to which my noble friend Lord Tordoff referred earlier, to the effect that an increasingly bitter battle is being fought within the Cabinet on moves toward European economic and monetary union?
Lord Trefgarne: My Lords, I know of no bitter battles going on in the Cabinet, as the noble Lord suggests, although there is often very useful discussion on these issues.

European Court of Auditors: Reports
11.20 a.m.
Lord Bruce of Donington Lord Bruce of Donington asked Her Majesty's Government:
Whether they will propose changes in the European Community financial regulations to ensure that all reports by the European Court of Auditors are dated and that they are published as soon as may be after completion, without the delays occasioned by the incorporation in such reports of the observations of the European Commission.
The Paymaster General (The Earl of Caithness): My Lords, the Commission's right to reply to the Court of Auditors annual report is enshrined in Article 206 a(4) of the treaty. Under a timetable set out in Article 88 of the financial regulation, the court must transmit the annual report by 15th July, the Commission must respond by 31st October and the report must be submitted in final form by 30th November.
As regards the court's special reports, Article 90(2) of the financial regulation provides for the relevant institution to reply within two and a half months. Both annual and special reports bear the date on which they were adopted by the court.
Lord Bruce of Donington: My Lords, I am grateful to the noble Earl for that reply. Is he aware that the last report of the European Court of Auditors, dealing with the accounts of the Community to 31st December 1988, was not finally published until 12th December 1989? Is he further aware that the practice of permitting institutions themselves to reply to observations made by the Court of Auditors holds up the publication of the report itself, which should stand on its own feet? I trust that the noble Earl will

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agree that that is a position which is almost the same as if a report of a Select Committee of your Lordships' House, or indeed of another place, were not to be submitted until after the Government had made their replies. Will he confirm that that position is intolerable and ought to be changed at the earliest possible opportunity?
The Earl of Caithness: My Lords, the noble Lord has a point with regard to the most recent report on export refunds, where the Commission's behaviour was perhaps ill considered in that it had the chance to give its comments with the report and then gave a press release at the same time. However, the practice of allowing the report or the institutional body's comments to be fed to the Court of Auditors before publication means that there is an opportunity to correct factual errors, which only serves to enhance the value of the report. Perhaps more important is that the inclusion of comments from the Commission or the institution or body being reported on puts more information before the Council. I feel that the noble Lord will agree with me that that leads to better informed scrutiny and conclusions.
Lord Molloy: My Lords, is the Minister aware that those noble Lords who were Members of the European Parliament in the mid-1970s were patently aware that the commissioners had very little time for the board—as much as they do now—of the Court of Auditors? They have never shown any real interest in supporting the principle.
The Earl of Caithness: My Lords, I am grateful for what the noble Lord has told us. The reforms that the United Kingdom instituted recently, whereby the reports are taken up to ECOFIN, as was the case with the recent report on export refunds which was done specifically at the request of my right honourable friend the Chancellor of the Exchequer, show that everybody takes the report seriously.
Lord Bruce of Donington: My Lords, will the Minister give the House an undertaking that he or one of his colleagues will raise this whole question with ECOFIN at its next meeting and, in view of the fact that there is to be an inter-governmental conference later this year, will also give consideration to effecting an amendment of the treaty? Such an amendment would get rid of the practice whereby reports by responsible institutions such as the Court of Auditors can be held up or their effect minimised by a right given to the institutions to hold them up while they make their comments upon them.
The Earl of Caithness: My Lords, I do not believe that the effect of the report is minimised, but the noble Lord has a point which perhaps could best be dealt with by a code of practice rather than a change to the treaty or amendment of the financial regulations. As the noble Lord will know, the last amendment to the financial regulations took some 10 years to agree. Therefore a code of practice might better serve his purposes.

National Health Service: Funding
11.26 a.m.
Lord Molloy Lord Molloy asked Her Majesty's Government:
Whether they intend the National Health Service to continue to receive 82 per cent. of its resources from general taxation.
Baroness Blatch: My Lords, the Government have no plans to alter the present arrangements for resourcing the National Health Service largely through general taxation. With regard to the assumption made in the Question that 82 per cent. of its resources is from general taxation, I put on record that 78·3 per cent. is from taxation and allocated from the Consolidated Fund; 16·2 per cent. is NHS allocation from national insurance; 4 per cent. is from charges and 1·5 per cent. from miscellaneous, which includes land and property sales.
Lord Molloy: My Lord, I thank the noble Baroness for her reply. Is she aware that the Prime Minister, when she wrote the foreword in the document Working for Patients, said that the NHS would be financed mainly out of general taxation? The figure was then running at 82 per cent. Later on, however, in an article in the Evening Standard Mr. Kenneth Baker, the chairman of the Conservative Party, said that the NHS would be largely financed out of general taxation. I am sure that the noble Baroness will agree that there is a grave nuance of difference between the words "mainly" and "largely". Can we assume that the words of the Prime Minister will prevail?
Baroness Blatch: My Lords, I am aware of the statement made in the preface to Working for Patients. I am also aware of what was said by my right honourable friend Kenneth Baker. We shall continue to fund the National Health Service largely from general taxation.
Lord Ennals: My Lords, let us move away from semantics. I have two questions for the noble Baroness. First, is it still the government's aim to see more and more health care provided by the private sector as opposed to the National Health Service? Secondly, will she accept that by snipping away at NHS provisions, such as the introduction of charges for eyesight tests, the health of the nation is increasingly imperilled as a result of government policy?
Baroness Blatch: My Lords, I believe that we live in a free country. It will be for the private sector to continue to grow at the rate at which it wishes to grow. The hope is that we shall all work together for the benefit of patients. With regard to the assumption that the noble Lord makes about underfunding, I do not accept that premise. Spending has risen from £8 billion to £29 billion in the lifetime of this Government—an increase of 44 per cent. in real terms. Even as a percentage of GDP, the record is better now than it was 10 years ago. As per capita spending it is also better than it was 10 years ago. However, we all agree that there is scope

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for better management and better application of resources. The Government are concerned with output as well as with input.
Baroness Phillips: My Lords, will the Minister confirm or deny the comment made on the radio this morning that the part-time chairmen of the health authorities are to receive a substantial increase in salary, whereas the workers, the practitioners, are denied a very reasonable increase in their wages?
Baroness Blatch: My Lords, I am aware of the statement that was made on the radio this morning. However, I cannot agree that the workers have been neglected in the pay awards this year.
Lord Monson: My Lords, given that 4 per cent. of NHS income already comes from charges, will the noble Baroness say whether Her Majesty's Government have considered levying a nominal bed-and-board charge on those patients, amounting to approximately 50 per cent. of hospital in-patients, who could well afford it?
Baroness Blatch: My Lords, I do not know of any plan to charge for bed and board in the NHS.
Lord Mellish: My Lords, I shall repeat what I said earlier because it is worth saying. Is the noble Baroness aware that no matter how much money is put into the National Health Service it will never be enough? She stated that spending had increased to about £28 billion. Is the Minister aware that it is still not enough and that whatever she does she will be criticised?
Baroness Blatch: My Lords, the noble Lord is absolutely right. Whatever sum of money is available there will always be a demand for it. However, it is right to repeat that in terms of what the country can afford I believe that the record at the moment is second to none. Spending stands at £29 billion. Of course if there were more money it could be spent. It might also be interesting to note that each time taxes have been lowered, revenue has been increased and spending on services has also been increased.
Lord Fraser of Kilmarnock: My Lords, would the noble Baroness agree that, since more than 90 per cent. of the population have used the health service virtually since its birth, there is a certain symmetry between the figure of over 90 per cent. using the health service and the fact that 82 per cent. of the resources for the health service should come from general taxation?
Baroness Blatch: My Lords, I am not sure I understand the particular point that the noble Lord makes.
Lord Fraser of Kilmorack: My Lords, does the noble Baroness agree with my point?
Baroness Blatch: My Lords, I note that he is saying that the majority of those people use it and that all taxpayers pay for it.
Lord Fraser of Kilmorack: My Lords, that seems fair and proper.
Baroness Blatch: My Lords, it does indeed.
Lord Molloy: My Lords, is the noble Baroness aware that much of what she said will give encouragement to the British Medical Association, the Confederation of Health Service Employees and the royal colleges? However, they have grave anxiety that inevitably the NHS will cost more. They welcome examination of the issue in order that vital changes should be made. However, despite the additional expenses that may be imposed, they would like reassurance that a fundamental element of the defence of the nation's health will be an adequate supply of finance to the National Health Service at all times.
Baroness Blatch: My Lords, I am somewhat relieved that I may be encouraging to the BMA. I believe that the BMA have done more to talk down the National Health Service than almost any other organisation.
Noble Lords: Oh!
Baroness Blatch: My Lords, however, the noble Lord made the case for the reforms almost as well as I did. If we are to spend large sums of money, we wish to see them spent in the most cost effective way so that they will benefit the patients.
Lord Ennals: My Lords, will the noble Baroness reconsider the words that she has just spoken? The British Medical Association represents the vast majority of consultants, hospital doctors and general practitioners in this country. To speak of them in such a way on behalf of the Government in your Lordships' House is surely a disgraceful way to treat the profession? Does she agree that it is absolutely vital that the medical profession enjoin with the Government in what they are trying to do? Is not such an intervention likely to do damage to the relationship with the medical profession?
Baroness Blatch: My Lords, I have no hesitation in paying a tribute to all who work in the National Health Service. I wish to make the distinction between those who work in the National Health Service and some of the quite overt and very public scaremongering that has been done in the name of the BMA and which, frankly, has let down many professional colleagues.
Lord Whaddon: My Lords, will the noble Baroness bear in mind that cost analyses of the treatment of illness by the NHS and by the private sector health services, both here and abroad, have shown time and again that the NHS is a very cost effective way of treating illness and that it is public money very well spent?
Baroness Blatch: My Lords, I absolutely agree. I add one factor. I believe that money spent on prevention is also money very well spent.

Employment Bill
11.35 a.m.
The Parliamentary Under-Secretary of State, Department of Employment (Lord Strathclyde): My Lords, I beg to move that the Bill be now read a second time.
This Bill is brought forward for your Lordships' consideration in furtherance of the Government's highly successful step-by-step reform of industrial relations and trade union law. It is no coincidence that our reform of this law has been accompanied by a remarkable transformation from the industrial relations chaos bequeathed to us by the Labour Government in 1979.
The Employment Acts of 1980, 1982 and 1988 and the Trade Union Act of 1984 have redressed the imbalance of power that existed between trade unions and employers in the 1970s, and protected union members against abuses of power by their leaders. But the Government have always made clear that the process of review and reform must continue, and that we stand ready to take whatever steps may be necessary to deal with any newly identified problems or abuses.
It was against this background that we published two Green Papers in 1989: Removing Barriers to Employment, and Unofficial Action and the Law. Those Green Papers proposed measures to deal with the remaining abuses of the closed shop, secondary industrial action and unofficial action. Following consultations which showed solid support for action on these matters, we brought forward the present Bill which carries the process of step-by-step reform an important stage further forward.
The first three clauses of the Bill deal with the pre-entry closed shop. In making it unlawful to refuse anyone employment on the grounds that he or she is not a union member, these clauses remove the last vestiges of statutory protection for the closed shop. The Government have always made clear their firm belief that in a civilised society no one should be denied employment simply because he does not hold a union card. This Bill represents an important landmark for human rights in this country by ensuring that such uncivilised practices will in future be unenforceable.
By the same token, and as a natural extension of the Government's policy expressed in existing legislation on unfair dismissal from employment, the Bill will also protect union members from being refused employment simply because they are union members. It is thus entirely even-handed in its treatment of union members and non-members and, as such, we have every right to expect that the relevant clauses of the Bill will be warmly welcomed on all sides of this House.
The Green Paper, Removing Barriers to Employment, presented important new evidence of the continuing extent of the pre-entry closed shop. British trade unions, almost alone in Europe, continue to abuse individual employees' rights through their enforcement of this nefarious practice. The Labour Government's 1976 closed shop legislation was condemned by the European Court
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of Human Rights in 1980. Ever since then the Opposition have known that there could be no return to that oppressive legislation. But they made no public recognition of this until December of last year when, following publication of the European Commission's proposals for a social charter, which included a clear right both to join and not to join a trade union, the Opposition in another place gave us to understand that they had now executed a remarkable volte-face on the issue of the closed shop.
If that is truly so—and the many loud voices of dissent from the Opposition's Back Benches in that place, and from trade unions, certainly give no grounds for confidence that it is—I look to the Opposition spokesmen in this House to make that abundantly clear. And will they further make clear whether they now believe that strikes to enforce a closed shop should remain unlawful and that union-labour-only clauses in contracts should remain unlawful? Will they join me in urging the trade unions to take immediate steps to dismantle the closed shops that still enforce union membership on more than 2 million people in this country? There is no need to wait until the Bill is passed. They can act now to end this blatant denial of human rights.
I turn now to Clause 4, which deals with secondary industrial action. That is action by workers who have no quarrel with their own employer. The 1980 Employment Act limited immunity for organising such action so that only employees of the customer or supplier of the company in dispute, or of an associated employer to whom disputed work had been transferred, could be lawfully induced to take such action. This contributed to a marked reduction in secondary action but events have shown that nevertheless it left scope for some extremely damaging forms of industrial disruption.
I refer of course to the irresponsible threats made by the TGWU in 1988 to black a new plant which Ford USA had proposed to construct at Dundee. The company had reached a single union agreement with the AEU over terms of employment for the new plant. Ford USA decided, as it was fully entitled to do, that it did not want to recognise or bargain with the TGWU at its proposed new plant. The TGWU responded by threatening industrial action against other Ford operations in the UK and, as a direct result of this threat, Ford USA decided to take its £40 million investment and 1,000 jobs to Spain instead.
There was no justification for the TGWU's irresponsible threats of secondary action over Dundee and not even the Opposition have attempted to provide one. But they have nonetheless opposed the provisions of Clause 4 of this Bill and, indeed, have now come forward with proposals for making secondary action lawful once again. Indeed, the terms of their proposal would quite specifically protect secondary action of the kind threatened over Dundee.
Let no one be in any doubt about the seriousness of what the Opposition are now proposing. While the Government want to protect jobs and investment the Opposition are apparently aiming to achieve exactly the opposite by, once again, licensing the flying picket and widespread secondary action.

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The Government firmly believe that the time has now come to remove immunity for organising any industrial action by any workers who have no dispute with their own employer. Clause 4 removes immunity for any such secondary action except in the course of peaceful picketing at the picket's own place of work as the present law allows.
The third major area of abuse which the Bill addresses in Clauses 6, 7 and 8 is unofficial industrial action; that is industrial action by union members which is not authorised by their union. As the Green Paper Unofficial Action and the Law pointed out, unofficial action costs jobs and undermines our international competitiveness. Unofficial strikes tend to be sudden, unpredictable and disruptive. This makes them particularly damaging to business. They can make it difficult or impossible for firms to meet deadlines, to fulfil their obligations to customers and to manage their businesses effectively. This applies not only to the employer directly affected but also to his customers and suppliers. Unofficial strikes can have a serious effect on the business of many firms (and the general public) which have no involvement with the particular issue in dispute.
Well over ½ million working days were lost through unofficial action in 1987 and almost 1·5 million were lost in 1988. A broad categorisation of the stoppages covered by the employment department's industrial disputes statistics shows that three-quarters of those which could be classified were unofficial. In addition to those recorded by the department there are numerous small and unofficial strikes not included in available statistics.
Furthermore, the problem has continued to be evident ever since the Green Paper proposals were made. For example, at the end of last year the motor industry was seriously hit by unofficial action at Ford plants. We have since seen other instances of such action affecting rail services, the Post Office and maintenance engineers at Heathrow.
No one doubts the seriousness of the problem of unofficial strikes. But as the law stands, trade unions have no statutory obligation to do anything to bring unofficial strikes to an end. Indeed, unions have immunity for action called by their own shop stewards even if there has been no ballot. In the Government's view that is a wholly unsatisfactory state of affairs and this Bill tackles it directly.
Clause 6 will change the present law on union liability so as to make unions properly responsible for any calls for industrial action by any of their officials, including shop stewards. If a union is to avoid such liability, it will have to make its repudiation of any such call absolutely clear and let its members and others with a legitimate interest know that it has done so. It will no longer be enough for union leaders to turn a blind eye to calls by their shop stewards for unballoted unofficial action or engage in nods and winks when such action puts extra pressure on employers during negotiations.
The Government believe that union members are entitled to vote in a secret ballot before being called to take industrial action and to know whether their
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shop steward's call to take industrial action is supported by their union. The provisions of Clause 7 of the Bill, therefore, complement those of Clause 6 and will require a union to specify on industrial action ballot voting papers who it wishes to have the authority to call the action to which the ballot relates.
This will protect both union members and employers against the kind of irresponsible behaviour which we saw at Ford's last year, when certain shop stewards called prematurely and unofficially for industrial action following an official ballot which had been organised by their union.
Clause 8 provides for further measures which will deter irresponsible industrial action. In particular, it addresses the anomaly in existing law whereby an employer faced with such action will risk claims for unfair dismissal if he dismisses selectively any of those taking the action. The present law means that an employer must dismiss all those taking the action or none of them. Clause 8 removes that anomaly.
The Bill also deals with other matters which, while not perhaps as significant as those I have described, are nonetheless important and worthwhile measures. They relate to the conduct of trade union ballots, the powers of the Commissioner for the Rights of Trade Union Members, the revision or revocation of certain statutory codes of practice, the merger of the redundancy and national insurance funds and the provision of work experience for school children.
This is the sixth major Bill to reform industrial relations that the Government have introduced since 1979. Every one of them has been opposed by the Labour Party but each one in turn has become an accepted part of the framework of industrial relations in this country. Indeed, opinion polls have consistently shown that our legislation has the support not only of the overwhelming majority of British people but also of most trade unionists. Yet the Opposition, immovable from their 1960's timewarp, have consistently opposed each and every measure that we have brought forward. They have recently published their own yet again revised proposals on industrial relations legislation. However, despite continuing large areas of imprecision and omission, even these latest ineffectual proposals have been met by a chorus of disapproval and dissension from many of their own supporters.
The Government's position, in stark contrast, is clear for all to see and our record speaks for itself. We believe that the law should protect workers, employers and the community from abuses of trade union power. This Bill, by extending personal liberty against the closed shop and safeguarding jobs and prosperity against the threat of irresponsible industrial action, will assist those objectives. I commend the Bill to the House.
Moved, That the Bill be now read a second time.—(Lord Strathclyde.)
11.48 a.m.
Lord Wedderburn of Charlton: My Lords, I thank the Minister for taking the House through the Bill. He has acquitted himself of what is now the annual

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task of presenting an Employment Bill which has little relevance to the employment needs of the nation. It contains nothing on training, industrial accidents or of course on industrial relations procedures. Noble Lords sitting with the Government prefer to debate industrial relations polices next Wednesday. They are right in doing so because the Bill contains nothing to promote better industrial relations policies.
First, the Bill tries to create work for the idle hands of institutions, such as the commissioner, CROTUM set up to calm the Government's fantasies about the oppression of union members. In Committee in another place it was revealed that during its first 12 months the CROTUM received 30 requests for assistance of which 12 fell within its remit. We know from its first report that of the first 10 requests only one let to a writ. That is one writ, 12 cases and all the resources of a statutory commission dealing with the problems of 10,238,000 trade union members.
That is the kind of world that government policy inhabits. Indeed, the Bill makes the world worse because it increases the prohibition upon workers who are dismissed even to go to a tribunal to challenge the arbitrariness of the dismissal. This Bill is more unfair and more extreme. It is widely recognised to be way over the top not only among trade unionists but also among management, as the recent statement by the British Institute of Management made clear, even on the Government's premises.
Since this Bill deals with freedom to strike, perhaps I may make two preliminary points. First, we see freedom to take industrial action as a civil liberty. The renowned American trade union leader, Samuel Gompers, said in 1908:
"It is our aim to avoid strikes, but I trust the day will never come when the workers of our country will have so far lost their ‥ in independence as to surrender their right to strike".
Secondly, when the Government speak about days lost, they should be rather more specific. Of course the legal factors have a considerable effect. And yet if one looks at the comparative figures of the five years before 1980 when their first Bill was passed and the five years before 1987 which are the latest comparative figures, one finds that the working days lost in disputes in Britain fell by 63 per cent., in France by 82 per cent., in Italy by 71 per cent., in Sweden by 86 per cent. and in Ireland by 76 per cent. We do not say that the Government's laws have had no effect but those other countries have not changed the structure of their laws. Therefore, they are perhaps pursuing policies in other ways which are rather superior to those of this Government. That would be a preliminary conclusion from such data.
We say too that the Bill must be judged on the standards set out in the international conventions of the ILO, the Council of Europe's social charter and the Community's social charter, which is linked to both of those sets of international instruments. When the Minister speaks of our being consistent in our opposition, perhaps he should reflect that that may have something to do with the consistency of principle with regard to the rights set out in such documents.
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He says too that this is a landmark in the law of human rights. It is. It is the most flagrant breach of the minimum standards of human rights at international level for two reasons: first, because of the increased powers for an employer arbitrarily to dismiss employees exercising a liberty of industrial action which is integrally part of the freedom of association; and secondly, by the ban on all forms of sympathetic industrial action without exception.
The new power of dismissal, which is lightly justified by government statements here and in another place, gives an employer a power to victimise by selective dismissal workers who are union members without any limit and without any power for the worker to go to the tribunal. It is offering to macho employers Rambo powers. The British Institute of Management is quite right in suggesting that many managers will be happy not to seek recourse to those proposals because the industrial action which we are considering may not even be a breach of the worker's contract of employment. Any concerted action is covered, even if it is not a breach of the contract.
Therefore, the Government have shown some desperation in finding justification for this wholly imbalanced proposal. In the Employment Gazette in January in one of their rare ventures into comparative labour law they said:
"The Government believes that employers in this country should have the same freedom to respond to unofficial action as employers in West Germany".
The employers in the Federal Republic have no such powers, even in the face of an unlawful unofficial strike. The dismissal of a striking employee must be notified to the works council, which can even prevent it on certain occasions. Secondly, the worker is able to challenge his dismissal in the labour court where the employer has to prove grounds for dismissal even in such a case. He is not shut out, as the British worker now is if he does not satisfy all the conditions of this Bill, from even going to the door of the tribunal if he is willing to pay the £150 which the Government imposed last year as a charge for workers to go to a tribunal.
There is no evidence of any need for this measure. Indeed, the record is very odd. On 23rd February 1989 the Minister, the noble Lord, Lord Trefgarne, speaking for the Government assured your Lordships:
"Unofficial action is not a significant problem at the moment".—[Official Report, 23/2/89; col. 844.]
Not a word of the problem appeared in the March Green Paper of that year, but by October, when it had been decided that there was need of another annual step in trade union law overruling the Secretary of State's first instincts, the tune had changed. The second Green Paper of October said that unofficial action is a major problem and that in 1987 three-quarters of stoppages which could be classified were unofficial.
That too is odd because three months earlier the official statistics in the Employment Gazette of July 1989 had stated, as it regularly does now, that because of the practical difficulty in determining the category, a distinction between official and

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unofficial disputes was no longer made in the statistics after 1981.
Government statements are based upon calculations which are wholly uncertain in that respect or, at least, they have not published the sources for their calculations. What is more, both the Secretary of State in another place and the second Green Paper said that that was a phenomenon almost unique to this country. The truth is that spontaneous walkouts—unoffical or unpredictable protests—take place in every country, in every office and in every factory. The legal consequences are diverse and complex. Most of the spontaneous action is short-lived. Much does not appear in any statistics. The sensible response was that given by the spokesman for the CBI in the Financial Times of 13th October 1989 when he suggested that such stoppages are best dealt with by effective management control and the following of grievance procedures. The important thing is to settle the grievance and solve the dispute.
When we come to the union's function in that, in which union officials play a major part, as any manager knows—and no wonder that the BIM and its constituents are worried by this Bill—if it endorses a stoppage before a ballot to try to save its members from arbitrary dismissal, the employer can obtain an injunction against the union. The employer exchanges his right to victimise the workers ultimately for a right to sue the union. If the stoppage is not endorsed, the employer can dismiss anyone he likes.
Let us suppose that the union feels that its members have a case. Should its officials go in to help, as they do, to solve the dispute? If they do, they run the risk under other clauses of the Bill of being liable not merely for the official but also for those with whom the official consorts in a group, even if those persons are not members of the union.
Therefore, this Bill can do nothing but make more difficult the job of union officials and managers on the ground-floor level to solve disputes. It is a flagrant derogation from international standards. I quote the words of the ILO Freedom of Association Committee and I put a question to the Minister. Does he not agree that Convention 87 of 1948 on freedom of association is acceptably construed by the Freedom of Association Committee such that a refusal to re-employ strikers or the dismissal of strikers constitutes a violation of freedom of association? That is the committee's authoritative view.
The ILO Committee of Experts on 28th April 1989 concluded in paragraph (f) that even as it stands today our law is a breach of the right to freedom of association because a striker has no:
"right to present a complaint against dismissal to a court or other authority independent of the parties".
That point has been put to the Government before. They have rightly replied that for procedural reasons that case went no further. However, that does not answer the analysis of the Committee of Experts, a group of internationally respected jurists.
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The Government have said also that the legislation of all parties has contributed to this position in our labour law in Britain. That is correct. However, I am proud to say that my party is not tied to the past in a manner which prevents it from being pledged to bring our law on the right to strike up to minimum international standards observed by all major European systems of law, which includes all systems within the Community.
The Bill's breach of international standards is redoubled by the discrimination between union member and non-member. So far that has received little attention in this country but it will receive great international attention. The non-unionist who consorts only with non-unionists is given industrial rights which are far more extensive than those of union members. Merely to state that proposition is to state an anomaly which is a further clear breach of the standards of all the conventions concerned.
The Bill is equally a breach of international standards in banning all sympathy action. The Committee of Experts of the ILO in the same report said of British legislation of 1980–88—even before the Bill—that,
"the overall effect of legislative change in this area since 1980 is to withdraw protection from strikes and other forms of industrial action in circumstances where such action ought to be permissible … by Articles 3, 8 and 10 of the Convention".
The committee specifically asked the Government to remove those impediments to the honouring of their obligations of the convention which they have ratified. The Government's response was to repeal even the tiny and ineffective gateways to legality for sympathy action in the 1980 Act.
Why do the Government disagree with the Secretary of State of the time—now the noble Lord, Lord Prior? He thought that that arrangement was balanced and reasonable, although as events in the courts later proved and as we said at the time, we thought he greatly overrated their effectiveness. But he thought then that a simple repeal of immunities for all secondary action would not be right. He set out his reasons at great length but the Government have never confronted those.
One of the reasons is that the Government do not understand secondary or sympathetic action. The character of sympathetic action is not determined, as the Minister seemed to think, by workers. It is defined by the employer or the employers. That is why the ILO Committee of Experts and the Freedom of Association Committee made clear that if workers have a direct interest in a dispute the boundaries of the employment unit do not define their right to strike under the convention. We agree with that.
If 1,000 workers are employed by a company and take industrial action, that is primary action. If the employer then splits the business into two companies and only the first company can answer a demand on the same matter, but it affects all 1,000 workers, the law now says that the group in the second company are taking secondary action. However, as far as the workers are concerned it is still the same matter.
The change was brought about largely by alteration of employers' employment units. We saw how that worked out in the Dimbleby case of 1984 and the Wapping dispute. It is true that every legal system

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puts some limits on sympathetic industrial action. That is a truism, but no other European code of labour law bans sympathy action altogether. There is a variety of tests. There is what may be called The Ally test, as in German law, where the question is whether the second employer is in an economic sense part of the first employer's undertaking or, as the Federal Labour Court put it, has departed from his neutrality in the industrial conflict.
There is then the rather different test of interest, which is used in Italy, France, Belgium, Greece, Spain and the Netherlands. There are different forms of deciding the legality according to the nature of the interest which the second group of workers have in the first. I am afraid that the Minister, in suggesting that such a test was ridiculous when we put one forward in our programme, was only showing once again that Her Majesty's Government have no interest regarding what happens in other member state systems of law.
Most of those countries have economies which are eminently competitive with ours; some lose more days from strikes, though most lose fewer. But not one of them bans sympathetic action altogether. What do the Government think is wrong with British employers or managers that they need protecting in this way? It is hardly a vote of confidence in either management or indeed the workforce. That is the lesson which is derived; confidence is hardly what either side of industry gets from the British employment laws as they have developed.
The case which the Government use to justify their action is that of the Ford Motor Company. It is the only one they put forward. Only the Ford motor problem can give them justification for this part of the Bill, and I leave that topic by saying that the Ford Motor Company statement was much more detailed and complex than the Minister suggested. In fact the union position was not the only major factor in it. Secondly, it did not involve any act or threat of secondary action at all. It was not a secondary action case. They are therefore left with nothing.
The Government's characteristic Nelsonian perception of even-handedness permeates the Bill at every point. When they come to the Community social charter—I congratulate the Minister for mentioning that today; we shall no doubt one day bring him into accord with it—they say applicants for jobs should not be rejected by employers by reason of membership or non-membership of a union However, where is the corollary principle that blacklists of workers should be banned? Or the parallel principle from the package of rights in the social charter that workers should be given the right to be represented by their union or—most important of all and central to the social charter's package of rights—that they should enjoy the right of collective bargaining to determine their terms and conditions of employment? They are not there at all.
We on these Benches reaffirm our support for 100 per cent. trade unionism: for legislation where there is a right to bargain and a right of representation where the package is in place so that the older problems of union security fade into insignificance. It is no answer to a programme which takes that
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posture for the Minister to invite people to do everything that he wants without all the other rights which are a necessary part of a civilised system of employment law.
We must consider the Bill's effect on ballots. The Government added a further clause and, more important—which this House must consider—new parts to the schedule on ballots; after four months they decided that it was necessary to insert those new provisions. One of them prevents a union from calling upon its members to support industrial action before they vote in the ballot. The union must not call upon them. If that is not an invitation to a court to find that in many situations a recommendation to vote yes is illegal, then I do not know what is. The point has been put to the Government; they have never answered it. We shall press it in Committee.
The Government have not even seen fit to adopt the elementary justice of the Bill introduced and passed through all its stages in this House by the noble Lord, Lord Campbell of Alloway, to allow the four-week period in which a ballot is valid to be extended through the period of litigation and its appeals if an employer decides to launch an action in the courts. One should have thought that there was elementary justice in that, but the Government do not think so.
The clauses on which a union is to be made vicariously liable and on which I can only make one point, are perhaps the least meritorious in the Bill. If one of your Lordships is made a defendant in an action for an act done by some other person, you are vicariously liable for that other person if he or she is an employee acting within the course of employment or an agent acting within the course of the agency, express, implied or ostensible. Of course that produces difficult legal problems.
That is what everyone else in the realm is judged by, but not trade unions—not since 1982. They came under the Industrial Relations Act 1971, but not under this Government. Now the Bill tightens the screw. The unions are now to be made liable for acts done by an official—even a lay official—in a branch, whether authorised or not, no matter how wrongful; more than that, even by a member of a group which the union official happens to have attended where that group is co-ordinating industrial action, even if that member of the group is not a member of the union. That is Alice in Wonderland trade union law and we feel sure that it cannot last long.
We say that the Government's aim is to attempt to extend what the noble Lord, Lord Donaldson of Lymington, recently called judicially:
"a minefield from which it is all too easy to stray from the paths of safety and legality".
The Bill is the worst of the annual steps backwards in employment law. It breaks international standards; it offends elementary fairness; it answers no proven need; its objectives are to continue to harrass workers' collective organisations in a labour market which the Government ideologically and sincerely, but desperately want to individualise. We shall press in Committee to correct its inequities, but shortly after that we shall sweep them away together with the Administration which begat them.
12.10 p.m.
Lord Rochester: My Lords, I thank the noble Lord, Lord Strathclyde, for the clear way in which he introduced the Bill. On these Benches we welcome the provision which makes it unlawful to deny employment to people because they are trade union members or because they are not, but we regret that the Bill, in our view, fails to do anything positive to improve industrial relations and we fear that the proposals to amend the law relating particularly to unofficial industrial action will result in further legal disputation rather than contribute to the peaceful resolution of disputes.
I deal with the main clauses of the Bill in turn. My party's opposition to the pre-entry closed shop is of long standing and we welcome the Government's belated decision to bring it to an end. In the debate in this House last February on the social charter I was intrigued, but not altogether convinced, by the exposition of the noble Lord, Lord McCarthy, who I am glad to see is in his place. Perhaps I should call it a rationalisation of how the Labour Party has at last reached the same conclusion. I am bound to say that I found little of what the noble Lord, Lord Wedderburn, had to say on the subject any more convincing, but that is just an aside.
Clause 1 provides that it is equally unlawful for someone to be denied employment because he is a trade union member or because he is not. The Government have come to that view rather late in the day, but it is nonetheless welcome so far as it goes. I put it like that because in Committee we shall need to be satisfied that a person should be debarred from employment no more because he has engaged in responsible trade union activities than because he is a union member. The issue is all the more important because of the way in which information concerning such activities is conveyed to employers by bodies like the Economic League.
Looking back I am glad that long ago in the company for which I used to work I was able to help in keeping that particular organisation in its proper place; that is, outside the factory gates. The question arises of whether the league's manually compiled files should be subject to the obligations of accuracy already imposed on computer records under the Data Protection Act. Many people suspect that the league is deliberately using record cards to avoid the provisions of that legislation. We shall have more to say on that matter in Committee.
There is another aspect that was touched upon at the Report stage of the Bill in another place. It concerns the circumstances in which an employer might offer employment but then withdraw the offer without a satisfactory explanation. I shall be grateful if the noble Lord, Lord Strathclyde, when he replies to the debate will confirm my understanding that the Government plan to introduce an amendment to put that right.
Clause 4 has the effect of making secondary action altogether illegal. This raises questions that are both complex and controversial. The Government's position, as I understand it, is that, whereas in 1980 the noble Lord, Lord Prior (as he has now become), as the noble Lord, Lord Wedderburn, reminded us,
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considered that as a matter of principle a group of employees directly affected by a dispute should be entitled to take industrial action in support of others, there have since been abuses of the situation. In that connection the Minister cited the Ford America dispute in Dundee where the threat of secondary action prevented the creation of, I believe, about 1,000 jobs. The question we must resolve in Committee is whether the mischief that has occurred since 1980 has been sufficient to justify this new government measure.
As with so much recent industrial relations legislation, we are concerned lest in this instance too the law should be less than even-handed as between employers and employees. In particular, we wonder—I put it no higher than that at this stage—whether the Government's proposal may encourage an unscrupulous employer artificially to divide his company into separately-owned organisations simply to defeat what would then become secondary action.
I turn now to Clauses 6 and 8 which aim to curb unofficial industrial action and are at the heart of the Bill. Opposition parties are not alone in criticising these clauses. For example, in their response to the Green Paper Unofficial Action and the Law the Institute of Personnel Management said:
"What is required is the elimination of the causes of unofficial disputes and the development of voluntary procedures for the rapid resolution of any that occur. Further legislation could create more difficulties for management by prolonging the procedures for resolving disputes. This would tend to incite employees to take unofficial action rather than the reverse".
Clause 6 provides that in order to avoid liability for the acts of its officials, including shop stewards, a union must almost immediately repudiate them by written notification to every union member who it has reason to believe is taking part or might otherwise take part in the industrial action. On this point the British Institute of Management states in its briefing memorandum on the Bill:
"Since the 1988 employment Act which inhibited a union's right to discipline its members, a simple repudiation of the action may do little to change the attitudes of those organising unofficial action. Again, managers will be faced with a situation that union officials are unable to deliver what may be agreed in good faith because their room for manoeuvre has been limited".
Leaving aside the considerable administrative problems that the need for repudiation may produce, we learn from the new subsection (5A) to the 1982 Act that the notice given to members must contain this precise statement:
"Your union has repudiated any call for industrial action to which this notice relates and will give no support to such action. If you are dismissed while taking unofficial industrial action, you will have no right to complain of unfair dismissal".
I was glad to see that the proposed wording of that statement proved to be too blunt for at least one government supporter—the honourable Member for Bedfordshire, South-West, Mr. David Madel, whom I happen to know and respect. He went so far as to say at the Report stage of the Bill in another place:
"That is not the language of industrial relations in the 1990s. It is too far removed from reality and too much like first world war generals barking orders to those on the ground".—[Official Report, Commons, 17/5/90; col. 1061.]
The Minister of State for employment finally saw the point and said,

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"we are prepared to consider whether the proposed words for the union's repudiation statement are the best and most apt in all the circumstances … we shall not close our minds on that issue"—[Col. 1071.]
We shall seek to test those words in Committee.
There is then the vexed question of whether a collective refusal to work on grounds of danger to health or safety does or does not constitute unofficial industrial action. In another place argument on that point ended in deadlock, each side contending that the law was clear on the matter. But legal opinion, as is often the case, apparently reached entirely different conclusions. As far as I know, at no point did the Minister give chapter and verse for the Government's view that such a refusal does not amount to industrial action.
In those circumstances, one would have thought that I here was good reason for including in the Bill some provision for what might be called avoidance of doubt on the question. However, as the Bill came to this House, there is none. The matter is all the more important because of its linkage with Clause 8, which is the clause that alters the present restrictions on selective dismissal or re-engagement so that an individual employee dismissed while participating in unofficial industrial action will in future be unable to claim unfair dismissal before an industrial tribunal.
That proposal has been criticised strongly by the IPM, though that institute is a management organisation, and by the Industrial Society, which is representative of both management and trade unions. Both of them fear that an unscrupulous employer—and there are still some of those about—could operate the proposal to his advantage by deliberately provoking unofficial action, perhaps in a redundancy situation, and then singling out for dismissal some individual without having to justify his action at a tribunal.
Again, I was glad to note that at Committee stage in another place a Conservative, the honourable Member for Elmet, Mr. Spencer Batiste, who clearly has considerable experience of these matters, put the point admirably when he said in Standing Committee D at col. 379:
"If employees are to be singled out I do not believe that an employer should arbitrarily be able to pick them out without having to justify or defend his actions".
That seems to us to be an elementary principle of justice which we shall certainly wish to incorporate in the Bill.
The last clause I wish to deal with is Clause 7, which is the clause that stipulates that if a union is to retain immunity under the 1974 Act, voting papers for ballots on industrial action must specify precisely who is authorised to call for the action. It further prescribes:
"there must have been no call by the trade union to take part … in industrial action to which the ballot relates … before the date of the ballot".
Thus, the clause appears to preclude a union from lawfully recommending that its members should engage in industrial action. I content myself with saying that that represents a major departure from past practice which we shall wish to question closely.
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Clause 7 also applies to the Bill, as I read it, a period of four weeks within which industrial action must take place after a ballot if the action is to be lawful. That is the provision which is deplored by noble Lords in all parts of the House and which the noble Lord, Lord Campbell of Alloway—I am glad to see him in his place—sought to remove in his Trade Union Act 1984 (Amendment) Bill passed by your Lordships last year.
I very much hope that the noble Lord—better still the Government—will take the opportunity presented by this Bill to move amendments to bring the law into line with what the House then decided. There has been no prior consultation concerning this new clause. There was no mention of it or of its supposed merits in the Government's Green Paper. It was introduced only at Report stage in another place. Therefore, it was not possible to discuss its contents in Committee there. We shall certainly wish to do so here. We shall need to be convinced that the new provisions will serve a purpose good enough to outweigh the additional logistical and other problems which they may bring in their train.
The basic question that we should be asking ourselves about this clause and others in the Bill is whether they are likely to improve relations between management and employees rather than give rise to still more legal disputation. As the BIM put it:
"Placing excessive further legislation in the area of industrial relations immediately introduces an element of confrontation between employer and union, destabilising the relationship by providing one side with a weapon. Such legislation could provoke unnecessary confrontation by reducing the dispute between employer and union into a battle through the courts".
I share that view.
I shall say no more about the Bill at this stage. In the ordinary way I might have ended by seeking to justify the statement that I made at the beginning and by suggesting a few positive ways in which industrial relations in this country might be improved. But, like the noble Lord, Lord Wedderburn, I have observed that next Wednesday we are to have a general debate on the Government's industrial relations policies. Therefore, it may be better if I wait until then before doing so.
12.26 p.m.
Lord Mellish: My Lords, all noble Lords present today will be delighted to hear that I do not propose to speak for very long. First, with modesty, I wish to commend the noble Lord who opened the debate for those of us who sit on this side of the House. His case was superb. This Bill is supposed to be about industrial relations. It is supposed to improve the situation and produce a panacea for the employers and the unions so that they get together in a working partnership in order to make life better for the community. That is what the Minister really said.
However, the Bill does exactly the opposite. It creates a legal forum, as the noble Lord who speaks for the Liberals said. (I think they are called Liberals though I am never sure.) He quite rightly said that the Bill is a jungle of legal argument and disputation. I commend the noble Lord, Lord Wedderburn, for what was a very good exposition of the case from this side of the House.

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I say with all modesty that I understand why the closed shop is unpopular. Perhaps I may also put the other side of the case and suggest why some employers have said that it is a necessary part of their structure. Some noble Lords will know that I was associated with the dock industry for about 20 or 30 years. The employers demanded and prayed that the employees would be members of a union because when they met trade union officials they then knew that they were speaking on behalf of the people.
I have never had anything but contempt for people who accept better salaries, wages and conditions and yet refuse to join the trade union that helps to get them those improvements. I have nothing but contempt for such people. It is a myth to put them up as freedom fighters and lovers of democracy. They are prostitutes.
Noble Lords: Oh!
Lord Mellish: My Lords, yes, they are. I say that frankly. Anyone who is first in the queue to put out his hand to take an increase in salary or an improvement in conditions but yet says "I shall have nothing whatever to do with the so-called trade unions who helped me get it", is a prostitute. That opinion may not be liked but it is true.
The argument about the closed shop is tainted. On paper it appears that the closed shop is very unfair. I ask the Minister this direct question. Will he be good enough to state the employers' organizations which have objected to the closed shop? If he has a case he should stand up and say so. He knows the attitude of the trade unions towards the closed shop. I ask him what the employers say. Have they objected to the closed shop?
I was associated with the engineering industry and the dock industry. In both instances the employers prayed that there would be universal membership of trade unions so that they could negotiate and talk in the way that they do.
I want to deal now with unofficial action. Honestly, and with great respect to the Minister, he should know that he is on a par for trouble here. To allow an employer the right to say that Brown, Smith and Jones are troublemakers and are therefore sacked is not a path to industrial relations harmony and is stark raving mad. Does he not realise that he will make them martyrs? Does he not understand that he will make these people worthy of a position that I frankly do not believe they should possess?
I was a trade union official at the ripe old age of 21. I know something about it. One of the biggest problems I had to face was the active trade unionist who was not politically motivated. That was the way I saw it. I do not deny that there are some whose only purpose inside the trade union is to get their way politically. I had no time for that type. I was only concerned with the person who was actively involved in trying to get better wages and conditions for those who worked in the industry.
One of the biggest problems inside the trade union movement today is apathy. I was a branch secretary,
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believe it or not, at the ripe old age of 16. I had a branch membership of more than 2,000. I was lucky on a Friday night to get an attendance of more than seven or eight. Why? It was because the vast majority preferred to leave it to those who were running the branch. They said, "We will pay our subscriptions. We don't have to attend meetings. This is a cumbersome burden on us and we don't want to know". They left it entirely alone and just a few of us ran it. Am I to be described as the type who, being an activist, wanted to bring employers down, change the economic system and all that rubbish? Of course not. The truth is that I was only concerned—I really was only concerned—with improving wages and conditions.
Clause 4 deals with secondary action. If I may say so, unless Government are prepared to admit that they are taking away the right to strike, why should not a person be able to go into another industry affected by his industry and say, "Look, we are on strike", and picket it? It is absolutely right so to do. To describe those people as breakers of the peace is a bit much. The vast majority of disputes inside the dock industry were unofficial. They did not come about because the unions themselves mishandled the situation in any way. A cargo would arrive in respect of which it was set down in the schedule that so much per tonne was available. But when the cargo was examined it was found to be in a terrible condition and nothing like what was laid down in the schedule.
The men would say, "Look, guv'nor, we want more money". The employers would say, "Oh no, you don't get any more because that is what is laid down in the schedule". There was a strike that was unofficial. Were the union officials to say that that was wrong, that it should not have been allowed and that those people were taking the wrong kind of action? The only way to resolve that argument was to force the employers to realise that the price being asked for that cargo was not right. There would be a strike. Others would not go to work. If you stopped work on a ship it meant there was no work on the quay and no work in the warehouse, so two or three hundred men would be affected straight away. They would be on strike as well, I suppose. Until the employers devise a system to resolve such problems there will be unofficial disputes again and again.
The Government say that there should be a ballot in such cases. Have you ever heard anything so stupid in your life? Are you stark raving mad? Do you not understand what industry is about? You cannot have a ballot when you are dealing with matters that have to be handled straight away. You cannot have someone saying, "Let's all sit down first and let's all put crosses", and so on. Employers would quite rightly say, "We want that cargo dealt with and we want it shipped straight away". You cannot wait for a ballot. I ask the Minister a further question on that point. Who is demanding a ballot? Which employers' organisations are asking for ballots?
We have heard international organisations say that the Government are taking away the right to strike. I put this on record. I hope that noble Lords on both sides of the House will recognise that I am

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by no means an extremist. All my life I have been a moderate, understanding type. I have always recognised that profit for any individual firm is right. No firm will work without a profit. I understand that. But what is important is what you do with the profits, how you operate and what conditions you apply to those who work for you. An employer should recognise that when he is employing a number of men he is in a way employing their wives and families. He has to accept responsibility for them. I object to the employer who does not give a tuppenny damn for any of that. That is why I say that the Bill does not serve its intended purpose, which I believe is better industrial relations.
It will create more trouble. It will be a jungle of law. The TUC—and I have my complaints about the TUC—has said again and again that it objects to a number of these unnecessary restrictions. I ask the Minister to justify his Bill not on party political grounds but by listing which employers' organisations have declared that the Bill is right and proper. My bet is that he cannot do it. He will say in effect that this is the brainchild of Conservative Central Office. That is a shame because we are dealing here with a very human matter. We shall see.
12.37 p.m.
Lord Boyd-Carpenter: My Lords, when the history of this Government comes to be written, one of the features which will stand out most prominently is the change that they have been able, as a result of a series of measures, to introduce into our industrial scene. Your Lordships will recall not many years ago the domination of our economy and of a great deal of our life by the trade unions; the major strikes and all the hustle and flurry of midnight meetings at 10 Downing Street followed by a settlement which very often was expensive and very often was not accepted—the whole confusion caused by the excesses and misuse of trade union power. That was the picture—let us remember it—not many years ago. The Government, by a series of measures—as my noble friend Lord Strathclyde said, moving step by step—have changed the situation, largely, though not wholly, by changing the law.
This is a remarkable improvement which, because it has happened slowly and step by step, perhaps on the whole our fellow countrymen have not fully appreciated. Yet when noble Lords look around they can see how much better industrial relations now are than they were then or indeed at almost any time for many years. Noble Lords will see the limited number of strikes which now take place and the whole change that has been effected. I ask your Lordships to appreciate that this has not just happened by chance or by good luck. It has happened because the Government have bravely faced up to and tackled the overweening power of unions, some of them led by people like Mr. Scargill who did not care two hoots what damage he did to the national economy or ultimately, as it turned out, to his own union. They have been right to secure the steady step-by-step improvement.
I think I understand the step-by-step approach. I am quite sure that if in 1981 or 1982 a
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comprehensive Bill embodying all that has been included in the last five or six measures had been introduced we would probably have had industrial trouble. It would probably have been thought that this was such an obvious onslaught on the unions that it must be resisted. The step-by-step approach has worked so well as to produce the much more satisfactory situation that we have today. I hope that this is not the last of such Bills because my one criticism of it is that it does not include what I had rather hoped a Bill about now would include—a measure dealing with the difficult problem of strikes in essential public services. In other countries employees in essential public services are sometimes restricted by law from taking strike action. They are strikes which affect the public without generally bothering the employers at all.
A strike on the London Underground can do immense harm and damage to the economy, inflict appalling misery on many fellow citizens but do no harm at all to the board of London Transport. Therefore I hope that the prospect of dealing—I do not pretend that it is not a difficult question; I think that it is—effectively with strikes in essential public services has not been pushed under the carpet, and that we may have a measure next year dealing with that issue.
Having said that, I welcome the Bill. I welcome the abolition of the closed shop. It was noticeable that in a speech which did not err on the side of brevity the noble Lord, Lord Wedderburn of Charlton, made hardly any reference to that subject. He lacked therefore the courage in facing up to it which characteristically was displayed by the noble Lord, Lord Mellish. I find a little difficulty in replying to the noble Lord merely because I nearly always agree with and welcome what he says in debate in the House. This time I am afraid that I must differ strongly. He is right to say that the closed shop is sometimes acceptable and indeed agreeable to certain employers. That does not to my mind justify for one moment saying that a man may not be given employment because he is not, or because he is, a member of a particular trade union, or of any trade union. I believe that on reflection the noble Lord will feel that his reference to those people who are in employment in which there is a union but who do not join it, in which he described them as prostitutes, was grossly unfair.
There are many good reasons for not joining a union. Sometimes one may object thoroughly to a policy or the leadership of that union. I have in mind certain unions—I shall not necessarily mention them—in which any decent man would object to the leadership. It seems to me to be a basic right of the citizen to be employed or not employed, as the case may be, for reasons distinct from whether he is a member or not a member of a union. I believe that I know the answer that the noble Lord, Lord Mellish, would give. The noble Lord, Lord Wedderburn of Charlton, is perhaps more cautious. Is it really said that in this day and age a man or a woman, perfectly suited for certain employment should and can be refused that employment merely because he or she has not joined a particular union or has joined one? Is that to be justified in this day and age? Is it any

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more justifiable than to discriminate because of race or religion or any other aspect of that person's views or opinions? I am therefore delighted that the Government have had the courage to tackle that issue and to see that the Bill marks the end of the closed shop.
I do not want to detain your Lordships at any great length. I should like to refer to one or two other provisions of the Bill. The noble Lord, Lord Wedderburn, went at great length into the question of secondary action; but I notice that he brushed aside the Ford Aberdeen case as if it were of no importance.
Lord Strathclyde: My Lords, Dundee.
Lord Boyd-Carpenter: My Lords, I am obliged to my noble friend. One becomes confused by those agreeable Scottish cities. The Dundee case is of great importance, not merely because of the immediate loss of an enterprise which would have employed to begin with 1,000 and in due course 2,000 people. It involved big investment in this company. It involved the giving of employment in an area where it was greatly needed. What happened must have had a discouraging effect on Ford and perhaps other companies which were contemplating investment in this country. The noble Lord cannot merely brush that case aside and say that it is so unimportant that it does not need dealing with.
I do not suggest that the provision dealing with secondary action is justified solely by that case. It is justifiable wholly in principle. Action against an employer who is not one's employer merely to put pressure upon him indirectly is surely an oppressive piece of social action. It is right for the Government to tackle that issue. There have been examples of such action in recent years and the Government might well have been at fault if they had not dealt with it.
The noble Lord, Lord Wedderburn of Charlton, referred briefly to Clause 9 and the position of the Commissioner for the Rights of Trade Union Members. He scored a good laugh by pointing out that there have been only a few cases. Does he not appreciate that it may well be the commissioner's existence and of the rights so given that has made it unnecessary for people to exercise those rights? Surely it is no criticism of a police force that there is no crime in its area. Surely it is a good indication of the existence of a valuable piece of machinery that it has not been required to go into operation. Its existence has been known, and it may well be that that has had a significant effect. It certainly seems to me to be no criticism. I had in mind as the noble Lord was speaking that if there had been masses of cases he would have been equally cross and would have said what an outrageous interference it was with trade union rights and what trouble it was causing.
I find the Bill on the whole an excellent measure. It is one more step in the direction towards maintaining our good industrial relations. I wholly agree with so much of what the noble Lord, Lord Rochester, said on that subject. There is no doubting
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the fact—the proof of the pudding is in the eating—that the change in the legal structure has been reflected by a great improvement in industrial relations. Therefore, although the noble Lord, Lord Wedderburn of Charlton, may work himself up into a characteristic passion about some of the provisions, they are provisions which follow others which have been proved, in practice, to work. I believe that these provisions will be proved, in practice, to work. I hope your Lordships will give the Bill a speedy passage.
12.48 p.m.
Baroness Phillips: My Lords, as your Lordships would expect, I shall hardly be following my friend—if I may so describe him—the noble Lord, Lord Boyd-Carpenter. However, in relation to the closed shop I seem to recall that when we were discussing the Courts and Legal Services Bill a certain profession, of which I believe he was a member, showed clearly that it was not going to have any inroads made into the closed shop. The professions have known much more about the closed shop for generations than dockers or faceworkers. The closed shop is not in any way peculiar to certain kinds of trades.
Lord Boyd-Carpenter: My Lords, I do not like to interrupt the noble Baroness immediately but I believe that she is subject to a misunderstanding. The closed shop, as she calls it, in the legal profession is not based upon membership of an organisation. It is based upon people having obtained certain qualifications, which is a totally different matter.
Baroness Phillips: My Lords, as I understand the closed shop, that is equally true. I do not want to digress (says she, proceeding to do so) but perhaps we might talk about the theatrical profession. Why has it got a closed shop? It is simply because they do not want untrained and unqualified people coming in and down-pointing their job. That is the basis of the closed shop. It is an unfortunate title.
Like the noble Lord, Lord Mellish, I lived and worked among the dockers during the time when one person went out early in the morning and said to the men: "You are employed, you are employed and you are employed" and the rest of the men went home; I have seen men weep because they did not have work. It was obscene, and must never happen again.
I have been a long time in this House and I still rather pathetically believe that if a Bill has in its title "housing" it is intended to produce more houses or, if it is called "employment" it is something to do with producing more jobs. I had read about removing barriers to employment and so I searched in vain for some reference to something to do with training and finding jobs. The only reference that I could find to training was in the rather curious obtuse clause that we seem to get in all legislation, which refers to the period for which children may be employed for work experience. The Bill says that new words will be substituted. It refers to a child being taken:

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"in his last year of compulsory schooling from the beginning of the term at his school which precedes the beginning of the school year in which, by virtue of section 9 … he would be entitled to leave school".
I can see teachers having great fun trying to work that out. To me it is rather like saying there has been a noticeable falling off in the lack of apathy or referring to an upward move or a downward trend. It does not tell us anything. However, I was very heartened to read that in Clause 1 we are dealing with a rather important point: it is unlawful to refuse a person employment because he is or is not a trade union member—it seems to me that it is the only vaguely fair clause in the whole Bill—all because he will not agree to become or to cease to be, a member.
That gives me an opportunity to raise my own particular bee-in-the-bonnet. If we are talking about discrimination, what is wrong with the Government extending this to age discrimination? That would fit in very neatly. If an advertisement specifies certain things and somebody applies, in the first place they may not be discriminated against and, in the second place, they can actually take action against the employer.
As your Lordships will know, I was involved in a Bill about age discrimination and I am very intrigued to know why the Government do not realise what a vote catcher that could be. A lot of people write to me about this matter. I do not know why I should hand this to the Government on a plate, but it is worth considering; I just want to see the legislation introduced. When will the Government bring employers into line with those in the United States and most of Europe? We are all asking about this. Are we talking about a number of people? Yes, we are talking about a large number of people. To start with, we are talking about 1½ million who are "aged" because they are over 40.
We all know that to refuse to employ somebody because of age is not really the reason; it is really money. One can offer an 18 year-old far less money than one can offer a 50 year-old. It is not good enough to let the employers deal with this themselves. Certain companies are now appearing as "the goodies" because they are appealing especially to the over-60s. Of course they do not say—I read this in a particular article—that they do not pay the over-60s as much as they would pay the 50 year-olds. This is not peculiar in any way to certain trades. The answer is not to undercut—that is not the answer at all.
This Bill provides the Government with an opportunity to introduce at least one clause that I hope will have all-party support. I give them notice that I intend to promote an amendment to that effect. I would not dream of referring to the other clauses and trying to follow the brilliant exposition of my noble friend on the Front Bench, but I endorse everything that has been said.
The Prime Minister seems to like the Polish trade unionists and why she does not like the British trade unionists is just one of those strange things. I appeal to the Government, if they have a heart (which I often wonder about) to bring forward something which will benefit a very large section of the
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community and provide employment. That will be needed, if not today then certainly tomorrow.
12.55 p.m.
Lord McCarthy: My Lords, my noble friend Lord Wedderburn has taken us through the 15 provisions of this Bill and no doubt we shall go back to them again in Committee. I do not wish to go over any ground that he has covered. The Minister has adopted a somewhat narrower focus. So far as I could see, and I was following his speech with the aid of a copy of the speech of the Secretary of State in another place, he followed the Secretary of State quite often word for word, except that he took one-third of the time.
He seemed to focus on three areas: the closed shop, unofficial strikes and the way in which the Government's legislation has transformed the economy. The latter phrase was also used by the Secretary of State. We have debated the closed shop at some length in this House, recently during the debate on the social charter. I appear to have made my argument clear to the Minister, although I am not sure where it landed me. That was clear to the noble Lord, Lord Rochester, but not how I got there. We shall be going over this ground again in connection with the first few clauses of the Bill, and no doubt these matters may be made clearer then.
The Minister then turned to unofficial strikes, and I think we shall have to put down a Question for Written Answer on this. So far as I am aware, this is the first time that we have had a statement from the Government about working days lost by unofficial strikes. The general position has always been, "You can't do it". I only hope that when we put down a Question for Written Answer we get a better Answer which gives more information than where the Government got their figures from regarding the closed shop. The House will remember that the only way you can work that out is to assume that somehow somewhere there are half a million members of Equity who have not got on to the union books.
I have looked at the figures and I think I have got them right because the Minister quoted them. If 3·5 million working days were lost in 1987 and 3·8 million were lost in 1988, I take it that the Minister is telling us that less than 25 per cent. of working days were lost in those two years due to unnofficial strikes. It is quite a minority problem, if one is bothered about working days lost. We are glad to have that, and would like to have some of it supported.
I turn to the doctrine of transformation by law. I am bound to say that the Secretary of State gave some figures in another place about this. I may be wrong but I do not think that the Minister today gave us any figures, particularly strike figures. In that sense the was joined by the noble Lord, Lord Boyd-Carpenter, who preferred the qualitative approach.
Nevertheless, I would take exception to—and I have said this several times in your Lordships' House—the way that the Government, when they

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list their legislative assault (and I want to be fair to them) always leave out a few Acts. We have had seven "sons of Frankenstein": 1980, 1982, 1984, 1986, 1988—it gets quicker then—1989 and 1990, all in one way or another designed to narrow individual rights and attack trade unions. Therefore I wonder why the Government talk about three or four Acts and why the noble Lord, Lord Boyd-Carpenter, hopes that we will go into double figures.
The Secretary of State in another place put forward a justification for the transformation of the British economy by laws against strikes, and I now quote from what he said in the other place on Second Reading at cols. 38 and 39 on the 29th January:
"There can be no doubt about the transformation which has taken place in British industrial relations in the past decade …
That transformation has occurred because this Government, unlike our predecessors, have had the courage to put sensible step-by-step reforms on to the statute book".
The Oxford English Dictionary states that a transformation is a metamorphosis—a total alteration in existing forms or substances. Therefore we must ask when and where the Government have put forward evidence of that transformation or metamorphosis of industrial relations. In so far as they have offered evidence, they have advanced three contentions. They assert that the law has transformed productivity and that there has been a productivity miracle. They further assert that the law has ended the problem of wage induced inflation. They have said again and again that the law has produced an improvement on the strike record. I am afraid I shall not be able to attend the House next Wednesday but I understand that a debate will take place to explain that assertion.
There are five things to be said about productivity. The first thing to be said is that the Government only claim to have transformed manufacturing productivity. They do not claim to have achieved a general improvement. They claim that manufacturing productivity has improved by 5 per cent. a year since they took office. Secondly, that transformation has not occurred throughout the whole of the Government's period in office. It started in 1983 and 1984 and it has now stopped. It seems to be linked to rising GDP. When GDP rises, the rise in productivity occurs. Thirdly, this has occurred many times in the past. It occurred under the Heath Government and under the previous Labour Government. When a recession occurs followed by a recovery, there is a rise in productivity. Finally and most importantly, it is claimed that the improvement in productivity is linked to the law. However, it does not phase with the law very well. Most of the improvements occurred before there was any law in this area. The more legislation that is introduced—there has been a doubling in the number of restrictive laws since 1988—the more the rate of improvement in productivity is reduced. Most people would say that, in terms of overall productivity and not merely in terms of manufacturing productivity, the productivity miracle is over. Most people would consider that there will be no improvement in overall productivity
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over the next two years and that it cannot be correlated to the law.
The same phenomenon occurs with inflation. The fall in the inflation rate pre-dates the restrictive legislation. That fall occurred in 1980. As legislation increases, the problem of wage induced inflation gets worse. The root of wage induced inflation at the moment—the Government more or less accept this now—does not lie with organised workers at all. Wage induced inflation is being pushed up from the top. The further down the ladder one goes, the lower the rate of wage increases. If one consults Incomes Data Services, that body will reveal that in any month of the year the average annual rate of settlement in the organised sector of the economy is somewhere between 8 or 9 per cent., whereas in the unorganised sector which constitutes businessmen, personnel executives and chief executives the average annual rate of settlement is 20 or 25 per cent. In the case of the chairman of British Airways it is 100 per cent. Therefore the rate of inflation has nothing to do with the level of wage settlements because that level this year is roughly the level of the retail prices index.
I suggest that as regards productivity and wages there is little to be said. Let us come to the litmus test of strikes. The Minister in another place had some comments to make on this. The Government can say that this Bill is directed at the problem of strikes, the illegality of all forms of sympathetic action, trade union liability for unofficial strikes without ballots and the right to victimise strikers on a selective basis. This Bill represents a redoubling of the Government's efforts in respect of legislation on strikes. The Minister left out of his speech some comments of the Secretary of State. On Second Reading in another place on 29th January the Secretary of State made two claims. He said at col. 39 of the Official Report, that the number of strikes was at its lowest for 50 years. I see that the Minister nods at that. The Secretary of State claimed that legislation was a primary cause of that. He further claimed that working days lost were running at 13 million a year in the 1970s but in the past three years they had been running at one-third of this rate.
There are a large number of points that one could make on that topic but I shall make just a few. The first point to make is that the number of days lost due to strikes has been falling merrily since 1970 and not since 1979. The fact is that we now have only 20 per cent. or less of the number of strikes that occurred in 1970. Apart from a single step fall in 1980—that could have nothing to do with legislation as we had not had an effective employment Act by 1980—which occurred in the middle of the recession, I calculate that the fall in the number of strikes since 1970 has been roughly 6 per cent. a year on average. That figure has remained much the same during Labour and Tory governments. Since 1970 the number of strikes in this country has been falling. There is no mystery about that. It is due to improvements in bargaining structure that occurred in the 1970s, especially the one-step change that occurred in 1980 due to the depression, the rise in unemployment and the shift away from manufacturing employment.

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As regards working days lost, it is extremely disingenuous of the Government to select the past three years in order to produce a two-thirds fall in working days lost. The Government have selected the past three years because that does not take account of the events of 1984. In that year 27 million working days were lost and the miners' strike occurred. The Government do not wish to include that figure, so they leave it out. I estimate that the number of working days lost under both Labour and Tory governments since 1970 is virtually identical. Under the Labour Government the number of working days lost averaged 9 million a year and under the Tory Government it averaged 9·4 million a year. The Government may say that is history and they want us to look at the immediate past. In that case let us look at the past four years rather than the past three years. In that case we shall see that the number of working days lost has doubled in the past four years from under 2 million to 4·1 million.
The argument that, internally, the Government have transformed the British strike record is highly suspect. The best arguments are the international ones as deployed by my noble friend Lord Wedderburn earlier. The best analysis of the international arguments appears in an article by Professor Willy Brown in the National Institute Economic Review. He shows that, according to the Government's own figures based on information issued in the Department of Employment Gazette and drawing on International Labour Organisation comparisons, in the 1980s working days lost per thousand fell in 15 of 20 countries. They fell most in countries other than Britain. In countries like Australia, Ireland, Japan, the Netherlands and Sweden they fell by 50 per cent. or more. However, in Thatcherite Britain they fell by 25 per cent.
We know why that is. It is quite simple to ascertain that. In a period of worldwide recession which affects working days lost, the Government did not take advantage of that situation because they were undergoing a series of unnecessary, bitter disputes with the public sector trade unions. The Government have preferred to legislate to stop strikes rather than to use the provisions of ACAS and go to conciliation and arbitration. They could have avoided these confrontations, but again and again they decided to go to law. We see no reason why we should support this Bill or why we should welcome the seventh, eighth, or ninth son of Frankenstein. We shall oppose the Bill all the way.
1.9 p.m.
Lord O'Hagan: My Lords, the noble Lord, Lord McCarthy, began by complaining about the brevity of the Minister's speech. However, he proceeded to remedy that defect by speaking for a long time himself. He then went on to say that he was surprised that the Minister here agreed with the Secretary of State in another place and that they had said the same thing. I do not think the Minister here would last very long if he said a different thing.
I flew from Strasbourg last night, somewhat delayed by industrial action—whether primary, secondary or tertiary—in air traffic control over various of the member states of the Community
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over which I had to pass. After listening to the contributions from noble Lords on different sides of the House I wonder whether there is anything left for me to say. Most of the main issues have been dealt with, particularly by my noble friend Lord Boyd-Carpenter. However, there is perhaps one illustration that I can leave for noble Lords to think about over the weekend.
Yesterday in the European Parliament as an elected Member I was debating Community legislation with my socialist counterparts there. There is a very striking contrast between noble Lords opposite and socialist Members of the European Parliament at the left-hand edge of the hemicycle. Noble Lords opposite do not want any law in this field, or at least they want it reduced or are opposed to the Government's proposals. They do not have much to put in the place of those proposals but they do not like them and they want to reduce the intervention of the legal system in these areas if at all possible. In contrast, their socialist colleagues in the European Parliament want the law introduced everywhere, all the time, into everything, particularly on the topic that we discussed yesterday, the field of temporary or part-time work on which the Commission has just made proposals. I wonder at this contrast between British and European socialists, who wish to have extreme legislation and the right of the courts to invervene in every kind of matter.
Lord Wedderburn of Charlton: My Lords, I thank the noble Lord for giving way. Will he think back to my expression of the policy which has been set out, and to which the Minister referred, desiring a set of rights in employment and trade union law and proposing a whole series of laws? 'There is no question of our wanting no law at all. Is the contrast not now one that the noble Lord would want to withdraw?
Lord O'Hagan: My Lords, for a long time I subscribed to the idea of incorporating the European Convention on Human Rights into British domestic law. I was a member of the Select Committee here in 1977 when all the Conservative members voted in favour of that proposal and all the Labour members voted against it. Therefore I maintain my position. I welcome the recent conversion of the Labour Party to having a small version of the European Convention on Human Rights incorporated into British law. I wish they would go the whole way. I am not talking about human rights in the sense of fundamental liberties but of the role of the state or of the European Community in employment issues more generally.
It is striking that the British elected socialist Members of the European Parliament who take the Labour Whip have moved towards a position in which they have become more and more closely associated with the European Community. I would ask the noble Lord, Lord Wedderburn, to re-examine what he said about the social charter. I sit on the committee of the European Parliament which deals with that issue. I may have misheard the noble Lord—his windmill manner of delivery is so fast

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that perhaps he was too quick for me. However, he implied that the social charter itself has legal force within the Community and that the rights concerning collective bargaining are matters over which the social charter has some say. They remain entirely national matters. The social charter is an interesting commentary and the Government's views on the social charter do not relate to this Bill.
Lord Wedderburn of Charlton: My Lords, once again I am obliged to the noble Lord, who invited me to clarify my position. I am sorry that I went too quickly for him. We are very well aware that the social charter is a statement of principles and that the action programme is a proposal to put some but not all of those principles into Community legislation. We also recognise, and wish that the Government and their Back-Bench supporters would recognise, that the social charter enshrines a package of rights against which we would wish to see legislation measured in this House. If the noble Lord is at one with us on that we are very happy that that is so. I invite him to say that he is, in contrast to his Front Bench.
Lord O'Hagan: My Lords, I am delighted that the noble Lord has confirmed that the real reason for the Labour Party's change of views on the closed shop has nothing whatever to do with the social charter. They wanted to do so anyway and the social charter issue was an alibi.
We are moving towards a series of detailed examinations of the individual clauses of the Bill. I may not be able to take part in all of them. I believe that it is very important that we ensure that our international comparisons are valid. That is the only point that I should like to make to my noble friend Lord Strathclyde, whose speech I welcomed.
I do not believe that all the references made to the ILO by the noble Lord, Lord Wedderburn, or to the European Community aspects, or in particular to practices among member states, will stand up to close examination, particularly in so far as he tried to alert your Lordships to the idea that our way of approaching the closed shop issue was specifically British. If I have misinterpreted him I hope that he will correct me. The noble Lord will find that we are coming up to a general European standard and are now guaranteeing people rights that have been taken for granted in other member states for a very long time.
This is an interesting debate. I do not expect that anybody who has listened to me has benefited from it, but I have certainly benefited from listening to the rest of your Lordships on this fascinating series of topics. I welcome the Goverment's slow, steady and thorough approach to these issues, which is far better than a huge explosion of legislative activity which would be bound to get something wrong. I hope that we can proceed to examine the clauses of the Bill as it goes through the House. I shall try to come back from time to time to speak briefly on the European aspects.
1.15 p.m.
Lord Houghton of Sowerby: My Lords, the presence and the speech of the noble Lord who has just spoken lend added importance to the debate. It is obvious that the Government do not regard it as an important debate, otherwise we should not be meeting in the gloom of a Friday to consider it.
One can always tell when a debate in your Lordships' House is important. When the cameras are off it is not important. The lights go down. The only time that we have full enlightenment is when the cameras are on and the lights are up. At other times the cameras are covered in their red hoods and look upon our proceedings like apparitions with evil portent, rather like the eye of the KGB.
We attach importance to this debate. Otherwise we should not have called to our aid this morning visiting professors—my noble friends Lord Wedderburn and Lord McCarthy. When we have them on our side we can be sure that by the time they have finished their speeches the full indictment of anything brought before the House by the Government will be complete.
I began to think that we had left the Second Reading and had moved on to the Committee stage. I should warn the Minister that that does not mean that it will be suitable to bring the Committee stage of this Bill in the supper break on some future occasion. We should like to have it at a more appropriate time.
noble Lord: And under the lights!
Lord Houghton of Sowerby: The noble Lord, Lord Boyd-Carpenter, must have a grievance this morning. He has been denied, and his television fans have been denied, the full publicity and approval that he receives for his many speeches defending Her Majesty's Government. The noble Lord is so popular for his defence of the Government because he is one of the few Members on the Benches opposite who does so. There are plenty of noble Lords who could do it. Look at the bevy of ex-Cabinet Ministers. There are at least two Tory Cabinets in this House, yet we hardly hear a word in defence of the Government from them. That is because they all have grudges against the Government. I keep wanting to call the noble Lord, Lord Boyd-Carpenter, my friend, and I venture to do so, because we have worked for so long on different sides of the House on matters of close personal interest.
I am prepared to look at some of the proposals in the Bill from a dispassionate point of view. The noble Lord, Lord O'Hagan, has told us that there is a European dimension to the Bill, as there is to almost everything that we touch now. I think it means that a Bill of this kind is perhaps not relevant or at least not timely when considered in association with our European friends and partners.
We want greater harmonisation and attempts are being made to achieve it. Although the proposals in the social charter and the attitude of M. Delors are probably not fully acceptable to the Prime Minister, we have there the beginning of the unification and

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harmonisation of working conditions and trade union and worker participation that we all want to see throughout the whole of Europe in our future work.
In Europe even the socialist Members of the European Parliament are anxiously looking at law-making in connection with working conditions. We are not. In this connection we regard law-making with great suspicion and are very reluctant to embrace its advantages, even when they may be clear. The trade unionists and the workers in Europe have regarded the law as a friend and protector. In this country we have regarded the law as the enemy of the trade union movement. That is purely historical and it is an attitude which is very difficult to remove.
The Whitley Council system that we introduced into this country in 1919 and applied only to the public services was accepted in Germany to cover the whole of the working population. It has endured there ever since. Their rights are embodied in labour codes in more detail than ours. They are much more explicit than even our laws are today. I do not think that we ought to be afraid to look at the formalisation of conditions of work between employer and worker and trade unions and the state, which in Europe has been carried much further than we have yet attempted to general consensus.
It is a great pity that we have a Bill of this kind in 1990 which I presume has not been discussed with the TUC. Consultation with unions has probably been of the most casual kind. By this time we ought to have much closer association between employers and unions to reach common agreement on whatever may lie ahead. The noble Lord, Lord Boyd-Carpenter, described conditions in the past and how far this Government had brought us in the reform of trade union law. I concede that. I am only sorry that the trade unions could not do it themselves and left it to a Conservative Government to do what in many respects public opinion regards as the right thing to have done. It is notable that neither the trade unions nor the Labour Party today propose to go back on much of what the Conservative Government have introduced. In fact trade unions' and workers' opinion was changing at the time that public opinion was changing.
The union of which I was secretary for over 38 years had ballots on the election of officers and executive committee members. It introduced an entirely new concept of democratic control of the organisation before the Government came on the scene. Had one waited a little longer, I am sure that other unions would have undertaken similar reviews of their arrangements.
We needed a change in trade union democracy. There was far too much power put in the hands of executive committees and full-time officers. I believe that the Government went too far in putting the officers or trade unions under a five-year re-election system. In my view they have gone too far down the scale of responsibility in trying to steer clear of political influences at work in re-election. There are still political influences at work in the election of officers and executive committee members in a number of trade unions.
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Since we are all going into a market economy and a good deal of what the trade union movement and the Labour Party stood for has been modified and even abandoned, I hope that it will soon be possible to get down to mutual industrial relationships which are more free of political ideology than before. I have long held the view, and have expressed it many times, that one of the great drawbacks in this country since the war has been the inability of the trade unions to come to terms with private enterprise. That was the root of much of the difficulty that we had. So long as that enmity and gap exist between employers and employees, we are bound to have a good deal of misunderstanding and difficulty.
I am sorry that the Government have brought the Bill forward now. Quite frankly, I do not think that it is worth while occupying parliamentary time with this Bill when there are so many pressing calls upon us. It would have been better if we had said that from now on we wanted to look at legislation in the European context and there was no need to go forward with little bits and pieces of national legislation. I do not think that we fully realise the implications that European unity will have. There are too many people pulling back in the name of nationalism, sovereignty, independence and identity. The world will not provide for that kind of thing in the future. We must take our place now among other nations which have similar problems and to which we probably have important messages to deliver.
I do not approach the Bill with any fundamental bias. I should like to look at exactly what is proposed, why it is proposed and what justifies the inclusion of some of these proposals in the Bill itself. That is the approach that we can all make now.
1.27 p.m.
Lord Jenkins of Putney: My Lords, a little while ago my noble friend Lord Willis wrote an entertaining article for The House magazine in which he examined the customs and practices of this House. Among other things he pointed to the development of what I suppose might be called "peerese" and the language that we employ. Among the examples that he gave of the use of peerese was that when we say "I shall not follow the noble Lord down that path", we really mean, as they say in the other House, "Rubbish!" I would not dream of using that word in respect of the noble Lord who introduced the Bill. I shall simply say that I shall not follow him down that path.
Comment has been made on the relative shortness of the noble Lord's speech compared with that of his right honourable friend in another place. Comparing the two, the main difference was not a difference in the length of the speeches but the number of diversions which the Secretary of State had to endure in the other place. I think that it might be rather a good idea if in this House we were to adopt the practice of interrogating a noble Lord who is introducing a Bill during the course of his exposition. It would enliven the proceedings. I see that the noble Lord is nodding. It would be useful not to regard a request to elucidate a point during the course of the speech as something which ought not to happen. It

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is perhaps a change in custom and practice which might conceivably be adopted. Your Lordships will not be surprised if the remainder of my remarks relate to the interest that I have in the fate of the British Actors' Equity Association rather than the customs and practices of this House.
By chance I recently came across an edition of the Equity Letter. This publication was a quarterly report to members of the British Actors' Equity Association, issued in January 1959. I must declare an interest. At that time I was the assistant general secretary of that trade union. The article was not written by me. It was probably written by Gerald Croasdell, the second of two brilliant lawyers, the first being Gordon Sandison, who were general secretaries for Equity. The article begins as follows:
"We, the undersigned, hereby pledge ourselves that we will not enter into any engagements with theatre managers on conditions which would deny our right to refuse to work with non-members of Equity".
Noble Lords will note with interest that what is being asserted here is a right. It brings forward the proposition which is difficult for members of the Government to accept: that there is such a thing as collective as well as individual rights. On occasion a collective right can properly override an individual right. We accept in a number of fields in general legislation that the individual cannot always do exactly as he wishes and that a collective right is right and proper.
I wish to suggest to the House that under certain circumstances the existence of such a collective right is proper and necessary.
The article continues:
"The Roll of Honour which hangs in the Council Room at 8 Harley Street, is signed by the leading actors and acresses of twenty-five years ago,"—
that is 1934——
"many of them happily still leading today, including the president, Felix Aylmer, Lewis Casson, Edith Evans, Sybil Thorndike and many others. There are some who are no longer with us and these include Yvonne Arnaud, Leslie Banks, Robert Donat, Leslie Henson, Gertrude Lawrence, Owen Nares, Ivor Novello, Godfrey Tearle, Marie Tempest",
and so on.
"If it were possible to say that a single decision was responsible for the fact that Equity has long passed its twenty-fifth birthday and looks forward with reasoned confidence to the future, this early assertion of the principle of universality of membership would be that decision".
Later the article states:
"Hard experience proved to the profession that standard contracts and enforceable minimum conditions can only be won on the basis of two principles established in the early battles after the formation of Equity. These are, first, that no member will work except upon an Equity-approved contract and, second, that no member will work with a non-member, i.e., with anyone who does not accept the same obligation.
If these principles were to be lost in practice, there is no reason to suppose that the Association could survive".
That may be as true today as it was when it was written in 1954. The circumstances of an actor's employment are extremely arduous. The article continues:
"Partial organisation may be partially effective in such secure occupations as banking, but in the jungle in which the actor of today still fights for a living as did his predecessor of twenty-five
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years ago, the bald fact of the matter is that you either have complete organisation or before long you have no organisation. This is so well accepted in the profession that over the years it had rightly come to be taken for granted that membership of Equity is a necessary part of the profession of an actor".
Once again that is still the situation.
Following the custom and practice when dealing with trade union matters, I wish to suggest that there is a general feeling that something is wrong and must be put right. The complexity of the situation and the nature of the different closed shops are only accepted by the Government by a broad distinction between a pre-employment closed shop—that is, a limitation on entry—and a post-entry. But the situation is very complex. Equity's situation is unique to that association just as the situation relating to other trade unions is unique to those organisations. The complexity is great.
I liken the Government's attitude to trade unions to that of the Labour Party at one time with regard to the City: that the City was generally bad and therefore we need not bother about it. That is the attitude of the Government towards trade unions. We now have Members on the Labour Front Benches and Back Benches who know a great deal about the City and can hold their own in a debate on that subject in any company. However, I have noticed no one on the Government Benches in either House who brings to the subject of trade unionism the same expertise as is now found in the Labour Party in relation to the City, evidence of which we have heard from my noble friends on the Front Bench and Back Benches.
What is to be done? The Government have not been entirely unsympathetic behind the scenes. When it has been brought sharply to their notice, they have understood the real problem whereby an association which does good work is in peril. The statement refers to the principle of universality of membership. That principle is exerted elsewhere. As the noble Lord, Lord Boyd-Carpenter, pointed out, when it is exerted in the medical or legal professions it is on the ground of qualification. However, universality of membership achieved in such a way also brings with it consequential universalities elsewhere. I believe that the legal and medical professions are held in high regard, and are suitably rewarded due in part to the principle of universality of membership exerted for quite different reasons.
The same applies to the British Actors' Equity Association. A principle of universality exerted for hard economic reasons has had this effect. It is generally recognised that the British actor has a standard and level of performance which is quite unique in the world. That is because the British actor accepts a degree of discipline that is not exercised in other countries. That degree of discipline stems from the Equity union shop.
The Government have seen that some means ought to be found, if possible, to deal with this unique situation in a unique fashion. When it arose originally it was dealt with by the creation of the theatre councils. The theatre councils issue Equity contracts. They are not called Equity contracts, but Esher contracts. The name stems from that of the third Viscount Esher, the father of the present noble

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Viscount, Lord Esher. He was a most remarkable man. He became the first chairman of the theatre councils, a position at present held by my noble friend on the Front Bench.
The Esher standard contract was the means whereby the principle of universality of membership could be sustained. The contract provided that all managers should be registered managers and all artists should be registered artists. Such registration was achieved, on the one hand, by membership of the Society of Theatre Managers and, on the other, by membership of the British Actors' Equity Association. The universality was achieved on both sides by a device which avoided mentioning either the society or Equity. A similar arrangement could now be approached.
It is my hope that the Government will look at the issue and at a later stage make an announcement in this Chamber. I shall not ask the Minister to commit the Government at the moment. However, in discussions with Equity a previous Secretary of State for Employment showed an understanding—and I put it no higher than that—of the nature of the problem. He spoke of the necessity of finding a way to preserve the universality of membership upon which the acting profession depends. Although in the amendments that we shall table we may not succeed in our endeavour to introduce those changes into the legislation, I hope that in Committee we shall obtain from the Minister the kind of undertaking that will enable the universality of membership principle to apply in the acting profession. It is necessary that that should occur by one means or another. It is my hope that we shall be able to achieve that.
We shall endeavour to improve the Bill in Committee. If we cannot do so, we can at least hope that the Minister will give the kind of understanding which will enable an association, which has done valuable work in our society, to continue to operate on the necessary basis, having regard to the circumstances within which the acting profession necessarily operates in the kind of society in which we must work.
1.42 p.m.
Baroness Turner of Camden: My Lord, with the Bill we have yet another piece of unnecessary legislation aimed at restricting trade union rights. Of course, as was expected, the Government seek to justify their approach by claiming an improvement in industrial relations. They attribute the apparent—and I emphasise the word "apparent"—decline in strikes in the private sector to the impact of their legislation. However, the past 10 years have also seen a decline in the manufacturing sector and with that an increase in unemployment in that sector. In my view, that has had a far greater influence than the legislation which the Government have introduced. Indeed, that point was made with force by my noble friend Lord McCarthy.
In the public sector we have seen the longest dispute of the decade; that of the ambulance workers. I hope that not even this Government will have the nerve to suggest that the public was on their side in the dispute. Every indication was entirely to the
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contrary. That lengthy dispute was largely sustained by public support because people freely gave money to help to maintain it. I hope that the Government do not feel inclined to go down the path suggested by the noble Lord, Lord Boyd-Carpenter, in relation to public-sector disputes. That would put us in further breach of our international obligations.
The Government are going over the same ground, perhaps believing in their propaganda that union bashing is an electoral winner. However, even among their supporters the Government will find that the continual sniping at unions is becoming a bit too much. That is particularly so because it is widely perceived that the need is not for more legislation about unions but for a really sustained effort to be made to bring workforce skills up to the standard needed in Europe; in other words, better and more sophisticated training programmes and facilities.
My noble friend dissected the Bill in his opening address. Therefore, I wish to limit myself to dealing with some of the points made in the debate. I shall I also make a few of my own resulting from my experience as an official of a union for some 20 years and a member of the TUC General Council for eight years.
First, there is the matter of the closed shop. Successive tranches of government legislation have made it increasingly unenforceable. I believe, as does the TUC, that the Government have exaggerated the number of employees covered by closed shop arrangements and have done so for their own purposes. The balloting hurdles which must be overcome to retain close shop provision are formidable; 80 per cent. of the workforce eligible to vote must be in favour. Yet despite this, in the majority of ballots there has been overwhelming support for its retention. Therefore, it continues to have support at shop floor and company level.
Nor should the Government believe that it is union officials and executives who are the principal proponents of the closed shop, or 100 per cent. trade union arrangements for that matter. It is often the rank and file trade unionists who say, "Why should they"—that is the non-unionists—"get the benefits of what we do if they do not pay? Why should we have to put up with these free riders?" In my day we resolved that problem by saying that those who did not want to pay to the union could pay to an agreed charity—often The Save the Children Fund—so that they did not receive the benefits for nothing. But even that is not possible under this Government's legislation.
We were told by the noble Lord, Lord O'Hagan, that in many EC countries the closed shop is outlawed. But in some of those countries it is permissible for unions and management to negotiate deals, the benefits of which go only to union members. That is a powerful incentive to join and to maintain union membership. However that may be, my party accepts the provisions and the philosophy of the European social charter which contains the right to belong and not to belong to a union. I emphasise that we accept the charter as a whole. The Government do not accept it at all and so can scarcely rely on that.

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Of course, the Government give much greater protection to the right—the negative right—not to belong to a union than they do to the right to belong. On that issue the Government are vulnerable because of their attitude to union membership at GCHQ. Moreover, although the blacklisting of union activists is known to be a widespread practice, there is no prohibition against that in the Bill or any indication from the Government that they believe that there should be.
Then there is the matter of secondary action. Again, the clause in the Bill is a clear demonstration of the one-sided approach of the Government. The effect of the clause is to make unlawful virtually all action which is not primary action. But an employer may put out work to a subsidiary. If the union attempts to block it by support action at the subsidary that, presumably, would be unlawful under the clause. Therefore, the employer may use his superior financial strength and organisation but the union may not attempt to do likewise. That does not appear to me to be very even-handed. It is highly likely that it so damages the essential right to strike that it breaches ILO Convention No. 87. That issue was dealt with at length by my noble friend Lord Wedderburn. There will be an opportunity next week for a fuller debate on the subject because the Government have decided that industrial relations should be one of their subjects for debate. I look forward to the debate. The Government are on very weak ground in relation to some of the issues.
To return to the secondary action issue, I have always much preferred to call it "sympathy action". Trade unionists have often been told that they are selfishly seeking only their own immediate good and that they care nothing for anything else. But sympathy action occurs when trade unionists not immediately affected want to help their colleagues. So far from being rather discreditable, as the Government appear to believe, it is quite the reverse. It actually has a moral dimension quite absent from the Government's legislation.
Earlier in the debate the issue of Ford at Dundee was raised. It was a more complex issue than was indicated by the Minister or the noble Lord, Lord Boyd-Carpenter. Certainly, it was not secondary action because the action was directed against the same employer. We should of course return to those issues in Committee.
The next major innovation in the Bill is the attempt to make unions responsible for unofficial action. They are to be responsible even when it is organised at shop floor level by unpaid officials such as shop stewards—a departure from the normal legal obligations of employers who are responsible only for the actions of paid employees. Those who drafted the legislation can have little connection with ordinary industrial life. Disputes often begin as unofficial action because of local grievances or breaches of procedure, and managements can breach procedures, not just unions. I have known that in my union experience.
There may be work hazards or an unsafe system of working. There is nothing on the face of the Bill
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to protect employees who walk off a job to protect their lives and those of their colleagues. Yesterday there was a Question in this House on the unsafe methods of working at the Channel Tunnel. We were told that there had been six fatalities and a very large number—I believe it was 502—of accidents. Therefore, there are some very hazardous working environments. This Bill does nothing to protect workers who walk off a job to try to protect themselves in those sort of environments.
In future, the union will only be able to avoid liability by writing to every individual repudiating the action. By the time that cumbersome process has been effected, the dispute may well be over. Even so, generally speaking, unions are not happy about unofficial action. Union executives and senior officials will often want to intervene to settle such a dispute as quickly as possible. However, if they have to start by repudiating the action by writing to every individual, credibility will have been damaged before that process starts and the chance of intervening and reaching an amicable solution may well have been lost.
It is noteworthy that the Institute of Personnel Management, which has experience of industrial relations on the other side, is not in favour of that measure and believes that it will not increase the chance of industrial peace. The Government should have left that well alone.
There is then the entirely obnoxious provision whereby an employer may selectively dismiss individual unofficial strikers and such people then lose their right to go to an industrial tribunal. Furthermore, a union will not be able to organise an official dispute following a ballot in support of such an individual and still retain immunity.
Surely that is grossly unfair. Perhaps even the Government can see that that is so. Even given the Government's ethos, let us suppose that an employer has made a mistake. Is the individual to have no legal right in this respect, with his colleagues also being debarred from supporting him? Is there to be no alternative in those circumstances but the dole queue? Again, I question seriously whether or not that interferes with the right to withdraw labour in a way which breaches ILO conventions.
Incidentally, employees in this country who withdraw their labour have far less protection than applies elsewhere in the EC because contracts of employment are regarded as terminated instead of suspended. The Government have steadfastly refused to do anything about that despite the fact that we have repeatedly raised it during discussion of previous employment Bills.
The commissioner for trade union rights is to be given further powers, presumably because so far she has not had enough to do. At this stage, I shall not say much about those responsibilities but I take amiss the fact that she will be able to join her name to any proceedings which she is assisting. For a number of years I was a member of the Equal Opportunities Commission. We did not have such a right despite the importance of the cases which we supported and we could have done with the money allocated to that quite unnecessary office.

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At a late stage in the Bill the Government introduced a few more unnecessary provisions by way of amendment; for example, the requirement to put the names of those able to call a dispute on the ballot paper. Is that the whole of the national executive? In many trade unions the only body with the ultimate power is the national executive council. Sometimes that body has as many as 60 members. That is not at all unusual in a case in which there have teen union mergers.
There is then the requirement to put on the form the name of the independent scrutineer. Again, there does not seem to be an adequate reason for that. Moreover, I note that the amendments introduced in the other place repeat also the requirement to implement a dispute decision within four weeks of the date of the ballot. That is despite the success in this House of the Bill of the noble Lord, Lord Campbell of Alloway, which would have given to the courts discretion in cases where an employer had encroached upon the four weeks by a series of legal actions. There will be an opportunity to return to that in Committee and we shall certainly do so.
Finally, dealing briefly with the ILO, there will be an opportunity for a fuller debate on industrial relations next week. For now, suffice it to say that the ILO has already warned the Government about the complexity and cumulative effect of piecemeal legal reforms and the Government's apparent lack of concern on the rights of trade unions and their members. The ILO asked the Government to report to it on measures to codify, clarify and simplify the legislation covering industrial relations. This Bill is not a contribution to that process.
As has been said on this side of the House by my noble friend Lady Phillips in particular, an employment Bill gives an opportunity to introduce a number of progressive measures designed to protect people against discrimination. Even within the Government's ethos, it would have been possible to do that. It would have been possible to have introduced measures to deal with discrimination against part-timers, the disabled and those who are HIV-positive or AIDS sufferers. However, the Government have not taken the opportunity to do any or that. Instead, we have a Bill which is not about employment at all. It is another dose of union bashing and we shall attempt to resolve that as best we can in Committee. I know that it is not the practice in this House to oppose on Second Reading measures which have been passed in the other place. We cannot do that. However, we have left your Lordships in no doubt as to the way in which we on this side of the House view this unnecessary and obnoxious measure.
1.56 p m.
Lord Strathclyde: My Lords, it comes as no surprise that we have had a most interesting debate. However, it comes as a surprise that I was accused of not speaking for long enough on my introductory speech. That is because the Bill is short and simple and I thought that I should keep my speech within the same vein.
It came also as a surprise to hear the noble Lord, Lord Houghton, complaining that this debate was
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taking place on a Friday and that that was an indication that we do not regard this Bill as important, partly because the television cameras are not on. He referred to the fan club of my noble friend Lord Boyd-Carpenter being disappointed by the absence of the television cameras. I can tell the noble Lord that my noble friend's fan club has been in existence far longer than television cameras have been in this House, and long may that continue. I am sure that the same is true for the noble Lord, Lord Houghton, himself.
However, I can confirm to him that the Committee stage of the Bill will not be taken in a dinner hour but that we shall have a full day or two on it.
Our debate on this Bill has concentrated to quite an extent on international comparisons, on a social charter, on the ILO and the European community. That is why it has been so interesting and helpful to have my noble friend Lord O'Hagan present at our deliberations. We have been able to listen to his advice and I hope that he can be present in Committee.
Noble Lords opposite have argued that the Bill should be used to implement all the rights of the European Community's social charter. I feel that that is an ill-considered suggestion. The Opposition is well aware of the Government's position on the social charter. We have consistently made clear that the charter as drafted is unacceptable. The Prime Minister confirmed that view when the issue was considered at the European Council meeting in Strasbourg at the beginning of December.
The charter paves the way for more legislation, much of it in areas which we believe are best left to employees and employers to settle themselves. We can see no need for the sort of harmonisation on social legislation which seems to lie behind the charter. That would be to ignore the great variety of customs and practices which exist within member states. There can be no doubt that if the charter were implemented in full, it would add considerably to employers' costs. That would only damage competitiveness and restrict firms' abilities to grow and create new job opportunities. By seeking to guarantee to employees some of those rights in law, we should be guaranteeing the deprivation to many people of new jobs and the opportunity to improve their living standards. That cannot be sensible.
Lord McCarthy: My Lords, the noble Lord is at it again. He says that there can be no doubt that it would be highly costly. I take it that he will not advance any figures at all.
Lord Strathclyde: My Lords, I am more than happy to produce figures when we reach Committee stage if that is required.
Perhaps I may turn to the ILO criticisms of our employment law. In 1989 the ILO Committee of Experts made a number of comments regarding UK law in connection with ILO Convention 87 on freedom of association and protection of the right to organise. There is nothing unusual in that process. The same committee, as part of the same report, made a number of similar comments with regard to the law in other European Community countries.

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Examples are, in Germany, the law allowing civil servants to replace striking state employees; in Greece, the law concerning strikes and state enterprises; in the Netherlands, ministerial powers to freeze the operation of collective agreements. There is nothing strange in the ILO looking at the employment laws of this country.
The Government responded to the ILO committee's points. As usual those comments were offered in confidence. However, the TUC subsequently withdrew the complaint that it had made regarding certain aspects of UK employment law. Accordingly there was no need for the matter to be further considered by the ILO. The TUC's withdrawal of its complaint speaks for itself; clearly it had no confidence that the ILO would uphold its views.
A lot of nonsense has been talked about comparison with other European Community countries.
Lord Wedderburn of Charlton: My Lords, before the Minister leaves the subject of the ILO, will he confirm that the Government accept the many judgments of the Freedom of Association Committee and the governing body, and that, in accepting those judgments, the dismissal of those on strike or taking unofficial action by reason of that action is a breach of Convention 87?
Lord Strathclyde: My Lords, I shall return to that point in a moment. I shall first deal with other European legislation and the accusation that other countries somehow have better employment laws than we have in this country. In many respects other European countries place far greater restrictions on industrial action than we do. For example, legally enforceable collective agreements are the norm in all Community countries except the United Kingdom and Ireland. In Germany, Denmark and Belgium, any strike in breach of the peace-keeping provisions of the collective agreement is unlawful. Industrial action is unlawful if its effects are out of proportion with the demands being made, and the courts will decide whether that is the case.
Recent court decisions included a ruling in France that a strike was unlawful because it impeded the function of a factory. In the Netherlands, industrial action by nurses was limited by the courts because of the effect it had on patients. In Belgium, industrial action by airline staff was ruled unlawful because of its effects on the community. Are those the actions that noble Lords opposite now wish to bring into United Kingdom law?
Certain groups had their right to strike removed by special legislation or administrative order. In Germany, all civil servants, teachers and post office staff are forbidden by law to strike. In France, the ban applies to prison officers and some postal workers; in Denmark, to all civil servants. I think I have said enough on that point. Perhaps noble Lords will agree that encompassing other European countries' customs and practices on employment law into our own legislation is not necessarily the best way forward.
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The noble Lord, Lord Wedderburn, felt that the UK would be in breach of ILO convention obligations. The Government believe that nothing in general employment law or within the Bill is inconsistent with our international obligations, including various ILO conventions.
Baroness Turner of Camden: My Lords, perhaps the noble Lord will give way. Have the Government yet responded to the ILO criticism of the piecemeal, cumbersome and complex nature of our legislation? Will they codify and simplify in the way that the ILO propose?
Lord Strathclyde: My Lords, we have responded to the accusations from the ILO. I am not sure that we have received a reply to that response.
The noble Lord, Lord Wedderburn, said that no other country has this kind of law limiting the scope for secondary action. Perhaps I may make a point regarding secondary action, which the noble Baroness, Lady Turner of Camden, said she preferred to call sympathy action. "Sympathy action" is a typical example of the Labour party using weasel words. We are dealing with secondary action; everybody knows that secondary action has been extremely destructive to vast amounts of British industry over the course of the past 20 years.
Instructive as it may be to know what happens overseas, no other country has the same framework of industrial relations and trade union law, or indeed the same industrial relations institutions and traditions as we. The Bill is concerned to obtain the right framework for this country and not for any other country.
The noble Lord, Lord Wedderburn, asked why the Government are unpicking the arrangements they declared were appropriate and fair in 1980. The noble Lord made a point that we had changed since 1980. That kind of point shows that the Opposition have no understanding of what the step by step approach to reform of industrial relations and trade union law really means. It vividly demonstrates the degree to which the Labour Party is stuck in some kind of time warp in which the past assumes much greater importance than the present or the future.
An essential principle of our approach is to keep relevant law under review and not be afraid to go forward with proposals to adapt the law to present day circumstances and needs. That is what the Government did in the Green Paper Removing Barriers to Employment. The Green Paper proposals on secondary action won solid support. What was right for industrial relations law in 1980 is by no means right today. There are numerous examples of the Government revising legislation that they have enacted since 1980—for example, on the closed shop.
The noble Lords, Lord Rochester and Lord Wedderburn, also discussed the fact that it was unfair to make unions responsible for acts of shop stewards, since that is a unique concept of vicarious liability not applied to any other organisation. The law of the UK has long recognised that unions are special bodies and special law is appropriate to regulate their affairs. Attempted analogies between

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unions and other bodies—for example, companies, sporting clubs and so on—are misplaced because they fail to take account of the different and unique purposes of a trade union.
I believe that the Opposition is being completely hypocritical in arguing that its own policy does not imply creating special conditions applicable to unions' vicarious liability. Under the last Labour Government's legislation the law on unions' vicarious liability was unique. Union funds, unlike those of companies or other bodies, were not put at risk even if union officers or officials committed unlawful tortious acts.
The noble Lord, Lord Wedderburn, knows, or certainly should know, that when the liability of trade unions for the acts of their officials was determined under the common law the result was uncertainty. I hope the noble Lord recognises that uncertainty in this area is of no benefit to anyone, least of all the trade unions themselves. The great advantage of the Employment Act 1982, and an advantage that will remain under the provisions of this Bill, is that the Act makes clear when a union is liable for the acts of its officials and when it is not. It appears that the noble Lord's party is prepared to abandon legal certainty in favour of the confusion demonstrated in the case Heaton v. TGWU simply because that certainty results from the Government's legislation.
I can confirm to the noble Lord, Lord Rochester, that in Committee the Government intend to table an amendment to Clause 1 to cover the situation where an employer makes an offer of employment and subsequently withdraws it, perhaps because he has discovered that the individual concerned is not a union member.
One important aspect of this Bill—an issue that I know we shall discuss at length in Committee—is the point raised by the noble Lord, Lord Rochester, and the noble Baroness, Lady Turner, on industrial action taken about unsafe working conditions. This issue was thoroughly debated in Committee and on Report in another place. I can assure your Lordships that we have given very careful consideration to the matter. Our conclusion is clear and unequivocal. The Government are absolutely confident that no court or tribunal has found, or will find, that simple refusal to do unsafe work amounts to taking industrial action.
It follows that if an employee simply refuses to do work which he believes to be unsafe and is dismissed an industrial tribunal has, and will continue to have, jurisdiction to determine whether dismissal was fair or unfair.
Lord Wedderburn of Charlton: My Lords, I am obliged to the Minister for giving way. This is simply an attempt to save time. There was a long wrangle in another place—we both know what was said on both sites—as to whether a stoppage in the face of unsafe conditions is industrial action. The legal basis on which the contrary view to that of the Minister was set out. The Minister will have seen the legal opinion. I have not seen it, but I am fairly sure what is in it. Will the Minister help us to save time by placing in the Library a statement of the legal
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authorities and sources upon which the Government's case relies? So far they have not been stated. That would save time in Committee.
Lord Strathclyde: My Lords, I shall certainly consider that point if it is seen to save time. However, I have to point out that the legislation on unfair dismissal enacted by the last Labour Government, which made dismissal of strikers fair, made no special provision for refusal to work on grounds of health and safety. There was no need then and I do not believe that there is any need now. In any case, it is very far from obvious that simply stopping work is always the right response for an employee who genuinely believes that working conditions are unsafe. Except in a minority of cases where there is in fact, or is believed to be, real and serious risk of personal injury there are other options.
The noble Lord, Lord Mellish, the noble Baroness, Lady Phillips, and the noble Lord, Lord Jenkins of Putney, spoke about the closed shop and the benefits that it had brought over a period of time. All noble Lords spoke with great sincerity and long experience, particularly the noble Lord, Lord Mellish, on a number of aspects of the closed shop. I respect those passionate arguments in favour of the closed shop, but I am not sure that there is any real point in taking up those issues too strongly with me. Those arguments would be better pursued with the noble Lord's own Front Bench, both here and in another place, on whether or not the closed shop has a rightful place in industrial legislation.
Lord Mellish: My Lords, my views on the closed shop are, I believe, practical. I asked the Minister—I hope he will now reply—exactly what employers' organisations have pleaded with the Government to get rid of it. At least he should answer that.
Lord Strathclyde: My Lords, I am not sure that that evidence would necessarily prove anything either way. The noble Lord, Lord Mellish, also asked for evidence about the requirement to hold a ballot before strikes. There is a principle involved here. The Government believe that it is entirely right that a union should hold a proper ballot before calling for industrial action by its members. Again, there are some members of the noble Lord's party who agree with that. That is what the law provides and it has an enormous amount of support from employers and union members themselves. That is the point.
Lord Mellish: My Lords, I am sorry to interrupt the Minister again. He is very courteous. I give an example of cargo which arrives at the port of embarkation. It is in a bad condition. The men refuse to work at a particular rate of pay and they go on strike. The employers will not give way and say that that is the rate for the job. The result is that 200, 300 or 400 men may be affected by the dispute. Is the Minister telling me that there should be a ballot to avoid a dispute of that kind? How is it possible to have a ballot concerning a cargo which, if it is not dealt with straightaway, will never be dealt with?
Lord Strathclyde: My Lords, there does not have to be a ballot or a strike. There can be negotiation

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to reach a solution which is mutually acceptable to both sides. There is no reason why a strike should happen. The noble Baroness, Lady Phillips, made a point about age discrimination which was supported by the noble Baroness, Lady Turner of Camden, who also introduced the matter of discrimination concerning the disabled and people suffering from AIDS. We discussed this matter at some length during the passage of the Employment Bill last year. I believe I am right in saying that the noble Baroness introduced a new clause. If she were to introduce a similar clause for this Bill, I suspect that it would be outside its scope. I have no doubt that the noble Baroness will be able to take advice on that.
I say to the noble Lord, Lord Jenkins of Putney, that Equity has stated that its casting agreements do not constitute a pre-entry closed shop. Actors who are not members of the union are able to gain entry to all areas of the profession. In any event, the Government believe that employers should be free to employ actors on the basis of their experience and ability and not because they hold an Equity card.
Lord Jenkins of Putney: My Lords, the notes probably exist of the discussion which took place with Equity and the predecessor to the present Secretary of State. I ask the noble Lord to look at those notes. If he does so, he may be more sympathetic when we introduce our amendment at Committee stage.
Lord Strathclyde: My Lords, I am more than happy to look at the notes if they exist, as I am sure they do. As the noble Lord said, that is something we shall be able to return to in Committee. My noble friend Lord Boyd-Carpenter made an excellent speech when he traced the history of employment legislation in this country. He proved how successful it had been in reducing strikes. That is the subject we shall be able to return to next Wednesday in our debate.
My noble friend rather accused the Government of not going far enough. He would like to see an addition to the Bill to prevent essential services going on strike. We have always believed that industrial action depriving the public of essential services is irresponsible. The Government have always condemned such action. Such bodies as the Armed Forces and the police have always been subject to special protection against industrial action through the criminal law. The Government can always use emergency powers to help to cope with a crisis.
The best way forward now is to make appropriate changes to the general framework of industrial relations and trade union law. For example, proposals on unofficial action should help to limit the disruption that it causes to essential services. We keep this matter under review and we shall continue to do so.
The noble Lords, Lord McCarthy and Lord Wedderburn, made certain criticisms of the detail in the Green Paper and the subsequent statements. As the Green Paper itself indicated, the statistics were based on a broad categorisation of the stoppages
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covered by the department's statistics. The definition is of official or unofficial stoppages. The statistics probably underestimate the extent of unofficial action because they do not cover small strikes. They were produced by an internal exercise especially for the Green Paper. In reviewing the figures, account was taken of the reported views of those involved in industrial action.
The noble Lord, Lord McCarthy, also indulged in an extraordinary but not unexpected attack on the Government's record. If he really believes that there is no connection between the dramatic improvement in our strike record in the 1980s and this Government's legislation, he must be part of a very small minority. It is certainly true for many of the overseas companies which have invested in this country during the 1980s. The noble Lord chose not to mention the widely-recognised change in this country's reputation overseas which has been reflected in substantially increased investment and significant numbers of new jobs.
The Government's industrial relations policy is a key element in those changed attitudes, in generating investors' confidence and in creating the prosperity and economic climate that has brought new jobs to this country.
Lord McCarthy: My Lords, the noble Lord referred to my speech but not to my figures. Is he challenging any of my figures, which were designed to show that that improvement had not taken place?
Lord Strathclyde: My Lords, when it comes to the noble Lord's figures and to the amount of research that has taken place on government legislation and its effect on strikes, there is a great deal of uncertainty and confusion. The noble Lord has made his case. It is not one that is universally agreed, and I doubt whether it will become so.
The Bill represents a further measured step in the Government's reform of industrial relations and trade union law. The reforms it proposes will provide the right legislative framework as we enter the 1990s, but they in no way imply an end to the necessary process of review which must continue so as to ensure that our laws remain in tune with the developing needs of employers, employees, their trade unions and the community as a whole. Noble Lords will shortly have the opportunity to consider the detailed provisions of the Bill in Committee. I have no doubt that the general principles and aims of the legislation will meet with your Lordships' approval, though, as with previous employment legislation put before the House, it may well be that noble Lords will be able to make worthwhile improvements to the detail.
The Government's step-by-step reform of trade union and industrial relations law has made an important contribution to the regeneration of the economy achieved during the 1980s. The Bill will help us to continue that important progress in the 1990s. It is in that spirit that I ask the House to give the Bill a Second Reading.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Education (School Teachers' Pay and Conditions) Order 1990
2.22 p. m.
Baroness Blatch Baroness Blatch rose to move, That the draft order laid before the House on 14th May, be approved [18th Report from the Joint Committee].
The noble Baroness said: My Lords, the order will give effect to the School Teachers' Pay and Conditions Document 1990 which sets out the rates of pay and conditions of service to apply in state schools in 1990–91.
The publication of the 1990 pay and conditions document will complete a process which began in September 1989 when my right honourable friend the Secretary of State for Education and Science asked the interim advisory committee to advise on teachers' pay in 1990–91. The committee was asked to consider what general pay increase should be given to teachers but also to look in particular at ways of further increasing flexibility within the pay system, of improving the career structure and of helping LEAs to tackle geographic and subject teacher shortages, giving particular consideration to the problems in London, and to review specifically again the pay of heads and deputies.
The committee has fulfilled its remit admirably and produced the third in what has been a series of excellent reports. It endorsed the thinking underlying the present pay structure and made recommendations intended to carry it even further into practice. The committee concluded that, although the recent improvements to the pay structure had all been in the right direction, more needed to be done to provide LEAs and governing bodies with sufficient flexibility to tackle the particular needs of individual schools, to reward responsibility and high performance, to respond to changing circumstances and to provide attractive career prospects for able and ambitious teachers whether they want to stay in the classroom or move to senior management positions.
The IAC made far-reaching proposals for change. It reaffirmed the importance of incentive allowances and boosted their number and value. But in addition it proposed that LEAs and governing bodies should be able to enhance the standard incremental pay of individual teachers on the standard scale on an annual basis and that it should be possible to adopt and use a local extension of the standard scale to enhance the pay of teachers on the top of the scale. It also clearly identified the need for greater recognition of differences in the circumstances of schools and the performance of individuals in the way heads and deputies are paid. It therefore proposed that the present system of spot salaries should be replaced by a system of range pay.
My right honourable friend the Secretary of State received the report on 30th January and announced on 1st February that he proposed to accept its recommendations in full but to stage their introduction in the same way as for the review body groups because of affordability within public expenditure totals within the year. By far the major part of the proposals will be implemented on 1st April, with some at the beginning of September.
They will all be implemented in full from 1st January 1991. The overall cost will be £620 million in 1990–91 and would be £733 million in a full year.
Section 3 of the Teachers' Pay and Conditions Act 1987 requires consultation with interested parties before the proposals can be implemented. The Secretary of State considered carefully the points made to him by the teacher unions and the employers, orally and in writing, and as a result made a number of further minor modifications to the IAC recommendations which are incorporated in the draft document that accompanies the draft order. They include placing certain deputy heads on a point higher on the new pay spine, which will give some 4,000 deputies an extra £300 on 1st January. The pay ranges for heads and deputies in small schools will also be extended by one point.
Acceptance of the IAC's recommendations means that teachers will receive substantial pay increases. By January 1991 heads and deputies will have seen their pay rise by up to 12.2 per cent. since March 1990; and from 1st January, under the new system of range pay, LEAs and governing bodies will have flexibility to recognise the demands of the job and the performance of the individual in the way they pay heads and deputies.
The changes recommended by the IAC to general salary grades have been sensitively handled and skilfully targeted. For new teachers salaries will increase by up to 11.8 per cent. Teachers on the top of the scale will receive 8.9 per cent. There will be a further 14,400 new incentive allowances, bringing the total to 189,000 in primary and secondary schools, and the value of the four higher rate incentive allowances will increase by 17 per cent. But that is not all. From 1st January LEAs and governing bodies will be able to award an incremental enhancement of up to £999 to any classroom teacher below the top of the scale, provided that the value of the next incremental point is not exceeded; and LEAs will be able to put in place local extensions to the standard scale and thereby raise the top point from £16,000 to £18,000.
Used imaginatively and effectively, those improvements will mean better career prospects for good teachers, better matching of rewards with contribution, and greatly enhanced scope for effective local decision taking. They will offer better rewards to the teacher in mid-career—this is an important point—to whose needs the Education Select Committee recently drew attention. They will also give LEAs and governors much more flexibility to respond effectively to local recruitment and retention problems. In inner London, where the problems are particularly acute, there will also be a new discretionary pay supplement of £750.
Pay flexibility and pay differentiation have a key role to play in improving morale and tackling shortages. The new flexibilities will greatly increase the capacity for local management to manage. They represent a real step forward in creating and sustaining the kind of teaching force we need for the future.
I am glad to have the opportunity to add my tribute to those already paid to the IAC for the

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clarity of its analyses in pointing the way ahead. My noble friend Lord Chilver and the members of his committee deserve high praise not only for the time and care they devoted to their tasks but for the skilful and clearsighted way in which they assessed the evidence, analysed the issues and produced carefully worked-out recommendations.
Last December, in the debate on the Teachers' Pay and Conditions Act 1987 (Continuation Order) 1989, my noble friend Lord Davidson referred to the discussions my right honourable friend the Secretary of State had recently completed with the teacher unions and employers on new pay machinery. In the light of those discussions my right honourable friend announced on 26th April his proposals for new permanent negotiating machinery. He has recently completed a series of constructive meetings with unions and employers and is now considering carefully the best way forward in the light of the differing views expressed to him. He has made it clear in another place that his aim remains to introduce legislation early in the next Session of Parliament.
In the meantime, I ask for your Lordships' approval to this order to ensure that teachers can have their 1990–91 pay increases. I commend the order to the House. I beg to move.
Moved, That the draft order laid before the House on 14th May be approved [18th Report from the Joint Committee].—(Baroness Blatch.)
2.30 p.m.
Lord Peston: My Lords, I thank the noble Baroness for her introduction of the Education (School Teachers' Pay and Conditions) Order 1990. If I may start where she ended, I am pleased to hear that the negotiations concerning the introduction of permanent negotiating machinery are completed. May I ask whether the Secretary of State will be making any kind of statement, ahead of the legislation, as to his interpretation of the negotiations? Also will he be giving us an indication beyond his earlier press statement of the likely content of the legislation?
The press statement itself was extremely interesting of course, and, for those of us who have been proponents of what is called an "income policy", parts at least of the statement which were indicative of the Secretary of State's thinking fall very much within incomes policy-type concepts. Let me say at this stage that I am not necessarily opposing some or all of the proposals the Secretary of State will eventually bring before us, but I should like to know whether we shall be informed earlier rather than later about progress.
Turning to the order itself, it is inappropriate late on a Friday afternoon to go back over the crisis in our schools, but I have to say that, as regards the problems arising from lack of motivation and low morale, it is difficult to see this order solving such problems. Indeed, if anything, the order will make teachers feel even less valued by this Government than they have felt up to now. In that connection, although I always pay tribute to any public body for
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trying to do its work, I note that even the interim advisory committee felt unable to offer to teachers the kind of increase in real incomes that almost everybody else who has looked at this matter feels to be desirable. On the other hand, they were at least very courageous because the Secretary of State instructed them to propose a package of pay increases that would not add more than £600 million to the pay bill. They felt able to say that something of the order of £730 million would be more appropriate.
Let me add that even the latter, which was not accepted by the Secretary of State, does not increase the real incomes of teachers as a whole. At best it leaves them standing still: but the Secretary of State offers even less than that. It strikes me as strange that, in the twelfth year of a government which lay claim to economic success, teachers are being asked to accept a real pay cut and we are told that even what the Secretary of State proposes to implement has to be staggered because of the problem of affordability. It strikes me as curious that in 1990 teachers should still be told that they have on average to make sacrifices in this way because the country cannot afford anything else. I find that astonishing.
On pay structure, of course I welcome the efforts to reward heads and deputy heads: that seems to me a very important matter. I strongly believe that the leadership given by head teachers is of great significance in terms of what makes a good, as opposed to a bad, school. However, I have to add that I believe it is usually the case that certainly heads and, to a considerable extent, deputy heads do not do much actual teaching. There is a good deal less on offer for those who do the actual teaching. I am not certain that that can be entirely acceptable. The noble Baroness referred to incremental enhancement. That is a marvellous expression which I shall contemplate and no doubt use myself in a speech in due course. However, I think it means giving a little more but not as much as a whole increment to some teachers to whom the Government are anxious to give a little more money.
Am I right in saying that although the Secretary of State wishes to see that happen he is providing no additional funds whatsoever to implement any flexibility, but is instead relying on a statement that I believe he made on 7th March 1990 when he said that somehow local authorities would be able to squeeze the amount of money required out of savings from their education services? I find that puzzling. I stand second to none in my desire to see all public sector bodies behave efficiently but I do not see how, in present circumstances, local authorities will squeeze any money out of savings. If we take into account the poll tax problems that local authorities have, all the evidence is that less money will be available rather than more.
I do not like to introduce a carping note. I know that when one looks at the figures simply as figures they appear to be large sums. However, that is simply an indication of the inflationary world we live in. Nowadays £600 or £700 million does not appear to be a lot of money. I take it that this will be our last debate on a school teachers' pay and conditions

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order because by this time next year the legislation will be in place.
I believe the Government have missed an opportunity here. They could have responded much more imaginatively to the needs of education and therefore to the needs of teachers. I am not discussing here whether or not teachers are a deserving case. They are a perfectly deserving case but that is not the way we need to approach this matter. I am suggesting that your Lordships consider the fact that we are discussing a pay award which will not help teacher recruitment. It will do absolutely nothing as regards recruitment to the extreme shortage subjects. However, we shall have an opportunity to debate pay differentials and other such matters in due course.
In welcoming the statement of the noble Baroness I must conclude by saying that I do not believe that what the Secretary of State has offered here meets the needs of our schools. When I consider the private sector of education, there is no better measure of the failure of the Secretary of State than the fact that no teacher in the private sector is being asked to take a real pay cut this year although, for reasons that are beyond me, teachers in the public sector are being asked to take such a pay cut.
2.38 p.m.
Lord Rochester: My Lords, I wish to join in thanking the noble Baroness, Lady Blatch, for introducing this order. At this time on a Friday afternoon I do not propose to discuss the findings of the interim advisory committee in detail but rather to take the opportunity briefly to say how we on these Benches view the present situation regarding the pay and conditions of teachers generally.
Sadly in the introduction to its report the committee states that the commitment of teachers:
"needs to be underpinned by far higher morale than we have found. Too many teachers feel that their efforts are undervalued by the Government, their employers, parents and society more generally. Our recommendations in this Report can address that only to a small extent. There is a wider challenge for the country".
That statement shows clearly just how serious the current position is.
The Secretary of State set a limit of £600 million on the cost of the committee's recommendations. He further directed that regard should be had to what he called affordability and the falling rate of inflation. In fact, while the retail prices index fell for a time from 8.3 per cent. in May last year, it rose during the course of the committee's inquiry and is now running at 9.7 per cent. That compares with an increase of only 7.9 per cent. in the total pay bill for teacher; during the year 1990–91. In real terms, therefore, as the noble Lord, Lord Peston, has already said, there will be a considerable reduction in teachers' pay this year.
In those circumstances one would have expected the Government at the very least to have accepted the committee's recommendations in full. The Government say that that is what they have done. However, they underplay the fact, made plain in the order that we are considering, that implementation of the recommendations is to be phased in rather
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than given immediate effect as the committee proposed. The committee's recommendation was that pay increases in 1990 should total £733 million, but because the Government are delaying payment of a substantial part of that amount until 1st January 1991 there will be a deficit.
On that point I do not believe that the Government have dealt adequately with the problem that is caused by revenue support to local authorities being calculated on the basis of a pay award costing £600 million compared with the immediate cost of £620 million that I have just mentioned. The difference of £20 million will have to be found by local authorities at a time when schools are already facing severe problems in finding the resources to introduce the national curriculum and to accept local management and when there are problems associated with the poll tax, as the noble Lord, Lord Peston, mentioned and so on.
I do not propose to return now to the arguments that we had when the Education Reform Bill was discussed in this House about the way in which the pay for teachers should be determined. We have to recognise that the Secretary of State announced his proposals for new permanent negotiating machinery at the end of April, and it is those proposals that we are now considering. Arising from the meetings that he has since held with employers and unions, however, I should like to ask the noble Baroness this straight question: can she assure me that those meetings really were consultative in the sense that the Secretary of State will give careful consideration to the views of those consulted? It is highly desirable that if at all possible a negotiating structure is designed which proves sufficiently acceptable to teachers and their representatives to ensure that there is no repetition of the disruption from which our schools have so recently suffered.
There is one other matter concerning the extension of the 1987 Act on which I must press the Minister. On 5th December last the Secretary of State said in another place:
"it is necessary for the present arrangements to be in place for one more year".—[Official Report, Commons, 5/12/89; col. 271.]
In dealing with the question of future pay machinery, he added on 6th June last:
"It remains my aim to introduce legislation early in the next Session of Parliament".—[Official Report, Commons, 6/6/90; col. 736.]
The noble Baroness repeated that statement this afternoon, and we understand that.
It is now rumoured that because it may not be possible for that legislation to be enacted by 31st March 1991 the Government intend to extend the duration of the 1987 Act still further. Accordingly I shall be grateful if the noble Baroness will confirm that legislation will not simply be introduced but will be enacted in time to ensure that the present arrangements will not be extended beyond 31st March 1991.
At the end of the day we have to say whether we consider that the overall amount of £600 million authorised by the Government this year is enough to recruit and retain a sufficient number of teachers of the quality required for the education of our

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children. Speaking on behalf of my noble friends, I have to say that in our view it is not.
2.45 p.m.
Baroness Blatch: My Lords, this has been a short but I believe important and very interesting debate. It has ranged quite widely and it may be of help to remind your Lordships that the order we are considering this afternoon is needed to bring into force the new rates of pay for school teachers to have them in their pockets with effect from 1st April 1990.
We have heard a good deal about the Government's decision to stage the recommendations of the interim advisory committee. As noble Lords are aware, the Government took the view that the cost of implementation from 1st April would be too high. Given that the original costing for the recommendation was put at £600 million and the sum came in at £733 million, I am grateful for the generous comments that have been made in generally welcoming this order. I understand some of the concerns about the phasing. We had to keep within financial guidelines and it was important to the Government—I hope it will be recognised by noble Lords—that that recommendation was met in full, albeit phased in at the tail end. It will mean very substantial improvements in both levels of pay and career structure.
Typical secondary heads will see their pay rise by some £3,000 from March 1990 and typical primary heads by some £2,000. For deputies the comparable increases will be £2,300 and £1,800. In addition, the introduction of range pay from 1st January will give local education authorities and governors much greater flexibility to reward responsibility and achievement.
For example, a good honours graduate entering the profession after 1st January will start on at least £10,503 or £12,003 in inner London. Teachers in inner London starting their second year of teaching next term and awarded one of the new pay supplements will see their salaries rise by 23 per cent. between March 1990 and January 1991. For such teachers there will also be the possibility of one of the new incentive allowances and of incremental enhancement worth up to £999. For teachers at the top of the scale there will be the possibility of one of the new higher value allowances and of a further substantial increase in salary if their local education authority adopts a local extension to the standard scale. Even without the use of the new discretions, teachers will have seen their pay increase by 50 per cent. on average since March 1986.
The speed with which the Secretary of State accepted the report clearly demonstrated his approval of the committee's whole approach. I welcome the comments made this afternoon about the quality of the committee's analysis and recommendations over the past three years. Such tributes are well merited and I shall pass them on. In a moment I shall come to the points made by the noble Lord, Lord Rochester.
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The interim advisory committee recognised that the introduction of a more flexible pay system places particular responsibilities on local decision-takers, in particular the governing bodies of the increasing number of schools with delegated budgets, but also local education authorities. There will clearly be some difficult choices to be made. There is no escaping that. But local management is about the targeting of resources to where they are most needed and will do the most good. As was said by my right honourable friend in another place, that will not be achieved if pay increases are awarded simply by "Buggins' turn".
A number of points were raised during the course of the debate. Given that it is Friday afternoon, I hope that noble Lords will forgive me if I deal with them relatively cursorily. The first question put by the noble Lord, Lord Peston, asked whether my right honourable friend will be making a Statement in advance of presenting legislation to Parliament. I can give him the assurance that the intention is that that Statement will be made as soon as possible. It links up to a question asked by the noble Lord, Lord Rochester: how long will the talking go on? I hope that there will be understanding that talk is seriously going on now and there is a very real intention that the highest degree of consensus should be arrived at. But at the end of the day a decision will have to be made, or we shall be into another year and yet another year. Understanding that that decision must be made, we can expect a Statement. The aim remains that if it is possible to put legislation before Parliament in the next Session it may well involve an extension for a short time while that legislation is put in place. Although I can never state it categorically, I hope that this will be the last time that Parliament is asked to make any extension for technical reasons and that the permanent arrangements will be put in place.
A very real point was made about recruitment, retention and motivation. A valid point was made that pay is only a part of that issue. I accept that. However, I hope again that some credit can be given to the Government and my right honourable friend for a range of measures that are being taken in order to deal with teacher shortages, the difficult times in which we live and the mobility of teachers. To name a few measures, I refer to the articled teachers scheme; the licensed teachers scheme; the encouragement of re-entry into teaching; a fairly expensive publicity campaign to attract people into the profession; helping with housing in London; a special additional London allowance; and I could go on. Therefore pay dovetails nicely into those arrangements. The very flexibility that has been built into the pay system will also make teaching more attractive.
A good deal was made of the relativity of teachers' pay to other non-manual earnings. I have taken that point because if one refers to the tables, the very best figure is the year of the Houghton award in 1973–74, which is rather a long time ago. Teachers were then earning 136 per cent. of the national average wage of non-manual earnings. By 1978, only a short time later, the relative value of teachers' pay to non-manual earnings had fallen by 22 per cent. It

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has dropped from 136 per cent. to today's figure of 107 per cent. That will creep up very slightly as a result of this award.
This is no time to score points. However, it dropped by 22 per cent. between 1974 and 1978 but between 1979 and 1989–90 the drop has been only 5 per cent. Nevertheless, in real terms it has dropped; I accept that point. There is nothing magic about relativity tables in themselves. At the end of the day the policy must be that teachers need to be paid sufficient to make recruitment and retention buoyant and to motivate teachers. I am sure that all noble Lords will agree on that point.
The point was also made about local authorities having difficulty in meeting the pay award because it was above the figure that noble Lords believed they can afford. Local authorities have to live in the real world like everyone else. They have to determine priorities. I believe they are partners in the funding of the teachers' pay award. Under the new system of community charge it will be for local authorities and their local communities to consider whether teachers should be paid more.
I wish to put a very important point on record. The issue was raised that teachers feel undervalued and that morale is low. My right honourable friend in another place, I believe, has consistently recognised and paid tribute to the work of teachers and of all people working in education. I have no hesitation in joining in that tribute to teachers, in particular at this time when there is so much change. I believe that it is not simply rhetoric. My right honourable friend has been concerned about the burden laid on teachers at this time and has taken positive steps to reduce that burden. For example, I cite the measures that he has taken with regard to the testing of children at the age of seven, and to lessen the burden of returning statistics to the Department of Education and Science. Therefore
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some positive measures are being taken. The work of teachers is not being underestimated by this Government.
If noble Lords will forgive me, those are the individual points with which I shall deal. The Government have taken wide-ranging measures to combat shortages. I have mentioned some. But, with the interim advisory committee, they firmly believe that pay flexibility and the targeting of resources by local education authorities and governing bodies is the correct, essential response to local problems. The new pay discretions for heads, deputies and classroom teachers will have a key role to play and the Government look to governors and LEAs to use them effectively and with imagination. In fact, there is evidence in London that many local education authorities are making good use of the new discretion to pay teachers a £750 inner London supplement.
The Government have made clear their view on teachers' pay and on the structural changes necessary to enhance career prospects, improve morale and tackle shortages at a local level. The Opposition, on the other hand, are anything but specific. There will be time to engage in a debate about the positive proposals that may come from our friends on the opposite Benches.
My right honourable friend the Secretary of State for Education and Science made clear in another place that his aim is to introduce legislation for new permanent negotiating machinery early in the next Session of Parliament. I am happy to repeat that statement. In the meantime, the order is needed to ensure that teachers receive their 1990–91 pay increases and I commend it to the House.
On Question, Motion agreed to.
House adjourned at five minutes before three o'clock.

  CHURCH SCHOOL TRUST BENEFICIARIES
  CHURCH SCHOOL TRUST BENEFICIARIES
  NUCLEAR INCIDENT RESPONSE ARRANGEMENTS
  NUCLEAR INCIDENT RESPONSE ARRANGEMENTS
  SERVICE PERSONNEL: REIMBURSEMENT OF TRAINING COSTS
  SERVICE PERSONNEL: REIMBURSEMENT OF TRAINING COSTS